Question 1

Investors and entrepreneurs should have an understanding of financial issues.

Accepted Answer

A) True 
 B)False

Question 2

A _________ forecast predicts the future cash inflows and outflows.

Accepted Answer

A)  money based
B)  short-term
C)  cash flow
D)  long-termE) B) and C)
F) B) and D)

Question 3

A financial manager is responsible for obtaining the necessary money to enable a firm to achieve its goals and objectives.

Accepted Answer

A) True 
 B)False

Question 4

Inadequate control of expenses represents a common financial problem that contributes to business failures.

Accepted Answer

A) True 
 B)False

Question 5

A _________ forecast predicts the revenues,costs,and expenses a firm will incur for a period longer than one year.

Accepted Answer

A)  cash flow
B)  short-term
C)  capital expenditures
D)  long-termE) B) and C)
F) All of the above

Question 6

What is financial management? Identify the duties and responsibilities of financial managers.

Accepted Answer

Financial management involves managing a...

Question 7

The interest paid for debt financing is a tax deductible expense for the firm.

Accepted Answer

A) True 
 B)False

Question 8

Owners of __________ shares do not get a vote but stockholders do receive dividends.

Accepted Answer

A)  preferred
B)  blue-chip
C)  common
D)  uncommonE) A) and D)
F) All of the above

Question 9

The main objective of financial control is to establish priorities for the purchase of plant and equipment.

Accepted Answer

A) True 
 B)False

Question 10

Susan is convinced that her new business failed because she lacked the necessary funds to do the things that it takes to get a new business up and running.Her problem apparently was:

Accepted Answer

A)  inadequate financial control.
B)  undervalued inventory.
C)  undercapitalization.
D)  a cash flow issue.E) A) and B)
F) None of the above

Question 11

A firm negotiates a(n) _________ with its bank so the firm will have access to a specified amount of unsecured short-term funds,provided the bank has the funds available.

Accepted Answer

A)  asset drawing account
B)  capital drawing agreement
C)  reserve account
D)  line of creditE) A) and B)
F) A) and C)

Question 12

Financial managers are involved in tax management and budgeting.

Accepted Answer

A) True 
 B)False

Question 13

Farmers Savings Co.agreed to extend Eckert's Orchards $200,000 of unsecured short-term funds,contingent upon the bank having the funds available.This arrangement represents a:

Accepted Answer

A)  line of credit.
B)  pledge agreement.
C)  factoring agreement.
D)  trade voucher.E) A) and B)
F) B) and D)

Question 14

Suppliers of short-term financing are prohibited from requiring collateral for the funds they lend to small businesses.

Accepted Answer

A) True 
 B)False

Question 15

An operating budget analyzes the firm's spending plans for long-lasting assets that require large sums of money.

Accepted Answer

A) True 
 B)False

Question 16

Tiffany's work in the finance department of her firm consists of checking accounting records and financial statements to verify that proper procedures are followed.Tiffany's activities are those of a(n) :

Accepted Answer

A)  internal auditor.
B)  comptroller.
C)  CPA.
D)  financial advisor.E) A) and B)
F) C) and D)

Question 17

By identifying variances from the financial plan,managers are able to focus on those departments that require corrective action.

Accepted Answer

A) True 
 B)False

Question 18

Small businesses rely heavily on long-term financing.

Accepted Answer

A) True 
 B)False

Question 19

Liberty Electronics is uncertain about their revenues,costs,and expenditures for the coming year.This firm would benefit from developing a:

Accepted Answer

A)  master budget.
B)  consolidated income statement.
C)  short-term forecast.
D)  statement of cash flows.E) B) and C)
F) A) and B)

Question 20

Companies raising funds must choose either debt or equity sources,but not both.

Accepted Answer

A) True 
 B)False

Exam 17: Financial Management

Inadequate control of expenses represents a common financial problem that contributes to business failures.

Correct AnswerverifiedShow Answer

What is financial management? Identify the duties and responsibilities of financial managers.

Correct AnswerverifiedFinancial management involves managing a...View AnswerShow Answer

Liberty Electronics is uncertain about their revenues,costs,and expenditures for the coming year.This firm would benefit from developing a:

Correct AnswerverifiedShow Answer

A financial manager is responsible for obtaining the necessary money to enable a firm to achieve its goals and objectives.

Correct AnswerverifiedShow Answer

A firm negotiates a(n) _________ with its bank so the firm will have access to a specified amount of unsecured short-term funds,provided the bank has the funds available.

Correct AnswerverifiedShow Answer

Tiffany's work in the finance department of her firm consists of checking accounting records and financial statements to verify that proper procedures are followed.Tiffany's activities are those of a(n) :

Correct AnswerverifiedShow Answer

A _________ forecast predicts the future cash inflows and outflows.

Correct AnswerverifiedShow Answer

A _________ forecast predicts the revenues,costs,and expenses a firm will incur for a period longer than one year.

Correct AnswerverifiedShow Answer

The interest paid for debt financing is a tax deductible expense for the firm.

Correct AnswerverifiedShow Answer

Owners of __________ shares do not get a vote but stockholders do receive dividends.

Correct AnswerverifiedShow Answer

Suppliers of short-term financing are prohibited from requiring collateral for the funds they lend to small businesses.

Correct AnswerverifiedShow Answer

Investors and entrepreneurs should have an understanding of financial issues.

Correct AnswerverifiedShow Answer

Companies raising funds must choose either debt or equity sources,but not both.

Correct AnswerverifiedShow Answer

Susan is convinced that her new business failed because she lacked the necessary funds to do the things that it takes to get a new business up and running.Her problem apparently was:

Correct AnswerverifiedShow Answer

The main objective of financial control is to establish priorities for the purchase of plant and equipment.

Correct AnswerverifiedShow Answer

Financial managers are involved in tax management and budgeting.

Correct AnswerverifiedShow Answer

Small businesses rely heavily on long-term financing.

Correct AnswerverifiedShow Answer

An operating budget analyzes the firm's spending plans for long-lasting assets that require large sums of money.

Correct AnswerverifiedShow Answer

Farmers Savings Co.agreed to extend Eckert's Orchards $200,000 of unsecured short-term funds,contingent upon the bank having the funds available.This arrangement represents a:

Correct AnswerverifiedShow Answer

By identifying variances from the financial plan,managers are able to focus on those departments that require corrective action.

Correct AnswerverifiedShow Answer

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Financial management involves managing a...
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