Business Finance 1st Quarter (Quarterly)
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Questions and Answers

Which attribute is NOT mentioned as a characteristic of competent managers?

  • People-oriented
  • Decisive
  • Visionary
  • Innovative (correct)

    • What is the role of financial management?

  • To maximize the value of shareholders' wealth (correct)
  • To make decisions for the company
  • To manage the company's finances
  • To attract foreign investors

    • What are economic conditions?

  • The prospects of the industry where the company operates
  • The state of the economy in a country or region (correct)
  • The flow of foreign funds invested in the stock market
  • The decisions made by financial managers

    • What is the goal of financial management?

    <p>To maximize the value of shares of stocks</p> Signup and view all the answers

    What is the impact of financial management decisions on the market?

    <p>They affect the market's perception of the company and influence the share price</p> Signup and view all the answers

    Which of the following attributes is NOT mentioned as a characteristic of competent managers?

    <p>Analytical</p> Signup and view all the answers

    What is the impact of economic conditions on businesses?

    <p>They determine the success or failure of a business</p> Signup and view all the answers

    What is the goal of financial management?

    <p>To maximize the value of shareholders' wealth</p> Signup and view all the answers

    Which factor is NOT mentioned as an uncontrollable or external factor affecting businesses?

    <p>Prospects of the industry</p> Signup and view all the answers

    What is the role of financial management in relation to the market's perception of a company?

    <p>Financial management decisions directly influence the share price</p> Signup and view all the answers

    According to the text, which of the following is NOT mentioned as an attribute of competent managers?

    <p>People-oriented</p> Signup and view all the answers

    According to the text, which of the following is NOT mentioned as an uncontrollable or external factor affecting businesses?

    <p>Prospects of the industry</p> Signup and view all the answers

    According to the text, what is the goal of financial management?

    <p>To maximize the value of shareholders' wealth</p> Signup and view all the answers

    According to the text, what do financial management decisions ultimately affect?

    <p>The market's perception of the company</p> Signup and view all the answers

    According to the text, what is the role of financial management in relation to the market's perception of a company?

    <p>To ultimately affect the market's perception of the company</p> Signup and view all the answers

    Which type of financial instrument has priority over common stock in terms of claims over a company's assets?

    <p>Preferred Stock</p> Signup and view all the answers

    In a company's liquidation, when are assets distributed to common stockholders?

    <p>After all the claims of preferred stockholders have been given</p> Signup and view all the answers

    When are cash dividends given to common stockholders?

    <p>After all the dividends due to preferred stockholders are paid first</p> Signup and view all the answers

    Which financial market enables suppliers and users of short-term funds to create a financial relationship?

    <p>Money Markets</p> Signup and view all the answers

    What do mutual funds do when they invest in debt or equity securities already held by investors?

    <p>They transfer ownership of the securities among investors</p> Signup and view all the answers

    Which type of financial instrument has priority over common stock in terms of claims over a company's assets?

    <p>Preferred Stock</p> Signup and view all the answers

    What is the purpose of a primary market?

    <p>To issue new securities</p> Signup and view all the answers

    What do insurance companies do with the premiums they receive from policyholders?

    <p>Invest in various securities</p> Signup and view all the answers

    What do mutual funds do when they invest in debt or equity securities already held by investors?

    <p>Transfer ownership of the securities among investors</p> Signup and view all the answers

    What do pension funds do with the payments they receive from employees?

    <p>Invest in various securities</p> Signup and view all the answers

    Which type of financial instrument has priority over common stock in terms of claims over a company's assets?

    <p>Preferred Stock</p> Signup and view all the answers

    What is the purpose of a primary market?

    <p>To issue new securities</p> Signup and view all the answers

    What do insurance companies do with the premiums they receive from policyholders?

    <p>Invest in various securities</p> Signup and view all the answers

    What do mutual funds do when they invest in newly issued debt or equity securities?

    <p>Finance new investment by firms</p> Signup and view all the answers

    What do pension funds do with the payments they receive from employees?

    <p>Invest the proceeds on behalf of employees</p> Signup and view all the answers

    Which of the following is NOT a responsibility of the VP for Marketing?

