Chapter 1
Which one of the following applies to a general partnership?
Any one of the partners can be held solely liable for all of the partnership's debt
Which one of the following occupations best fits into the corporate area of finance?
Chief financial
The Sarbanes-Oxley Act in 2002 was prompted by which one of the following from the 1990's?
Corporate accounting and financial fraud
Matt and Alicia created a firm that is a separate legal entity and will share ownership of that firm on a 75/25 basis. Which type of entity did they create if they have no personal liability for the firm's debts?
Corporation
Todd and Cathy created a firm that is a separate legal entity and will share ownership of that firm on a 50/50 basis. Which type of entity did they create if they have no personal liability for the firm's debts?
Corporation
Working capital management includes which one of the following?
Determining which customers will be granted credit
If you accept a job as a domestic security analyst for a brokerage firm, you are most likely working in which one of the following financial areas?
Investments
Which one of the following forms of business organization offers liability protection to some of its owners but not to all of its owners?
Limited partnership
Which one of the following is an advantage of being a limited partner?
Losses limited to capital invested
A limited liability company:
prefers its profits be taxed as personal income to its owners
Limited liability companies are primarily designed to:
provide limited liability while avoiding double taxation
The Sarbanes-Oxley Act
require the corporate officers to personally attest that the financial statements are a fair representation of the company's financial results
Will and Bill both enjoy sunshine, water, and surfboards. Thus, the two friends decided to create a business together renting surfboards, paddle boats, and inflatable devices in California. Will and Bill will equally share in the decision making and in the profits or losses. Which type of business did they create if they both have full personal liability for the firm's debts?
General partnership
Which one of the following best describes they primary intent of the Sarbanes-Oxley Act of 2002?
Increase the protections against corporate fraud
Which one of the following best matches the primary goal of financial management?
Increasing the market value of firm
Which one of the following statements correctly applies to a sole proprietorship?
Obtaining additional equity is dependent on the owner's personal finances
Which one of the following statements about a limited partnership is correct?
There must be at least one general partner
Stadford, Inc. is financed with 40 percent debt and 60 percent equity. This mixture of debt and equity is referred to as the firm's
capital structure
A sole proprietorship:
has its profits taxed as personal income
Corporate shareholders:
have the ability to change the corporation's bylaws
If you accept a job as a domestic security analyst for a brokerage firm, you are most likely working in which one of the following financial areas?
investments
A corporation:
it is legal entity separate from its owners
The Sarbanes-Oxley Act of 2002 has:
made officers of publicly traded firms personally responsible for the firm's financial statements
In a general partnership, each partner is personally liable for:
the total debts of the partnership, even if he or she was unaware of those debts
In general partnership, each partner is personally liable for:
the total debts of the partnership, even if he or she was unaware of those debts
The daily financial operations of a firm are primarily controlled by managed the:
working capital
The daily financial operations of a firm are primarily controlled by managing the:
working capital