BFS Practice Test

What is essential to the identification of trends in financial data for a horizontal analysis: a. Data in a Statement of Cash Flows b. Data form the most recent financial report c. Data in financial reports from multiple time periods d Data from a zero-based budget

Data in financial reports from multiple time periods

Why are financial institution using tokenization?

To protect online transactions

Why would creditors have increased their surveillance of customers' financial information during the tough economic times of the last few years?

To reduce the likelihood that customers will not pay their bills

When a human resources department uses interactive computer simulations to help employees learn how to do their jobs, it is using technology for _____ purposes.

Training

A stock broker is using Customer Relationship Management (CRM) technology to learn more about his typical customer's purchasing pattern. The stock broker is using CRM technology to analyze typical customer _____.

Trajectory

To prevent injuries when operation machinery, it is important to: a. know standard first aid b. purchase the most efficient equipment c. purchase the newest equipment d. follow the instruction manual

follow the instruction manual

A customer sent the Webster Company a check in the amount of $1,725 as partial payment for a $2,456.29 purchase. During the current billing cycle, the customer made several purchases, totaling $466.23. Now Webster must generate a new account statement to sent to the customer. How much money does the customer owe Webster?

$1,197.52 {2,456.29 - 1,725 = 731.29 + 466.23 = 1,197.52}

A small tool manufacturer's total cost were $56,000 before it began to produce hammers. When the manufacturer produced its fist 2,000 hammers, costs increased to $62,500. What was the marginal cost of producing each hammer?

$3.25 {62,500 - 56,000 = 6,500 / 2,000 = 3.25}

If one Canadian dollar is equal to.958750 U.S. dollar, how much would you pay for an item that costs $624.60 Canadian dollars in U.S. dollars?

$598.84 {624.60 x .958750 = 598.835 (Round up)}

During its 20 years of operation, the Normany Company has made very few changes to its accounting methods and systems. As a result, the company's financial information is likely to be very _____.

Consistent

An investor using a securities table can learn about a stock's volatility by checking the stock's what?

52-Week HI/LO

Which of the following is most likely to be a benefit of proactive compliance plans for businesses: a. Minimized costs and a reduction in senior management b. A competitive advantage and a reduction in senior management c. A competitive advantage and minimized costs d. Increased government scrutiny and minimized costs

A competitive advantage and minimized costs

Which statement about deposit-taking financial institutions is true: a. The Small Business Administration and the Federal Housing Administration are examples of deposit-taking financial institutions. b. When a saver deposits funds, they receive a claim on the individual or firm to whom the depository institution lends these funds. c. A deposit-taking institution's primary liabilities are checking accounts, savings accounts, money market accounts, and certificates of deposit. d. Two types of commercial banks are mutual savings banks and savings and loan associations (S&Ls).

A deposit-taking institution's primary liabilities are checking accounts, savings accounts, money market accounts, and certificates of deposit.

Which statement regarding the financial-information management function is true: a. The financial-information management function's responsibilities have declined in recent years. b. The financial-information management function is an electronic, web-based activity. c. A financial-information management system can be used to support operations management decisions. d. Data in a financial-information management system are typically at least four to six months old.

A financial-information management system can be used to support operations management decisions.

Which mutual fund is most likely to be tax inefficient: a. A fund with a low portfolio turnover rate b. A fund with a high portfolio turnover rate c. A fund that concentrates on a specialized sector d. A fund that attempts to match a broad market index

A fund with a high portfolio turnover rate

What represents a difference between accounting and finance: a. Finance collects and presents financial information, while accounting determines financial strategies. b. Finance tracks revenues and expenses when they are incurred, while accounting recognizes them when money is exchanged. c. Accounting recognizes revenues and expenses when they are incurred, while finance recognizes them when money is exchanged. d. Accounting collects and presents financial information, while finance creates financial statements.

Accounting recognizes revenues and expenses when they are incurred, while finance recognizes them when money is exchanged.

What is the connection between accounting and finance: a. Accounting relies on fiance to generate reports that are used to create financial statements b. Accounting and finance perform the same functions c. Accounting's reports aid finance in analyzing a company's financial position d. Accounting uses the revenue and expense reports generated by fiance to make financial decisions?

Accounting's reports aid finance in analyzing a company's financial position

What would afford finance professionals the best opportunity to build long-lasting relationships with other finance professionals: a. Regularly attending trade shows for the finance industry b. Actively participating in a local professional association for the finance industry c. Occasionally auditing classes at a local post-secondary institution d. Actively atteding meetings sponsored by the local chamber of commerce

Actively participating in a local professional association for the finance industry

What is an important aspect of a customer-centric business?

