Financial Planning Process Flashcards, test questions and answers
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We've found 7 Financial Planning Process tests
Business Management
Buying Goods And Services
Demand For The Product
Dow Jones Industrial Average
Finance
Financial Planning Process
Patent And Trademark Office
Short Term Financing
Flashcards About Week 10 – 30 terms
30 terms
Preview
Flashcards About Week 10 –
question
Which of the following represents a capital expenditure?
answer
purchasing a building to be used for office space Capital expenditures are major investments in long-term assets such as land, buildings, and equipment; or, intangible assets such as patents.
question
Dividends represent a portion of a firm's profits that are distributed to bondholders first then stockholders.
answer
False
question
Although companies that issue bonds are required to pay interest, companies issuing stock are not required to pay dividends.
answer
True
question
One of the criticisms of the Dow Jones Industrial Average is that it does not include enough stocks to provide a good representation of the entire stock market.
answer
True Some analysts prefer to watch other indexes such as the Standard & Poor's 500, or the NASDAQ average.
question
By issuing bonds, a firm's debt level increases, which may adversely affect the firm's image in the financial community.
answer
True
question
Financial managers are responsible for controlling cash flows.
answer
True
question
Zach purchased 200 shares of Fast Track Corporation last year. This year, he plans to hire an attorney to go after the company for failure to pay dividends. If Zach follows through with his plan, he will probably win the lawsuit because companies are obligated to pay their stockholders dividends for owning and holding the firm's stock.
answer
False Although companies will offer shareholders dividends if they have earnings after taxes, they are under no legal obligation to pay dividends. High-growth companies will often retain their earnings and further expand the business.
question
Private investors benefit from securities markets primarily by:
answer
having a place to buy and sell stocks and bonds.
question
A bull market occurs when overall stock prices increase.
answer
True
question
An investor who purchases stock in a company becomes a(n):
answer
Owner
question
Both stocks and bonds represent temporary sources of funding for a firm. Eventually they must be repaid.
answer
False
question
Financial managers are responsible for budgeting, auditing, and advising top management on financial matters.
answer
True
question
White Palace operates a chain of restaurants specializing in hamburgers. The corporation plans to expand to new communities. The acquisition of land and construction of new restaurants represent major capital expenditures.
answer
True Capital expenditures are major investments in tangible, long-term assets, such as land, buildings, and equipment, as well as intangible assets such as patents, trademarks, and copyrights.
question
One step in the financial planning process is to establish financial control procedures that allow managers to monitor the organization's performance.
answer
True
question
Changes in investor trust and confidence strongly influence stock market prices.
answer
True
question
Only government employees represent institutional investors.
answer
False
question
__________ provide financing to new or emerging companies with high profit potential. In return, these organizations expect a share of ownership in the company.
answer
Venture capital firms
question
By selling shares of ownership in their company, California Scientific acquires the funds needed to finance their research and development projects. California Scientific provides for their long-term funding needs through ________ financing.
answer
Equity Equity financing is generated through the sale of stock. It is also generated when a firm retains its earnings and reinvests those earnings back into the company.
question
A loan backed by collateral represents a(n):
answer
Secured loan
question
From an investor's point of view, corporate bonds offer less risk than government bonds.
answer
False
question
A secured loan means the borrower has the security of knowing repayment is not due for several years.
answer
False
question
Issuing ________ increases a firm's debt and may adversely affect the financial community's perception of the firm.
answer
Bonds
question
Carolina Financial Services is considering the purchase and installation of an expensive computer network. This is the type of expenditure that would be included in a(n):
answer
capital budget The capital budget highlights a firm's spending plans for major asset purchases that often require large sums of money.
question
Corporations sell a new issuance of securities in the Primary Market.
answer
True
question
A capital budget highlights a firm's spending plans for major assets, such as property, buildings, and equipment.
answer
True
question
Trade credit means the seller will sell and deliver products and/or services to the buyer, with the understanding that the buyer will pay for these products and/or services at a later date.
answer
True
question
Finance managers need funds for capital purchases, but seldom for the day-to-day operations.
answer
False
question
Effective financial managers evaluate customers' ability to pay for merchandise purchased on credit.
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True
question
Examples of institutional investors are pension funds, mutual funds, and insurance companies.
answer
True
question
A company's capital budget helps management plan for cash shortages or surpluses.
answer
False A capital budget highlights the firm's planned spending on fixed assets such as buildings and equipment. It is the cash budget that provides managers with information regarding projected cash balances.
Consumer Goods And Services
Financial Planning Process
Needs And Wants
Personal Finance
Personal Financial Planning
Profit Sharing Plans
Personal Financial Test 1 133 terms
133 terms
Preview
Personal Financial Test 1
question
Standard of living
answer
The necessities, comforts, and luxuries we have or desire.
question
What is average propensity
answer
The percentage of each dollar of income, on average, that a person spends for current needs rather than savings.
question
Do an example of average propensity
answer
Income 100 / Spending 900 = 90% average propensity
question
When is a good/best time to do a financial plan in one's life? Is financial planning a onetime thing or ongoing?
answer
Everyone needs to develop a personal financial plan as soon as they can. As goals and life changes financial goals should be redefined so that they better meet your current needs.
question
What impact does financial planning have on your standard of living?
answer
Closely tied. With personal financial planning we learn to acquire, use, and control our financial resources more efficiently. It allows us to gain more enjoyment from our income and thus to improve our standard of living.
question
How many months of emergency funds should you have saved?
answer
3-6 months
question
What impact does current consumption/spending have on saving for the future?
answer
You should set aside a portion of current income for deferred, or future, spending. Placing these funds in various savings and investment vehicles allows you to generate a return on your funds until you need them.
question
What percent of Americans have retirement planning as their priority?
answer
35%
question
What is the most effective way to achieve your financial objectives?
answer
Personal financial planning, which helps us define our financial goals and develop appropriate strategies to reach them.
question
Be familiar with the steps of the financial planning process.
answer
1) Define financial goals 2) Develop financial plans and strategies to achieve goals. 3) Implement financial plans and strategies. 4) Periodically develop and implement budgets to monitor and control progress toward goals. 5) Use financial statements to evaluate results of plans and budgets, taking corrective action as required. 6) Redefine goals and revise plans and strategies as personal circumstances change.
question
How do most families feel about talking about money (easy/ difficult/avoid)
answer
Most people are uncomfortable talking about money matters and avoid such discussions, even with their partners.
question
What is wealth?
answer
The total value of all items owned by an individual, such as savings accounts, stocks, bonds, home, and automobiles.
