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Finance MCQ

The acquisition of a firm in the same industry as the bidder is called a _____ acquisition.

Conglomerate

Forward

Backward

Horizontal

Vertical

Answer

Correct Answer: Horizontal

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In working capital management, risk is measured by the probability that a firm will be ________.

Unable to repay its long-term obligations

Unable to pay annual dividends to stockholders

Unable to pay its bills as they come due

Unable to earn profits from day-to-day operations

Answer

Correct Answer: Unable to pay its bills as they come due

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Experts estimate that ________ of sustainability occurs at the design stage.

70%

80%

90%

100%

Answer

Correct Answer: 90%

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The cost of unsold inventory at the end of the year is classified as a(n) in the .

Revenue; Income statement

Asset; Balance sheet

Expense; Income statement

Liability; Balance sheet

Answer

Correct Answer: Asset; Balance sheet

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The cost of capital reflects the cost of funds ________.

That makes the net present value of a project equal zero

At a given point in time

Over a long-run time period

At current book values

Answer

Correct Answer: Over a long-run time period

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The difference between balanced funds and asset allocation funds is that _____.

Balanced funds have relatively stable proportions of stocks and bonds while the proportions may vary dramatically for asset allocation funds

TF values can diverge from NAV- NOT true

The NAV calculated at the market close at 4 pm New York time

Securities issued by firms in a particular industry

Answer

Correct Answer: Balanced funds have relatively stable proportions of stocks and bonds while the proportions may vary dramatically for asset allocation funds

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Increases in the materials account are based on which are supported by__.

Receiving report

Finished Goods

Work in process

Cost of Goods Sold

Finished Goods

Receiving reports; suppliers' invoices

Answer

Correct Answer: Receiving reports; suppliers' invoices

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In the united states, venture capital firms invested __________ in 2009.

Two-thirds less

In certificates of deposit

$3 billion in NINJA loans

$21 billion

Answer

Correct Answer: $21 billion

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Portfolio diversification volatility while return.

Stocks, bonds, mutual funds

Painting the kitchen

Decreases, increases

Reduces, averaging out

Answer

Correct Answer: Reduces, averaging out

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The biggest benefit of a public stock offering is ________.

The capital infusion the company receives

A listing on a stock exchange

The ability to use its stock to attract and retain key managers and employees

The ability to use its stock to acquire other companies

Answer

Correct Answer: The capital infusion the company receives

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The banking industry almost exclusively uses ______ for check processing.

OCR

MICR

Magnetic stripes

QR codes

Answer

Correct Answer: MICR

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Published data on past returns earned by mutual funds are required to be ______.

Dollar weighted returns

Geometric returns

Excess returns

Index returns

Answer

Correct Answer: Geometric returns

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Prior to 1921, ______ provided the primary leadership during the federal budget process.

Congress

John Maynard Keynes.

Monetary Policy.

Increase

Answer

Correct Answer: Congress

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Prices of existing bonds move ___ as market interest rates move _.

Down, down

Up, up

Up, down

Bond prices don't move when market interest rates move

Answer

Correct Answer: Up, down

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In the basic valuation model, risk is generally incorporated into the ________.

Cash flows

Timing

Discount rate

Total value

Answer

Correct Answer: Discount rate

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In general, it is possible to eliminate ________ risk by holding a large portfolio of assets.

Unsystematic

Unsystematic and systematic

Systematic

None of the above

Answer

Correct Answer: Unsystematic

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Investors who want to liquidate their holdings in a closed-end fund may ___________________.

Sell their shares in the open market

Sell their shares back to the fund at net asset value

Sell their shares at a premium to net asset value if they wish

Sell their shares back to the fund at a discount if they wish

Answer

Correct Answer: Sell their shares in the open market

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One type of passive portfolio management is ________.

Investing in a well-diversified portfolio without attempting to search out mispriced securities

A measure of variability that describes an average distance of every score from the mean

Measures risk return trade off

Best known for the Nobel prize-winning work on techniques used to identify efficient portfolios of risky assets

Answer

Correct Answer: Investing in a well-diversified portfolio without attempting to search out mispriced securities

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The expected 1-year interest rate 2 years from now should be _________.

5.83%

Current price = $1,000 - 73.75 = $926.25, so current yield = $54/$926.25 = 5.83%

-1.4%

Explanation

Invoice price = 1.13(1,000) + 28.00(3/6) = 1,144.00

A. 30-year bond with a 10% coupon.

Answer

Correct Answer: Invoice price = 1.13(1,000) + 28.00(3/6) = 1,144.00

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The duration of a perpetuity varies _______ with interest rates.

Inversely.

Concavely.

Convexly.

Directly.

Answer

Correct Answer: Inversely.

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Prepaid expenses will become ________ when their future benefits expire.

Liabilities

Expenses

Assets.

Revenues

Answer

Correct Answer: Expenses

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Warranties are commonly associated with ____________ purchases.

Investment

Insurance

Credit

Financial service

Consumer

Answer

Correct Answer: Consumer

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Vaccinations convey ________ to third parties.

Positive externalities

Public goods

Negative externalities

Economy of scale

Answer

Correct Answer: Positive externalities

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Utilities, plant insurance, and depreciation expense are examples of ________.

Indirect costs

Merchandising company

Raw materials inventory

Other indirect manufacturing costs

Answer

Correct Answer: Other indirect manufacturing costs

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Treasury bonds are issued by the federal government through the _____________________ .

Federal Reserve

Central Bank

U.S. Department of the Treasury

U.S. Office of the Comptroller of Currency

Answer

Correct Answer: U.S. Department of the Treasury

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The ________ in the capital market is the basis for determining a bond's coupon interest rate.

Cost of money

Weighted average cost of capital

Bond's face value

Average coupon interest rate

Answer

Correct Answer: Cost of money

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To use a credit card wisely, pay off the balance in full every ________.

Month

Week

Day

Year

Answer

Correct Answer: Month

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The ________ date is the date at which the bond issuer must repay the loan or borrowed funds.

Premium

Ending

Completion

Maturity

None of the above

Answer

Correct Answer: Maturity

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The ________ capital budgeting model is generally the simplest to compute.

Accounting rate of return

Net present value

Internal rate of return

Payback

Answer

Correct Answer: Payback

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The _____ is an analysts' consensus of the potential stock price of a company.

Unsecured bonds

Common stock

Target price

Technology stocks

Answer

Correct Answer: Target price

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The _____ account on the balance sheet shows profits that the firm has reinvested in the company.

Intangible assets

Notes payable

Stockholder's equity

Retained earnings

Answer

Correct Answer: Retained earnings

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Significant influence equity investments must be accounted for using the ________ method.

Equity

Consolidation

Discounted cash flow

Acquisition

Answer

Correct Answer: Equity

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Revenue that has been earned but not yet collected in cash is called a(n) ________.

Accrued revenue

Deferred expense

Deferred revenue

Accrued expense

Answer

Correct Answer: Accrued revenue

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Research suggests that you can eliminate random risk by holding ____ or more stocks and bonds.

Answer

Correct Answer: 15

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A bank does not issue a debit memorandum to notify a depositor of _____.

A deduction to a depositor's account

A deposit to the depositor's account

A withdrawal through an ATM

A check that was deposited in the account but was returned NSF

Periodic payments arranged in advance, by a deposito

Answer

Correct Answer: A deposit to the depositor's account

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A fund that invests only in a particular industry would be a ____ fund.

Money market

Maximum capital

Sector

Balanced

Answer

Correct Answer: Sector

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A firm with a low net profit margin can improve its return on total assets by ________.

Increasing its debt ratio

Increasing its total asset turnover

Decreasing its fixed asset turnover

Decreasing its total asset turnover

Answer

Correct Answer: Increasing its total asset turnover

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A contingent deferred sales load is commonly called a ____.

Front-end load

Back-end load

12b-1 charge

Top-end sales commission

Answer

Correct Answer: Back-end load

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A business that accepts payments by credit and debit cards ________.

Almost always pays a fee to the seller to cover the processing costs

No longer has to deal with the collection of the receivables from the customers

The amount of bad debts expense is estimated at the end of the accounting period

Shown as a contra account related to accounts receivable

Answer

Correct Answer: Almost always pays a fee to the seller to cover the processing costs

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A broker statement is an example of a(n) __________ record.

Financial

Generate

Investment

Exemption

Answer

Correct Answer: Investment

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A bond's principal is repaid on the ____ date.

Current yield

Coupon Rate

Maturity

Market Price

Answer

Correct Answer: Maturity

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A _____________ is an employer-sponsored retirement account.

401(k)

402(k)

403(k)

404(k)

Answer

Correct Answer: 401(k)

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A __________ is prepared when materials that have been ordered are received and inspected.

Time ticket

Job cost sheet

Materials requisition

Receiving report

Answer

Correct Answer: Receiving report

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A __________ bond can be paid off early at a specified price.

Debit

Callable

Payable

Expense

Answer

Correct Answer: Callable

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A _________ represents a long-term debt obligation issued by a corporation or a government.

Growth

Bond

Stock

Underwriting

Answer

Correct Answer: Bond

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A _________ forecast predicts the future cash inflows and outflows in future periods.

Short-term

Cash flow

Budget

Finance

Answer

Correct Answer: Cash flow

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A ________ brings together those who want to invest money and those who want to borrow money.

Consumer market

Value chain

Supply chain

Capital market

Answer

Correct Answer: Capital market

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A _____ has all the respective rights and privileges of a legal person.

Processing

Shareholders

Corporation

Partnership

Answer

Correct Answer: Corporation

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A ____ is the most important part of your employment search.

Job interview

Cover letter

Job application

Reference letter

Answer

Correct Answer: Job interview

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A ____ is often a source of low-rate automobile financing on specific models of vehicles.

Credit union

Commercial bank

Consumer finance company

Captive finance company

Answer

Correct Answer: Captive finance company

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A ____ is a time-phased budget that project managers use to measure and monitor cost performance.

Budget baseline

Ledger

Cost baseline

Cost line

Answer

Correct Answer: Cost baseline

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__________ is the process of analyzing the performance of the securities held by an investor.

Portfolio tracking

Investor trading

Index pegging

Securities building

Answer

Correct Answer: Portfolio tracking

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__________ funds stand ready to redeem or issue shares at their net asset value.

Closed-end

Index

Open-end

Hedge

Answer

Correct Answer: Open-end

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_________ represent a powerful force in the buying and selling of corporate securities.

Individual investors

Mutual banks

Institutional investors

Investment banks

Answer

Correct Answer: Institutional investors

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_____ is the price at which a particular common stock is currently trading.

Market value

Unsecured bonds

Prime rate

Securities markets

Answer

Correct Answer: Market value

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_____ is a method for determining the estimated annual costs and benefits for a project.

Critical path analysis

Cash flow analysis

Present value analysis

Requirements analysis

Answer

Correct Answer: Cash flow analysis

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_____ helps develop an accurate projection of a projects financial expenses and benefits.

Profit cycle costing

Financial costing

Life cycle costing

Profit margin costing

Answer

Correct Answer: Life cycle costing

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_____ has (have) a legal responsibility to represent stockholders interests.

Management is separate from ownership.

Corporation

Stockholder's wealth maximization

A corporation's board of directors

Answer

Correct Answer: A corporation's board of directors

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__________ portfolio construction starts with asset allocation.

Bottom-up

Top-down

Upside-down

Side-to-side

Answer

Correct Answer: Top-down

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____ résumés emphasize your career-related experiences.

Skills format

Chronological format

Normal format

Functional format

Answer

Correct Answer: Functional format

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____ loans do not have to be repaid until after you graduate from college.

Stafford and Perkins

Stafford and PLUS

Perkins and PLUS

Only Stafford

Answer

Correct Answer: Stafford and Perkins

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____ invest in highly liquid, relatively safe securities with very short maturities.

Money market funds

Asset allocation fund

Target-date retirement

Unit investment trust

Answer

Correct Answer: Money market funds

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____ are received as current income while one owns shares in a mutual fund.

Letter of last instructions.

Ordinary income dividend distributions and capital gains distributions

Auto-rebalance tool.

Portfolio.

Answer

Correct Answer: Ordinary income dividend distributions and capital gains distributions

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In a statement of retained earnings, decreases in retained earnings result from ________.

Issue of stock

Net losses

Net income

Revenues earned

Answer

Correct Answer: Net losses

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Holding cash simply as a financial reserve is referred to as the ____ motive.

Precautionary

Disbursement

Operations

Speculative

Answer

Correct Answer: Precautionary

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Based on the concept of _____, big companies probably do not record all its assets as assets.

Consistency

Materiality

Comparability

Completeness

Answer

Correct Answer: Materiality

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An intermediary that pools and manages funds for many investors is called ______.

An investment company

A credit union

An investment banker

A commercial bank

Answer

Correct Answer: An investment company

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When we use the wacc to assess a project, we assume that the ________ ratio does not change.

Reward to systematic risk

Risk to reward

Debt to equity

Volatility to systematic risk

Answer

Correct Answer: Debt to equity

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When using backflush costing, product costs are first accumulated in the __________ account.

Cost of Goods Sold

Work in Process Inventory

Conversion Costs

Finished Goods Inventory

Answer

Correct Answer: Cost of Goods Sold

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When using ________ financing, the company incurs a legal obligation to repay the amount borrowed.

Debt

Equity

Retained earnings

Commitment.

Answer

Correct Answer: Debt

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When reading mutual fund quotations, the ________ is the price per share.

NAV (Net Asset Value)

PSV (Per Share Value)

MFV (Mutual Fund Value)

None of these

Answer

Correct Answer: NAV (Net Asset Value)

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When projecting future cash flows of an investment ________.

Cash flows include depreciation

Cash inflows and outflows are treated separately, rather than being netted together

Cash flows are projected by accounting personnel without considering input from other departments

The initial investment is a significant cash outflow that is treated separately from all other cash flows

Answer

Correct Answer: Cash inflows and outflows are treated separately, rather than being netted together

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The primary difference between treasury notes and bonds is ________.

Coupon rate

Tax status

Maturity at issue

Default risk

Answer

Correct Answer: Maturity at issue

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The price at which an investor can purchase in the bond market is called the _____ price.

Asked

Coupon

Call

Face

Bid.

Answer

Correct Answer: Asked

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The market risk premium is defined as __________.

The difference between the return on an index fund and the return on Treasury bills

The difference between the return on a small firm mutual fund and the return on the Standard and Poor's 500 index

The difference between the return on the risky asset with the lowest returns and the return on Treasury bills

The difference between the return on the highest yielding asset and the lowest yielding asset.

Answer

Correct Answer: The difference between the return on an index fund and the return on Treasury bills

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The management fee for most mutual funds ranges between ______ percent.

0.25 to1.5

1.5 to3

3 to4

5 to 61/2

7 to 81/2.

Answer

Correct Answer: 0.25 to1.5

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The legal contract setting forth the terms and provisions of a corporate bond is a(n) ________.

Indenture.

Debenture

Loan document.

Promissory note.

Answer

Correct Answer: Indenture.

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The january effect refers to the pressure on stocks in january of every year.

Upward; small

Downward; large

Upward; large

Downward; small

Answer

Correct Answer: Upward; small

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The investor will receive the face value of the bond on the ________ date.

Declaration

Annual interest

Maturity

Purchase anniversary

Answer

Correct Answer: Maturity

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The interest rate that investors demand to earn for loaning their money is known as the ________.

Market interest rate.

Yield to maturity.

Coupon rate.

Differential rate

Answer

Correct Answer: Market interest rate.

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The higher your credit score the ____ your fixed expenses

Lower

Mortgage

Collateral

Higher

Answer

Correct Answer: Lower

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The greatest percentage of mutual fund assets are invested in ________.

Bond funds

Equity funds

Hybrid funds

Money market funds.

Answer

Correct Answer: Equity funds

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The future value of an uneven cash flow stream is also referred to as its _____.

Terminal value

Amortized value

Consolidated value

Periodic value

Answer

Correct Answer: Terminal value

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On an income statement covering january 1 to june 30, ____ would not be included as income.

Inheritance granted in April, to be paid in September

Leaving a large estate

Level of risk and expected return

Standard of living

The value of your stock portfolio

Answer

Correct Answer: Inheritance granted in April, to be paid in September

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No journal entries are required for the reconciling items on the bank side because ________.

Those transactions have not yet been recorded on the company's books.

There are outstanding checks.

A debit to Accounts Receivable and a credit to Cash

A receiving report, an invoice, and a purchase order

Answer

Correct Answer: Those transactions have not yet been recorded on the company's books.

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Net worth represents _____ of the liabilities and net worth of commercial banks.

About 51%

About 91%

About 11%

About 31%.

Answer

Correct Answer: About 51%

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Most u.s. corporate and government bonds choose to make ________ coupon payments.

Secondary market

Semiannual

Standard deviation and variance

None of these

Answer

Correct Answer: Semiannual

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Most mature corporations distribute ____ of their after-tax profits as dividends to stockholders.

None

10 to 25 percent

40 to 60 percent

70 to 80

Answer

Correct Answer: 40 to 60 percent

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Mortgage lenders probably have the most interest in the ______ ratios.

Long-term debt and times interest earned

Profit margin, Total asset turnover, & Equity Multiplier.

Ratios to the company's historical ratios.

None of these

Answer

Correct Answer: Long-term debt and times interest earned

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More companies fail for the lack of than for the lack of .

Net revenue; gross revenue

Cash; profit

Vision; profit

Profit;

Answer

Correct Answer: Cash; profit

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Low-load mutual funds usually have sales charges of ____ percent.

Answer

Correct Answer: 1%

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Liabilities equal approximately _____ of total assets for nonfinancial u.s. businesses.

10%

25%

48%

75%.

Answer

Correct Answer: 10%

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Kay alden manages a department that prepares annual reports. kay works in ________.

Financial accounting

Accounting

Revenue - Expenses = Net Income (or Loss)

Receivable

Answer

Correct Answer: Financial accounting

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Companies with good credit ratings use _________________ bonds extensively.

Callable bonds

Convertible bonds

Mortgage bonds

Debenture bonds

Answer

Correct Answer: Debenture bonds

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An essential part of the maculae involved in static equilibrium is (are) the ________.

Operating expenses

Interest

Real estate taxes

Closing costs

Principal

Answer

Correct Answer: Real estate taxes

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A stock's alpha measures the stock's ____________________.

Expected return

Abnormal return

Excess return

Residual return

Answer

Correct Answer: Abnormal return

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A major barrier preventing more widespread use of biodiesel is ________.

Alteration of river sediment deposition

Political and economic inertia and current lack of abundant fueling stations

A diesel fuel blend of 20% biodiesel to 80% petrodiesel

Energies to bridge the time between fossil fuel depletion and new renewables

Answer

Correct Answer: Political and economic inertia and current lack of abundant fueling stations

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A loan to purchase real estate in which the real estate itself serves as collateral is a ____ loan.

Subleasing

Closing

Private

Mortgage

Answer

Correct Answer: Mortgage

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_____ risk results from the behavior of investors in the securities market.

Business

Financial

Market

Purchasing power

Interest rate

Answer

Correct Answer: Market

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Any fee payment made to the commission shall be remitted by _______.

Money order

Agency check

Electronic payment

All of the above

Answer

Correct Answer: All of the above

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The tax deductibility of various expenses such as general and administrative expenses ________.

Increases their pretax cost

Reduces their after-tax cost

Has no effect on their after-tax cost

Has an unpredictable effect on their after-tax cost

Answer

Correct Answer: Reduces their after-tax cost

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To overpromise and underdeliver to a customer is an example of a(n) _____.

Enhancer

Service motivator

Service quality

Service strategy

Detractor

Answer

Correct Answer: Detractor

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Research indicates that we reach the peak of our cognitive powers during ______.

Childhood

Adolescence

Early adulthood

Middle adulthood

Answer

Correct Answer: Early adulthood

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A(n) ____ sells fund shares, either directly to the public or through certain authorized dealers

Money manager.

Transfer agent.

Distributor.

All of this

Answer

Correct Answer: Distributor.

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A renter may have to pay ____ when moving into an apartment.

The last month's rent

The first month's rent

The security deposit

All of these

Answer

Correct Answer: All of these

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The final step in setting standards by benchmarking is to _____.

Identify the companies against which to benchmark one's standards

Implement functional departmentalization across a company

Collect data to determine other companies' performance standards

Determine the effects of benchmarking on the company's performance

Answer

Correct Answer: Collect data to determine other companies' performance standards

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The first sale of stock by a firm to the public is referred to as a(n) ________.

Stock repurchase.

Econdary stock offering.

Initial rights issue.

Initial public offering (IPO).

Answer

Correct Answer: Initial public offering (IPO).

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Bob wins the lottery. this included in category of gdp.

Is; the consumption

Is; the investment

Is; the government purchases

Is; the net export

Is not; any

Answer

Correct Answer: Is not; any

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A credit boom can lead to a(n) ________ such as we saw in the tech stock market in the late 1990s.

Asset-price bubble

Liability war

Decline in lending

Decrease in moral hazard

Answer

Correct Answer: Asset-price bubble

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The term quality of earnings refers to ________.

Statement of operating earnings

The realism and sustainability of reported earnings

Whether actual earnings matched expected earnings

How well reported earnings fit a trend line of earnings growth

Answer

Correct Answer: The realism and sustainability of reported earnings

Note: This Question is unanswered, help us to find answer for this one

The systemic risk that led to the financial crisis of 2008 was increased by _____ .

Collateralized debt obligations

Subprime mortgages

Credit default swaps

All of these

Answer

Correct Answer: Collateralized debt obligations

Note: This Question is unanswered, help us to find answer for this one

The supplementary record providing information on each customer is called the _____.

Payroll register

Cash receipts journal

Accounts receivable ledger

Income statement

Answer

Correct Answer: Accounts receivable ledger

Note: This Question is unanswered, help us to find answer for this one

The sml is valid for _, and the cml is valid for .

Both well-diversified portfolios and individual assets; well-diversified portfolios only

Has a beta that is likely to be anything between .6541 and 1.465 inclusive

E(rP) = rf + β[E(rM) - rf]

None of these

Answer

Correct Answer: Both well-diversified portfolios and individual assets; well-diversified portfolios only

Note: This Question is unanswered, help us to find answer for this one

If the risk-free rate is greater than the dividend yield, then we know that _______________.

The futures price will be higher as contract maturity increases

F0 < S0

FT>ST

Arbitrage profits are possible

Answer

Correct Answer: The futures price will be higher as contract maturity increases

Note: This Question is unanswered, help us to find answer for this one

If bonds with a face value of $209,000 are issued at 93, the amount of cash proceeds is ________.

$208,907

$209,000

$194,370

$179,740

Answer

Correct Answer: $194,370

Note: This Question is unanswered, help us to find answer for this one

If bankruptcy were to occur, ________ would have the first claim on assets.

Preferred stockholders

Unsecured creditors

Equity stockholders

Secured creditors

Answer

Correct Answer: Secured creditors

Note: This Question is unanswered, help us to find answer for this one

If a manager requires greater return when risk increases, then he is said to be ________.

Risk-seeking

Risk-indifferent

Risk-averse

Risk-aware

Answer

Correct Answer: Risk-averse

Note: This Question is unanswered, help us to find answer for this one

If a company secures a three-year bank loan, this is considered _________.

Short-term financing

Asset funding

Liability funding

Long-term financing

Answer

Correct Answer: Long-term financing

Note: This Question is unanswered, help us to find answer for this one

Ideally, you want to have a positive "double" bottom line. this means ________.

You are achieving a profit and meeting your mission

You have twice the number of customers that you expected

You have twice the profit you expected

Your profit allows you to stay in business and achieve your mission

Answer

Correct Answer: You are achieving a profit and meeting your mission

Note: This Question is unanswered, help us to find answer for this one

Homeowners today often spend up to ____ percent of disposable income on housing.

30 to 40

40 to 50

50 to 60

60 to 70

Answer

Correct Answer: 30 to 40

Note: This Question is unanswered, help us to find answer for this one

Changes in the cost of money is referred to as ____________ risk.

Interest-rate

Inflation income

Personal liquidity

None of these

Answer

Correct Answer: Interest-rate

Note: This Question is unanswered, help us to find answer for this one

Bonds are different from stocks because ________.

Bonds promise fixed payments for the length of their maturity

Bonds give payments only after other owners are paid

Bonds do not have maturity date

Bonds promise growth in earnings

Answer

Correct Answer: Bonds promise fixed payments for the length of their maturity

Note: This Question is unanswered, help us to find answer for this one

Bond prices and current interest rates are ____ related

Inversely

Directly

Slightly

Positively

None of the above

Answer

Correct Answer: Inversely

Note: This Question is unanswered, help us to find answer for this one

Beta is a measure of security responsiveness to _________.

Firm specific risk

Diversifiable risk

Market risk

Unique risk

Answer

Correct Answer: Firm specific risk

Note: This Question is unanswered, help us to find answer for this one

Banks and other financial institutions can best manage interest rate risk by _____________.

