MIE 201 Exam 5

The FDIC insures personal bank accounts up to a maximum of Blank______. Multiple choice question. $25,000 $50,000 $100,000 $250,000

$250,000

The companies listed on the Dow Jones Industrial Average make up about Blank______ of the total value of the NYSE. Multiple choice question. 25 percent 40 percent 80 percent 10 percent

25 percent

During the board meeting, the members discussed the company's dividend. What would this discussion involve? Multiple choice question. A cash rebate distributed among lenders The interest accrued on a loan Financial assistance provided by the government A payment of additional shares or cash to stockholders

A payment of additional shares or cash to stockholders

What is the main distinguishing factor between accountants and bookkeepers? Multiple choice question. Accountants analyze and interpret financial information and bookkeepers do not. Bookkeepers record financial information and accountants do not. Accounting is more mechanical and narrow in focus compared to bookkeeping. Bookkeepers require additional training beyond a college accounting degree and accountants do not.

Accountants analyze and interpret financial information and bookkeepers do not.

What is a debenture? Multiple choice question. The interest rate on a bond Another name for a bond contract A secured bond An unsecured bond

An unsecured bond

If Joe, the owner of Joe's Flowers, has a large stash of cash, he might choose to store the money in a(n) _____ for six months, one year, or even seven years and receive a predetermined rate of interest. Multiple choice question. time deposit demand deposit CD NOW account

CD

What are three characteristics of a certificate of deposit? Multiple select question. Pays lower interest rates than typical savings account Covers periods such as six months, one year, or seven years Type of savings account Also known as demand deposit Substantial penalty for premature withdrawal

Covers periods such as six months, one year, or seven years Type of savings account Substantial penalty for premature withdrawal

Banks are able to accomplish "paperless" transactions through the use of Blank______. Multiple choice question. a mutual fund the FDIC SECs EFTs

EFTs

What is considered to be one of the most important facets of financial management? Multiple choice question. Ensuring that there is always a balance between the firm's current liabilities and assets with its long-term liabilities and assets Minimizing the amount of working capital and transaction balances Prioritizing the firm's debts so that the business pays as little penalties as possible Ensuring that there are sufficient (but not excessive) funds on hand to meet the company's obligations

Ensuring that there are sufficient (but not excessive) funds on hand to meet the company's obligations

What are three descriptors of "the Fed"? Multiple select question. Elected branch of the federal government Prints U.S. currency Established in 1913 Regulates the U.S. financial industry Part of state government Organized into 12 regions

Established in 1913 Regulates the U.S. financial industry Organized into 12 regions

The _____ was established in 1933 and insures individual bank accounts for Americans. Multiple choice question. FDIC NCUA SEC IRS

FDIC

Which nonbank financial service is most closely associated with the use of premiums? Multiple choice question. Diversified firms Pension funds Brokerage firms Insurance companies

Insurance companies

Select from the following those items that characterize a certified public accountant. (Select all that apply) Multiple select question. May file tax returns Is certified through the federal government Reason: A CPA is certified by the states. May provide opinions regarding the accuracy of financial statements Must be self-employed to avoid conflicts of interest Reason: CPAs may either be self-employed or work for another firm. May complete audits of corporate financial records

May file tax returns May provide opinions regarding the accuracy of financial statements May complete audits of corporate financial records

What are three important functions of money? Multiple select question. Medium of exchange Presentation mechanism Show of power Measure of value Store of value

Medium of exchange Measure of value Store of value

What are three characteristics of credit unions? Multiple select question. Members are allowed to share in the credit union's profits. Members are allowed to vote for directors. They are also called "thrifts." They are considered financial institutions. They are owned by state governments.

Members are allowed to share in the credit union's profits. Members are allowed to vote for directors. They are considered financial institutions.

