T Or F Flashcards
Financial statements are needed in the analysis of financial ratios
True
Liquidity ratios can detect whether the firm is able to pay it’s grand financial obligation using its current assets
True
Profitability ratios can measure the ability of the firm to generate income to cover expenses
True
Financial ratios made from audited financial statements are not reliable
True
Financial ratios alone without any interpretation will enable managers to make decisions
False
Planning is no longer needed when the resources of the firm are bounteous
False
Budgeting helps in the control the operations of the firm
True
Budgeting tends to synchronize the firms operations because the budget serves as a guide as to what a company should achieve
True
The components in the budget manual are needed to facilitate the preparation of the budget
True
Top management does not have to formulate directives to come up with the budget estimates
False
The sales projection is the basis for determining the number of units to be sold
True
The budget has to be approved by the board of directors before it can be implemented
True
It is the corporate planning department that consolidates the individual budgets to come up with the draft master budget
True
The heads and supervisors are involved in the preparation of individual budgets to be consolidated to create a master budget
True
The financial manager has a role to play in the preparation of the master budget
True
The sales budget is considered the cornerstone of budgeting
True
Budgeting can help in coordinating the activities of the firm
True
There is a need to create schedules of production, selling, administrative and other expenses
True
A pro forma income statement uses the schedules of sales and various expenses
True
A proforma cash budget can be created using the estimated cash receipts and cash disbursements
True
Approve form a cash budget and pro forma income statement are needed in the preparation of proforma statement of financial position or balance sheet
True
As a primary step in making decisions involving capital outlays the financial managers should use tools of time value of money analysis
True
It is correct to compare the present value of capital outlay and a future value of the capital outlays
False
There is no sense comparing present value the amount and future valued amount
True
At a certain rate of interest your 100,000 will be higher 5 years from now
True
The present value is the opposite of future value
True
To find the future value of an amount at the rate of 7% for the 5 years just multiply the amount by 1.07 5 times
True
The process of computing the future value of a single amount and several equal amounts is the same
False
The future value with several amounts considered as ordinary annuity and considered as annuity due are the same
False
In finding the present value of an annuity due with just reverse the treatment for the future value of an annuity due
True
The only difference between the ordinary annuity and the annuity due is that in the annuity due the investment or payment is done at the beginning of the year
True
The investments or payments made involves several equal amount and several uneven amounts
True
The future value of uneven cash payment or receipt is called terminal value
True
In assessing returns of investment or loan values it is important for firms to have a common basis for comparing interest rates
True
Time value of money analysis can be used in determining the amount to be deposited annually to accumulate a certain amount in the future
True
Time value of money analysis can also be used in loan amortization
True
In determining the future value you multiply the amount by the FV factor
True
In computing for the present value the amount is divided by the factor
True
The future value of 100,000 at the rate of 8% per annum is 116 640 for the second year
True
At the end of the future the future value of 100,000 invested at 8% per annum is a little less than 150,000
True
Time value of money analysis uses a table of factors when computing using short method
True
Cash is valued at face value
True
The best system in handling cash is imprest system
True
In imprest system of handling cash, all cash received are deposited at the bank, all disbursement in the form of checks except for small expenses which can be paid out of petty cash fund
True
Combo account is better than just a saving account as it generates more interest
True
Better yet, cash and combo account be transferred as time deposit to earn much more income
True
There are risk in not maintaining a change fund under the imprest system of handling cash
True
Provisional receipt can also be used by the cashier upon receipt of cash
False
The collector can also use official receipt upon receiving cash
False
Policies on cash handling can deter misuse of cash
true
Establishing good relationship with the banker officers is a key in getting better interest rate in time deposits
True
Routine audit to counter check the books and reports is one way of controlling cash
True
There is no need to identify the books where cash transactions were recorded
False
The preparation of a strategic plan does not help in controlling cash
False
Without the in-depth knowledge of the cash environment control will become a matter of trial and error
True
To avoid queuing in the bank, e- banking can be used in transacting with the bank
True
