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T Or F Flashcards

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1
Q

Financial statements are needed in the analysis of financial ratios

A

True

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2
Q

Liquidity ratios can detect whether the firm is able to pay it’s grand financial obligation using its current assets

A

True

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3
Q

Profitability ratios can measure the ability of the firm to generate income to cover expenses

A

True

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4
Q

Financial ratios made from audited financial statements are not reliable

A

True

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5
Q

Financial ratios alone without any interpretation will enable managers to make decisions

A

False

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6
Q

Planning is no longer needed when the resources of the firm are bounteous

A

False

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7
Q

Budgeting helps in the control the operations of the firm

A

True

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8
Q

Budgeting tends to synchronize the firms operations because the budget serves as a guide as to what a company should achieve

A

True

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9
Q

The components in the budget manual are needed to facilitate the preparation of the budget

A

True

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10
Q

Top management does not have to formulate directives to come up with the budget estimates

A

False

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11
Q

The sales projection is the basis for determining the number of units to be sold

A

True

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12
Q

The budget has to be approved by the board of directors before it can be implemented

A

True

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13
Q

It is the corporate planning department that consolidates the individual budgets to come up with the draft master budget

A

True

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14
Q

The heads and supervisors are involved in the preparation of individual budgets to be consolidated to create a master budget

A

True

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15
Q

The financial manager has a role to play in the preparation of the master budget

A

True

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16
Q

The sales budget is considered the cornerstone of budgeting

A

True

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17
Q

Budgeting can help in coordinating the activities of the firm

A

True

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18
Q

There is a need to create schedules of production, selling, administrative and other expenses

A

True

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19
Q

A pro forma income statement uses the schedules of sales and various expenses

A

True

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20
Q

A proforma cash budget can be created using the estimated cash receipts and cash disbursements

A

True

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21
Q

Approve form a cash budget and pro forma income statement are needed in the preparation of proforma statement of financial position or balance sheet

A

True

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22
Q

As a primary step in making decisions involving capital outlays the financial managers should use tools of time value of money analysis

A

True

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23
Q

It is correct to compare the present value of capital outlay and a future value of the capital outlays

A

False

24
Q

There is no sense comparing present value the amount and future valued amount

A

True

25
Q

At a certain rate of interest your 100,000 will be higher 5 years from now

A

True

26
Q

The present value is the opposite of future value

A

True

27
Q

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

A

True

28
Q

The process of computing the future value of a single amount and several equal amounts is the same

A

False

29
Q

The future value with several amounts considered as ordinary annuity and considered as annuity due are the same

A

False

30
Q

In finding the present value of an annuity due with just reverse the treatment for the future value of an annuity due

A

True

31
Q

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

A

True

32
Q

The investments or payments made involves several equal amount and several uneven amounts

A

True

33
Q

The future value of uneven cash payment or receipt is called terminal value

A

True

34
Q

In assessing returns of investment or loan values it is important for firms to have a common basis for comparing interest rates

A

True

35
Q

Time value of money analysis can be used in determining the amount to be deposited annually to accumulate a certain amount in the future

A

True

36
Q

Time value of money analysis can also be used in loan amortization

A

True

37
Q

In determining the future value you multiply the amount by the FV factor

A

True

38
Q

In computing for the present value the amount is divided by the factor

A

True

39
Q

The future value of 100,000 at the rate of 8% per annum is 116 640 for the second year

A

True

40
Q

At the end of the future the future value of 100,000 invested at 8% per annum is a little less than 150,000

A

True

41
Q

Time value of money analysis uses a table of factors when computing using short method

A

True

42
Q

Cash is valued at face value

A

True

43
Q

The best system in handling cash is imprest system

A

True

44
Q

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

A

True

45
Q

Combo account is better than just a saving account as it generates more interest

A

True

46
Q

Better yet, cash and combo account be transferred as time deposit to earn much more income

A

True

47
Q

There are risk in not maintaining a change fund under the imprest system of handling cash

A

True

48
Q

Provisional receipt can also be used by the cashier upon receipt of cash

A

False

49
Q

The collector can also use official receipt upon receiving cash

A

False

50
Q

Policies on cash handling can deter misuse of cash

A

true

51
Q

Establishing good relationship with the banker officers is a key in getting better interest rate in time deposits

A

True

52
Q

Routine audit to counter check the books and reports is one way of controlling cash

A

True

53
Q

There is no need to identify the books where cash transactions were recorded

A

False

54
Q

The preparation of a strategic plan does not help in controlling cash

A

False

55
Q

Without the in-depth knowledge of the cash environment control will become a matter of trial and error

A

True

56
Q

To avoid queuing in the bank, e- banking can be used in transacting with the bank

A

True

Finance (3 decks)

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