The present value of the payment

Lower when the yield to maturity is higher

Duration of the portfolio

Matching the durations of their assets and liabilities

Answer

Correct Answer: Matching the durations of their assets and liabilities

Note: This Question is unanswered, help us to find answer for this one

Arbitrage is based on the idea that _________.

Assets with identical risks must have the same expected rate of return

Securities with similar risk should sell at different prices

The expected returns from equally risky assets are different

Markets are perfectly efficient

Answer

Correct Answer: Assets with identical risks must have the same expected rate of return

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Approximately ____ percent of all households invest in mutual funds.

Answer

Correct Answer: 50

Note: This Question is unanswered, help us to find answer for this one

An investment that can be sold quickly but only by making price concessions suffers from ____ risk.

Market volatility

Liquidity

Financial

Marketability

Answer

Correct Answer: Marketability

Note: This Question is unanswered, help us to find answer for this one

An investment company that will repurchase shares at any time is called a(n) _____ fund.

Hedge

Closed-end

Open-end

Public

Exchange traded

Answer

Correct Answer: Open-end

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An individual who goes short in a futures position _____.

Commits to delivering the underlying commodity at contract maturity

Commits to purchasing the underlying commodity at contract maturity

Has the right to deliver the underlying commodity at contract maturity

Has the right to purchase the underlying commodity at contract maturity

Answer

Correct Answer: Commits to delivering the underlying commodity at contract maturity

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An individual retirement account is an example of a(n) ____________ asset.

Liquid

Common

Investment

Household

Budgeted

Answer

Correct Answer: Investment

Note: This Question is unanswered, help us to find answer for this one

According to the capital asset pricing model, in equilibrium _________.

Along the security market line

Assets with identical risks must have the same expected rate of return

All securities' returns must lie on the security market line

Is always the minimum-variance portfolio on the efficient frontier

Answer

Correct Answer: All securities' returns must lie on the security market line

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A/an ________ is a contract to lock in today interest rates over a given period of time.

Forward rate agreement

Interest rate future

Interest rate swap

None of the above

Answer

Correct Answer: Interest rate future

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A(n)________ is hired by a firm to find prospective buyers for its new stock or bond issue.

Commercial loan officer

Investment banker

Securities analyst

None of these

Answer

Correct Answer: Investment banker

Note: This Question is unanswered, help us to find answer for this one

Generally, an increase in risk will result in ________.

A lower required return or interest rate

A higher required return or interest rate

A higher return on investment

A lower return on investment

Answer

Correct Answer: A higher required return or interest rate

Note: This Question is unanswered, help us to find answer for this one

Generally speaking, bonds issued in the u.s. pay interest on a(n) ________ basis.

Semiannual

Daily

Annual

Monthly

Quarterly

Answer

Correct Answer: Semiannual

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For a tax-paying firm, an increase in _____ will cause the cash flow from assets to increase.

Depreciation

Net capital spending

Change in net working capital

Taxes

Production costs

Answer

Correct Answer: Depreciation

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For a promissory note, the entity to whom the promise of future payment is made is the ________.

Payee of the note

Maker of the note

Banker of the note

Endorser of the note

Answer

Correct Answer: Payee of the note

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For a company which produce its products in batches, the ceo's salary is a(n) ________ cost.

Batch-level

Output unit-level

Facility-sustaining

Product-sustaining

Answer

Correct Answer: Facility-sustaining

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Financial assets represent _____ of total assets of u.s. households.

Over 60%

Over 90%

Under 10%

About 30%

Answer

Correct Answer: Over 60%

Note: This Question is unanswered, help us to find answer for this one

Companies that research and development costs assets and net income.

Overstate; capitalize; capitalize

Capitalize; overstate; overstate

Overstate; overstate; overstate

Capitalize; overstate; capitalize

Answer

Correct Answer: Capitalize; overstate; overstate

Note: This Question is unanswered, help us to find answer for this one

Bank loans from the federal reserve are called and represent a of funds.

Discount loans; use

Discount loans; source

Fed funds; use

Fed funds; source

Answer

Correct Answer: Discount loans; source

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Basu found that firms with high p/e ratios __________.

Earned higher average returns than firms with low P/E ratios

Earned the same average returns as firms with low P/E ratios

Earned lower average returns than firms with low P/E ratios

Had higher dividend yields than firms with low P/E ratios

Answer

Correct Answer: Earned lower average returns than firms with low P/E ratios

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In a 1953 study of stock prices, maurice kendall found that ________.

Day-to-day stock prices followed consistent trends

Stock prices exhibited strong serial autocorrelation

There were no predictable patterns in stock prices

Fundamental analysis could be used to generate abnormal returns

Answer

Correct Answer: There were no predictable patterns in stock prices

Note: This Question is unanswered, help us to find answer for this one

In _____, a firm frames a guiding policy to address the competitive challenge.

Strategy control

Strategy implementation

Strategy formulation

Strategy analysis

Answer

Correct Answer: Strategy formulation

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Cash and cash equivalents are divided by ________ to determine the cash ratio.

Equity

Total current liabilities

Total long-term liabilities

Fixed assets

Answer

Correct Answer: Total current liabilities

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Tips offer investors inflation protection by ______________ by the inflation rate each year.

Increasing only the coupon rate

Increasing only the par value

Increasing both the par value and the coupon payment

Increasing the promised yield to maturity

Answer

Correct Answer: Increasing both the par value and the coupon payment

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The value of a call option increases with all of the following except ___________.

Stock price

Time to maturity

Volatility

Exercise price

Answer

Correct Answer: Stock price

Note: This Question is unanswered, help us to find answer for this one

The unified rate schedule applies to federal ____ taxes.

Gross estate

Gift and estate

Income and estate

Gift and income

Answer

Correct Answer: Gift and estate

Note: This Question is unanswered, help us to find answer for this one

There are approximately ____ mutual fund families in the united states.

400

2,800

3,678

13,000

Answer

Correct Answer: 400

Note: This Question is unanswered, help us to find answer for this one

The portfolio with the lowest standard deviation for any risk premium is called the_______.

Efficient frontier portfolio

CAL portfolio

Global minimum

None of these

Answer

Correct Answer: Global minimum

Note: This Question is unanswered, help us to find answer for this one

One method of forecasting the risk premium is to use the _______.

Average abnormal return on the index portfolio

Coefficient of variation of analysts' earnings forecasts

Average historical excess returns for the asset under consideration

Variations in the risk free rate over time

Answer

Correct Answer: Average abnormal return on the index portfolio

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Nominal interest rates are the sum of two major components. these components are ________.

The real interest rate and expected inflation

Compounding periods for the length of an investment

Number of discounting periods for the length of an investment

Number of compounding periods per year

Answer

Correct Answer: The real interest rate and expected inflation

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Money market securities are sometimes referred to as cash equivalents because _____.

They are safe and marketable

They are not liquid

They are high-risk

They are low-denomination

Answer

Correct Answer: They are safe and marketable

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Floating-rate bonds have a __________ that is adjusted with current market interest rates.

Maturity date

Coupon payment date

Coupon rate

Dividend yield

Answer

Correct Answer: Coupon rate

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An analysis that combines scenario analysis with sensitivity analysis is called _____ analysis.

Soft rationing

Analysis

Simulation

Financial

Answer

Correct Answer: Simulation

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An american call option gives the buyer the right to _________.

Buy the underlying asset at the exercise price on or before the expiration date

Buy the underlying asset at the exercise price only at the expiration date

Sell the underlying asset at the exercise price on or before the expiration date

Sell the underlying asset at the exercise price only at the expiration date

Answer

Correct Answer: Buy the underlying asset at the exercise price on or before the expiration date

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A point, as defined in the real estate market, is ____ percent of the loan amount.

Answer

Correct Answer: 1

Note: This Question is unanswered, help us to find answer for this one

Financial institutions search for ________ has resulted in many financial innovations.

Higher profits

Regulations

Respect

Higher risk

Answer

Correct Answer: Higher profits

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Financial functions format calculated values as currency, with _______.

Positive cash flow appearing in red font

Positive cash flow enclosed in parentheses

Negative cash flow appearing in green font

Negative cash flow appearing in red font

Answer

Correct Answer: Negative cash flow appearing in red font

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Finance managers spend the majority of their time managing ____.

Cash flow

Long-term financial needs

Short-term financial needs

Equity financing

Answer

Correct Answer: Short-term financial needs

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A(n) ____ is not an interest-bearing account.

Regular checking account.

Fixed-rate mortgage

Mileage driven

Shorter maturities

Answer

Correct Answer: Regular checking account.

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Licensing is when a company ____.

Preference for doing one thing at a time

Of the world economy toward becoming a more interdependent system

Allows a foreign company to pay it a fee to make or distribute the first company's product or service

Major trading blocs

Answer

Correct Answer: Allows a foreign company to pay it a fee to make or distribute the first company's product or service

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The time value of a call option is likely to decline most rapidly ________ days before expiration?

Answer

Correct Answer: 10

Note: This Question is unanswered, help us to find answer for this one

The initial maturities of most exchange-traded options are generally __________.

Less than 5 year

Less than 4 year

Less than 0 year

Less than 1 year

Answer

Correct Answer: Less than 1 year

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New-economy companies generally have higher _______ than old-economy companies.

Book value per share.

P/E multiples.

Profits.

Asset values.

Answer

Correct Answer: Book value per share.

Note: This Question is unanswered, help us to find answer for this one

Most people would readily agree that the stock market is not _________.

Random walk

Weak form

Strong form

Strong form efficient

Answer

Correct Answer: Strong form efficient

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Market signals will help to allocate capital efficiently only if investors are acting _____ .

Accurate information

Debt deflation

Securitization

Distribution

Origination

Answer

Correct Answer: Accurate information

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The stockholders' annual report must include ________.

Common-size financial statements

An income statement

An advance tax statement

The margin of safety report

Answer

Correct Answer: An income statement

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The key inputs to the valuation process include ________.

Returns and risk

Cash flow, cash flow timing, and risk

Cash flows and discount rate

Cash flows and taxes

Answer

Correct Answer: Cash flows and taxes

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The greater a firms sales, the greater need for financing because of greater _____ requirements.

Asset.

Equipment.

Retained earnings.

Liquidity.

Answer

Correct Answer: Asset.

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When financial institutions expect interest rates to , they may .

Increase; decrease

High yield; appreciates

12 percent

Increase; sell bonds and buy short-term securities

Answer

Correct Answer: Increase; sell bonds and buy short-term securities

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The nyse acquired the ecn _, and nasdaq recently acquired the ecn __.

Archipelago; Instinet

Instinet; Archipelago

Island; Instinet

None of these

Answer

Correct Answer: Archipelago; Instinet

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The following formula is used to calculate the _____________ of a money market investment.

Banker's acceptance.

Is the U.S. Treasury

Single-payment yield

None of these

Answer

Correct Answer: Single-payment yield

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Compound interest is interest computed on the _ as well as on any accumulated _.

Effective annual yield, simple

Original principle, interest

One, monthly

Two, monthly

Answer

Correct Answer: Original principle, interest

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A speculator that has a futures contract has taken a position.

Sold; long

Purchased; short

Sold; short

Purchased; sold

Answer

Correct Answer: Sold; short

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________ exposure deals with cash flows that result from existing contractual obligations.

Operating

Transaction

Translation

Economic

Answer

Correct Answer: Transaction

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________ are exchange rates governing some specific future date foreign exchange transactions.

Forward exchange rates

Spot exchange rates

Currency swaps

Future exchange rates

Answer

Correct Answer: Forward exchange rates

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A time spread may be executed by _____.

Selling an option with one exercise price and buying a similar one with a different exercise price

Buying two options that have the same expiration dates but different strike prices

Selling two options that have the same expiration dates but different strike prices

Selling an option with one expiration date and buying a similar option with a different expiration date

Answer

Correct Answer: Selling an option with one expiration date and buying a similar option with a different expiration date

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A successful job search might require ____ hours per week of your time.

5 to 10

15 to 20

20 to 30

35 to 40

Answer

Correct Answer: 20 to 30

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Subtracting ____ and _ from _____ yields free cash flow.

Net income and net cash provided by operating activities.

As an increase in the operating activities section

Capital expenditures; net cash provided by operations

Acquiring land by issuing common stock

Answer

Correct Answer: Capital expenditures; net cash provided by operations

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Value stocks are more likely to have a peg ratio _____.

Less than one

Equal to one

Greater than one

Less than zero

Answer

Correct Answer: Less than one

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______ is the total accumulation of past budget deficits less surpluses.

The budget deficit

The budget surplus

The public debt

Answer

Correct Answer: The public debt

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A buyer who says "your company is too small to meet my needs" is expressing a _____.

Price objection

Time objection

Source objection

Answer

Correct Answer: Source objection

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A buyer expressing resistance because he or she is loyal to another supplier is raising a _____.

Time objection

Price objection

Trial commitment

Service related

Answer

Correct Answer: Time objection

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A testimonial written in story form is known as a(n) _____.

Customer statement

Case history

Analogy

Example

Comparison

Answer

Correct Answer: Case history

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Financial experts recommend a debt/payments ratio of less than ____ of take-home pay.

5-10%

20%

25-35%

Answer

Correct Answer: 20%

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The safest and most popular type of mortgage loan has a fixed rate and is called a _____.

Balloon loan

ARM

Traditional loan

VA loan

Answer

Correct Answer: Traditional loan

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Decreasing the number of stocks in a portfolio from 50 to 10 would likely ________________.

Increase the systematic risk of the portfolio

Increase the unsystematic risk of the portfolio

Increase the return of the portfolio

Decrease the variation in returns the investor faces in any one year

Answer

Correct Answer: Increase the unsystematic risk of the portfolio

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The _____ of a stock reflects stockholders confidence.

Par value

Face value

Dividend yield

Price/earnings ratio

Book value.

Answer

Correct Answer: Price/earnings ratio

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_____ is a mechanism for mitigating potential agency problems.

Tying income of managers to success of the firm

Directors defending top management

Antitakeover strategies

All of the options.

Answer

Correct Answer: Tying income of managers to success of the firm

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All other things equal, a bond's duration is _________.

Higher when the coupon rate is higher

Lower when the coupon rate is higher

The same when the coupon rate is higher

Indeterminable when the coupon rate is high

Answer

Correct Answer: Higher when the coupon rate is higher

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The discount rate is kept ________ the federal funds rate because the fed prefers that

Below; banks can monitor each other for credit risk

Below; the Fed can monitor banks for credit risk

Above; banks can monitor each other for credit risk

Above; the Fed can monitor banks for credit risk

Above; banks borrow reserves from each other

Answer

Correct Answer: Above; banks borrow reserves from each other

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The amount of checks or debits listed on the january bank statement is______________.

$158.53

$246.56

$88.00

$954.47

Answer

Correct Answer: $954.47

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Strikes, lawsuits, regulatory actions, or the loss of a key account are all examples of ________.

Market risk

Economic risk

Systematic risk

Diversifiable risk

Answer

Correct Answer: Diversifiable risk

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In his famous critique of the capm, roll argued that the capm ______________.

Is not testable because the true market portfolio can never be observed

Is of limited use because systematic risk can never be entirely eliminated

Should be replaced by the APT

Should be replaced by the Fama-French three-factor model

Answer

Correct Answer: Is not testable because the true market portfolio can never be observed

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In a private companys accounting system, inputs are ___ and outputs are _.

Transactions such as sales, payroll, and other expenses; financial statements

Summarizing and interpreting company financial information.

Help stakeholders evaluate the financial condition of the firm.

None of these

Answer

Correct Answer: Transactions such as sales, payroll, and other expenses; financial statements

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When the market risk premium rises, stock prices will ________.

Rise

Fall

Recover

Have excess volatility

Answer

Correct Answer: Fall

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A hedge ratio of .70 implies that a hedged portfolio should consist of ________.

Long .70 shares for each long call

Long .70 calls for each short stock

Long .70 shares for each short call

Short .70 calls for each long stock

Answer

Correct Answer: Long .70 shares for each long call

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Twitters organizational culture most resembles a(n) ______ culture.

Adhocracy

Competitive

Market

Hierarchy

Clan.

Answer

Correct Answer: Clan.

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____ are a loose-knit network of attackers, identity thieves, and financial fraudsters.

Cybercriminals

Hackers

Spies

Script kiddies

Answer

Correct Answer: Cybercriminals

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A reduction of manufacturing delivery speed is a ________.

Value-added activity

Number of parts

Batch-level cost

Appraisal costs

Answer

Correct Answer: Value-added activity

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The weak form of the emh states that ________ must be reflected in the current stock price.

All past information, including security price and volume data

All publicly available information

All information, including inside information

All costless information

Answer

Correct Answer: All past information, including security price and volume data

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In an ad/as diagram, __________________________ could explain a rise in cyclical unemployment?

A shift to the left in either AS or AD

Real GDP is shown on the horizontal axis.

Keynesian zone of the AS curve

None of these

Answer

Correct Answer: A shift to the left in either AS or AD

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An advantage of offering more lenient credit terms is that it helps a firm _____.

Increase its sales

Liquidity

Cash equivalents

None of this

Answer

Correct Answer: Increase its sales

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An unfavorable flexible budget variance in variable costs suggests a(n) ________.

Increase in sales price per unit

Decrease in sales volume

Increase in variable cost per unit

Decrease in fixed costs

Answer

Correct Answer: Increase in variable cost per unit

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Diversification is most effective when security returns are _________.

High

Negatively correlated

Positively correlated

Uncorrelated

Answer

Correct Answer: Negatively correlated

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Goals can be considered positive or negative. this is an expression of a goal's ________.

Direction

Valence

Strength

Dissonance

Answer

Correct Answer: Valence

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A level _____ subscriber to the nasdaq system may enter bid and ask prices.

Answer

Correct Answer: 3

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As the aggregate price level in an economy rises, ____________________.

Interest rates increase

Consumer demand increases

Exports decrease

Investment increases

Answer

Correct Answer: Interest rates increase

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A rise in the money wage rate with no change in potential gdp creates ______.

A leftward shift of the SAS curve and no change in the LAS curve

Short-run aggregate supply decreases; the quantity of real GDP supplied increases

Long-run aggregate supply and short-run aggregate supply increase

All of this

Answer

Correct Answer: A leftward shift of the SAS curve and no change in the LAS curve

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A firm cuts its dividend payout ratio. as a result, you know that the firm's _______.

Return on assets will increase

Earnings retention ratio will increase

Earnings growth rate will fall

Stock price will fall

Answer

Correct Answer: Earnings retention ratio will increase

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The setting of Edouard manet's reclining nude figure of olympia is a(n) __________.

The design for the Oval Office

Bordello of the Parisian demimonde

Virtuoso brushwork and a brilliant palette

Experience working with live models and dissecting corpses

Answer

Correct Answer: Bordello of the Parisian demimonde

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typically lead(s) sales; typically lag(s) sales.

Production; receivables

Collections; purchases

Receipts; production

Purchases; collections

Answer

Correct Answer: Production; receivables

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A dollar-denominated deposit at a london bank is called _____.

Eurodollars.

Libor

Fed funds

Bankers' acceptance.

Answer

Correct Answer: Eurodollars.

Note: This Question is unanswered, help us to find answer for this one

With an inflation rate of 9 percent, prices would double in about ___________ years.

Answer

Correct Answer: 8.

Note: This Question is unanswered, help us to find answer for this one

When a stockholder contributes cash to a corporation in exchange for stock, ________.

Liabilities and stockholders' equity are increased

Assets and stockholders' equity are increased

One asset is increased and another is decreased

Assets and liabilities are increased

Answer

Correct Answer: Assets and stockholders' equity are increased

Note: This Question is unanswered, help us to find answer for this one

When a plant asset is disposed of, the business must ________.

Immediately replace it

Ensure that the plant asset is obsolete or worn out

Comply with the conservatism principle and record losses but not gains

Bring the depreciation up to date

Answer

Correct Answer: Bring the depreciation up to date

Note: This Question is unanswered, help us to find answer for this one

When a bond is issued at a price higher than the face value, the difference is known as a ________.

Premium.

Discount.

Maturity value.

Face value.

Answer

Correct Answer: Premium.

Note: This Question is unanswered, help us to find answer for this one

Using factory utilities would most likely be classified as a ________ cost.

Product-level

Batch-level -

Unit-level

Facility-level.

Answer

Correct Answer: Facility-level.

Note: This Question is unanswered, help us to find answer for this one

Typically, only highly regarded customers with financial stability receive __________.

Secured loans

Bank premiums.

Unsecured loans.

Commercial paper.

Answer

Correct Answer: Secured loans

Note: This Question is unanswered, help us to find answer for this one

The sales returns and allowances account has a normal ______ balance.

Expense, income statement, reducing

Contra revenue, decrease, revenue, sales

Accrued revenue, account receivable

Sale, revenue, matching concept

Answer

Correct Answer: Accrued revenue, account receivable

Note: This Question is unanswered, help us to find answer for this one

The reason investors buy bonds is to ________.

Principal Amount

Stated Interest Rate

Earn Interest

Maturity Date

Answer

Correct Answer: Earn Interest

Note: This Question is unanswered, help us to find answer for this one

The purchase of raw materials should be recorded as a debit to ________ in a job order cost system.

Direct labor

Nails and screws

Laptop keyboard

Drywall

Answer

Correct Answer: Direct labor

Note: This Question is unanswered, help us to find answer for this one

The payroll department of a manufacturing company is most likely to be a(n) ________.

Cost center

Revenue center

Investment center

Profit center.

Answer

Correct Answer: Cost center

Note: This Question is unanswered, help us to find answer for this one

The expense for warranty costs is recorded in the period ________.

$526,000

$7,971

$8,971

$8,976

Answer

Correct Answer: $526,000

Note: This Question is unanswered, help us to find answer for this one

Q 7.13: a(n)________ requires a journal entry by the depositor.

Journal entry

Collection of a note receivable.

An NSF check.

Bank service charges

Answer

Correct Answer: Collection of a note receivable.

Note: This Question is unanswered, help us to find answer for this one

One way of reducing project costs is identifying tasks that _________ can do themselves.

Vendors

Suppliers

Customers

Company employees

Answer

Correct Answer: Vendors

Note: This Question is unanswered, help us to find answer for this one

National banks are regulated by , and state banks are regulated by .

FDIC insurance on deposits.

All Fed member banks must hold. are; are not.

Reigle-Neal Interstate Banking and Branching Efficiency Act

Prevent another credit crisis.

Answer

Correct Answer: FDIC insurance on deposits.

Note: This Question is unanswered, help us to find answer for this one

Managerial accounting provides information to ________.

Outside investors and lenders

Creditors

Taxing authorities

Internal decision makers.

Answer

Correct Answer: Outside investors and lenders

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Increasing your 401k deduction will ________ your federal taxes in the current year

Increase

Decrease

Not change.

Non of these.

Answer

Correct Answer: Decrease

Note: This Question is unanswered, help us to find answer for this one

In order to assist in revenue realization, a(n) ________ allocates resources throughout the firm.

All of these

Forecast.

Balance sheet

Budget

Answer

Correct Answer: Forecast.

Note: This Question is unanswered, help us to find answer for this one

In a private company?s accounting system, inputs are _______ and outputs are _.

Marketing strategy-type information; sales data

Results of surveys on consumer satisfaction; accounts payables

Transactions such as sales, payroll, and other expenses; financial statements

Transactions such as the cash flow statement; payroll taxes

Answer

Correct Answer: Transactions such as sales, payroll, and other expenses; financial statements

Note: This Question is unanswered, help us to find answer for this one

Gaap requires companies to use the ________ method to record bad debts expense.

360-day.

Allowance.

Amortization.

Direct write-off.

Answer

Correct Answer: 360-day.

Note: This Question is unanswered, help us to find answer for this one

Emergencies can be difficult for retirees to handle, because retirees ___________.

Typically live on a fixed income

Making itemized deductions on your return is not

Begin researching your company's promotion procedures

They would receive only a partial benefit for as long as they collect Social Security

Answer

Correct Answer: Typically live on a fixed income

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Continuing education opportunities allow adults to _____.

Online learning

Personal career profile

Trade school

All of the above

Answer

Correct Answer: All of the above

Note: This Question is unanswered, help us to find answer for this one

Buying and selling goods, acquiring insurance and using supplies represent __________ transactions.

Marketing

Financial

Management

Resource trading.

Answer

Correct Answer: Resource trading.

Note: This Question is unanswered, help us to find answer for this one

Another name for a bachelor's degree is a(n) _____.

Undergraduate degree

Associate's degree

Professional degree

Doctoral degree.

Answer

Correct Answer: Undergraduate degree

Note: This Question is unanswered, help us to find answer for this one

An apprenticeship involves _____.

