Question 1

Corporations that issue debenture bonds are required to provide collateral.

Accepted Answer

A) True 
 B)False

Question 2

A comptroller is responsible for the acquiring and managing of funds for an organization.

Accepted Answer

A) True 
 B)False

Question 3

The duties and responsibilities of a financial manager are virtually identical to the duties and responsibilities of an accountant.

Accepted Answer

A) True 
 B)False

Question 4

The rationale behind offering customers credit is

Accepted 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.
B)   offering customers credit helps with the firm's cash flow position.
C)   offering customers 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.E) A) and B)
F) B) and C)

Question 5

The financial manager of Picture Perfect Graphics negotiated a ________ with her bank that allows Picture Perfect to borrow up to $75,000 without collateral. This arrangement eliminates the need to renegotiate the terms of the loan and complete new paperwork each time Picture Perfect borrows money. The preapproved short-term loan agreement is contingent upon the bank having the funds available.

Accepted Answer

A)   line of credit
B)   factor agreement
C)   cash flow conversion
D)   renewable income optionE) A) and B)
F) None of the above

Question 6

Tax management by financial managers involves the development of strategies to evade tax liabilities.

Accepted Answer

A) True 
 B)False

Question 7

A ________ forecast predicts the future cash inflows and outflows in future periods.

Accepted Answer

A)   money based
B)   short-term
C)   cash flow
D)   long-termE) None of the above
F) A) and D)

Question 8

The owners of Spokes Bicycle Shop worry that cash flow this winter may be insufficient to meet the current operating expenses. While they anticipate a surplus of cash inflow as warm weather approaches, they need funds now to meet the company's immediate obligations. The owners can best resolve cash flow concerns by obtaining ________ financing.

Accepted Answer

A)   intermediate
B)   contingency
C)   short-term
D)   long-termE) All of the above
F) B) and D)

Question 9

Lydia is a financial manager with Securitas Financial. She regularly compares actual revenues and expenses against their projected values. After identifying areas with significant deviations from planned values, she investigates to find the cause of these variances. Lydia's activities represent the steps involved in the preparation of Securitas's capital budget.

Accepted Answer

A) True 
 B)False

Question 10

Commercial paper is unsecured short-term debt.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Efficient cash management requires firms to pay their bills as quickly as possible, and delay the collection of accounts receivable.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following correctly identifies areas of authority and responsibility for a chief financial officer (CFO) ?

Accepted Answer

A)   accounting and finance
B)   marketing and finance
C)   production and accounting
D)   finance and research and developmentE) B) and C)
F) B) and D)

Question 14

________ examine the data prepared by ________ and then make recommendations to top management regarding strategies for improving the firm.

Accepted Answer

A)   Accountants; financial managers
B)   Accountants; bankers
C)   Financial managers; accountants
D)   Financial managers; bankersE) B) and D)
F) B) and C)

Question 15

Pure Power issued $300 million of bonds to finance a major upgrade of its largest power plant in Georgia. The issuance of these bonds indicates that Pure Power utilizes equity capital to meet its long-term financing needs.

Accepted Answer

A) True 
 B)False

Question 16

Many sellers offer a 2% discount to a buyer that makes payment 20 days before the due date, (2/10, net 30). Firms that fail to take advantage of this early payment discount are giving up approximately 36%.

Accepted Answer

A) True 
 B)False

Question 17

Selling accounts receivable to obtain short-term funds is called

Accepted Answer

A)   pledging.
B)   factoring.
C)   equity financing.
D)   debt financing.E) C) and D)
F) A) and C)

Question 18

Through equity financing, stockholders become ________ of the firm.

Accepted Answer

A)   creditors
B)   employees
C)   suppliers
D)   ownersE) C) and D)
F) A) and B)

Question 19

Which of the following statements is most accurate?

