FIN 315 CHAPTER 1
WHICH OF THE FOLLOWING ARE CONSIDERED STAKEHOLDERS IN A COMPANY
1) SUPPLIERS 2)GOVERNMENT 3)EMPLOYEES
THE LIFE OF A CORPORATION
IS UNLIMITED
A SOLE PROPRIETORSHIP IS A BUSINESS THAT
OWNED BY ONE PERSON
THE OWNERS OF A CORPORATION ARE CALLED
SHAREHOLDERS
A SOLE PROPRIETOR HAS____PERSONAL LIABILITY FOR ALL BUSINESS DEBTS AND OBLIGATIONS
UNLIMITED
WHICH OF THE FOLLOWING IS INCLUDED IN WORKING CAPITAL
1)ACCOUNTS RECIVABLE 2)CURRENT (SHORT-TERM) ASSETS 3)ACCOUNTS PAYABLE
INVENTORY IS
1)PART OF WORKING CAPITAL 2)CURRENT ASSETS
THE SARBANES-OXLEY ACT REQUIRES CORPORATE OFFICERS TO DO WHICH OF THE FOLLOWING
1) CONFIRM THE VALIDITY OF THE ANNUAL FINANCIAL REPORT 2)ACCEPT RESPONSIBILITY FOR MATERIAL ERRORS IN THE ANNUAL REPORT 3)LIST ANY DEFICIENCIES IN INTERNAL CONTROLS
AN ORGANIZATION MUST PREPARE____ AND BYLAWS WHEN FORMING A CORPORATION
ARTICLES OF INCORPORATION
THE RULES USED BY A CORPORATION TO REGULATE ITS EXISTENCE ARE KNOWN AS
BYLAWS
IN A LARGE FIRMS FINANCIAL ACTIVITY IS USUALLY ASSOCIATED WITH WHICH TOP OFFICER
CHIEF FINANCIAL OFFICER
THE FEDERAL GOVERNMENT TAXES WHICH OF THE FOLLOWING
CORPORATE EARNINGS AND SHAREHOLDERS DIVIDENDS
SOME OF THE CASH FLOW GENERATED BY A FIRM GOES BACK TO THE FINANCIAL MARKETS IN THE FORM OF
DIVIDENDS AND DEBT PAYMENTS
TRUE OR FALSE: IT IS SOMETIMES ARGUED THAT LEFT TO THEMSELVES MANAGERS TEND TO MINIMIZE THE AMOUNT OF RESOURCES OVER WHICH THEY HAVE CONTROL
FALSE
TRUE OR FALSE: THE SARBANES-OXLEY ACT PROVIDES INCENTIVES FOR COMPANIES TO GO PUBLIC IN US MARKETS
FALSE
A CORPORATION IS A DISTINCT____ ENTITY AND AS SUCH CAN HAVE A NAME AND TAKE ADVANTAGE OF THE LEGAL POWERS OF NATURAL PERSONS
LEGAL
BUSINESSES ARE MOTIVATED TO ORGANIZE AS CORPORATIONS BECAUSE STOCKHOLDERS IN A CORPORATION HAVE ___ LIABILITY FOR CORPORATE DEBTS
LIMITED
IN A LIMITED PARTNERSHIP A LIMITED PARTNERS LIABILITY FOR BUSINESS DEBTS IS ___
LIMITED TO THEIR CASH CONTRIBUTION TO THE PARTNERSHIP
CAPITAL BUDGETING IS CONCERNED WITH PLANNING AND MANAGING A FIRMS
LONG TERM INVESTMENTS
IN A SHAREHOLDER-MANAGER RELATIONSHIP WHO IS THE AGENT
MANAGERS
INDIRECT AGENCY COST ARE OFTEN DUE TO LOST
OPPORTUNITIES
WHICH OF THE FOLLOWING STATEMENTS ABOUT OWNERSHIP TRANSFER IN A CORPORATION IS CORRECT
OWNERSHIP IS TRANSFERRED BY GIFTING OR SELLING SHARES OF STOCK
A BUSINESS WITHOUT SEPARATE LEGAL AUTHORITY FORMED BY TWO OR MORE PEOPLE IS KNOWN AS A
PARTNERSHIP
A LIMITED COMPANY IS TAXED LIKE A ____ AND ITS OWNERS HAVE _____ LIABILITY
PARTNERSHIP; LIMITED
WHEN A CORPORATION RAISES FUNDS IN THE FINANCIAL MARKETS, THE TRANSACTION OCCURS ON THE
PRIMARY MARKETS
WHICH OF THE FOLLOWING PARTIES WOULD BE THE LAST PARTY TO RECEIVE PAYMENT IF A FIRM WERE TO CLOSE ASSUME ALL PARTIES HAVE A LEGITIMATE CLAIM ON THE FIRMS ASSETS
SHAREHOLDERS
____ ARE FREQUENTLY USED TO ENCOURAGE KEY MANAGERS TO MAXIMIZE THE VALUE OF THE FIRMS STOCK
STOCK OPTIONS
A CORPORATION RECIVES CASH FROM FINANCIAL MARKETS BY SELLING___ AND __
STOCKS AND BONDS
THE LIABILITY OF SHAREHOLDERS IN A CORPORATION IS LIMITED TO WHICH OF THESES
THE AMOUNT THE SHAREHOLDER INVESTED IN THE CORPORATION
ORGANIZED AUCTION MARKETS INCLUDE
THE NEW YORK STOCK EXCHANGE
WHICH ONE OF THESE MOTIVATES MANAGERS TO MAKE GOOD DECISIONS
THREAT OF HOSTILE TAKE OVER
