Question 1

The decision to issue additional shares of stock is an example of which one of the following?

Accepted Answer

A)   working capital management
B)   net working capital decision
C)   capital budgeting
D)   controller's duties
E)   capital structure decisionF) None of the above
G) B) and E)

Question 2

The articles of incorporation:
I.describe the purpose of the firm.
II.are amended periodically.
III.set forth the number of shares of stock that can be issued.
IV.detail the method that will be used to elect corporate directors.

Accepted Answer

A)   I and III only
B)   I and IV only
C)   II and III only
D)   II and IV only
E)   I,III,and IV onlyF) None of the above
G) B) and D)

Question 3

Corporate bylaws:

Accepted Answer

A)   must be amended should a firm decide to increase the number of shares authorized.
B)   cannot be amended once adopted.
C)   define the name by which the firm will operate.
D)   describe the intended life and purpose of the organization.
E)   determine how a corporation regulates itself.F) C) and E)
G) A) and D)

Question 4

Compare and contrast the NYSE with NSADAQ.

Accepted Answer

The NYSE is an auction market where sell...

Question 5

Decisions made by financial managers should primarily focus on increasing which one of the following?

Accepted Answer

A)   size of the firm
B)   growth rate of the firm
C)   gross profit per unit produced
D)   market value per share of outstanding stock
E)   total salesF) B) and E)
G) A) and E)

Question 6

The controller of a corporation generally reports directly to the:

Accepted Answer

A)   board of directors.
B)   chairman of the board.
C)   chief executive officer.
D)   president.
E)   vice president of finance.F) C) and D)
G) None of the above

Question 7

What concerns might a loan officer have when loaning funds to a sole proprietorship that he or she might not have when loaning funds to a corporation?

Accepted Answer

The existence and viability of a sole proprietor is dependent upon one individual.Should that individual die,the entity would cease to exist.Likewise,should the owner lose interest in the business or become ill,the business might also cease to exist.With a corporation,the company ownership could be sold in any one of those situations such that the business entity would continue to exist.

Question 8

Sally and Alicia currently are general partners in a business located in Atlanta,Georgia.They are content with their current tax situation but are both very uncomfortable with the unlimited liability to which they are each subjected.Which form of business entity should they consider to replace their general partnership assuming they wish to remain the only two owners of their business? Whichever organization they select,they wish to be treated equally.

Accepted Answer

A)   sole proprietorship
B)   joint stock company
C)   limited partnership
D)   limited liability company
E)   corporationF) B) and D)
G) A) and E) D

Question 9

Which one of the following terms is defined as the mixture of a firm's debt and equity financing?

Accepted Answer

A)   working capital management
B)   cash management
C)   cost analysis
D)   capital budgeting
E)   capital structureF) A) and E)
G) B) and E)

Question 10

Which one of the following grants an individual the right to vote on behalf of a shareholder?

Accepted Answer

A)   proxy
B)   by-laws
C)   indenture agreement
D)   stock option
E)   stock auditF) D) and E)
G) C) and D)

Question 11

Which of the following are results related to the enactment of the Sarbanes-Oxley Act of 2002?
I.increased foreign stock exchange listings of U.S.stocks
II.decreased compliance costs
III.increased privatization of public corporations
IV.increased public disclosure by all corporations

Accepted Answer

A)   I and III only
B)   II and IV only
C)   I,II,and III only
D)   II,III,and IV only
E)   I,III,and IV onlyF) C) and E)
G) A) and C)

Question 12

Why are so many businesses structured as sole proprietorships when the corporate form of business offers more advantages?

Accepted Answer

A significant advantage of the sole proprietorship is that it is inexpensive and easy to form.If the sole proprietor has limited capital to start with,it may not be desirable to spend part of that capital forming a corporation.Also,limited liability for business debts may not be a significant advantage if the proprietor has most of his or her personal assets tied up in the business already.Finally,for a typical small firm,having an unlimited life for the business has no real advantage since the heart and soul of the business is the person who founded it,thereby effectively limiting the life of the business to that of its founder.