Accepted Answer

A)   Accounting and finance are not related.
B)   Financial managers keep the books for a firm.
C)   Financial managers need to understand accounting.
D)   Nonprofit organizations must choose between accounting and finance.E) A) and C)
F) A) and B)

Question 20

The most widely used source of short-term funding is trade credit.

Accepted Answer

A) True 
 B)False

Exam 18: Financial Management

The most widely used source of short-term funding is trade credit.

Correct Answer
verified

Corporations that issue debenture bonds are required to provide collateral.

Correct Answer
verified

Through equity financing, stockholders become ________ of the firm.

Correct Answer
verified

Selling accounts receivable to obtain short-term funds is called

Correct Answer
verified

Many sellers offer a 2% discount to a buyer that makes payment 20 days before the due date, (2/10, net 30). Firms that fail to take advantage of this early payment discount are giving up approximately 36%.

Correct Answer
verified

Correct Answer
verified

The rationale behind offering customers credit is

Correct Answer
verified

Pure Power issued $300 million of bonds to finance a major upgrade of its largest power plant in Georgia. The issuance of these bonds indicates that Pure Power utilizes equity capital to meet its long-term financing needs.

Correct Answer
verified

Tax management by financial managers involves the development of strategies to evade tax liabilities.

Correct Answer
verified

examine the data prepared by and then make recommendations to top management regarding strategies for improving the firm.

Correct Answer
verified

Efficient cash management requires firms to pay their bills as quickly as possible, and delay the collection of accounts receivable.

Correct Answer
verified

Commercial paper is unsecured short-term debt.

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

A ________ forecast predicts the future cash inflows and outflows in future periods.

Correct Answer
verified

The duties and responsibilities of a financial manager are virtually identical to the duties and responsibilities of an accountant.

Correct Answer
verified

A comptroller is responsible for the acquiring and managing of funds for an organization.

Correct Answer
verified

Which of the following correctly identifies areas of authority and responsibility for a chief financial officer (CFO) ?

Correct Answer
verified

Which of the following statements is most accurate?

Correct Answer
verified

Exam 18: Financial Management

The most widely used source of short-term funding is trade credit.

Correct AnswerverifiedShow Answer

Corporations that issue debenture bonds are required to provide collateral.

Correct AnswerverifiedShow Answer

Through equity financing, stockholders become ________ of the firm.

Correct AnswerverifiedShow Answer

Selling accounts receivable to obtain short-term funds is called

Correct AnswerverifiedShow Answer

Many sellers offer a 2% discount to a buyer that makes payment 20 days before the due date, (2/10, net 30). Firms that fail to take advantage of this early payment discount are giving up approximately 36%.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The rationale behind offering customers credit is

Correct AnswerverifiedShow Answer

Pure Power issued $300 million of bonds to finance a major upgrade of its largest power plant in Georgia. The issuance of these bonds indicates that Pure Power utilizes equity capital to meet its long-term financing needs.

Correct AnswerverifiedShow Answer

Tax management by financial managers involves the development of strategies to evade tax liabilities.

Correct AnswerverifiedShow Answer

________ examine the data prepared by ________ and then make recommendations to top management regarding strategies for improving the firm.

Correct AnswerverifiedShow Answer

Efficient cash management requires firms to pay their bills as quickly as possible, and delay the collection of accounts receivable.

Correct AnswerverifiedShow Answer

Commercial paper is unsecured short-term debt.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A ________ forecast predicts the future cash inflows and outflows in future periods.

Correct AnswerverifiedShow Answer

The duties and responsibilities of a financial manager are virtually identical to the duties and responsibilities of an accountant.

Correct AnswerverifiedShow Answer

A comptroller is responsible for the acquiring and managing of funds for an organization.

Correct AnswerverifiedShow Answer

Which of the following correctly identifies areas of authority and responsibility for a chief financial officer (CFO) ?

Correct AnswerverifiedShow Answer

Which of the following statements is most accurate?

Correct AnswerverifiedShow 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

examine the data prepared by and then make recommendations to top management regarding strategies for improving the firm.

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
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