Question 1

Corporate controllers are responsible for the accounting functions in most large corporations.

Accepted Answer

A) True 
 B)False  True

Question 2

A big disadvantage of proprietorships versus corporations is:

Accepted Answer

A)  the inexperience of proprietors. 
B)  the difficulty of raising money to start or expand the business for proprietors. 
C)  taxes on the proprietor. 
D)  the limited personal liability of the proprietor. 
A)  the inexperience of proprietors. 
B)  the difficulty of raising money to start or expand the business for proprietors. 
C)  taxes on the proprietor. 
D)  the limited personal liability of the proprietor. B

Question 3

A stockbroker is licensed to trade securities on behalf of investors.

Accepted Answer

A) True 
 B)False  True

Question 4

Ethical investors buy the securities of firms that behave according to accepted ethical and moral standards.

Accepted Answer

A) True 
 B)False

Question 5

Because it historically provides a positive return, common stock is typically classified as a real asset.

Accepted Answer

A) True 
 B)False

Question 6

A company can raise money to purchase assets by:

Accepted Answer

A)  borrowing money. 
B)  issuing stock. 
C)  using money earned. 
D)  Both a & b 
E)  All of the above 
A)  borrowing money. 
B)  issuing stock. 
C)  using money earned. 
D)  Both a & b 
E)  All of the above

Question 7

Which of the following apply to an S-type corporation?

Accepted Answer

A)  Double taxation of earnings 
B)  Taxation similar to a partnership 
C)  Can be owned by another corporation 
D)  None of the above 
A)  Double taxation of earnings 
B)  Taxation similar to a partnership 
C)  Can be owned by another corporation 
D)  None of the above

Question 8

Finance has its theoretical roots in ____, but requires a practical understanding of ____.

Accepted Answer

A)  accounting, economics 
B)  accounting, the stock market 
C)  mathematics, accounting 
D)  economics, accounting 
A)  accounting, economics 
B)  accounting, the stock market 
C)  mathematics, accounting 
D)  economics, accounting

Question 9

The essence of finance is the process of raising capital (money), exclusively through the sale of bonds.

Accepted Answer

A) True 
 B)False

Question 10

Financial theory has grown out of economics.

Accepted Answer

A) True 
 B)False

Question 11

The CFO is the person primarily responsible for judging the financial viability of projects proposed by other executives.

Accepted Answer

A) True 
 B)False

Question 12

_____ make entrepreneurs liable for loans made to their businesses.

Accepted Answer

A)  Selling stocks 
B)  Losing a lawsuit 
C)  Unlimited liability 
D)  Personal guarantees 
A)  Selling stocks 
B)  Losing a lawsuit 
C)  Unlimited liability 
D)  Personal guarantees

Question 13

Principals can use the all of the following techniques to control their agents (in a business setting) except:

Accepted Answer

A)  compensation tied to performance. 
B)  stock options. 
C)  bond redemption. 
D)  the threat of firing. 
E)  perquisites. 
A)  compensation tied to performance. 
B)  stock options. 
C)  bond redemption. 
D)  the threat of firing. 
E)  perquisites.

Question 14

A ____ pools the contributions of many investors and employs a professional manager to select securities that match a particular set of investment goals.

Accepted Answer

A)  mutual fund 
B)  stock 
C)  bond 
D)  real asset 
A)  mutual fund 
B)  stock 
C)  bond 
D)  real asset

Question 15

Historically, the field of finance was limited to:

Accepted Answer

A)  accounting. 
B)  raising money. 
C)  activities of investors. 
D)  financial management. 
A)  accounting. 
B)  raising money. 
C)  activities of investors. 
D)  financial management.

Question 16

Companies finance the purchase of assets through:

Accepted Answer

A)  debt financing, the sale of bonds. 
B)  equity financing, the sale of stock. 
C)  lease financing. 
D)  Only a. and b. above 
E)  All of the above 
A)  debt financing, the sale of bonds. 
B)  equity financing, the sale of stock. 
C)  lease financing. 
D)  Only a. and b. above 
E)  All of the above

Question 17

A decision that increases immediate net profit is always consistent with maximizing shareholder wealth.

Accepted Answer

A) True 
 B)False

Question 18

Financial assets like stocks and bonds have value because:

Accepted Answer

A)  they represent ownership of companies. 
B)  people are proud to own them. 
C)  they provide tangible benefits as do real assets. 
D)  they give their owners command over future cash flows. 
A)  they represent ownership of companies. 
B)  people are proud to own them. 
C)  they provide tangible benefits as do real assets. 
D)  they give their owners command over future cash flows.