Hands-on experience in a skill

1-5 years

Personal information and career information

Online learning

Answer

Correct Answer: Hands-on experience in a skill

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A rough order of magnitude estimate can be referred to as a _____ estimate.

Definitive

Final

Budgetary

Ballpark.

Answer

Correct Answer: Ballpark.

Note: This Question is unanswered, help us to find answer for this one

A production cost report aids in preparing an income statement by providing data for ________.

Process Costing System

A production cost report

Cost of goods sold during the period

Answer

Correct Answer: Cost of goods sold during the period

Note: This Question is unanswered, help us to find answer for this one

Texas uses ________ to review the facts and decide whether enough evidence exists to try cases.

Deciding points of fact versus points of law

Both grand juries and administrative hearings

Removal by the governor after a hearing

Rehabilitation, deterrence, and punishment

Answer

Correct Answer: Both grand juries and administrative hearings

Note: This Question is unanswered, help us to find answer for this one

The balance sheet of a ________ company will include work-in-process inventory as a line item.

Manufacturing

Advertising expense

Employees

Cereal

Answer

Correct Answer: Manufacturing

Note: This Question is unanswered, help us to find answer for this one

The ________ budget is the only budget stated only in units, not dollars.

Production

Sales

Direct materials

Manufacturing overhead

Answer

Correct Answer: Production

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A privately run institute that trains students for a particular profession is called a _____.

Personal career profile

Vocational-technical center

Trade school

Answer

Correct Answer: Vocational-technical center

Note: This Question is unanswered, help us to find answer for this one

A personal career profile form evaluates two sets of data, _____.

Personal information and career information

Personal career profile

An example of a short-term goal would be buy a house in 2 years

None of these

Answer

Correct Answer: Personal information and career information

Note: This Question is unanswered, help us to find answer for this one

The federal government has worked to regulate campaign finance __________.

Or more than a century.

Congressional district committees

Going door to door to solicit votes

Proportional representation

Answer

Correct Answer: Or more than a century.

Note: This Question is unanswered, help us to find answer for this one

A balance sheet lists assets in order of their ______________.

Preparing the store's balance sheet and other major financial statements.

Readily available financial information.

Liquidity, with the most liquid assets listed first

Are tools to help the accountant perform his or her job

Answer

Correct Answer: Liquidity, with the most liquid assets listed first

Note: This Question is unanswered, help us to find answer for this one

A cost is relevant to a decision if ________.

Ensure the costs in the cost pool are homogenous with respect to the cost driver

A cost related to all errors that are not detected and corrected before delivery to the customer

It is a future cash flow and differs between alternatives

Have separate cost allocation rates for each activity identified by the company

Answer

Correct Answer: It is a future cash flow and differs between alternatives

Note: This Question is unanswered, help us to find answer for this one

A financial institution has a higher degree of interest rate risk on a than a .

30-year fixed-rate mortgage; 15- year fixed-rate mortgage.

Interest payments exceeds principal payments early on

Private-label pass-through securities

2 percent per year and 5 percent for the mortgage lifetime

Answer

Correct Answer: 30-year fixed-rate mortgage; 15- year fixed-rate mortgage.

Note: This Question is unanswered, help us to find answer for this one

An american put option gives its holder the right to _________.

Sell the underlying asset at a price determined by the average stock price during some specified portion of the option's life

Sell the underlying asset at the exercise price on or before the expiration date

Buy the underlying asset at the exercise price on or before the expiration date

Buy the underlying asset at a price determined by the average stock price during some specified portion of the option's life

Answer

Correct Answer: Sell the underlying asset at the exercise price on or before the expiration date

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______ would not be included in the eafe index.

Australia

Canada

France

Japan.

Answer

Correct Answer: Australia

Note: This Question is unanswered, help us to find answer for this one

When a note receivable is honored, cash is debited for the note's ________ value.

Market value

Face value

Maturity value

Fair value

Answer

Correct Answer: Maturity value

Note: This Question is unanswered, help us to find answer for this one

Q 9.13: to find the asset turnover ratio, divide net ________ total assets.

Sales by average

Cost of the asset and the accumulated depreciation to date.

Double declining-balance

all of the Above

Answer

Correct Answer: Sales by average

Note: This Question is unanswered, help us to find answer for this one

Capital losses may be _______.

Carried back 3 years

Carried forward up to 5 years

All of the above

Answer

Correct Answer: All of the above

Note: This Question is unanswered, help us to find answer for this one

Economics studies ______

How society manages its scarce resources

Structural

Higher productivity

The Phillips Curve

Answer

Correct Answer: How society manages its scarce resources

Note: This Question is unanswered, help us to find answer for this one

If the npv of a project is positive, the irr is __________ the cost of capital.

Riskier than

Less than

Greater than

Equal to

Answer

Correct Answer: Greater than

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The money the borrower pays for the use of the lender's money is called the ______.

Interest

Annual

Principal

Variable

Answer

Correct Answer: Interest

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With respect to a personal loan, the finance charge a borrower pays is _____.

An income tax on the loan

The extra money he or she pays in interest

Usually a one time $20 application processing fee

Something the borrower can opt out of with good credit

Answer

Correct Answer: The extra money he or she pays in interest

Note: This Question is unanswered, help us to find answer for this one

Which word best completes the following sentence? a player's role is his or her ______ in the game.

Job

Place

Presence

None of the above

Answer

Correct Answer: Job

Note: This Question is unanswered, help us to find answer for this one

When you are shopping around for a loan, the __________ is the important rate to compare.

APR

RPA

ARP

None of the above

Answer

Correct Answer: APR

Note: This Question is unanswered, help us to find answer for this one

When the total variable costs are deducted from total mixed costs, we obtain ________.

Mixed cost per unit

Variable cost per unit

Total high-low costs

Total fixed costs

Answer

Correct Answer: Total fixed costs

Note: This Question is unanswered, help us to find answer for this one

Uranium fuel is ____________ before it can be put into a reactor.

Extensively processed to clean and purify it

Found in concentrated form in the Earth and then washed

Produced by bombarding it with electrons from radioactive plutonium

Extensively processed in order to change it to a safer form

None of these is correct

Answer

Correct Answer: Extensively processed to clean and purify it

Note: This Question is unanswered, help us to find answer for this one

Today the united states is considered a ___________ free enterprise system.

Capitalist or

Non-capitalist or

Both a and b

None of the above

Answer

Correct Answer: Capitalist or

Note: This Question is unanswered, help us to find answer for this one

To say that economists use the scientific method means that they are using ___________.

An ongoing process to develop models of the world and then test and evaluate those models.

A process to develop models that are intended to exactly represent all the details of a system.

A method to determine the best course of action for fiscal and monetary policy

A method to develop recommendations for policy makers to run economies.

Answer

Correct Answer: An ongoing process to develop models of the world and then test and evaluate those models.

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Time taken to fix a broken build is measured using ________________.

Build repair rate

Successful build rate

Total Build time

None of the above

Answer

Correct Answer: Build repair rate

Note: This Question is unanswered, help us to find answer for this one

Thomas malthus argued that population ________.

Would increase in a geometric (exponential) progression while the food supply would increase only by an arithmetic progression

Would decrease in a geometric (exponential) progression while the food supply would increase only by an arithmetic progression

Would neither increase nor decrease in a geometric (exponential) progression while the food supply would increase only by an arithmetic progression

None of the above

Answer

Correct Answer: Would increase in a geometric (exponential) progression while the food supply would increase only by an arithmetic progression

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The ultimate control of the corporation rests with the ________.

SEC and congress

Chife excutive officer

Stockholders

Employes

Answer

Correct Answer: Stockholders

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The two revenue sources for the government are _ and _.

Taxes and spending

Taxes and interest

Taxes and borrowing

None of the above

Answer

Correct Answer: Taxes and borrowing

Note: This Question is unanswered, help us to find answer for this one

The total cost curve shows how _ cost depends on the quantity of _.

Total; fixed inputs

Total; output

Marginal; output

Average; variable inputs

Answer

Correct Answer: Total; output

Note: This Question is unanswered, help us to find answer for this one

The term ________ is best described as a relationship among principal, interest rate, and time.

Capital budgeting

Time value of money

Payback period

Annuity

Answer

Correct Answer: Time value of money

Note: This Question is unanswered, help us to find answer for this one

The rotational energy of the blades of a wind turbine ________.

Is used to generate hydrogen from water

Drives a generator inside the nacelle compartment to produce electricity

Generates as much greenhouse gases as burning natural gas

Will not occur unless electricity is provided to generate the motion

Is so expensive to produce that no commercial development has been possible

Answer

Correct Answer: Drives a generator inside the nacelle compartment to produce electricity

Note: This Question is unanswered, help us to find answer for this one

The real flows are that flow from households to firms through markets.

The services of factors of production; real

Payments; financial

Government goods; factor

The services of factors of production; factor

Consumption goods; financial

Answer

Correct Answer: The services of factors of production; factor

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The quantity of a product that will be produced and sold at a specific price is the __________.

Demand

Supply

Quantity demanded

Quantity supplied

Answer

Correct Answer: Quantity supplied

Note: This Question is unanswered, help us to find answer for this one

The more frequently a bank compounds interest, ____ will be.

The higher the stated interest rate

The lower the stated interest rate

The higher the APY

The lower the APY

A and c

Answer

Correct Answer: The higher the APY

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The monopolist charges a price that is __________ the perfectly competitive industry.

Higher than

Lower than

Equal to

None of the above

Answer

Correct Answer: Higher than

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The main factors that determine quantity supplied are price and _____.

Consumers' preferences

Costs of productive resources

Population growth

None of the above

Answer

Correct Answer: Costs of productive resources

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The law of supply states that as prices _, the quantity _.

Fall; supplied rises

Rise; supplied rises

Fall; supplied fall

Rise; supplied fall

Answer

Correct Answer: Rise; supplied rises

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The key securities traded in the capital markets are ________.

Stocks

Bonds

Both a and b

None of the above

Answer

Correct Answer: Both a and b

Note: This Question is unanswered, help us to find answer for this one

The free market economy developed in the _____

19th century

20th century

21st century

Answer

Correct Answer: 19th century

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The first step in the journalizing and posting process is to ________.

Record the transaction in the journal

Identify the accounts involved and the account type

Decide whether each account increases or decreases

Post the journal entry to the ledger

Answer

Correct Answer: Identify the accounts involved and the account type

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The fed is the lender of last resort, which means _______.

An institution which is willing to offer loans as a last resort

An institution which is not willing to offer loan

An institution will may or may not offer a loan

None of the above

Answer

Correct Answer: An institution which is willing to offer loans as a last resort

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The extent to which something provides economic value greater than its cost is called its _____.

Reliability

Validity

Utility

None all of the above

Answer

Correct Answer: Reliability

Note: This Question is unanswered, help us to find answer for this one

1,000 par value zero-coupon bonds (ignore liquidity premiums)
Bond YrsTM YTM
A1 6%
B 2 7.5%
C 3 8.00%
D 4 8.50%
E 5 10.25%
the expected 1-year interest rate 2 years from now should be _________.

10%

Answer

Correct Answer: 8%

Note: This Question is unanswered, help us to find answer for this one

The distribution of a stock dividend ________.

Affects only stockholders' equity accounts

Decreases assets and increase liabilities

Decreases both assets and liabilities

Increases both dividends payable and cash

Answer

Correct Answer: Affects only stockholders' equity accounts

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The debt-to-assets ratio and times-covered ratio are types of ______ ratio.

Profitability

Leverage

Liquidity

None of the above

Answer

Correct Answer: Leverage

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The concept of diminishing marginal benefits means that __________.

Each additional unit consumed is worth more to you than the previous one, but the additional benefit grows at a diminishing rate.

The more of a good that you consume, the lower is your overall benefit from that good.

As you consume more of a good, your willingness to pay for that good increases faster than the benefit you receive.

Each additional unit consumed is worth less to you than the previous one.

Answer

Correct Answer: Each additional unit consumed is worth less to you than the previous one.

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The change in total cost that results from a change in output is __________ cost.

Average fixed

Average variable

Average total

Marginal

Answer

Correct Answer: Marginal

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The basic applications of fiscal policy relates to ___________ theory.

Monetarist

Classical

Keynesian

None of the above

Answer

Correct Answer: Keynesian

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The _____ shows the financial picture of a company at a given time.

Debt-equity ratio

Balanced scorecard

Balance sheet

Theory of constraints

Net working capital ratio

Answer

Correct Answer: Balance sheet

Note: This Question is unanswered, help us to find answer for this one

The _____ presents a snapshot of an organization's financial position at a given moment.

Balance sheet

Financial statements

Both a and b

None of the above

Answer

Correct Answer: Balance sheet

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The _____ pool consists of all persons who are actually evaluated for selection.

Applicant

Selection

Labor

Talent

Answer

Correct Answer: Applicant

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The _ market is an example of type of market.

Corn; a perfectly competitive

Mattress; a monopoly

Car insurance; an oligopoly

Airplane manufacturing; a monopolistically competitive

Cell phone; a perfectly competitive

Answer

Correct Answer: Corn; a perfectly competitive

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The _ is the sum of past _.

Public debt; national debts

Public debt; budget deficits

Budget deficit; public debts

Budget deficit; national debts

Answer

Correct Answer: Public debt; budget deficits

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The _____ is the price less the variable cost per unit.

Profit margin

Break-even point

Target return price

Contribution per unit

Fixed cost

Answer

Correct Answer: Contribution per unit

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Term loans impose restrictions called ________.

Conditions

Covenants

Limits

Rules

Answer

Correct Answer: Covenants

Note: This Question is unanswered, help us to find answer for this one

Technological advancement can come from improved devices or new ___________.

Methods

Tools

Creations

None of the above

Answer

Correct Answer: Methods

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Supply is provided by producers and demand is created by __________ .

Consumers

Suppliers

Producers

None of the above

Answer

Correct Answer: Consumers

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Revenues normally carry a _ balance and are shown in the ________.

Credit, income statement

Debit; balance statement

Credit; balance sheet

All of the above

Answer

Correct Answer: Credit, income statement

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Refer to the diagram. total utility is at a maximum at _____ units of x.

Answer

Correct Answer: 6

Note: This Question is unanswered, help us to find answer for this one

Readiness for training depends on _____.

Situational constraints

Training curriculum

Predictive validation

Concurrent validation

Criterion-related validity

Answer

Correct Answer: Situational constraints

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Rationing is a common form of distribution in a _____.

A centrally planned economy.

A free market economy.

A price-based system.

A market based on competition.

Answer

Correct Answer: A centrally planned economy.

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Price elasticity of demand is not _______.

Constant along a linear demand curve.

Varying along a linear demand curve.

Both a and b

None of the above

Answer

Correct Answer: Constant along a linear demand curve.

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Patents and copyrights are classified as ___________ on the balance sheet.

Intangible assets

Tangible assets

Both a and b

None of the above

Answer

Correct Answer: Intangible assets

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Open market operations refer to the purchase or sale of ________ to control the money supply.

Corporate bonds and stocks by the Federal Reserve

U.S. Treasury securities by the Federal Reserve

Corporate bonds and stocks by the U.S. Treasury

U.S. Treasury securities by the U.S. Treasury

Answer

Correct Answer: U.S. Treasury securities by the Federal Reserve

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One reason for the slope of the demand curve is that as prices fall .

Downward; more people find that the price is less than their reservation price.

Upward; more people find that the price is less than their reservation price.

Moderate; more people find that the price is less than their reservation price.

None of the above

Answer

Correct Answer: Downward; more people find that the price is less than their reservation price.

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One of the most fundamental principles in the field of finance is that money has __________ value.

Time

Controller

High

Financing

Answer

Correct Answer: Time

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Oligopoly is a market in which a _ number of _ firms compete.

large; interdependent

large; independent

small; interdependent

small; independent

Answer

Correct Answer: small; independent

Note: This Question is unanswered, help us to find answer for this one

Money-creating transactions of a bank ( _________________ ) directly impact the money supply.

Banks making loans

Banks not making loans

Companies making loans

Companies not making loans

Answer

Correct Answer: Banks making loans

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Market, planned, and mixed are three basic types of _____.

Economic systems

Market systems

Business systems

None of the above

Answer

Correct Answer: Economic systems

Note: This Question is unanswered, help us to find answer for this one

Market demand is derived by __________.

Adding up both the prices each buyer pays and the quantities that each buyer demands.

Dividing each buyer's demand by the total number of consumers in the market

Fixing the quantity and adding up the prices that each buyer pays.

Fixing the price and adding up the quantities that each buyer demands.

Answer

Correct Answer: Fixing the price and adding up the quantities that each buyer demands.

Note: This Question is unanswered, help us to find answer for this one

M1 __________

Money supply that is composed of currency and other liquid deposits

Money supply that is composed of demand deposits

Both a and b

None of the above

Answer

Correct Answer: Money supply that is composed of currency and other liquid deposits

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Libor is _____ the prime rate.

Approximately equal to;

Considerably higher than;

Considerably lower than;

A lagging indicator of.

Answer

Correct Answer: Considerably lower than;

Note: This Question is unanswered, help us to find answer for this one

Less certain a cash flow, the the risk, and the present value of the cash flow.

Higher; lower

Lower; lower

Higher; higher

Lower; higher

Answer

Correct Answer: Higher; lower

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Joint ventures are _ in scope and _ in purpose than non-joint ventures.

More broad; less broad

More broad; more broad

Less broad; less broad

Less broad; more broad

Answer

Correct Answer: More broad; more broad

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Investment includes the amount of _________ that was produced for businesses.

Tools

Equipment

Both a and b

None of the above

Answer

Correct Answer: Both a and b

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Individual supply curves generally slope because .

Upward; of decreasing opportunity costs.

Upward; of increasing opportunity costs.

Downward; of decreasing opportunity costs.

Downward; of increasing opportunity costs.

Answer

Correct Answer: Upward; of increasing opportunity costs.

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Individual consumers supply and purchase .

Factors of production; final goods and services

Intermediate goods; final goods and services

Both a and b

None of the above

Answer

Correct Answer: Factors of production; final goods and services

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Income is a _ variable, and financial wealth is a _ variable.

Stock; stock

Stock; flow

Flow; flow

Flow; stock

Answer

Correct Answer: Flow; stock

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In valuing a business, the methods that buyers and sellers can use include ________.

Market-based value

Book value

Future earnings

All of the above

None of the above

Answer

Correct Answer: All of the above

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In the figure above, this product is price ___________ between point e and point f.

Elastic

Inelastic

Semi-elastic

None of the above

Answer

Correct Answer: Inelastic

Note: This Question is unanswered, help us to find answer for this one

In the beginning, some entrepreneurs use ____________ as a source of financing.

Personal credit cards

Personal debit cards

Personal visa cards

None of the above

Answer

Correct Answer: Personal credit cards

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In general, monopolistically competitive firms earn profits _____.

Slightly above their cost in the long run.

Slightly below their cost in the short run.

Slightly below their cost in the long run.

Slightly above their cost in the short run.

Answer

Correct Answer: Slightly above their cost in the long run.

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In a competitive equilibrium, firms earn ______ economic profits.

Zero

10%

50%

23&

Answer

Correct Answer: Zero

Note: This Question is unanswered, help us to find answer for this one

In a ____________ firm there is a separation between the demand line and the mr.

Monopolistic competition

Pure competition

Monopoly

Oligopoly

All of the above

Answer

Correct Answer: All of the above

Note: This Question is unanswered, help us to find answer for this one

If a supply-demand curve were applied to basic resources, _____.

Their prices would be increasing

Prices would stabilize

Supplies would go up

Their prices would be decreasing

Answer

Correct Answer: Their prices would be increasing

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How resources are used is determined by people's _____ .

Choices

Retail

Costs

Regulations

Answer

Correct Answer: Choices

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Gross profit will always be _____ net income.

Greater than

Lesser than

Equal to

None of these

Answer

Correct Answer: Greater than

Note: This Question is unanswered, help us to find answer for this one

Gross profit is calculated as ________.

Gross Profit = Revenue – Cost of Goods Sold

Gross Profit = Revenue + Cost of Goods Sold

Gross Profit = Revenue / Cost of Goods Sold

Gross Profit = Revenue * Cost of Goods Sold

Answer

Correct Answer: Gross Profit = Revenue – Cost of Goods Sold

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Gross investment is . net investment is .

Total addition made to the capital stock of an economy over a given period of time; the actual addition made to the capital stock of an economy

The actual addition made to the capital stock of an economy; total addition made to the capital stock of an economy over a given period of time

Both a and b

None of the above

Answer

Correct Answer: Total addition made to the capital stock of an economy over a given period of time; the actual addition made to the capital stock of an economy

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Given linear demand curves, if demand increases and supply decreases, then __________.

The equilibrium price will increase but the effect on the equilibrium quantity will be ambiguous

The equilibrium price will decrease but the effect on the equilibrium quantity will be ambiguous

The equilibrium price will neither increase nor decrease but the effect on the equilibrium quantity will be ambiguous

None of the above

Answer

Correct Answer: The equilibrium price will increase but the effect on the equilibrium quantity will be ambiguous

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For a purely competitive firm _; and for a uniform-price monopolist _ :

P = MR = AR; P = AR < MR

P = MR = AR; P = AR > MR

P = MR = AR; P = MR < AR

P = AR > MR; P > MR = AR

P > MR = AR; P = AR > MR

Answer

Correct Answer: P = MR = AR; P = AR > MR

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Firms that require funds from external sources can obtain them ________.

Two ways

Four ways

Three ways

One way

Answer

Correct Answer: Three ways

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Firms in monopolistic competition compete in three areas, which are _______.

quality, price, and marketing

price, celebrity endorsements, and sporting event sponsorships

Number of retail outlets, price, and marketing

quality, celebrity endorsements, and sporting event sponsorships

Answer

Correct Answer: quality, price, and marketing

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Financing provided by a firms owners is classified as _____ financing.

Equity

Debt

Primary

Unrestricted

Answer

Correct Answer: Equity

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Expenditure on consumption goods and services flows from through the markets.

Households to firms; goods

Households and governments to firms; goods

Governments to households; goods

Firms to households; factor

Households and governments to firms; factor

Answer

Correct Answer: Households to firms; goods

Note: This Question is unanswered, help us to find answer for this one

Equilibrium in the _______________ occurs at the intersection of money supply and money demand.

Financial market

General market

Stock market

None of these

Answer

Correct Answer: Financial market

Note: This Question is unanswered, help us to find answer for this one

Economists usually assume that money has __________ marginal utility.

Increasing

Constant

Decreasing

Zero

Answer

Correct Answer: Decreasing

Note: This Question is unanswered, help us to find answer for this one

Dividends paid by the firm ________.

Increase the firm's equity.

Are tax deductible.

Are considered a non-cash expense.

Are paid out of net income.

Are treated as an operating expense.

Answer

Correct Answer: Are paid out of net income.

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Demand tends to be ______ in the short run than in the long run.

More elastic

More inelastic

More volatile

Less important

Answer

Correct Answer: More inelastic

Note: This Question is unanswered, help us to find answer for this one

Demand for a product typically as price .

Increases, increases

Decreases, increases

Increases, decreases

Decreases, decreases

Answer

Correct Answer: Decreases, increases

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Constant returns to scale are features of a firm's technology that _______.

Make average total cost rise as output increases

Drive average total cost to zero

Keep average total cost constant as output increases

Make average total cost fall as output increases

Answer

Correct Answer: Keep average total cost constant as output increases

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Competition in the cell phone market results in _____.

Poor customer service

Higher cell phone prices

Better quality cell phones

None of the above

Answer

Correct Answer: Better quality cell phones

Note: This Question is unanswered, help us to find answer for this one

Compared with competitive markets, monopolies charge prices and produce a output.

Lower; higher

Higher; higher

Lower; lower

Higher; lower

Answer

Correct Answer: Higher; lower

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Commercial bank deposits with the fed become ___________ of the bank making the deposit.

Assets

Mark-up

Profit

None of the above

Answer

Correct Answer: Assets

Note: This Question is unanswered, help us to find answer for this one

Capital consists of _______.

Tools, instruments

Machines, buildings

Other items that have been produced in the past and that businesses now use to produce goods and services.

All of the above

Answer

Correct Answer: All of the above

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Buying on credit ____ the amount of working capital needed by the business doing the buying.

Decreases

Increases

Equalizes

All of the above

Answer

Correct Answer: Decreases

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Average variable cost (avc) = total ___________ cost (tvc) / quantity (q)

Fixed

Variable

Total

All of the above

Answer

Correct Answer: Variable

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Average _________ cost (atc) = total cost (tc) / quantity produced (q)

Fixed

Variable

Total

All of the above

Answer

Correct Answer: Total

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At _____ tax rates, _ in those tax rates lead to _______ in total tax revenue.

Low; decreases; decreases

Low; increases; increases

High; decreases; increases

None of the above

Answer

Correct Answer: Low; decreases; decreases

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As per the payback period method, a project is acceptable to a firm if _____.

