finance 3500 unit 1 exam
ch 3 quiz: total owners' equity can be found in which section of a cash flow statement prepared using the direct method?
TOTAL owners' equity does not appear on a cash flow statement
ch 4 quiz: the salary paid to a CEO of a Fortune 500 company is an example of ...
general and administrative expenses (not cost of service bc they are more overseeing)
ch 4 textbook: the difference between revenue and costs of service is ...
gross profit
ch 2 quiz: any start up business will need some cash to cover expenses until cash is received from customer purchases
true
ch 2 quiz: manufacturing businesses are engaged in the process of turning raw materials into finished goods
true
ch 2 quiz: professional service businesses sell the time and skills of their employees
true
ch 2 textbook: retail businesses sell products directly to consumers
true
ch 3 quiz: the cash flow statement tells a business where cash is coming from and where cash is being spent
true
ch 4 quiz: the profit and loss statement, income statement, and statement of operations all refer to the same financial statement
true
ch 3 quiz: which of the following cannot be determined from a summary cash flow statement: uses of cash, types of cash, changes in cash balance, sources of cash
uses of cash
ch 4 textbook: the profit and loss statement tells you and your investors ...
whether or not your business is making money
ch 3 quiz: operating activity cash flow includes and new asset purchases made by the business
false
ch 3 textbook: a cash flow statement using the direct method shows the net profits of the business
false
ch 3 textbook: financing activity is the best source of funding of the ongoing operations of a business
false
ch 4 quiz: for a successful business, profits and cash flow are the same
false
loan principal payments are included as non operating expenses on a profit and loss statement
false (BECAUSE IT'S A PRINCIPAL STATEMENT NOT A LOAN INTEREST PAYMENT)
ch 3 textbook: a business BORROWS $50,000, which it uses to purchase a new forklift. this is an example of which type of cash flow activity?
financing activity cash flow
ch 3 textbook: sales taxes are collected by retailers and paid to ...
the state taxing agency
ch 1 textbook: a business that focuses on obtaining higher prices through innovation and design is a customer centric business
true
ch 1 textbook: a business that focuses on obtaining higher prices through sales and marketing is a customer centric business
true
ch 1 textbook: the financial operations of a business are reported on its financial statements
true
ch 3 textbook: if a business had $500 of cash at the beginning of the month, receives $5,000 of cash during the month, and pays $4,000 of cash during the month, what is the cash balance at the end of the month?
$1,500
ch 4 quiz: if revenue is $12,000 and cost of goods sold is $7,000 and operating expenses are $3,000... the operating profit is ...
$2,000
ch 4 textbook: if revenue is $150,000 and expenses are $115,000, how much is the net profit?
$35,000
ch 3 textbook: if a business had $100,000 of sales during the month and the state sales tax was 4%, how much would the business show as sales tax collections on their cash flow statement for the month?
$4,000
ch 4 textbook: revenue - expenses = ...
NET profits
ch 4 quiz: the profit and loss statement is also referred to as ...
P&L, statement of operations, income statement
ch 3 quiz: on the cash flow statement, dividends paid to shareholders would be classified as ...
a financing activity
ch 3 textbook: money received from a bank loan is an example of ...
a financing activity cash flow
ch 2 quiz: if you own a share of stock in a corporation what rights DO you have?
a right to receive significant corporate information a pro rata share of the profits the ability to vote on significant corporate decisions
ch 3 textbook: an indirect cash flow statement is prepared using...
both the net profits and changes in balance sheet values
ch 3 textbook: which of the following is not a type of cash?
accounts receivable
ch 2 textbook: a business that recognizes a sale as occurring when a service is rendered, rather than when payment is received, is using ...
accrual accounting
ch 4 textbook: from an accounting perspective, the purpose of depreciation is to ...
allow a business to deduct the periodic wear and tear of its equipment when calculating profits
ch 3 textbook: a new asset purchase is an example of ...
an asset activity cash flow
ch 3 textbook: the cash generated through the sale of a business' services is an example of ...
an operating activity cash flow
ch 3 textbook: a business SPENDS $50,000 to purchase a new forklift. this is an example of which type of cash flow activity?
asset activity cash flow
ch 4 textbook: when revenue and expenses are recognized on the profit and loss statement, it is determined ...
based on the rules of accounting
ch 1 textbook: a customer centric business competes by optimizing its operations to become a low-cost producer
false
ch 1 textbook: an operational-centric business focuses on providing exceptional customer service
false
ch 2 quiz: retail businesses manufacture products to be sold to consumers wholesale
false
ch 2 textbook: manufacturing businesses sell the time and skills of their employees directly to customers
false
ch 2 textbook: a manufacturing business needs ____________ to sustain the business between the manufacture of products and the receipt of payment for those products
cash
ch 3 textbook: a business pays its bills with ____________
cash
ch 2 textbook: a business that recognizes a sale as occurring when the money is exchanged is using ...
cash accounting
ch 3 quiz: a simple cash flow statement shows cash at the beginning of the month, cash received during the month, cash paid during the month, and ...
cash at the end of the month
ch 3 textbook: a simple cash flow statement shows cash at the beginning of the month, cash received during the month, cash paid during the month, and
cash at the end of the month
ch 4 textbook: on the profit and loss statement, the cost of services provided by a consultant would be known as ...
cost of services
ch 4 textbook: on the profit and loss statement, the cost of the products sold by a retailer is known as ...