question
Examples of financial assets
answer
they are intangible: paper assets, such as savings accounts and securities (stocks, bonds, mutual funds, and so forth)
question
What is utility?
answer
The amount of satisfaction received from purchasing certain types of quantities of goods and services.
question
What relationship does the financial plan have in conjunction with a person's goals? Or is there a relationship?
answer
Financial goals and decisions should be consistent with your personal values. You can formulate financial plans that provide the greatest personal satisfaction and quality of life by identifying your values.
question
What impact does your personal value system have on your attitude on money?
answer
They are closely linked. If you place high value on family life you may choose a job that does not require a lot of travel. You maybe have plenty of money but choose to live frugally. If status and image are important to you, you may spend a high portion of your income on luxuries.
question
Is there 1 financial plan that works for everyone?
answer
No they are defined to one person's financial desires. Financial goals cover a wide range of financial aspirations: controlling living expense, meeting retirement needs, setting up savings and investment programs, etc.
question
How exciting is financial planning?
answer
Exciting because the more you save and the more you plan the more successful you will be. You can formulate financial plans that provide the greatest personal satisfaction and quality of life by indentifying your values.
question
Can money be an emotional factor and what is an example if so?
answer
Yes. Money can be one of the most emotional issues in any relationship, including with a partner, paretns, or children. Differing opinions on how to spend money may threaten the stability of a marriage or cause arguments between parents and children.
question
How many years would be considered to be a long term goal? Have an example.
answer
A long term goal should indicate wants and desires for a period covering about 6 years out to the next 30 or 40 years. An example would be to pay off a mortgage within X amount of years.
question
What would be an example of a short term goal?
answer
Short term goals are set each year and cover a 12 month periods. An example would be making substantial, regular contributions to savings or investments in order to accumulate your desired worth.
question
What is the definition of debt?
answer
It is a liability
question
What is the purpose of insurance?
answer
Insurance is a way to reduce financial risk and protect both income and assets.
question
What are examples of employee benefits? Do employee benefits transfer to other jobs.
answer
- Vacation and time off - Health and life insurance - Disability insurance - Long-term care insurance - Pension and profit-sharing plans - Supplemental retirement programs, such as 401k plans - Dental and vision care - Child care, elder care, and educational assistance programs - Subsidized employee food services. * no they do not transfer to another job
question
Tangible asset and intangible assets and know examples?
answer
Tangible assets are physical assets, such as real estate and automobiles. Intangible assets are financial assets such as stocks, bonds, mutual funds, etc.
question
How important are employee benefits when you are looking at your financial planning?
answer
Managing your employee benefit plans and coordinating them with your other plans is an important part of the overall financial planning process. Your personal financial plans should include contingency plan to replace employer-provided benefits as required.
question
What would be a good goal to have during every step of the financial planning process?
answer
The amount will change but the goal stays the same. ex. I want to buy a $10,000 car. Your income has increase and now you can save more to buy a $20,000 car.
question
How does the government control consumers and businesses?
answer
Government is a customer of business and an employer of consumers, so it's a source of revenue for business and of wages for consumers.
question
What determines the kinds of goods and services that business will provide?
answer
Consumer choices ultimately determine the kinds of goods and services that businesses will provide.
question
Which is most important, the percent of interest you pay or the length of time you pay it?
answer
The length of time you keep your money invested is just as important as the rate of return you earn on your investments.
question
When should you begin to plan for retirement?
answer
Retirement planning should begin long before you retire. The sooner you start, the better of you'll be.
question
Will you have the same amount of money to retire on if you begin saving later (40s) rather than earlier (20s)?
answer
If you start investing for retirement at age 40, and put only $2000 per year in an IRA earning 5% for 25 years, then your account will grow to $95,454 at age 65. However, if you start your retirement program at 30, your IRA will grow to a whipping $180,641 at age 65.
question
What is inflation?
answer
A state of the economy in which the general price level is increasing.
question
What impact does the level of education have on your income over your lifetime? - page 21
answer
The higher the education the more money you will make.
question
What is estate planning?
answer
As people grow older, they must consider how they can most effectively pass their wealth on to their heirs, this is known as estate planning.
question
What is the main objective of estate planning? - page 336
answer
The main objective of estate planning is to eliminate or maximize taxes and thereby maximize the amount of your estate that ultimately passes to your heirs and beneficiaries. Page 336
question
What types of things do you need to be knowledgeable of when doing estate planning?
answer
You need to be knowledgeable of people planning - anticipating the psychological and financial needs of those you love and providing adequate resources to ensure continuation of their way of life and asset planning - planning who will receive your assets upon your death. Also, planning involves directions about your medical care, whom to rely on for financial or legal advice, and other special instructions you want to give your family when you are unable to do so personally. Page 336
question
What are some potential problems that you could have with estate planning? - page 337
answer
Some problems are excessive transfer costs, lack of liquidity, improper disposition of assets, inadequate income at retirement, inadequate income, if disabled, inadequate income for family at estate owner's death and insufficient capital. Page 337
question
What impact can insufficient capital have on settling an estate?
answer
Insufficient capital can cause inadequate income at retirement. Page 337
question
What is the one catastrophic thing that a person can do to destroy estate planning?
answer
...
question
What are funeral expenses in the estate planning? What is covered?
answer
Funeral expenses are considered first-level death-related costs. Medical bills are also included in the first-level costs. Second-level costs are attorneys, appraisals, and accountants, along with probate expenses. Page 338
question
How are minors treated when you do an estate planning? - page 337
answer
Minors cannot legally handle large sums of money or deal directly with real estate of securities. This would be a burden on them.
question
What impact does property in different states have on estate planning?
answer
The impact could be on the ability to transfer the property. It depends on how you own your property (who is on the deed or title). Also, the nature of the asset (whether it's cash, real property, cars, collectibles) can have an impact. Page 337
question
How important is it to know where important documents are in estate planning?
answer
It is important to know because you might need to have these on hand and might need to tell others where the are located. Page 338
question
What are some benefits of a trust?
answer
Some benefits are to attain income and estate tax savings and to manage and conserve property over a long period. Page 348
question
What are some common reasons for estates to break up? - page 338
answer
Estates break up because of death-related costs, inflation, lack of liquidity, omproper use of vehicles of transfer, and disibilites. Page 338
question
How is life insurance treated in probating an estate? - page 339
answer
Life insurance is property in your gross estate, but not in the probate estate. All property in your gross estate may be subject to the estate tax. Page 339
question
What is liquidity and how important is it in paying expenses of the estate? - page 338
answer
Liquidity is how easy an asset can be turned into cash. It is important in paying expenses because there is a need for cash to cover death costs and other estate obligations. Page 338
question
What are the things you have to list when you probate an estate?
