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TRUE/FALSE, Write T if the statement is true and 'F' if the statement is false. I 1) Finance is any transaction where money is exchanged for goods and services. 1) 2) A dividend is an after tax payment that must be made by all stock companies to the stockholders each year. 2) 3) A market economy is one where all goods and services are exchanged freely 3) 4) The mental and physical talents of human beings are entrepreneurial resources. 4) 5) A goal is a measurable objective that can be reached in a specified time frame. 5) 6) Public corporations have double taxation, limited liability for owners, and can raise large amounts of cash by selling stocks or bonds. 6) 7) Limited partnerships have limited liability for all of the partners. 7) B) A franchiser sells the right to produce a product or service to the franchisee. 8) 9) If a partner dies his share of the partnership must be sold to an outsider. 9) 10) Every business, regardless of its size requires a full-time accountant. 10) 11) The business form that is equivalent to the personal cash flow statement is the income statement. 11) 12) A refund of the purchase price increased warranty or partial credit on the next purchase would be listed on the income statement as returns and allowances 12) 13) Vertical analysis of a balance sheet is obtained by using Total Liabilities as a constant and dividing 13) 13) Vertical analysis of a balance sheet is obtained by using Total Liabilities as a constant and dividing every figure on the balance sheet by Total Liabilities. 13) 14) Horizontal Analysis is obtained by determining the percentage change in an account from a base period to a successive time period. 14) 15) The current ratio is calculated by dividing current assets minus inventory by current liabilities. 15) I 16) Your company is effective if you establish a specific goal and accomplish that goal. 16) 17) Profit is an absolute number that appears on the bottom line of an income statement. 17) 18) Chapter 11 bankruptcy occurs when a business has to liquidate all of its assets in order to pay off its creditors. 18) 19) A forecast is an accurate estimate of future demand. 19) Final Exam Buisness Finance Final Exam Buisness Finance 20) The time value of money is the loss of purchasing power that occurs over time as a result of inflation. 20) 21) The time value of money is the gain of purchasing power that occurs over time as a result of deflation 21) 22) There is a direct relationship between the forecast accuracy and time. 22) ons for 23) Funds used to start a business are usually the owner's 23) AV NEURIndividual kosinacenter Final Exam Buisness Finance 20) The time value of money is the loss of purchasing power that occurs over time as a result of Inflation. 20) 21) The time value of money is the gain of purchasing power that occurs over time as a result of deflation. 21) 22) There is a direct relationship between the forecast accuracy and time. 22) 23) Funds used to start a business are usually the owner's. 23) 24) As your individual business assets increase your ability to borrow funds decreases. 24) 25) As your individual business assets increase, the complexity of determining how to invest and protect these assets normally decreases 25) MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question 26) Which of the following is NOT a viable source of financing for the small business? A) using cash generated from current sales B) borrowing from other individuals C) issuing bonds to the general public D) borrowing money from financial institutions E) using one's own savings 26) 27) A tree in a forest is an example of a(n) A) human resource, C) entrepreneurial resource. 27) B) capital resource. D) natural resource. anti 28) The management function that takes us from some current state to a desired future state is A) organizing B) staffing C) directing Page 2 1 2 D) planning 28) uple choice pornoney from fin E) using one's own savings Open with Google Docs 27) A tree in a forest is an example of a(n) A) human resource. C) entrepreneurial resource. 27) B) capital resource. D) natural resource. 28) 28) The management function that takes us from some current state to a desired future state is A) organizing B) staffing C) directing D) planning E) controlling 29) 29) Carla has just started a business and is asking herself the following question. Where do I want my business to be in five years? Carla is in the process of A) establishing basic parameters for her business. B) analyzing her financial requirements. C) determining how to write a functional plan D) establishing the basic control functions for her business, E) developing a strategic plan. 30) 30) The majority of businesses in the United States today are organized as A) partnerships B) sole proprietorships. C) Subchapter S corporations D) corporations E) limited partnerships. 2