    <p>Identifying adequate and cheap raw material suppliers</p> Signup and view all the answers

    What are the four functions of the VP for Finance?

    <p>Financing, Investing, Operating, Dividend Policies</p> Signup and view all the answers

    What is the role of the VP for Administration?

    <p>Coordinating the functions of administration, finance, and marketing departments</p> Signup and view all the answers

    Which condition must exist for a company to declare cash dividends?

    <p>The company must have enough retained earnings (accumulated profits) to support cash dividend declaration</p> Signup and view all the answers

    What is the purpose of long-term investing for a company?

    <p>To prepare a capital budgeting analysis to determine if the long term investment will be profitable</p> Signup and view all the answers

    Which of the following is NOT a responsibility of the VP for Administration?

    <p>Coordinating the functions of administration, finance, and marketing departments.</p> Signup and view all the answers

    What is the role of a financial manager in determining cash dividends?

    <p>To determine when the company should declare cash dividends.</p> Signup and view all the answers

    What is the purpose of short-term investing for a company?

    <p>To secure the best profits from excess cash.</p> Signup and view all the answers

    What is the role of the VP for Marketing in relation to market and competitor analysis?

    <p>To perform market and competitor analysis.</p> Signup and view all the answers

    Which factor is mentioned as an uncontrollable or external factor affecting businesses?

    <p>Economic conditions</p> Signup and view all the answers

    Which of the following is NOT a responsibility of the VP for Marketing?

    <p>Conducting or directing research that will allow the company identifies new marketing opportunities</p> Signup and view all the answers

    Which of the following is NOT a responsibility of the VP for Production?

    <p>Coming up with a production plan that maximizes the utilization of the company’s production facilities</p> Signup and view all the answers

    Which of the following is NOT a responsibility of the VP for Administration?

    <p>Coordinating the functions of administration, finance, and marketing departments</p> Signup and view all the answers

    Which of the following is NOT one of the four functions of the VP for Finance?

    <p>Marketing</p> Signup and view all the answers

    Which of the following is NOT a condition that must exist for a company to declare cash dividends?

    <p>The company must have outstanding debt</p> Signup and view all the answers

    Which of the following statements is true about adjusting entries?

    <p>Adjusting entries are recognized at the end of each accounting period.</p> Signup and view all the answers

    What is the purpose of preparing an adjusted trial balance?

    <p>To ensure that the total debit balances equal the credit balances after adjusting entries.</p> Signup and view all the answers

    Which financial statements can be prepared from the adjusted trial balance?

    <p>Statement of financial position, statement of profit or loss, and statement of cash flows.</p> Signup and view all the answers

    What happens to revenue and expense account balances during the closing entries?

    <p>They are transferred to an account called Income Summary Account.</p> Signup and view all the answers

    What is the purpose of preparing a post-closing trial balance?

    <p>To ensure that the total debit balances equal the credit balances after closing entries.</p> Signup and view all the answers

    Which of the following statements is true about adjusting entries?

    <p>Adjusting entries are recognized at the end of each accounting period.</p> Signup and view all the answers

    What is the purpose of a post-closing trial balance?

    <p>To test if the debit balances equal the credit balances after the closing entries are considered.</p> Signup and view all the answers

    What happens to the balance of the Income Summary Account during the closing entries?

    <p>The balance of the Income Summary Account is transferred to the retained earnings account.</p> Signup and view all the answers

    When are assets distributed to common stockholders in a company's liquidation?

    <p>After the liquidation process.</p> Signup and view all the answers

    What are the financial statements that can be prepared from the adjusted trial balance?

    <p>Statement of financial position, statement of profit or loss, and statement of cash flows.</p> Signup and view all the answers

    Which financial statements are prepared from the adjusted trial balance?

    <p>Statement of financial position, statement of profit or loss, and statement of cash flows</p> Signup and view all the answers

    When are cash dividends given to common stockholders?

    <p>When the company has a net income</p> Signup and view all the answers

    What happens to revenue and expense account balances during the closing entries?

    <p>Revenue account balances are transferred to an account called Income Summary Account</p> Signup and view all the answers

    What is the purpose of preparing an adjusted trial balance?

