QUESTION Bank deposit insurance and other policies were adopted to protect depositors as a result of the many banking troubles leading up to the Great Depression. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: The many banking troubles leading up to the Great Depression did result in the creation of […]
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 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 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 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 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 […]
QUESTION Santos’s executives are most interested in seeing the company’s liquidity ratios. Based on this information, what question do they most likely want to have answered? A) Can the company pay its short-term debts without obtaining further loans? B) Does the company have enough inventory to meet sales demands? C) How much inventory on hand […]
QUESTION There were no warning signs prior to the financial crisis of 2008. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: There were ample warning signs in 2006-2007 that a financial meltdown might be coming.
QUESTION Financial management is the job of acquiring funds for a firm and managing them to accomplish the firm’s objectives. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Financial management is the job of acquiring funds for a firm and managing them to accomplish the firm’s objectives. An important aspect […]
QUESTION The top financial manager in a firm often holds the title of chief financial officer (CFO). Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: The people responsible for planning and controlling the acquisition and uses of funds are called financial managers, and the top such manager in a firm […]