Question 13

Which of the following accounts are included in working capital management?
I.accounts payable
II.accounts receivable
III.fixed assets
IV.inventory

Accepted Answer

A)   I and II only
B)   I and III only
C)   II and IV only
D)   I,II,and IV only
E)   II,III,and IV onlyF) All of the above
G) A) and C)

Question 14

Which one of the following statements concerning a sole proprietorship is correct?

Accepted Answer

A)   A sole proprietorship is designed to protect the personal assets of the owner.
B)   The profits of a sole proprietorship are subject to double taxation.
C)   The owner of a sole proprietorship is personally responsible for all of the company's debts.
D)   There are very few sole proprietorships remaining in the U.S.today.
E)   A sole proprietorship is structured the same as a limited liability company.F) A) and B)
G) All of the above

Question 15

Which of the following individuals have unlimited liability based on their ownership interest?
I.general partner
II.sole proprietor
III.stockholder
IV.limited partner

Accepted Answer

A)   II only
B)   I and II only
C)   II and IV only
D)   I,II,and III only
E)   I,II,and IV onlyF) A) and E)
G) A) and B)

Question 16

A business owned by a solitary individual who has unlimited liability for its debt is called a:

Accepted Answer

A)   corporation.
B)   sole proprietorship.
C)   general partnership.
D)   limited partnership.
E)   limited liability company.F) A) and B)
G) A) and C)

Question 17

A firm which opts to "go dark" in response to the Sarbanes-Oxley Act:

Accepted Answer

A)   must continue to provide audited financial statements to the public.
B)   must continue to provide a detailed list of internal control deficiencies on an annual basis.
C)   can provide less information to its shareholders than it did prior to "going dark".
D)   can continue publicly trading its stock but only on the exchange on which it was previously listed.
E)   ceases to exist.F) A) and E)
G) A) and B)

Question 18

How might agency problems arise in partnerships?

Accepted Answer

Agency conflicts typically arise when th...

Question 19

Which one of the following functions should be the responsibility of the controller rather than the treasurer?

Accepted Answer

A)   daily cash deposit
B)   income tax returns
C)   equipment purchase analysis
D)   customer credit approval
E)   payment to a vendorF) A) and E)
G) None of the above

Question 20

Which one of the following statements concerning a sole proprietorship is correct?

Accepted Answer

A)   The life of a sole proprietorship is potentially unlimited.
B)   A sole proprietor can generally raise large sums of capital quite easily.
C)   Transferring ownership of a sole proprietorship is easier than transferring ownership of a corporation.
D)   A sole proprietorship is taxed the same as a C corporation.
E)   It is easy to create a sole proprietorship.F) D) and E)
G) C) and D)

Exam 1: Introduction to Corporate Finance

The decision to issue additional shares of stock is an example of which one of the following?

Correct Answer
verified

The articles of incorporation: I.describe the purpose of the firm. II.are amended periodically. III.set forth the number of shares of stock that can be issued. IV.detail the method that will be used to elect corporate directors.

Correct Answer
verified

Corporate bylaws:

Correct Answer
verified

Compare and contrast the NYSE with NSADAQ.

Correct Answer
verified
The NYSE is an auction market where sell...
View Answer

Decisions made by financial managers should primarily focus on increasing which one of the following?

Correct Answer
verified

The controller of a corporation generally reports directly to the:

Correct Answer
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What concerns might a loan officer have when loaning funds to a sole proprietorship that he or she might not have when loaning funds to a corporation?

Correct Answer
verified
D

Which one of the following terms is defined as the mixture of a firm's debt and equity financing?

Correct Answer
verified

Which one of the following grants an individual the right to vote on behalf of a shareholder?

