FINANCIAL MANAGEMENT EXAM
QUESTIONS AND ANSWERS
Netvfworkingvfcapitalvfisvfdefinedvfas:vf-vfanswer--currentvfassetsvfminusvfcurrentvfliabilities
Thevfcommonvfsetvfofvfstandardsvfandvfproceduresvfbyvfwhichvfauditedvffinancialvfstateme
ntsvfarevfpreparedvfisvfknownvfasvfthe:vf-vfanswer--
GenerallyvfAcceptedvfAccountingvfPrinciples
Thevfpercentagevfofvfthevfnextvfdollarvfyouvfearnvfthatvfmustvfbevfpaidvfinvftaxesvfisvfreferredvf
tovfas:vf-vfanswer--Thevfmarginalvftaxvfrate
Thevfcashvfflowvfrelatedvftovfinterestvfpaymentsvflessvfanyvfnewvfnewvfborrowingsvfisvfcalled
vfthe:vf-vfanswer--cashvfflowvftovfcreditors
Whichvfonevfofvfthevffollowingvfstatementsvfconcerningvfnetvfworkingvfcapitalvfisvfcorrect?vf-
vfanswer--Netvfworkingvfcapitalvfincreasesvfwhenvfinventoryvfisvfsoldvfforvfcashvfatvfavfprofit.
Whichvfonevfofvfthevffollowingvfaccountsvfisvfthevfmostvfliquid?vf-vfanswer--
Whichvfonevfofvfthesevfisvfmostvfaptvftovfbevfavffixedvfcost?vf-vfanswer--
Whichvfonevfofvfthevffollowingvftermsvfisvfdeniedvfasvfthevfmanagementvfofvfavffirm'svflong-
termvfinvestments?vf-vfanswer--capitalvfbudgeting
Whichvfonevfofvfthevffollowingvftermsvfisvfdefinedvfasvfthevfmixturevfofvfavffirmsvfdebtvfandvfeq
uityvffinanacing?vf-vfanswer--capitalvfstructure
Whichvfonevfofvfthevffollowingvfisvfavfcapitalvfstructurevfdecision?vf-vfanswer--
determiningvfthevfamountvfofvffundsvfneededvftovffinancevfcustomervfpurchasesvfofvfavfnewv
fproduct.
Whichvfonevfofvfthevffollowingvffunctionsvfshouldvfbevfthevfresponsibilityvfofvfthevfcontrollervfr
athervfthanvfthevftreasurer?vf-vfanswer--equipmentvfpurchasevfanalysis
Whichvfofvfthevffollowingvfarevfadvantagesvfofvfthevfcorporatevfformvfofvfbusinessvfownershi
p?vf-vfanswer--1)vflimitedvfliabilityvfforvffirmvfdebt
2)vfabilityvftovfraisevfcapital
3)vfunlimitedvffirmvflife
Whichvfformvfofvfbusinessvfstructurevfisvfmostvfassociatedvfwithvfagencyvfproblems?vf-
vfanswer--corporation
Decisionsvfmadevfbyvffinancialvfmanagersvfshouldvfprimarilyvffocusvfonvfincreasingvfwhichv
fonevfofvfthevffollowing?vf-vfanswer--marketvfvaluevfpervfsharevfofvfoutstandingvfstock
QUESTIONS AND ANSWERS
Netvfworkingvfcapitalvfisvfdefinedvfas:vf-vfanswer--currentvfassetsvfminusvfcurrentvfliabilities
Thevfcommonvfsetvfofvfstandardsvfandvfproceduresvfbyvfwhichvfauditedvffinancialvfstateme
ntsvfarevfpreparedvfisvfknownvfasvfthe:vf-vfanswer--
GenerallyvfAcceptedvfAccountingvfPrinciples
Thevfpercentagevfofvfthevfnextvfdollarvfyouvfearnvfthatvfmustvfbevfpaidvfinvftaxesvfisvfreferredvf
tovfas:vf-vfanswer--Thevfmarginalvftaxvfrate
Thevfcashvfflowvfrelatedvftovfinterestvfpaymentsvflessvfanyvfnewvfnewvfborrowingsvfisvfcalled
vfthe:vf-vfanswer--cashvfflowvftovfcreditors
Whichvfonevfofvfthevffollowingvfstatementsvfconcerningvfnetvfworkingvfcapitalvfisvfcorrect?vf-
vfanswer--Netvfworkingvfcapitalvfincreasesvfwhenvfinventoryvfisvfsoldvfforvfcashvfatvfavfprofit.
Whichvfonevfofvfthevffollowingvfaccountsvfisvfthevfmostvfliquid?vf-vfanswer--
Whichvfonevfofvfthesevfisvfmostvfaptvftovfbevfavffixedvfcost?vf-vfanswer--
Whichvfonevfofvfthevffollowingvftermsvfisvfdeniedvfasvfthevfmanagementvfofvfavffirm'svflong-
termvfinvestments?vf-vfanswer--capitalvfbudgeting
Whichvfonevfofvfthevffollowingvftermsvfisvfdefinedvfasvfthevfmixturevfofvfavffirmsvfdebtvfandvfeq
uityvffinanacing?vf-vfanswer--capitalvfstructure
Whichvfonevfofvfthevffollowingvfisvfavfcapitalvfstructurevfdecision?vf-vfanswer--
determiningvfthevfamountvfofvffundsvfneededvftovffinancevfcustomervfpurchasesvfofvfavfnewv
fproduct.
Whichvfonevfofvfthevffollowingvffunctionsvfshouldvfbevfthevfresponsibilityvfofvfthevfcontrollervfr
athervfthanvfthevftreasurer?vf-vfanswer--equipmentvfpurchasevfanalysis
Whichvfofvfthevffollowingvfarevfadvantagesvfofvfthevfcorporatevfformvfofvfbusinessvfownershi
p?vf-vfanswer--1)vflimitedvfliabilityvfforvffirmvfdebt
2)vfabilityvftovfraisevfcapital
3)vfunlimitedvffirmvflife
Whichvfformvfofvfbusinessvfstructurevfisvfmostvfassociatedvfwithvfagencyvfproblems?vf-
vfanswer--corporation
Decisionsvfmadevfbyvffinancialvfmanagersvfshouldvfprimarilyvffocusvfonvfincreasingvfwhichv
fonevfofvfthevffollowing?vf-vfanswer--marketvfvaluevfpervfsharevfofvfoutstandingvfstock