Podcast
Questions and Answers
Who typically uses financial statements to evaluate operations and make investment decisions?
Who typically uses financial statements to evaluate operations and make investment decisions?
What is considered the heart of any information system?
What is considered the heart of any information system?
Which type of information system should a vice president of sales refer to for previous day's sales?
Which type of information system should a vice president of sales refer to for previous day's sales?
How does a virtual private network (VPN) enhance workforce productivity?
How does a virtual private network (VPN) enhance workforce productivity?
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What is one of the ways cloud computing services enhance productivity in companies?
What is one of the ways cloud computing services enhance productivity in companies?
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For which type of communication should employees expect privacy from company monitoring?
For which type of communication should employees expect privacy from company monitoring?
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What activity raises ethical concerns due to the capabilities of data mining?
What activity raises ethical concerns due to the capabilities of data mining?
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What intent of spyware poses a security issue for companies?
What intent of spyware poses a security issue for companies?
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Which part of the organizing process helps achieve progress toward planned goals and may result in changes within the organization?
Which part of the organizing process helps achieve progress toward planned goals and may result in changes within the organization?
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What is the likely result when a company increases the delegation of authority?
What is the likely result when a company increases the delegation of authority?
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Which two key elements are essential for an effective organization?
Which two key elements are essential for an effective organization?
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Why does a line organizational structure function effectively in a crisis situation?
Why does a line organizational structure function effectively in a crisis situation?
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Which step in the organizing process is responsible for grouping work activities into units within the organization?
Which step in the organizing process is responsible for grouping work activities into units within the organization?
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In the context of management's primary drivers for an organization's structure, which is the main focus?
In the context of management's primary drivers for an organization's structure, which is the main focus?
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What type of competitive advantage is a company leveraging by emphasizing superior connectivity and collaboration capabilities?
What type of competitive advantage is a company leveraging by emphasizing superior connectivity and collaboration capabilities?
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What is the correct sequence of steps in the recruiting and interviewing process?
What is the correct sequence of steps in the recruiting and interviewing process?
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Which two activities are finance activities rather than accounting activities?
Which two activities are finance activities rather than accounting activities?
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Which three sources should a business consider when seeking a long-term source of funding?
Which three sources should a business consider when seeking a long-term source of funding?
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In which type of security should a business invest its excess cash in anticipation of paying off the current year's tax liability?
In which type of security should a business invest its excess cash in anticipation of paying off the current year's tax liability?
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What role does the underwriter play when a business uses the capital market to sell securities?
What role does the underwriter play when a business uses the capital market to sell securities?
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Why should a manager use financial controls in a firm's financial plan?
Why should a manager use financial controls in a firm's financial plan?
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What does a CFO use in financial planning to determine expected revenue levels for future periods?
What does a CFO use in financial planning to determine expected revenue levels for future periods?
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How did the Dodd-Frank Act impact retailers?
How did the Dodd-Frank Act impact retailers?
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Which two activities are prohibited by insider trading laws and should be avoided by a firm's employees?
Which two activities are prohibited by insider trading laws and should be avoided by a firm's employees?
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Which two risks does a firm face by funding the purchase of long-term assets with short-term funding sources?
Which two risks does a firm face by funding the purchase of long-term assets with short-term funding sources?
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Which of the following is not considered a type of departmentalization?
Which of the following is not considered a type of departmentalization?
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Which generation is known to favor structure in their organizational roles?
Which generation is known to favor structure in their organizational roles?
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What key element is not included in the definition of an organization?
What key element is not included in the definition of an organization?
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Which accounting method is used to minimize exchange rate disparity?
Which accounting method is used to minimize exchange rate disparity?
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Which of the following is considered long-term financing?
Which of the following is considered long-term financing?
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What is likely to happen to shareholder control if a firm has more equity capital than debt capital?
What is likely to happen to shareholder control if a firm has more equity capital than debt capital?
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Which forecast is ignored by the CFO when determining necessary funds?
Which forecast is ignored by the CFO when determining necessary funds?
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Which of the following is not a common type of financial security?
Which of the following is not a common type of financial security?
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Which of the following ratios measures a firm's ability to meet its short-term obligations?
Which of the following ratios measures a firm's ability to meet its short-term obligations?
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What is the formula for calculating the gross profit margin?
What is the formula for calculating the gross profit margin?
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Which of the following is not considered a liquidity ratio?
Which of the following is not considered a liquidity ratio?
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What two components make up the leverage ratios?
What two components make up the leverage ratios?
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Which of the following best describes the purpose of integrated marketing communications?
Which of the following best describes the purpose of integrated marketing communications?
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What do turnover ratios measure?
What do turnover ratios measure?
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Which of the following is an example of an operational support system?
Which of the following is an example of an operational support system?
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What key advantage does WiFi provide in a local area network (LAN)?
What key advantage does WiFi provide in a local area network (LAN)?
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The acid test ratio excludes which of the following from current assets?
The acid test ratio excludes which of the following from current assets?
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Which of the following is used to measure a firm's reliance on debt financing?
Which of the following is used to measure a firm's reliance on debt financing?
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Study Notes
International Financial Reporting Standards (IFRS)
- Owners and creditors use financial statements to evaluate firm operations and make investment decisions.
Information Systems
- The heart of any information system is the database.
- A transaction processing system helps the vice president of sales for a national department store chain see the previous day's sales receipts.
- A virtual private network allows employees to work remotely with secure connectivity to the corporate network via the internet, enhancing workforce productivity.
- Cloud computing services enhance productivity through better resource utilization, elimination of application downtime, and dedicated resources for each user.
Ethical Considerations
- Employees have an ethical expectation of privacy for personal letters sent through the company mail room.
- Selling customer data for external marketing research raises ethical issues heightened by the capabilities of data mining.
