Intro to Financial Management

Which one of these is commonly considered the greatest disadvantage of a sole proprietorship? Multiple choice question. Cost of formation Government regulation Taxes Unlimited liability

Unlimited liability

Which of these provides the best description of the difference between accounting and finance? Multiple choice question. Finance is the recording of accounting transactions that have occurred or are expected to occur. Accounting and finance are interchangeable terms which have the same meaning and application. Accounting records past activities of a firm while finance helps with decisions regarding the firm's future. Accounting is centered on current and future activities while finance focuses on the analysis of past transactions.

Accounting records past activities of a firm while finance helps with decisions regarding the firm's future.

Which of these is an example of how finance is used throughout a firm? Multiple choice question. Finance can be used to determine which applicant to hire. Finance can be used to determine the accounting value of an asset being used in any department of a firm. Finance can be used for cost/benefit analysis. Finance can be used to determine how taxes are to be allocated to a firm's various divisions.

Finance can be used for cost/benefit analysis.

Which one of these is NOT a sub-area of finance? Multiple choice question. Financial institutions and markets Investments Financial management Financial Assets

Financial Assets

Which one of these is NOT a sub-area of finance? Multiple choice question. Financial Assets Financial management Investments Financial institutions and markets

Financial Assets

Financial institutions contribute to the dynamics of which one of the following rates? Multiple choice question. Exchange rates Interest rates Inflation rates Dividend growth rates

Interest rates

Which one of these is a function assigned to the company treasurer? Multiple choice question. Data processing management Management of cash Management of accounting records Tax reporting

Management of cash

Which one of these is an advantage of the corporate form of ownership? Multiple choice question. Limited size of business Double taxation Small possibility of any conflicts of interest Separate legal entity

Separate legal entity

Which one of these is an advantage of a general partnership? Multiple choice question. Single taxation Unlimited capital Limited liability Tax-free profits

Single taxation

Which one of these is an advantage of a general partnership? Multiple choice question. Tax-free profits Unlimited capital Limited liability Single taxation

Single taxation

Which one of these features would be considered the most advantageous benefit of a general partnership? Multiple choice question. Substantial growth obtainable without changing the form of ownership Management control spread amongst the partners Increased capital financing as compared to a sole proprietorship Personal liability limited to percentage of ownership

Increased capital financing as compared to a sole proprietorship

Financial institutions contribute to the dynamics of which one of the following rates? Multiple choice question. Inflation rates Dividend growth rates Exchange rates Interest rates

Interest rates

Which of the following uses of the excess cash results in maximizing owners' equity? Multiple choice question. Paying excessive bonuses to managers Investing in unprofitable projects Paying dividends to shareholders Lowering prices below costs

Paying dividends to shareholders

Which of these features could accurately be included in the definition of a corporation? Select all that apply. Multiple select question. Separate legal entity Double taxation Division of ownership and control Limited access to capital

Separate legal entity Double taxation Division of ownership and control

The controller typically oversees the following areas: Multiple select question. purchasing insurance managing taxes repurchasing stock financial accounting issuing stock

managing taxes financial accounting

Which of these is an example of how finance is used throughout a firm? Multiple choice question. Finance can be used for cost/benefit analysis. Finance can be used to determine how taxes are to be allocated to a firm's various divisions. Finance can be used to determine the accounting value of an asset being used in any department of a firm. Finance can be used to determine which applicant to hire.

Finance can be used for cost/benefit analysis.

Which three decisions have the most effect on shareholder wealth? Select all that apply. Multiple select question. Deciding between debt and equity financing Deciding how to return profits to owners Deciding which charity should receive a $1,000 donation Deciding which project to accept

Deciding between debt and equity financing Deciding how to return profits to owners Deciding which project to accept

Which of these features could accurately be included in the definition of a corporation? Select all that apply. Multiple select question. Division of ownership and control Double taxation Limited access to capital Separate legal entity

Division of ownership and control Double taxation Separate legal entity

Which of these is an example of how finance is used throughout a firm? Multiple choice question. Finance can be used to determine how taxes are to be allocated to a firm's various divisions. Finance can be used to determine which applicant to hire. Finance can be used for cost/benefit analysis. Finance can be used to determine the accounting value of an asset being used in any department of a firm.

