Business Chapters 3,15,17
The purpose of ethics in accounting is to maintain public confidence in business institutions, financial markets, and the products and services of the accounting profession.
True
Unlike the Dow and the S&P 500, all NASDAQ-listed companies, not just a selected few, are included in the index for a total of some 3,800 firms across six continents.
True
An S corporation has stock that is widely held and available for sale to the general public.
False
If a company's assets exceed its liabilities, owners' equity is negative.
False
In a secondary securities market, new stocks and bonds are bought and sold by firms and governments.
False
Joe has good reason to suspect that his investments in XYZ Manufacturing are being fraudulently recorded and used by the accountants of that company. In order to start a legal investigation, he needs to go to the American Institute of Certified Public Accountants.
False
Loans are the most important sources of money for new businesses.
False
Most businesses in the United States are large businesses with more than 500 employees.
False
Owners' equity is net worth minus liabilities.
False
The Dow Jones Industrial Average (DJIA) has remained unchanged in recent years.
False
The board of directors of a corporation reports to the officers of the corporation.
False
The failure rate among small businesses has been increasing in recent years.
False
The largest stock exchange in the world is the Tokyo exchange.
False
The most liquid asset for a firm are marketable securities that can be sold very quickly.
False
When an investment bank engages in underwriting, that investment bank is taking on risk in the process of launching new securities.
True
By law, each general partner is liable for all debts incurred in the name of the partnership.
True
Current assets refers to all assets that are able to be liquidated in a short amount of time.
True
Initial public offerings (IPOs) are the first sale of a company's stock to the general public and are a major source of funds that fuel continued growth for many firms.
True
Low start-up costs and tax benefits are advantages of sole proprietorships.
True
Most venture capital companies do not lend money.
True
Stocks are known as securities because they represent a secured interest in a company.
True
The Small Business Administration (SBA) may consider a business with many employees to be small as long as it has low annual revenues.
True
The most commonly used liquidity ratio is found by calculating current assets to current liabilities.
True
A firm's financial accounting system is only concerned with external users of information.
True
A limited liability corporation is a hybrid of a publicly held corporation and a partnership.
True
An audit examines whether a firm's financial statement conforms to generally accepted accounting principles.
True
An investment bank is a financial institution that specializes in issuing and reselling new securities.
True
Because of the uncertainties involved in stock prices, investment professionals believe day-to-day prices to be a generally poor indicator of any stock's real value.
True
Bonds may be issued by federal, state, or local governments.
True
Bookkeeping is a comprehensive system for collecting, analyzing, and communicating financial information.
false
