Question 1

All limited liability company shareholders must take active roles in managing the company.

Accepted Answer

A) True 
 B)False

Question 2

Which form of business organization does not have a basic weakness of raising capital?

Accepted Answer

A)  proprietorship 
B)  corporation 
C)  limited partnership 
D)  partnership 
A)  proprietorship 
B)  corporation 
C)  limited partnership 
D)  partnership

Question 3

Typically, a close estimate of market value added (MVA) is the market value of equity less the book value of equity.

Accepted Answer

A) True 
 B)False

Question 4

The Sarbanes-Oxley Act of 2002 was passed by the U.S. Congress in response several ethical scandals.

Accepted Answer

A) True 
 B)False

Question 5

Managers hired by the owners to run the firm.

Accepted Answer

A)  Investors 
B)  Principals 
C)  Agents 
D)  Operators 
A)  Investors 
B)  Principals 
C)  Agents 
D)  Operators

Question 6

An increase in an equity account is a use of cash flows.

Accepted Answer

A) True 
 B)False

Question 7

The current liabilities of a business may include:

Accepted Answer

A)  notes payable 
B)  accounts receivable 
C)  prepaid expenses 
D)  depreciation reserves 
A)  notes payable 
B)  accounts receivable 
C)  prepaid expenses 
D)  depreciation reserves

Question 8

Which of the following activities is not under the controller?

Accepted Answer

A)  Capital budget 
B)  Tax planning 
C)  Cost accounting 
D)  Financial accounting 
A)  Capital budget 
B)  Tax planning 
C)  Cost accounting 
D)  Financial accounting

Question 9

All of the following accounts are considered to be current liabilities on the balance sheet except:

Accepted Answer

A)  accounts receivable 
B)  accounts payable 
C)  accruals 
D)  notes payable 
A)  accounts receivable 
B)  accounts payable 
C)  accruals 
D)  notes payable

Question 10

The balance sheet is a statement of a company's financial position over an accounting period.

Accepted Answer

A) True 
 B)False

Question 11

If a firm issues 10,000 shares of common stock with a par value of $5 and for a sales price of $15, what amount would be recorded in the capital paid-in excess of par account?

Accepted Answer

A)  $10,000 
B)  $15,000 
C)  $50,000 
D)  $100,000 
A)  $10,000 
B)  $15,000 
C)  $50,000 
D)  $100,000

Question 12

The three main sections of the statement of cash flows include all of the following except:

Accepted Answer

A)  cash from saving 
B)  cash from investments 
C)  cash from operations 
D)  cash from financing 
A)  cash from saving 
B)  cash from investments 
C)  cash from operations 
D)  cash from financing

Question 13

Which of the following would not be included on the balance sheet?

Accepted Answer

A)  dividends paid 
B)  retained earnings 
C)  capital paid in excess of par 
D)  common stock 
A)  dividends paid 
B)  retained earnings 
C)  capital paid in excess of par 
D)  common stock

Question 14

Corporations issue stock.

Accepted Answer

A) True 
 B)False

Question 15

Financial statements that must be included in the annual report include the:

Accepted Answer

A)  statement of sales 
B)  right sized income statement 
C)  statement of cash flows 
D)  statement of changes in shareholder market value 
A)  statement of sales 
B)  right sized income statement 
C)  statement of cash flows 
D)  statement of changes in shareholder market value

Question 16

The market value added measures the value created by the firm's managers.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not part of the finance focus?

Accepted Answer

A)  Seek to measure firm profitability 
B)  Market value of assets 
C)  Identifying cash inflows and outflows 
D)  Track the cash flows to assess the "quality" of reported assets and earnings 
A)  Seek to measure firm profitability 
B)  Market value of assets 
C)  Identifying cash inflows and outflows 
D)  Track the cash flows to assess the "quality" of reported assets and earnings

Question 18

For a corporation, a firm commonly shows its net income on a per-shareholder basis. This is referred to as the earnings per shareholder (EPS).