Discounted value of cash inflows is less than the initial investment

The payback period is less than the maximum cost-recovery time established by the firm

There are no cash outflows during the payback period

The total cash inflows yield a rate of return more than the expected rate of return from the project

The payback period is longer than the life of the project

Answer

Correct Answer: The payback period is less than the maximum cost-recovery time established by the firm

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An economy grows when it does all of the following except _______.

Lowers prices

Implements on-the-job training

Develops better technologies

Improves the quality of labor by education

Acquires more machines to help it produce

Answer

Correct Answer: Lowers prices

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All of the following are indicators of low social welfare except __________.

High infectious disease rates

Inadequate sewer systems

High literacy rates

Large numbers of child laborers

Answer

Correct Answer: High literacy rates

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After an economy has reached its peak, it begins the ______ phase of the business cycle.

Contraction

Recession

Both a and b

None of the above

Answer

Correct Answer: Recession

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Adam smith wrote the famous economics book _____.

The Wealth of Countries

The Rise of Mercantilism

The Wealth of Nations

The Wealth of Economic Systems

Answer

Correct Answer: The Wealth of Nations

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A(n) _____ is a noninterest-paying demand deposit account.

Regular checking account

Money market mutual fund

Money market deposit account

None of the above

Answer

Correct Answer: Regular checking account

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A rise in the price of sawdust _______.

Increases the supply of plywood

Decreases the supply of plywood

Neither increases nor decreases

None of the above

Answer

Correct Answer: Decreases the supply of plywood

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A machine that is used to sew shirts is called a _____ .

Capital good

Natural resource

Nonrenewable resource

None of these

Answer

Correct Answer: Capital good

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A deposit receipt is ________.

The same as a signature card

Used by the bank as an alternative to a remittance advice

Given by the customer to the bank as a proof of deposit

Retained by the customer as proof of a deposit transaction

Answer

Correct Answer: Retained by the customer as proof of a deposit transaction

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A commodity or token is money if it is _______.

Generally accepted as means of payment

A store of value

Used in a barter transaction

Completely safe as a store of value

Answer

Correct Answer: Generally accepted as means of payment

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A ________ groups cost by behavior; costs are classified as either variable costs or fixed costs.

Contribution margin income statement

Balance sheet

Traditional income statement

Absorption costing income statement

Answer

Correct Answer: Contribution margin income statement

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A ________ curve shows the marginal cost of producing one more unit of a good or service.

Supply

Demand

Price

Product

Answer

Correct Answer: Supply

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A _ is a tax on imported goods. a _ is a quantitative restriction on imported goods.

Cost, subsidy

Regulation, standard

Tariff, quota

None of the above

Answer

Correct Answer: Tariff, quota

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A ____ is an interest-bearing checking account.

Regular checking account Incorrect

Treasury bill

Certificate of deposit

Series EE US savings bond

NOW account

Answer

Correct Answer: NOW account

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_____________ are the total sacrifices that must be made to do something or acquire something.

Explicit costs

Implicit costs

Indirect costs

Economic costs

Answer

Correct Answer: Economic costs

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________ loans are typically unsecured.

Term

Asset-based

Equity

Capital

Answer

Correct Answer: Term

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________ are a company's distribution of its profits in the form of cash or stock to its owners.

Dividends

Coupon interest payments

Equity payments

Shareholder divestments

None of the above

Answer

Correct Answer: Dividends

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_____ remain constant regardless of how many products are sold.

Variable costs

Overhead costs

Fixed costs

Marginal costs

Answer

Correct Answer: Variable costs

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_____ are counted in both the gross domestic product (gdp) and the gross national product (gnp).

Cars made in a Japanese-owned plant in Georgia

Clocks from an American-owned shop in France

Services from an American-owned hospital in Montana

All of the above

Answer

Correct Answer: Clocks from an American-owned shop in France

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____ typically pay the highest rates of interest on savings.

Credit Unions

Savings account

Certificate of deposit

Money market account

Answer

Correct Answer: Credit Unions

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____ is (are) the portion of a company's profits that the firm pays out to its shareholders.

Dividends

Multipliers

Both a and b

None of the above

Answer

Correct Answer: Dividends

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Risk that can be eliminated through diversification is called ______ risk.

Unique

Firm-specific

Diversifiable

All of these options

Answer

Correct Answer: All of these options

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An adjusted beta will be ______ than the unadjusted beta.

Lower

Higher

Closer to 1

Closer to 0

Answer

Correct Answer: Closer to 1

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The _________ assumes returns are reinvested at the cost of capital.

Payback method

Internal rate of return

Net present value

None of these

Answer

Correct Answer: Net present value

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The beta of a risky portfolio cannot be less than _ nor greater than .

The market beta

The lowest individual beta in the portfolio; market beta

The market beta; the highest individual beta in the portfolio

The lowest individual beta in the portfolio; the highest

Answer

Correct Answer: The lowest individual beta in the portfolio; the highest

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With the existence of fixed operating costs, a decrease in sales will result in ________ in ebit.

A less than proportional decrease

A proportional increase

An equal increase

A more than proportional decrease

Answer

Correct Answer: A less than proportional decrease

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For the levered firm the equity beta is __________ the asset beta.

Greater than

Equal to

Less than

None of these

Answer

Correct Answer: Greater than

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Corporate owners receive return ________.

By realizing gains through increases in share price and cash dividends

By realizing gains through increases in share price and interest earnings

Through capital appreciation and retained earnings

Through interest earnings and earnings per share

Answer

Correct Answer: By realizing gains through increases in share price and cash dividends

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______________________ are often called mutual funds.

Open-end investment companies

Closed-end investment companies

Both of these

None of these

Answer

Correct Answer: Open-end investment companies

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________ is one indication that a small business may be undercapitalized.

A current ratio below 1:1

A net sales-to-working capital ratio equal to 3:1

A quick ratio above 2:1

A debt-to-net worth ratio above 1:1

Answer

Correct Answer: A debt-to-net worth ratio above 1:1

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One of the primary motives for adding fixed assets to a firm is ________.

Expansion.

Replacement.

Renewal.

Transformation.

Answer

Correct Answer: Expansion.

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A(n) ________ stock pays a large dividend and is unlikely to experience major appreciation.

Blue chip.

Income.

Defensive.

Cyclical

Answer

Correct Answer: Income.

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When a company's revenue is greater than its expenses, it means that ________.

The company earns a profit

The company spends more than it earns

The company needs to increase its spending

The company must increase its productivity

Answer

Correct Answer: The company earns a profit

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War, inflation, and the condition of the foreign markets are all examples of ________.

Internal risk

Unsystematic risk

Business specific risk

Nondiversifiable risk

Answer

Correct Answer: Nondiversifiable risk

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The three basic types of leverage are ________.

Operating, production, and financial

Operating, production, and total

Production, financial, and total

Operating, financial, and total

Answer

Correct Answer: Operating, financial, and total

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If the price of pepsi increases, then there will be ________ of pepsi.

An increase in the quantity demanded

A decrease in the quantity demanded

A decrease in the demand

An increase in the demand

Answer

Correct Answer: A decrease in the quantity demanded

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Advertising, commissions, download fees, licensing, and product sale are examples of ________.

Revenue streams.

Basis of differentiation.

Key assets

None of these

Answer

Correct Answer: Revenue streams.

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Investors ________ for estimating the wacc.

Pefer Market value to book value.

Prefer book value to market value.

Both a,b

Prefer a mix of book and market value.

Answer

Correct Answer: Pefer Market value to book value.

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Price analysis is part of the ____ phase of the research-based buying process.

Evaluating alternatives

Selection and purchase

Pre shopping activities

Post purchase activities

Answer

Correct Answer: Evaluating alternatives

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In the goods market, firms and households .

Hire land, labor, capital, and entrepreneurship services; purchase goods and services

Pay rent, wages, interest, and profit; earn rent, wages, interest, and profit

Purchase goods and services; supply goods and servicesE

Supply goods and services; purchase goods and services

Answer

Correct Answer: Supply goods and services; purchase goods and services

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Buy-side marketplaces use _____ auctions and are suitable for _.

Reverse; procurement

Forward; procurement

Forward; customization

Reverse; customization

Answer

Correct Answer: Reverse; procurement

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Eurobonds are best defined as international bonds issued in _ and denominated in .

A single country; multiple currencies

A single country; a single currency

Multiple countries; multiple currencies

Multiple countries; a single currency

Answer

Correct Answer: Multiple countries; a single currency

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Consistency of a product mix refers to the ________.

Number of versions offered for each product in the line

Ways in which the various product lines are related

Number of different product lines the company carries

Total number of items a company carries within its product lines

Answer

Correct Answer: Ways in which the various product lines are related

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According to the efficient market hypothesis, prices of actively traded stocks ________.

Can be under- or over-valued in an efficient market

Can only be over-valued in an efficient market

Can only be under-valued in an efficient market

Do not differ from their true values in an efficient market

Answer

Correct Answer: Do not differ from their true values in an efficient market

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Generally, increases in leverage result in return and risk.

Decreases; increased

Increases; decreased

Increases; increased

Increases; decreased

Answer

Correct Answer: Increases; increased

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An escrow account is used to collect ____ from one's monthly mortgage payment.

Interest

Principal

Real estate taxes

Homeowner's

Answer

Correct Answer: Real estate taxes

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The rate of interest on short-term loans among financial institutions is _____.

Bankers acceptances

Brokers calls

Federal funds

Libor

Answer

Correct Answer: Federal funds

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The invoice price of a bond is the ______.

Stated or flat price in a quote sheet plus accrued interest

Secured by property owned by the firm

Secured by other securities held by the firm

Increasing both the par value and the coupon payment

Answer

Correct Answer: Stated or flat price in a quote sheet plus accrued interest

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The entity that signs the promissory note and promises to pay the required amount is the ________.

Maker

Method

Accounting

Notes

Answer

Correct Answer: Maker

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The difficulty of converting savings and investments to cash is referred to as ____________ risk.

Liquidity

Inflation

Economic

Trade-off

Answer

Correct Answer: Liquidity

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The capital asset pricing model asserts that the expected return ________.

Is equal to the risk premium plus a risk-free rate for unsystematic risk

Is equal to the risk -free rate plus a risk premium for systematic risk

Is equal to the risk -free rate plus a risk premium for unsystematic risk

Is equal to the risk premium plus risk - free rate for systematic risk

Answer

Correct Answer: Is equal to the risk -free rate plus a risk premium for systematic risk

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The apr is the percentage cost of credit on a(n) ______________ basis.

Monthly

Quarterly

Semi-annual

Annual

Life-of-loan

Answer

Correct Answer: Annual

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The __________ is the ratio of profit to the investment used to earn that profit.

Group of answer choices

Return on assets

Markup

Return on investment

Selling margin

Answer

Correct Answer: Return on investment

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The _____ is collected through payroll deductions, money deducted even before one receives salary.

Value added tax

Sales tax

Personal income tax

Property tax

Answer

Correct Answer: Personal income tax

Note: This Question is unanswered, help us to find answer for this one

Stocks are a(n) investment representing of a business.

Direct; ownership

Direct; debt

Indirect; ownership

Indirect; debt

Answer

Correct Answer: Direct; ownership

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Purchases of new issues of stock take place _________.

In the primary market

Market order

Book building

Institutional investors

Answer

Correct Answer: In the primary market

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Personal selling adds value in each of the following ways except _______.

Helping to lower prices below competitors

Educating and providing advice

Saving the customer time and making it easier for them to buy

Answer

Correct Answer: Helping to lower prices below competitors

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Payments that do not vary from month to month are ____________ expenses.

Fixed

Current

Variable

Luxury

Budgeted

Answer

Correct Answer: Fixed

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Net pay is not ________.

The money that you take home on your paycheck

Your gross pay plus any bonuses

Less than gross pay

Answer

Correct Answer: Your gross pay plus any bonuses

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In this formula, i represents the _____ of the loan.

Number of periods over which interest is calculated on the loan

Number of applicants for the loan

Number of years it will take to pay the loan back

Number of dollars the loan is for

Answer

Correct Answer: Number of periods over which interest is calculated on the loan

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The first step in setting goals is _____.

Success

Identifying

Prominent

Guide

Answer

Correct Answer: Identifying

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When you spend more than you make you have a(n) _____

Rent

Deficit

Credit profile

Noen of these

Answer

Correct Answer: Deficit

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When a liability is first recorded, it is _____.

Reported as a current liability.

Reported as a long-term liability.

Measured in terms of the probable future payment of assets or services that a company is presently obligated to make as a result of past transactions or events.

Recorded only if it must be paid within the current operating cycle or one year, whichever is longer.

Recorded only if it must be paid within the current operating cycle or one year, whichever is shorter.

Answer

Correct Answer: Measured in terms of the probable future payment of assets or services that a company is presently obligated to make as a result of past transactions or events.

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Young investors are often more interested in ______ investments than are older investors.

Growth-oriented

Government bond

Cash

Conservative

Answer

Correct Answer: Growth-oriented

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Variable costing is sometimes called ______ costing.

Direct

Differential

Absorption

Profitability

Answer

Correct Answer: Direct

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When there are more substitutes for a product, the for the product is .

Inelastic; increase

Good X and Y are substitutes

Demand; more price elastic

Relatively elastic; inelastic

Answer

Correct Answer: Demand; more price elastic

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When the backup stock is large, _____.

Higher level of stimulation associated with the shopping experience.

The assortment and variety increases

The allocation decision depends on the current inventory in a store.

Assortment

Answer

Correct Answer: The assortment and variety increases

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A(n) ____ cannot be changed or ended.

Irrevocable trust

Living will

Power of attorney

Revocable trust

Will

Answer

Correct Answer: Irrevocable trust

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The use of the ________ is especially helpful in valuing firms that are not publicly traded.

Liquidation value

Book value

P/E multiple

Answer

Correct Answer: P/E multiple

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If a company is financing more assets with debt than with equity, the ________.

Debt to equity ratio will be between 0 to 1.

Debt to equity ratio will be equal to 1.

Debt to equity ratio will be more than 1.

Debt to equity ratio will be negative

Answer

Correct Answer: Debt to equity ratio will be more than 1.

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When a utility bill is paid with cash, cash is decreased and utilities expense is __________.

Increased

Decreased

Equal

Answer

Correct Answer: Increased

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Variances are calculated by subtracting the actual cost from _____.

Earned value.

Planned value.

Scheduled value

Answer

Correct Answer: Earned value.

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Variable costing is more appropriate than absorption costing when the decision ________.

Relates to production planning within the capacity limits in the short run

Does not involve analysis of contribution margin

Involves reducing fixed costs that are controllable by the upper management

Does not involve analysis of profitability based on sales mix

Answer

Correct Answer: Relates to production planning within the capacity limits in the short run

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Under variable costing, a unit of a product includes ________.

Direct materials

Direct labor

Variable overhead costs

All of the above

Answer

Correct Answer: All of the above

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The purchase of multiple plant assets for one purchase price is called a ______ purchase.

Lump-sum

Direct materials

Direct labor

Variable overhead costs

Answer

Correct Answer: Lump-sum

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The journal entry to record direct labor costs actually incurred involves a debit to the ________.

Work-in-Process Inventory account

Wages Payable account

Manufacturing Overhead account

Raw Materials Inventory account

Answer

Correct Answer: Work-in-Process Inventory account

Note: This Question is unanswered, help us to find answer for this one

The journal entry for accrued interest on a note payable includes ________.

A credit to Interest Expense and debit to Notes Payable

A debit to Interest Expense and credit to Cash

A debit to Interest Expense and credit to Interest Payable

A debit to Interest Payable and credit to Cash

Answer

Correct Answer: A debit to Interest Expense and credit to Interest Payable

Note: This Question is unanswered, help us to find answer for this one

Sales discounts is a account with a normal balance.

Contra-revenue; Debit

Earned value; Planned value.

Scheduled value; Contra-revenue

Debit; Planned value

Answer

Correct Answer: Contra-revenue; Debit

Note: This Question is unanswered, help us to find answer for this one

Salaries payable, accounts payable, and unearned revenue are examples of ________.

Short term investments.

Fixed Assets.

Current Liabilities

Answer

Correct Answer: Current Liabilities

Note: This Question is unanswered, help us to find answer for this one

Ratios that measure a firm's liquidity are known as _____ ratios.

Asset management.

Long-term solvency.

Short-term solvency.

Profitability.

Book value

Answer

Correct Answer: Short-term solvency.

Note: This Question is unanswered, help us to find answer for this one

Q 7.4: ________ controls enhance the accuracy and reliability of the accounting records.

Automated controls

Mechanical and electronic controls

Physical controls

Logical Control

Answer

Correct Answer: Physical controls

Note: This Question is unanswered, help us to find answer for this one

Put the following abc implementation steps in order ________. A: Compute the allocation rates. B: Compute the total cost of the products. C: Identify the products that are the cost objects. D; Select the cost allocation bases.

DACB

DBCA

BADC

CDAB

Answer

Correct Answer: CDAB

Note: This Question is unanswered, help us to find answer for this one

Profit center responsibility reports include ________.

Revenues only

Invested capital

Both revenues and expenses

Returns on investments

Answer

Correct Answer: Both revenues and expenses

Note: This Question is unanswered, help us to find answer for this one

Period costs under the variable costing method include ________.

Variable manufacturing overhead

Variable selling and administrative costs

Direct materials

Direct labor

Answer

Correct Answer: Variable selling and administrative costs

Note: This Question is unanswered, help us to find answer for this one

Paid-in capital would appear under ________ on a balance sheet.

Contra to stockholders' equity

Stockholders' equity

Capital stock

Additional paid-in capital

Answer

Correct Answer: Stockholders' equity

Note: This Question is unanswered, help us to find answer for this one

On the maturity date of a bond investment, the journal entry includes ________.

A debit to Cash and a credit to Held-to-Maturity Debt Investments

A debit to the Interest Revenue and a credit to Cash

Recording a gain or loss on disposition at maturity

A debit to Long-term Investments and a credit to Cash

Answer

Correct Answer: A debit to Cash and a credit to Held-to-Maturity Debt Investments

Note: This Question is unanswered, help us to find answer for this one

Manufacturing overhead is also referred to as ________.

Factory overhead

Factory burden

Production overhead

All of the above

Answer

Correct Answer: All of the above

Note: This Question is unanswered, help us to find answer for this one

Management develops the company's objectives (goals) in the __________ phase.

Improving

Controlling

Decision making

Planning

Answer

Correct Answer: Planning

Note: This Question is unanswered, help us to find answer for this one

Management by exception is a practice whereby managers focus more closely on ________.

A static budget

Areas that are not operating as anticipated

Activity-based costing

Exceptional decision-making models

Answer

Correct Answer: Areas that are not operating as anticipated

Note: This Question is unanswered, help us to find answer for this one

Journal entries are required for the reconciling items on the book side because ________.

Those transactions have not yet been recorded by the bank

The adjusted balances on both sides are the same amounts

The amounts are immaterial

Those transactions have not yet been recorded on the company books

Answer

Correct Answer: Those transactions have not yet been recorded on the company books

Note: This Question is unanswered, help us to find answer for this one

Information is _________ if independent measures, using the same methods, obtain similar results.

Verifiable

Relevant

Consistent

Understandable

Answer

Correct Answer: Verifiable

Note: This Question is unanswered, help us to find answer for this one

In the typical firm, the ________ is the chief accounting manager.

Chief executive officer

Controller

Treasurer

Chief financial office

Answer

Correct Answer: Controller

Note: This Question is unanswered, help us to find answer for this one

In a _______ managers are responsible for both revenues and costs.

Profit center

Chief executive officer

Controller

Treasurer

Answer

Correct Answer: Profit center

Note: This Question is unanswered, help us to find answer for this one

From a corporation's point of view, a disadvantage of issuing preferred stock is ________.

That the dividends are not tax-deductible

Equipment that are used in production process

Goods held for sale to customers

Raw materials that are used for production

Answer

Correct Answer: That the dividends are not tax-deductible

Note: This Question is unanswered, help us to find answer for this one

For a merchandiser, the term ""inventory"" refers to ________.

The cost of goods sold

Equipment that are used in production process

Goods held for sale to customers

Raw materials that are used for production

Answer

Correct Answer: Goods held for sale to customers

Note: This Question is unanswered, help us to find answer for this one

For a company with diverse products, undercosting overhead of a product will lead to ________.

Direct labor costs of the product are misallocated

Direct material costs of the product are misallocated

Indirect costs of another product are misallocated

Direct costs of another product are misallocated

Answer

Correct Answer: Indirect costs of another product are misallocated

Note: This Question is unanswered, help us to find answer for this one

Following gaap, the income statement issued to investors and creditors must ________.

Be prepared in the traditional format

Be prepared using variable costing

Be prepared in the contribution margin format

Show the value of contribution margin

Answer

Correct Answer: Be prepared in the traditional format

Note: This Question is unanswered, help us to find answer for this one

Financial managers use _____ to assess the financial strengths and weaknesses of their firm.

CAD/CAM

Value stream mapping

PERT

Ratio analysis

Answer

Correct Answer: Ratio analysis

Note: This Question is unanswered, help us to find answer for this one

Delivery expense is a(n) ________.

Overhead expense

Administrative expense

Part of Cost of Goods Sold

Operating expense

Answer

Correct Answer: Operating expense

Note: This Question is unanswered, help us to find answer for this one

Common stock and bond brokerage statements are an example of a(n) ____________ record.

Estate planning

Tax

Insurance

Investment

Consumer purchase

Answer

Correct Answer: Investment

Note: This Question is unanswered, help us to find answer for this one

Cash flows used in net present value and internal rate of return analyses ignore ________.

Future increased sales

Depreciation expense

Future cost savings

Residual value

Answer

Correct Answer: Depreciation expense

Note: This Question is unanswered, help us to find answer for this one

Cash dividends are paid to __________ stock.

Outstanding

Neutral.

Positive.

Negative

Answer

Correct Answer: Outstanding

Note: This Question is unanswered, help us to find answer for this one

Cash dividends and treasury stock purchases ________.

Represent cash payments that are made to ensure higher reported profits

Make more resources available to pay liabilities

May be restricted as a way to lower federal income tax expense

May be limited by creditors to ensure that the company maintains a minimum level of stockholders' equity

Answer

Correct Answer: May be limited by creditors to ensure that the company maintains a minimum level of stockholders' equity

Note: This Question is unanswered, help us to find answer for this one

Cash borrowed on a mortgage note is a(n) ________ activity on the statement of cash flows.

Financing

Insurance.

Estate planning.

Tax.

Answer

Correct Answer: Financing

Note: This Question is unanswered, help us to find answer for this one

Brokerage statements are an example of a(n) ____________ record.

Investment.

Insurance.

Estate planning.

Tax.

Consumer purchase

Answer

Correct Answer: Investment.

Note: This Question is unanswered, help us to find answer for this one

As fixed operating costs increase and all other factors are held constant, ________.

Degree of operating leverage will increase

Degree of operating leverage will decrease

Degree of operating leverage will stay the same

Answer

Correct Answer: Degree of operating leverage will increase

Note: This Question is unanswered, help us to find answer for this one

An internal control system consists of the policies and procedures managers use to _____.

Ensure reliable accounting

Protect assets

Promote efficient operations

Uphold company policies

All of the above

Answer

Correct Answer: All of the above

Note: This Question is unanswered, help us to find answer for this one

An expense is entered as a _____ in a financial ledger.

Balance

Credit

Debit

Savings

Answer

Correct Answer: Debit

Note: This Question is unanswered, help us to find answer for this one

An example of a relevant cost to a decision would include a ________.

Differential cost

Sunk cost

Depreciation cost

Non-financial gain

Answer

Correct Answer: Differential cost

Note: This Question is unanswered, help us to find answer for this one

An example of a non-value added activity would include ________.

Traveling to a supplier for a meeting

Producing parts in conformance to specifications

Originating a bank loan

Processing a purchase order

Answer

Correct Answer: Traveling to a supplier for a meeting

Note: This Question is unanswered, help us to find answer for this one

An entity that buys goods and sells them to customers at a markup is a ________.

Merchandiser

Service provider

Manufacturer

Producer

Answer

Correct Answer: Merchandiser

Note: This Question is unanswered, help us to find answer for this one

An adjusting entry that debits accounts receivable is an example of a(n) ________.

Deferred revenue

Accrued expense

Deferred expense

Accrued revenue

None of the above

Answer

Correct Answer: Accrued revenue

Note: This Question is unanswered, help us to find answer for this one

Amounts owed for products or services purchased on account are called ________.

Warranty payable

Acenued expense

Accounts payable

Answer

Correct Answer: Accounts payable

Note: This Question is unanswered, help us to find answer for this one

All of the following are types of securities except _____.

Cash

Notes receivable

Unearned revenues

Revenues

Answer

Correct Answer: Cash

Note: This Question is unanswered, help us to find answer for this one

All else being equal, a reduction in selling price will ________.