Aligning business activities with customer needs

What is a situation that involves the illegal use of copyrighted material: a. An online business allows its customers to download and share music without the recording artist's consent. b. An apparel company imprints a hockey league's logo on a new line of sportswear c. A manufacturer attempts to produce another business's invention, which has been registered with the government. d. A computer company develops a new project-management software program.

An online business allows its customers to download and share music without the recording artist's consent.

Describe the taxation of Roth IRAs.

Contributions are taxed, but withdrawals during retirement are not.

The Money for You Bank recently merged with the Keeping You Safe Insurance Company. The merger is an example of _____ in the finance industry.

Convergence

While Tobi is in the middle of an important meeting with some new clients, her assistant steps into the room to let Tobi know that her biggest customer, Mr. Williams, is one the phone with some questions about his account. It is 3:30 p.m. What should Tobi do? a. Invite the new clients out for dinner and call Mr. Williams in the morning b. Ask the new clients to take a break so that she can take the call immediately c. Ask her assistant to handle Mr. Williams' call and answer his questions d. Ask her assistant to inform Mr. Williams that Tobi will return his call at 5:00 p.m.

Ask her assistant to inform Mr. Williams that Tobi will return his call at 5:00 p.m.

Anna, a new employee with Turbo Electronics, must write a letter to a customer. Anna does not know which letter format to use. What should she do?

Ask her supervisor which letter format the company uses.

Todd needs to develop an overall plan for his business but does not know what type of information to include in the document. Todd logs onto a search engine to quickly locate the information he needs. What search term is most likely to provide Todd with the desired search results: a. Plan components b. Develop planning document c. Business plan elements d. Business document components

Business plan elements

How could financial analysis applications be used to identify possible conflicts of interest? a. By comparing yearly volume with on-hand quantity for stock item b. By isolating entries against authorization records for new or terminated employees c. By comparing vendor payables posted to purchase order d. By comparing employee phone numbers and addresses to vendor information for payables

By comparing employee phone numbers and addresses to vendor information for payables

A financial-information management system can help a financial manager to make which type of decisions?

Capital budgeting

In what type of accounting system are revenue and expenses accounted for at the time money is received or spent?

Cash

To maintain its current customer base and attract new markets, the KMV Company lowered the prices of some of its products. What external factor most likely influenced this action?

Changes in consumer spending

What certification is sought by individuals who evaluate companies and industries and make, buy, sell, and hold recommendations for certain securities?

Chartered Financial Analyst (CFA)

What certification is sought by individuals who provide guidance to individuals and families about their investments and financial decisions and also buy and sell certain financial products such as insurance and retirement plans?

Chartered Financial Consultant (CsFC)

Rather than studying individual customer data, First Bell Bank is interested in analyzing groups of customers. Members of a group should be similar and markedly different from other customer groups. What type of Customer Relationship Management (CRM) activities should be used to prepare First Bell Bank's customer data for analysis?

Clustering

To be an effective team member, an employee needs to be willing to what?

Collaborate with others

Why is it important to select and occupation that matches your aptitudes?

Considering your aptitudes will make achieving your career goals realistic

What must be done first to begin a Six Sigma Improvement Model: a. Review data to determine if change needs to be made. b. Collect data to measure areas identified as problematic. c. Make improvements to areas with low customer satisfaction scores. d. Define the gaps between customer satisfaction and the company's capabilities.

Define the gaps between customer satisfaction and the company's capabilities.

To hedge the risk of investing in the foreign exchange market, some investors use what?

Derivatives

In which situation is it most appropriate to use technical jargon to communicate information: a. While casually talking with acquaintances during a social gathering b. During a meeting in which business-people share the same vocabulary c. When making a public speech to the residents of a local community d. While demonstrating a complex machine to a new customer

During a meeting in which business-people share the same vocabulary

What is a common outcome of poor financial-information management in a finance department?

Employees cannot correctly assess trends

Frankfort and Sons, an American firm, is preparing to issue bonds overseas. even though the bonds will be sold outside the U.S., they will be denominated in American dollars. What are these bonds called?

Eurobonds

Why should a researcher consider an author's expertise in a particular topic when assessing the validity of written articles and publications?

Evaluate the author's level of credibility

For an investment to yield positive results at the end of the investment period, the earnings should what?

Exceed the rate of inflation

In what stage of the data-mining process would you clean data in a database?

Exploration

The Dewberry Company pays both its female and male employees the same salary range for the same type of work. Dewberry is providing its employees with what?

Fair treatment

When the Consumer Price Index (CPI) increases sharply, what usually happens to stock prices?

Fall

What is a way that small business use technology to perform accounting tasks: a. Developing institutional policies b. Requesting quotes by e-mail c. Establishing tax codes d. Filing tax returns online

Filing tax returns online

What is an output of a financial system?