Accepted Answer

A) True 
 B)False

Question 19

Under accrual accounting, revenues and their associated expenses are recognized when a sale occurs, regardless of when cash revenues or expenses occur.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements is false?

Accepted Answer

A)  Working capital represents assets needed to carry out the normal operations of the business. 
B)  Wages payable are part of a firm's accounts payable, 
C)  Because of accrual accounting, a firm's net income over some period is not necessarily the same as its cash flows. 
D)  Capital is recorded on the liability side of the balance sheet. 
A)  Working capital represents assets needed to carry out the normal operations of the business. 
B)  Wages payable are part of a firm's accounts payable, 
C)  Because of accrual accounting, a firm's net income over some period is not necessarily the same as its cash flows. 
D)  Capital is recorded on the liability side of the balance sheet.

All limited liability company shareholders must take active roles in managing the company.

Which form of business organization does not have a basic weakness of raising capital?

Typically, a close estimate of market value added (MVA) is the market value of equity less the book value of equity.

The Sarbanes-Oxley Act of 2002 was passed by the U.S. Congress in response several ethical scandals.

Managers hired by the owners to run the firm.

An increase in an equity account is a use of cash flows.

The current liabilities of a business may include:

Which of the following activities is not under the controller?

All of the following accounts are considered to be current liabilities on the balance sheet except:

The balance sheet is a statement of a company's financial position over an accounting period.

If a firm issues 10,000 shares of common stock with a par value of $5 and for a sales price of $15, what amount would be recorded in the capital paid-in excess of par account?

The three main sections of the statement of cash flows include all of the following except:

Which of the following would not be included on the balance sheet?

Corporations issue stock.

Financial statements that must be included in the annual report include the:

The market value added measures the value created by the firm's managers.

Which of the following is not part of the finance focus?

For a corporation, a firm commonly shows its net income on a per-shareholder basis. This is referred to as the earnings per shareholder (EPS).

Under accrual accounting, revenues and their associated expenses are recognized when a sale occurs, regardless of when cash revenues or expenses occur.

Which of the following statements is false?

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuations

Securities and Markets

Financial Return and Risk Concepts

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

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Exam 13: Business Organization and Financial Data

All limited liability company shareholders must take active roles in managing the company.

Which form of business organization does not have a basic weakness of raising capital?

Typically, a close estimate of market value added (MVA) is the market value of equity less the book value of equity.

The Sarbanes-Oxley Act of 2002 was passed by the U.S. Congress in response several ethical scandals.

Managers hired by the owners to run the firm.

An increase in an equity account is a use of cash flows.

The current liabilities of a business may include:

Which of the following activities is not under the controller?

All of the following accounts are considered to be current liabilities on the balance sheet except:

The balance sheet is a statement of a company's financial position over an accounting period.

If a firm issues 10,000 shares of common stock with a par value of $5 and for a sales price of $15, what amount would be recorded in the capital paid-in excess of par account?

The three main sections of the statement of cash flows include all of the following except:

Which of the following would not be included on the balance sheet?

Corporations issue stock.

Financial statements that must be included in the annual report include the:

The market value added measures the value created by the firm's managers.

Which of the following is not part of the finance focus?

For a corporation, a firm commonly shows its net income on a per-shareholder basis. This is referred to as the earnings per shareholder (EPS).

Under accrual accounting, revenues and their associated expenses are recognized when a sale occurs, regardless of when cash revenues or expenses occur.

Which of the following statements is false?

The Financial Environment

Money and the Monetary System

Banks and Other Financial Institutions

Federal Reserve System

Policy Makers and the Money Supply

International Finance and Trade

Savings and Investment Process

Interest Rates

Time Value of Money

Bonds and Stocks: Characteristics and Valuations

Securities and Markets

Financial Return and Risk Concepts

Financial Analysis and Long-Term Financial Planning

Managing Working Capital

Short-Term Business Financing

Capital Budgeting Analysis

Capital Structure and the Cost of Capital

Filters