Reduce fixed costs.

Reduce operating income.

Increase contribution margin

Answer

Correct Answer: Reduce operating income.

Note: This Question is unanswered, help us to find answer for this one

Adjusting entries are needed to correctly measure the ________.

Ending balance in the Cash account

Net income (loss) on the balance sheet

Net income (loss) on the income statement

Beginning balance in the Cash account

Answer

Correct Answer: Net income (loss) on the income statement

Note: This Question is unanswered, help us to find answer for this one

A weak system of internal provides the to commit fraud.

Audits; rationalization

Loan covenants; incentive

Controls; opportunity

Financial statements; opportunity

Answer

Correct Answer: Controls; opportunity

Note: This Question is unanswered, help us to find answer for this one

A fixed cost expense that management has little or no control over in the short run is a ________.

Committed fixed cost

Total variable cost

Total fixed cost

Variable production cost

Answer

Correct Answer: Committed fixed cost

Note: This Question is unanswered, help us to find answer for this one

A firm with limited dollars available for capital expenditures is subject to ________.

Capital dependency

Capital gains

Working capital constraints

Capital rationing

Answer

Correct Answer: Capital rationing

Note: This Question is unanswered, help us to find answer for this one

A corporation that does not distribute all of its profit to stockholders has ___.

Retained earnings

Sinking fund

Private accountant

Answer

Correct Answer: Retained earnings

Note: This Question is unanswered, help us to find answer for this one

A company's value chain includes all of the following elements except ________.

Purchasing

Distribution

Supplier logistics

Marketing

Answer

Correct Answer: Supplier logistics

Note: This Question is unanswered, help us to find answer for this one

A company should ________ when projecting cash receipts for a given month.

Include cash to be collected in that month regardless of when the sale was made

Have a relatively more variable costs than fixed costs

Include cash to be collected in that year regardless of when the sale was made

Answer

Correct Answer: Include cash to be collected in that month regardless of when the sale was made

Note: This Question is unanswered, help us to find answer for this one

A cash budget reveals important clues about how well a company ________.

Balances its accounts receivable and accounts payable

Controls inventory

Finances its growth

All of these

Answer

Correct Answer: All of these

Note: This Question is unanswered, help us to find answer for this one

A cash budget is only as accurate as the ________ forecast from which it is derived.

Profit

Receivables

Income

Sales

Answer

Correct Answer: Sales

Note: This Question is unanswered, help us to find answer for this one

A bond is issued at premium ________.

When a bond's stated interest rate is equal to the market interest rate

When a bond's stated interest rate is less than the effective interest rate

When a bond's stated interest rate is less than the market interest rate

When a bond's stated interest rate is higher than the market interest rate

Answer

Correct Answer: When a bond's stated interest rate is higher than the market interest rate

Note: This Question is unanswered, help us to find answer for this one

A bank's balance sheet follows the accounting format that assets _______________ + net worth

Liabilities

Excess

Interest rate

Answer

Correct Answer: Liabilities

Note: This Question is unanswered, help us to find answer for this one

A 15% increase in production volume will result in a ________.

15% increase in the variable cost per unit

15% increase in total mixed costs

15% increase in total administration costs

15% increase in total variable costs

Answer

Correct Answer: 15% increase in total variable costs

Note: This Question is unanswered, help us to find answer for this one

A ________ is a direct payment from a firm to its shareholders.

Dividend

Bond

Capital gain

Answer

Correct Answer: Dividend

Note: This Question is unanswered, help us to find answer for this one

________ refers to the combination of direct labor and manufacturing overhead.

Conversion costs

Prime costs

Controllable costs

Uncontrollable costs

Answer

Correct Answer: Conversion costs

Note: This Question is unanswered, help us to find answer for this one

________ is designed to meet the needs of internal decision makers.

Managerial accounting

Financial accounting

Tax accounting

Audit accounting

Answer

Correct Answer: Managerial accounting

Note: This Question is unanswered, help us to find answer for this one

________ is an example of a period cost rather than a product cost for a manufacturing company.

Depreciation on factory equipment

Wages of salespersons

Insurance on factory equipment

Wages of machine operators

Answer

Correct Answer: Wages of salespersons

Note: This Question is unanswered, help us to find answer for this one

________ causes a change in cash during a period.

Declaration of a cash dividend

Payment of an accounts payable

Recording depreciation expense

Accrual of an expense

Answer

Correct Answer: Payment of an accounts payable

Note: This Question is unanswered, help us to find answer for this one

________ are professional accountants who serve the general public, not one particular company.

Certified public accountants

Certified management accountants

Cost accountants

Controllers

Answer

Correct Answer: Certified public accountants

Note: This Question is unanswered, help us to find answer for this one

_____ is/are what the firm owes its creditors.

Liabilities

Assets

Owner's equity

Income statement

Answer

Correct Answer: Liabilities

Note: This Question is unanswered, help us to find answer for this one

_____ are those costs that are difficult to measure in monetary terms

Intangible costs

Tangible costs

Direct costs

Fixed costs

Answer

Correct Answer: Intangible costs

Note: This Question is unanswered, help us to find answer for this one

_____ are the only long-term funds that a company can generate internally.

Retained earnings

Net income

Revenue

None

Answer

Correct Answer: Retained earnings

Note: This Question is unanswered, help us to find answer for this one

Under the _________________, factory overhead costs are allocated to products only using one rate.

Activity-based costing method

Single plantwide factory overhead rate method

Multiple production department factory overhead method

None of these choices are correct

Answer

Correct Answer: Single plantwide factory overhead rate method

Note: This Question is unanswered, help us to find answer for this one

The journal entry for adjustment of overallocated manufacturing overhead includes a ________.

Credit to finished goods inventory

Credit to manufacturing overhead

Debit to work in process inventory

Credit to cost of goods sold

Answer

Correct Answer: Credit to cost of goods sold

Note: This Question is unanswered, help us to find answer for this one

Reducing expenses to increase operating profit is representative of ________.

Safeguarding assets.

Following company policies.

Promoting operational efficiency.

Ensuring accurate, reliable accounting records

Answer

Correct Answer: Promoting operational efficiency.

Note: This Question is unanswered, help us to find answer for this one

Recognizing interest revenue on a note receivable on the date of issuance will cause ________ to be

Revenues; overstated

Retained earnings; net income

Revenue; overstated

Revenues; net income

Answer

Correct Answer: Revenues; overstated

Note: This Question is unanswered, help us to find answer for this one

Costs assigned to goods sold are transferred to the cost of goods sold account from the ________.

Raw Materials Inventory account

Sales Revenue account

Finished Goods Inventory account

Work-in-Process Inventory account

Answer

Correct Answer: Finished Goods Inventory account

Note: This Question is unanswered, help us to find answer for this one

Corporations sell equity in the form of ________.

Stock

Ownership

Debt

Bonds

Notes

Answer

Correct Answer: Stock

Note: This Question is unanswered, help us to find answer for this one

Comparing budgeted costs to actual costs helps managers to improve ________.

Coordination

Control

Implementation

Planning

Answer

Correct Answer: Control

Note: This Question is unanswered, help us to find answer for this one

Companies must report on the to show that the asset is still in use.

Fully depreciated assets; income statement

Fully depreciated assets; balance sheet

Gains and losses from asset disposals; income statement

Periodic depreciation expense; balance sheet

Answer

Correct Answer: Fully depreciated assets; balance sheet

Note: This Question is unanswered, help us to find answer for this one

Companies can amortize a patent for a period that cannot exceed ________ years.

20 years

50 years

10 years

40 years

Answer

Correct Answer: 20 years

Note: This Question is unanswered, help us to find answer for this one

By increasing ________, a manager can increase operating income under absorption costing.

Leased assets

Fixed costs

Variable costs

Production

Answer

Correct Answer: Production

Note: This Question is unanswered, help us to find answer for this one

Businesses record goodwill ________.

When they enjoy an outstanding reputation and loyalty with customers

If they acquire another company at an amount higher than the market value of its net

When they continue the business of an acquired corporation

If their market value has increased significantly in the recent years

Answer

Correct Answer: If they acquire another company at an amount higher than the market value of its net

Note: This Question is unanswered, help us to find answer for this one

Buildings, land, and equipment are classified as ________.

Urrent assets

Long−term liabilities

Long−term assets

Current liabilities

Answer

Correct Answer: Long−term assets

Note: This Question is unanswered, help us to find answer for this one

Annual reports are an example of ________

Uncontrolled messages

Controlled messages

Event sponsorship

Product placement

Semicontrolled messages

Answer

Correct Answer: Controlled messages

Note: This Question is unanswered, help us to find answer for this one

All of the following actions result in equity capital except ________.

Issuing bonds

Liquidating assets

Issuing stock.

Reinvesting earnings

Answer

Correct Answer: Issuing bonds

Note: This Question is unanswered, help us to find answer for this one

Accountants provide ___________ to various parties so they can make business decisions.

Financial information

IT information

Sales information

Answer

Correct Answer: Financial information

Note: This Question is unanswered, help us to find answer for this one

A(n) _________________ changes basic inputs into products that are sold to customers.

Service business

Enterprise business

Manufacturing business

Merchandising business

Answer

Correct Answer: Manufacturing business

Note: This Question is unanswered, help us to find answer for this one

A company that manufactures ________ would not use job order costing.

Bridges

Homes

Cereal

Motion pictures

Answer

Correct Answer: Cereal

Note: This Question is unanswered, help us to find answer for this one

________ ratios indicate how efficiently the small firm is being managed.

Profitability

Dept

Net profits on sales

Net profit to equity

Answer

Correct Answer: Profitability

Note: This Question is unanswered, help us to find answer for this one

Some credit card companies charge a(n) __________ even if you do not use your credit card.

Fee

Profitability

Dept

Net profits on sales

Answer

Correct Answer: Fee

Note: This Question is unanswered, help us to find answer for this one

When a company pays cash for a long-term investment in bonds, ________.

Equity remains unchanged

Current assets increase

Liabilities increase

Total assets increase

None of the above

Answer

Correct Answer: Equity remains unchanged

Note: This Question is unanswered, help us to find answer for this one

To construct an income distribution table, the second step is to _____.

Divide the list of the nation's households into fifths

Current assets increase

Liabilities increase

Total assets increase

Answer

Correct Answer: Divide the list of the nation's households into fifths

Note: This Question is unanswered, help us to find answer for this one

The _____ is the discount rate that results in an npv of zero for a project.

Internal rate of return

Profitability

Dept

Net profits on sales

Answer

Correct Answer: Internal rate of return

Note: This Question is unanswered, help us to find answer for this one

There are two categories of variable costs: ________.

Net variable costs and cost of goods sold

Cost of goods sold and other variable costs

Gross costs and net variable costs

Interest and taxes paid

Answer

Correct Answer: Cost of goods sold and other variable costs

Note: This Question is unanswered, help us to find answer for this one

The _______ period is a quick method of projecting the value of an investment.

PAYBACK

Profitability

Dept

Net profits on sales

Answer

Correct Answer: PAYBACK

Note: This Question is unanswered, help us to find answer for this one

Raising money for a business is an aspect of ________, which is the use of money for a purpose.

Financing

Surety sequencing

Equity analysis

Comparative advantage

Acquisition

Answer

Correct Answer: Financing

Note: This Question is unanswered, help us to find answer for this one

Orders are not entered onto the cash flow statement as cash receipts because you ________.

Don't get the cash until the customer actually pays for the order

Might get them confused with revenue on the income statement

Will have a more accurate cash flow statement if you enter them once a month

Might get a cancellation

Answer

Correct Answer: Don't get the cash until the customer actually pays for the order

Note: This Question is unanswered, help us to find answer for this one

Servicing the debt is _____.

Monitoring the rise and fall of the debt

Paying interest on debt

Seeking lenders to borrow from

Submitting reports on the debt to the Office of Management and Budget

Answer

Correct Answer: Paying interest on debt

Note: This Question is unanswered, help us to find answer for this one

The __________ sets accounting standards used in government accounting.

Governmental Accounting Standards Board

Monitoring the rise and fall of the debt

Paying interest on debt

Seeking lenders to borrow from

Answer

Correct Answer: Governmental Accounting Standards Board

Note: This Question is unanswered, help us to find answer for this one

When a notes receivable is outstanding at the end of an accounting period, _______.

The revenue recognition principle requires that earnings from the note be recorded in the year the cash is received

No adjusting entry is needed

The total interest on the note should be recorded in the adjusting entry

The interest revenue earned on the note up to year-end is part of that years earnings

Answer

Correct Answer: The interest revenue earned on the note up to year-end is part of that years earnings

Note: This Question is unanswered, help us to find answer for this one

When a company receives cash from customers before earning the revenue, _________ will be credited.

Accounts Receivable

Sales Tax Payable

Accounts Payable

Unearned Revenue

Answer

Correct Answer: Unearned Revenue

Note: This Question is unanswered, help us to find answer for this one

There are two closing entries. the first one is to close _; the second one is to close _.

Revenues, expenses and the drawing account

Revenues, expenses

Revenues and expenses, the drawing account

The drawing account, revenues

Answer

Correct Answer: Revenues and expenses, the drawing account

Note: This Question is unanswered, help us to find answer for this one

The use of absorption costing for segmented income statements results in ________.

Omission of upstream and downstream costs

Failure to trace costs directly

Inappropriate use of allocation base

Arbitrary division of common costs among segments

Answer

Correct Answer: Omission of upstream and downstream costs

Note: This Question is unanswered, help us to find answer for this one

The sox act created the ______________________, which sets accounting and auditing standards.

The Family Educational Rights and Privacy Act (FERPA)

Public Company Accounting Oversight Board (PCAOB)

The National Institute of Standards and Technology (NIST)

Children's Internet Protection Act (CIPA

Answer

Correct Answer: Public Company Accounting Oversight Board (PCAOB)

Note: This Question is unanswered, help us to find answer for this one

The purpose of studying financial statements is ________.

To mechanically build portfolio analysis

To understand those portions of the statements that have relevance for financial decision making

To primarily investigate all portions of the statements that have relevance for dividend policy

To mechanically learn how to read and understand footnotes

Answer

Correct Answer: To understand those portions of the statements that have relevance for financial decision making

Note: This Question is unanswered, help us to find answer for this one

The primary disadvantage of equity capital is that the entrepreneur ________.

Must repay it at some point with interest.

Must give up some-perhaps most-of the ownership in the business to outsiders.

Experiences the disadvantage of the risk/return tradeoff in the form of higher interest rates.

B and C above

Answer

Correct Answer: Must give up some-perhaps most-of the ownership in the business to outsiders.

Note: This Question is unanswered, help us to find answer for this one

The preferred title for women in business is ________, unless the individual says otherwise.

Mrs.

Miss

Ms.

Madam

Mme

Answer

Correct Answer: Ms.

Note: This Question is unanswered, help us to find answer for this one

The operating budget process generally concludes with the preparation of the ________.

Production budget

Cash flow statement

Research and development budget

Budgeted income statement

Answer

Correct Answer: Budgeted income statement

Note: This Question is unanswered, help us to find answer for this one

The lease cost of office computers is a _____ for an accounting firm.

Committed fixed cost

Discretionary fixed cost

Semi-variable cost

Variable cost

Answer

Correct Answer: Committed fixed cost

Note: This Question is unanswered, help us to find answer for this one

The income statement of a service company will most likely include ________.

Salaries expense

Factory overhead

Direct materials

Cost of goods sold

Answer

Correct Answer: Salaries expense

Note: This Question is unanswered, help us to find answer for this one

The greater a firm's sales, the greater need for financing because of greater _____ requirements.

Asset

Factory overhead

Direct materials

Cost of goods sold

Answer

Correct Answer: Asset

Note: This Question is unanswered, help us to find answer for this one

The fixed costs per unit will ________.

Increase as production decreases

Factory overhead

Direct materials

Cost of goods sold

Answer

Correct Answer: Increase as production decreases

Note: This Question is unanswered, help us to find answer for this one

The entry to record the purchase of direct materials on account would include a ________.

Debit to the Raw Materials Inventory account.

Debit to the Work-in-Process Inventory account.

Credit to the Work-in-Process Inventory account

Answer

Correct Answer: Debit to the Raw Materials Inventory account.

Note: This Question is unanswered, help us to find answer for this one

The date of declaration creates a(n) ________ for the corporation.

Asset

Liability

Expense

Revenue

Answer

Correct Answer: Liability

Note: This Question is unanswered, help us to find answer for this one

The cost of units sold is recorded by debiting cost of goods sold and crediting ________.

Finished Goods Inventory

Sales Revenue

Work-in-Process Inventory

Wages Payable

Answer

Correct Answer: Finished Goods Inventory

Note: This Question is unanswered, help us to find answer for this one

The contribution margin income statement presents ________ above the contribution margin line.

All fixed expenses

Only variable expenses relating to selling and administrative actvities

Only fixed expenses relating to selling and administrative activities

All variable expenses

Answer

Correct Answer: All variable expenses

Note: This Question is unanswered, help us to find answer for this one

The contribution margin approach helps managers in short-term decision making because it ________.

Treats fixed manufacturing overhead as product cost

Reports only mixed costs

Reports costs and revenues at present value

Isolates costs by behavior

Answer

Correct Answer: Isolates costs by behavior

Note: This Question is unanswered, help us to find answer for this one

The change in net working capital when evaluating a capital budgeting decision is ________.

The change in fixed liabilities minus the change in fixed assets

The increase in current assets

The increase in current liabilities

The change in current assets minus the change in current liabilities

Answer

Correct Answer: The change in current assets minus the change in current liabilities

Note: This Question is unanswered, help us to find answer for this one

The advance cash receipts of future revenues are called ________.

Deferred revenues

Accrued revenues

Deferred expenses

Accrued expenses

Answer

Correct Answer: Deferred revenues

Note: This Question is unanswered, help us to find answer for this one

The accounts payable account is a/an _, and it has a normal _ balance.

Revenue; debit

Expense; credit

Liability; debit

Liability; credit

Answer

Correct Answer: Liability; credit

Note: This Question is unanswered, help us to find answer for this one

The accounting department should only have access to __ since its function is to .

A copy of the deposit slip; make the bank deposit.

Cash and checks; make the bank deposit.

Prenumbered remittance advices; open mail receipts.

A copy of the list of checks; record the change in cash

Answer

Correct Answer: A copy of the list of checks; record the change in cash

Note: This Question is unanswered, help us to find answer for this one

The __________ requires that members prepare financial statements in accordance with gaap.

AICPA's Code of Professional Conduct

A copy of the deposit slip; make the bank deposit.

Cash and checks; make the bank deposit.

Prenumbered remittance advices; open mail receipts

Answer

Correct Answer: AICPA's Code of Professional Conduct

Note: This Question is unanswered, help us to find answer for this one

The __________ of a bond is computed as the ratio of the annual coupon payment to the market price.

Nominal yield

Current yield

Yield to maturity

Yield to call

Answer

Correct Answer: Current yield

Note: This Question is unanswered, help us to find answer for this one

The ________ shows the change in the firm's working capital since the beginning of the year.

Balance sheet

Income statement

Pro forma

Statement of cash flows

Answer

Correct Answer: Statement of cash flows

Note: This Question is unanswered, help us to find answer for this one

The ________ refers to a company's amount of relative fixed and variable costs.

Operating leverage

Learning and growth perspective

Correlation coefficient

Cash flow statement

Answer

Correct Answer: Operating leverage

Note: This Question is unanswered, help us to find answer for this one

The ________ of the balanced scorecard focuses on continuing to improve and create value.

Learning and growth perspective

Operating leverage

Correlation coefficient

Cash flow statement

Answer

Correct Answer: Learning and growth perspective

Note: This Question is unanswered, help us to find answer for this one

The ________ is the financial statement describing a firm's yearly cash receipts and cash payments.

Cash flow statement

Operating leverage

Correlation coefficient

Learning and growth perspective

Answer

Correct Answer: Cash flow statement

Note: This Question is unanswered, help us to find answer for this one

The ________ is equal to the square root of the systematic variance divided by the total variance.

Correlation coefficient

Learning and growth perspective

Operating leverage

Cash flow statement

Answer

Correct Answer: Correlation coefficient

Note: This Question is unanswered, help us to find answer for this one

The ________ is a budget based on multiple levels of projected sales or production.

Static budget

Flexible budget

Standard budget

Fixed budget

Answer

Correct Answer: Flexible budget

Note: This Question is unanswered, help us to find answer for this one

The ________ function pertains to keeping the activities of the enterprise on track.

Directing

Controlling

Accounting

Planning

Answer

Correct Answer: Controlling

Note: This Question is unanswered, help us to find answer for this one

The ________ budget is a component in a financial budget.

Direct materials

Sales

Cash

Operating expense

Answer

Correct Answer: Cash

Note: This Question is unanswered, help us to find answer for this one

The _____ records purchases of assets by the private and public sectors.

Accounting system

Capital account

Capital fund

Current account

Answer

Correct Answer: Capital account

Note: This Question is unanswered, help us to find answer for this one

The ____ is where a transaction can first be found in the accounting records.

Journal

Capital account

Capital fund

Current account

Answer

Correct Answer: Journal

Note: This Question is unanswered, help us to find answer for this one

Step costs are ________.

Fixed over a small range of activity and then jump to a new fixed level with moderately small changes in volume

Cash and checks; make the bank deposit.

Prenumbered remittance advices; open mail receipts.

A copy of the list of checks; record the change in cash

Answer

Correct Answer: Fixed over a small range of activity and then jump to a new fixed level with moderately small changes in volume

Note: This Question is unanswered, help us to find answer for this one

Starting a small business that may or may not succeed is an example of ___________ risk.

Speculative

Pure

Commercial

Personal

Liability

Answer

Correct Answer: Speculative

Note: This Question is unanswered, help us to find answer for this one

Start-up investment is the one-time expense of opening a business. it is also called ________.

Seed capital

Commercial

Personal

Liability

Answer

Correct Answer: Seed capital

Note: This Question is unanswered, help us to find answer for this one

Receivables are valued based on their ________.

Fair value

Estimated amount collectible

Lower-of-cost-or-market value

Historical cost

Answer

Correct Answer: Estimated amount collectible

Note: This Question is unanswered, help us to find answer for this one

Receivables are _ on the , which are listed in order of ______.

Current assets; balance sheet; liquidity

Theoretical; normal; ideal

Bond; perpetuity; common stock

All of these

Answer

Correct Answer: Current assets; balance sheet; liquidity

Note: This Question is unanswered, help us to find answer for this one

Preferred stock is valued as if it were a ________.

Fixed-income obligation

Bond

Perpetuity

Common stock

Answer

Correct Answer: Perpetuity

Note: This Question is unanswered, help us to find answer for this one

Outstanding stock represents shares of stock that ________.

Are held by the stockholders

Fair value

Estimated amount collectible

Lower-of-cost-or-market value

Answer

Correct Answer: Are held by the stockholders

Note: This Question is unanswered, help us to find answer for this one

One of the first steps to take when using cvp analysis to help make decisions is ________.

Identifying the variable and fixed costs

Estimated amount collectible

Lower-of-cost-or-market value

Historical cost

Answer

Correct Answer: Identifying the variable and fixed costs

Note: This Question is unanswered, help us to find answer for this one

Most companies use ________ when the lower level management develops budgets each year.

Participative budgeting

A top-down approach

Zero-based budgets

Answer

Correct Answer: Participative budgeting

Note: This Question is unanswered, help us to find answer for this one

Leasing a car for a short time is usually cheaper than buying the same car since __________.

Insurance premiums are lower for leased cars

Leasing generally comes with a lower interest rate

People who lease cars are considered more responsible than those who buy

In leasing a car you pay only for the depreciation of the car rather than the total value

Answer

Correct Answer: In leasing a car you pay only for the depreciation of the car rather than the total value

Note: This Question is unanswered, help us to find answer for this one

Inventory as an asset on the balance sheet and a __________ on the income statement.

Liability

Footnote

Statement

Variable expense

Answer

Correct Answer: Variable expense

Note: This Question is unanswered, help us to find answer for this one

In process costing, factory rent and utilities are debited to the ________.

Manufacturing Overhead account

Work-in-Process Inventory account

Cost of Goods Sold account

Finished Goods Inventory account

Answer

Correct Answer: Manufacturing Overhead account

Note: This Question is unanswered, help us to find answer for this one

Discounted cash flow methods, such as net present value and internal rate of return, ________.

Use simple interest calculations

Use net income amounts rather than cash flows

Focus on the payback period

Consider discounted cash flows

Answer

Correct Answer: Focus on the payback period

Note: This Question is unanswered, help us to find answer for this one

Discounted cash flow methods typically ________.

Focus on the payback period

Assume that cash flows will be reinvested when received

Comply with the requirements of GAAP

Use simple interest calculations

Answer

Correct Answer: Assume that cash flows will be reinvested when received

Note: This Question is unanswered, help us to find answer for this one

An explanation as to why entities act in a socially responsible manner is ________.