FROM THE STOCKHOLDERS PERSPECTIVE WHAT IS THE PRIMARY PURPOSE OF AWARDING STOCK OPTIONS TO MANAGERS
TO INCREASE SHAREHOLDERS WEALTH
THE MAIN GOAL OF FINANCIAL MANAGEMENT
TO MAXIMIZE CURRENT VALUE PER SHARE OF EXISTING STOCK
THE OFFICER RESPONSIBLE FOR MANAGING THE FIRMS CASH FLOWS IS THE
TREASURER
CORPORATIONS IN OTHER COUNTRIES ARE OFTEN CALLED
1)JOINT STOCK COMPANIES 2)PUBLIC LIMITED COMPANIES
THE GOAL OF A BUSINESS IS TO ______ EXISTING OWNERS EQUITY
MAXIMIZE
WHICH OF THE FOLLOWING COMPANIES WERE INVOLVED IN CORPORATE SCANDALS THAT LED TO SARBANES OXLEY
1)WORLDCOM 2)ENRON 3)TYCO
THE POSSIBLE GOAL OF PROFIT MAXIMIZATION
1)WOULD PROBABLY BE THE MOST COMMONLY SHIFTED GOAL FOR A BUSINESS 2)CAN BE ACHIEVED BY COST CUTTING
WHICH ONE OF THESE IS AN IMPORTANT MECHANISM USED BY UNHAPPY STOCKHOLDERS TO REPLACE CURRENT MANAGEMENT
PROXY FIGHT
BECAUSE SHAREHOLDERS GET PAID LAST AFTER ALL OTHER OBLIGATIONS ARE SATISFIED, THEY ARE OFTEN CALLED
RESIDUAL OWNERS
WHEN A CORPORATION IS FORMED IT IS GRANTED WHICH OF THE FOLLOWING RIGHTS
1) LEGAL POWER TO SUE 2)THE ABILITY TO ISSUE STOCK 3)STATE CITIZENSHIP FOR JURISDICTIONAL PURPOSES
WHICH OF THE FOLLOWING ARE AMONG THE MOST IMPORTANT QUESTIONS TO BE ASKED WHEN A BUSINESS IS STARTED
1) WHERE WILL LONG TERM FINANCING BE OBTAIN TO PAY FOR INVESTMENTS 2)WHAT LONG TERM INVESTMENTS SHOULD BE MADE 3)HOW WILL EVERYDAY FINANCIAL ACTIVITIES BE HANDLED
WHAT ARE THE TWO BASIC CLASSIFICATIONS UNDER WHICH MOST POTENTIAL FINANCIAL GOALS FALL
1)EARNING OR INCREASING PROFITS 2)CONTROLLING RISK
THE CONTROLLER IS RESPONSIBLE FOR WHICH OF THE FOLLOWING TASKS
1)FINANCIAL ACCOUNTING 2)TAX REPORTING
THE RELATIONSHIP BETWEEN STOCKHOLDERS AND MANAGEMENT CAN BEST BE DESCRIBED AS ______RELATIONSHIP
AGENCY
THE COSTS INCURRED DUE TO A CONFLICT OF INTEREST BETWEEN STOCKHOLDERS AND MANAGEMENT ARE CALLED
AGENCY COSTS
SINCE OWNERSHIP IN A CORPORATION CAN BE DISPERSED OVER A HUGE NUMBER OF STOCKHOLDERS IT CAN BE ARGUED THAT_____ EFFECTIVELY CONTROLS THE FIRM
MANGEMENT
WHICH ONE OF THESE PROVIDES A MANAGER AN INCENTIVE TO PERFORM WELL
PROMOTIONS
WHICH OF THE FOLLOWING SHOW WHY A CORPORATION IS THE MOST IMPORTANT FORM OF BUSINESS
1) CORPORATIONS CAN ENTER INTO CONTRACTS 2)CORPORATIONS CAN SUE AND BE SUED 3)A CORPORATION IS A SEPARATE LEGAL ENTITY WITH THE ABILITY TO ACQUIRE AND EXCHANGE PROPERTY
A GOOD FINANCIAL DECISION WILL DO WHICH OF THE FOLLOWING
1) INCREASE MARKET VALUE OF SHAREHOLDERS EQUITY 2)INCREASE THE VALUE OF THE FIRMS EXISTING STOCK
A GENERAL PARTNERSHIP HAS WHICH OF THE FOLLOWING CHARACTERISTICS
1) IT IS DIFFICULT TO TRANSFER OWNERSHIP 2)EACH OWNERSHIP HAS UNLIMITED LIABILITY FOR ALL FIRM DEBTS
IN A LARGE CORPORATION, THE FINANCIAL MANAGER IS PRIMARILY RESPONSIBLE FOR
1)FINANCING DECISIONS 2)LONG TERM INVESTMENT DECISIONS 3)FINANCIAL ASPECTS OF OPERATIONS SUCH AS COLLECTIONS OF ACCOUNTS RECIVABLE
WHICH OF THE FOLLOWING ARE IMPORTANT WHEN CONSIDERING A PARTNERSHIP
1)FUND RAISING LIMITATIONS 2)PERSONAL LIABILITY FOR FIRM DEBTS 3)TAXATION OF PARTNERSHIP INCOME
WHICH OF THE FOLLOWING ARE INCLUDED IN A FIRMS CAPITAL STRUCTURE
1)LONG TERM DEBT 2) EQUITY
WHICH OF THE FOLLOWING CAN BE USED TO ENCOURAGE MANAGERS TO ACT IN THE BEST INTERESTS OF SHAREHOLDERS
1)MANAGERIAL COMPENSATION TIED TO PERFORMANCE 2)BETTER PROSPECTS OF PROMOTION 3)STOCK OPTIONS AND BONUSES