QUESTION Which two types of budgets are referred to as financial budgets? A) capital budgets and cash budgets B) capital budgets and operating budgets C) cash budgets and operating budgets D) cash budgets and master budgets E) master budgets and operating budgets ANSWER Answer: A Explanation: A) Capital budgets and cash budgets are called […]
QUESTION Selling stock means selling ownership shares in a firm. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: To sell stock is to sell ownership shares in a firm.
QUESTION Subprime loans are loans for people with blemished or limited credit histories, which carry a higher rate of interest than prime loans to compensate for increased credit risk. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Subprime loans are loans for people with blemished or limited credit histories, which […]
QUESTION Short-term financing is typically needed when a company decides to make a major investment. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Short-term financing can help a company meet current operating needs, but long-term financing is typically needed when a company decides to make a major investment, such as […]
QUESTION What is the name given to the overall business function of obtaining funds for a company and managing them to accomplish the company’s objectives? A) finance B) forecasting C) budgeting D) asset collection E) capital expenditure ANSWER Answer: A Explanation: A) Finance is the business function of obtaining funds for a company and […]
QUESTION Both government-issued coins and paper money are referred to as currency. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Government-issued coins and paper money are both referred to as currency.
QUESTION Currency represents roughly 3/4 of all media of exchange in the United States. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Currency represents only about 1/3 of all media of exchange in the United States.
QUESTION Although the Federal Reserve is the central bank of the United States, it does not control the U.S. money supply. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: The Federal Reserve is the central bank of the United States and it DOES control the U.S. money supply.
QUESTION The only government organization that offers financial protection for money in banks, savings and loans, and credit unions is the FDIC. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Three different government organizations, the FDIC, SAIF, and NCUA, offer financial protection for money in banks, savings and loans, and […]
QUESTION All commercial banks are chartered. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: All commercial banks are chartered, meaning they have received government permission to operate.
