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Study Resources (Business Management)

  331.Carole Grand and Bonnie Lamore run a shuttle service from Western Illinois to the busy Chicago O'Hare airport. Last month, they recorded the following:  If 25% of their net income is paid to the government in taxes, what is their net income after taxes? A. $1410.00B. $1160.00C. $682.00D. $870.00 332.Costas Calendar Company's Statement of Cash Flows showed.
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  181.Susan started a cake decorating business that failed. She is convinced that she lacked the necessary funds to promote her business and get it off the ground. Susan experienced:A. Inadequate financial control.B. Undervalued inventory.C. Undercapitalization.D. A cash flow issue. 182.Carlos is the manager of Oh! Canada Sporting Goods. During the past six months, his cash.
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  378.Identify the three key financial statements that corporations are required to prepare, and describe the type of information found on each. 379.Identify and explain the differences between LIFO and FIFO inventory valuation methods. What would be the difference in gross margin using FIFO versus LIFO?     .
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  221.The effective management of accounts receivable requires financial managers to:A. review the credit history of new customers.B. provide prompt cash payments to suppliers.C. allow customers more time in paying their past due accounts.D. refuse bank-issued credit cards. 222.With plans to build a $50 million theme park, Extreme Entertainment, Inc. intends to finance this project through.
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  111.Suppliers prefer to offer trade credit to customers with poor credit ratings or no credit history. 112.A promissory note is a written contract between a supplier and a business customer, with a promise that customer will pay supplier a specified amount by a certain date. 113.Family and friends represent "problem free" sources.
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  51.A cash budget helps managers anticipate borrowing, debt repayment, operating expenses, and short-term investment opportunities. 52.The main objective of financial control is to establish priorities for the purchase of plant and equipment. 53.By identifying variances from the financial plan, managers are able to focus on those departments that require corrective action. 54.Financial control.
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  121.Factoring refers to the process of selling accounts receivable for cash. 122.Factoring refers to the process of selling inventory to generate short-term funds. 123.Factoring represents the least expensive way for a firm to raise short-term funds. 124.A tool that provides lots of convenience, credit cards are a source of a readily available line.
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  291.The "bottom line" of an income statement shows the firm's: A. Retained earnings.B. Gross profit.C. Net income or net loss.D. Owners' equity. 292.Expenses a firm incurs for insurance, office salaries, and rent are classified as: A. Selling expenses on an income statement.B. General expenses on an income statement.C. Current liabilities on a balance sheet.D. General expenses on a cash flow statement. 293.Debts.
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  231.Green Builder's Supply, Inc. does not offer customers a cash discount for early payment of their accounts receivable. As a result, most customers wait to pay their bill on the last day before late penalties are charged. These customers apparently understand the:A. time value of money.B. benefits of tax-deductible expenses.C. financial community's perception.
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  311.In the Spotlight on Small Business box titled, “What’s Coming and Going at the College Bookstore?”  the passage explained that accounting for profits may differ, depending upon___________________. A. the accounting method used to calculate overhead expenses.B. the accounting method used to calculate the cost of inventory.C. price and volume.D. the company’s tax bracket. 312.During a period.
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  Essay Questions  372.Explain the differences between managerial and financial accounting, and give examples of the types of problems and issues examined by each of these areas of accounting. 373.Discuss the role of an independent auditor. Provide information about the types of accounting activities they perform and the recent laws that have emerged.
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  11.While finance is a critical activity for profit-seeking organizations, by definition nonprofit organizations are not required to fulfill the finance function. 12.A comptroller is responsible for the acquiring and managing of funds for an organization. 13.Inability to attract and retain qualified employees is one of the most common ways for a firm.
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  71.Effective financial managers evaluate customers' ability to pay for merchandise purchased on credit. 72.With added competition, firms prefer not to offer the availability of credit sales to their customers. 73.Accepting credit cards, such as MasterCard or Visa, enables a firm to decrease the expense of extending credit to customers. 74.The cost to a.
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  241.The most widely used source of short-term funding is:A. trade credit.B. a line of credit.C. factoring.D. commercial finance companies. 242.________ is a form of short-term financing. Businesses buy merchandise from their suppliers, but are not required to pay for their purchases until some future date.A. Secured creditB. Trade creditC. Revolving creditD. Factoring 243.Some suppliers hesitate to offer trade credit to.
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  161.Corporations that issue debenture bonds are required to provide collateral. 162.Corporations that issue stock to raise long-term funds accept the legal obligation to repay the amount borrowed. 163.Unlike bonds, stocks offer the advantage of tax-deductible interest payments. 164.As a financial manager for a very profitable manufacturer of specialty steel, Kurt has been asked.
