QUESTION The Federal Reserve helps get money to commercial banks by making currency available and by making loans available. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: The Federal Reserve helps get money to commercial banks by making currency available and by making loans available.
QUESTION Whether short term or long term, a loan may be secured or unsecured. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Both short-term and long-term loans can be either secured or unsecured loans.
QUESTION The only way for a firm to make use of its accounts receivable in order to generate short-term funds is by selling them. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: There are two ways firms can make use of their accounts receivable in order to generate short-term funds: […]
QUESTION Factoring is a very inexpensive way for firms to get a short-term infusion of funds. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Factoring is an expensive way for firms to get a short-term infusion of funds, but it provides an avenue for small businesses that may not qualify […]
QUESTION Promissory notes are lines of credit to be paid off at a later date. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Because they allow a buyer to pay a seller at a later date, promissory notes are often used in the jewelry business.
QUESTION Among the activity ratios the executives want to see calculated is the inventory turnover ratio. Which of the following questions does this ratio best help answer? A) How many employees does Santos need to turn over its inventory? B) How much debt does Santos currently carry? C) What is Santos’s current owners’ equity? D) […]
QUESTION Equipment is one example of an intangible asset. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Equipment is a tangible asset. Intangible assets are patents, copyrights, and trademarks.
QUESTION Which of the following, if true, strengthens the case that Matheson’s acid-test ratio will be above the standard of 1.0? A) Matheson keeps a low inventory. B) Matheson has high owners’ equity. C) Matheson has high liabilities. D) Matheson has a large amount of cash on hand. E) Matheson has a high net income. […]
QUESTION The money supply has two definitions, the broader one being the most frequently used. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: The money supply has two definitions, one narrower (M1) and one more broad (M2), with M2 the most frequently used.
QUESTION Which of the following, if true, strengthens the case that determining the return on owners’ equity ratio would be helpful to Matheson? A) Matheson wants to know how profitable its business is overall. B) Matheson wants to know how well it is performing for its stockholders. C) Matheson wants to know how efficiently it […]