Finance can be used for cost/benefit analysis.

Which one of these features would be considered the most advantageous benefit of a general partnership? Multiple choice question. Increased capital financing as compared to a sole proprietorship Personal liability limited to percentage of ownership Substantial growth obtainable without changing the form of ownership Management control spread amongst the partners

Increased capital financing as compared to a sole proprietorship

Which one of the following statements correctly identifies a group that supplies money to the financial markets? Multiple choice question. The research and development departments of major corporations provide money to the financial markets. Individuals saving for retirement provide money to the financial markets. Banks provide money to the financial markets. Young, start-up firms provide money to the financial markets.

Individuals saving for retirement provide money to the financial markets.

Which of the following are the well-developed viewpoints that have arisen regarding the goal of a firm? Multiple select question. Maximize shareholder wealth Emphasize social responsibility Maximize sales Maximize market share

Maximize shareholder wealth Emphasize social responsibility

Which one of these is an advantage of a general partnership? Multiple choice question. Unlimited capital Limited liability Single taxation Tax-free profits

Single taxation

Which of these is an example of a personal financial decision? Multiple choice question. Tami decided to order her new car in red rather than in blue. Sue opted to increase her company retirement plan contribution to 6 percent of her salary. Tom decided to spend his Saturday cleaning out his garage rather than planting his garden. Faith decided to watch TV rather than one of the DVDs she owns.

Sue opted to increase her company retirement plan contribution to 6 percent of her salary.

Select all that apply The controller typically oversees the following areas: Multiple select question. purchasing insurance financial accounting issuing stock repurchasing stock managing taxes

financial accounting

Which one of the following is an advantage of a sole proprietorship? Multiple choice question. Limited liability Unlimited liability Limited operational control Ease of formation

Ease of formation

Which one of the following is an advantage of a sole proprietorship? Multiple choice question. Unlimited liability Ease of formation Limited liability Limited operational control

Ease of formation

Which of these are advantages of the corporate form of business ownership? Select all that apply. Multiple select question. Easy access to capital Double taxation Legal status Limited liability

Easy access to capital Legal status Limited liability

Which of the following are the well-developed viewpoints that have arisen regarding the goal of a firm? Multiple select question. Maximize sales Emphasize social responsibility Maximize market share Maximize shareholder wealth

Emphasize social responsibility Maximize shareholder wealth

Which of these decisions involves international finance? Assume the firms are U. S. firms. Multiple choice question. Exports Ltd. decides to open a new domestic retail outlet. Exports Ltd. decides to open a warehouse in Europe. Imports Ltd. decides to open a new distribution center in Iowa. Imports Ltd. decides to invest its excess cash in U. S. Treasury bills.

Exports Ltd. decides to open a warehouse in Europe.

True or false: Finance is more concerned about the past while accounting is more concerned about the future. True false question. True False

False

Which statement best describes how finance is dependent upon accounting? Multiple choice question. Financial decisions require an understanding of a firm's past transactions in order to plan for the future. Financial decisions eventually appear in the accounting statements. Financial decisions only affect the finance department and require the accounting statements to review the entire firm. Financial decisions are based solely upon the information contained in the financial statements prepared by accountants.

Financial decisions require an understanding of a firm's past transactions in order to plan for the future.

What role does a financial institution play in a financial system? Multiple choice question. -Financial institutions must decide which projects to fund. -Financial institutions must distribute capital in an efficient manner. -Financial institutions must decide how much capital to return to investors. -Financial institutions must assess which investment opportunities are right for their needs.

Financial institutions must distribute capital in an efficient manner.

Financial management relates to which one of the following? Multiple choice question. Financial management relates to the facilitation of capital flows between investors and firms. Financial management relates to the analysis and process of choosing securities and other assets to purchase. Financial management relates to a firm's decisions regarding the acquisition and use of funds. Financial management relates to the use of finance theory in a global business environment.