answer
Probate estates consist of the real and personal property you own in your own name that can be transferred at death according to the terms of a will, or if there is no will, intestate laws. All cash, personal property, real property, insurance policies, investments need to be listed. Page 339
question
Is your estate federally and/or stated taxed? - page 339
answer
Both. Page 339
question
What are the things you include in a gross estate? - page 339
answer
A gross estate includes all the property-both probate and non probate-that might be subject to taxes such as property you will continue to own until your death. Page 339
question
Should you update an estate plan?
answer
Yes, at least every 3-5 years. Page 340
question
What impact does an adoption have on a estate transfer?
answer
If a testator did not provide for a child that was adopted, the child recieves that share of the estate not passing to the testator's spouse that would have been given to him or her had the deceased not had a will. Page 344
question
What is intestate? - page 339
answer
When you die without a will.
question
What is the definition of a good estate plan?
answer
A good estate plan maximizes the usefulness of people's assets during their lives and to achieve their personal objectives after their deaths.
question
What is a will? - page 340
answer
A written legally enforceable expression or declaration of a person's wishes concerning the disposition of his or her property upon death. Page 340
question
Is a will required by law? NO
answer
No
question
Who decides the disposition of your estate if you die without a will? - page 340
answer
The State intestacy laws Page 340
question
Who needs a will? - page 340
answer
Everyone, regardless of the size of your estate. Page 340
question
What are the requirements of doing a will?
answer
Provide a plan for distributing the testator's assets according to his or her wishes, consider the changes in family circumstances, and be concise and complete in describing the testator's desires. Page 341
question
How important is it to gather data on all aspects of the family when doing estate planning?
answer
It is very important because you don't want to leave any family members out and it's important to have everyone's role included.
question
What are some things that will make a will invalid?
answer
A will can become invalid if mental incapacity is shown, threats, misrepresentations, inordinate flattery, or mental or physical coersion is used to persuade someone, of if it's improperly executed. Page 343
question
How many witnesses do you need to have on a will? - 2
answer
A will needs to have two wittness, this is required by all states. Page 342
question
What is a codicil? - page 343
answer
A codicil is a simple, often single-page document that provides a convenient legal means of making minor changes to a will. Page 343
question
What impact does a new will have on the old or previous will?
answer
If the new will is created, because substantial changes are necessary, the old oneshould be destroyed to aviod offending anyone. Also, if the new will fails for some reason, the prior will may qualify. Page 344
question
What impact does divorce have on a will?
answer
If a divorce occurs, the state will make all provsions in the will relating to the spouse ineffective. If a testater marries after making the will, the spouse recieves that portion of the estate that would have been recieved had the testator died without a valid will.
question
Can a valid will be contested?
answer
Yes
question
Can you omit a spouse from a will?
answer
Yes, but it might get contested.
question
What should you do with copies of wills? - page 344
answer
Keep them in a safe and accessible place at home and with the attorney who drafted it. Page 344
question
What is a letter of last instruction? - page 344
answer
The best way to communicate to others your thoughts and instructions that aren't appropriate to include in a will. Page 344
question
What is meant by mental capacity? - page 343
answer
You must be of sound mind, know what a will is and aware that you are making and signing one, understand your relationship wiht persons for whom you would normally provide, understand what you own, and are able to decide how to distribute your property. Page 343
question
Who can be a witness to a will?
answer
Generally, a beneficiary should not serve as a witness. Page 343 A witness should be in the presence of another after they witness the signing by the testator. Their address should be on the will. Page 342 & 343
question
What impact does death have on your debts?
answer
The debts are paid by your estate. Page 346
question
What is meant by joint ownership of assets? - page 346
answer
The interest of a decedent passes directly to the surviving joing tenant. A joint tenancy may consist of any number of persons who don't have to be related. A tenancy by the entirety can exist only between husband and wife. Page 346
question
What is a trustee? - page 347
answer
An organization or individual chosed by a grantor to manage and conserve property that is placed in trust for the benefit of the beneficiaries. Page 347
question
Who should be chosen as a trustee for a trust? - page 348
answer
A trustee should posess sound business knowledge and judgement, have an intimate knowledge of the beneficiaries needs and finances, be skilled in investment and trust management, be avaliable to beneficiaries, and be able to make decisions impartially. Page 348
question
What is a testamentary trust and who does/how do you create it? - page 348
answer
It is created by a decedent's will and funded thought the probate process. Page 350
question
Is there a gift tax on all gifts distributed through the will?
answer
The tax applies to the fair market value of the property transferred to a donee, less the amount of compensation given to a donor. Not all gifts. Transfers to a minor trust and the curmmey provision. Page 351
question
At what point does an asset become a gift when settling the estate?
answer
When it is a gift of present interest, not of future interest. Page 351
question
What can an individual do with power of attorney? What are some things you can not do? - page 346
answer
You can take over someone's financial affairs and act on his or her behalf.Page 346
question
What is an executor? - page 346
answer
The personal rep. of an estate designated in the decedent's will. Page 346
question
What is a durable power of attorney for health care? - page 346
answer
Allows your agent to make health care decisions for you if you aren't able to do so. Page 346
question
What is federal unified transfer tax?
answer
A tax on the right to transfer property from one individual to another. Page 350
question
What is the amount of money that can be given away each year without paying tax? And to who can it be given to? - page 340
answer
$13,000. It can be given to any donee.
question
What impact does gift giving have on estate tax liability?
answer
Gift giving can reduce the taxable estate in two ways: 1) future appreciation of the gifted property is excluded from the estate because the decedent does not own the property on the date of death and 2) if the gift is so largethat taxes are due, the money used to pay the tax is also removed from the estate.
question
Is inheritance tax the same as estate tax?
answer
No. Property that is inherited has a basis equal to the fair market value at the date of death. Page 352
question
How man can your estate be worth and you not be subject to federal estate taxes?
answer
$9,999 Page 351
question
What is meant by gift splitting? - page 353
answer
A method f reducing gift taxes; When gifts may be split between husband and wife.
question
How often should you review your estate? - page 340
answer
Periodically, every 3-5 years. Page 340
question
Who is the testator of a will?
answer
The person who makes a will that provides for the disposition of property at his or her death. Page 340
question
What makes a will valid?
