C201 ACCOUNTING FOR BUSINESS AND
MANAGEMENT PRACTICE TEST QUESTIONS
What is one role of a financial manager? - Answers -Analyzing major investment
decisions
Which two activities are finance activities rather than accounting activities? - Answers -
Making capital market investments and Creating a financial plan
Which three sources should a business consider when seeking a long-term funding
source? - Answers -Venture capital, Public sale of stocks and Hedge funds
In which type of security should a business invest its excess cash in anticipation of
paying off the current year's tax liability? - Answers -Commercial paper
Which role does the underwriter play in financing business operations when using the
capital market to sell securities to the public? - Answers -It assumes the risk of the
assessed value of the security from the issuer.
Why should a manager use financial controls in a firm's financial plan? - Answers -To
determine the accuracy of forecasted revenues, costs, and expenses
Which funding option would a business seek in order to cover one month's operations
costs? - Answers -Opening a line of credit from the bank
Why should companies that are conservative investors with liquidity concerns invest
their excess cash in money market funds? - Answers -It converts easily into cash.
A company's board of directors wants to know the details of the buildings, equipment,
supplies, accounts receivable, and marketable securities the company owns. The board
also wants to know the details of the accounts payable and long-term debt.
Which report should the financial manager look at to obtain the required information? -
Answers -The balance sheet
A company showing increasing revenue is not showing a corresponding increase in
profits. The company's chief executive officer (CEO) wants to determine whether there
is an unexpected increase in costs that needs to be controlled.
Which financial report should the CEO look at to obtain the required information? -
Answers -The income statement
Which question does the current ratio answer about a company? - Answers -Will the
company be able to its meet short-term obligations?
MANAGEMENT PRACTICE TEST QUESTIONS
What is one role of a financial manager? - Answers -Analyzing major investment
decisions
Which two activities are finance activities rather than accounting activities? - Answers -
Making capital market investments and Creating a financial plan
Which three sources should a business consider when seeking a long-term funding
source? - Answers -Venture capital, Public sale of stocks and Hedge funds
In which type of security should a business invest its excess cash in anticipation of
paying off the current year's tax liability? - Answers -Commercial paper
Which role does the underwriter play in financing business operations when using the
capital market to sell securities to the public? - Answers -It assumes the risk of the
assessed value of the security from the issuer.
Why should a manager use financial controls in a firm's financial plan? - Answers -To
determine the accuracy of forecasted revenues, costs, and expenses
Which funding option would a business seek in order to cover one month's operations
costs? - Answers -Opening a line of credit from the bank
Why should companies that are conservative investors with liquidity concerns invest
their excess cash in money market funds? - Answers -It converts easily into cash.
A company's board of directors wants to know the details of the buildings, equipment,
supplies, accounts receivable, and marketable securities the company owns. The board
also wants to know the details of the accounts payable and long-term debt.
Which report should the financial manager look at to obtain the required information? -
Answers -The balance sheet
A company showing increasing revenue is not showing a corresponding increase in
profits. The company's chief executive officer (CEO) wants to determine whether there
is an unexpected increase in costs that needs to be controlled.
Which financial report should the CEO look at to obtain the required information? -
Answers -The income statement
Which question does the current ratio answer about a company? - Answers -Will the
company be able to its meet short-term obligations?