Financial management relates to a firm's decisions regarding the acquisition and use of funds.

The subarea of finance known as financial management addresses which of these decisions? Select all that apply. Multiple select question. How can corporate taxes be minimized? How might foreign political risk affect the value of a new project? How can a firm attract more capital financing? Should a firm issue debt (bonds) or equity (stocks)?

How can a firm attract more capital financing? Should a firm issue debt (bonds) or equity (stocks)? How can corporate taxes be minimized?

Which one of the following statements correctly identifies a group that supplies money to the financial markets? Multiple choice question. Young, start-up firms provide money to the financial markets. The research and development departments of major corporations provide money to the financial markets. Individuals saving for retirement provide money to the financial markets. Banks provide money to the financial markets.

Individuals saving for retirement provide money to the financial markets.

International finance does which one of the following? Multiple choice question. International finance applies only to transactions involving foreign banking institutions. International finance applies finance theory to a global world with changing political, currency, and legal environments. International finance is related solely to business decisions involving foreign operations. International finance deals solely with foreign investments made by individual investors.

International finance applies finance theory to a global world with changing political, currency, and legal environments.

Which of these correctly defines a role of investments? Multiple choice question. Investments address the timing of cash flows most desired by investors. Investments are concerned with helping banks determine the amount of capital they can lend. Investments addresses which projects a firm should finance. Investments are concerned with which operations should be conducted overseas.

Investments address the timing of cash flows most desired by investors.

Which one of these functions is a treasury function? Multiple choice question. Managing the firm's taxes Managing the firm's pension plan Overseeing the accounting functions Overseeing the data processing functions

Managing the firm's pension plan

Which one of these functions is a treasury function? Multiple choice question. Overseeing the accounting functions Managing the firm's pension plan Overseeing the data processing functions Managing the firm's taxes

Managing the firm's pension plan

Which group has individual investors as participants and is a lender of funds to the financial markets? Multiple choice question. People with both money and ideas lend funds to the financial markets. People with money and no ideas lend funds to the financial markets. People with no ideas and no money lend funds to the financial markets. People with ideas and no money lend funds to the financial markets.

People with money and no ideas lend funds to the financial markets.

Which group has individual investors as participants and is a lender of funds to the financial markets? Multiple choice question. People with no ideas and no money lend funds to the financial markets. People with money and no ideas lend funds to the financial markets. People with both money and ideas lend funds to the financial markets. People with ideas and no money lend funds to the financial markets.

People with money and no ideas lend funds to the financial markets.

Which of these are characteristics of a general partnership? Multiple select question. Profits split among the partners Double taxation of profits Limited access to capital Limited personal liability

Profits split among the partners Limited access to capital

Which one of the following is a disadvantage of the corporate form of business? Multiple choice question. Separation of management and ownership Limited liability for owners Access to capital markets Legal status

Separation of management and ownership

Putting the interests of which party first should be the primary goal of a corporation? Multiple choice question. Government Employees Managers Shareholders

Shareholders

The subarea of finance known as financial management addresses which of these decisions? Select all that apply. Multiple select question. Should a firm issue debt (bonds) or equity (stocks)? How can corporate taxes be minimized? How might foreign political risk affect the value of a new project? How can a firm attract more capital financing?

Should a firm issue debt (bonds) or equity (stocks)? How can corporate taxes be minimized? How can a firm attract more capital financing?

Which one of these is an investments activity? Multiple choice question. Kristie pays $200 a month on her credit card. Mark spent $800 on a new TV. Sue has $200 a month deposited into a stock mutual fund. Kate pays $800 a month for food.

Sue has $200 a month deposited into a stock mutual fund.

Which aspect of a corporation is viewed as a disadvantage? Multiple choice question. Property ownership Taxation Owners' liability Legal status

Taxation

Which one of the following best illustrates the definition of a sole proprietorship? Multiple choice question. Ted was forced to sell his personal home in order to pay the debts of a business he owned in entirety. Alberto received 60 percent of the income from a business and had that income taxed as personal income. The income Maria received from her business interest was taxed twice as income. Ido's portion of a firm's debts was $38,000 but he only lost the $20,000 investment he had in the company when it went bankrupt.

