question

Which of the following is not a source of funds for a sole proprietorship?

answer

Selling stock or issuing bonds

question

When are limited partnerships generally used?

answer

When the project is risky and the chance of loss is great

question

All of the following are advantages of a sole proprietorship except

answer

unlimited liability.

question

Which stockholders usually have the right to vote and control the board of directors?

answer

Common

question

The organizational form that many consider to be a blend of the best characteristics of corporations, partnerships, and sole proprietorships is the

answer

Limited Liability Company (LLC)

question

The type of ownership that has the ability to raise capital most easily is a

answer

public corporation

question

S Corporations, unlike standard corporations ("C corporations"), and are not double taxed.

answer

True

question

An acquisition occurs when two companies (usually corporations) combine to form a new company.

answer

False

question

From "Rethinking the Boosterism About Small Business": The author claims government programs and policies aimed at small business usually help the wrong kinds of businesses (i.e. those that never intend to generate employment except for their founders). As an example of this misguided effort he cites

answer

the home office tax deduction

question

If you want to go into business for yourself, the easiest way is a sole proprietorship

answer

True

question

An important advantage to the corporate form of business (both normal or C corporations as well as S Corporations) is what?

answer

limited liability

question

Corporations distribute profits to their owners in the form of

answer

Dividends

question

When a group of investors borrows money to buy a company or division, using the company's assets to guarantee the loan, it is called a(n)

answer

leveraged buyout

question

From "Rethinking the Boosterism About Small Business": Large companies (over 2,500) tend to pay less per hour, but offer better benefits and insurance.

answer

False-They pay better AND offer better benefits. "Hourly wages at the largest companies, those with more than 2,500 employees, average around $27, compared with $16 in companies with payrolls of fewer than 100. Companies with more than 100 workers are almost twice as likely to offer retirement benefits and insurance, and considerably more likely to offer health care."

question

From "Rethinking the Boosterism About Small Business": According to the article _____% of small companies that remained in business from 2000-2003 didn't add a single employee.

answer

80%

question

On the balance sheet a company's assets that can be easily converted into cash are called

answer

current assets

question

Which of the following equations is equivalent to the accounting equation?

answer

Owners' equity = assets - liabilities

question

From Shape Shifters: The article noted that his act, while limiting some types of non-audit services American accounting firms can offer, did not forbid them all. What act was this?

answer

Sarbanes-Oxley

question

Bookkeeping is only one aspect of accounting and involves the recording of routine, day-to-day business transactions.

answer

True

question

When an accountant allocates the cost of a piece of equipment over a period of time, this is called

answer

Depreciation

question

The debts Anna's Flowers owes to the Small Business Administration and her company's suppliers represent which of the following?

answer

Liabilities

question

According to the text, a financial managers' greatest concern is probably

answer

Cash Flow

question

From Marketplace Whiteboard Video: When a company records the value of its assets on its balance sheet at market value it is employing the____________ method of asset valuation.

answer

Mark to Market

question

The financial document that has been likened to a snapshot of how the company's finances are doing at that moment is called a(n)

answer

Balance Sheet

question

Assets are a firm's economic resources.

answer

True

question

From Shape Shifters: The article states some lawmakers are worried that the Big 4's consulting and tax advisory is a conflict with what?

answer

Their Auditing

question

Accounting

answer

records, measures, and interprets financial data.

question

Liquidity is judged by how easily an asset can be turned into cash.

answer

True : an asset that is quickly turned into cash (e.g. accounts receivable) is considered "more liquid" than an asset that cannot be quickly turned into cash (e.g. equipment, land, etc.). Assets are listed in order of liquidity on a balance sheet - with the most liquid asset (cash) at the top and the least liquid at the bottom

question

An income statement shows

answer

revenues, expenses, and net income over a period of time.

question

Information found on the company's income statement and balance sheet is extracted from these documents and examined more closely through the use of

answer

Ratio Analysis

question

If a boat manufacturer orders 50 units of fiberglass material and promises to pay the supplier at a later date, the manufacturer will record the amount to be paid as a(n)

answer

Accounts Payable

question

In the area of short-term assets and liabilities, a word that is synonymous with "short term" is

answer

Current

question

The last in line for the payment of profits are the

answer

Common Stockholders

question

Product Placement

answer

A business pays a media (such as a movie) to have the character holding/using/owning their product.

question

Reverse Product Placement

answer

placing the show in their ad.

question

Dan bought three new trucks with money borrowed from the First National Bank. If he fails to repay the loan, the bank will repossess the trucks. The trucks are

answer

collateral

question

The only long-term funds that a company can generate internally are

answer

retained earnings

question

When a company invests a lot of money in a particular project, it is concerned about the amount of risk involved. In general, the longer the expected life of a project or asset, the potential risk is

answer

greater

question

Which of the following capital budgeting projects is the most risky?

answer

Introducing a new product in a foreign market

question

A marketable security is a temporary investment of cash.

