Question 1

Which one of the following correctly defines the upward chain of command in a typical corporate organizational structure?

Accepted Answer

A)  The vice president of finance reports to the chairman of the board.
B)  The chief executive officer reports to president.
C)  The controller reports to the president.
D)  The treasurer reports to the vice president of finance.
E)  The chief operations officer reports to the vice president of production.F) All of the above
G) B) and D)

Question 2

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) None of the above
G) B) and C)

Question 3

Which one of the following business types is best suited to raising large amounts of capital?

Accepted Answer

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

Question 4

Which one of the following is defined as a firm's short-term assets and its short-term liabilities?

Accepted Answer

A)  working capital
B)  debt
C)  investment capital
D)  net capital
E)  capital structureF) B) and D)
G) B) and C)

Question 5

Shareholder A sold 500 shares of ABC stock on the New York Stock Exchange.This transaction:

Accepted Answer

A)  took place in the primary market.
B)  occurred in a dealer market.
C)  was facilitated in the secondary market.
D)  involved a proxy.
E)  was a private placement.F) A) and D)
G) D) and E)

Question 6

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) C) and E)
G) A) and D)

Question 7

Which one of the following best states the primary goal of financial management?

Accepted Answer

A)  maximize current dividends per share
B)  maximize the current value per share
C)  increase cash flow and avoid financial distress
D)  minimize operational costs while maximizing firm efficiency
E)  maintain steady growth while increasing current profitsF) C) and D)
G) B) and D)

Question 8

Which form of business structure is most associated with agency problems?

Accepted Answer

A)  sole proprietorship
B)  general partnership
C)  limited partnership
D)  corporation
E)  limited liability companyF) None of the above
G) A) and E)

Question 9

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 pr...

Question 10

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) B) and C)
G) D) and E)

Question 11

From a liability point of view,what is the difference between investing in a sole proprietorship and a general partnership?

Accepted Answer

Both a sole proprietor and a general par...

Question 12

The Sarbanes-Oxley Act of 2002 is a governmental response to:

Accepted Answer

A)  decreasing corporate profits.
B)  the terrorists attacks on 9/11/2001.
C)  a weakening economy.
D)  deregulation of the stock exchanges.
E)  management greed and abuses.F) None of the above
G) A) and E)

Question 13

Which type of business organization has all the respective rights and privileges of a legal person?

Accepted Answer

A)  sole proprietorship
B)  general partnership
C)  limited partnership
D)  corporation
E)  limited liability companyF) D) and E)
G) B) and E)

Question 14

A business partner whose potential financial loss in the partnership will not exceed his or her investment in that partnership is called a:

Accepted Answer

A)  generally partner.
B)  sole proprietor.
C)  limited partner.
D)  corporate shareholder.
E)  zero partner.F) All of the above
G) None of the above

Question 15

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) C) and D)
G) D) and E)

Question 16

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 prop...

Question 17

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 C)
G) D) and E)

Question 18

Which one of the following is a means by which shareholders can replace company management?

Accepted Answer

A)  stock options
B)  promotion
C)  Sarbanes-Oxley Act
D)  agency play
E)  proxy fightF) B) and D)
G) B) and E)

Question 19

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) B) and D)
G) A) and E)

Question 20

Which one of the following statements is correct concerning the NYSE?

Accepted Answer

A)  The publicly traded shares of a NYSE-listed firm must be worth at least $250 million.
B)  The NYSE is the largest dealer market for listed securities in the United States.
C)  The listing requirements for the NYSE are more stringent than those of NASDAQ.
D)  Any corporation desiring to be listed on the NYSE can do so for a fee.
E)  The NYSE is an OTC market functioning as both a primary and a secondary market.F) None of the above
G) A) and E)

Exam 1: Introduction to Corporate Finance

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

Correct Answer
verified

A business partner whose potential financial loss in the partnership will not exceed his or her investment in that partnership is called a:

Correct Answer
verified

Shareholder A sold 500 shares of ABC stock on the New York Stock Exchange.This transaction:

Correct Answer
verified

Which one of the following is defined as a firm's short-term assets and its short-term liabilities?

Correct Answer
verified

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

Correct Answer
verified
A significant advantage of the sole prop...
View Answer

From a liability point of view,what is the difference between investing in a sole proprietorship and a general partnership?

Correct Answer
verified
Both a sole proprietor and a general par...
View Answer

The Sarbanes-Oxley Act of 2002 is a governmental response to:

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

Correct Answer
verified

Which type of business organization has all the respective rights and privileges of a legal person?

Correct Answer
verified

Which one of the following correctly defines the upward chain of command in a typical corporate organizational structure?

Correct Answer
verified

Which one of the following best states the primary goal of financial management?

Correct Answer
verified

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

Correct Answer
verified

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 one of the following statements is correct concerning the NYSE?

Correct Answer
verified

Which one of the following business types is best suited to raising large amounts of capital?

Correct Answer
verified

Which one of the following is a means by which shareholders can replace company management?

Correct Answer
verified

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
The existence and viability of a sole pr...
View Answer

Which form of business structure is most associated with agency problems?

Correct Answer
verified

Exam 1: Introduction to Corporate Finance

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

Correct AnswerverifiedShow Answer

A business partner whose potential financial loss in the partnership will not exceed his or her investment in that partnership is called a:

Correct AnswerverifiedShow Answer

Shareholder A sold 500 shares of ABC stock on the New York Stock Exchange.This transaction:

Correct AnswerverifiedShow Answer

Which one of the following is defined as a firm's short-term assets and its short-term liabilities?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedA significant advantage of the sole prop...View AnswerShow Answer

From a liability point of view,what is the difference between investing in a sole proprietorship and a general partnership?

Correct AnswerverifiedBoth a sole proprietor and a general par...View AnswerShow Answer

The Sarbanes-Oxley Act of 2002 is a governmental response to:

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

Correct AnswerverifiedShow Answer

Which type of business organization has all the respective rights and privileges of a legal person?

Correct AnswerverifiedShow Answer

Which one of the following correctly defines the upward chain of command in a typical corporate organizational structure?

Correct AnswerverifiedShow Answer

Which one of the following best states the primary goal of financial management?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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 one of the following statements is correct concerning the NYSE?

Correct AnswerverifiedShow Answer

Which one of the following business types is best suited to raising large amounts of capital?

Correct AnswerverifiedShow Answer

Which one of the following is a means by which shareholders can replace company management?

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 AnswerverifiedThe existence and viability of a sole pr...View AnswerShow Answer

Which form of business structure is most associated with agency problems?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A significant advantage of the sole prop...
View Answer

Correct Answer
verified
Both a sole proprietor and a general par...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The existence and viability of a sole pr...
View Answer

Correct Answer
verified