From a budgeting view, which of the following statements is not true concerning variances? A) A favorable expense variance means the budgeted amount was more than actual. B) Cumulative variance = current month’s variance + variances of previous months. C) Ideally, cumulative variances for the year will equal zero. D) Ideally, cumulative variances for the […]
A provision included in a claims-made commercial general liability policy provides coverage for claims filed after the policy has expired. This provision is called a(n) A) extended reporting period provision. B) agreed amount endorsement. C) retroactive date provision. D) per-occurrence limit clause. ANSWER Answer: A
Which of the following is (are) covered under a claims-made policy? I. Claims arising out of occurrences which take place during the policy period, regardless of when the claim is made II. Claims first reported during the policy period, provided the event occurred after a retroactive date stated in the policy A) I only B) […]
Auto Loans R Them loans you $24,000 for four years to buy a car. The loan must be repaid in 48 equal monthly payments. The annual interest rate on the loan is 9 percent. What is the monthly payment? A) $543.79 B) $563.82 C) $597.24 D) $500.92 ANSWER C
What information does a firm’s statement of cash flows provide to the viewing public? A) a report documenting a firm’s cash inflows and cash outflows from operating, financing, and investing activities for a defined period of time B) an itemization of all of a firm’s assets, liabilities, and equity for a defined period of time […]
Under the Truth in Lending Act, your financial loss due to a lost or stolen credit card is: A) zero. B) limited to $50. C) limited to $500. D) unlimited. ANSWER B
Which of the following would NOT be a direct concern of working capital sensitivity? A) accounts receivable collection period B) inventory turnover C) annual tax obligations D) average age of accounts payable ANSWER C
A favorable income variance indicates a monthly income A) equal to the budgeted monthly income. B) greater than budgeted monthly expenses. C) greater than budgeted monthly income. D) greater than accumulated income variances. ANSWER C
Examples of uses of cash include A) selling machinery. B) paying cash dividends to stockholders. C) borrowing an additional amount using a secured loan. D) all of the above ANSWER B
Because risk is measured by variability of returns, how long we hold our investments does not matter very much when it comes to reducing risk. Indicate whether the statement is true or false ANSWER FALSE
