Exam 3 Intro To Business

Dividends of a company are:

A distribution of earning that are paid to a corporation's stockholders.

What types of people use accounting?

ALL OF THESE -Managers -Shareholders -Suppliers

Miller is the owner of a restaurant that has several franchises. One of the franchisees owes Miller a sum of $18,000 for the goods that he had bought from Miller on credit. In this scenario, the money owed to Miller is known as _____.

Accounts Receivable

Using _______ accounting, revenues are recognized when they are earned

Accural-basis

Institutional investors:

Amass huge pools of financial capital from various sources.

Inventory turnover is an example of a _________ ratio

Asset management

_____ measure how effectively an organization uses its resources to generate net income.

Asset management

Unlike the debt in a firm's capital structure, the equity in a firm's capital structure:

Imposes no required payments

For a corporation, direct investment from owners occurs when:

It sells newly issued stock

In finance, a _____ is one that can be quickly converted into cash with little risk of loss.

Liquid assets

Financial ratios that measure a company's ability to meet current obligations are called _________ ratios

Liquidity

_____ provide analysis and prepare reports and financial statements for their organization.

Management Accountants

Which of the following is a source of long-term funds for a firm?

Retained earnings

Which of the following is an example of an intangible asset?

The goodwill showed by a food manufacturing company by helping its competitor at a time of crisis

Which of the following is a drawback of mutual funds?

The professional managemnt touted by many funds does not come cheap.

In the context of balance sheets, resources owned by a firm are known as _____.

Assets

The basic accounting equation, assets = liabilities + owners equity, is found in the

Balance sheet

This is a tool used by companies to determine how they will accomplish goals in a stated time period

Budgeting

_____ is a management tool that explicitly shows how a firm will acquire and use the resources needed to achieve its goals over a specific time period.

Budgeting

Cash inflows and outflows are projected using a

Cash budget

Sharholder that have ________ stock have the right to vote on company issues

Common

These are typically sold at a discount to the face value

Corporate bonds

In the context of balance sheets, accounts receivable is an example of _____.

Current assets

Balance sheets usually organize liabilities into two broad categories, which are:

Current liabilities and long-term liabilities

Companies can obtain additional capital through either debt or _______

Equity

When a company issues and sells new stock or uses retained earnings to meet its financial needs, it is using _____.

Equity financing

This is the process by which companies sell their accounts receivable at a discount

Factoring

It is always a good idea to fund a business with as much equity as possible

False

Accounting that is used to provide information to those outside the company is called _________ accounting

Financial

Exchange-traded funds and mutual funds account for:

Financial Diversifications

Markets that transfer funds from savers to borrowers are referred to as _____.

Financial markets

Financial managers use _____ to assess the financial strengths and weaknesses of their firm.

Financial ratio analysis

Companies must adhere to this set of guidelines when making various reports

Generally Accepted Accounting Principles

Which of the following explains the preemptive right of common stockholders?

If a corporation issues new stock, existing stockholders can purchase new shares in proportion to their existing holding before the sock is offered to the other investors.

This shows the financial result from business' operations over time

Income statement

The _____ is an asset management ratio that measures how quickly a firm sells its stock to generate revenue.

Inventory turnover ratio

A(n) _____ is a financial intermediary that specializes in helping firms raise financial capital by issuing securities in primary markets.

Investment bank

When a company offers stock to the pulic intially, they get the help of a(n)

Investment bank

Which of the following statements is true of a socially responsible firm?

It has obligation to respect the need of all stakeholders.

The price at which shares of an open-end mutual fund are issued and redeemed is based on the fund's _____.

Net asset value per share

In the context of an independent auditor's report, if the auditor identifies some minor concerns but believes that on balance the firm's statements remain a fair and accurate representation of the company's financial position, the report will offer a(n) _____ opinion.

Qualified

_____ measures the income earned per dollar invested by the stockholders of a firm.

Return-on-equity

This shows how much cash is going in and out of a business

Statement of cash flows

NYSE and NASDAQ are examples of

Stock exchanges

A public accounting firm takes up a contract to perform an external audit for an oil manufacturing company. The firm, however, is already in a consulting contract with the oil company. Because of its prior association with the oil company and the hefty fee the oil company pays the firm, the firm manipulates the audit report. Which of the following laws is violated in this scenario?

The Sarbanes-Oxley Act

Which of the following is true of securities brokers?

They act as agents for investors who want to buy or sell financial securities.

To buy today and pay later with invetory, a supplier may offer a

Trade credit

Mutual funds are a much more affordable way to diversify investments

True

A health and fitness startup company goes for an initial public offering. For assistance, it enters into a firm commitment arrangement with an investment bank. As per the agreement, the investment bank itself will purchase all the shares at a specified price. This will guarantee that the company will receive a fixed amount of new funds. This scenario exemplifies a(n) _____.

Underwriting

In the context of financial accounting, the external stakeholders of a firm:

are seldom interested in analyzing detailed accounting information about the individual departments within the firm.