Financial condition

If an employee needs to do some research to answer a customer's telephone inquiry, what is the best action for the employee to take is to take after obtaining the customer's telephone number: a. Put the customer on hold until the research has been completed b. Ask the sales manager to call the customer back c. Send the customer literature about the business and its products d. Follow-up with the customer after obtaining the requested information

Follow-up with the customer after obtaining the requested information

The Milton Ladder Corporation, which is publicly traded, is in the process of acquiring the Bradley Chute Company. What type of document is Milton Ladder required to file within 15 days of the acquisition?

Form 8-K

Adam wants to hire a financial-services provider who will provide him a wide variety of services, such as recommending insurance coverage, providing in-depth financial advice, and making investments on his behalf. What type of financial-services provider would be best suited to handle Adam's needs?

Full-service broker

Last week, a man who frequents Alice's health club and goes to the same church approached her and struck up a conversation. After a bit of small talk, the man said that he would love to help Alice earn some money in the stock market. "You can trust me," the man said. "We go to the same church and the same gym. In fact, our minister and the manager of the gym just gave me a ton of money to invest for them!" The man is attempting to commit _____ fraud.

Group affinity

Which of the following issues is keeping risk managers form getting the right information into the right context so the right decisions can be made: a. Having transparency around the effects of volatility on the organization b. Having too little information that can be sued to assess and understand risk c. Having many different sources of data that can be sued to asses risk d. Having a centralized enterprise risk management system

Having many different sources of data that can be sued to asses risk

Financial globalization tends to cause an increase in what?

Herd behavior among investors

The most significant barriers that many companies face when implementing integrated governance, risk, and compliance (GRC) technology are what?

High cost and lack of evidence of return on investment

The key factors involved in compounding growth are the amount of money you invest, how much your investment grows each year, and?

How long your money is invested

A business report provides statistical data indicating that the demand for a specific type of product has been increasing between three and six percent over the past several months. Why is this information useful to companies?

Identify trends

What is NOT a benefit of a post-implementation review: a. Identifying cost-savings opportunities for future projects. b. Identifying cost-savings opportunities for the current project. c. Identifying ways to improve project planning. d. Identifying ways to improve the company's processes.

Identifying cost-savings opportunities for the current project.

When nominal Gross National Product (GNP) increases, what typically happens to the money supply?

Increases

What is a benefit of managing budgeting data efficiently through budgeting applications?

Increases management's confidence in budgets

What would be appropriate to use as a primary key for identification of customers at a financial institution: a. First and last names b. Social security number c. Zip code d. Individual account number

Individual account number

If you wanted to pursue a career that specialized in helping corporations and governments issue securities, what would you work in?

Investment banking

What is a financial concern that entrepreneurs often face when starting new businesses? a. Irregular paychecks b. Long working hours c. Shorter vacations d. Lower production standards

Irregular paychecks

What is the significance of the base year in horizontal trend analysis?

It's the time period that is used as the basis for comparisons

On January 3, Anna mailed her credit-card payment, which was due on January 5. The credit-card issuer received the payment on January 7. What most likely appeared on Anna's credit-card statement the following month?

Late fee

What type of insurance company serves as a financial intermediary?

Life

A creditor carefully examines a business's financial information to determine whether the business has sufficient money to meet its short-term obligations when they come due. In this situation, the creditor is concerned about the business's _____.

Liquidity

When a creditor analyzes financial data to determine whether a client should be able to pay the principal and interest on a loan, the credit is assessing the client's what?

Long-term solvency

What is likely to occur when the inflation rate increases, and workers do not receive pay increases?

Lower standard of living

What is a true statement about managers: a. Mangers usually train the employees to do the work b. Mangers must be able to do their employees' jobs c. Managers allow employees to set the organizational standards d. Managers decide how to use the business's resources

Managers decide how to use the business's resources

What leads accountants to apply unethical earnings-management practices: a. Postponing a large purchase to a later time b. Meeting analysts' estimated earnings c. Accelerating payment of expenses when earnings are high d. Selling securities for a gain

Meeting analysts' estimated earnings

A business is behaving unethically if it: a. Obtains information about its competitors b. Misinterprets a customer's requests c. Misrepresents its capabilities to customers d. Partner with another business for financial gain

Misinterprets a customer's requests

Pedro Sanchez works as a loan processor for the MON Company, which is located in Smithsville. Pedro has recently approved an application to extend a $10,000 line of credit to Mrs. Jones. Who is the creditor in this situation?

Mon Company

Which statement regarding the merger of multiple financial firms is true: a. The merger typically results in a smaller variety of products and service, lower costs, and reduced consumer risks. b. More consumer loans may be available from the new larger firm than were available from the smaller, individual firms. c. A merger usually makes it easier to determine which supervisory agency should oversee the new, larger company. d. The merger usually helps financial experts to get an accurate picture of the new, larger firm's financial condition.