answer
Must be product of a person with sound mind, no undue influence, must be properly executed, and must be free from fraud. Page 342
question
How do you revoke a will? - page 344
answer
You must either make a letter that expressly revokes prior wills, make a codicil that expressly revokes all wills earlier than the one thing being modified, make a later will that is inconsistent with a former will, or physically mutilating, burning, tearing, or defacing the will with the intention of revoking it. Page 344
question
Who should you talk to to get guidance /advice when doing a will?
answer
A will no matter how modes the estate is, should not be attempted by a layperson. Some people seek out legal representation. Page 341-342
question
What is a balance sheet? - page 25
answer
A financial statement that describes a person's financial position at a given point in time
question
What kind of documents would you use to create a balance sheet?
answer
Checking, savings, investment statements; assets: kbb for home and cars; liabilities: all bills(expenses); equity: minus your liabilities from you assets
question
What information does the income and expenditure statements tell you?
answer
It tells you where your money goes. It showsa your income, expenses and cash surplus. (cash in flows and out flows)
question
What is a budget and what time frame does a budget cover?
answer
A short-term financial planning report that helps you achieve your short-term financial goes (short-term' anything 1yr or less)
question
What are some examples of personal property? - page 27
answer
Moveable tangible assets used in everyday life: autos, recreational equipment and household furnishings
question
What are some examples of real property? - page 27
answer
Immovable tangible assets: land, the house fixed to the land
question
Does personal property generally increase or decrease over time? - decrease - page 27
answer
Generally decreases over time. (depreciates)
question
What are some examples of investment assets? - page 26
answer
Investment assets earn a return; stocks, bonds, mutual funds, securities, IRA's, 401(k), life insurance and pensions
question
What impact does a date have on your goals in life?
answer
?- I really cant find a certain answer. I feel if you put a date on your goals as when you want to accomplish them by then you tend to work harder and consitant at reaching them
question
How do you determine the equity in your home?
answer
Take what you owe and minus that from the fair market value. (Fair Market Value-Outstanding Balance=Equity)
question
What is the best way to balance your budget?
answer
Estimate you income and expenses. Keep tract of all information that relates to cash in flow and out flow. Compare estimated with projected, this shows surplus/deficits. Reduce your deficits if need be to balance.
question
Is there a difference in budgeting and record keeping?
answer
Yes, record keeping deals with financial transactions and budgeting shows your cash in and cash out. Good record keeping helps you budget better.
question
Where should you keep your budget?
answer
Where it is easily acessible so you can make changes if needed
question
Is federal income tax progressive or flat? (is everyone paying the same amount?) - no
answer
Progressive and no everyone does not pay the same amount.
question
Is there a difference between tax avoidance and tax evasion? - page 66
answer
Tax evasion is illegal where tax avoidance is a legal way to reuce the taxes you pay.
question
What is the main objective to tax planning?
answer
To maximize the amount of money you keep by minimizing the amount if taxes you pay.
question
What must you do to get a tax refund?
answer
File a tax return
question
Can a married person file the marital status as single on a tax return?
answer
No, you can file seprate tax returns but you have to file marital status as married.
question
Who writes the federal income tax code?
answer
?, I guess the IRS... not really sure.
question
Is there a limit of social security tax that can be withheld from your earnings?
answer
Yes, you pay 11.3% of Fica, 8.4 ss and 2.9 medicare. The 11.3 only applies to the first $106,800 of your earnings. Medicare then applies to all earns but the ss tax stops after 106,800.
question
What is the Medicare tax? Is it based on 100% of your earnings? - page 49/50
answer
Medicare tax is a tax that withholds 2.9% of all earnings. Medicare is a type of a federal health insurance for older people (not sure of the age)
question
What is child support and is it taxable?
answer
We all should know what it is. It is not considered a gross income and not taxable.
question
What is alimony and is it taxable?
answer
Gross income that is active and noninvestment income that is taxable
question
Are dividends from stock taxable?
answer
Yes
question
Is there a taxable gain on the sell of your house?
answer
Yes, after the first $250,000 gain for a single person double that for a married taxpayers. Also:
question
How many years must you own your home to be able to sell it without paying a capital gains tax? - page 52
answer
You must own and occupy your home for at lest 2 out of 5 years prior to the sell.
question
What is the difference between itemized deductions and standard deductions and what are some examples of itemized? - page 53
answer
Standard deductions is a fixed amount that depends on your filing status. Itemized deductions is personal expenses that can be deducted from your AGI. Ex: Medical and Dental expense; Property Taxes; Personal Property Taxes; Mortgage and investment interest
question
What are the qualifications of tax preparers? - page 64
answer
Anyone can prepare a tax return. Your can prepare your own return. There are no certain qualifications but the person that prepares the retturn must sign as the preparer.
question
What is the current fica withholding rate? - page 49
answer
11.3% (8.4% ss and 2.9% medicare)
question
Do you normally earn a higher rate of interest on a CD, checking account, or money market account?
answer
CD usually pay a higher rate of interest.
question
Is there a penalty when you do an early withdrawal from a CD?
answer
Yes, an interest penalty if withdrawl is done before maturity
question
What is the highest amount the FDIC covers on money market?
answer
FDIC only covers deposit accounts. If the Money market is not a deposit account(Money Market Mutual Fund) then it is not covered. If it is a money market deposit account then it covers up to $250,000 per depositor for the total of all deposit accounts not per account.
question
What is a credit union and what is required to be a member?
answer
A non-profit member-owned fianncial cooperative. Members have to be a part of a certain occupation, religious or fraternal order, or residential area
question
What kind of customer needs to do internet banking?
answer
Internet users who are comfortable with the online banking process. It is in their best interest as well as the financial insitute.
question
What are the two advantages of online bill payment?
answer
-Save Time -Save Postage
question
Do all ATM transaction require the use of a PIN?
answer
Yes
question
What is compound interest?
answer
Interest earned each period. Is figured by applying the stated rate of interest to the sum of (the initial deposit and the interest earned in each prior period) compound interest=future value
question
What is a certified check? Is there a difference between a certified check and cashiers check? - page 84
answer
A certified check is related to kyour personal account which the bank stamps and certifies that the money is available. The difference is that with a cashiers check anyone can purchase with cash and a certified is not purchased with cash. The money is already in the bank. Cashier checks are used usually by people who do not have a checking account
question
What are the major reasons of overdrafts?
answer
-People write checks/use dedit card for more money than what the account balance is. -People dont balance their check book regularly -People do not use good cash management techniques -People also know that there are so many ways to have overdraft protection
question
What are the factors that influence the choice of where to hold your checking account?