costs of goods sold
ch 1 textbook: a knowledgable and helpful sales force is an example of a company using a _________________ strategy
customer service
ch 2 textbook: professional service businesses are engaged in the process of turning raw materials into finished goods
false
ch 4 textbook: which of the following IS an operating expense: cost of services, depreciation, principal payment, income tax payment
depreciation
ch 2 textbook: which of the following types of businesses are likely to have no inventory?
doctors office
ch 3 textbook: ___________ allow a business or individual to make payments without the use of checks or currency
electronic payments
ch 3 quiz: which of the following would generate a cash outflow to a business: sales tax collections, employee travel reimbursement, write-down of expired inventory, sale of inventory
employee travel reimbursement
ch 1 textbook: which of the following is not a key business strategy that can be used to differentiate a business from the competition: imitating competitors, low cost operations, sales and marketing, innovation and design
imitating competitors
ch 1 textbook: which of the following activities is least likely to be used by a company that follows an innovation and design strategy?
implementing a just-in-time inventory system
ch 1 textbook: a company with a large research and development budget would be using an ____________ strategy
innovation and design
ch 4 quiz: which of the following is not an operating expense: rent payment, interest payments, depreciation, payroll expense
interest payment
ch 4 textbook: which of the following is NOT an operating expense: rent, utilities, copier lease payment, interest payment
interest payment
ch 3 quiz: which of the following is not a type of cash: inventory, checks to be deposited, money in the bank, currency in the cash register
inventory
ch 2 quiz: which of the following is likely to be the most significant start up expense for a retailer occupying store space in the mall?
inventory purchases
ch 1 textbook: which of the following activities is least likely to be used by a company that follows a sales and marketing strategy?
investing in research and development to patent new drugs
ch 2 quiz: which of the following start-up expenses is likely to be unique to a manufacturer?
leasing machinery for the factory
ch 1 textbook: financial statements tell a business _______________ whether or not the business is making money
lenders, owners, and investors
ch 1 textbook: an operational centric business would most likely utilize which of the following strategies?
low cost operations
ch 2 textbook: which type of business is most likely to sell products it has manufactured?
manufacturer
ch 2 textbook: a ___________ business will likely have to create and equip a factory before it is able to make any products
manufacturing
ch 4 quiz: revenue recognition from a sale ...
may occur before payment from the customer is received
ch 4 textbook: when a business owner asks his accountant to "give me the bottom line", what financial value is he asking for?
net profits
ch 4 textbook: operating expenses include all of the following except ...
one-time, non-recurring expenses
ch 3 textbook: collections of accounts receivable is an example of ...
operating activity cash flow
ch 3 textbook: inventory purchased for resale is an example of which type of cash flow activity?
operating activity cash flow
ch 4 textbook: the ongoing monthly expenses of operating a business are known as ...
operating expenses
ch 4 textbook: when an accountant subtracts operating expenses from gross profit, the result is ...
operating profit
ch 1 textbook: using a just-in-time inventory system is an example of a ___________ strategy
operation
ch 2 quiz: which of the following is likely to be the most significant expense during the early months of a medical office such as uptown chiropractic?
paying employees
ch 3 textbook: which of the following is not a common use of financing activity cash inflows?
payment of income taxes due
ch 2 textbook: which type of business is most likely to sell the time and skills of its employees?
professional service
ch 4 textbook: the fundamental rule of the profit and loss statement is ...
profit = revenue - expenses
ch 4 textbook: when an accountant subtracts interest payments and other non-operating expenses from operating profit, the result is ...
profit before taxes
ch 3 quiz: which of the following cash flows would be classified as an operating activity?
receiving payment from a customer for a load of topsoil delivered by the new dump truck
ch 2 textbook: which type of business is most likely to sell products manufactured by others?
retailer
ch 2 textbook: which type of business is mostly likely to receive a payment from customers at the time of sale?
retailer
ch 3 textbook: which of the following is not one of the three primary financial statements?
retained earnings statement
ch 4 quiz: gross sales can differ from net sales because of ...
returns
ch 4 textbook: which of the following would be a likely reason for the difference between gross revenue and net revenue?
returns
ch 4 textbook: the money a business earns by selling goods and services to the public or to other businesses is known as ...
revenue
ch 3 quiz: which of the following would generate a cash inflow to a business: repayment of a bank loan, sale of inventory, payment of the company's credit card bill, employee travel reimbursement
sale of inventory
ch 4 textbook: which of the following is another common name for revenue?
sales
ch 1 textbook: ______________ describes the staffing and operations the company uses to convince customers that the company's products and services are preferred over the competition
sales and marketing
ch 1 textbook: locating on Fifth Avenue in New York is an example of a _____________ strategy
sales and marketing
ch 2 quiz: the period between the manufacturing of a product and the receipt of payment from customers is known as the ...
sales cycle
ch 2 textbook: the period between the manufacture of a product and the receipt of payment for that product is known as the ______________
sales cycle
ch 2 quiz: a professional service business ...
sells the time and skills of its employees
ch 3 textbook: the primary purpose of the cash flow statement is to ...
tell a business where cash is coming from and where cash is being spent
ch 2 quiz: if you own a share of stock in a corporation which of the following rights do you NOT have?
the ability to hire and fire corporate officers such as the CEO and CFO
ch 3 textbook: a direct cash flow statement is prepared from ...
the cash inflows and outflows of the business during the month
ch 4 quiz: when a manager says "just give me the bottom line", they are referring to ...
the net profit line on a profit and loss statement
ch 2 textbook: retail businesses generate money primarily through ...
the sale of products manufactured by others
