Test bank for anybodys business 1st edition by van syckle

Answer: FALSE Objective: Explain why financial statements matter to businesses and the people who own them, manage them, and work in them.. Answer: FALSE Objective: Explain why financial

Trang 1

TEST BANK FOR ANYBODYS BUSINESS 1ST EDITION BY VAN SYCKLE

1) Whenever your standard of living goes up, so does your quality of life

Answer: FALSE

Objective: Explain why financial statements matter to businesses and the people who own them, manage them, and work in them

2) Net profit, when used alone, shows a company’s true financial health

Answer: FALSE

3) A budget quantifies all of a company’s expected inflows and outflows of cash

Answer: TRUE

Objective: Recognize cash flow and how to interpret a cash flow statement

4) Income and revenue are not the same thing

Answer: TRUE

Objective: Recognize profit and how to interpret an income statement

5) Revenue can come from goods and services, but not from experiences that customers have

Answer: FALSE

6) Not-for-profit organizations do not need net income

Answer: FALSE

7) A company can still have cash flow problems if it is profitable

Answer: FALSE

Multiple Choice

8) Which of the following is NOT a financial statement?

A) cash flow statement

B) general ledger

C) income statement

Trang 2

D) balance sheet

Answer: B

9) Which of the following is NOT a factor affecting standard of living?

A) your income

B) the quality of goods and services available to you

C) tour well-being

D) the consumption patterns of the people in your community

Answer: C

10) A publicly traded company is

A) a company that is family-owned and –founded

B) a company that is funded primarily through federal income taxes levied by the government

C) a company that is owned by its employees

D) a company that issues stock for people to buy on a stock exchange or other

markets

Answer: D

11) An annual report is

A) a description of a firm’s financials, distributed to everyone who owns stock in the firm

B) a statement describing market growth in a specific industry, such as automotive or telecommunications

C) a set of documents explaining trends and challenges in a nation’s economy

D) a booklet published by the Treasury Department each year outlining returns on Treasury bill investments

Answer: A

12) Which of the following is NOT true about open book management?

A) Employees are encouraged to suggest ways to improve the company’s

performance

B) Employees directly review their managers’ on-the-job performance

Trang 3

C) Employees have access to the firm’s financial statements and other information about the company’s performance

D) Employees see how their performance affects the company’s performance

Answer: B

13) Which of the following is the most likely objection to open book management? A) Employees will feel disrespected by management if the company’s financial performance is poor

B) The company will be violating laws about keeping financial information

confidential

C) The firm’s financial information will get into the hands of competitors

D) Employees will have difficulty seeing the connection between their performance and the company’s

Answer: C

14) Open book management improves employees’ quality of life because

A) it creates a work environment characterized by reduced stress

B) it ensures employees a steady paycheck

C) it enables employees to buy higher-quality goods and services

D) it frees employees from having to contribute ideas for improving the company’s performance

Answer: A

15) The “bottom line” is

A) the lowest possible revenue a company can earn without having to declare

bankruptcy

B) the final decision a CEO makes regarding whether to sell the company or divest a division

C) an accounting calculation that figures out a company’s financial performance based on net profit

D) an equation showing how much market share a company lost during the previous fiscal year

Answer: C

Trang 4

16) Which of the following is a well-stated business goal?

A) “Strengthen our ability to manufacture products without error.”

B) “Enhance morale and engagement throughout our workforce.”

C) “Improve our ability to innovate new products and services.”

D) “Increase revenues twofold by the end of the fiscal year.”

Answer: D

17) In a company using open book management, which of the following incentives would likely motivate the majority of employees to improve their performance?

A) vacations to resorts on distant, exotic locations

B) gift certificates to local cultural and sports events

C) a profit-sharing or equity-sharing program

D) a bonus check that is a specific percentage of employees’ pay

Answer: C

18) Financial statements help managers and employees

A) understand their company’s previous, current, and possibly future performance B) improve their standard of living but not their quality of life

C) select other companies that may be worth investing in

D) distinguish differences between their company’s and rival companies’ offerings Answer: A

19) Which of the following are NOT reflected in a company’s cash flow statement? A) purchases of office supplies needed by the business

B) payments from customers for products

C) monies the company owes investors

D) rent checks from a property the company is subleasing

Answer: C

Diff: Challenging Page Ref: 9

20) A budget

A) spells out which vacant positions a company will need to fill with new hires B) quantifies all of a company’s expected inflows and outflows of cash

C) shows the trends in a firm’s revenues and profits over the previous three years D) depicts salary differences between executives, managers, and employees

Answer: B

Trang 5

Diff: Easy Page Ref: 9

21) You are comparing cash flow statements for your business from the current month and the previous month Which of the following would you be able to figure out? A) what denominations the business’s cash is in

B) whether the business has cash

C) how much cash the business has

D) whether the business has more or less cash this month than last month

Answer: A

22) Which of the following indicates that a company has negative cash flow?

A) The company’s cash on hand is unpredictable from month to month

B) The company’s cash is in the form of small bills

C) The company has more cash now than it did the previous month

D) The company has less cash now than it did the previous month

Answer: D

23) A company raises the price on its products and sells more of them What is the impact

on its cash flow?

A) Cash inflow increases

B) Cash inflow decreases

C) Cash outflow increases

D) Cash outflow decreases

Answer: A

24) How would you apply the principle of “paying yourself first”?

A) Every time you get paid, put most of the money into a checking account that you can easily access

B) Every time you get paid, use a set amount of money to buy a small luxury item you’ve been wanting

C) Every time you get paid, transfer a set amount of money to a savings account or 401(k)

D) Every time you get paid, pay your most important bills first and save the rest of the money

Answer: C

25) What is an important benefit of the practice of paying yourself first?

