Finance

Which of the following would be considered a liability

Accounts payable

What is the basic accounting equation

Assets=liabilities + owners equity

A debt security issues by a state or local government

Bond

The approximate sales volume required for a business to cover costs, below which production would be unprofitable and above which would be profitable is called the

Breakeven point

A wise spending plan, often called a _______ is the foundation for achieving personal financial goals

Budget

Is the value all investors have in a company

Capital

Which of the following would be considered a nondeposit institution

Check cashing outlet

Is an asset promised by a business to a creditor if repayment of a loan isn't completed

Collateral

A place where raw materials, oil, livestock, metals and gold are sold

Commodity market

Investing in a variety of assets is called

Diversification

The science of decision making about the allocation of scarce resources is the definition of

Economics

A partnership is a business owned by 3 or more people

False

As more people desire a certain investment its value will likely decrease

False

Cash, accounts recievable, and inventory are all examples of liquid assets

False

Financial claims on a company's resources come from both creditors and owners

False

Inflation is the place where stocks are traded

False

______ markets are contracts negotiated for the sale of products at a future date

Futures

Provides a view of the financial changes in a business that have occurred during a specific period of time

Income statement

The financial statement provides a view of the financial changes in a business that has occurred during a specific period of time

Income statement

An item vistas $100 last year and this year is $104

Inflation

Refers to business transactions involving companies that do business in one state

Intrastate commerce

A measure commonly used to determine how many times inventory is sold and replaced is called

Inventory turnover

What a business owes to others

Liabilities

Refers to the ease and speed with which an investment can be converted into cash

Liquidity

The ease and speed of which an investment can be converted into cash is called

Liquidity

The price at which equal number of products will be produced and purchased is called the

Market price

What is the balance point between supply and demand

Market price

The level of economic decisions related to the choices of individuals and businesses is know as

Markets

Financial records reflect the use of one stable currency; even if financial transactions may have been completed using multiple currencies

Monetary unit

______markets specialize in buying and selling financial instruments for short periods of a year or less

Money

Which is the following provides loans for purchasing a home

Mortgage company

Which of the following is an example of a deposit institution

None of the above

A limited liability company combines features of which two forms of business ownership

Partnership and corporation

Which of the following is used to raise new capital for an organization

Primary offering

The amount of money a business borrows is called the

Principal

Which of the following is an example of a fixed expense

Rent

Profits earned by a company that are not paid to shareholders as dividends are called

Retained earnings

The three common sources of funds for most businesses are

Revenue , investor funds, borrowing

The tax you pay when you purchase an iPod

Sales tax

The most common form of business organization in the US is

Sole proprietorship

Organized exchange of the ownership shares of public corporation occurs at a

Stock market

Which of the following is not part of the US free enterprise economy

Strong government controls

If a country exports more than it imports it is said to have a

Trade surplus

When a country exports more than it imports

Trade surplus

A bond is a financial instrument that obligates the issuer to pay the bond holder the principal plus interest at the end of the designated period

True

A government uses tax dollars to protect citizens, consumers and businesses

True

CEO, COO, CFO are all positions within a corporation

True

Cash is not the equivalent of profit

True

Companies are expected to record revenues when they are actually earned and not when payment is received

True

Economics is the science of decision making about the allocation of scarce resources

True

Equity financing involves the use of borrowed money to buy assets

True

Having large amounts of inventory on hand can lead to high storage costs and out of date material

True

If a business owner wants to know whether the amount of available cash for her business is increasing or decreasing, she would probably consult the cash flow statement

True

If liabilities increase in relation to the value of assets, owners equity decreases

True

Investments with high financial risk also offer the opportunity for greater financial return

True

Labor costs, production materials, and utilities are all considered variable costs

True

Pressure on a corporation management to maintain a high rate of return for investors sometimes leads to poor financial decisions

True

Supple is the quantity of a product and the demand is the amount that individuals want to satisfy their wants and needs

True

The most common type of debt security is stock

True

The simple interest formula is I=PRT

True

You should review your personal financial plan at least once per year and perhaps more often based on your personal situation

True