Unit 4 Exam Reivew

A company had sales revenue of $1,000,000 last year. Its operating expenses were $100,000 and its income tax expense was $10,000. Additionally, the company had $20,000 in sales returns and cost of goods sold of $500,000. What was its gross profit?

480,000

Elementary Online Training had net sales of $750,000, sales returns of $10,000, sales allowances of $5,000, and cost of goods sold of $500,000. If its accounts payable is $50,000 and its average inventory value is $75,000, what is its inventory turnover ratio?

6.67

Melanie's Diner has current assets of $75,000 and current liabilities of $16,500. She is expecting sales this week of $12,500. What is Melanie's Diner's current ratio?

4.45

Get It Company wants to determine how well it is using its assets to generate profits. It knows that its net income for the year was $20,000. It also had $16,000 of cash, $70,000 of inventory, land and buildings valued at $250,000, $50,000 of accounts receivable, and goodwill valued at $20,000. What is Get It Company's return on assets?

4.92%

Alabaster Enterprises has net income of $35,000, total assets of $300,000, common stock of $50,000, and retained earnings of $25,000. Calculate its return on investment.

46.00%

Short Term payments on time

Liquity

Giedre is going on vacation next week and runs to her bank to pick up traveler's checks to use while she is away. These checks are best described as an example of which part of the money supply?

M1

Of the five investment strategies, which has the highest risk?

Market Timing

The two financial markets in which securities are sold are the

Primary and secondary market

Which federal agency regulates U.S. stock exchanges?

SEC

What is a purpose of the Fed's administrative districts?

To provide the member banks with sufficient

Catherine invests her retirement savings in no-load funds, which means she

pays no sales charges

With a ________, a bank specifies how much it is willing to lend the borrower during a specified period of time, and the bank guarantees the loan and is obligated to loan funds up to the credit limit.

revolving credit agreement

A ________ forecast is a prediction about how money will come into and go out of a firm during the next 4 to 12 months.

short-term

Peer-to-peer lending, which allows individuals to borrow and lend money while bypassing financial institutions, is also called

social landing

In a stock ________, a company divides its existing shares into multiple shares.

split

The money derived from the sale of the stocks or bonds goes to

the issuer

A ________ is credit extended by a bank for a specific purpose, such as for constructing a new store or stocking up on new inventory for the season.

transaction loan

Rajya is very pleased by the money she has made from investing in securities. This income can also be described as the

yield

Which activity represents a way that a commercial bank might make money?

offering life insurance

________ ratios determine how much the firm relies on borrowing to finance its operations.

Debt to Owners equity

The ________, a general measure of the movement of U.S. stock prices, is an index of the average of prices of the stocks of 30 large corporations.

Dow Jones

________ is the job of acquiring funds for a firm and managing them to accomplish the firm's objectives.

Financial management

Which statement describes value investing?

I want a steady flow of action

Which statement describes investing for growth?

I want to make money fast and risk

Which statement demonstrates the concept of uniqueness as it relates to money?

The dollar bill cannot be easily copied or copywrited

________ consist(s) of funds acquired from wealthy individuals and institutions that invest in promising start-ups or emerging companies in return for their giving up some ownership.

Venture Capital

Tree Down Landscaping recently took out a mortgage for its new vehicle storage facility. When it prepares its balance sheet, the mortgage will be classified as

a long-term accessibility

If you express interest in buying a security, the seller must first send you

a prospectus

Seren works for Alpha Communications and is responsible for preparing and analyzing the company's financial statements. Seren can be best described as a(n)

accountant

A company's insurance costs, supplies, and utilities are all ________ expenses.

administration

The ________ provides a summary of a company's financial condition on a given date.

balance sheet

Temur recently graduated from college and immediately began building his investment portfolio. He is patient and plans to avoid watching market fluctuations. He believes that he will be able to ride out any market declines and come out ahead in the long run. Which investment strategy does this best represent?

buying and holding

The cash flow statement reports disbursement relating to the firm's operating activities, investing activities, financing activities, and

cash balance

A ________ forecast is a prediction about how money will come into and go out of a firm in the near future, usually the next 1-3 months, and are based on anticipated sales and expenses.

cash flow

All commercial banks are________, meaning they have received government permission to operate, either from the federal government (national banks) or an individual state (state banks).

charatered

When bookkeepers put journal entries into categories in a ledger, they are in which step of the accounting process?

classification

In which step in the accounting process would a company find and sort data from all transactions related to the business?

collection

Yelena just completed her income statement. She included her company's sales revenue, operating expenses, and net income. Which principal part of an income statement did Yelena forget to include?

cost of goods sold

Loren's broker knows Loren doesn't know anything about how the stock market works, so she advises him to trust her to decide when to buy and sell. This illustrates ________ orders.

discrentionary

BlueDot Training just finished paying annual dividends to its stockholders. It uses the remaining money to fund the purchase of the acquisition of a smaller competitor. This best describes an example of

equity financing

In ________, a firm sells its accounts receivable at a discount to a financial institution.

factoring accounts receivable

A(n) ________ is a firm's strategy for reaching its financial goals.

financial plan

Meister Mixers is planning to build a new production facility next year. The owners visit their bank to borrow the money needed to begin the construction process. Which of the reasons a firm borrows money does this best demonstrate?

funds for major investment

Unshakeable Smoothies has an outstanding reputation in the community thanks to its many charitable donations. The company's reputation is an example of ________, a type of ________.

goodwill:intangible asset

Stock market ________ are indexes of stock market prices of groups of stocks that are related in some way.

indicators

Investment bankers sell securities to ________ investors, or large organizations such as pension funds and insurance companies.

institutional

Moments Photography purchased a new fleet of hybrid vehicles last year. When completing the cash flow statement, an accountant would classify the fleet purchase as

investing activities

Which function of money is apparent when it makes economic transactions easier and eliminates the need to barter?

medium of exchange

How often are longer-term securities auctioned?

monthly