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  341.________ measures the amount of profit earned by a company for each share of outstanding common stock. A. Basic earnings per share (basic EPS)B. Diluted earnings per share (diluted EPS)C. Simple earnings per share (simple EPS)D. Return on shares outstanding (RSO) 342.__________ earnings per share measures the amount of profit a firm earns per share of.
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  271.Business match their long-term capital needs to:A. the firm's debt to equity ratio.B. the ratio of long-term vs. short-term capital available.C. trade credit discounts.D. their long-term goals and objectives. 272.Businesses acquire long-term financing from two major sources:A. debt financing and government funds.B. equity financing and trade credit.C. retained earnings and commercial paper.D. debt financing and equity financing. 273.When using ________.
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True / False Questions  1.Finance is the function in a business that acquires funds for the firm and manages those funds within the firm. 2.Managing a firm's resources so that it can meet its goals and objectives is the goal of financial accounting. 3.A financial manager makes recommendations to top executives regarding strategies.
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  321."You Incorporated", Figure 17.6, in Chapter 17 shows how to calculate your personal balance sheet. You can list your assets as well as your debts, in order to calculate your _________. A. cash flowB. real incomeC. working capitalD. net worth 322.If a firm can reduce its cost of goods sold and continue to sell its product.
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  308.Explain the term leverage. When is it more favorable for firms to use this strategy? Multiple Choice Questions  Mini-CaseTishian's Funeral Home has been in business for over eighty years. Throughout its history, the firm has been a family-run operation. Today, the business is managed by Mort Tishian, a grandson of the founder..
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  151.Venture capital is money that is invested in new or emerging companies that are perceived as having great profit potential. 152.Venture capitalists expect lower than average returns on their investment since they are exposed to little risk. 153.Most companies have the ready cash available to make large purchases. 154.Acquiring funds through equity financing.
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  301.The Balance Sheet for Renuvation LLC shows assets totaling $107,000 and liabilities totaling $75,000. Which of the following statements is correct? A. Owner's Equity equals $182,000.B. Current Assets are worth $32,000.C. Net Income for the period is $32,000.D. Owner's Equity equals $32,000. 302.Use the fundamental accounting equation to solve the following: Assets minus liabilities equals: A. net income.B. gross.
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  251.Since commercial finance companies offer loans to higher risk customers than commercial banks, the interest rates they charge are usually ________ than rates charged by banks.A. higherB. lowerC. more predictableD. subject to lower taxes 252._________ offers financially stable corporations a technique to raise short-term funds by issuing unsecured promissory notes to the general public with.
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  41.The long-term financial forecast plays a crucial part in the company's long-term strategic plan. 42.The long-term financial forecast gives top management some sense of the profit potential of various strategic decisions. 43.A budget reflects management's expectations for revenues and allocates the use of specific resources throughout the firm. 44.Budgets are prepared after the.
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  291.To maximize the benefits of using financial leverage, a firm should:A. strive to minimize their cost of capital.B. avoid securing funds through long-term debt financing.C. limit their investments to projects with minimum risk levels.D. incorporate in states with relatively low tax rates. 292.As John considers approaching a venture capital firm to provide funding for his.
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  31.To be effective, an internal auditor must be critical of any improprieties or deficiencies found in the financial activities of the firm. 32.Mark manages credit and collections at Polly Parrot Pet Supplies, Inc. He is responsible for accounts receivable and accounts payable. These activities suggest that his job is in financial.
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  271.The balance sheet is composed of the following types of accounts: A. Revenue, expenses, and earnings.B. Operating expenses, cash flow, and capital expenditures.C. Capital, cost, and valuation.D. Assets, liabilities, and owners' equity. 272.A balance sheet lists assets in order of their _______________. A. Dollar value, from smallest to largestB. Date of acquisition, with the most recently acquired assets listed.
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  281.__________ represent a favorable source of meeting long-term financing needs because there are no interest payments, dividends, or underwriting fees required when using this source.A. Secured bondsB. DebenturesC. WarrantsD. Retained earnings 282.__________ provide financing to new or emerging companies with high profit potential. In return, these organizations expect a share of ownership in the company.A. Commercial.
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  281.Debts that are due in one year or less are classified on the Balance Sheet as: A. Current liabilities.B. Bonds payable.C. Callable bonds.D. Immediate expenses. 282.The value of resources the firm owns, minus the amount of money the firm owes to others = ____________. A. liabilitiesB. liquidityC. leverageD. owners’ equity 283.The _____ account on the Balance Sheet shows profits that the firm.
