FIN 325 Exam 1 wsu Study Guide

FIN 325 Exam 1 wsu Study Guide
Finance Correct Answer-The study of money management


Personal Finance examples Correct Answer-Education, loans, cars


Corporate Finance Correct Answer-Firms, Managers,
- Projects, assets, liabilities


Public finance Correct Answer-Countries, states, central banks
- Government budgets, bonds


Treasurer Correct Answer-oversees cash management, credit
management, capital expenditures, and financial planning


controller Correct Answer-oversees taxes, cost accounting, financial
accounting and data processing


Three major forms of business Correct Answer-sole proprietorship,
partnership, corporation


Advantages of Sole Proprietorship Correct Answer-Easiest to start
Least regulated
Single owner keeps all the profits
Taxed once as personal income

, Sole Proprietorship Correct Answer-A business owned by one person


Disadvantages of Sole Proprietorship Correct Answer--Limited to life of
owner
-Equity capital limited to owner's personal wealth
-Unlimited liability
-Difficult to sell ownership interest


Partnership Correct Answer-A business in which two or more persons
combine their assets and skills


Advantages of a Partnership Correct Answer--2 or more owners
- More capital available
- relatively easy to start
- Income Taxed once as personal income


Disadvantages of a Partnership Correct Answer-Unlimited liability
• General partnership
• Limited partnership
Partnership dissolves
when one partner
dies or wishes to sell
Difficult to transfer