Purchase or sale of open market investments is performed by the Federal Reserve Bank located in what city? Multiple choice question. New York Dallas Philadelphia Boston

New York

Because most corporate bonds and all U.S. government debt securities are traded in the _____ market, this market regularly accounts for the largest total dollar value of all the secondary markets. Multiple choice question. NASDAQ OTC NYSE ICE

OTC

Which two terms are synonymous with "income statement"? Multiple select question. Trial balance Statement of cash flows Balance sheet P&L statement Operating statement

P&L statement Operating statement

What are the three types of asset utilization ratios? Multiple select question. Total liabilities turnover Receivables turnover Total asset turnover Inventory turnover Retained earnings turnover

Receivables turnover Total asset turnover Inventory turnover

What are the two largest stock markets in the United States? Multiple select question. The New York Stock Exchange The Chicago Stock Exchange The OTC market The NASDAQ

The New York Stock Exchange The NASDAQ

Who owns and controls a credit union? Multiple choice question. The state government in which it operates The credit union's depositors The federal government The board that created the credit union

The credit union's depositors

Which two statements are true about commercial banks? Multiple select question. Their loans tend to be small in order to retain a large percentage of their deposits Their main source of funds comes from checking and savings accounts They are the largest of all financial institutions They are owned and controlled by depositors

Their main source of funds comes from checking and savings accounts They are the largest of all financial institutions

What is the primary purpose of money in a society? Multiple choice question. To serve as a value for services To enable a person or organization to trade money for a good or a service To trade one good or service for another good or service of similar value To serve as a limited-supply commodity that offers a service of value

To enable a person or organization to trade money for a good or a service

Select from the following the two formats of balance sheets. Multiple select question. Vertical Traditional Equal Modern Parallel

Vertical Traditional

In response to third-party payment tools like Apple Pay, Early Warnings Services introduced Blank______ that is used by banks to make cash transfers easier for customers. Multiple choice question. Venmo PayPal Zelle Bitcoin

Zelle

The fee that an insurance company charges for coverage is known as _____. Multiple choice question. collateral a premium a mortgage a pension

a premium

_____ is likely the most important characteristic of money. If businesses do not take money as payment, consumers will have to find another means of paying for purchases. Multiple choice question. Divisibility Portability Acceptability Stability

acceptability

Organizations evaluate their operations through the recording, measurement, and interpretation of financial information. This process is known as _______. Multiple choice question. processing finance bookkeeping accounting

accounting

Joan owns a flower shop. As a small business owner, she carefully manages the finances of her business. If Joan purchases flowers from a local producer for $500 and agrees to pay for the flowers within a month, Joan will list the $500 bill as _______ on her balance sheet. Multiple choice question. accounts payable long-term debt revenue accounts receivable

accounts payable

Which two characteristics are especially important in accounting practices? Multiple select question. philanthropy accuracy flexibility transparency

accuracy transparency

An EFT would be accomplished by using Blank______. Multiple choice question. collateral a mutual fund an ATM a savings account

an ATM

Receivables turnover is a type of _____ ratio. Multiple choice question. liquidity profitability asset utilization debt utilization

asset utilization

Receivables turnover is a type of _____ ratio. Multiple choice question. profitability liquidity asset utilization debt utilization

asset utilization

To be most effective, liquidity ratios should be examined in conjunction with ______. Multiple choice question. debt utilization ratios per share ratios asset utilization ratios profitability ratios

asset utilization ratios

To be most effective, liquidity ratios should be examined in conjunction with ______. Multiple choice question. profitability ratios debt utilization ratios per share ratios asset utilization ratios

asset utilization ratios

Current____ are short-term resources such as cash, investments, accounts receivable, and inventory.

assets

Economic resources owned by a firm are called Blank______. Multiple choice question. goods assets credits endowments

assets

Refrigerated display cases, commercial meat slicers, and walk-in cold storage units are Blank______ of Julie's Deli in downtown Portland. Multiple choice question. capital income assets liabilities

assets

Refrigerated display cases, commercial meat slicers, and walk-in cold storage units are Blank______ of Julie's Deli in downtown Portland. Multiple choice question. capital liabilities assets income

assets

What are two commonly-known financial statements a company would use? Multiple select question. balance sheet personnel application marketing survey income statement

balance sheet income statement

Managers of most firms tend to keep debt-to-asset levels ______. Multiple choice question. above 90% above 70% below 10% below 50%

below 50%

A(n) _____is a debt instrument that larger companies and governments sell to raise long-term funds.

