QUESTION Which of the following is TRUE of commercial paper? A) They are secured. B) They are not promissory notes. C) They are long-term notes. D) They are $100,000 or greater. E) They are issued mainly by smaller institutions. ANSWER Answer: D Explanation: D) Substitutes for bank loans, commercial paper consists of unsecured, short-term […]
QUESTION Spartan Furniture’s controller wants to show managers where the firm may have shortages or surpluses of funds throughout the year so that they can anticipate when they may have to borrow money. Which type of budget does he need? A) capital budget B) cash budget C) master budget D) operating budget E) discretionary budget […]
QUESTION What is the job of acquiring and managing funds called? A) financial prediction B) financial management C) sales forecasting D) budgeting E) bookkeeping ANSWER Answer: B Explanation: B) The job of acquiring and managing funds is called financial management.
QUESTION Which of the following is considered an intangible asset? A) a plot of land B) a downtown building C) oven equipment in a restaurant D) an office supply company delivery truck E) the copyright on a book ANSWER Answer: E Explanation: E) Tangible assets are defined as land, buildings, and equipment. Intangible assets […]
QUESTION Which of the following best defines risk-return trade-off? A) overseeing the collection of money owed B) the job of acquiring and managing funds in order to accomplish the firm’s objectives C) the balancing of the firm’s investment exposure with the expected payoffs from its investments D) a prediction about how money will come in […]
QUESTION What is the chief purpose of the process known as financial control? A) to tie together the different types of budgets to present the company’s overall plan B) to identify deviations from the financial plan so that corrective action can be taken C) to identify a firm’s sales and production goals and specify the […]
QUESTION Kent is the financial manager for a downtown department store. Which of the following is NOT one of the roles he assumes? A) oversee bill payment B) minimize taxes C) monitor accounting D) set interest rates on loans E) oversee collection of money owed ANSWER Answer: D Explanation: D) Financial managers oversee bill […]
QUESTION Which of the following is considered a tangible asset? A) a plot of land B) a software patent C) the copyright on a book D) a trademark on a food product E) the goodwill a neighborhood business has gained ANSWER Answer: A Explanation: A) Tangible assets are defined as land, buildings, and equipment. […]
QUESTION Which of the following is defined as predicting revenues, costs, and expenses for a certain period of time? A) forecasting B) budgeting C) accounting D) planning E) operating ANSWER Answer: A Explanation: A) Forecasting is predicting revenues, costs, and expenses for a certain period of time.
QUESTION Which type of budget ties together the other three types of budgets? A) capital budget B) cash budget C) master budget D) operating budget E) sales budget ANSWER Answer: C Explanation: C) Master budgets tie together the other three budgets (capital, cash, and operating) to present the company’s overall plan of action for […]
