Chapter 14: Using Financial Information and Accounting, Chapter 15: Understanding Money and Financial Institutions

Dividends are: a)the earnings of the corporation b)loans made to the shareholders c)annual payments on bonds d)payments to the shareholders from company earnings

d)payments to the shareholders from company earnings

Federal Reserve banks must hold a certain portion of their deposits in reserve. This percentage is called the: a)interest rate average b)discount requirement c)prime monetary percentage d)reserve requirement

d)reserve requirement

Valeria Ramirez keeps track of day-to-day operational data to make sure her employer has enough cash to run the business and will determine if and when the company she works for should open a second distribution center. Ramirez is a(n) _____ manager. a)analysis b)facilities c)operations d)sales revenues

d)sales revenues

A(n) _____ is the financial statement that is used to assess the sources and uses of cash flow during the year. a)balance sheet b)trial balance c)profitability statement d)statement of cash flows

d)statement of cash flows

Financial institutions can be divided into two broad categories. These are ______ institutions. a)depository and nondepository b)depository and fiduciary c)currency and loan d)credit and debt

a)depository and nondepository

A(n) _____ is a summary of what a company has earned and spent over a given period. a)income statement b)balance sheet c)annual stockholders' report d)trial balance

a)income statement

Pricila Martinez recently inherited $300,000. She has invested the inherited money in real estate and government securities. Martinez is using her money as a: a)store of value b)commodity of exchange c)medium of exchange d)measure of wealth

a)store of value

In seeking a balance between the opportunity for profit and the potential for loss, a financial manager is dealing with the concept of _____ trade-off. a)potential profit b)profit-budget c)risk-return d)sales-profit

c)risk-return

Which of the following calculations is a formal expression of the accounting equation? a)assets + liabilities = retained earnings b)assets + net income = liabilities c)assets + owners' equity = liabilities d)assets = liabilities + owners' equity

d)assets = liabilities + owners' equity

Items that groups of people use as money must be _____ to be acceptable mediums of exchange. a)distributable, durable, comparable and valuable b)valuable, durable, compatible and scarce c)portable, sortable, profitable, and divisible d)scarce, divisible, portable, and durable

d)scarce, divisible, portable, and durable

_____ invest in new businesses in return for part of the ownership, sometimes as much as 60 percent. a)Venture capitalists b)Intrapreneurs c)Business opportunists d)Multipreneurs

a)Venture capitalists

The _____ is an independent, quasi-public corporation backed by the full faith and credit of the U.S. government that insures deposits in commercial banks and thrift institutions for up to a ceiling of $250,000 per account. a)National Credit Union Share Insurance Fund b)Federated Deposit Investment Corporation (FDIC) c)Savings Association Insurance Fund (SAIF) d)Bank Insurance Fund (BIF)

b)Federated Deposit Investment Corporation (FDIC)

_____ deals with reporting to outsiders. _____ deals with the internal operations of the firm. a)Client accounting; Tax accounting b)Bookkeeping; Financial accounting c)Financial accounting; Managerial accounting d)Auditing; Managerial accounting

c)Financial accounting; Managerial accounting

The Bookish Bean is an independent coffeehouse/bookstore that went bankrupt only eight months after opening due to an unexpected demand for cash to fix a leaking roof. Better cash _____ might have allowed the business to continue operation. a)capitalization b)maintenance c)management d)targeting

c)management

A gift shop would categorize which of the following as the BEST example of a current asset? a)the building in which the store is located b)salary paid to student employees c)money in the business bank account d)money paid for rent and utilities

c)money in the business bank account