Accounting
Accounting and Finance
Finance
Finance and Securities
Securities
100
The _____ shows the assets, liabilities, and owners' equity of a firm, at a specific point in time. A. income statement B. balance sheet C. statement of cash flows D. trial balance
What is B. balance sheet
100
The purpose of the current ratio is to evaluate the firm's ability to: A. Generate sales with a given level of current assets. B. Utilize current assets profitably. C. Pay its bills in the short run. D. Effectively use borrowed funds.
What is C. Pay its bills in the short run.
100
A _________ forecast predicts the revenues, costs, and expenses a firm will incur for a period of one year or less. A. near-horizon B. short-term C. capital expenditures D. tactical
What is B. short-term
100
Lancer Wholesale Company wants to improve cash flow. Which of the following strategies would be most likely to help Lancer achieve this objective? A. Relaxing its credit policy for new customers B. Offering cash discounts to buyers who pay their accounts promptly C. Accepting IOUs from customers who buy in large quantities D. Offering extended payment plans to qualified buyers
What is B. Offering cash discounts to buyers who pay their accounts promptly
100
A ________ certificate provides evidence of ownership in a specific corporation. A. stock B. bond C. debt D. capital
What is A. stock
200
Which financial statement reports the company's revenues and selling costs over a period of time? A. income statement B. balance sheet C. statement of cash flows D. trial balance
What is A. income statement
200
Earnings per share, return on sales, and return on equity are examples of: A. leverage ratios. B. liquidity ratios. C. equity ratios. D. profitability ratios.
What is D. profitability ratios.
200
Which of the following shows a firm's spending plans on fixed assets such as large equipment? A. Capital budget B. Operating budget C. Cash budget D. Surplus budget
What is A. Capital budget
200
Selling accounts receivable to obtain short-term funds is called: A. pledging. B. factoring. C. equity financing. D. debt financing
What is B. factoring.
200
The corporate certificate issued to an investor that has loaned money to the corporation or government is called a: A. common stock. B. preferred stock. C. bond. D. debt document.
What is C. bond.
300
Company resources that are purchased with the intention that they will convert to cash within one year are: A. Fixed assets B. Current liabilities C. Current assets D. Owners' equity
What is C. Current assets
300
Generally, a high ___________ ratio could lead investors and creditors to view the company as being very risky. A. debt to owners' equity B. acid-test C. diluted earnings per share D. inventory turnover
What is A. debt to owners' equity
300
The concept, "time value of money" indicates: A. the value of a dollar decreases over time as prices increase. B. the prices of goods and services will fluctuate over time due to inflation and higher costs of production. C. monetary systems tend to become more sophisticated over time. D. a dollar received today is worth more than a dollar received a year from today.
What is D. a dollar received today is worth more than a dollar received a year from today.
300
Corporations benefit from securities markets primarily by: A. creating an efficient mechanism to invest in stocks and bonds. B. obtaining the capital they need to finance their operations. C. securing memberships on various stock exchanges. D. participating in the mutual funds of investment bankers.
What is B. obtaining the capital they need to finance their operations.
300
Which of the following represents a disadvantage of issuing bonds? A. Bonds are permanent debt on the firm's balance sheet. B. Dividends are legally required. C. Bonds increase the firm's debt. D. Bondholders receive voting rights.
What is C. Bonds increase the firm's debt.
400
The Statement of Cash flows identifies cash receipts and disbursements that result _______________. A. from selling goods and/or services, exclusively. B. solely from a firm's investments. C. from a firm's operations and investment activities, but not from financing activities. D. from a firm's operations, investment, and financing activities.
What is D. from a firm's operations, investment, and financing activities.
400
Undercapitalization refers to the problem of: A. insufficient start-up funds. B. inadequate control of expenses. C. inappropriate cash flows. D. under-valued capital stock.
What is A. insufficient start-up funds.
400
Acquiring funds through borrowing represents: A. debt financing. B. venture capital. C. speculative capital. D. equity financing.
What is A. debt financing.
400
Most businesses prefer to meet their long-term financial needs through: A. debt financing. B. capital from the sale of stock. C. retained earnings. D. capital from the sale of bonds.
What is C. retained earnings.
400
Creating a portfolio by buying several different types of investments to spread the risk of investing is called _______________. A. modulation B. diversification C. re-allocation D. formula investing
What is B. diversification
500
The financial ratios that measure a firm's ability to pay its short-term debts are called: A. leverage ratios. B. liquidity ratios. C. equity ratios. D. profitability ratios.
What is B. liquidity ratios.
500
A(n) _____________ job includes forecasting, budgeting, cash flow analysis, cost control, taxes, and credit management. A. CPA's B. investment banker's C. financial manager's D. portfolio manager's
What is C. financial manager's
500
With plans to build a $50 million theme park, Extreme Entertainment, Inc. intends to finance this project through the sale of additional shares of ownership in their firm. Selling new shares of stock represents ___________ financing. A. retained B. debt C. initial offering D. equity
What is D. equity
500
An organization whose members can buy and sell securities for companies and investors is known as a: A. public securities dealer. B. securities facilitator. C. transfer medium. D. stock exchange.
What is D. stock exchange.
500
When an investor sells a security for more than the purchase price, the investor earns a(n): A. dividend payment. B. appreciated interest receipt. C. corporate benefit. D. capital gain.
What is D. capital gain.
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