bond

Heather works at Big City Bus Corp. It is her job to record the day-to-day financial transactions of the company, including paying utilities and accepting bill payments. Heather works as a _____. Multiple choice question. creditor forensic accountant bookkeeper private accountant

bookkeeper

Securities trade in the secondary market by _____. Multiple choice question. businesses brokers the original organization stockholders

brokers

Quinn works for a manufacturing company and is in the process of making a decision about the funding of future projects. Since the company has outlined more potential projects than can actually be funded, Quinn must select those projects that promise the greatest future return for the company. Quinn is involved in the process of _______. Multiple choice question. strategic goal setting factoring capital budgeting asset budgeting

capital budgeting

When the board of directors distributes some of a corporation's profits to the owners, it issues them as ______. Multiple choice question. retained earnings equity holdings cash dividend payments common stock

cash dividend payments

An individual who has been certified by the state in which he or she practices and has the right to express, officially, an unbiased opinion regarding the accuracy of a client's financial statements works as a(n) _____. Multiple choice question. certified public accountant independent auditor certified bookkeeper corporate tax official

certified public accountant

In a credit union, a share draft account is the name given to a _____. Multiple choice question. money market account checking account 401K account savings account

checking account

Which banking institution is the largest and oldest of all financial institutions and relies mainly on checking and savings accounts as its major source of funds? Multiple choice question. Savings and loan association Commercial bank Credit union Federal Deposit Insurance Corporation (FDIC)

commercial bank

A written promise from one company to another to pay a specific amount of money is the definition of ______. Multiple choice question. marketable securities commercial paper Treasury bills commercial certificates of deposit

commercial paper

Cash, investments, accounts receivable and inventory are all examples of ______. Multiple choice question. working management capital operating funds current liabilities current assets

current assets

Two common choices for raising funds to pay for long-term assets are equity financing and _____ financing. Multiple choice question. capital principal debt asset

debt

Ratios that measure how much debt an organization is using relative to other sources of capital, such as owners' equity are ______ ratios. Multiple choice question. debt utilization profitability asset utilization liquidity

debt utilization

A checking account is also called a(n) _____. Multiple choice question. interest account demand deposit paper account certificate of deposit

demand deposit

The reserve requirement is the percentage of ______. Multiple choice question. a financial institution's loans that must be used for local development deposits that must be kept in reserve by banking institutions the federal budget that must be spent through banking accounts a financial institution's expenses that must be kept on hand

deposits that must be kept in reserve by banking institutions

Nonbanks are financial organizations that _____. Multiple choice question. do not work with consumers are guaranteed by the FDIC regulate the money supply do not accept deposits

do not accept deposits

True or false: All financial statements follow the exact same format under government regulations.

false

True or false: An expense account provides an explanation of how the company's cash changed from the beginning of the accounting period to the end.

false

True or false: CPAs pass and obtain their certification through the federal government.

false

True or false: The most common tool used by the Federal Reserve is to change the reserve requirement.

false

Overall, a company must be able to cover both Blank______ costs or it will eventually fail. Multiple choice question. employee and shareholder goods and services principal and interest financial and operating

financial and operating

A company would rely on ratio analysis to calculate the organization's: Multiple choice question. projected sales. projected income tax. dividend payout. financial health.

financial heath

Production facilities, office equipment, and heavy machinery are assets that are expected to last many years and are called long-term or Blank______ assets. Multiple choice question. current fixed flex principal

fixed

The accounting cycle is a _____-step process. Multiple choice question. two four five three

four

A demand deposit (also known as a checking account) is referred to as such because ______. Multiple choice question. depositors can demand a certain rate of interest it is the only account that demands regulation by the Federal Reserve the Federal Reserve can demand a certain level of deposit funds may be withdrawn by its owner without advance notice

funds may be withdrawn by its owner without advance notice

_____ is an intangible asset that reflects an organization's positive reputation. Multiple choice question. Goodwill Equity A dividend Cash

goodwill

By its very design, the ______ offers one of the clearest possible pictures of the company's overall revenues and the costs incurred in generating those revenues. Multiple choice question. income statement balance sheet trial balance statement of cash flows

income statement

Which report summarizes an organization's profitability over a specific period, which may be a week, a month, or a year? Multiple choice question. Balance sheet Ratio analysis Income statement Statement of cash flows

income statement

A ratio analysis combines information from which two reports? Multiple select question. income statement balance sheet statement of cash flows owner's equity report

income statement balance sheet

An increase in the reserve requirement will ______ the amount of money a bank would need to keep in reserves. Multiple choice question. decrease increase not change

increase

What type of ratio measures the speed with which a company can turn its assets into cash in order to meet its debts? Multiple choice question. Liquidity ratio Debt utilization ratio Leverage ratio Profitability ratio

liquidity ratio

The goal of double-entry bookkeeping is to ______. Multiple choice question. keep owner's equity to a minimum make sure that assets are always greater than liabilities maintain the balance of the accounting equation eliminate liabilities from the accounting equation

maintain the balance of the accounting equation

The internal use of accounting statements by managers in planning and directing the organization's activities is known as _____accounting.

