Chapter 14, 15, 16
____ is (are) the earnings of a corporation that are distributed to the stockholders.
Dividends
Bonds that are secured by various assets of the issuing corporation are called debenture bonds.
False
The terms 2/10, net 30 are used with most promissory notes.
False
While common stockholders have the right to receive dividends, holders of preferred stock elect the board of directors and approve or disapprove major corporate actions.
False
____ is considered a social networking site for professionals.
What are the three activities according to which a statement of cash flows is organized?
Operating, investing, financing
What is Groupon?
Social media site
Which of the following is not an internal force affecting e-business?
The economy
Bonds that can be exchanged for a specified number of shares of common stock are called convertible bonds.
True
On a balance sheet, assets are listed in order, from the most liquid to the least liquid.
True
The debts of a business are called its liabilities.
True
The denominations for corporate bonds range from $1,000 to $50,000.
True
The maturity date is the date on which the corporation is to repay the money borrowed from bondholders.
True
The most basic form of corporate ownership is common stock.
True
The most expensive form of short-term financing is factoring of accounts receivable.
True
There is added protection for whistle-blowers who report violations of the Sarbanes-Oxley Act.
True
Trade credit is the most popular form of short-term financing available for most businesses.
True
Without the audit function and GAAP, there would be very little oversight or supervision of corporate accounting practices.
True
____ is the largest video site on the Internet.
YouTube
The most liquid asset is
cash.
The right to vote on major corporate actions belongs to
common stockholders.
The term ____ describes assets that can be quickly converted into cash or consumed in one year or less.
current assets
Salaries payable, accounts payable, and taxes payable are examples of
current liabilities.
The debts of a business that will be paid in one year or less are called its
current liabilities.
To be successful while pursuing a career in finance, an employee must
have a strong background in accounting or mathematics.
The earnings statement is another term for the
income statement.
Trademarks and goodwill are both
intangible assets.
The mortgage on Prudential Insurance's local facility will be paid off over the next 30 years. The majority of this mortgage would be classified on Prudential's balance sheet as a(n)
long-term liability.
The Nasdaq, part of the ___ market, provides price information on more than 3,600 stocks.
over-the-counter
The balance sheet is composed of
owners' equity, assets, and liabilities.
The two types of stock a company can sell are
preferred and common.
When a corporation uses an initial public offering to raise capital, the stock is sold in the
primary market.
Venture capital firms invest in
small firms that have the potential to be very successful.
The lowest rate of interest charged by a bank for a short-term loan is known as
the prime interest rate.
What right do most common stockholders have that most preferred stockholders do not have?
Voting rights
The date on the face of a bond telling when the face value is to be repaid is called the
maturity date.
Which of the following presents assets in the correct balance sheet order?
Cash, inventory, equipment
____ is (are) short-term promissory notes with no collateral that are issued by large corporations.
Commercial paper
With regard to the ongoing expense of long-term corporate financing, which of the following would be the least expensive?
Common stock