answer
-Look at balance requirements -Fees/Service Charges -Convient ATM's/ATM Fees -Overdraft and FDIC Protection -Interest bearing checking and Online Banking
Financial Planning Process
Implementing The Plan
Net Cash Flow
Strengths And Weaknesses
The American College CFP HS300 – Chapter 1 9 terms
9 terms
Preview
The American College CFP HS300 – Chapter 1
question
Which of the financial planning domains is where the advisor identifies the strengths and weaknesses in the client's present financial situation?
answer
Analyze and evaluate the data.
question
According to the consumer survey conducted by the CFP Board of Standards, the top reason why people being financial planning is to
answer
Build and liquidate a retirement account.
question
Which financial planning domain is where the advisor reviews changes in the client's circumstances and the financial environment?
answer
Monitor the plan
question
A comprehensive financial plan organized to follow the financial planning process should start by
answer
Specifying the responsibilities of each party for implementing the plan and carrying it through to completion.
question
Which of the following financial advisors using the financial planning process is practicing multiple-purpose financial planning? A. A multiline insurance agent who sells all lines of life, health, and property and liability insurance. B. A tax attorney who assists clients with their income, estate, and gift tax planning. C. An investment advisor who is registered as such with the Securities and Exchange Commission. D. A life insurance agent who also sells a family of mutual funds to meet both the protection and wealth accumulation needs of clients.
answer
A multiline insurance agent who sells life, health, and property and liability insurance to a client.
question
The financial planning pyramid is
answer
A widely accepted approach for developing a comprehensive financial plan over a period of time.
question
Financial advisor activities considered to be part of developing financial planning recommendations in the financial planning process do not include
answer
Reviewing the plan to see that it is performing satisfactory.
question
According to a survey conducted by the CFP Board, the top three financial planning areas of specialization that advisors engage in do NOT include
answer
Closely held business planning
question
Starting at a relatively young age, a career-minded person typically will pass through all of the phases of the financial life cycle en route to retirement EXCEPT
answer
Post retirement
Financial Planning Process
The American College CFP HS300 – Chapter 1 T/F 20 terms
20 terms
Preview
The American College CFP HS300 – Chapter 1 T/F
question
Data gathering in the financial planning process typically entails more than asking the client a series of questions in order to fill out a form.
answer
True
question
The advisor's responsibility in the fifth financial planning domain is to see that the plan is implemented.
answer
False
question
In its purest form, comprehensive financial planning is done with the managing advisor's entire compensation consisting of commissions from the sale of one financial product.
answer
False
question
According to the single-purpose approach to financial planning, a life insurance agent who sells key person life insurance to the owner of a small business is engaged in comprehensive financial planning.
answer
False
question
Every financial plan is developed around information gathered during the second step in the financial planning process.
answer
True
question
Part of a financial advisor's responsibility is to motivate and assist the client in completing all of the steps necessary for full plan implementation.
answer
True
question
In its purest form, comprehensive financial planning is performed for a client over a period of time.
answer
True
question
A comprehensive financial plan should address all of the major planning areas as they relate to the client.
answer
True
question
A comprehensive financial plan should be communicated to the client either orally or in a written report.
answer
False
question
There are three distinct phases in an individual's financial life cycle.
answer
False
question
The phase of the financial life cycle that an individual is currently in strongly influences the priority given to the goals for each of the planning areas.
answer
True
question
One result of analyzing the strengths and weaknesses of a client's present financial status may be the need for the advisor to work with the client to revise the client's goals and objectives.
answer
True
question
Comprehensive financial planning services have been available to most Americans in the lower and middle income brackets for more than 50 years.
answer
False
question
One result of market volatility of the past decade was an increase in the sophistication of planners.
answer
True
question
A survey conducted by the CFP Board in 1999 identified estate planning as the most popular financial planning specialization engaged in by financial planning advisors.
answer
False
question
A trend creating opportunities for financial planning advisors is the falling median age of Americans.
answer
False
question
A trend creating opportunities for financial planning advisors is that financial conditions in the American economy are becoming more stable.
answer
False
question
According to a survey conducted by the CFP Board, the main reason people begin financial planning is to generate retirement income.
answer
True
question
According to a study of baby boomers, only 10 percent of them will continue to work during retirement.
answer
False
question
An obstacle preventing consumers from gaining control of their financial destinies is their tendency to spend up to or beyond their incomes.
answer
True
American Heart Association
Business Management
Finance
Financial Planning Process
Personal Finance
Chapter 4- Ethics & Social Responsibility – Flashcards 37 terms
37 terms
Preview
Chapter 4- Ethics & Social Responsibility – Flashcards
question
Enron Scandal
answer
went bankrupt in a matter of weeks, was hiding a lot of debt
question
WorldCom Scandal
answer
double-counting revenues, didn't disclose all debts
question
Bernie Madoff
answer
defrauded $65 million from investors using a Ponzi scheme, sentenced to 150 yrs in prison
question
True or false: Law protects us from ALL wrong behavior (theft, violence, etc)
answer
FALSE, only some wrong behavior
question
Are all legal behavior ethical though?
answer
NOPE
question
3 questions to ask in an ethical dilemma
answer
Is my proposed action legal? is it balanced? how will it make me feel about myself?
question
True or false: Laws that protect us from fraud, theft, and violence determine ethical behavior.
answer
FALSE, ethical behavior involves more than following the law
question
True or false: Two recent studies found a strong correlation between academic dishonesty among undergraduates and dishonesty at work.
answer
True
question
True or false: What is considered ethical is universal and absolute. (shared by many religions)
answer
True
question
True or false: Overly ambitious business goals and employee incentives can lead to unethical behavior.
answer
True
question
True or false: Businesses with a formal code of ethics are less common now than in the past.
answer
True
question
True or false: Corporate social responsibility refers to the concern businesses have for the welfare of society.
answer
TRUE
question
What are ethics codes?
answer
written documents that define ethical conduct
question
Compliance-based ethics codes
answer
based on control & punishment
question
Integrity-based ethics codes
answer
appeal to the conscience of all employees and rely on a culture of ethical behavior
question
6 steps to improve business ethics
answer
- top mgmt must define & model behavior -employees must understand what is expected fro them -training -ethics office(r); protection of whistleblowers -ethics code must be reach beyond company (ex: suppliers) -ethics code must be enforced
question
whistleblower
answer
insiders who report illegal or unethical behavior
question
When discussing moral and ethical issues, it is helpful to remember that ethical behavior begins with ___.
