Strayer JWI530 All Knowledge Checks Latest 2020 JULY

JWI530 FINANCIAL MANAGEMENT I

Week 1 Knowledge Check

Question 1Historical cost is an accounting principle that says what a company owns is originally recorded at which of the following

Answers:            

A. Appraised value

B. Purchase cost

C. Insured value

D. Market value

Question 2Generally accepted accounting principles include

Answers:            

A. Revenue recognition

B. Matching revenues and expenses

C. Historical cost

D. Full disclosure

E. All of the above

Question 3Which of the following statements are

Answers:            

A. Revenues are top line

B. Profits are bottom line

C. Both A and B

D. Costs are the same as expenses

Question 4The finance department has responsibility for which of the following

Answers:            

A. Treasury function

B. Insurance and risk management

C. Mergers and acquisitions

D. All of the above

Question 5Cash appears on which of the following financial statements

Answers:            

A. Statement of cash flows

B. Balance sheet

C. Both A and B

D. Income statement

Question 6The matching principle means which of the following

Answers:            

A. Record cash as revenue when received

B. Record costs associated with producing revenue at the same time

C. Applies to accrual accounting

D. Both B and C

Question 7Which of the following issues domestic Generally Accepted Accounting Principles

Answers:            

A. IFRS

B. SEC

C. NASDAQ

D. FASB

Question 8Solvency is the same as profitability

True

False

Question 9Finance is responsible for which of the following

Answers:            

A. Internal control

B. Collecting data for financial reporting

C. Financial information used by other departments

D. All of the above

Question 10Which is a statement under the accrual method of accounting?

Answers:            

A. A company recognizes revenue when it receives cash

B. A company recognizes expense when it pays cash

C. A company recognizes revenue when earned or it consummates a sale

D. A company matches cash received with cash paid

 

 

JWI530 FINANCIAL MANAGEMENT I

Week 2 Knowledge Check

Question 1Match each term with the definition.

Question            

Liquidity

Insolvency

Leverage

Write-off

Question 2Financial Statements like the Balance Sheet are required to have standard titles and formats.

Match the phrases – in the sequence – with the 3 lines on a Balance Sheet for “Company ABC”:

Question            

Line 1:

Line 2:

Line 3:

Question 3Top Rated Cars is a worldwide manufacturer of cars and trucks. They maintain a reserve on the balance sheet for future warranty claims. The balance in this account at December 31, 2015, 2016, 2017, and 2018 (in millions) was: $315.0, $329.0, $354.7 and $361.9 respectively. In addition, revenues for the same periods were (in millions): $10,000.8, $10,122.0, $10,098.6 and $9,999.6. From this data, one could surmise that the quality of their cars and trucks is improving.

Question 4Weather Bank Corporation shows the following selected items on its current balance sheet: (1) Total current assets of $123,487; (2) Total Current Liabilities of $98,459; (3) Total assets of $500,084 and (4) Total stockholders’ equity of $239,765. Remember A=L+E. What are the Total Liabilities?

Question 5Weather Bank Corporation shows the following selected items on its current balance sheet: (1) Total current assets of $123,487; (2) Total current liabilities of $98,459; (3) Total assets of $500,084; and (4) Total stockholders’ equity of $239,765. Remember, A = L + E. Based upon this information, the current ratio is:

Question 6Deliverance Corporation has annual credit sales of $56.0 million. Its CEO boasts of the fastest receivables turnover in the industry because he never has more than 36 days of sales in receivables. Is he , if receivables at the end of last quarter were approximately $8.0 million? Hint: Compute the dollar amount of daily sales.

Question 7Winston Land and Cattle Company is a large operator of cattle feedlots and steak restaurants. Its recent financial statements showed their real estate holdings to be in excess of $50.0 million. Winston recently had a company-wide appraisal done for insurance purposes, and the report showed real estate to have a current market value of $356.0 million. Jim Winston, the owner, requested that the firm’s auditors show that value on the financial statements, and the auditors declined his request because:

Question 8Deliverance Corporation has annual Cost of Goods Sold of $56.0 million and Average Inventory of $4,760,000. Its CEO boasts of the fastest Inventory Turnover of 8.5 times a year. Is he right?