Ted was forced to sell his personal home in order to pay the debts of a business he owned in entirety.

Which one of the following is the key disadvantage of a general partnership? Multiple choice question. The key disadvantage is the division of profits by ownership percentage. The key disadvantage is taxation at the business level. The key disadvantage is the division of control by ownership percentage. The key disadvantage is the unlimited liability for all of the firm's legal actions and all of its debts.

The key disadvantage is the unlimited liability for all of the firm's legal actions and all of its debts.

Which one of the following is the key disadvantage of a general partnership? Multiple choice question. The key disadvantage is the unlimited liability for all of the firm's legal actions and all of its debts. The key disadvantage is the division of profits by ownership percentage. The key disadvantage is taxation at the business level. The key disadvantage is the division of control by ownership percentage.

The key disadvantage is the unlimited liability for all of the firm's legal actions and all of its debts.

Which one of these is NOT a financial decision made within a firm? Multiple choice question. Operations decides to pay overtime rather than hire another employee. The president decides to fire the company treasurer for ethical violations. The personnel department decides to switch its employee health insurer due to changes in costs. The sales department decides to cancel newspaper advertising due to low sales generation from that advertising.

The president decides to fire the company treasurer for ethical violations.

Which one of these is NOT a financial decision made within a firm? Multiple choice question. The president decides to fire the company treasurer for ethical violations. The sales department decides to cancel newspaper advertising due to low sales generation from that advertising. Operations decides to pay overtime rather than hire another employee. The personnel department decides to switch its employee health insurer due to changes in costs.

The president decides to fire the company treasurer for ethical violations.

What are two primary sources of friction that decrease cash flows from companies to their investors? Multiple choice question. The two primary sources of friction are taxes and dividend payments. The two primary sources of friction are dividend and interest payments. The two primary sources of friction are retained earnings and taxes. The two primary sources of friction are retained earnings and dividend payments.

The two primary sources of friction are retained earnings and taxes.

Money that firms either retain or pay to the government are sources of friction that reduce cash flows to investors in the financial markets. True false question. True False

True

Which of the following are disadvantages of a sole proprietorship? Select all that apply. Multiple select question. Double taxation of profits Type of owner liability Ability to raise capital Ownership control

Type of owner liability Ability to raise capital

Which one of these is commonly considered the greatest disadvantage of a sole proprietorship? Multiple choice question. Unlimited liability Cost of formation Government regulation Taxes

Unlimited liability

The sub-area of finance that deals with a firm's decisions in acquiring and using cash from investors and retained earnings is called Multiple choice question. financial assets investment management financial management financial institutions

financial management

Which one of these best defines a general partnership? Multiple choice question. Three brothers form a business. None of the brothers are liable for the firm's debts. Four sisters form a business which goes bankrupt. Only one sister is liable for all the firm's debts. A brother and sister form a business. Both share jointly unlimited personal liability for the debts of the firm. A brother and sister form a business. The firm goes bankrupt but neither owner has to repay the firm's debts.

A brother and sister form a business. Both share jointly unlimited personal liability for the debts of the firm.

What is the primary function of a financial institution? Multiple choice question. A financial institution facilitates cash flows between investors and companies. A financial institution provides a means of saving for retirement. A financial institution provides checking accounts to facilitate payments. A financial institution provides credit cards to consumers.

A financial institution facilitates cash flows between investors and companies.

What is the definition of a general partnership? Multiple choice question. A general partnership is defined as joint ownership of a firm with some partners having limited liability while others have unlimited liability. A general partnership involves multiple business owners who are each personally responsible for all of the partnership's debts. A general partnership is defined as a business entity where each partner owns an equal share of the business. A general partnership is joint ownership of a firm where each owner is responsible for only a portion of the partnership's debts.

A general partnership involves multiple business owners who are each personally responsible for all of the partnership's debts.