answer
each of us
question
A phone call to a government official by an employee of the Enron Corporation disclosed the deception and dishonesty of the firm's accounting records. This employee played the role of a:
answer
whisteblower
question
Corporate Social responsibility
answer
a business's concern for the welfare of society
question
Opponents of CSR
answer
maximize financial return of investment
question
Proponents of CSR
answer
maximize value for all stakeholders; make this world a better place
question
corporate philanthropy
answer
dimension of social responsibility that includes charitable donations
question
corporate social initiatives
answer
enhanced forms of corporate philanthropy directly related to the company's competencies
question
Corporate responsibility
answer
the dimension of social responsibility that includes everything from hiring minority workers to making safe products
question
corporate policy
answer
the dimension of social responsibility that refers to the position a firm takes on social and political issues
question
important stakeholders
answer
customers investors, shareholders employees society environment
question
Caveat Emptor
answer
"let the buyer beware"
question
Caveat Venditor
answer
"let the seller beware"
question
President Kennedy proposed 4 basic rights of consumers:
answer
right to safety right to be informed right to choose right to be heard
question
insider trading
answer
using privileged info for person and unfair gain
question
Key features of Modern Corporations
answer
Shared ownership, limited liability, "person" status
question
social audit
answer
a company report that measures the firm's social contributions inside and outside of the firm.
question
Ethical behavior covers a ________ range of conduct than legal behavior.
answer
wider
question
4 types of Social Audit watchdogs
answer
socially conscious investors, environmentalists, union officials, customers
question
Sustainability: Who discovered over 150 years ago that CO2 traps heat?
answer
John Tydall
question
Sustainability: Keeling Curve
answer
showed Co2 concentrations are rising
Finance
Financial Planning Process
Personal Finance
Progressive Tax System
Financial Planning 1 – Flashcards 142 terms
142 terms
Preview
Financial Planning 1 – Flashcards
question
Standard of Living is defined as the necessities, comforts, and luxuries desired by an individual or group.
answer
True
question
Your average propensity to consume is the percentage of each dollar of income, on the average, that is spent for current needs rather than savings.
answer
True
question
A good financial plan completed when one is in there 30s will typically last a lifetime.
answer
False
question
Financial planning can improve your standard of living.
answer
True
question
Financial planning is a continuing, life-long process.
answer
True
question
Current consumption is inversely related to saving for the future.
answer
True
question
About 20% of Americans say retirement planning is their most pressing financial concern.
answer
False
question
The most effective way to achieve financials is through financial planning.
answer
True
question
Defining financial goals is an important first step in personal financial planning process.
answer
True
question
Two persons with equal average propensities to consume will not necessarily have equal standards of living because of differences in income.
answer
True
question
The need for financial planning declines as your income increases.
answer
False
question
Current consumption effects future consumption.
answer
True
question
A person who has $2,000 monthly income and spends $1,800 has an average propensity to consume of 90%.
answer
True
question
A person making $35,000 and spending $30,800 has an average propensity to consume of 80%.
answer
False
question
Most Families find it difficult to discuss money matters.
answer
True
question
Average propensity to consume refers to how much of your money you plan to save in your financial plan.
answer
False
question
Tangible assets are earning assets that are held for the returns they promise.
answer
False
question
Financial assets are paper assets, such as savings account and securities.
answer
True
question
Mutual funds are examples of financial assets.
answer
True
question
Spending for your childs private-school education is an example of deferred consumption.
answer
False
question
Wealth can be defined as the total value of all the things you own.
answer
True
question
Wealth is the key consideration is establishing financial goals as it is the measure of value in financial transactions.
answer
False
question
Financial assests include investments such as stocks and bonds.
answer
True
question
Utility refers to the amount of satisfaction a person gets from buying certain items.
answer
True
question
A successful financial plan will be based on a person's goals.
answer
True
question
Your personal value system will shape your attitude toward money and wealth accumulation.
answer
True
question
It is possible to draw up one financial plan that will work for most people.
answer
False
question
Financial planning is a dynamic process.
answer
True
question
The first step in the financial planning process is to develope financial plans and strategies to achieve goals.
answer
False
question
Money can be an emotional factor that may affect a person's financial plans.
answer
True
question
Long-term goals are typically for periods of over 6 years.
answer
True
question
Saving $3,000 for a large, flat screen TV within the next 3 years is an example of a short-term goal.
answer
False
question
Short-term goals include things one wants to achieve in a year or less.
answer
True
question
Debt is another word for liability.
answer
True
question
Insurance provides a way to make money on unfortunate events.
answer
False
question
Employee benefits can typically be transferred to a new job when one changes employers.
answer
False
question
Your house is an example of tangible asset.
answer
True
question
For most people working in large firms, employee benefits are an important part of their financial planning.
answer
True
question
A personal computer can be very useful in assisting one with their financial planning.
answer
True
question
A financial goal that would be important in all stages of the life cycle is creating and maintianing an emergency fund.
answer
True
question
Government controls consumers and businesses by regulation and taxation.
answer
True
question
Businesses are a key part of the circular flow of income that sustains our free enterprise system.
answer
true
question
Consumer choices ultimately determine the kinds of goods and services businesses will provide.
answer
True
question
GDP refers to the total earnings of American workers during a year.
answer
False.
question
Consumers affect businesses by their choice of goods and services to purchase and by choosing whether they will spend or save their incomes.
answer
True
question
How long you invest is not nearly as important as the rate of interest you can earn on your investments.
answer
False
question
The longer you wait to begin retirement planning, the less you will likely have in your retirement fund.
answer
True
question
Inflation means price levels have declined.
answer
False
question
The consumer price index (CPI) is the amount of goods and services each dollar buys at a given point in time.
answer
False
question
Typically, higher levels of education are rewarded with higher income over the lifetime.
answer
True
question
Cities with higher costs of living also experience higher rates of inflation.
answer
False
question
Accumulating wealth for later years is called estate planning.
answer
False
question
High interest rates after the financial crisis of 2008-2009 reflect the federals reserve's efforts to tighten or reduce, the money supply.
answer
False
question
The government employs monetary and fiscal policy to ensure the economy always remains stable.
answer
False
question
A strong economy leads to higher levels of employment.
answer
True
question
An economic contraction usually begins after a trough is reached.
answer
False
question
The financial Crisis of 2008-2009 was the first depression the U.S. has experienced in 75 years.
answer
question
Personal financial management is important because it?
answer
Makes personal financial goals easier to achieve.
