Meanings

Question 1

The Science and art of managing money

Answer 1

Finance

Question 2

The act of estimating revenue and expenses over a period of time

Answer 2

Budgeting

Question 3

The act of bringing money into the organization

Answer 3

Financing

Question 4

Give three methods of financing

Answer 4

a. Taking on debt
b. Credit arrangement
c. Investments on real assets and financial assets

Question 5

Is an integrated strategy that takes into account various departments such as sales, production, marketing, and operations

Answer 5

Long-Term Financial Plans

Question 6

Specify short term financial actions and the anticipated impact of those actions. Solving immediate problems and developing strategies that will lend to results usually within one year

Answer 6

Short-Term Financial Plans

Question 7

For a business enterprise, having the right amount of cash is important since cash is used to make payments for purchases

Answer 7

Cash Budget

Question 8

This includes collections from receivables, proceeds from loans or issuance of new shares of stock

Answer 8

Cash Receipt

Question 9

This is the cash used for paying
ex. expenses such as salaries. utilities, rent, and taxes

Answer 9

Transactional

Question 10

The cash held to meet bank requirements such as the minimum cash balance for checking accounts

Answer 10

Compensating Balance

Question 11

What are the two primary reasons for holding cash

Answer 11

Transactional and Compensating Balance

Question 12

Is the cash maintained for emergencies such as the additional cash you keep during political and economical uncertainties

Answer 12

Precautionary

Question 13

Refers to the cash held by the company to take advantage of opportunities

Answer 13

Speculative

Question 14

What are the two secondary reasons for holding cash

Answer 14

Precautionary and Speculative

Question 15

Measure of a company’s total financial resources

Answer 15

Gross Working Capital

Question 16

Provides a much more thorough comprehensive picture of a company’s financial health

Answer 16

Net Working Capital

Question 17

What are the two concepts of working capital

Answer 17

Gross Working Capital and Net Working Capital

Question 18

Objectives of Financial Management

Which of the following is incorrect?

a. ensures regular and adequate supply of funds

b. ensures adequate returns of shareholders

c. ensures optimum fund utilization

d. ensures safety of investments to achieve adequate rate of return.

e. plan a sound capital structure so that the balance between equity capital will be maintained

d. ensures that the company receives their liquid assets by the end of the year

Answer 18

D

Question 19

Give the four functions of the CFO (Chief Financial Officer)

Answer 19

1. Financing
2. Investing
3. Operating
4. Dividend Policies

Question 20

Elect the board of directors each share held is equal to one voting right

Answer 20

Shareholders

Question 21

The highest policy making body in a corporation

Answer 21

Board of Directors

Question 22

The role of a president in a corporation may vary from one company to another

Answer 22

President (Chief Executive Officer CEO)

Question 23

The sale of either bonds or stock to the general public

Answer 23

Public Operate

Question 24

Brings buyers and sellers together to trade stocks, bonds, currencies, and other financial assets

Answer 24

Capital Market

Question 25

Where investors buy and sell securities they already own

Answer 25

Secondary Market