Question 1

Implicit agency costs:

Accepted Answer

A) may will not harm shareholders 
B) do not have a direct expense associated with them 
C) may include restrictive covenants 
D) all the above 
E) none of the above 
A) may will not harm shareholders 
B) do not have a direct expense associated with them 
C) may include restrictive covenants 
D) all the above 
E) none of the above

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

If a corporation liquidates infiles for bankruptcy, creditors may attach try to get control of the personal assets of the owners of the company to collect on their debts.

Accepted Answer

A) True 
 B)False

Question 4

Information about which accounting principles were used by the firm are included in the:

Accepted Answer

A) balance sheet 
B) footnotes to the financial statements 
C) management discussion on annual report 
D) none of the above 
A) balance sheet 
B) footnotes to the financial statements 
C) management discussion on annual report 
D) none of the above

Question 5

Generally accepted accounting principles are formulated by the:

Accepted Answer

A) Securities and Exchange Commission 
B) Financial Accounting Standards Board 
C) Federal Trade Commission 
D) General Accounting Office 
A) Securities and Exchange Commission 
B) Financial Accounting Standards Board 
C) Federal Trade Commission 
D) General Accounting Office

Question 6

A limited liability company can have an unlimited number of shareholders, including other corporations.

Accepted Answer

A) True 
 B)False

Question 7

Cash flows from operating activities might include:

Accepted Answer

A) net income 
B) increase in notes payableequity sold to investors 
C) dividend payment 
D) all the above 
E) none of the above 
A) net income 
B) increase in notes payableequity sold to investors 
C) dividend payment 
D) all the above 
E) none of the above

Question 8

For a given accounting period, which of the following is likely to represent primarily variable costs?

Accepted Answer

A) cost of goods sold 
B) general and administrative expenses 
C) depreciation expense 
D) interest expense 
A) cost of goods sold 
B) general and administrative expenses 
C) depreciation expense 
D) interest expense

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is not considered to be one of the three major forms of business ownership in the United States?

Accepted Answer

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

Question 11

Which of the following is a use of cash?

Accepted Answer

A) an increase in an asset account 
B) a decrease in an asset account cb.an increase in a liability account
Dc)an increase in an equity account
Ed)none of the above 
A) an increase in an asset account 
B) a decrease in an asset account cb.an increase in a liability account
Dc)an increase in an equity account
Ed)none of the above

Question 12

The term ___________ conveys a relationship of equality between the assets of the business and the sources of funds for their acquisition.

Accepted Answer

A) statement of cash flows 
B) cash transactions statement 
C) income statement 
D) balance sheet 
A) statement of cash flows 
B) cash transactions statement 
C) income statement 
D) balance sheet

Question 13

Shareholder wealth would beis measured as:

Accepted Answer

A) assets plus liabilities 
B) assets minus liabilities 
C) common stock price times number of shares outstanding 
D) none of the above 
A) assets plus liabilities 
B) assets minus liabilities 
C) common stock price times number of shares outstanding 
D) none of the above

Question 14

Partnership income is taxed at the partnership income tax rate.

Accepted Answer

A) True 
 B)False

Question 15

A business organization that receives the limited liability of a corporation but is taxed as a proprietorship or partnership is called a:

Accepted Answer

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

Question 16

The financial statement that provides a snapshot view of the financial condition of a business at a point in time is the:

Accepted Answer

A) balance sheet 
B) income statement 
C) statement of cash flows 
D) statement of retained earnings 
E) two of the above 
A) balance sheet 
B) income statement 
C) statement of cash flows 
D) statement of retained earnings 
E) two of the above

Question 17

On the income statement, gross profit is defined as:

Accepted Answer

A) operating profits minus operating expenses 
B) gross profit minus 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 expenses 
B) gross profit minus operating expenses 
C) sales revenue minus cost of goods sold 
D) sales revenue minus operating expenses 
E) none of the above

Question 18

proprietorships are the most widely used form although they are generally the smallest organizations in terms of assets.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following would not be a source of funds?

Accepted Answer

A) decrease in an equity account 
B) increase in a liability account 
C) decrease in an asset account 
D) all the above are sources of funds 
A) decrease in an equity account 
B) increase in a liability account 
C) decrease in an asset account 
D) all the above are sources of funds

Question 20

All of the following accounts are considered to be fixed assets on the balance sheet except:

Accepted Answer

A) buildings 
B) equipment 
C) plant 
D) machinery 
E) all of the above are fixed assets 
A) buildings 
B) equipment 
C) plant 
D) machinery 
E) all of the above are fixed assets

Implicit agency costs:

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

If a corporation liquidates infiles for bankruptcy, creditors may attach try to get control of the personal assets of the owners of the company to collect on their debts.

Information about which accounting principles were used by the firm are included in the:

Generally accepted accounting principles are formulated by the:

A limited liability company can have an unlimited number of shareholders, including other corporations.

Cash flows from operating activities might include:

For a given accounting period, which of the following is likely to represent primarily variable costs?

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

Which of the following is not considered to be one of the three major forms of business ownership in the United States?

Which of the following is a use of cash?

The term ___________ conveys a relationship of equality between the assets of the business and the sources of funds for their acquisition.

Shareholder wealth would beis measured as:

Partnership income is taxed at the partnership income tax rate.

A business organization that receives the limited liability of a corporation but is taxed as a proprietorship or partnership is called a:

The financial statement that provides a snapshot view of the financial condition of a business at a point in time is the:

On the income statement, gross profit is defined as:

proprietorships are the most widely used form although they are generally the smallest organizations in terms of assets.

Which of the following would not be a source of funds?

All of the following accounts are considered to be fixed assets on the balance sheet except:

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

Implicit agency costs:

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

If a corporation liquidates infiles for bankruptcy, creditors may attach try to get control of the personal assets of the owners of the company to collect on their debts.

Information about which accounting principles were used by the firm are included in the:

Generally accepted accounting principles are formulated by the:

A limited liability company can have an unlimited number of shareholders, including other corporations.

Cash flows from operating activities might include:

For a given accounting period, which of the following is likely to represent primarily variable costs?

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

Which of the following is not considered to be one of the three major forms of business ownership in the United States?

Which of the following is a use of cash?

The term ___________ conveys a relationship of equality between the assets of the business and the sources of funds for their acquisition.

Shareholder wealth would beis measured as:

Partnership income is taxed at the partnership income tax rate.

A business organization that receives the limited liability of a corporation but is taxed as a proprietorship or partnership is called a:

The financial statement that provides a snapshot view of the financial condition of a business at a point in time is the:

On the income statement, gross profit is defined as:

proprietorships are the most widely used form although they are generally the smallest organizations in terms of assets.

Which of the following would not be a source of funds?

All of the following accounts are considered to be fixed assets on the balance sheet except:

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