Question 1

The success of a business in raising funds for operations depends upon the extent that profits can be produced from operations.

Accepted Answer

A) True 
 B)False

Question 2

Which one of the following balance sheet accounts would not be considered to be a current liability?

Accepted Answer

A) account payable 
B) bank notes payable 
C) accrued liabilities 
D) mortgage debt 
A) account payable 
B) bank notes payable 
C) accrued liabilities 
D) mortgage debt

Question 3

Of the following forms of organization, which businesses are the greatest in numbers?

Accepted Answer

A) proprietorships 
B) partnerships 
C) corporations 
D) limited partnerships 
A) proprietorships 
B) partnerships 
C) corporations 
D) limited partnerships

Question 4

On the income statement, operating profit is defined as:

Accepted Answer

A) operating profits minus operating expensesselling, general, and administrative expense 
B) gross profit minus selling, general, and administrative expense and depreciation operating expenses 
C) sales revenue minus cost of goods sold 
D) sales revenue minus operating expenses 
E) none of the above 
A) operating profits minus operating expensesselling, general, and administrative expense 
B) gross profit minus selling, general, and administrative expense and depreciation operating expenses 
C) sales revenue minus cost of goods sold 
D) sales revenue minus operating expenses 
E) none of the above

Question 5

The corporate form of organization is recognized in many countries.Which one of the following does not designate a corporation?

Accepted Answer

A) Inc. 
B) PLC 
C) AG 
D) SEC 
A) Inc. 
B) PLC 
C) AG 
D) SEC

Question 6

Of the following forms of business organization, which have the advantage of limited liability but no stockholders?

Accepted Answer

A) proprietorships 
B) partnerships 
C) corporations 
D) limited partnerships 
A) proprietorships 
B) partnerships 
C) corporations 
D) limited partnerships

Question 7

Which of the following are considered to be major financial management functions?

Accepted Answer

A) financial planning and analysis 
B) asset management 
C) raising funds 
D) all of the above 
A) financial planning and analysis 
B) asset management 
C) raising funds 
D) all of the above

Question 8

In the statement of cash flows, changes in retained earnings are reported as two separate line items, which are __________ and ___________.

Accepted Answer

A) revenues and expenses 
B) assets and liabilities 
C) depreciation and amortization 
D) net profits and taxes 
E) none of the above 
A) revenues and expenses 
B) assets and liabilities 
C) depreciation and amortization 
D) net profits and taxes 
E) none of the above

Question 9

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

Accepted Answer

A) taxes payabledepreciation 
B) accounts payable 
C) accruals 
D) notes payable 
E) all of the above are current liabilities 
A) taxes payabledepreciation 
B) accounts payable 
C) accruals 
D) notes payable 
E) all of the above are current liabilities

Question 10

What would be recorded in the common stock par value account on the balance sheet if 20,000 shares are issued at a par value of $2 and the market value is $5?

Accepted Answer

A) $20,000 
B) $40,000 
C) $30,000 
D) $60,000 
A) $20,000 
B) $40,000 
C) $30,000 
D) $60,000

Question 11

The 2002 Sarbanes-Oxley Act was designed to:

Accepted Answer

A) limit the compensation that could be paid to CEOs. 
B) exacerbate the many disclosure and conflict of interest problems of corporationsincrease the number of independent directors on corporate Boards. 
C) provide uniform international accounting standards 
D) two of the above 
E) none of the above 
A) limit the compensation that could be paid to CEOs. 
B) exacerbate the many disclosure and conflict of interest problems of corporationsincrease the number of independent directors on corporate Boards. 
C) provide uniform international accounting standards 
D) two of the above 
E) none of the above

Question 12

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

Accepted Answer

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

Question 13

Profits from a proprietorship are taxed at the corporate income tax rates.

Accepted Answer

A) True 
 B)False

Question 14

On the balance sheet, retained earnings represents

Accepted Answer

A) net profits for the current year 
B) net profits for the current year minus preferred stock dividends 
C) cash reinvested in fixed assets to support growth 
D) the total of earnings reinvested in the firm for the current year 
E) none of the above 
A) net profits for the current year 
B) net profits for the current year minus preferred stock dividends 
C) cash reinvested in fixed assets to support growth 
D) the total of earnings reinvested in the firm for the current year 
E) none of the above

Question 15

The balance sheet equation or accounting identity can be written as: assets equal liabilities minus owners' equity.