answer

True

question

Stockholders who get preference in the distribution of the company's profits but cannot vote are called

answer

Preferred stockholders

question

If a financial manager focuses on monitoring and influencing the company's current assets and liabilities, he or she is involved with

answer

working capital

question

Capital budgeting is the process of analyzing business needs and the selection of assets that will maximize the value of the business.

answer

True

question

Short-term debt obligations that must be repaid within a year are

answer

Current Liabilities

question

If a company retains all of its earnings, then it will not pay

answer

Dividends

question

Overall, financial management primarily involves acquiring and managin

answer

funds

question

Because having idle cash on hand is undesirable, a manager may choose to invest in

answer

marketable securities

question

When the Fed buys securities, it decreases the money in circulation.

answer

False

question

From "The Paradox of Corporate Taxes": Airlines buying more planes than they need, energy companies drilling more holes, and drug companies conducting research with only a marginal prospect of success are examples of how the current tax system

answer

distorts incentives - Decisions that are made based on the tax implications are not necessarily efficient ones for the company.

question

When the Fed lowers the discount rate, it

answer

increases the money supply

question

Data Mining

answer

the process for identifying patterns and relationships within customer and survey data-gathered from online actions, purchasing, user feedback and such-taht can be then used to improve marketing activities

question

If the Fed lowers the reserve requirement for banks this will decrease the supply of money.

answer

False

question

From "Commitment Guaranteed": The article quoted one bank president as saying that personal guarantees are often requested from family businesses because family businesses tend to not have much net worth. He attributed this to:

answer

In an effort to minimize taxes family businesses tend not to leave much profit in the company

question

This Act prohibited commercial banks from being in the insurance and investment banking business.

answer

Glass Stegal

question

Money market funds are a form of mutual fund that

answer

invests in short-term debt securities issued by governments and corporations.-These were the funds that pulled their money out of the commercial paper market creating a credit freeze.

question

The Federal Reserve System is responsible for

answer

creating a stable environment for economic growth.

question

From "The Paradox of Corporate Taxes": What is the much quoted corporate tax rate?

answer

35%

question

The Securities and Exchange Commission (SEC) insures individual bank accounts., not in accordance with the fact or reality or actuality

answer

False-The FDIC insures accounts.

question

From "Commitment Guaranteed": Critics of personal loan guarantees say:

answer

All of the above

question

From "The Paradox of Corporate Taxes": Because the official tax rate is higher than in almost any other country, companies devote enormous time and effort to

answer

Finding loopholes

question

From "The Paradox of Corporate Taxes": The article noted that 115 of the S;P 500 firms had paid a total corporate tax rate of less than _______% in taxes over the last five years.

answer

20%

question

From "Commitment Guaranteed": Ned Smith's company - ABC Realty - just filed bankruptcy. This automatically releases Ned from the personal guarantees he made.

answer

False

question

To carry out its function of controlling the supply of money, the Federal Reserve Board

answer

uses monetary policy.

question

Viral Marketing

answer

Marketing phenomenon that facilitates and encourages people to pass along a marketing message.

question

Which of the following statements explains the difference between profit and cash.

answer

Cash tells us how much money is in our bank account and profit tells us how much revenue has exceeded costs during a specific period of time.

question

If someone asks you to better manage accounts receivable and inventory, the objective is to improve

answer

cash flow

question

Which of the following is most important to the daily operations of a business?

answer

cash

question

Cost Based Pricing

answer

cost+desired profit

question

Demand based pricing

answer

Target costing pricing-what price will the market pay? Deduct my desired profit and build it for this amount.

question

Competition based pricing

answer

What are my competitors charging? Base my pricing on this.

question

Marketing channel(channel of distribution)

answer

A group of organizations that moves products from producers to customers.

question

Channel Conflict

answer

Situation when a producer or supplier bypasses the normal channel of distribution and sells directly to the end user.

question

Product Placement

answer

Putting products into TV shows and movies where they will be seen. Typically paid for by the business.

question

Behavioral Targeting

answer

Track a person's behavior (online, shopping, etc.) and make inferences about what they like and who they are. Target ads based on these inferences.

question

Geographic Targeting

answer

Track where people are (through digital devices primarily) and make offers from local businesses.

question

Viral Marketing

answer

Marketing phenomenon that facilitates and encourages people to pass along a marketing message. (Viral marketing depends on a high pass-along rate from person to person. If a large percentage of recipients forward something to a large number of friends, the overall growth snowballs very quickly.)

question

Owners Equity

answer

All the money that has ever been contributed to the company that never has to be paid back.

question

Owners Equity

answer

All the money that has ever been contributed to the company that never has to be paid back.

question

Owners Equity

answer

All the money that has ever been contributed to the company that never has to be paid back.

BA 101 2nd Midterm – Flashcards

Unlock all answers in this set

Haven't found what you were looking for?

Search for samples, answers to your questions and flashcards