QUESTION Pension funds tend to invest in short-term aggressive assets. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Pension funds tend to invest in long-term conservative assets such as common stock or government securities.
Date: September 3rd, 2020
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.
Date: September 3rd, 2020
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) […]
Date: September 3rd, 2020
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.
Date: September 3rd, 2020
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. […]
Date: September 3rd, 2020
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.
Date: September 3rd, 2020
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 […]
Date: September 3rd, 2020
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 […]
Date: September 3rd, 2020
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.
Date: September 3rd, 2020
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 […]
Date: September 3rd, 2020
