ISOM 125 Final Review

Financial managers constantly strive for a balance between:

The opportunity for profit and the potential for loss

The _____ summarizes an organization's financial status at the end of an accounting period

Balance sheet

A computer program that copies itself into other software and can spread to other computer systems is called:

A computer virus

Insurance policy holders make premium payments to buy financial protection. Insurance companies invest the premiums in:

All of the above

Money is used as:

All of the above

National banks:

All of the above

The purchase or sale of U.S government bonds by the Federal Reserve to stimulate or slow down the economy is called:

An open market operation

Long-term debts (liabilities) for corporations and governments are called

Bonds

____ is the system used to record a firm's financial transactions in a routine and clerical process

Bookkeeping

Which of the following is an example of a depository financial institution

Credit union

______ is cash held in the form of coins and paper money

Currency

The U.S money supply is composed of:

Currency, demand deposits, and checking accounts

The ratio of total current assets to current liabilities is called the ____ ratio

Current

If a manager needs a reporting system that provides the ability to ask "what if" questions, they would probably install a _____ system

Decision support

Net Sales:

Deducts sales discount and returns allowances from gross sales deducting sales discount and returns and allowances from gross sales

Profitability ratios are used to

Determine how efficiently a company is being managed

Another name for a stockbroker:

Fiduciary expert

____ deals with reporting to outsiders. _____ accounting deals with the internal operations of the firm

Financial accounting; managerial accounting

The Federal Deposit Insurance Corporation:

Is accurately described by all of the above

After all expenses have been subtracted on an income statement, the final figure or bottom line is called the ____ when it is a positive number

Net profit

Current assets, such as marketable securities and inventory, usually are expected to be turned into cash within:

One year

Dividends are:

Payments to the shareholders from company earnings

_____ are large pools of money set aside by corporations, unions, and governments for later use in paying retirement benefits to their employees or members

Pension funds

Federal Reserve banks must hold a certain portion of their deposits in reserve. This percentage is called the:

Reserve requirement

The three principal tools of the Federal Reserve System are:

Reserve requirements, discount rate, and open market operations

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

Retained earnings

In finance, ____ is the potential for loss

Risk

_____ are two types of thrift institutions

Savings banks and savings and loan associations

A loan that requires the borrower to pledge specific assets as collateral is called a ____ loan

Secured

______ are investment certificate that represent either ownership or a loan to the corporation

Securities

Copying of software programs by people who haven't paid for them is called:

Software piracy

A _____ is a summary of the money flowing into and out of a firm

Statement of cash flows

The ____ ratio is a measure of the firm's ability to pay its current liabilities once inventory is subtracted from current assets

acid-test

A ____ is a service company that buys and maintains software on its servers and distributes it through high-speed networks to subscribers for a set period of time and predetermined price

application service provider

Term loans:

All of the above

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

Angel investors

A ____ is a service company that buys and maintains software on its servers and distributes it through high-speed networks to subscribers for a set period of time and a predetermined price

Application service provider

Savings banks

Are a type of thrift institutions

Short-term loans:

Are shown as current liability on the balance sheet

Things of value owned by a firm are called its:

Assets

Financial managers focus on ____, the inflow and outflow of cash

Cash flows

The two types of finance companies are:

Commercial finance companies and consumer finance companies

_____ is a short-term unsecured debt issued by a financially strong corporation

Commercial paper

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

Comparable accounting standards

In manufacturing, all costs directly related to production including raw materials, labor, and factory overhead are classified as:

Cost of goods sold

A ____ system is a management support system that uses artificial intelligent to enable computers to reason and learn to solve problems in much the same way as humans do

Expert

A _____ system is a management support system that uses artificial intelligent to enable computers to reason and learn to solve problems in much the same way as humans do

Expert

_____ are examples of wide area networks (WANs)

Extranets and intranets

Intranets are essentially min-Internets that operate behind a_____ that prevents unauthorized access

Firewall

A company that needs access to high-end computing resources periodically but has little money to spend on such a project can use:

Grid computing

_____ refers to all of the equipment and techniques needed to manage and process information

Information technology

A network that connects computers at one site is called a:

Local area network

A group of two or more computer systems linked together by communication channels to share data and information is called a computer:

network

A ____ is an information system that uses information technology tools to improve communications throughout an organization

office automation system

processing data as they become available is called ____ processing

online

_____ are deposits at a bank or other financial institution that pay interest but cannot be withdrawn on demand without penalty

Time deposits

Which type of information system is used only by operational managers?

Transaction processing system

A network that connects computers at different sites via telecommunications media

Wide area network

A _____ is an organization's management support system that combines many databases to improve management decision making

data warehouse

A _____ is an internal web site that provides proprietary corporate information to a defined user group

enterprise portal

_____ ratios reflect the speed with which resources are converted to cash or sales.

Activity

____ are internal corporate wide area networks that use internet technology to link employees in many different locations and with many different types of computers

Intranets

_____ management focuses on gathering and sharing an organizations collective knowledge to improve productivity and foster innovation

Knowledge

____ contribute to and benefit from information that use in performing, acquiring, searching, analyzing, organizing, storing... functions

Knowledge workers

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

Making sure that enough cash is on hand to pay bills as they come due and to meet unexpected expenses is called cash:

Management

A system that collects and stores the company's key data and produces the information needed by managers for analysis, control, and decision making is called a

Management support system

A ______ loan is a long-term loan using real estate or other assets as collateral

Mortgage