    <p>To ensure that the total debit balances equal the credit balances after posting and journalizing adjusting entries</p> Signup and view all the answers

    Which accounts are shown in the post-closing trial balance?

    <p>Permanent or real accounts</p> Signup and view all the answers

    Which ratio measures a company's ability to generate revenues for every peso of asset invested?

    <p>Total Asset Turnover Ratio</p> Signup and view all the answers

    Which ratio measures the company's efficiency in managing its inventories?

    <p>Inventory Turnover Ratio</p> Signup and view all the answers

    Which ratio measures the company's ability to pay maturing obligations from its current assets?

    <p>Current Ratio</p> Signup and view all the answers

    Which ratio provides information if a company has enough operating income to cover interest expenses?

    <p>Interest Coverage Ratio</p> Signup and view all the answers

    Which ratio measures the efficiency by which account receivable are managed?

    <p>Accounts Receivable Turnover Ratio</p> Signup and view all the answers

    Which ratio measures how much net profit a company generates for every peso of sales or revenues that it generates?

    <p>Net Profit Margin</p> Signup and view all the answers

    Which ratio measures the company's ability to generate revenues for every peso of asset invested?

    <p>Total Asset Turnover Ratio</p> Signup and view all the answers

    Which ratio measures the company's efficiency in managing its inventories?

    <p>Inventory Turnover Ratio</p> Signup and view all the answers

    Which ratio measures the company's ability to pay maturing obligations from its current assets?

    <p>Current Ratio</p> Signup and view all the answers

    Which ratio provides information regarding the rate by which trade payables are paid?

    <p>Accounts Payable Turnover Ratio</p> Signup and view all the answers

    Which ratio measures the ability of a company to pay maturing obligations from its current assets?

    <p>Current Ratio</p> Signup and view all the answers

    Which ratio is a stricter measure of a company’s liquidity position?

    <p>Quick Ratio</p> Signup and view all the answers

    Which ratio measures how much of the total assets are financed by liabilities?

    <p>Debt Ratio</p> Signup and view all the answers

    Which ratio provides information if a company has enough operating income to cover interest expenses?

    <p>Interest Coverage Ratio</p> Signup and view all the answers

    Which ratio measures the company’s ability to generate revenues for every peso of asset invested?

    <p>Total Asset Turnover Ratio</p> Signup and view all the answers

    Which of the following is a correct statement about photosynthesis?

    <p>Photosynthesis is the process by which plants convert carbon dioxide into glucose.</p> Signup and view all the answers

    Which of the following is a characteristic of a mammal?

    <p>Nurses its young with milk</p> Signup and view all the answers

    Which of the following is a renewable energy source?

    <p>Solar power</p> Signup and view all the answers

    Which of the following is a function of the respiratory system?

    <p>Taking in oxygen and removing carbon dioxide</p> Signup and view all the answers

    Which of the following is a characteristic of a solid?

    <p>Has a definite volume</p> Signup and view all the answers

    Which of the following is not a primary color?

    <p>Green</p> Signup and view all the answers

    Which planet is closest to the Sun?

    <p>Mercury</p> Signup and view all the answers

    What is the capital of France?

    <p>Paris</p> Signup and view all the answers

    What is the largest ocean in the world?

    <p>Pacific Ocean</p> Signup and view all the answers

    What is the chemical symbol for gold?

    <p>Au</p> Signup and view all the answers

    Which of the following is a characteristic of a mammal?

    <p>Produces milk for its young</p> Signup and view all the answers

    Which planet is closest to the Sun?

    <p>Mercury</p> Signup and view all the answers

    What is the capital city of France?

    <p>Paris</p> Signup and view all the answers

    What is the chemical symbol for gold?

    <p>Au</p> Signup and view all the answers

    What is the largest planet in our solar system?

    <p>Jupiter</p> Signup and view all the answers

    What is the largest organ in the human body?

    <p>Skin</p> Signup and view all the answers

    What is the chemical formula for water?

    <p>H2O</p> Signup and view all the answers

    What is the capital city of Australia?

    <p>Canberra</p> Signup and view all the answers

    What is the largest ocean on Earth?

    <p>Pacific Ocean</p> Signup and view all the answers

    What is the symbol for the element oxygen?

    <p>O</p> Signup and view all the answers

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