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  376.Explain the meaning of the fundamental accounting equation and its relation to the Balance Sheet. If it is helpful, create an example using numbers. 377.Explain the difference between current, fixed, and intangible assets. Give two examples of each of these different types of assets.     .
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  201.215. (p. 489) Liberty Electronics wants to predict how much money it can make this coming year. Liberty would benefit from developing a:A. master budget.B. consolidated income statement.C. short-term forecast.D. statement of cash flows. 202.Carlos wants to know the income potential for his computer consulting business during the next five years. Which of the following would be most.
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  191.The overall objective of financial planning is to:A. forecast the impact of technological trends.B. prepare financial statements for managers.C. optimize the firm's profitability.D. establish budgets for financial control. 192.The first step in the financial planning process is:A. forecasting financial needs.B. preparing financial statements.C. developing budgets.D. establishing financial control. 193.A _________ forecast predicts the revenues, costs, and expenses a firm will.
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  141.A share of stock represents a company-issued IOU including a promise to repay on a certain date. 142.A bond represents a long-term debt obligation of a corporation or government. 143.An unsecured corporate bond is known as a debenture bond. 144.A debenture bond is backed only by the reputation of the issuer. 145.The types of.
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  21.Tax payments are important to the finance manager because they represent a cash inflow to a firm. 22.An internal auditor is responsible for paying the company's bills and collecting overdue payments from customers. 23.Financial managers are responsible for buying merchandise on credit and collecting payment from accounts receivable. 24.Accountants truly represent the financial.
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  380.What is ratio analysis? Explain the four different types of ratios and how each is used. 381.What is the difference between a profit [net income after taxes] on an income statement and the cash balance reflected at the bottom of the statement of cash flows? Multiple Choice Questions  Mini-CaseMinnie A. Wright-Hoff works as.
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  361.Backstreet Books, a small eclectic bookstore in a bustling college town wants to open another store at the west end of campus. Allison Robards, the store owner, plans to visit her banker in the hopes of obtaining additional financing. In preparation for her visit, the banker asks her for the.
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  261.The Spotlight on Small Business box titled, “Exploring the Financing Universe,”A. Refers newly formed small businesses to the Small Business Administration as the only bona fide source of loans for small businesses.B. Introduces us to innovative new sites such as Lendio or Lending Club that may help fulfill the need for funding,.
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True / False Questions  1.Securities markets represent the financial marketplaces for stocks and bonds. 2.Securities markets provide private investors a place to buy and sell stocks, bonds, and mutual funds. 3.An initial public offering (IPO) represents the first time a corporation's stock is offered and sold to persons outside of the company. 4.The proceeds.
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  101.The finance manager at Preferred Pet Care Inc has asked the company's accountant to prepare a report that shows the amount the firm is spending monthly on veterinary supplies for its western suburb service area, in the hopes of negotiating better payment terms with its suppliers. The purpose of this.
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  81.Equity financing must be repaid. 82.Equity financing represents funds acquired from within the firm or through the sale of stock, representing ownership in the company. 83.Business organizations always use long-term financing for (both) short-term and long-term needs, but they never use short-term financing for (both) short-term and long-term needs. 84.Debt financing refers to.
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  211.Money has a time value because:A. inflation increases the value of money over time.B. money earns interest over time.C. monetary systems are more automated than in the past.D. a dollar received today is worth more than a dollar received yesterday. 212.The rationale behind offering customers credit is:A. Permitting customers to pay with credit cards or on.
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  351.Leverage ratios indicate the extent to which ________ has been used to fund a business's operations. A. debtB. equityC. owner invested capitalD. profit 352.The Chapter 17 Reaching Beyond Our Borders box discusses the future of international accounting standards.  In summary, the message is: A. GAAP (Generally Accepted Accounting Standards) created and established in the U.S. will be adopted.
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  171._____________ is the function in business that is responsible for acquiring funds for the firm, and managing funds within the firm.A. AccountingB. Managerial accountingC. FinanceD. Financial accounting 172.Which of the following correctly identifies areas of authority and responsibility for a chief financial officer (CFO)?A. Accounting and financeB. Marketing and financeC. Production and accountingD. Finance and research and development 173.No matter.
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  61.As a financial manager of a small firm, Jerry needs to determine how much his company will have to borrow in the coming months, and when the borrowed funds will be needed. The preparation of the cash budget will help. 62.Karen, a financial manager with Bigbux Incorporated, regularly compares actual revenues.
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  91.Successful businesses establish restrictive credit policies encouraging customers to pay cash. 92.Offering cash discounts to customers who pay their bills by a certain date represents an effective technique to manage accounts receivable. 93.An effective strategy to manage cash flows requires retail businesses to eliminate their inventory. 94.As a financial manager for a large.
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