Customers and the community expect socially responsible entities

Focus on the payback period

Assume that cash flows will be reinvested when received

Comply with the requirements of GAAP

Answer

Correct Answer: Customers and the community expect socially responsible entities

Note: This Question is unanswered, help us to find answer for this one

A business must pay insurance and rent; these are examples of _______ expenses.

Fixed

Transitional

Mixed

Variable

Answer

Correct Answer: Fixed

Note: This Question is unanswered, help us to find answer for this one

A budget that compares sales or revenues to expenses is called a(n) __________ budget.

Operating

Flexible

Fixed

Zero-based

Answer

Correct Answer: Operating

Note: This Question is unanswered, help us to find answer for this one

________ offer accounting services to the public and are licensed at the state level.

Certified public accountants

Certified management accountants

Cost accountants

Controllers

Answer

Correct Answer: Certified public accountants

Note: This Question is unanswered, help us to find answer for this one

________ is not considered a step in activity-based costing.

Identifying a single overhead rate as the predetermined overhead rate

Identify and classify the activities involved in the manufacture of each of its products.

None

Answer

Correct Answer: Identifying a single overhead rate as the predetermined overhead rate

Note: This Question is unanswered, help us to find answer for this one

Another term for human capital is _____ capital.

Labor

Intellectual

Both A & B

Answer

Correct Answer: Both A & B

Note: This Question is unanswered, help us to find answer for this one

________ is the equity earned by profitable operations that is not distributed to stockholders.

Assets

Dividend

Retained earnings

Common stock

Answer

Correct Answer: Retained earnings

Note: This Question is unanswered, help us to find answer for this one

________ refers to organizing and gathering capital through various lenders.

Capital budgeting

Opportunity cost

Equity financing

Cost of capital

Debt financing

Answer

Correct Answer: Debt financing

Note: This Question is unanswered, help us to find answer for this one

The cost to a firm of each type of capital is dependent upon ________.

The risk-free rate of bonds plus the business risk of the firm

The risk-free rate of each type of capital plus the business risk of the firm

The risk-free rate of each type of capital plus the financial risk of the firm

The risk-free rate of each type of capital plus the business risk and the financial risk of the firm

Answer

Correct Answer: The risk-free rate of each type of capital plus the business risk and the financial risk of the firm

Note: This Question is unanswered, help us to find answer for this one

The cost of common stock equity may be estimated by using the ________.

Yield curve.

Gordon constant growth stock valuation model.

Security Market Line (SML) equation.

DuPont analysis.

B and C

Answer

Correct Answer: B and C

Note: This Question is unanswered, help us to find answer for this one

The cost of common stock equity is ________.

The cost of the guaranteed stated dividend expected by the stockholders

The rate at which investors discount the expected dividends of the firm to determine its share value

The after-tax cost of the interest obligations

The historical cost of floating the stock issue

Answer

Correct Answer: The rate at which investors discount the expected dividends of the firm to determine its share value

Note: This Question is unanswered, help us to find answer for this one

Residual income indicates how ________.

Efficiently a division uses its financial leverage to generate sales and thereby profits

Much operating income the division earns on every dollar of sales

Much return a division generates on average assets

Much extra operating income a division generates above the minimum acceptable level

Answer

Correct Answer: Much extra operating income a division generates above the minimum acceptable level

Note: This Question is unanswered, help us to find answer for this one

A _____ is a company with a large share of a slow growing market.

Cash cow

Dog model

Question mark

Stars

Answer

Correct Answer: Cash cow

Note: This Question is unanswered, help us to find answer for this one

________ feasibility analysis is a quick financial assessment of the viability of a business idea.

Organizational

Institutional

Product/service

Financial

Industry/market

Answer

Correct Answer: Financial

Note: This Question is unanswered, help us to find answer for this one

The amount of net income is transferred from to .

The balance sheet; the income statement

The income statement; the statement of owner's equity

The balance sheet; the statement of cash flows

The income statement; the statement of expenditures

Answer

Correct Answer: The income statement; the statement of owner's equity

Note: This Question is unanswered, help us to find answer for this one

_ are a higher-risk investment than _.

Growth stocks; blue-chip

Blue-chip stocks; growth

Certificates of deposit; growth

U.S. Treasury securities; blue-chip

Answer

Correct Answer: Growth stocks; blue-chip

Note: This Question is unanswered, help us to find answer for this one

A bank statement provides a record of all the following except ____.

Outstanding checks

Compounding interest

High interest rates

Commercial bank

Answer

Correct Answer: Outstanding checks

Note: This Question is unanswered, help us to find answer for this one

A ________ is a source document used to track employee hours.

Labor time record

Process costing

Job cost record

Job costing

Answer

Correct Answer: Labor time record

Note: This Question is unanswered, help us to find answer for this one

A ________ is a schedule that summarizes the earnings, withholdings, and net pay for each employee.

Short-Term Note Payable

Current Liabilities

Payroll Register

Long-Term Liability

Answer

Correct Answer: Payroll Register

Note: This Question is unanswered, help us to find answer for this one

A _______ endorsement is especially useful when you are depositing checks.

Research

Restrictive

Obtaining

Investment

Answer

Correct Answer: Restrictive

Note: This Question is unanswered, help us to find answer for this one

are those items of value the business owns; are those things the business owes.

Assets; liabilities

Liabilities; assets

Ratios; equities

Equities; liabilities

Answer

Correct Answer: Assets; liabilities

Note: This Question is unanswered, help us to find answer for this one

____ is a benefit of borrowing.

Create a positive credit history

Leverage can be used to increase the return on your investments

Interest on some forms of borrowing is tax deductible

All of these

Answer

Correct Answer: All of these

Note: This Question is unanswered, help us to find answer for this one

_____ are valuable things owned by the firm.

Retained earnings

Owners’ equities

Liabilities

Assets

Answer

Correct Answer: Assets

Note: This Question is unanswered, help us to find answer for this one

A minimum wage set above the equilibrium wage rate for low-skilled workers _______.

Creates more employment opportunities for low-skilled workers

Creates more prosperity among younger people

Creates unemployment among low-skilled workers

Increases the number of good paying jobs available to young people

Answer

Correct Answer: Creates more employment opportunities for low-skilled workers

Note: This Question is unanswered, help us to find answer for this one

Deposits of commercial banks at the federal reserve are called _____.

Bankers acceptances

Federal funds

Repurchase agreements

Time deposits

Answer

Correct Answer: Federal funds

Note: This Question is unanswered, help us to find answer for this one

Common stock is a separate account in the ________ category of the accounting equation.

Asset

Revenue

Liability

Equity

Answer

Correct Answer: Equity

Note: This Question is unanswered, help us to find answer for this one

An airplane that fedex owns and uses to deliver packages is a(n) ____ of fedex.

Liability

Asset

Owners' equity

Expense

Revenue

Answer

Correct Answer: Asset

Note: This Question is unanswered, help us to find answer for this one

An account that is not closed at the end of the period is called a(n) ________.

Expense account

Permanent account

Revenue account

Temporary

Answer

Correct Answer: Permanent account

Note: This Question is unanswered, help us to find answer for this one

Amounts earned from delivering goods or services to customers are called ________.

Notes receivable

Unearned revenues

Revenues

Withdrawals

Answer

Correct Answer: Revenues

Note: This Question is unanswered, help us to find answer for this one

A(n)________ requires a journal entry by the depositor

Money market funds

NSF check

No sufficient funds

Internal

Answer

Correct Answer: NSF check

Note: This Question is unanswered, help us to find answer for this one

A(n) ____ would not be listed as an asset on your balance sheet.

Mortgaged home

Savings account

Owned automobile

Checking account

Leased automobile

Answer

Correct Answer: Leased automobile

Note: This Question is unanswered, help us to find answer for this one

A savings account at a credit union is called a ____________ account.

Debit

Club

Certificate

Money market

Answer

Correct Answer: Share

Note: This Question is unanswered, help us to find answer for this one

A request that a stock be bought or sold at a specified price is called a ____________ order.

Market

Limit

Stop

Round

Discretionary

Answer

Correct Answer: Market

Note: This Question is unanswered, help us to find answer for this one

A firm's ________ reports the profit or loss for the firm over a specified time period.

Income statement

Balance sheet

Statement of cash flows

Bank statement

Answer

Correct Answer: Income statement

Note: This Question is unanswered, help us to find answer for this one

A balance sheet includes , , and .

Income; expenses; net worth

Assets; expenses; liabilities

Income; liabilities; net worth

Assets; liabilities; net worth

Answer

Correct Answer: Assets; liabilities; net worth

Note: This Question is unanswered, help us to find answer for this one

_____ make it possible for owners to sell their stocks and bonds to other investors.

Principal

Unsecured loan

Securities markets

Capital budgeting

Answer

Correct Answer: Securities markets

Note: This Question is unanswered, help us to find answer for this one

Companies record their _____ in the revenue and expense accounts during an accounting period.

Selling

Quick

Vertical

Operational

Answer

Correct Answer: Operational

Note: This Question is unanswered, help us to find answer for this one

Benefits expected from proposed capital expenditures ________.

Must be on an after-tax basis because no benefits may be used until tax claims are satisfied

Are independent of interest and taxes

May be valued either on pre-tax or after-tax basis based on the size of the firm

Must be on a pre-tax basis because it provides the true position of profits by the firm

Answer

Correct Answer: Must be on an after-tax basis because no benefits may be used until tax claims are satisfied

Note: This Question is unanswered, help us to find answer for this one

Attempts to increase income are part of the ____________ component of financial planning.

Planning

Obtaining

Saving

Sharing

Spending

Answer

Correct Answer: Obtaining

Note: This Question is unanswered, help us to find answer for this one

At the maturity of a note payable, a borrower will pay ________.

The interest amount only

The principal plus interest

The principal amount only

The principal minus interest

Answer

Correct Answer: The principal plus interest

Note: This Question is unanswered, help us to find answer for this one

As a first step in the accounting cycle, _________ involves the recording of business transactions.

Short-term

Long-term

Bookkeeping

Balance sheet

Answer

Correct Answer: Bookkeeping

Note: This Question is unanswered, help us to find answer for this one

All variable costs are listed ________ on a contribution margin income statement.

Above the contribution margin line

Below the contribution margin line

Below the gross profit line

Above the gross profit line

Answer

Correct Answer: Above the contribution margin line

Note: This Question is unanswered, help us to find answer for this one

All of the closing entries will adjust ____ to update that account.

The capital account

Drawing Account, Fees Earned, Rent Expense

Closing entries

Unearned Rent

Answer

Correct Answer: The capital account

Note: This Question is unanswered, help us to find answer for this one

All of the accounts and the account balances of a company appear on the ________.

Expense recognition principle

Adjusted trial balance

Unearned revenue

Twelve months

Answer

Correct Answer: Adjusted trial balance

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Account analysis is ________.

A method to determine cost behavior that is based on a manager's judgment in classifying each general ledger account as a variable, fixed, or a mixed cost

The range of activity (volume) over which total fixed costs and variable costs per unit can be assumed to remain the same.

Are plotted on the vertical axis (y-axis) of a graph

Costing method where products

Answer

Correct Answer: A method to determine cost behavior that is based on a manager's judgment in classifying each general ledger account as a variable, fixed, or a mixed cost

Note: This Question is unanswered, help us to find answer for this one

A(n) __________ provides accounting services to individuals or firms on a fee basis.

Account agent

Contract accountant

Independent accountant

Public accountant

Answer

Correct Answer: Public accountant

Note: This Question is unanswered, help us to find answer for this one

A progressive tax system is one in which higher-income people pay ____ than lower-income people.

Taxation and regulation

Tax at a higher rate

A and b

Traveler's checks

Answer

Correct Answer: Tax at a higher rate

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A customer's promise to pay in the future for services or goods sold is called a(n) ________.

Unearned Revenue

Accounts Receivable

Notes Payable

Accounts Payable

Answer

Correct Answer: Accounts Receivable

Note: This Question is unanswered, help us to find answer for this one

A percentage of the bond?s par value, the _____ is the interest paid to bondholders.

Coupon rate

Avoids the need to file paperwork with the SEC.

The DJIA and the S&P 500.

Convertible bonds

Answer

Correct Answer: Coupon rate

Note: This Question is unanswered, help us to find answer for this one

The excess return is the _________.

Rate of return that can be earned with certainty

Rate of return in excess of the Treasury-bill rate

Rate of return to risk aversion

Index return

Answer

Correct Answer: Rate of return in excess of the Treasury-bill rate

Note: This Question is unanswered, help us to find answer for this one

Gross domestic product (gdp) includes _____ goods and services.

New

Intermediate

Last year's

Answer

Correct Answer: New

Note: This Question is unanswered, help us to find answer for this one

An investor's degree of risk aversion will determine his or her ______.

Optimal risky portfolio

Risk-free rate

Optimal mix of the risk-free asset and risky asset

Capital allocation line

Answer

Correct Answer: Optimal mix of the risk-free asset and risky asset

Note: This Question is unanswered, help us to find answer for this one

A company selling a bond is ________ money.

Borrowing

Lending

Taking

Reinvesting

Answer

Correct Answer: Borrowing

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When a business factors its accounts receivables, the business ________.

Uses the receivables as security for a loan

No longer has to deal with the collection of the receivables from the customers

Receives the the total amount of the receivables from the factor

Receives cash, less an applicable fee, after the factor collects from the customers

Answer

Correct Answer: No longer has to deal with the collection of the receivables from the customers

Note: This Question is unanswered, help us to find answer for this one

During the 1926-2013 period the geometric mean return on treasury bonds was _________.

5.07%

5.56%

9.34%

11.43

Answer

Correct Answer: 5.07%

Note: This Question is unanswered, help us to find answer for this one

The ________ ratios are primarily used as measures of return.

Liquidity.

Activity.

Debt.

Profitability.

Answer

Correct Answer: Profitability.

Note: This Question is unanswered, help us to find answer for this one

The ________ is useful in evaluating credit and collection policies.

Average payment period

Current ratio

Average collection period

Current asset turnover

Answer

Correct Answer: Average collection period

Note: This Question is unanswered, help us to find answer for this one

The constant-growth dividend discount model (ddm) can be used only when the ___________.

Growth rate is less than or equal to the required return

Growth rate is greater than or equal to the required return

Growth rate is less than the required return

Growth rate is greater than the required return

Answer

Correct Answer: Growth rate is less than the required return

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The production manager is responsible for ________.

Efficiently and effectively producing quality products

Decisions to acquire new equipment

All product costs

His or her own salary

None of the above

Answer

Correct Answer: Efficiently and effectively producing quality products

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If a firm increases its plowback ratio, this will probably result in _______ p/e ratio.

A higher

A lower

An unchanged

The answer cannot be determined from the information given

Answer

Correct Answer: The answer cannot be determined from the information given

Note: This Question is unanswered, help us to find answer for this one

Potable water is ____.

Also known as industrial wastewater

Also known as irrigation water

Also known as sewage

Also known as groundwater

Fit for drinking

Answer

Correct Answer: Fit for drinking

Note: This Question is unanswered, help us to find answer for this one

The ____ is a highly regarded interest inventory.

Strong Interest Inventory

Stanford-Binet Assessment

Likert Inventory

Simpson Test of Preferences (STOP

Answer

Correct Answer: Strong Interest Inventory

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The cash basis of accounting ignores ________.

Payables

Revenue

Cash

Expenses

Answer

Correct Answer: Payables

Note: This Question is unanswered, help us to find answer for this one

Cost accounting systems are used ________.

To accumulate product cost information

To accumulate and assign period costs to products

By manufacturing companies, not service companies

By stockholders for decision-making purposes

Answer

Correct Answer: To accumulate product cost information

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A debenture is _________.

Secured by other securities held by the firm

Secured by equipment owned by the firm

Secured by property owned by the firm

Unsecured

Answer

Correct Answer: Unsecured

Note: This Question is unanswered, help us to find answer for this one

Entrepreneurs determine financial requirements based on ________.

Predictions

Suggestions

Assumptions

Projections

Answer

Correct Answer: Assumptions

Note: This Question is unanswered, help us to find answer for this one

A _____ would be properly classified as cash.

Savings Account

Certificate

Bond sinking fund composed entirely of cash

Post- dated check on hand

Answer

Correct Answer: Savings Account

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The term inside quotes refers to _____.

The difference between the lowest bid price and the highest ask price in the limit order book.

The difference between the highest bid price and the lowest ask price in the limit order book.

The difference between the lowest bid price and the lowest ask price in the limit order book.

The difference between the highest bid price and the highest ask price in the limit order book.

Answer

Correct Answer: The difference between the highest bid price and the lowest ask price in the limit order book.

Note: This Question is unanswered, help us to find answer for this one

The _____ shows the assets, liabilities, and owners' equity of a firm, at a specific point in time.

Tax accountants.

Income statement

Balance sheet

Private accountant

Answer

Correct Answer: Balance sheet

Note: This Question is unanswered, help us to find answer for this one

The change in retained earnings of a firm is found by subtracting _____ from the net income.

Dividends paid to shareholders

Generally accepted accounting principles

Capital expenditure

None of these

Answer

Correct Answer: Dividends paid to shareholders

Note: This Question is unanswered, help us to find answer for this one

The discounted payback period method takes __________ into consideration.

Discounts cash flows.

Ignores initial cost.

Always uses all possible cash flows in its calculation

Time value of money

Answer

Correct Answer: Time value of money

Note: This Question is unanswered, help us to find answer for this one

____ trade futures contracts for their own account.

Commission brokers

Floor brokers

Commission traders

Floor traders

Answer

Correct Answer: Floor traders

Note: This Question is unanswered, help us to find answer for this one

________ is pay stated as a percentage of a sale amount.

Salary

Wage

Commission

Bonus

Answer

Correct Answer: Commission

Note: This Question is unanswered, help us to find answer for this one

Standard deviation of portfolio returns is a measure of ___________.

Total risk

Relative systematic risk

Relative non-systematic risk

Relative business risk

Answer

Correct Answer: Total risk

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Refer to the table. between years 1 and 2, real gdp grew by __________ percent in alta.

Answer

Correct Answer: 5

Note: This Question is unanswered, help us to find answer for this one

Under the perpetual inventory system, discounts taken on an invoice by the buyer would be ________.

Credited to Merchandise Inventory

Debited to Merchandise Inventory

Debited to Cost of Goods Sold

Credited to Cost of Goods Sold

Answer

Correct Answer: Credited to Merchandise Inventory

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The expected rate of return of a portfolio of risky securities is _________.

The sum of the securities' covariances

The sum of the securities' variances

The weighted sum of the securities' expected returns

The weighted sum of the securities' variances

Answer

Correct Answer: The weighted sum of the securities' expected returns

Note: This Question is unanswered, help us to find answer for this one

Merchandise inventory and cost of goods sold appear ________.

On the income statement and statement of cash flows, respectively

On the statement of retained earnings and income statement, respectively

On the balance sheet and statement of retained earnings, respectively

On the balance sheet and income statement, respectively

Answer

Correct Answer: On the balance sheet and income statement, respectively

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When using the allowance method, the write-off of a receivable ________.

Affects the net realizable value of accounts receivable

Involves a contra-revenue account

Decreases net income

Reduces the amount of the allowance for bad debts account

Answer

Correct Answer: Reduces the amount of the allowance for bad debts account

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When the sales price per unit decreases, the breakeven point ________.

Decreases

Decreases proportionately

Remains the same

Increases

Answer

Correct Answer: Increases

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When preparing the cost of goods sold budget, ________.

Ignore balances in Finished Goods Inventory

Start by calculating the projected cost to produce each unit

Ignore the inventory costing method

Multiply units produced by the total projected cost per unit

Answer

Correct Answer: Start by calculating the projected cost to produce each unit

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Under the gross method, ________.

The processing fees charged are deducted from the company's bank account by the credit card processor

The total sales plus the processing fee assessed equals the net amount of cash deposited

The proceeds from debit and credit card transactions are deposited on the last day of the month

There will be no fee charged by the credit card processor for the transaction

Answer

Correct Answer: The processing fees charged are deducted from the company's bank account by the credit card processor

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There are about _____ exchange traded funds

150

775

Answer

Correct Answer: 775

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The weights used in weighted average cost of capital must be ________.

Greater than 50%

Nonnegative

Less than zero

Zero

Answer

Correct Answer: Nonnegative

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The standard quantity per unit defines the ________.

Amount of direct materials that should be used for each unit of finished product including an

Allowance for normal inefficiencies, such as scrap and spoilage.

Price that should be paid for each unit of direct materials.

Total cost of direct materials that should be used for each unit of finished product.

Amount of direct labor-hours that should be used to produce one unit of finished goods

Answer

Correct Answer: Amount of direct materials that should be used for each unit of finished product including an

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The specific cost of each source of long-term financing is based on and costs.

After-tax, current

Current, after-tax

After-tax,after-tax

Current,current

Answer

Correct Answer: After-tax, current

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The predetermined overhead allocation rate is calculated by dividing ________.

The actual overhead costs by actual amount of the cost driver or allocation base

The total estimated overhead costs by total number of days in a year

The estimated amount of cost driver by actual total overhead costs

The estimated overhead costs by total estimated quantity of the overhead allocation base

Answer

Correct Answer: The estimated overhead costs by total estimated quantity of the overhead allocation base

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The predetermined overhead allocation rate for a given production year is calculated ________.

At the end of the production year.

Before the production year begins.

After the preparation of financial statements for the year.

After completion of each job

Answer

Correct Answer: Before the production year begins.

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The materiality concept states that a company must ________.

Report only such information that enhances the financial position of the company

Perform strictly proper accounting only for significant items

Report enough information for outsiders to make knowledgeable decisions about the company

Use the same accounting methods and procedures from period to period

Answer

Correct Answer: Perform strictly proper accounting only for significant items

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The lower the correlation between asset returns, the ________.

The greater the potential diversification of risk.

The lesser the potential diversification of risk.

Both A & B

None of the above

Answer

Correct Answer: The greater the potential diversification of risk.

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The journal entry to record indirect labor costs incurred involves a debit to the ________.

Finished Goods Inventory account

Work-in-Process Inventory account

Wages Payable account

Manufacturing Overhead Account

Answer

Correct Answer: Manufacturing Overhead Account

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The journal entry for adjustment of underallocated manufacturing overhead includes a ________.

Credit to Finished Goods Inventory

Credit to Manufacturing Overhead

Debit to Work-in-Process Inventory

Credit to Cost of Goods Sold

Answer

Correct Answer: Credit to Manufacturing Overhead

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The first step in the capital budgeting process is ________.

Estimate cash flow

Assess risk.

Implement

Proposal Generation

Answer

Correct Answer: Proposal Generation

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The expected value and the standard deviation of returns for asset a is ________.

12 percent and 4 percent.

12.7 percent and 2.3 percent.

12.7 percent and 4 percent.

12 percent and 2.3 percent

Answer

Correct Answer: 12.7 percent and 2.3 percent.

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The equivalent units of production for transferred in units are always 100% because ________.

They are the finished goods purchased and transferred to the next department

They are considered 100% complete with respect to the entire production process

They were 100% complete with respect to the previous department

They are not utilized for production in the subsequent department

Answer

Correct Answer: They were 100% complete with respect to the previous department

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The dollar-weighted return is the _________.

Difference between cash inflows and cash outflows

Arithmetic average return

Geometric average return

Internal rate of return

Answer

Correct Answer: Internal rate of return

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The direct materials budget is prepared using information from the ________ budget.

Cash

Master

Capital expenditure

Production

Answer

Correct Answer: Production

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The constant growth dividend discount model (ddm) may be written as _____.

P0 = D1/(rs – g)

R0 = D0/(P0 – g)

P0 = D0/(rs − g)

r0 = D0/(P0 + g)

Answer

Correct Answer: P0 = D1/(rs – g)

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The budgeting process ________.

Usually begins about one month before the beginning of the budget period to allow for more current information to be considered

Is standard among all types of companies

Does not need input from all levels because it is the role of management to control costs and meet revenue goals

Requires significant coordination among the company's various business segments

Answer

Correct Answer: Requires significant coordination among the company's various business segments

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The _ reward-to-variability ratio is found on the capital allocation line.

Highest; steepest

Lowest; steepest

Highest; flattest

Lowest; flattest

Answer

Correct Answer: Highest; steepest

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The is below the coupon rate when the bond price is its par value.

Discount rate; below

Yield to maturity; above

Yield to maturity; below

Discount rate; above

Answer

Correct Answer: Yield to maturity; above

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The ________ capital budgeting model considers both profitability and the time value of money.

Net present value

Payback

Accounting rate of return °

Both a and c are correct

Answer

Correct Answer: Net present value

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Standards that can be attained with reasonable effort are called __________ standards.

Normal

Theoretical

Ideal

None of these choices are correct

Answer

Correct Answer: Normal

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Salaries payable, interest payable, and unearned revenue are examples of ________.