Trang 6

A) The practice enables you to treat yourself to lavish purchases.

B) You keep all your money in a liquid form that you can easily access as needed C) You can pay off your largest bills in a more timely manner

D) The money you save will create personal cash inflow by earning interest

Answer: D

26) Interest is

A) the fee that a bank or other institution pays you for the use of your money

B) the fee that you pay a bank in order to use a personal or business checking

account

C) the money you set aside in a savings account every time you get paid

D) the money taken out of your paycheck to pay taxes

Answer: A

27) Suppose you have put $50 in an interest-bearing account and you want to double the amount of money in the account What calculation would you use to determine how many years it would take to double your money?

A) Divide 50 by the interest rate and add 2

B) Divide 72 by the interest rate

C) Multiply the interest rate by 2

D) Add the interest rate to 5

Answer: B

28) How does the Rule of 72 calculation work?

A) Subtract the interest rate from 72

B) Divide 72 by the interest rate

C) Multiply the interest rate by 72

D) Add the interest rate to 72

Answer: B

29) You have saved $200 in an interest-bearing account and plan to leave it there for 5 years How would you calculate the interest you would need to earn in order to double your money in those 5 years?

A) Divide 72 by the number of years you have to save

B) Multiply 72 by the number of years you have to save

C) Multiply 5 by 2, then subtract the product from 72

D) Divide the number of years you have to save by 72

Answer: A

Trang 7

Diff: Moderate Page Ref: 12

30) In addition to cash-in and cash-out transactions, a cash flow statement shows

A) cash a company’s creditors have on hand

B) the profit a company earned in the most recent quarter

C) a company’s beginning and ending cash balances

D) amounts a company owes suppliers

Answer: C

31) What is another term for net profit?

A) net cash

B) net income

C) net revenue

D) net value

Answer: B

31) What is net profit?

A) the amount of money a business has paid to its suppliers over one year

B) the amount of money a business has in the bank at any one time

C) the amount of money a business brings in from customers in one year

D) the amount of money remaining after a business has paid all its expenses

Answer: D

33) What is another term for income statement?

A) profit and loss statement

B) general ledger statement

C) business value statement

D) revenue and expense statement

Answer: A

34) An income statement measures

A) a company’s budget for the coming year and the resources needed to fund the projects in the budget

B) a company’s cash flow recorded over the course of one year of selling to

customers

C) a company’s net profit by tracking the firm’s revenues and expenses during a given period

Trang 8

D) a company’s debts and other liabilities incurred by its strategic plan executed over the previous year

Answer: C

35) Income is

A) the amount of cash a company deposits in its bank during one year

B) the amount of cash a company expects to bring in during the coming year

C) the amount of money a company generates during a period of time

D) the total amount of money received by a company for a good, service, or

experience

Answer: C

36) Revenue is

A) the amount of cash a company deposits in its bank during one year

B) the amount of cash a company expects to bring in during the coming year

C) the amount of money a company generates during a period of time

D) the total amount of money received by a company for a good, service, or

experience

Answer: D

37) Revenue is recorded

A) only after payment for a sale has been received by the company

B) when a sale is made, but not necessarily when payment for the sale is received C) as soon as a customer has expressed interest in placing an order with a company D) when a customer approves the price proposed for a particular good or service Answer: B

38) Which of the following is NOT an example of a good?

A) a car

B) a vacation

C) a bottle of shampoo

D) a washing machine

Answer: B

39) Which of the following companies is in the service business?

A) a company that rents cars

Trang 9

B) a company that sells consumer products

C) a company that makes medical devices

D) a company that manufacturers military equipment

Answer: A

40) In the equation for calculating a company’s net profit, what do expenses refer to? A) the invoices sent to the company by the suppliers it is buying from

B) the cash flowing out of the company during the current period

C) the amount of money the company spent on something during a certain time D) the total amount money the company expects to spend in the coming year Answer: C

41) When does a company record its expenses?

A) when the company receives a bill

B) when the company pays a bill

C) when the company’s supplier has put a bill in the mail

D) when the company decides to purchase something

Answer: A

42) When does an expense become a cash outflow?

A) when a company makes a withdrawal from its bank

B) when a company decides to make a purchase

C) when a company receives a bill

D) when a company pays a bill

Answer: D

43) Expenses are divided into

A) operating expenses and income

B) cost of revenue and operating expenses

C) cash out and cash deferred

D) invoices received and invoices paid

Answer: B

44) What is another term for cost of revenue?

A) cost of profit

B) cost of operating income

Trang 10

C) cost of goods sold

D) cost of interest

Answer: C

45) What is cost of revenue?

A) any amount incurred by a company for expenses directly related to sale of a product

B) amounts a company pays for expenses not directly related to the sale of its product C) unavoidable expenses that a company incurs when it generates reports on its financial dealings

D) costs incurred only by companies that sell services rather than tangible goods Answer: A

46) What are operating expenses?

A) amounts incurred by a company for expenses directly related to sale of a product B) amounts a company pays for expenses not directly related to the sale of its product C) unavoidable expenses that a company incurs when it generates reports on its financial dealings

D) costs incurred only by companies that sell services rather than tangible goods Answer: B

47) You are a car dealer Which of the following would your cost of revenue consist of? A) rent paid to the owner of your building

B) amounts spent on utilities

C) money paid for administrative salaries

D) purchase of cars for resale

Answer: D

48) You are an antiques dealer Which of the following would NOT be an example of your operating expenses?

A) rent paid to the owner of your building

B) amounts spent on utilities

C) money paid for administrative salaries

D) purchase of antiques for resale

Answer: D

Định dạng
Số trang	17
Dung lượng	84 KB