Question 9 Which of the following is a liability?

Question 10Classify if the asset should be fixed or current

Question            

Cash

Land

Inventory

Accounts Receivable

Long-Term Investments

 

JWI530 FINANCIAL MANAGEMENT I

Week 3 Knowledge Check

•             Question 1          What are the different names for the income statement? Select all that apply:                                 

A. Profit and Loss Statement

                B. Gross Profit and Loss Statement

                C. Net Margin Statement

                 D. Statement of income and expenses

Question 2          Which item is not depreciable?                                 

                 A. Land

                B. Furniture

                C. Vehicles

                D. Manufacturing Machinery

•             Question 3Expenses are recorded when…                                          

                A. A purchase order is issued

                B. A supplier agrees to goods and services ordered

                C. At the end of the month

                 D. When the supplier acts on the promise to deliver

•             Question 4          Which financial report most used by nonfinancial managers.                                      

                A. Balance Sheet

                B. Cash Flow Statement

                 C. Income Statement

                D. Statement of Retained Earnings

•             Question 5          Which line item is not an expense?                                         

                A. Sales and Marketing

                B. General and Administrative

                 C. Property, Plant, and Equipment

                D. Training and Professional Development

•             Question 6          Sales of services are called                                          

                A. Earnings

                B. Cost of Goods Sold

                 C. Revenues

                D. Sales Discounts

Question 7          Which cost does not represent cost of sales?                                     

                A. Direct Labor

                B. Raw Materials

                C. Commissions

                 D. Office Supplies                                          

•             Question 8          Gross Profit Margin is calculated as                                         

Difference between sales and cost of sales (aka gross profit) divided by sales

                A. Revenues plus cost of sales

                B. Difference between sales discounts and sales expenses

                 C. Difference between sales and cost of sales (aka gross profit) divided by sales

                D. Revenues less cost of sales

•             Question 9          Net Profit Margin is calculated as                                             

                A. Revenues plus cost of sales

                B. Difference between sales discounts and sales expenses

                 C. Difference between sales and all costs/expenses divided by sales

                D. Revenues less cost of sales

•             Question 10What is the result of net loss or net income allocated to each share of stock?                                             

                 A. Earnings Per Share

                B. Net Margin

                C. Gross Profit

                D. Earnings Before Interest, Taxes, Depreciation, and Amortizations

 

JWI530 FINANCIAL MANAGEMENT I

Week 4 Knowledge Check

Question 1The Cash Flow Cycle includes which of the following activities:

Answers:            

A. Setup

B. Production

C. Sales

D. All of the above

Question 2Capital Expenditures is the amount spent for contract labor used in the business, and reported under Cash for Investing.

Answers:            

True

False

Question 3Most small businesses, and all large ones, favor accrual basis books over cash basis books for all of the following reasons EXCEPT:

Answers:            

A. They’re concerned about the profit margin on products they sell.

B. They want to know when they’re making money and when they’re not.

C. Accrual basis accounting always shows a higher profit than cash basis of accounting.

D. They’re required by lenders, investors or government authorities to report their activities using accrual basis accounting

Question 4Free Cash Flow is defined as:

Answers:            

A. A measure of ongoing cash flow from normal business activities (including CapEx)

B. A list of dividend payments made to shareholders.

C. Any cash flow given as bonus compensation to executives.

D. Cash flows raised from debt and equity offerings.

Question 5Which of the following transactions does NOT lower Cash:

Answers:            

A. Paying salaries

B. Paying for equipment

C. Paying off a loan balance

D. Receiving money from investors

Question 6The Pumice Stone Company has the following measurements ready for its Statement of Cash Flows:

Beginning Cash Balance $125,300

Acquisitions $400,000

Net cash flow from Operating Activities $297,600

Net cash flow from Investing Activities ($328,400) (negative/use)

Net cash flow from Financing Activities $250,000

Answers:            

A. $344,500

B. $232,600

C. $55,700

D. ($205,100)

Question 7Earnings per Share is a more important financial measure than cash flow for private equity firms.

Answers:            

True

False

Question 8The BesTest Sprinkler Company engaged in the following Financing Activities during the year 2020:

Issuance of new Debt $ 10,000,000

Repayment of Debt $7,000,000

Payment of Dividends $750,000

Sale of Stock $2,500,000

What are the Net Borrowings?