Current liabilities

Short term investments

Fixed Assets

Long term Liabilities

Answer

Correct Answer: Current liabilities

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Restrictions on retained earnings are ________.

Reported on the statement of cash flows

Usually reported in the notes to the financial statements

Reported on the income statement

Designed to maximize dividends paid to shareholders

Answer

Correct Answer: Usually reported in the notes to the financial statements

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Repurchase of stock the earnings per share and the market price of stock.

Increases; increases

Decreases; decreases

Increases; decreases

Decreases; increases

Answer

Correct Answer: Increases; increases

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Ratios provide a ________ measure of a company's performance and condition.

Relative

Absolute

Linear

None of the above

Answer

Correct Answer: Relative

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Preferred stock dividends __________ earnings available to common stockholders

There is not enough information to determine

Decrease

Increase

Do not effect

Answer

Correct Answer: Decrease

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Overcosting a particular product may result in ________.

Pricing the product too high

Pricing the product too low

Operating efficiencies

Understating total product costs

Answer

Correct Answer: Pricing the product too high

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On a balance sheet for a merchandiser, merchandise inventory is listed as a(n) ________.

Current assets

Current liability.

Expense.

Revenue

Answer

Correct Answer: Current assets

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Journalizing a transaction involves ________.

Calculating the balance in an account using journal entries

Posting the account balances in the chart of accounts

Recording the data only in the journal

None of the above

Answer

Correct Answer: Recording the data only in the journal

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Inventory reduction is a ____ principle.

Lean

Traditional Processing

Economic

Wait Time

Answer

Correct Answer: Lean

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Income __________ when there is zero beginning inventory and all inventory units produced are sold.

Will be lower under variable costing than absorption costing

Will be higher than gross margin under variable costing

Will be the same under both variable and absorption costing

Will be lower than administrative costs under absorption costing

Answer

Correct Answer: Will be the same under both variable and absorption costing

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Currently, the dow jones industrial average is computed by _________.

Adding the prices of 30 large

Calculating the total market value of the 30 firms in the index and dividing by 30

Measuring the current total market value of the 30 stocks in the index relative to the total value on the previous day

Adding the prices of 30 large blue-chip stocks and dividing by a divisor adjusted for stock splits and large stock dividends

Answer

Correct Answer: Adding the prices of 30 large blue-chip stocks and dividing by a divisor adjusted for stock splits and large stock dividends

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Commodity and derivative markets allow firms to adjust their _________.

Management styles

Focus from their main line of business to their investment portfolios

Exposure to various business risks

Ways of doing business so that they'll always have positive returns

Answer

Correct Answer: Exposure to various business risks

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Borrowers are of loanable funds, and lenders are of loanable funds.

Demanders; suppliers

Suppliers; demanders

Suppliers; suppliers

Demanders; demanders

Answer

Correct Answer: Demanders; suppliers

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All other things equal, a corporation will pay a coupon rate on bonds.

Higher, higher risk

Lower, lower risk

Higher, lower risk

Lower, higher risk

Answer

Correct Answer: Higher, higher risk

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A bond with a face value of $1,000 that sells for $1,000 in the market is called a _____ bond.

Par value

Discount

Premium

Zero coupon

Answer

Correct Answer: Par value

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A ________ is used to accumulate the costs of a job.

Job costing system

Job cost record

Raw materials records

Cost allocation

Answer

Correct Answer: Job cost record

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________ is a philosophy of continuous improvement of products and processes.

Just-in-Time (JIT) Management

Enterprise Resource Planning (ERP)

Supply Chain Management (SCM)

Total Quality Management (TQM

Answer

Correct Answer: Total Quality Management (TQM

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________ are the expenses that occur in an entity's major line of business.

Operating expenses

Selling Expenses

Administrative Expenses

Cost of goods

Answer

Correct Answer: Operating expenses

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The purchase of treasury stock ________.

Decreases total assets and increases total stockholders' equity.

Increases total assets and decreases total stockholders' equity.

Increases total assets and increases total stockholders' equity.

Decreases total assets and decreases total stockholders' equity

Answer

Correct Answer: Decreases total assets and decreases total stockholders' equity

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When the total fixed costs increases, the contribution margin per unit ________.

Remains the same

Increase

Decreases

Sometimes increases and sometimes decreases

Answer

Correct Answer: Remains the same

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When the total fixed costs decrease, the breakeven point ________.

Decreases

Increases

Remains the same

Increases proportionately

Answer

Correct Answer: Decreases

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Under a standard cost system, the journal entry to record direct labor includes ________.

A credit for standard quantity usage for actual production times actual cost per hour

A debit for standard direct labor quantity for actual production times standard direct labor cost per hour

A credit for standard quantity for actual production times standard cost per hour

A debit for actual quantity times standard cost per hour

Answer

Correct Answer: A debit for standard direct labor quantity for actual production times standard direct labor cost per hour

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To find the price, a monopolist looks at the price _____ at the chosen quantity.

Demanded

Supplied

In equilibrium

None of the above

Answer

Correct Answer: Demanded

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The yield to maturity for a discount bond is ________ related to the current bond price.

Negatively

Positively

Not

Directly

Answer

Correct Answer: Negatively

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The terms of an invoice are 3/10, n/25. this means that a ________.

Discount of 3% is allowed if the invoice is paid within 10 days

Discount of 5% is allowed if the invoice is paid within 10 days

Discount of 3% is allowed if the invoice is paid within 7 days

Discount of 5% is allowed if the invoice is paid within 7 days

Answer

Correct Answer: Discount of 3% is allowed if the invoice is paid within 10 days

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The reward-to-volatility ratio is given by _________.

The slope of the capital allocation line, sharpe ratio

The second derivative of the capital allocation line

The point at which the second derivative of the investor's indifference curve reaches zero

The portfolio's excess return

Answer

Correct Answer: The slope of the capital allocation line, sharpe ratio

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The journal entry to issue indirect materials to production should include a debit to the ________.

Finished Goods Inventory account

Raw Materials Inventory account

Manufacturing Overhead account

Work-in-Process Inventory account

Answer

Correct Answer: Manufacturing Overhead account

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The correlation coefficient indicates the weakest relationship when ________.

It is closest to 0

It is closest to -1

It is positive

It is negative

Answer

Correct Answer: It is closest to 0

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The arithmetic average of -11%, 15%, and 20% is ________.

15.67%

8.00%

11.22%

6.45

Answer

Correct Answer: 8.00%

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Standard deviation measures _ risk while beta measures _ risk.

Total, systematic

Total,total

Systematic, total

Systematic, systematic

Answer

Correct Answer: Total, systematic

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Serena would like to calculate the total cost of a car loan. she should _____.

Use an online calculator or the formula P(1+R/12)n

Call a bank and talk to a loan officer

Multiply the amount of the loan by the APR

Use this formula: P x (J / (1 - (1 + J)N))

Answer

Correct Answer: Use an online calculator or the formula P(1+R/12)n

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Restricting retained earnings for the cost of treasury stock purchased is a ________ restriction.

Voluntary

Legal

Stock

Contractual

Answer

Correct Answer: Legal

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Product costs are expensed ________.

When the products are consumed or sold

When the accounting period they are incurred in comes to an end

When the market value of products goes above the recorded value

When the products are transferred to the? Work-in-Process Inventory account

Answer

Correct Answer: When the products are consumed or sold

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On the balance sheet of a retailer, the merchandise inventory account ________.

Is not included because it is an income statement account

Is included in the current assets section

Is listed after prepaid assets

Represents the value of inventory that has been sold during the period

Answer

Correct Answer: Is included in the current assets section

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Bonds perceived as high risk typically pay ________ interest rates.

Higher

Lower

More volatile

Less volatile

Answer

Correct Answer: Higher

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An interest rate is the price of money _ or _.

Spent, lent

Borrowed, saved

Supplied, loaned out

None of the above

Answer

Correct Answer: Borrowed, saved

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A bond will sell at __________ if the required return is greater than the coupon rate.

A discount

Profit

A premium

Equal cost

Answer

Correct Answer: A discount

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A bond dealer sells at the _ price and buys at the _ price.

Clean; dirty

Dirty; clean

Bid; asked

Asked; bid

Answer

Correct Answer: Bid; asked

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________ are a company's decision makers.

Managers

Employee

Engineers

Answer

Correct Answer: Managers

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When a company uses the perpetual inventory system _________.

Purchases of Office Supplies and Equipment that will be used in the day-to-day operations of the business are recorded as debits to Merchandise Inventory.

The purchase of merchandise inventory on account is recorded as a debit to Accounts Payable and a credit to Merchandise Inventory.

The Merchandise Inventory account is reported as an expense on the income statement.

The Merchandise Inventory account is debited for purchases of goods that the company intends to resell to customers

Answer

Correct Answer: The Merchandise Inventory account is debited for purchases of goods that the company intends to resell to customers

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An activity's crash cost includes ________ costs.

Indirect

Direct

Overhead

Both A and B are correct

Answer

Correct Answer: Direct

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An _______________is a series of identical cash flows.

Ongoing Cash Flow.

Payback.

Accrual

Cash Accumulation

Annuity

Answer

Correct Answer: Annuity

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The duration of a 5-year zero-coupon bond is ____ years.

4.5

5.5

3.5

Answer

Correct Answer: 5

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A compensating balance on a bank loan effectively ____________ the cost of the loan.

Raises

Lowers

Has no effect on

Has an indeterminate effect on

Answer

Correct Answer: Raises

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The holding period return on a stock is equal to _________.

The capital gain yield over the period plus the inflation rate.

The capital gain yield over the period plus the dividend yield.

The current yield plus the dividend yield.

The dividend yield plus the risk premium

Answer

Correct Answer: The capital gain yield over the period plus the dividend yield.

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Unearned revenue is a(n) account and carries a normal balance.

Asset; debit

Revenue; debit

Liability; credit

Asset; credit

Answer

Correct Answer: Liability; credit

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The total variable cost curve because as output increases.

Slopes upward; variable cost increases

Slopes downward; variable cost decreases

Slopes upward; variable cost decreases

Slopes downward; variable cost increases

Answer

Correct Answer: Slopes upward; variable cost increases

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The value of any asset is the ________.

Sum of all future cash flows it is expected to provide over the relevant time period.

Sum of the present values of all future cash flows it is expected to provide over the relevant time period.

Present value of the sum of all future cash flows it is expected to provide over the relevant time period.

Sum of all compounded future cash flows it is expected to provide over the relevant time period

Answer

Correct Answer: Sum of the present values of all future cash flows it is expected to provide over the relevant time period.

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The ultimate goal of the capital budgeting process is to ________.

To determine how the consequences of making a particular decision affect the rum's revenues and costs.

To list the projects and investments that a company plans to undertake in the future.

To forecast the consequences of a list of future projects to the firm.

To determine the effect of the decision to accept or reject a project on the firm's cash flows

Answer

Correct Answer: To determine the effect of the decision to accept or reject a project on the firm's cash flows

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As new capital budgeting projects arise, we must estimate__________.

The cost of the stock being sold for the specific project.

When such projects will require cash flows.

The cost of the loan for the specific project.

The float costs for financing the project

Answer

Correct Answer: When such projects will require cash flows.

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A beta coefficient of 0 represents an asset that ________.

Has returns that do not fluctuate at all

Has the same response as the market portfolio.

Has an expected return equal to the riskminusfree rate

Has an expected return greater than the market portfolio

Answer

Correct Answer: Has the same response as the market portfolio.

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The purchase of a futures contract gives the buyer _________.

The right to buy an item at a specified price

The right to sell an item at a specified price

The obligation to buy an item at a specified price

The obligation to sell an item at a specified price

Answer

Correct Answer: The obligation to buy an item at a specified price

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The mirr is the compound annual interest rate that equates with for a project?

The present value of the future cash flows at the IRR; the cost.

The future value of the cash inflows at the WACC; the present value of the outflows at the WACC

The present value of the cash inflows at the WACC; the present value of the outflows at the WACC

None of the above

Answer

Correct Answer: The future value of the cash inflows at the WACC; the present value of the outflows at the WACC

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____ is (are) not a determinant of translation exposure.

The MNC's degree of foreign involvement

The accounting methods used

The local (domestic) earnings of the MNC

None of the options listed

Answer

Correct Answer: The local (domestic) earnings of the MNC

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The term "underwriting syndicate" describes _______.

The issuing firm

The lead underwriter

The investment banks that participate in the underwriting

The private investors that purchase the shares

Answer

Correct Answer: The investment banks that participate in the underwriting

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Indirect materials and indirect labor are ________ for a manufactured product.

Overhead and period costs

Operating and period costs

Overhead and product costs

Operating and product costs

Answer

Correct Answer: Overhead and period costs

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A futures call option provides its holder with the right to ___________.

Purchase a futures contract at a specified price for a specified period of time

Agrees to buy shares at a set price if the option holder desires

Buy the underlying asset at the exercise price on or before the expiration date

Buy the underlying asset at the exercise price only at the expiration date

Answer

Correct Answer: Purchase a futures contract at a specified price for a specified period of time

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The put/call ratio is a ______ indicator.

Sentiment

Flow of funds

Market structure

Fundamental

Answer

Correct Answer: Sentiment

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The potential loss for a writer of a naked call option on a stock is _________.

The premium

Stock price minus the strike price

Unlimited

Stock price plus the strike price

Answer

Correct Answer: Unlimited

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The bulk of most initial public offerings (ipos) of equity securities goes to ___________.

Institutional investors

Individual investors

The firm's current shareholders

Day traders

Answer

Correct Answer: Institutional investors

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Relevant cash flows for a project are best described as ________.

Incidental cash flows.

Incremental cash flows.

Sunk cash flows.

Accounting cash

Answer

Correct Answer: Incremental cash flows.

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Direct finance involves the sale to ________ of marketable securities such as stocks and bonds.

Households

Insurance companies

Pension funds

Financial intermediaries

Answer

Correct Answer: Households

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The geometric average of -12%, 20%, and 25% is _________.

18.88%

9.7%

11%

8.42

Answer

Correct Answer: 9.7%

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The _ dealt mainly with the regulation of secondary securities markets and created the _.

Investors expect more long-term growth in earnings over time from Donna's than from Penny's.

Securities Exchange Act of 1934; Securities and Exchange Commission

Offer investors professional management and liquidity.

Avoids the need to file paperwork with the SEC

Answer

Correct Answer: Securities Exchange Act of 1934; Securities and Exchange Commission

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When using the allowance method, after a company has previously written off an account, ________.

Reduces the amount of allowance for bad debts account

When a customer pays on an account that has been written off, the company needs to reverse the writeminus−off to the Allowance for Bad Debts account and then record the receipt of cash

None of these

Both of these

Answer

Correct Answer: When a customer pays on an account that has been written off, the company needs to reverse the writeminus−off to the Allowance for Bad Debts account and then record the receipt of cash

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Liabilities normally carry a _ balance and are shown in the ________.

Debit; Statement of stockholders' equity

Debit; Income statement

Credit; Balance sheet

Debit; Balance sheet

Answer

Correct Answer: Credit; Balance sheet

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____ is a short-term investment activity.

Buying life insurance

Saving

Investing in common stock

Buying bonds

Speculating in common stock

Answer

Correct Answer: Speculating in common stock

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____ is a fixed auto ownership cost.

Gasoline

Installment loan payment

Auto insurance

Maintenance

B and C

Answer

Correct Answer: B and C

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Leasing accounts for about ____ percent of all vehicles sold today.

Answer

Correct Answer: 19

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A measure of the riskiness of an asset held in isolation is ____________.

Beta

Standard deviation

Covariance

Alpha

Answer

Correct Answer: Standard deviation

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Paying life insurance premiums on a(n) ____ basis will be the most economical.

Annual

Semi-annual

Quarterly

Monthly

Answer

Correct Answer: Annual

Note: This Question is unanswered, help us to find answer for this one

You pay personal taxes on your calculated ____ income.

Marginal

Taxable

Adjusted gross

Gross

Answer

Correct Answer: Taxable

Note: This Question is unanswered, help us to find answer for this one

If people have ______ income, they will purchase more of an “inferior”good.

Less

None of these

Answer

Correct Answer: More

Note: This Question is unanswered, help us to find answer for this one

A flexible budget performance report for variable manufacturing costs shows _______.

Only the activity variances.

Both the activity variances and the spending variances.

Both the revenue variances and the spending variances.

Both the quantity variances and the price variances.

Answer

Correct Answer: Both the activity variances and the spending variances.

Note: This Question is unanswered, help us to find answer for this one

The fdic must take steps to close down banks whose equity capital is less than ________ of assets.

Answer

Correct Answer: 2%

Note: This Question is unanswered, help us to find answer for this one

The ________ of a coupon bond and the yield to maturity are inversely related.

Par value.

Term.

Maturity date.

Price

Answer

Correct Answer: Price

Note: This Question is unanswered, help us to find answer for this one

Unlike entrepreneurs of the past, today's entrepreneurs ________.

Find fewer closed doors as small business start-ups have become less risky.

Have to piece their capital together from several sources.

Are spending a smaller percentage of their time raising capital for their businesses.

None of these

Answer

Correct Answer: Have to piece their capital together from several sources.

Note: This Question is unanswered, help us to find answer for this one

The vertical axis (y-axis) on a graph plots ________.

Select from list below

Remain constant

The total volume of activity.

Sales mix

Total fixed costs or total variable costs

Answer

Correct Answer: Total fixed costs or total variable costs

Note: This Question is unanswered, help us to find answer for this one

Your _______ should furnish enough money to live on, in an emergency, for six months.

Savings

Investments

Interest

IRA

Answer

Correct Answer: Savings

Note: This Question is unanswered, help us to find answer for this one

The difference between cost variances and efficiency variances pertains to ________.

The difference between the static budget and the previousyear's actual results

The difference between the flexible budget and the static budget

The difference between the static budget and actual results

The difference between the flexible budget and actual results

Answer

Correct Answer: The difference between the flexible budget and actual results

Note: This Question is unanswered, help us to find answer for this one

Variable cost per unit, within the relevant range, will ________.

Increase as production decreases

Decrease as production decreases

Remain the same as production levels change

Decrease as production increases

Answer

Correct Answer: Remain the same as production levels change

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The sales discounts forfeited account ________.

Is a contra Sales Revenue account

Represents additional sales revenue

Is a balance sheet account

Represents the discount lost when a customer does not pay within the discount period

Answer

Correct Answer: Represents the discount lost when a customer does not pay within the discount period

Note: This Question is unanswered, help us to find answer for this one

The entry to write off an account receivable under the allowance method will ________.

Reduce net income

Increase total assets

Have no effect on net income

Increase net income

Answer

Correct Answer: Have no effect on net income

Note: This Question is unanswered, help us to find answer for this one

The entry to record depreciation includes a debit to the ________ account.

Equipment account

Cash account

Accumulated Depreciation account

Depreciation Expense account

Answer

Correct Answer: Depreciation Expense account

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Top management compensation cost is an example of ________ in the cost hierarchy.

Unit-level costs

Batch-level costs

Product-sustaining costs

Facility-sustaining costs

Answer

Correct Answer: Facility-sustaining costs

Note: This Question is unanswered, help us to find answer for this one

The expected value and the standard deviation of returns for asset a is ________. (see below.)

12 percent and 4 percent.

12.7 percent and 2.3 percent.

12.7 percent and 4 percent.

12 percent and 2.3 percent

Answer

Correct Answer: 12.7 percent and 2.3 percent.

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The direct materials required to manufacture each unit of product are listed on a ________.

Bill of materials

Materials requisition form

Materials ticket

Job order cost sheet

Answer

Correct Answer: Bill of materials

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The correlation coefficient between two assets equals _________.

Their covariance divided by the product of their variances

The product of their variances divided by their covariance

The sum of their expected returns divided by their covariance

Their covariance divided by the product of their standard deviations

Answer

Correct Answer: Their covariance divided by the product of their standard deviations

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The budget process is a loop that consists of ________.

Planning,acting and controlling

Devolping strategies, planning, acting, and controlling

Developing strategies, acting, and controlling

Deveolping strategies,planning, and acting

Answer

Correct Answer: Devolping strategies, planning, acting, and controlling

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The matching principle is also called the ________.

Revenue recognition principle

Expense recognition principle

Adjusting entry concept

Time period concept

Answer

Correct Answer: Expense recognition principle

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The market portfolio has a beta of _________.

-1

Answer

Correct Answer: 1

Note: This Question is unanswered, help us to find answer for this one

The financial leverage multiplier is an indicator of how much ________ a corporation is utilizing.

Operating leverage

Long-term debt

Total debt

Total assets

Answer

Correct Answer: Total debt

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Regarding the tax treatment of payments to securities holders, it is true that ________.

Interest and preferred stock dividends are not tax-deductible; common stock dividends are tax deductible

Interest and preferred stock dividends are tax-deductible; common stock dividends are not tax-deductible

Common stock dividends and preferred stock dividends are not tax-deductible; interest is tax-deductible

Common stock dividends and preferred stock dividends are tax-deductible; interest is not tax-deductible

Answer

Correct Answer: Common stock dividends and preferred stock dividends are not tax-deductible; interest is tax-deductible

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The present value of a $25,000 perpetuity at a 14 percent discount rate is ________.

$285,000

$178,571

$219,298

$350,000

Answer

Correct Answer: $178,571

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A firm can accept a project with a net present value of zero because ________.

The project would maintain the wealth of the firm's owners

Projects having higher early year cash flows tend to be preferred at higher discount rates

It is commonly used to expand the level of operations.

It does not explicitly consider the time value of money

Answer

Correct Answer: The project would maintain the wealth of the firm's owners

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The writer of a put option _______________.

Agrees to sell shares at a set price if the option holder desires

Has the right to buy shares at a set price

Agrees to buy shares at a set price if the option holder desires

Has the right to sell shares at a set price

Answer

Correct Answer: Agrees to buy shares at a set price if the option holder desires

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The term complete portfolio refers to a portfolio consisting of _________________.

The risk-free asset combined with at least one risky asset

The market portfolio combined with the minimum-variance portfolio

Securities from domestic markets combined with securities from foreign markets

Common stocks combined with bonds

Answer

Correct Answer: The risk-free asset combined with at least one risky asset

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The tax liability of a corporation with ordinary income of $105,000 is ________.

$35, 700

$24, 200

$23, 950

$42,000

Answer

Correct Answer: $42,000

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All else constant, a bond will sell at _ when the yield to maturity is _ the coupon rate

A premium; equal to

Par; less than

A discount; less than

A discount; higher than

A premium; less than

Answer

Correct Answer: A discount; higher than

Note: This Question is unanswered, help us to find answer for this one

All else constant, a bond will sell at _ when the coupon rate is _ the yield to maturity.

A premium; equal to

Par; less than

A discount; less than

A discount; higher than

A premium; less than

Answer

Correct Answer: A premium; less than

Note: This Question is unanswered, help us to find answer for this one

A(n) ________ yield curve reflects higher expected future rates of interest.

Flat

Downwarddash-sloping

Upwarddash-sloping

Linear

Answer

Correct Answer: Upwarddash-sloping

Note: This Question is unanswered, help us to find answer for this one

A(n) ________ gives purchasers inflation protection.

Junk bond

Floating rate bond

Income bond

Zero-coupon bond

Answer

Correct Answer: Floating rate bond

Note: This Question is unanswered, help us to find answer for this one

Ups devices typically run up to ____ va.

1,000

100

500

250

Answer

Correct Answer: 1,000

Note: This Question is unanswered, help us to find answer for this one

Stock market analysts have tended to be ___________ in their recommendations to investors.

Slightly overly optimistic.

Overwhelmingly optimistic

Both of these

None of these

Answer

Correct Answer: Overwhelmingly optimistic

Note: This Question is unanswered, help us to find answer for this one

__________ portfolio construction starts with selecting attractively priced securities.

Top-down

Upside-down

Side-to-side

Bottom-up

Answer

Correct Answer: Bottom-up

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__________ is the return on a stock beyond what would be predicted from market movements alone.

A normal return

A subliminal return

An abnormal return

None of these option

Answer

Correct Answer: An abnormal return

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A classified balance sheet ______.

Shows only current assets and current liabilities

Shows changes in assets, liabilities, revenues

And expenses

Contains confidential information

Shows subtotals for current assets and current Liabilities

Answer

Correct Answer: Shows subtotals for current assets and current Liabilities

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A corporation uses __________ as its federal tax id number.

The owner's social security number

An EIN number

Business operating license number

None of these

Answer

Correct Answer: An EIN number

Note: This Question is unanswered, help us to find answer for this one

Both and are monetary liabilities of the fed.

Government securities; discount loans

Currency in circulation; reserves

Government securities; reserves

Currency in circulation; discount loans

Answer

Correct Answer: Currency in circulation; reserves

Note: This Question is unanswered, help us to find answer for this one

Both and are federal reserve assets.