Question 19

The S-corporation was designed to address the concerns of shareholders of large, publicly traded companies that wanted to avoid the double taxation of their income.

Accepted Answer

A) True 
 B)False

Question 20

The following position(s) and/or department(s) is/are in the finance department under the CFO:

Accepted Answer

A)  Treasurer 
B)  Controller 
C)  Accounting department 
D)  All of these are correct. 
A)  Treasurer 
B)  Controller 
C)  Accounting department 
D)  All of these are correct.

Corporate controllers are responsible for the accounting functions in most large corporations.

A big disadvantage of proprietorships versus corporations is:

A stockbroker is licensed to trade securities on behalf of investors.

Ethical investors buy the securities of firms that behave according to accepted ethical and moral standards.

Because it historically provides a positive return, common stock is typically classified as a real asset.

A company can raise money to purchase assets by:

Which of the following apply to an S-type corporation?

Finance has its theoretical roots in , but requires a practical understanding of .

The essence of finance is the process of raising capital (money), exclusively through the sale of bonds.

Financial theory has grown out of economics.

The CFO is the person primarily responsible for judging the financial viability of projects proposed by other executives.

_____ make entrepreneurs liable for loans made to their businesses.

Principals can use the all of the following techniques to control their agents (in a business setting) except:

A ____ pools the contributions of many investors and employs a professional manager to select securities that match a particular set of investment goals.

Historically, the field of finance was limited to:

Companies finance the purchase of assets through:

A decision that increases immediate net profit is always consistent with maximizing shareholder wealth.

Financial assets like stocks and bonds have value because:

The S-corporation was designed to address the concerns of shareholders of large, publicly traded companies that wanted to avoid the double taxation of their income.

The following position(s) and/or department(s) is/are in the finance department under the CFO:

Financial Background: a Review of Accounting, Financial Statements, and Taxes

Cash Flows and Financial Analysis

Financial Planning

The Financial System, Corporate Governance, and Interest

Time Value of Money

The Valuation and Characteristics of Bonds

The Valuation and Characteristics of Stock

Risk and Return

Capital Budgeting

Cash Flow Estimation

Risk Topics and Real Options in Capital Budgeting

Cost of Capital

Capital Structure and Leverage

Dividends

The Management of Working Capital Multiple Choice Questions

The Management of Working Capital

Corporate Restructuring

International Finance

Filters

Exam 1: Foundations

Corporate controllers are responsible for the accounting functions in most large corporations.

A big disadvantage of proprietorships versus corporations is:

A stockbroker is licensed to trade securities on behalf of investors.

Ethical investors buy the securities of firms that behave according to accepted ethical and moral standards.

Because it historically provides a positive return, common stock is typically classified as a real asset.

A company can raise money to purchase assets by:

Which of the following apply to an S-type corporation?

Finance has its theoretical roots in ____, but requires a practical understanding of ____.

The essence of finance is the process of raising capital (money), exclusively through the sale of bonds.

Financial theory has grown out of economics.

The CFO is the person primarily responsible for judging the financial viability of projects proposed by other executives.

_____ make entrepreneurs liable for loans made to their businesses.

Principals can use the all of the following techniques to control their agents (in a business setting) except:

A ____ pools the contributions of many investors and employs a professional manager to select securities that match a particular set of investment goals.

Historically, the field of finance was limited to:

Companies finance the purchase of assets through:

A decision that increases immediate net profit is always consistent with maximizing shareholder wealth.

Financial assets like stocks and bonds have value because:

The S-corporation was designed to address the concerns of shareholders of large, publicly traded companies that wanted to avoid the double taxation of their income.

The following position(s) and/or department(s) is/are in the finance department under the CFO:

Financial Background: a Review of Accounting, Financial Statements, and Taxes

Cash Flows and Financial Analysis

Financial Planning

The Financial System, Corporate Governance, and Interest

Time Value of Money

The Valuation and Characteristics of Bonds

The Valuation and Characteristics of Stock

Risk and Return

Capital Budgeting

Cash Flow Estimation

Risk Topics and Real Options in Capital Budgeting

Cost of Capital

Capital Structure and Leverage

Dividends

The Management of Working Capital Multiple Choice Questions

The Management of Working Capital

Corporate Restructuring

International Finance

Filters

Finance has its theoretical roots in , but requires a practical understanding of .