Intro. Business: Finance and Financial Information

Which of the following is a key component of managing working capital

cash conversion cycle

For financial information to be reliable, it must also be

complete

For financial information to be comparable, it must also be

consistent

There may be more than one acceptable way to record and organize a piece of financial information, but it's important to

do it the same way everytime

Money the business owes is known as

accounts payable

Money owed to the business is known as

accounts receivable

Which of the following is an example of business-related financial information

accounts receivable record

Decisions about financing refer to the

acquisition of funds

Useful financial information is understandable to

anyone who needs to use it.

The cash conversion cycle should be

as short as possible

The finance function is usually responsible for which of the following processes:

budgeting

Businesses use financial information to create and adjust

budgets

In business, the most important application of financial information is

business decision-making

Determining which projects a business should invest in is known as

capital budgeting

A business signs a contract to provide services to another business. Before signing, the businesses go over financial information to ensure the payment terms are acceptable. This is an example of using financial information to:

enter into legal agreements.

Selling shares in the company to raise money for a new venture is referred to as ____________ funding

equity

In its raw state, financial data aren't very helpful. To be useful to businesses, financial data need to be

gathered and organized in some way

When return on capital is positive, the company is

growing in value.

Which of the following is a capital investment decision:

how to finance investments

The finance function ensures that the company's financial goals are

in line with organizational priorities

A retail business looks at financial information to see if the company can afford to purchase a popular item to add to its shelves. This is an example of using financial information to:

increase sales

To keep communication flowing with other departments, the finance function depends on

information systems

The administration if assets refers to decisions about

investments

How does the finance function relate to company spending?

it plans and controls spending

A business decides to use some surplus cash to pay off a loan early. This is an example of using financial information to:

manage debt

Finance is the business function that involves managing

money

A business expected to reduce expenses by 4% last quarter. The financial information, however, shows that expenses were actually reduced by 2%. This is an example of using financial information to:

monitor ongoing business activities.

If a business wants to prepare reliable financial reports, it must be

neutral

The finance function would definitely be involved in a decision regarding

new business projects and strategies

"Jargon" is a term used to describe specialized language that is known only by specific people. Based on this definition, financial information that contains jargon would

not be considered understandable

Which of the following is an example of personal financial information:

pay stub

Accounting is distinct from finance because its main focus is on

record keeping activities

A business looks at financial information and learns that the company could save money by switching to a different internet provider. This is an example of using financial information to:

reduce expenses

The goals of the finance function are to ensure profitability and

reduce risks

Financial information that is ____________ conforms to specific processing standards:

reliable

Which of the following is a measure of how well a business generates cash flow

return on capital

A business wants to purchase new machinery for its production line. Which of the following pieces of financial information would be most relevant for their purchase decision:

the amount of money left in the budget for the fiscal year

For financial information to be relevant, it must also be

timely

Which of the following is a reason that a business might look at financial information from another company:

to see how their company compares to the competition

A company's current balance of assets and liabilities falls under the focus of

working capital management