4.01 accounting quiz Flashcards

1
Q

Accounting is distinct from finance because its main focus is on

acquisition of funds.

administration of assets.

money management decisions.

recordkeeping activities.

A

recordkeeping activities.

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2
Q

Which of the following is a capital investment decision:
How to finance investments

How to handle accounts payable

How to manage cash flow

How to manage inventory

A

How to finance investments

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3
Q

Decisions about financing refer to the

accounts receivable.

accounting department.

acquisition of funds.

administration of assets.

A

acquisition of funds.

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4
Q

Selling shares in the company to raise money for a new venture is referred to as ___________ funding.

accounts payable

debt

dividend

equity

A

equity

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5
Q

The administration of assets refers to decisions about

accounting.

financing.

investments.

spending.

A

investments.

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6
Q

Which of the following is a measure of how well a business generates cash flow:

Accounts payable

Accounts receivable

Capital structure

Return on capital

A

Return on capital

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7
Q

Money the business owes is known as

assets.

equity.

accounts payable.

accounts receivable.

A

accounts payable.

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8
Q

The finance function is usually responsible for which of the following processes:

Budgeting

Manufacturing

Operations

Research

A

Budgeting

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9
Q

Which of the following is a key component of managing working capital:

Capital budgeting

Capital structure

Cash conversion cycle

Financing

A

Cash conversion cycle

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10
Q

Determining which projects a business should invest in is known as

capital budgeting.

capital structuring.

return on capital.

the cash conversion cycle.

A

capital budgeting.

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11
Q

The goals of the finance function are to ensure profitability and

advertise products.

give out information.

manufacture raw materials.

reduce risks.

A

reduce risks.

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12
Q

The finance function would definitely be involved in a decision regarding

hiring.

new business projects and strategies.

personal selling.

public relations and publicity.

A

new business projects and strategies.

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13
Q

A company’s current balance of assets and liabilities falls under the focus of

capital investment decisions.

return on capital.

the cash conversion cycle.

working capital management.

A

working capital management.

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14
Q

To keep communication flowing with other departments, the finance function depends on

accounts receivable.

information systems.

marketing.

production.

A

information systems.

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15
Q

When return on capital is positive, the company is

growing in value.

losing value.

low on cash.

paying out dividends.

A

growing in value.

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16
Q

The finance function ensures that the company’s financial goals are

acceptable to the marketing department.

easy to accomplish.

in line with organizational priorities.

related to product development.

A

in line with organizational priorities.

17
Q

Money owed to the business is known as

assets.

equity.

accounts payable.

accounts receivable.

A

accounts receivable.

18
Q

Finance is the business function that involves managing

information.

marketing.

money.

production.

A

money.

19
Q

How does the finance function relate to company spending?

It does not relate to spending.

It plans and controls spending.

It produces reports about spending.

It spends on investments only.

A

It plans and controls spending.

20
Q

The cash conversion cycle should be

as long as possible.

as short as possible.

at equilibrium.

on an upward trend.

A

as short as possible.