business quiz 1

Which of the following makes comparisons of the financial conditions at multiple organizations possible: a) Accounting standards b) Bookkeeping c) Source documents d) Trial balance

Accounting standards

Determining which projects a business should invest in is known as a) capital budgeting. b) return on capital. c) the cash conversion cycle. d) capital structuring.

capital budgeting.

What type of accounting method would most likely be used by a small business owner who does not offer credit? a) Accrual method b) Cash method c) Check method d) COD method

cash method

Managing information for business continuity is important in case of a) a drop in stock price b) low sales volume. c) high employee turnover. d) a disaster

a disaster

Decisions about financing refer to the a) accounts receivable. b) accounting department. c) administration of assets d) acquisition of funds.

acquisition of funds.

A creditor is most likely to examine a business's financial accounting records if the business is a) applying for a bank loan. b) selecting a new market. c) complying with regulations. d) using cash accounting.

applying for a bank loan

Information management can be a challenge because the business world is a) completely dependent on paper files. b) suffering from a lack of information c) not open to new technology. d) constantly changing

constantly changing

The finance function ensures that the company's financial goals are a) acceptable to the marketing department. b) easy to accomplish. c) related to product development d) in line with organizational priorities.

in line with organizational priorities.

Finance is the business function that involves managing a) production b) money c) information d) marketing

money

The finance function would definitely be involved in a decision regarding a) new business projects and strategies. B) hiring c) personal selling. d) public relations and publicity.

new business projects and strategies.

Accounting records for a business show that the week's total sales revenues were $125,000. Cash sales accounted for $50,000 and credit sales, $75,000. This is an example of a) classifying financial information. b) the accrual method of accounting. c) an income statement. d) the cash accounting method.

the accrual method of accounting.

Wireless networks are now more common due to a) increased distribution of the workforce. b) increased competition. c) information overload. d) government regulations requiring them.

increased distribution of the workforce.

To keep communication flowing with other departments, the finance function depends on a) production b) information systems. c) accounts receivable. d) marketing

information systems.

The administration of assets refers to decisions about a) investments b) accounting C) financing d) spending

investments

Which of the following is a true statement about information: a) It has no value for an organization. b) it is simple to manage c) it is data put into a useful form d) it is the same thing as data

it is data put into useful form

Which of the following is a capital investment decision: a) How to manage inventory b) How to finance investments c) How to manage cash flow d) How to handle accounts payable

How to finance investments

The process of keeping the financial records of a business is known as a) accounting b) controlling c) financing d) bookkeeping

accounting

Money the business owes is known as a) equity B) accounts payable. c) assets d) accounts receivable.

accounts payable.

For an accounting system to be useful to the business, the accounting information it contains must be a) recorded using the accrual method. b) approved by the chief executive officer. c) posted by an accountant. d) accurate and up to date.

accurate and up to date.

The cash conversion cycle should be a) as long as possible. b) as short as possible. c) on an upward trend. d) at equilibrium.

as short as possible.

A risk involved with information management is being unprepared for a government a) loan b) tax break c) audit d) election

audit

Appropriate information management helps a business build a good reputation by a) being consistent b) offering quality products. c) eliminating all mistakes. d) charging high prices.

being consistent

How does appropriate information management affect a business's relationship with its customers? a) businesses serve customers more effectively b) Businesses earn higher profits. c) Businesses make better financial decisions. d) Businesses lose focus on customers.

businesses serve customers more effectively

The overall purpose of accounting is to a) maintain accurate reports b) keep track of sales c) control the finances of the business d) compile the business's expenses

control the finances of the business

Which of the following actions is a part of information management: a) observing competitors b) disseminating information c) creating data d) creating technology

disseminating information

Information usually comes in either physical form or __________ form. a) verbal b) electronic c) note card d) book

electronic

Selling shares in the company to raise money for a new venture is referred to as __________ funding. a) debt b) accounts payable c) dividend d) equity

equity

A risk involved with information management is leaving customers unprotected from a) faulty products. b) high prices c) identity theft d) bad customer service.

identity theft

Appropriate information management saves businesses time and money by a) increasing paper trails b) increasing information overload c) maintaining higher levels of productivity d) maintaining yearly raises for employees

maintaining higher levels of productivity

Which of the following groups makes regular use of a business's managerial accounting information: a) creditors b) customers c) managers d) investors

managers

Checks, receipts, invoices, and purchase orders are examples of a) department ledgers. b) accounting standards c) source documents. d) financial statements

source documents.