question
financial planning can help us to
answer
spend wisely
question
the last step in the financial planning process is to
answer
redefine goals and revise plans and strategies as personal circumstances change
question
the term most closely associated with quality of life is
answer
standard of living
question
a primary determinant of your quality of life
answer
wealth
question
the average propensity to consume refers to the
answer
percentage of income spent for current consumption
question
becky graduated witha masters degree in personal financial planning. after working 2 years in a small FP firm becky earns 60,000 annually and saves 10,000 a year what is her average propensity to consume
answer
83.3
question
when setting financial goals one should typically start by setting
answer
long term goals
question
which of the following goals is stated in a way that is most useful for developing a financial plan
answer
make a 12,000 down payment on an automobile in a 4 years
question
generally as income rises the average propensity to consume
answer
decreases
question
the amount of money we set aside for future consumption will be determined by
answer
how much we currently earn and spend
question
money is
answer
a medium of exchange
question
family financial goals should be
answer
realistically attainable
question
utility refers to
answer
the satisfaction you receive from purchasing something
question
the main reason to do personal financial planning is to
answer
maximize overall utility
question
the most important financial planning for young people concerns
answer
career
question
martha is 80 and has a very high net worth her most important financial concern is probably her
answer
estate
question
sam and lele are in their late 20s with 3 young children. thier most important financial financial planning concerns would probably include all of the following except
answer
retirement and estate planning
question
employee benefints may include
answer
retirement plans health insurance employee discounts tuition reiembursments
question
tax planning is most commonly done to
answer
minimize taxes
question
investements are distinguished from savings on the basis of
answer
level of risk and expected return
question
estate planning involves
answer
considering how your wealth can be most effectively passed on to heirs
question
while your are still working you should be managing you finances for retirement planning. which of the following is not a goal of your retirement planning>
answer
effectively passing wealth on the heirs
question
the three key groups in the economic enviornment are
answer
government consumers business
question
government places controls on the personal financial enviornment by use of
answer
taxation and regulations
question
businesses provide
answer
goods and services
question
the individual consumer is
answer
the party around which the personal financial environment is centered
question
the four stages of an economic cycle would not include
answer
stagnation
question
inflation refers to
answer
rising prices
question
as the rate of inflation increases
answer
retirement plans have more difficulty meeting their goals
question
the amount of goods and services each dollar buys at a given point in time is
answer
purchasing power
question
this is a measure of inflation based on changes in the cost of a market basket of consumer goods and services
answer
consumer price index CPI
question
your income is directly related to your
answer
geofraphic location age education maritial status
question
typically people with the lowest income tend to be
answer
very young or very old
question
_______ tends to increase and then decrease over the life cycle
answer
debt and income
question
financial goals should be
answer
specific attainable prioritize
question
ideally retirement planning should begin
answer
?
question
apersonal computer could not be used to
answer
make financial decisions
question
_______ is the financial goal most people think is least important
answer
leaving a large estate
question
professional financial planners
answer
help by establishing personal financial goals
question
a ______ is a designation earned by financial planners after completing required courses of study
answer
CFP
question
Low interest rates after 2008 and 2009 reflect the federal reserves desire to
answer
stimulate ecomonic growth reduce unemployment
question
what policies can the government utilize to help stabize the economy
answer
monetary policy fiscal policy
question
a strong economy leads to
answer
higher employment
question
an economy will usually go into a ______ after a peak
answer
contraction
question
the financial crisis of 2008 and 2009 is best characterized as a _______
answer
recession
question
the best way to achieve your financial objectives is to
answer
develop a sound financial plan
question
financial planning _______ guarantee a sound financial future
answer
does not
question
_____________ would be an example of current consumption
answer
putting money into a retirement fund
question
_____________ would be considered a necessity of life
answer
neither
question
the average _______household has higher income
answer
self employed
question
the average______ household has higher levels of assets
answer
self emplyed
question
the average americans _______ is higher
answer
home mortgage
question
________ the majority of americans believe that money cannot buy happiness
answer
more than
question
__________ would be considered a financial asset
answer
disney stock
question
_______would be considered to be real property
answer
your house
question
________ is the common denominator for gauging all financial transactions
answer
money
question
_______ is the amount of goods and services each dollar buys at a given pont in time
answer
neither
question
______ refers to the satisfaction you receive from buying certain items
answer
utility
question
is is ______ to find a financial plan that will work for everyone
answer
impossible
question
most families find is _________ to discuss money matters
answer
difficult
question
i want to accumulate a comforatble retirement fund _________ be a specific financial goal
answer
would not
question
income tends to ______ between the ages of 55 and 75
answer
decrease
question
your level of formal education is a ________ factor that has a considerable effect of your income
answer
controllable
question
for most people, debts ________ during their lifetimes
answer
increase and then decrease
question
most people graduate from college with ______ debt
answer
some
question
the two principal contraints which government places upon us are regulation and _______
answer
taxes
question
the consumer price index is a measure of
answer
inflation
question
two key indicators of economic activity in the US are production levels and _______
answer
employment levels
question
a decrease in the gross domestic product would indicate that or economy is is ______
answer
stagnating
question
______ planning is introduced early in the life cycle
answer
liability and insurance
question
during the expansion phase of the business cycle the unemployment rate will
answer
decrease
question
as the rate of inflation increases the purchasing power of your dollars will
answer
decrease
question
the primary determinant of your standard of living is your
answer
wealth
question
your ______ will usually have no effects on your earning capacity
answer
none of the above
question
after reaching adulthood your financial goals will
answer
continue to change
question
for most people employee benefits are _______ importance
answer
major
question
typically your salary will be ____ if you live in a large metropolitan area rather than a small town or rural area
answer
higher
question
___________ is the total of all goods and services produced by workers located within the country
answer
GDP
question
THE AVERAGE INCOME OF HOUSEHOLD HEADS INCREASE UNTIL AGE ______ then income stats decreasing
answer
55
question
the federal reserve action after the financial crisis of 2008 and 2009 resulted in ______
answer
reduced interest rate
question
the government employs monetary and fiscal policy to help foster a ______
answer
neither
question
a stronger economy leads to _______
answer
higher employment
question
following an economic trough the economy will often enter a period of _________
answer
expansion
question
the financial crisis of 2008 and 2009 is best characterized as a ______
answer
recession
Finance
Financial Planning Process
Long Term Financing
Non Profit Organizations
Intro to Business Chapter 18 – Flashcards 30 terms
30 terms
Preview
Intro to Business Chapter 18 – Flashcards
question
Typically, only highly regarded customers with financial stability receive __________. A. secured loans B. bank premiums C. unsecured loans D. commercial paper
answer
C. unsecured loans
question
A firm negotiates a(n) _________ with its bank. This arrangement gives the firm access to a specified amount of unsecured short-term funds, provided the bank has the funds available. A. asset drawing account B. capital drawing agreement C. reserve account D. line of credit
answer
D. line of credit
question
By selling shares of ownership in their company, California Scientific acquires the funds needed to finance their research and development projects. California Scientific provides for their long-term funding needs through ________ financing. A. debt B. equity C. retained D. asset
answer
B. equity
question
An effective budget requires: A. a successful advertising campaign. B. accurate forecasts. C. management approval. D. stakeholder consensus.
