Intro to Business - Test Review #4

What is the primary goal of the financial manager?

to maximize the value of the firm to its owners

What is the basic accounting equation?

Assets = Liabilities + Owners' Equity

What are the three forms of enterprise portals?

B2B, B2E, and B2C

What Banking Act created the FDIC?

Banking Act of 1933

What are long-term debts (liabilities) for corporations and governments called?

Bonds

What is the name of the independent agency that is a quasi-public corporation backed by the full faith and credit of the United States government? (It guarantees consumer deposits up to $250k)

Federal Deposit Insurance Corporation (FDIC)

What is the name of the private organization that is responsible for establishing financial accounting standards in the United States?

Financial Accounting Standards Board (FASB)

What is the term used to describe the art and science of managing a firm's money so the firm can meet its goals?

Financial Management

What are the financial manager's three main responsibilities?

Financial planning, Investing, and Financing

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

Generally Accepted Accounting Principles (GAAP)

What is the practice called of leveraging multiple computers, often geographically distributed but connected by networks, to work together to accomplish joint tasks?

Grid Computing

includes the equipment and techniques used to manage and process information.

Information Technology.

What type of workers contributes to and benefits from information that use in performing, acquiring, searching, analyzing, organizing, storing, programming, producing, distributing, marketing, or selling functions?

Knowledge Workers

What is an agreement between a bank and a business called that specifies the maximum amount of unsecured short-term borrowing the bank will make available?

Line of Credit

What are the two basic kinds of networks?

Local Area Network (LAN) and Wide Area Network (WAN)

Describe the difference between managerial accounting and financial accounting.

Managerial accounting provides financial information for managers within the firm to manage, budget, and analyze the progress of the firm. Financial accounting focuses on preparing the financial reports used by managers and outsiders to track the firm's performance and compare it with other firms.

Assets - Liabilities equals what?

Owners' Equity

What is the owners' investment in the business is called?

Owners' Equity

What are the four main types of financial ratios used in accounting and finance?

Profitability, liquidity, leverage, operating

What is the term used to describe the percentage amount that the Federal Reserve banks must hold a certain portion of their deposits in reserve?

Reserve requirement

List the four key characteristics of money if it is to be a suitable means of exchange.

Scarcity, durability, portability, and divisibility.

What are investment certificates issued by corporations or governments called?

Securities

What is the most important function of the Federal Reserve?

The carrying out of monetary policy.

Savings accounts, money market deposit accounts, and certificates of deposit are examples of what?

Time deposits

What are the three major types of federal debt securities sold by the U.S Treasury?

Treasury Bills, Treasury Notes, and Treasury Bonds

What do many companies use to connect two or more private networks over a public network, such as the Internet

Virtual Private Networks (VPN)

Intranets, VPNS, and extranets are forms of what?

WAN (Wide Area Network)

What is the process called that allocates the original cost of a long-term asset over the years of its useful life?

Depreciation

What is the term used to describe the interest rate that the Federal Reserve charges member banks for loans?

Discount rate

What is the term used in accounting used to describe the process where every transaction must be recorded as two different entries?

Double-entry bookkeeping

What is the term used to describe an internal web site that provides proprietary corporate information to a defined user group?

Enterprise Portal

What system gives managers advice similar to what they would get from a human consultant?

Expert System

What is the term used to describe the specific assets that a borrower to pledge to secure a loan?

Collateral

What type of finance companies make loans to businesses?

Commercial finance companies

What type of stock is a security that represents an ownership interest in a corporation and has voting rights?

Common stock

What is a sophisticated data application called that looks for hidden patterns in a group of data to help predict future behavior?

Data Mining

A checking account is also commonly referred to as what type of deposit?

Demand deposits

What is the major advantage of debt financing?

deductibility

What are the three principal tools of the Federal Reserve System?

reserve requirements, discount rate, and open market operations

What is the term used to describe the process of collecting, recording, classifying, summarizing, reporting, and analyzing the financial condition of an organization?

Accounting

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 price.

Application Service Providers (ASP).

What is the snapshot of the firm's financial position at a certain point in time called?

Balance sheet

What are the three primary financial statements included in the annual report?

Balance sheet, Income statement, and Statement of cash flows

What is a group of two or more computers linked together by communications channels to share data and information called?

Computer Network

What is the term used to describe a computer program that copies itself into other software and can spread to other computer systems?

Computer Virus

What type of finance companies make loans to individuals?

Consumer finance companies

What are the two types of expenses recorded on the income statement?

Cost of goods sold and operating expenses

Name one type of financial institution that is a not-for-profit institution.

Credit Union

Commercial banks, thrift institutions, and credit unions are examples of what type of financial institutions?

Depository financial institutions

What do you call independent accountants who serve organizations and individual on a fee basis?

Public Accountants

What is the name of the Act that redefines the public corporation-auditor relationship and restricts the types of services auditors can provide to clients?

Sarbanes-Oxley Act

What are investment certificates called that represent either ownership of a corporation or a loan to the corporation?

Securities