managerial

The internal use of accounting statements by managers in planning and directing the organization's activities is referred to as ______. Multiple choice question. plan accounting managerial accounting bookkeeping cost accounting

managerial accounting

The Fed controls the amount of money available in the U.S. economy through _____. Multiple choice question. fiscal policy economic policy monetary policy market policy

monetary policy

Anything that can be used for payment of goods and services is defined as ______. Multiple choice question. money barter finance trade

money

Which type of investment tool should Carrie use if she wants to pool her small investment of $1,000 with other people who also have a small investment? Multiple choice question. insurance premium mutual fund savings account credit union

mutual fund

Which tool, used by the Federal Reserve Board to control the money supply, is the most common and is performed almost daily? Multiple choice question. Employing credit controls Changing the discount rate Changing the reserve requirements Open market operations

open market operations

Ali owns stock in a U.S. publicly-traded company. As a shareholder she is a(n) _____ of the corporation. Multiple choice question. employee supplier owner creditor

owner

Data used by investors to compare the performance of one company with another on an equal, per share basis is the definition of ______. Multiple choice question. per share data dividends per share earnings per share return on assets

per share data

What are the four steps in the accounting cycle? Multiple select question. prepare financial statements analyze corporate debt examine source documents post transactions record transactions assess company value

prepare financial statements examine source documents post transactions record transactions

The new issue market is called a(n) _____ market because the sale of the securities is for the first time. Multiple choice question. secondary investment primary initial

primary

What type of ratios measure how effectively a firm is using its various resources to achieve profits? Multiple choice question. Liquidity Leverage Profitability Activity

profitability

______ ratios measure how much operating income an organization is able to generate relative to assets, owners' equity, and sales. Multiple choice question. Asset utilization Profitability Debt utilization Liquidity

profitability

______ markets handle the trading of securities between investors rather than the company that issued the stock or bonds. Multiple choice question. Par Spot Secondary Primary

secondary

An individual wants to sell his or her stocks and bonds to other investors. This is made possible through ______. Multiple choice question. public offerings new issues investment banking securities markets

securities markets

Investors may use per _____data to compare the performance of one company with another on an equal, or per share, basis.

share

The term working capital management refers to the continuous flow of _____ and _____ through an organization, which are said to be "working." (Be sure to select two items from the list.) Multiple select question. fixed assets owners' equity short-term liabilities short-term assets

short-term liabilities short-term assets

The ______ explains how the company's cash changed from the beginning of the accounting period to the end. Multiple choice question. cost of goods sold balance sheet income statement statement of cash flows

statement of cash flows

The organization in charge of regulating the banking and financial industry in the United States is ______. Multiple choice question. the American Banking Association the Federal Reserve Board the U.S. Mint the U.S. Congress

the Federal Reserve Board

Finance is defined as ______. Multiple choice question. money stored in an account at a bank or other financial institution that can be withdrawn without advance notice accounts with funds that usually cannot be withdrawn without advanced notice the study of how money is managed by individuals, companies, and governments anything generally accepted in exchange for goods and services

the study of how money is managed by individuals, companies, and governments

Accountants who follow ethical practices demonstrate integrity and are respected for their work. What characteristics would be evident in ethical accounting practices? Multiple choice question. transparency conspiracy mimicry flexibility

transparency

True or false: Historically, items as diverse as salt, fish, rocks, and shells have been used by various cultures as money.

true

True or false: In order to keep the accounting equation in balance, each business transaction must be recorded in two separate accounts.

true

True or false: People both inside and outside of an organization use accounting tools to evaluate organizational operations.

true

True or false: The Fed is tasked with keeping the money supply and the money demand in balance.

true

True or false: When considering the risk of an overseas investment, a company must take into account the political climate of the region.

true

What is an example of a P2P electronic payment tool? Multiple choice question. money market Treasury bill Venmo personal check

venmo

The _____ format balance sheet is newer and gaining wide acceptance. It shows assets on the top followed by liabilities and owners' equity. Multiple choice question. horizontal pyramid diagonal vertical

vertical

How often are T-bills issued? Multiple choice question. Daily Weekly Monthly Yearly

weekly