Currency in circulation; reserves

Currency in circulation; government securities

Government securities; discount loans

Government securities; reserves

Answer

Correct Answer: Government securities; discount loans

Note: This Question is unanswered, help us to find answer for this one

In a(n) ________ center, managers are accountable to both revenues and costs.

Cost center

Revenue center

Profit center

Investment center

None of these

Answer

Correct Answer: Profit center

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If goods are sold on terms fob shipping point, the ________.

Seller normally pays the transportation costs

Buyer normally pays the transportation costs

Buyer and the seller split the transportation costs

Shipping company bears the transportation cost

Answer

Correct Answer: Buyer normally pays the transportation costs

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Expenses normally carry a _ balance and are shown in the ________.

Debit; income statement

Income statement ;debit

Both of these

None of these

Answer

Correct Answer: Debit; income statement

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Assets normally carry a _ balance and are shown in the ________.

Debit; Income statement

Debit; Statement of stockholders' equity

Credit; Balance sheet

Debit; Balance sheet

Answer

Correct Answer: Debit; Balance sheet

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An ethics program is expected to have ________ impact on a firm's share price.

A positive

A negative

No impact

An unpredictable

Answer

Correct Answer: A positive

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An adjusting entry that credits salaries payable is an example of a(n) ________.

Accrued expense

Deferred expense

Deferred revenue

Accrued revenue

None of the above

Answer

Correct Answer: Accrued expense

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According to the capital asset pricing model, fairly priced securities have _________.

Negative betas

Positive alphas

Positive betas

Zero alphas

Answer

Correct Answer: Zero alphas

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According to the capital asset pricing model, a fairly priced security will plot _________.

Above the security market line

Along the security market line

Below the security market line

At no relation to the security market line

Answer

Correct Answer: Along the security market line

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Abc and traditional systems are quite similar in ________.

The treatment of direct costs

The allocation of overheads

Evaluating performance

The identification of cost pools

Answer

Correct Answer: The treatment of direct costs

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A(n) ________ cost is a cost whose total amount changes in direct proportion to a change in volume.

Variable

Fixed

Mixed

Irrelevant

Answer

Correct Answer: Variable

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A modern perpetual inventory system ________.

Achieves better control over inventory

Records the quantity, but not the cost, of merchandise inventory on hand

Eliminates the need for a physical count of inventory

Is required by U.S. GAAP

Answer

Correct Answer: Achieves better control over inventory

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Gross margin is to absorption costing as ____ is to variable costing.

Gross profit

Territory margin

Income

Contribution margin

Answer

Correct Answer: Contribution margin

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For each petty cash payment, the custodian of the account prepares a(n) ________.

Invoice

Purchase order

Receipt

Petty cash ticket

Answer

Correct Answer: Petty cash ticket

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Cost objects may include all of the following except ________.

Direct materials

A unit

A product line

A plant / factory

Answer

Correct Answer: Direct materials

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Companies with a great deal of long-term debt would rate fairly high in ____ risk.

Business

Event

Financial

Liquidity

Market

Answer

Correct Answer: Financial

Note: This Question is unanswered, help us to find answer for this one

As a key participant in financial transactions, individuals are ________.

That homeowners may not be able to, or choose not to, repay their loans

Net suppliers of funds because they save more money than they borrow

Both of these

None of these

Answer

Correct Answer: Net suppliers of funds because they save more money than they borrow

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All of the following are profitability ratios except ________.

Profit margin

Earnings per share

Inventory turnover

Return on assets

Return on equity

Answer

Correct Answer: Inventory turnover

Note: This Question is unanswered, help us to find answer for this one

A profit center responsibility report ________.

Should not include costs for which the profit center manager is not accountable

Does not include revenues since that information only appears on the revenue center responsibility report

Is the same as a performance report

Includes traceable fixed expenses

Answer

Correct Answer: Should not include costs for which the profit center manager is not accountable

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A normal cost system applies overhead to jobs ________.

By multiplying a predetermined overhead rate by the estimated amount of the allocation base incurred by the job

By multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the job

Using the actual amount of overhead caused by each job

Using the normal amount of overhead caused by each job

Answer

Correct Answer: By multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the job

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A favorable flexible budget variance in sales revenue suggests a(n) ________.

Decrease in number of actual units sold when compared to the expected number of units sold.

Increase in variable cost per unit.

Increase in number of actual units sold when compared to the expected number of units sold.

Increase in sales price

Answer

Correct Answer: Increase in sales price

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A cost system determines the cost of a cost object by ________.

Accumulating and then assigning costs

Accumulating costs

Assigning and then accumulating costs

Assigning costs

Answer

Correct Answer: Accumulating and then assigning costs

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A business's cash receipts and cash payments for a specific period are reported on a(n) ________.

Income statement

Balance sheet

Statement of cash flows

Cash reconciliation statement

Answer

Correct Answer: Statement of cash flows

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A ________ is a grouping of individual indirect cost items.

Cost allocation base

Cost assignment

Cost pool

Job-costing system

Answer

Correct Answer: Cost pool

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In general, banks would prefer to acquire funds quickly by rather than .

Educing loans; selling securities

Reducing loans; borrowing from the Fed

Borrowing from the Fed; reducing loans

"calling in" loans; selling securities

Answer

Correct Answer: Borrowing from the Fed; reducing loans

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In general, banks make profits by selling liabilities and buying assets.

Long-term; shorter-term

Short-term; longer-term

Illiquid; liquid

Risky; risk-free

Answer

Correct Answer: Short-term; longer-term

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In accounting for stock investments between 20% and 50%, the _______ method is used.

Equity

Consolidated statements

Controlling interest

Cost

Answer

Correct Answer: Equity

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Real gdp per person is not an accurate measure of the standard of living because it ______.

Omits the goods and services that people produce for themselves.

Omits the goods and services imported from other countries.

Includes the goods and services that governments buy.

Includes goods and services bought by firms

Answer

Correct Answer: Omits the goods and services that people produce for themselves.

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Debt is generally the least expensive source of capital. this is primarily due to ________.

The priority of claims on assets and earnings in the event of liquidation

The secured nature of a debt obligation

The fixed interest payments

The tax deductibility of interest payments

Answer

Correct Answer: The tax deductibility of interest payments

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The present value of an expected future payment ________ as the interest rate increases.

Falls

Rises

Is constant

Is unaffected

Answer

Correct Answer: Falls

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The entry to recognize the bad debt expense ________ when the allowance method is used.

Increase net income

Decrease total current liabilities

Decreases current assets

Increase working capital

Answer

Correct Answer: Decreases current assets

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The purchase of equipment financed by a long-term notes payable is an example of ________.

Investing activity

Financing activity

Operating activity

Non-cash investing and financing activity

Answer

Correct Answer: Non-cash investing and financing activity

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If a company retires preferred stock, ________.

Total stockholders' equity will decrease

Total stockholders' equity will increase

The company can record a gain or loss on retirement of stock

The number of outstanding shares will increase

Answer

Correct Answer: Total stockholders' equity will decrease

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Companies invest in trading investments with the intent of ________.

Increasing the amount of long-term assets

Gaining the controlling rights of the investee

Holding the investment till maturity

Generating a profit on a quick sale

Answer

Correct Answer: Generating a profit on a quick sale

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__________ damage for the sake of doing damage, and they often choose targets of opportunity.

Vandals

Saboteurs

Disgruntled employees

Hackers

Answer

Correct Answer: Vandals

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A foreign subsidiary's ________ currency is the currency used in the firm's day-to-day operations.

Local

Integrated

Notational dollar

Functional

Answer

Correct Answer: Functional

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As the risk of a stock investment increases, investors' ________.

Required rate of return will increase

Required rate of return will decrease

Return will increase

Return will decrease

Answer

Correct Answer: Required rate of return will increase

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Total itemized deductions must be ____ to reduce your tax liability.

Greater than your standard deduction

Greater than 5 percent of your adjusted gross income

Greater than 7.5 percent of your adjusted gross income

Less than your taxable income

Answer

Correct Answer: Greater than your standard deduction

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The primary goal of consistently delivering superior value is to ________.

Expand into global markets

Maximize profits

Build profitable customer relationships

Avoid the need to advertise

Answer

Correct Answer: Build profitable customer relationships

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The decision to approve a capital budget is an example of a(n) ________ decision.

Structured

Analytic

Semi-structured

Undocumented

Unstructured

Answer

Correct Answer: Unstructured

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The change brought about by online competition from amazon and walmart are examples of _____

Same customer preferences.

Changing customer preferences.

Decreasing customer preferences.

None of these

Answer

Correct Answer: Changing customer preferences.

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The bid-ask spread exists because of _______________.

Market inefficiencies

Discontinuities in the markets

The need for dealers to cover expenses and make a profit

Lack of trading in thin markets

Answer

Correct Answer: The need for dealers to cover expenses and make a profit

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The ______ measure of returns ignores compounding.

Geometric average

Arithmetic average

IRR

Dollar-weighted

Answer

Correct Answer: Arithmetic average

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Risk aversion is the behavior exhibited by managers who require ________.

An increase in return, for a given increase in risk

Decrease in return, for a given increase in risk

An increase in return, for a given decrease in risk

No changes in return, for a given increase in risk

Answer

Correct Answer: An increase in return, for a given increase in risk

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Proponents of the emh think technical analysts __________.

Should focus on resistance levels.

Should focus on support levels.

Should focus on financial statements.

Are wasting their time

Answer

Correct Answer: Are wasting their time

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One year from now bond c should sell for ________ (to the nearest dollar).

$857

$894

$835

$821

Answer

Correct Answer: $821

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In comparing the internal rate of return and net present value methods of evaluation, ________.

Internal rate of return is theoretically superior, but financial managers prefer net present value.

Net present value is theoretically superior, but financial managers prefer to use internal rate of return.

Financial managers prefer net present value, because it is presented as a rate of return.

Financial managers prefer net present value, because it measures benefits relative to the amount invested

Answer

Correct Answer: Net present value is theoretically superior, but financial managers prefer to use internal rate of return.

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When the total fixed costs increase, the breakeven point ________.

Decreases

Increases

Both of these

None of these

Answer

Correct Answer: Increases

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Work performance information and cost forecasts are main outputs of the _____ process.

Cost budgeting

Cost estimating

Cost control

Cost pricing

Answer

Correct Answer: Cost control

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The value chain is the sequence of business functions in which ________.

Products and services are evaluated with respect to their value to the supply chain

Value is deducted from the products or services of an organisation

Value is added to the products or services from the customers perspective

Usefulness is added to the products or services of an organization.

Answer

Correct Answer: Usefulness is added to the products or services of an organization.

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Your _____ is an example of a liquid asset.

Home

Car

Checking account

Charge account

Life insurance cash value

Answer

Correct Answer: Checking account

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The ________ is utilized to value preferred stock.

Capital asset pricing model

Arbitrage pricing model

Zero-growth model

Black-Scholes model

Answer

Correct Answer: Zero-growth model

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The ____ is not an organized security exchange.

New York Stock Exchange

American Stock Exchange

Midwest Stock Exchange

Pacific Stock Exchange

OTC Exchange

Answer

Correct Answer: OTC Exchange

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The fundamental starting point of all the accounting statements is the ________.

Accounting identity

Computing identity

Investing identity

Financing identity

Answer

Correct Answer: Accounting identity

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The ___ decision should take precedence over the _ decision.

Asset allocation; stock selection

Bond selection; mutual fund selection

Stock selection; asset allocation

Stock selection; mutual fund selection

Answer

Correct Answer: Asset allocation; stock selection

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The value of internet companies is based primarily on _____.

Growth opportunities

Replacement cost

Current profits

Tobin's q

Answer

Correct Answer: Growth opportunities

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Standard deviation measures _____ risk.

Portfolio expected return

Total, systematic

Market risk premium

Portfolio systematic risk

Answer

Correct Answer: Total, systematic

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Revenue is earned when ________.

(or as) the business satisfies each performance obligation

The journal entry to record revenue has been prepared

There is a binding agreement to provide goods or services

The business has received cash from the customer

Answer

Correct Answer: (or as) the business satisfies each performance obligation

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One of the main outputs of the _____ process is a cost baseline.

Cost budgeting

Cost control

Estimating costs

Cost forecasts

Answer

Correct Answer: Cost budgeting

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Net operating losses may be _______.

Carried back 2 years or carried forward up to 20 years

Upward sloping

Interest paid on debt

Maximizing the value of the firm's equity

Answer

Correct Answer: Carried back 2 years or carried forward up to 20 years

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Market risk is also called __ and _.

Systematic risk, diversifiable risk.

Systematic risk, nondiversifiable risk.

Unique risk, non diverse risk.

Unique risk, diversifiable risk.

Firm-specific risk

Answer

Correct Answer: Systematic risk, nondiversifiable risk.

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Managerial finance ________.

Involves tasks such as budgeting, financial forecasting, cash management, and funds procurement

Involves the design and delivery of advice and financial products

Recognizes funds on an accrual basis

Devotes the majority of its attention to the collection and presentation of financial data

Answer

Correct Answer: Involves tasks such as budgeting, financial forecasting, cash management, and funds procurement

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It is important to use the__________ as the standard against which actual cost is compared.

Cumulative budget

Total budget

Budget at completion

Phased budget

Answer

Correct Answer: Phased budget

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In the cost allocation process, an allocation base ________.

Must be some characteristic that is common to all of the cost objectives.

Ideally should result in cost being allocated based on a cause-and-effect relationship.

Selection is not an easy matter.

All of these answer choices are correct

Answer

Correct Answer: All of these answer choices are correct

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Expenses that fall outside the regular operations of a business are ________.

Included under the other income and expenses section of the income statement

Not considered for the calculation of net income

Generally a substantial part of net income

Recorded in the Retained Earnings account

Answer

Correct Answer: Included under the other income and expenses section of the income statement

Note: This Question is unanswered, help us to find answer for this one

Each cost in the activity cost pools are ________ costs.

Manufacturing overhead (MOH)

Activity-based costing (ABC)

Reduction of delivery speed

Overutilizing employees

Answer

Correct Answer: Manufacturing overhead (MOH)

Note: This Question is unanswered, help us to find answer for this one

Common stockholders are sometimes referred to as ________.

Rights offering

The stock market

Residual owners

Present value of a constant growing dividend stream

Answer

Correct Answer: Residual owners

Note: This Question is unanswered, help us to find answer for this one

Changes in activity have a(n) _________ effect on fixed costs per unit.

Inverse

Neutral

Positive

Negative

Answer

Correct Answer: Inverse

Note: This Question is unanswered, help us to find answer for this one

By finding the total cost and dividing by the number of units produced ______________ are found.

Average or per unit costs

Good Choices

Law of Diminishing Returns

Marginal Product

Answer

Correct Answer: Average or per unit costs

Note: This Question is unanswered, help us to find answer for this one

________have separate cost allocation rates for each activity identified by the company.

Lean thinking

Activity-based costing (ABC) systems

TQM programs emphasize nonfinancial measures

Activity based-costing (ABC) causes more cost distortion, which results from the allocation of indirect costs, based on the types of product activities and product usage

Answer

Correct Answer: TQM programs emphasize nonfinancial measures

Note: This Question is unanswered, help us to find answer for this one

_ accounting serves internal users, whereas _ accounting serves external users.

Managerial; financial

Managerial; advisory

Financial; managerial

Investigative; forensic

Answer

Correct Answer: Managerial; financial

Note: This Question is unanswered, help us to find answer for this one

_ and _ are measures that are used to measure stock market performance.

Unsecured; bonds

Dividend; yield

Indexes; averages

Retained; earnings

Answer

Correct Answer: Indexes; averages

Note: This Question is unanswered, help us to find answer for this one

____ is considered a social networking site for professionals.

MySpace

Google+

Facebook

Answer

Correct Answer: LinkedIn

Note: This Question is unanswered, help us to find answer for this one

The revenue recognition principle guides accountants in ________.

Determining when to record revenues

Depreciation Expense

Financial statements can be prepared for specific periods

None of these

Answer

Correct Answer: Determining when to record revenues

Note: This Question is unanswered, help us to find answer for this one

Prior period adjustments ________.

Always increase the beginning balance of retained earning

Are shown on the statement of retained earnings as corrections to the beginning balance

Affect balance sheet accounts only and must be included on single-step income statement

Must be included as a separate line item on a multi-step income statement

Answer

Correct Answer: Must be included as a separate line item on a multi-step income statement

Note: This Question is unanswered, help us to find answer for this one

Managerial accounting information for a company is primarily used by ________.

Work-in-Process Inventory account

It provides information to investors needed for their investment decisions.

The cost of those goods that were completed during the period

Its employees to plan, direct and control operations

Answer

Correct Answer: Its employees to plan, direct and control operations

Note: This Question is unanswered, help us to find answer for this one

Machine setminusup would most likely be classified as a ________ cost.

Unit-level

Decrease

Batch-level

None of these

Answer

Correct Answer: Batch-level

Note: This Question is unanswered, help us to find answer for this one

If you oppose , you will likely argue that .

Industrial policy; governments, not the free market, should determine which sectors succeed and fail

Anti-cabotage laws; the government doesn't need to support basic research

Industrial policy; the free market, not governments, should determine which sectors succeed and fail

Anti-cabotage laws; the private sector doesn't always support basic research

Answer

Correct Answer: Industrial policy; the free market, not governments, should determine which sectors succeed and fail

Note: This Question is unanswered, help us to find answer for this one

Holders of equity capital ________.

Own the firm

Receive interest payments

Receive guaranteed income

Have loaned money to the firm

Answer

Correct Answer: Own the firm

Note: This Question is unanswered, help us to find answer for this one

Financial statements are prepared from the balances in a(n) ________.

Unadjusted trial balance

Adjusted trial balance

Chart of accounts

General journal

Answer

Correct Answer: Adjusted trial balance

Note: This Question is unanswered, help us to find answer for this one

Changing the method of valuing inventory ignores the principle of ________.

Lower of cost or market

Specific identification

Consistency

Ending inventory comes from the most recent purchases

Answer

Correct Answer: Consistency

Note: This Question is unanswered, help us to find answer for this one

Budgeted costs are ________.

The costs incurred this year

The costs incurred last year

Planned or forecasted costs

Competitor's costs

Answer

Correct Answer: Planned or forecasted costs

Note: This Question is unanswered, help us to find answer for this one

As a rule of thumb, your piti costs shouldn't exceed ________ of your pretax monthly income.

8 percent

18 percent

28 percent

48 percent

Answer

Correct Answer: 28 percent

Note: This Question is unanswered, help us to find answer for this one

Actual costing is a costing system that traces direct costs to a cost object by ________.

A cost-allocation base can be either financial or nonfinancial

Using the actual direct cost rates times the actual quantities of the direct-cost inputs

Budgeted annual indirect costs divided by budgeted annual quantity of cost allocation base

Answer

Correct Answer: Using the actual direct cost rates times the actual quantities of the direct-cost inputs

Note: This Question is unanswered, help us to find answer for this one

Abc systems ________.

Highlight the different levels of activities

Limit cost drivers to units of output

Allocate costs based on the overall level of activity

Generally undercost complex products

Answer

Correct Answer: Highlight the different levels of activities

Note: This Question is unanswered, help us to find answer for this one

A lorenz curve graphs the _________________ received by everyone up to a certain quintile.

Unequal distribution over time

Normative shares of income

Cumulative shares of income

Total share of income

Answer

Correct Answer: Cumulative shares of income

Note: This Question is unanswered, help us to find answer for this one

________ is shown on a multiple-step but not on a single-step income statement.

Credited to Inventory

A customer utilizes a prompt payment incentive.

Debited to the Inventory account

Gross profit

Answer

Correct Answer: Gross profit

Note: This Question is unanswered, help us to find answer for this one

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Finance MCQ

The acquisition of a firm in the same industry as the bidder is called a _____ acquisition.

In working capital management, risk is measured by the probability that a firm will be ________.

Experts estimate that ________ of sustainability occurs at the design stage.

The cost of unsold inventory at the end of the year is classified as a(n) ______ in the ______.

The cost of capital reflects the cost of funds ________.

The difference between balanced funds and asset allocation funds is that _____.

Increases in the materials account are based on __________ which are supported by____________.

In the united states, venture capital firms invested __________ in 2009.

Portfolio diversification ____ volatility while ____ return.

The biggest benefit of a public stock offering is ________.

The banking industry almost exclusively uses ______ for check processing.

Published data on past returns earned by mutual funds are required to be ______.

Prior to 1921, ______ provided the primary leadership during the federal budget process.

Prices of existing bonds move _________ as market interest rates move _______.

In the basic valuation model, risk is generally incorporated into the ________.

In general, it is possible to eliminate ________ risk by holding a large portfolio of assets.

Investors who want to liquidate their holdings in a closed-end fund may ___________________.

One type of passive portfolio management is ________.

The expected 1-year interest rate 2 years from now should be _________.

The duration of a perpetuity varies _______ with interest rates.

Prepaid expenses will become ________ when their future benefits expire.

Warranties are commonly associated with ____________ purchases.

Vaccinations convey ________ to third parties.

Utilities, plant insurance, and depreciation expense are examples of ________.

Treasury bonds are issued by the federal government through the _____________________ .

The ________ in the capital market is the basis for determining a bond's coupon interest rate.

To use a credit card wisely, pay off the balance in full every ________.

The ________ date is the date at which the bond issuer must repay the loan or borrowed funds.

The ________ capital budgeting model is generally the simplest to compute.

The _____ is an analysts' consensus of the potential stock price of a company.

The _____ account on the balance sheet shows profits that the firm has reinvested in the company.

Significant influence equity investments must be accounted for using the ________ method.

Revenue that has been earned but not yet collected in cash is called a(n) ________.

Research suggests that you can eliminate random risk by holding ____ or more stocks and bonds.

A bank does not issue a debit memorandum to notify a depositor of _____.

A fund that invests only in a particular industry would be a ____ fund.

A firm with a low net profit margin can improve its return on total assets by ________.

A contingent deferred sales load is commonly called a ____.

A business that accepts payments by credit and debit cards ________.

A broker statement is an example of a(n) __________ record.

A bond's principal is repaid on the ____ date.

A _____________ is an employer-sponsored retirement account.

A __________ is prepared when materials that have been ordered are received and inspected.

A __________ bond can be paid off early at a specified price.

A _________ represents a long-term debt obligation issued by a corporation or a government.

A _________ forecast predicts the future cash inflows and outflows in future periods.

A ________ brings together those who want to invest money and those who want to borrow money.

A _____ has all the respective rights and privileges of a legal person.

A ____ is the most important part of your employment search.

A ____ is often a source of low-rate automobile financing on specific models of vehicles.

A ____ is a time-phased budget that project managers use to measure and monitor cost performance.

__________ is the process of analyzing the performance of the securities held by an investor.

__________ funds stand ready to redeem or issue shares at their net asset value.

_________ represent a powerful force in the buying and selling of corporate securities.

_____ is the price at which a particular common stock is currently trading.

_____ is a method for determining the estimated annual costs and benefits for a project.

_____ helps develop an accurate projection of a projects financial expenses and benefits.

_____ has (have) a legal responsibility to represent stockholders interests.

__________ portfolio construction starts with asset allocation.

____ résumés emphasize your career-related experiences.

____ loans do not have to be repaid until after you graduate from college.

____ invest in highly liquid, relatively safe securities with very short maturities.

____ are received as current income while one owns shares in a mutual fund.

In a statement of retained earnings, decreases in retained earnings result from ________.

Holding cash simply as a financial reserve is referred to as the ____ motive.

Based on the concept of _____, big companies probably do not record all its assets as assets.

An intermediary that pools and manages funds for many investors is called ______.

When we use the wacc to assess a project, we assume that the ________ ratio does not change.

When using backflush costing, product costs are first accumulated in the __________ account.

When using ________ financing, the company incurs a legal obligation to repay the amount borrowed.

When reading mutual fund quotations, the ________ is the price per share.

When projecting future cash flows of an investment ________.

The primary difference between treasury notes and bonds is ________.

The price at which an investor can purchase in the bond market is called the _____ price.

The market risk premium is defined as __________.

The management fee for most mutual funds ranges between ______ percent.

The legal contract setting forth the terms and provisions of a corporate bond is a(n) ________.

The january effect refers to the ____ pressure on ____ stocks in january of every year.

The investor will receive the face value of the bond on the ________ date.

The cost of unsold inventory at the end of the year is classified as a(n) in the .

Increases in the materials account are based on which are supported by__.

Portfolio diversification volatility while return.

Prices of existing bonds move ___ as market interest rates move _.

The january effect refers to the pressure on stocks in january of every year.

More companies fail for the lack of than for the lack of .

Bob wins the lottery. this included in category of gdp.

The sml is valid for _, and the cml is valid for .

Companies that research and development costs assets and net income.

Bank loans from the federal reserve are called and represent a of funds.