What is the definition of a general partnership? Multiple choice question. A general partnership is defined as joint ownership of a firm with some partners having limited liability while others have unlimited liability. A general partnership is joint ownership of a firm where each owner is responsible for only a portion of the partnership's debts. A general partnership is defined as a business entity where each partner owns an equal share of the business. A general partnership involves multiple business owners who are each personally responsible for all of the partnership's debts.

A general partnership involves multiple business owners who are each personally responsible for all of the partnership's debts.

How is a public corporation defined? Multiple choice question. A public corporation is a firm with a large number of owners who directly control its operations. A public corporation is a firm owned by a large number of stockholders from the general public. A public corporation is defined as a firm with 1,000 or more individual owners, A public corporation is defined as a firm with a large number of owners, each of whom has unlimited liability for a percentage of the firm's debts.

A public corporation is a firm owned by a large number of stockholders from the general public.

What is the definition of a sole proprietorship? Multiple choice question. A sole proprietorship is owned by a single individual whose personal assets are legally separated from the business assets. A sole proprietorship is owned by a single individual but is financed by a venture capitalist. A sole proprietorship is a business entity that is not legally separate from its owner. A sole proprietorship is owned by a single individual who enjoys limited liability.

A sole proprietorship is a business entity that is not legally separate from its owner.

Which of these best illustrates how funds flow in a financial system? Multiple choice question. A financial institution offers both checking and savings accounts An individual analyzes a project and receives financing from a company. A company retains earnings that flow to financial institutions. An individual invests in a bank savings account and the bank lends money to companies.

An individual invests in a bank savings account and the bank lends money to companies.

Which of the following are finance functions that fall under the supervision of the treasurer? Multiple select question. Capital spending Interest rate hedging Managing cash Managing taxes

Capital spending Interest rate hedging Managing cash

Which of the following are finance functions that fall under the supervision of the treasurer? Multiple select question. Managing taxes Capital spending Interest rate hedging Managing cash

Capital spending Interest rate hedging Managing cash

Which of the following are finance functions that fall under the supervision of the treasurer? Multiple select question. Capital spending Managing cash Managing taxes Interest rate hedging

Capital spending Managing cash Interest rate hedging

Which firm is a borrower of funds in the financial markets? Multiple choice question. Lew's is very successful and has excess cash available so is expanding its product line. Ken's has a new product that it is ready to market to the public as soon as financing can be arranged. Sid's has been in business for three years but is now closing its doors. JKL Co. has developed a new product but has discovered there is no market demand for it.

Ken's has a new product that it is ready to market to the public as soon as financing can be arranged.

Which of these are personal financial decisions? Multiple select question. Jessica decided to spend her morning mowing the yard rather than cleaning the house. Kendyll moved money from her checking account to her savings account to earn interest. Samantha financed her mortgage for 20 rather than 30 years to save on interest. Marie decided that leasing a car was cheaper for her than buying a car.

Kendyll moved money from her checking account to her savings account to earn interest. Samantha financed her mortgage for 20 rather than 30 years to save on interest. Marie decided that leasing a car was cheaper for her than buying a car.

Which one of these features is an advantage of a sole proprietorship? Multiple choice question. Less regulation than other business forms Ease of raising capital Personal liability for all business debts Tax-free earnings

Less regulation than other business forms

Which of these are characteristics of a general partnership? Multiple select question. Limited access to capital Double taxation of profits Profits split among the partners Limited personal liability

Limited access to capital Profits split among the partners

Which of these are advantages of the corporate form of business ownership? Select all that apply. Multiple select question. Limited liability Easy access to capital Double taxation Legal status

Limited liability Easy access to capital Legal status

Which one of these is a function assigned to the company treasurer? Multiple choice question. Management of cash Tax reporting Management of accounting records Data processing management

Management of cash

What result should you expect from firms that make wise financial decisions? Multiple choice question. You should expect the wealth of individuals to increase in the future. You should expect the economy to remain stable over time. You should expect firms to decrease their level of output. You should expect investors to lose their excess funds.

You should expect the wealth of individuals to increase in the future.