Correct Answer
verified

Which of the following are results related to the enactment of the Sarbanes-Oxley Act of 2002? I.increased foreign stock exchange listings of U.S.stocks II.decreased compliance costs III.increased privatization of public corporations IV.increased public disclosure by all corporations

Correct Answer
verified

Why are so many businesses structured as sole proprietorships when the corporate form of business offers more advantages?

Which of the following accounts are included in working capital management? I.accounts payable II.accounts receivable III.fixed assets IV.inventory

Correct Answer
verified

Which one of the following statements concerning a sole proprietorship is correct?

Correct Answer
verified

Which of the following individuals have unlimited liability based on their ownership interest? I.general partner II.sole proprietor III.stockholder IV.limited partner

Correct Answer
verified

A business owned by a solitary individual who has unlimited liability for its debt is called a:

Correct Answer
verified

A firm which opts to "go dark" in response to the Sarbanes-Oxley Act:

Correct Answer
verified

How might agency problems arise in partnerships?

Correct Answer
verified
Agency conflicts typically arise when th...
View Answer

Which one of the following functions should be the responsibility of the controller rather than the treasurer?

Correct Answer
verified

Which one of the following statements concerning a sole proprietorship is correct?

Correct Answer
verified

Exam 1: Introduction to Corporate Finance

The decision to issue additional shares of stock is an example of which one of the following?

Correct AnswerverifiedShow Answer

The articles of incorporation: I.describe the purpose of the firm. II.are amended periodically. III.set forth the number of shares of stock that can be issued. IV.detail the method that will be used to elect corporate directors.

Correct AnswerverifiedShow Answer

Corporate bylaws:

Correct AnswerverifiedShow Answer

Compare and contrast the NYSE with NSADAQ.

Correct AnswerverifiedThe NYSE is an auction market where sell...View AnswerShow Answer

Decisions made by financial managers should primarily focus on increasing which one of the following?

Correct AnswerverifiedShow Answer

The controller of a corporation generally reports directly to the:

Correct AnswerverifiedShow Answer

What concerns might a loan officer have when loaning funds to a sole proprietorship that he or she might not have when loaning funds to a corporation?

Correct AnswerverifiedD

Which one of the following terms is defined as the mixture of a firm's debt and equity financing?

Correct AnswerverifiedShow Answer

Which one of the following grants an individual the right to vote on behalf of a shareholder?

Correct AnswerverifiedShow Answer

Which of the following are results related to the enactment of the Sarbanes-Oxley Act of 2002? I.increased foreign stock exchange listings of U.S.stocks II.decreased compliance costs III.increased privatization of public corporations IV.increased public disclosure by all corporations

Correct AnswerverifiedShow Answer

Why are so many businesses structured as sole proprietorships when the corporate form of business offers more advantages?

Which of the following accounts are included in working capital management? I.accounts payable II.accounts receivable III.fixed assets IV.inventory

Correct AnswerverifiedShow Answer

Which one of the following statements concerning a sole proprietorship is correct?

Correct AnswerverifiedShow Answer

Which of the following individuals have unlimited liability based on their ownership interest? I.general partner II.sole proprietor III.stockholder IV.limited partner

Correct AnswerverifiedShow Answer

A business owned by a solitary individual who has unlimited liability for its debt is called a:

Correct AnswerverifiedShow Answer

A firm which opts to "go dark" in response to the Sarbanes-Oxley Act:

Correct AnswerverifiedShow Answer

How might agency problems arise in partnerships?

Correct AnswerverifiedAgency conflicts typically arise when th...View AnswerShow Answer

Which one of the following functions should be the responsibility of the controller rather than the treasurer?

Correct AnswerverifiedShow Answer

Which one of the following statements concerning a sole proprietorship is correct?

Correct AnswerverifiedShow Answer

Correct Answer
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The NYSE is an auction market where sell...
View Answer

Correct Answer
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D

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Agency conflicts typically arise when th...
View Answer

Correct Answer
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