Bus100 test 2

Which of the following is an example of an institutional investor?

A mutual fund

In the context of balance sheets, assets such as machinery, building, and equipment have a limited useful life, so accountants subtract _____ from the original value of these assets, to reflect the fact that these assets are being used up over time.

Accumulated depreciation

A _____ is a requirement a lender imposes on the borrower as a condition of the loan.

Covenant

A firm's _____ include cash and other assets expected to be converted into cash in the following year.

Current assets

In the context of liquidity ratios, a firm's _____ are the debts that must be repaid in the following year.

Current liabilities

Balance sheets usually organize liabilities into two broad categories, which are:

Current liabilities and long-term liabilities.

When a company takes out a bank loan, or issues and sells corporate bonds, it is relying on _____.

Debt financing

A _____ is a type of franchising arrangement in which the franchiser makes a product and licenses the franchisee to sell it

Distributorship

When a business that is incorporated in one state does business in other states, it is called a(n) _____ in the state where it is incorporated.

Domestic corporation

_____ indicate the cash a firm spends, or other assets it uses up, to carry out the business activities necessary to generate its revenue.

Expenses

Financial managers use _____ to assess the financial strengths and weaknesses of their firm.

Financial ratio analysis

Financial capital refers to the

Funds a firm uses to acquire its assets and finance its operations.

_____ perform a variety of accounting functions for local, state, or federal agencies, such as the Internal Revenue Service (IRS) and the Federal Deposit Insurance Corporation (FDIC).

Government accountants

What does a money market mutual fund do?

It pools funds from many investors and uses these funds to purchase very safe, highly liquid securities

A _____ is a partnership arrangement that includes at least one general partner and at least one limited partner.

Limited Partnership

_____ provide analysis and prepare reports and financial statements for their organization.

Management accountants

_____ measures the income earned per dollar invested by the stockholders of a firm.

Return-on-equity

The _____ of a company is a simple statement that shows how the accumulated revenues that have been reinvested in the company have changed from one accounting period to the next.

Statement of retained earnings

A ____ ratio is a leverage ratio

The debt ratio

Which of the following is a disadvantage of franchising for a franchisee?

The negative halo effect

In the context of accounting, which of the following best defines cost?

The value of what is given up in exchange for something else

The _____ summarizes the financial results of a firm's operations over a given period of time.

. Income statement

_____ is a type of divestiture in which a firm converts a particular unit or division into a separate company and issues stock in the newly created corporation to outside investors.

A carve-out

The three kinds of basic financial statements that are prepared in financial accounting are:

Balance sheet, income statement, and statement of cash flows.

A _____ can help a firm evaluate how much internal financing (funds generated by earnings) will be available for a planning period

Budget income statement

_____ is a management tool that explicitly shows how a firm will acquire and use the resources needed to achieve its goals over a specific time period

Budgeting

When people use the term "corporation" without specifying which type, they are generally referring to a(n) _____.

C corporation

Which of the following is a key item that is most likely covered in a franchise agreement?

Conflict resolution

The basic rules governing how a corporation is organized and how it conducts its business are known as _____.

Corporate bylaws

A _____ is a form of business ownership in which the business is considered a legal entity that is separate and distinct from its owners.

Corporation