answer
B. accurate forecasts.
question
Delaware Aluminum uses its stock of unsold aluminum products as collateral for a short-term loan. This arrangement represents: A. a secured loan. B. a revolving credit agreement. C. factoring. D. an unsecured loan.
answer
A. a secured loan.
question
By borrowing $10 million from First Dayton Bank, Hi-Lo Industries is utilizing ________. A. equity financing. B. debt financing. C. liability funding. D. asset funding.
answer
B. debt financing.
question
The rationale behind offering customers credit is: A. Permitting customers to pay with credit cards or on credit makes it easier for them to buy, and it also attracts new customers. B. Offering customer's credit helps with the firm's cash flow position. C. Offering customer's credit helps match revenues with expenses for the same time period. D. Permitting customers to pay with credit cards or on credit forces a company to rely less on accounts receivables and more on accounts payables.
answer
A. Permitting customers to pay with credit cards or on credit makes it easier for them to buy, and it also attracts new customers.
question
If a company secures a three year bank loan, it is considered _________. A. short-term financing B. asset funding C. liability funding D. long-term financing
answer
D. long-term financing
question
Which of the following represents a source of short-term funding? A. Retained earnings B. Commercial paper C. Common stock D. Corporate bonds
answer
B. Commercial paper
question
Which of these statements about corporate bonds is correct? A. Bonds provide equity financing. B. Issuing new bonds dilutes the existing ownership in the firm. C. Interest paid to bondholders represents a tax-deductible business expense. D. Debenture bonds require assets pledged as collateral.
answer
C. Interest paid to bondholders represents a tax-deductible business expense.
question
The overall objective of financial planning is to: A. forecast the impact of technological trends. B. prepare financial statements for managers. C. optimize the firm's profitability. D. establish budgets for financial control.
answer
C. optimize the firm's profitability.
question
Which of the following companies is undercapitalized? A. A large corporation that has been hit with a major lawsuit because one of its products has a design flaw that has led to serious injuries B. A new company struggling because it has insufficient start-up funds C. A medium-sized company that has decided to buy out a smaller competitor D. An electric utility that has recently experienced a significant increase in the cost of coal and labor
answer
B. A new company struggling because it has insufficient start-up funds
question
A _________ forecast predicts the revenues, costs, and expenses a firm will incur for a period longer than one year. A. cash flow B. short-term C. capital expenditures D. long-term
answer
D. long-term
question
Undercapitalization refers to the problem of: A. insufficient start-up funds. B. inadequate control of expenses. C. inappropriate cash flows. D. under-valued capital stock.
answer
A. insufficient start-up funds.
question
___________ refers to the process that identifies variances by comparing actual revenues and expenses to projected revenues and expenses. A. Factor analysis B. Forecasting C. Financial planning D. Financial control
answer
D. Financial control
question
No matter the size of the business, finance is a critical activity for: A. profit-seeking, but not for nonprofit organizations. B. profit-seeking and nonprofit organizations. C. nonprofit organizations, but not for profit-seeking businesses. D. accountants, but not for financial managers.
answer
B. profit-seeking and nonprofit organizations.
question
Which of the following commonly results in the financial failure of a firm? A. Diversification B. Undercapitalization C. Control of expenses D. Management of cash flows
answer
B. Undercapitalization
question
The rate of return a company must earn to meet the demands of its lenders and expectations of its equity holders is called: A. opportunity rate. B. retained earning. C. cost of capital. D. acquisition cost.
answer
C. cost of capital.
question
A(n) __________ is responsible for verifying that the accounting procedures within a firm are consistent with established accounting principles. A. managerial accountant B. tax accountant C. bookkeeper D. internal auditor
answer
D. internal auditor
question
Virginia Supply offers their customers trade credit with terms 2/15 net 30. This implies that: A. Virginia's customers have very little incentive to pay within the discount period. B. paying within 30 days will let a customer deduct 15% off the invoice price. C. most customers will pay their bill within 2 days in order to take the maximum discount. D. the annual financing cost of failing to pay within 15 days is about 48%.
answer
D. the annual financing cost of failing to pay within 15 days is about 48%.
question
Money has a time value because: A. inflation increases the value of money over time. B. money earns interest over time. B. monetary systems are more automated than in the past. C. a dollar received today is worth more than a dollar received yesterday.
answer
B. money earns interest over time.
question
In order to assist in revenue realization, a(n) ________ allocates resources throughout the firm. A. forecast B. balance sheet C. budget D. income statement
answer
C. budget
question
A _________ represents a long-term debt obligation issued by a corporation or a government. A. share of stock B. commercial note C. certificate of deposit D. bond
answer
D. bond
question
The interest paid on ________ represents a tax-deductible business expense. A. bonds B. stock C. retained earnings D. depreciated assets
answer
A. bonds
question
The effective management of accounts receivable requires financial managers to: A. review the credit history of new customers. B. provide prompt cash payments to suppliers. C. allow customers more time in paying their past due accounts. D. refuse bank-issued credit cards.
answer
A. review the credit history of new customers.
question
Which of the following shows a firm's spending plans on fixed assets such as large equipment? A. Capital budget B. Operating budget C. Cash budget D. Surplus budget
answer
A. Capital budget
question
Carolina Financial Services is considering the purchase and installation of an expensive computer network. This is the type of expenditure that would be included in a(n): A. capital budget. B. cash budget. C. operating budget. D. asset budget.
answer
A. capital budget.
question
__________ provide financing to new or emerging companies with high profit potential. In return, these organizations expect a share of ownership in the company. A. Commercial banks B. Venture capital firms C. Federal Reserve banks D. Investment bankers
answer
B. Venture capital firms
question
Which business function involves credit management/collecting funds from customers? A. Accounting B. Production C. Marketing D. Finance
answer
D. Finance
question
Which of the following statements about taxes is accurate? A. Taxes represent an inflow of cash to the firm. B. Profitable businesses usually pay taxes. C. Tax management falls within the responsibility of marketing managers. D. Taxes cannot be managed because of fluctuations in political policy.
answer
B. Profitable businesses usually pay taxes.