- Spyware's intent to report on a user's internet activity creates a company security issue.
Departmentalization and Finance Activities
- Departmentalization matches smaller groups within a company to the types of customers they serve.
- Finance activities include making capital market investments and creating a financial plan.
Seeking Long-Term Sources
- Business should consider hedge funds, venture capital, and public sales of stocks when seeking long-term sources.
- Commercial paper is a type of security a business should use when investing excess cash in anticipation of paying off the current year's tax liability.
Underwriter Role
- An underwriter insures the value of the security to the investor when using the capital market to sell securities to the public.
Financial Controls
- A manager should use financial controls to determine the accuracy of forecasted revenues, costs, and expenses in a firm's financial plan.
- A CFO uses sales forecasts plus non-sales revenue to determine the expected level of revenue for future periods.
Dodd-Frank Wall Street Reform and Consumer Protection Act
- The Dodd-Frank Wall Street Reform and Consumer Protection Act capped the debit card fee at 21 cents, impacting retailers.
Insider Trading Laws
- Selling company stock because a co-worker told the employee the company's new drug is failing in clinical trials, and buying stock in the public company for which the employee works based on a conversation the employee overheard at a cocktail party between two of the company's executives are both prohibited by insider trading laws.
Firm Risks
- Volatility of interest rates and frequent renewals are risks a firm faces by funding the purchase of long-term assets with short-term financing sources.
Organizing Process
- Evaluating results aids in effective and efficient progress toward planned goals and often results in changes within the organization.
- Increasing delegation of authority and the span of control results in an increased number of direct reports per manager.
Organizational Structure
- An effective organization includes human interaction and structure.
- A line organizational structure functions most effectively in a crisis situation because it establishes a direct flow of authority.
Recruiting and Interviewing Process
- The seven steps in the recruiting and interviewing process are:
- Define job requirements.
- Contact and visit colleges for applicants/interns.
- Conduct employment tests.
- Review resumes.
- Conduct candidate interviews.
- Follow up interviews.
- Hiring determination.
Organizational Structure Drivers
- Achievement of company goals is the primary driver for an organization's structure.
- Departmentalization is the step in the organizing process that results in management group work activities into units within the organization.
Competitive Advantages
- A high tech startup company launching a marketing campaign for its new social media portal by highlighting how the portal exceeds the connectivity and collaboration capabilities of all other social media sites is leveraging a competitive advantage of customer loyalty.
Productivity
- Total productivity is calculated by dividing output (goods or services) by input (human, natural resources, capital).
Liquidity Ratios
- Liquidity ratios measure a firm's ability to meet its short-term obligations.
- Examples include the liquidity ratio and acid test.
- The liquidity ratio is calculated as current assets divided by current liabilities.
- The acid test is calculated as current assets minus inventory divided by current liabilities.
Activity Ratios
- Activity ratios measure a firm's use of resources.
- Examples include turnover ratios, which measure how efficiently a firm uses its assets.
- Inventory turnover is calculated as the cost of goods sold divided by average inventory.
- Receivables turnover is credit sales divided by average accounts receivables.
- Total asset turnover is calculated as sales divided by average total assets.
Profitability Ratios
- Profitability ratios measure a firm's profitability.
- Examples include: gross profit margin, net profit margin, and return on equity.
- Gross profit margin is calculated as gross profit divided by sales.
- Net profit margin is calculated as net income divided by sales.
- Return on equity is calculated as net income divided by average equity.
Leverage Ratios
- Leverage ratios measure a firm's reliance on debt financing.
- Examples include the debt ratio and long-term debt to equity.
- The debt ratio is calculated as total liabilities divided by total assets.
- Long-term debt to equity is found by dividing long-term debt by owner's equity.
Support Systems
- Management uses support systems for decision making.
- Information systems for activities fall under the operational support system.
- The transaction processing system and the process control system are operational support systems.
- Decision support systems (DSS) belong to the management support system.
Ethics and Legality
- Ethics and legality are not the same thing.
Local Area Network (LAN)
- A LAN is a network in which two or more users connect using Ethernet or WiFi to the same server to share printers or other information.
WiFi Advantages
- WiFi provides advantages of mobility and an expansion of LANs.
Integrated Marketing Communications
- Integrated marketing communications coordinate all promotional activities – media advertising, direct mail, personal selling, sales promotion, and public relations – to produce a unified, customer-focused message.
Departmentalization Types
- Two types of departmentalization are functional and process.
Committee
- A committee structure is an organizational structure that is slow to make decisions because it seeks consensus.
Matrix Structure
- In a matrix structure, you can report vertically and horizontally.
Millennials
- Millennials prefer structure.
- The earliest year a Millennial could have been born is 1980.
Organizational Elements
- The three key elements of an organization are human interaction, goal-directed activities, and structure.
CFO Role
- The CFO uses the sales forecast to indicate where necessary funds will come from.
- The CFO does not consider non-sales revenue when determining the origin of necessary funds for the planning period.
- Asset intensity is the amount of assets a firm needs to support the forecast for a planning period.
Global Operations
- Firms pay taxes on profits that are repatriated as part of global operations.
Balance Sheet Hedge
- A balance sheet hedge is an accounting method that helps a firm reduce the disparity in exchange rates.
Debt Capital vs. Equity Capital
- Creditors accept a lower rate of return than investors.
- If a firm has more equity capital than debt capital, shareholders will have less control.
Short-Term Financing
- A three-year fixed interest loan is not short-term financing.
Securities
- Money market instruments, bonds, and stocks are all types of securities.
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Description
This quiz explores key concepts in International Financial Reporting Standards (IFRS) and essential components of information systems, including database management, transaction processing, and ethical considerations in data handling. Test your understanding of how financial statements and information systems impact business decisions and ethical practices.
