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 (C)</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 (B)</p> Signup and view all the answers

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

    <p>Analytical (B)</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 (A)</p> Signup and view all the answers

    What is the goal of financial management?

    <p>To maximize the value of shareholders' wealth (A)</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 (B)</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 (D)</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 (B)</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 (C)</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 (C)</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 (B)</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 (D)</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 (A)</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 (B)</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 (A)</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 (B)</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 (A)</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 (C)</p> Signup and view all the answers

    What is the purpose of a primary market?

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

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

    <p>Invest in various securities (A)</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 (B)</p> Signup and view all the answers

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

    <p>Invest in various securities (A)</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 (B)</p> Signup and view all the answers

    What is the purpose of a primary market?

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

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

    <p>Invest in various securities (D)</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 (D)</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 (C)</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 (C)</p> Signup and view all the answers

    What are the four functions of the VP for Finance?

    <p>Financing, Investing, Operating, Dividend Policies (B)</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 (C)</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 (C)</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 (B)</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. (D)</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. (D)</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. (A)</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. (B)</p> Signup and view all the answers

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

    <p>Economic conditions (C)</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 (D)</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 (A)</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 (C)</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 (C)</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 (D)</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. (B)</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. (A)</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. (D)</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. (B)</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. (D)</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. (D)</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. (A)</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. (A)</p> Signup and view all the answers

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

    <p>After the liquidation process. (A)</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. (B)</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 (D)</p> Signup and view all the answers

    When are cash dividends given to common stockholders?

    <p>When the company has a net income (B)</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 (D)</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 (C)</p> Signup and view all the answers

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

    <p>Permanent or real accounts (A)</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 (D)</p> Signup and view all the answers

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

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

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

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

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

    <p>Inventory Turnover Ratio (B)</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 (D)</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 (B)</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 (A)</p> Signup and view all the answers

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

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

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

    <p>Debt Ratio (D)</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 (D)</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 (D)</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. (B)</p> Signup and view all the answers

    Which of the following is a characteristic of a mammal?

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

    Which of the following is a renewable energy source?

    <p>Solar power (C)</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 (B)</p> Signup and view all the answers

    Which of the following is a characteristic of a solid?

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

    Which of the following is not a primary color?

    <p>Green (B)</p> Signup and view all the answers

    Which planet is closest to the Sun?

    <p>Mercury (D)</p> Signup and view all the answers

    What is the capital of France?

    <p>Paris (C)</p> Signup and view all the answers

    What is the largest ocean in the world?

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

    What is the chemical symbol for gold?

    <p>Au (C)</p> Signup and view all the answers

    Which of the following is a characteristic of a mammal?

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

    Which planet is closest to the Sun?

    <p>Mercury (A)</p> Signup and view all the answers

    What is the capital city of France?

    <p>Paris (A)</p> Signup and view all the answers

    What is the chemical symbol for gold?

    <p>Au (A)</p> Signup and view all the answers

    What is the largest planet in our solar system?

    <p>Jupiter (A)</p> Signup and view all the answers

    What is the largest organ in the human body?

    <p>Skin (D)</p> Signup and view all the answers

    What is the chemical formula for water?

    <p>H2O (A)</p> Signup and view all the answers

    What is the capital city of Australia?

    <p>Canberra (D)</p> Signup and view all the answers

    What is the largest ocean on Earth?

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

    What is the symbol for the element oxygen?

    <p>O (B)</p> Signup and view all the answers

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