Lackawanna BUS105 Module 4 Quiz Latest 2021 April

BUS105 Introduction to Business

Module 4 Quiz  

Question 1Stockholders would most likely use accounting information provided by their firm to

obtain information needed to fill out their individual tax returns

make capital budgeting decisions.

 gauge whether the firm is generating a satisfactory return on their investment.

 determine whether the firm can repay them for their stock.

 Question 2_____ perform or assist in a wide variety of tasks for the firms in which they work. These tasks include budgeting, cost and asset management, and the preparation of reports for the firm’s stakeholders.

Internal auditors

 Public accountants

Management accountants

 Government accountants

 Question 3Tiny Timber Tree Farms applied to United Bank for a business loan. Which financial statements would the loan officer of the bank be most likely to request?

journals, ledgers, and trial balances

 balance sheets, income statements, and cash flow statements

 total debits and total credits

 the prospectus, statement of retained earnings, and total liability statement

 Question 4Lottadoe’s liabilities are $130,000, and its owners’ equity is $170,000. This means that Lottadoe’s:

net income is $40,000.

 net cash flow for the current year was $40,000.

 net income for the current year was $300,000.

 total assets are $300,000.

 Question 5As the owner of 100 shares of Megabux Corporation’s stock, Elbert Treble wants to know whether his company earned a profit or loss during the past year. He can find the answer to this by looking at Megabux’s

income statement.

 revenue report.

 master budget.

 statement of cash flows.

 Question 6An auditor issuing a(n) _____ has uncovered serious and widespread problems with the preparation of a firm’s financial statements.

unqualified opinion

qualified opinion

 untenured opinion

 adverse opinion

 Question 7As a financial manager for his firm, Martin Meyer is worried about possible cash shortages his firm might face over the next few months. The _____ budget would help him identify periods when cash might be very tight.

cash

 liquitity

 revenue

 sales

 Question 8Profit is the difference between

notes payable and accounts payable.

 revenue and expenses.

 assets and liabilities.

 retained earnings and cost of goods sold.

 Question 9_____ is/are the claims owners have against their firm’s assets.

Assets

 Loans payable

Owners’ equity

 Liabilities

 Question 10Which assets on a balance sheet have a limited useful life and are subject to the subtraction of their value via accumulated depreciation?

inventory

 accounts receivable

 accounts payable

 buildings, machinery, equipment, and other long-term assets

 Question 11In financial management, the degree of uncertainty related to the actual outcome of a decision is referred to as:

depreciation.

 rate of return.

risk.

loss.

 Question 12Key numbers that financial managers use to calculate ratios usually come from the firm’s:

prospectus and operating budget.

balance sheet and income statement.

 statement of cash flows.

 cost budget statements.

 Question 13At Chips and Dips, a local convenience market, an increase in the inventory turnover ratio would indicate that it is:

 at risk of holding too much inventory.

 selling its merchandise more quickly.

 more likely to face a cash flow problem.

 relying heavily on credit sales.

 Question 14As part of the financial planning process, planners create budgeted income statements and budgeted balance sheets

which are also known as _____ statements.

prescriptive

 pro forma

empirical

per capita

 Question 15As a short-term credit arrangement, banks sometimes extend _____, which are guaranteed lines of credit in which

the borrowing firm pays a commitment fee on the unused portions of the funds the bank has committed.

commercial papers

 trade credits

 revolving credit agreements

 term loans

 Question 16Rose is a member of the California Teachers’ Association. She has just inherited a large sum of money and is trying to decide where she should deposit her money in order to earn the highest interest rate. In which depository institution should she deposit her money?

A savings and loan association

A reputed commercial bank in her residential area, so she can carry out transactions easily

 An investment bank

 The credit union run by the teachers’ association

 Question 17Michael wants to invest in a gourmet restaurant chain in his area. Michael needs some help with the market research and financial planning for the venture. Michael should contact a(n) _____.

securities dealer

 investment banker

 securities broker

 institutional investor

 Question 18 Deborah owns 100 shares of common stock in the Macrofirm Corporation. She bought the stock at a price of $33 per share, and it is now selling at $46 per share. If she sold it now, she would realize a _____.

premium

 regular dividend

capital gain

cumulative dividend

 Question 19_____ are bonds or shares of preferred stock that investors can exchange for a given number of shares of theissuing corporation’s common stock.

Convertible securities

Exchange-traded funds

 Exchangeable bonds

 Mutual funds

Question 20In a private placement, the issuing firm negotiates the terms of the offer directly with a small number of _____, individuals or businesses that meet specific financial requirements set by the SEC.

stockbrokers

 angel investors

 accredited investors

 venture capitalists