Intro to Business test 5 Quiz Questions

Capital budgeting:

???

The ratio of net profit to the number of shares of common stock outstanding is called the:

earnings for profit ????

A _______ makes short-term loans for which the borrower puts up tangible assets (such as an automobile, inventory, machinary, or property) as security.

finance company

Financial intermediation is the process in which:

financial institutions act as intermediaries between the suppliers and demanders of funds

Competing against foreign banks can be difficult for U.S. banks because:

foreign banks are subject to fewer regulations than U.S. banks.

The difference between net sales and cost of goods sold is:

gross profit

In finance, _______ is the potential for loss.

risk

Weeds, sand, and paper clips would not make good mediums of exchange because they lack the key characteristic of:

scarcity

Business loans available from commercial banks with terms generally five to tweleve years and secured or unsecured are called _______ loans.

term

Money market deposit accounts and certificates of deposit are officially called ______ deposits.

time

Which of these is NOT a way to help you learn how to concentrate?

Always say "Yes"

Private individual investors who sometimes provide venture capital to small firms in need of equity capital are called:

Angel Investors

Which of the following calculations is a formal expression of the accounting equation?

Assets = liabilities + owner's equity

All of these are tips and techniques to be an effective player in the political game EXCEPT:

Avoid doing the job no one else wants to do

The Federal Deposit Insurance Corporation (FDIC) insures deposits in commercial banks. The FDIC was created by the:

Banking Act of 1933

A secured loan requires that the borrower pledge specific assets to secure the loan. These assets are called:

Collateral

________ stock is a security that represents an ownership interest in a corporation and has voting rights.

Common

_______ are specific repayment conditions as to how long customers have to pay bills and the amount of cash discount allowed.

Credit Terms

_______ are debts that are to be paid within twelve months.

Current Liabilities

_______ management is the art and science used to determine the most effective ways to acquire and use funds to achieve the firm's goals.

Financial

In selecting the right job, one should start with consideration to "FACTS" where "F" stands for:

Fit

To ensure accuracy and consistency in the way financial information is reported, accountants follow rules known as:

Generally Accepted Accounting Principles

A(n) ________ is a summary of what a company has earned and spent over a given period.

Income Statement

When conflicts occur, try the K-I-N-D technique. Where K stands for:

Kind

Which of these is the fifth step of the planning process?

Make a commitment

________ are temporary investments of excess cash in bonds and stocks that can readily be converted into cash.

Marketable Securities

_______ is anything (regardless of form) that is acceptable as payment for goods and services.

Money

When conflicts occur, try the K-I-N-D technique. Where N stands for:

New

The funds that are reinvested in the firm out of profits after dividends are paid are called:

Retained Earnings

Amanda is interested in building her interpersonal skills. She should focus all ot these EXCEPT:

Set a goal and acquire knowledge

A(n) _________ is a summary of the money flowing into and out of a firm.

Statement of cash flows

Accounting involves the _________ of the financial activities for firms.

Summarizing

All of these are rules of the test-taking game EXCEPT:

Take short, frequent breaks

The three main types of unsecured short-term loans are:

Trade Credit, Bank Loans, and Commercial Paper

All careers have which of the following in common?

You need to have a basic understanding of business

The operating license for a commercial bank is called a(n):

bank charter

In its role as lender to member banks, the Federal Reserve is called the:

banker's bank

An accountant who has a bachelor's degree, passes a test prepared by the professional organization AICPA, and has a certain number of years of on-the-job training becomes a:

certified public accountant ?????

The ______ ratio measures the relationship between the amount of debt financing and the amount of equity financing.

debt-to-equity

The major advantage of debt financing is the:

deductibility of interest expenses

The ratios that are of special interest to the firm's creditors and measure the firm's ability to pay short-term debts as they come due are called _______ ratios.

liquidity

Which of the following services would you NOT expect a depository institution to offer?

loans to individuals with poor credit

Thrift institutions were formed specifically to encourage households savings and to:

make home mortgage loans

Financial managers often shift temporary funds from checking accounts to _______ securities to earn higher interest returns.

marketable

The Primary goal of the financial manager is to:

maximize the value of the firm to its owners

A(n) ________ is a method or process worked out in advance that leads to the achievement of some goal.

plan

The three principal tools of the Federal Reserve System are:

reserve requirements, discount rate, and open market operations