Answers:            

A. $ 3,000,000

B. $ 5,500,000

C. $ 10,000,000

D. $ 4,750,000

Question 9A cash flow statement is basically a reconciliation of the company’s purchase log.

Answers:            

True

False

Question 10The Cash Flow Statement measures “how much money, net of everything else, have I made this year, and how much will I have going forward next year”, according to Jack Welch.

Answers:            

True

False

 

JWI530 FINANCIAL MANAGEMENT I

Week 5 Knowledge Check

Question 1According to the GAO Internal Controls article, the key elements of Internal Controls that should be a part of Enterprise Risk Management (ERM) includes which of the following components?

Answers:            

A. Monitoring Activities

B. Control Activities

C. Risk Assessment

D. All Answers are

E. Control Environment

F. Information and Communication

Question 2You are a Division Manager and the administrative assistant, who is preparing an expense report for Frank, one of your direct reports, approaches you because she discovers that Frank used the company credit card to purchase jewelry for his wife. What is the best course of action to be taken by the Division Manager?

Answers:            

A. Just ignore it since he exceeded his sales goal by more than a million dollars for the last 3 years straight.

B. Call Internal Controls and Human Resources to start the termination process.

C. Schedule a meeting with Frank to review this personal purchase that was made on his company credit, advise him that he will need to pay for it immediately, and reinforce the credit card policy as it relates to making personal purchases.

D. Schedule a meeting with Frank to let him know that you caught him red-handed however next time, you will overlook it, as long as he also purchases jewelry for you as well.

Question 3Larry is an employee of Cracker Jack Electronics, and he needs his business travel expenses reimbursed, but must have approval for payment. He completes an expense report and attaches all of his receipts and submits it. Suzanna is Larry’s supervisor, and the assistant controller for Cracker Jack Electronics, and she is responsible for verifying Larry’s expense report and signing off on it for approval for reimbursement. This arrangement is called:

Answers:            

A. Separation of Functions

B. Labor-saving Productivity

C. Segregation of Duties

D. Both Separation of Functions and Segregation of Duties

E. Collusion

Question 4Which of the following is true as it relates to internal controls?

Answers:            

A. It is a set of rules or procedures that a company puts in place for conducting its business

B. It ensures that there is a system of checks and balances in place

C. It is aimed at protecting the integrity of financial information and safeguarding company assets

D. Prevents waste and misuse of assets and resources

E. Ensure bills are paid timely and that accounting transactions are recorded ly

F. All of the Above

Question 5Who prepares, creates, and is solely accountable for the official Financial Statements of a publicly traded company?

Answers:            

A. The receptionist in the CEO’s office

B. A third-party independent Auditor

C. Company Management

D. A CPA with at least 20 years of experience

E. The Securities and Exchange Commission (SEC)

Question 6Match the following terms with their definition.

Question             Match   Selected Match

10-K

EDGAR

Annual Report

10-Q

All Answer Choices

A. An annual report required by the SEC, generally in simple text/data format, which summarizes key financial and operational highlights.

B. SEC database in the U.S., where all required financial disclosures and publications are stored and available for free to the public.

C. A quarterly report required by the SEC, generally in simple text/data format, which summarizes key financial and operational highlights.

D. Yearly publication from a company that describes the operational and financial results. It often comes in booklet form with glossy pages and shareholder communications with pictures, graphs, and images. Contains the full financial statements, management disclosure, and notes to the financial statements.

Question 7When a company uses I.D. Badges, a security guard or even a receptionist to limit or control access to the company office building, which type of internal control does this refer to?

Answers:            

A. Policies and Procedures

B. Separation of Duties

C. Barriers

D. Record Keeping

E. Inspection

Question 8You are the CEO of an organization, and you’re having a private, non-business dinner with a shareholder (who is not an employee but someone you have known since high school) one week before your company is expected to release its prior year financial results. In meeting with your CFO, you know there is a significant surprise profit shortfall coming from the Latin American organization. This shareholder says, “My kid is going off to college this fall, and things are really tight around my house since I just started my own business. I am so thankful your stock has been doing well. If it rises just a few more dollars in price, I am going to cash out so I can send her to school. Think we will see a boost in price after next week’s earnings release?” Which of the following is the best response?