Accepted Answer

A) True 
 B)False

Question 16

The most desirable form of business organization in terms of ease of start-up is a corporation.

Accepted Answer

A) True 
 B)False

Question 17

On the income statement, net profit after tax is generally defined as:

Accepted Answer

A) operating profit minus operating expenses 
B) operating profit minus cost of goods sold 
C) operating profit minus interest 
D) operating profit minus interest minus taxes 
E) none of the above 
A) operating profit minus operating expenses 
B) operating profit minus cost of goods sold 
C) operating profit minus interest 
D) operating profit minus interest minus taxes 
E) none of the above

Question 18

Cash flows from financing activities might include:

Accepted Answer

A) increase in notes bonds payable 
B) increase in accounts payable 
C) depreciation 
D) all the above 
E) none of the above 
A) increase in notes bonds payable 
B) increase in accounts payable 
C) depreciation 
D) all the above 
E) none of the above

Question 19

The actual disbursement of cash is recorded in which of the following financial statements?

Accepted Answer

A) 	income statement 
B) 	balance sheet 
C) 	statement of cash flows 
D) 	treasurer’s report 
A) 	income statement 
B) 	balance sheet 
C) 	statement of cash flows 
D) 	treasurer’s report

Question 20

Limited partners must take an active role in the operations of the firm.

Accepted Answer

A) True 
 B)False

The success of a business in raising funds for operations depends upon the extent that profits can be produced from operations.

Which one of the following balance sheet accounts would not be considered to be a current liability?

Of the following forms of organization, which businesses are the greatest in numbers?

On the income statement, operating profit is defined as:

The corporate form of organization is recognized in many countries.Which one of the following does not designate a corporation?

Of the following forms of business organization, which have the advantage of limited liability but no stockholders?

Which of the following are considered to be major financial management functions?

In the statement of cash flows, changes in retained earnings are reported as two separate line items, which are and _.

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

What would be recorded in the common stock par value account on the balance sheet if 20,000 shares are issued at a par value of $2 and the market value is $5?

The 2002 Sarbanes-Oxley Act was designed to:

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

Profits from a proprietorship are taxed at the corporate income tax rates.

On the balance sheet, retained earnings represents

The balance sheet equation or accounting identity can be written as: assets equal liabilities minus owners' equity.

The most desirable form of business organization in terms of ease of start-up is a corporation.

On the income statement, net profit after tax is generally defined as:

Cash flows from financing activities might include:

The actual disbursement of cash is recorded in which of the following financial statements?

Limited partners must take an active role in the operations of the firm.

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 Valuation

Securities 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

Exam 13: Business Organization and Financial Data

The success of a business in raising funds for operations depends upon the extent that profits can be produced from operations.

Which one of the following balance sheet accounts would not be considered to be a current liability?

Of the following forms of organization, which businesses are the greatest in numbers?

On the income statement, operating profit is defined as:

The corporate form of organization is recognized in many countries.Which one of the following does not designate a corporation?

Of the following forms of business organization, which have the advantage of limited liability but no stockholders?

Which of the following are considered to be major financial management functions?

In the statement of cash flows, changes in retained earnings are reported as two separate line items, which are __________ and ___________.

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

What would be recorded in the common stock par value account on the balance sheet if 20,000 shares are issued at a par value of $2 and the market value is $5?

The 2002 Sarbanes-Oxley Act was designed to:

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

Profits from a proprietorship are taxed at the corporate income tax rates.

On the balance sheet, retained earnings represents

The balance sheet equation or accounting identity can be written as: assets equal liabilities minus owners' equity.

The most desirable form of business organization in terms of ease of start-up is a corporation.

On the income statement, net profit after tax is generally defined as:

Cash flows from financing activities might include:

The actual disbursement of cash is recorded in which of the following financial statements?

Limited partners must take an active role in the operations of the firm.

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 Valuation

Securities 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

In the statement of cash flows, changes in retained earnings are reported as two separate line items, which are and _.