Chapter 1 Learnsmart 1
A corporation received cash from fonancial markets by selling ___ and ___.
*Bonds *Stocks
Which of the following show why a corporation is the most important form of business?
*Corporations can sue and be sued *A corporation is a seperal legal entity with the ability to acquire and exchange property *Corporations can enter into contracts
Which of the following is included in working capital?
*Current (short-term) assets *Accounts Payable *Accounts Receivable
Inventory is:
*Current assets *Park of working capital
Which of the following companies were involved in corporate scandals that led to Sarbanes-Oxley?
*Enron *WorldCom *Tyco
In a large corporation, the financial manager is primarily responsible for:
*Financial aspects of operations, such as collections of accounts receivables *Financial decisions *Long-ter investment decisions
A good financial decision will do which of the following?
*Increase the value of the firm's existing stock *Increase market value of shareholders' equity
A general partnership has which of the following characteristics?
*It is dificult to transfer ownership *Each owner has unlimted liability for all form debts
Which of the following are true of a sole proprietorship?
*It is the simplest type of business to form *A proprietorship has a limited life
Which of the following are included in a firm's capital structure?
*Long-term debt *Equity
A treasurer's responsiblities typically include:
*Making financial plans *Handling cash flows *Managing capital expenditure decisions
Which of the following, according to the textbook, are possible financial goals for a company?
*Minimize costs *Maximizes profits *Survival
The controller is responsible for which of the following tasks?
*Tax reporting *Financial accounting
Which of the following are important when considering a partnership?
*Taxation of partnership income *Person liability for firm debts *Fund raising limitations
If you hire a real estate company to sell your house, you are most apt to encounter which one of the following?
Agency problem
The conflict of interest between an agent and a principal is called a(n) ___.
Agency problem
An organization must prepare ___ and bylaws when forming a corporation.
Articles of incorporation
The rules used by a corporation to regulate its existance are known as ____.
Bylaws
Which term applies to the mixture of debt and equity maintained by a firm?
Capital Structure
The officer responsible for corporate tax reporting is the ___?
Controller
A bad sinancial decision is defind as a decision that ___owners' equity.
Decreases
Some of the cash flow generated by a firm goes back to the financial markets in the form of ____?
Dividends and debt payments
The life of a corporation _____.
Is unlimited
A corporation is a distinct ___ entity and as such can have a name and take advantage of the legal powers of natural persons.
Legal
In a limted partnership, a limited partner's liability for business debts is ___?
Limited to their cash contribution to the partnership
The goal of a for-profit business is to ___ existing owners' equity.
Maximize
A sole proprietorship is a business owned by ___Person(s)?
One
How is ownership transferred in a corporation?
Ownership is transferred by gifting or selling shares of stock
A business without seperate legal authority formed by two or more people is known as a ____?
Partnership
Because shareholders get paid last after all other obligations are satisfied, they are often called:
Residual owners
When one owner or creditor sells to another, the transaction takes place in the ___ market.
Secondary
The owners of a corporation are called ____?
Shareholders
A ___ is someone other than an owner or a creditor who potentially has a claim of the cash flows of a firm.
Stakeholder
What is the main goal of financial management?
To maximize shareholder wealth
The officer responsible for the firm's cash flows is the ___?
Treasurer
A sole proprietor has ___ personal liability for all business debts and obligations.
Unlimited