More consumer loans may be available from the new larger firm than were available from the smaller, individual firms.

Which web site is most likely to contain accurate, trustworthy securities information: a. Wikipedia b. Morningstar c. StandardLine d. Facebook Finance

Morningstar

Effective collaboration among coworker requires what?

Mutual respect

Why must investment firms accurately report their financial position? a. They are trusted to maintain an accurate accounting of people's revenue and expenses b. Others rely on the information when making credit and/or investment decisions c. They maintain brick-and-mortar and virtual businesses for trading d. People know that investment firms would not take advantage of them

Others rely on the information when making credit and/or investment decisions

Very small companies and companies with poor credit ratings are most likely to trade their stock where?

Over the Counter Bulletin Board (OTCBB)

What is a control that financial institution have implemented to protect bank accounts when debit cards are used to pay for online transactions?

PIN debits

Why has online technology's use increased in financial-information management: a. Recognition that the security of transactions is no longer an issue b. Removal of electronic information exchange procedures c. Passage of laws that recognize electronic law as legally binding. d. Protection of customers' right to privacy

Passage of laws that recognize electronic law as legally binding.

If you are going to successfully lead change within your organization, you need to be _____.

Persuasive

What is a primary reason that governments regulate corporations' financial activities?

Protect stockholders

An important purpose of full-disclosure laws and regulations is to:

Provide information to investors so they can make informed decisions

One way for Sidney to motivate her team members to accomplish a certain goal in a specific amount of time is by what?

Providing an incentive

What risk is being avoided when financial institutions use cloud computing?

Return on investment risk

What is an example of a preventive internal control?

Segregation of duties.

Marissa believes that she posses the skills to make a positive contribution to the work team. What is Marisa is exhibiting?

Self-confidence

What would a small business's budgeting applications most likely be able to do: a. Show the business's cash-flow status b. Predict new services to offer customers c. Determine the business's electronic data interchange (EDI) needs d. Identify equipment needing repairs

Show the business's cash-flow status

When providing product information to clients finance professional should use: a. Standard responses b. Technical Terms c. Financial Acronyms d. Simple Explanations

Simple Explanations

While reviewing a business's general ledger, a virtual auditor identified two identical journal entries within the same accounting period. What reasoning technique did the virtual auditor use?

Symbolic

Brandon has been given a 385-page report and does not have time to review the entire document, but does need to understand specific information that is included in the report. What section of the report will guide Brandon to the information he needs?

Table of contents

How do ethics relate to risk management: a. The best form of business ethics is risk management b. Risk management is all about the ethical treatment of customers c. Risk management is insurance for lapses in business ethics d. The best form of risk management is adherence to business ethics

The best form of risk management is adherence to business ethics

How can businesses benefit from using a central data repository for its financial information?

They can obtain faster response to queries

What is the most likely reason why a manager would review financial information for his/her industry and compare his/her business's operating results with industry averages: a. To calculate the business' percentage increase in net sales b. To determine if the business is performing above or below average c. To prepare a company budget for the following year d. To determine the return on common stockholders' equity

To determine if the business is performing above or below average

Why would a meta-learner be used in data mining: a. To determine the best fit of classification resulting from multiple models b. To orient analytic models to the data stored in a data base c. To enhance search engine optimization (SEO) strategies d. To select the analytic model to apply to the data in a database

To determine the best fit of classification resulting from multiple models

What has proven to be an effective way to initiate a professional relationship with a vendor: a. Treating the person to a round of golf b. Giving the vendor an expensive gift c. Having salespeople talk to the vendor d. Offering jobs to people on the vendor's staff

Treating the person to a round of golf

Important considerations when identifying your personal vision are your _____ and _____.

Values and Aspirations

Jane works in a factory. She has noticed that sections of the factory floor are consistently slippery because oil drips on them. She has reported this to her manager twice, but the problem hasn't been corrected. Jane is so worried that an employee could slip and fall that she contacts the government agency that handles workplace safety. This is an example of what?

Whistleblowing

The MSB Company provides its customers with critical or time-sensitive product information by sending them alerts or messages through their cellular phones. What form of technology is MSB using as an element of customer relationship management?

Wireless

Smith Company typically promotes employees based on seniority. To do this, which of the following pieces of information would Smith Brothers need for each employee: a. Years of college education b. Years of experience in the career field c. Years worked at current job d. Years of good performance at the current job

Years worked at current job

A company trains its human resources department in how to handle emergency situations. Is this an example of operations management? Why or why not?

Yes; it involves the operational aspects of safety and security

Complex buying behavior is most likely involved when the customer is purchasing: a. a car b. a meal c. socks d. gasoline

a car