Which of the following presents the first three steps in the accounting cycle in the correct order: a) Analyze, post, and journalize b) Post, journalize, and analyze c) Post, analyze, and journalize d) Analyze, journalize, and post

Analyze, journalize, and post

Which of the following categories of information are found on a balance sheet: a) Revenues, expenses, profit b) Assets, liabilities, margin c) Assets, liabilities, owner's equity d) Income, expenditures, profit

Assets, liabilities, owner's equity

A bank denies a business owner's application for credit saying, "We feel that you would be unable to make the monthly payments because of your other debts." What financial report did the bank review? a) Budget b) Income statement c) Balance sheet d) Operating budget

Balance sheet

Which of the following is a true statement: a) Bookkeeping does not use computers. b) Bookkeeping is limited to information on sales. c) Bookkeeping records business transactions. d) Bookkeeping is the same as accounting.

Bookkeeping records business transactions.

The finance function is usually responsible for which of the following processes: a) Budgeting b) Operations c) Manufacturing d) Research

Budgeting

Which of the following is a key component of managing working capital: a) Financing b) Cash conversion cycle c) Capital budgeting d) Capital structure

Cash conversion cycle

Which of the following financial reports provides estimates of when, where, and how much money will come into and out of a business next year: a) Bank statement b) Balance sheet c) Income statement d) Cash flow statement

Cash flow statement

What accounting record would summarize a business's profit or loss for a previous year? a) Balance sheet b) Income statement c) Bank statement d) Inventory record

Income statement

Which of the following is a trend in information management: a) Decreased number of electronic documents b) Increased number of workers in the office c) Decreased competition d) Increased compliance laws and regulations

Increased compliance laws and regulations

Which of the following is a true statement about a management information system (MIS): a) It is the same thing as an information management program b) It does not assist with a business's information management program. c)It may be one part of a business's overall information management program. d) It includes people, processes, and practices.

It may be one part of a business's overall information management program.

How does the finance function relate to company spending? a) It produces reports about spending. b) It plans and controls spending. c) It does not relate to spending. d) It spends on investments only.

It plans and controls spending.

Which of the following is a requirement for a good accounting system: a) It should eliminate the need for an accountant b)It should be updated annually. c) It should be replaced every two or three years. d) It should provide needed information quickly

It should provide needed information quickly

Two employees used a business's computerized accounting system to change some records. They were able to steal $50,000 from the business because the accounting system lacked which of the following: a) Printed financial statements b) An affordable price c) Protection from theft and fraud d) A manual system as backup

Protection from theft and fraud

Which of the following is a measure of how well a business generates cash flow: a) Return on capital b) Accounts payable c) Capital structure d) Accounts receivable

Return on capital

Which of the following U.S. laws relates to information management a) The Landrum-Griffin Act b) The Taft-Hartley Act c) The Sherman Anti-Trust Act d) The Sarbanes-Oxley Act

The Sarbanes-Oxley Act

Why are accurate accounting records important to a business? a) They prevent any financial losses. b) They increase the return on investments. c) They give the business an image of success. d) They show how the business is doing.

They show how the business is doing.

Which of the following is an example of a type of information a business must manage: a) accounting records b) competitors' payrolls c) employees' personal bills d) government spending

accounting records

Money owed to the business is known as a) accounts payable. b) accounts receivable. c) equity d) assets

accounts receivable.

What type of accounting method would most likely be used by a large business that has a large number of outstanding loans and customer charge accounts? a) COD method b) Cash method c) Accrual method d) Check method

accrual method

Who is responsible for information management? a) An information technology manager b) everyone in the organization c) The chief executive officer d) The information management department

everyone in the organization

When return on capital is positive, the company is a) low on cash. b) growing in value. c) paying out dividends. d) losing value.

growing in value.

Riley is an employee of the federal government who studies the financial reports of major businesses in a specific industry. The government's purpose in assigning this task to Riley is to a) determine creditworthiness. b) decide if funds are available for pay raises. c) identify trends in the industry. d) search for profitable investments.

identify trends in the industry.

Managing information regarding copyrights and trademarks helps a company to preserve its a) inventory b) customers c) correspondance d) identity

identity

Carson is a staff accountant, and he needs to look at last year's tax return. However, he can't find it anywhere. Which information management guideline is not being followed in this situation? a) Set and consistently follow organizational information management practices. b) Prioritize information management needs according to business needs. c) Make sure that information is accurate. d) make sure that information is retrievable

make sure that information is retrievable

Information management can be a challenge because a) there is only one right way to do it. b) there is often not enough information to manage. c) many people don't understand what it is d) no one wants to participate in it.

many people don't understand what it is

Accounting is distinct from finance because its main focus is on a) money management decisions. b) administration of assets. c) acquisition of funds. d) recordkeeping activities.

recordkeeping activities.

a benefit of informed decisions is that they a) reduce a business's risk b) are usually bad decisions c) cost less money d) hurt a business's chances at competing

reduce a business's risk

The goals of the finance function are to ensure profitability and a) reduce risks. b) give out information. c) manufacture raw materials d) advertise products.

reduce risks

A company's current balance of assets and liabilities falls under the focus of a) the cash conversion cycle. b) return on capital. c) capital investment decisions. d) working capital management.

working capital management.