Answers:            

A. Tell your friend you are very sorry, but you are not allowed to comment on pending financial results.

B. Since this is only an individual investor and not an employee, it is acceptable to share this information, provided the person promises not to act on it or share it with anyone else.

C. Being very careful not to disclose any specifics or details, tell the person to consider selling some shares now.

D. Stop the conversation immediately and contact the authorities to report a breach of insider trading laws by your friend for asking you the question.

Question 9Under the Sarbanes-Oxley Act of 2002, executives of publicly held companies are held to a very high standard of ethical conduct. Because it is not possible for an executive to be aware of all that is transpiring in the organization, the SEC decided that senior executives are exempt from liability if they were not aware that a subordinate was cooking the books.

True

False

Question 10Internal Controls will be very effective as long as the senior management follows the policies, even if all other employees do not?

Answers:            

True

False

 

JWI530 FINANCIAL MANAGEMENT I

Week 6 Knowledge Check

Question 1Financial accounting is primarily externally directed, meaning financial accounting’s main function is informing external stakeholders such as lenders, shareholders and governmental agencies. Managerial accounting, on the other hand, is primarily internally directed, meaning managerial accounting is directed towards helping leadership and management operate the business on a day-to-day basis. Which of the following is NOT true?

Answers:            

A. Variable or direct costing is allowed for financial reporting purposes under both GAAP and IFRS.

B. Managerial accounting is essential to determining product and service pricing.

C. Inventory is an asset to both financial and managerial accountants.

D. Standard costs are not very important to most financial accountants.

Question 2Match each term to its definition.

Question             Match   Selected Match

Job costing

Process costing

Bill of materials

Standard costing

All Answer Choices

A. A management tool that estimates the overall cost of production, assuming normal operations.

B. Collecting costs for a manufacturing process that’s geared to producing products in individual lots and assigning cost to those jobs.

C. Collecting all costs incurred in a continuous process, then averaging the costs over all units produced.

D. A list of all the parts and components that go into manufacturing a product, including any raw material.

Question 3Match each cost to its cost driver.

Question             Match   Selected Match

Cost of wood for wood-burning pizza oven

Cost of machine lubricants

Cost of round steel bars

Cost of jet fuel for an airliner

All Answer Choices

A. Baking pizzas

B. Flying the airliner

C. Producing Screws

D. Running machine

Question 4The ABC Company, maker of birdhouses is looking at different ways of allocating shared costs (overhead). The Cost Accountant has been provided the following data for the past month:

 Birdhouse Models           Quantity Produced          Total Machine Hours     Total Labor Hours

 Basic     100         10           25

 Standard             100         20            40

 Deluxe 25           40           60

The Spend pools are provided as:

Material: $3000

Direct Labor: $5000

Overhead: $2000

If Overhead is allocated based on the activity of Quantity Produced, how much of the $2,000 cost will be allocated to the Deluxe Birdhouse?

A. $222

B. $888

C. $960

D. $1,142

Question 5Bill Williams is an engine tech for a Ford dealership and is assigned to the service department. Here is a table of costs associated with the dealership and Bill’s engine repair job today:

 Engine parts      $       675

 Gasket, oil, and other fluids       $       113

 Standard Labor Costs    $       700

 Expensible tools              $         48

 Service Write Up Wages              $    1,366

 Radio Advertising            $       850

 Parking lot paving project            $    9,850

 Quality Inspection Dept.              $    5,248

Which is of the following is not true?

Answers:            

A. Direct costs on this job are $1,536.

B. The dealership is most likely using job costing.

C. Shared costs of $6,614 were incurred today.

D. All of the parking lot paving costs will be allocated to each vehicle repaired in the facility today.

Question 6Standard costing and budgeting systems create variances which enables managers to use management by exception principles. Which of the following is true about management by exception?

Answers:            

A. Is the same as managing by walking around, which was pioneered by the Japanese.

B. Material price variances can be ignored unless exceptionally high.

C. Variances reduce the number of data points a manager must consider each day.

D. In a union facility, labor usa