FINANCIAL ACCOUNTING EXAM 1 LATEST 2025
WITH 180 ACTUAL EXAM QUESTIONS AND
CORRECT ANSWERS/ INTRO TO FINANCIAL
ACCOUNTING EXAM 1 (BRAND NEW) WITH MOST
TESTED QUESTIONS
THIS RESOURCE PROVIDES A COMPREHENSIVE SET OF PRACTICE QUESTIONS COVERING KEY
CONCEPTS IN BUSINESS FINANCE AND CAPITAL MARKETS TOPICS INCLUDE FINANCIAL
INSTITUTIONS, INVESTMENT BANKING, MONEY AND CAPITAL MARKETS, SECURITIES
ISSUANCE, MORTGAGE-BACKED SECURITIES, AND HISTORICAL U.S. FINANCIAL REGULATION.
DESIGNED TO STRENGTHEN UNDERSTANDING AND PREPARE STUDENTS FOR THE OBJECTIVE
ASSESSMENT (OA) IN THE 2025 ACADEMIC YEAR.
1) As a key participant in financial transactions, individuals are ________.
A net demanders of funds because they save more money than they borrow
B) net users of funds because they save less money than they borrow
C) net suppliers of funds because they save more money than they borrow
D) net purchasers of funds because they save more money than they borrow - CORRECT
ANSWER-C
2) Government is typically a ________.
A) net provider of funds because it borrows more than it saves
B) net demander of funds because it borrows more than it saves
C) net provider of funds because it can print money at will
D) net demander of funds because it saves more than it borrows - CORRECT ANSWER-B
3) Government can obtain funds ________.
A) by trading in equity market
B) by issuing financial instruments such as futures and options
C) through forex market
D) by selling debt securities - CORRECT ANSWER-D
,4) Firms that require funds from external sources can obtain them ________.
A) through financial institutions
B) from central bank directly
C) through forex market
D) by issuing T-bills - CORRECT ANSWER-A
5) Investment banks are institutions that ________.
A) perform all activities of commercial banks and retail banks
B) are exempted from Securities and Exchange Commission regulations
C) engage in trading and market making activities
D) are only limited to capital market activities - CORRECT ANSWER-C
) Which of the following serves as an intermediary channeling the savings of individuals, businesses,
and governments into loans and investments?
A) financial institutions
B) financial markets
C) Securities and Exchange Commission
D) OTC market - CORRECT ANSWER-A
7) Which of the following provides savers with a secure place to invest funds and offer both
individuals and companies loans to finance investments?
A) investment banks
B) securities exchanges
C) mutual funds
D) commercial banks - CORRECT ANSWER-D
8) Which of the following assists companies in raising capital, advise firms on major transactions
such as mergers or financial restructuring, and engage in trading and market making activities?
A) investment banks
B) securities exchanges
C) mutual funds
,D) commercial banks - CORRECT ANSWER-A
9) Most businesses raise money by selling their securities in a ________.
A) public offering
B) forex market
C) futures market
D) commodities market - CORRECT ANSWER-A
10) Which of the following is a means of selling bonds or stocks to the public?
A) private placement
B) public offering
C) organized selling
D) direct placement - CORRECT ANSWER-B
11) Which of the following is a forum in which suppliers and demanders of funds can transact
business directly?
A) shadow banking system
B) financial markets
C) commercial banks
D) financial institutions - CORRECT ANSWER-B
12) The sale of a new security directly to an investor or a group of investors is called ________.
A) arbitraging
B) short selling
C) a capital market transaction
D) a private placement - CORRECT ANSWER-D
13) The ________ market is where securities are initially issued and the ________ market is where
pre-owned securities (not new issues) are traded.
A) primary; secondary
B) money; capital
, C) secondary; primary
D) primary; money - CORRECT ANSWER-A
14) The over-the-counter (OTC) market is ________.
A) a highly liquid market as compared to NASDAQ
B) a market in which low risk-high return securities are traded
C) an organized market in which all financial derivatives are traded
D) a market where smaller, unlisted securities are traded - CORRECT ANSWER-D
15) Which of the following is true of a primary market?
A) It is an organized market in which all financial derivatives are traded.
B) It is regulated by The Sarbanes-Oxley Act.
C) It is a market where smaller, unlisted securities are traded.
D) It is the only market in which the issuer is directly involved in the transaction. - CORRECT
ANSWER-D
16) Which of the following is true of a secondary market?
A) It is a market for an unlisted company to raise equity capital.
B) It is a market where securities are issued through private placement
C) It is a market in which short-term money market instruments such as Treasury bills are traded.
D) It is a market in which preowned securities are traded - CORRECT ANSWER-D
17) Which of the following is true of preferred stock?
A) It has features of bonds and a common stock.
B) It has a claim on assets prior to creditors in the event of liquidation.
C) Its dividends can be paid only after paying dividends to the common stockholders.
D) It usually has a maturity of thirty years. - CORRECT ANSWER-A
18) The key securities traded in the capital markets are ________.
A) commercial papers and Treasury bills
WITH 180 ACTUAL EXAM QUESTIONS AND
CORRECT ANSWERS/ INTRO TO FINANCIAL
ACCOUNTING EXAM 1 (BRAND NEW) WITH MOST
TESTED QUESTIONS
THIS RESOURCE PROVIDES A COMPREHENSIVE SET OF PRACTICE QUESTIONS COVERING KEY
CONCEPTS IN BUSINESS FINANCE AND CAPITAL MARKETS TOPICS INCLUDE FINANCIAL
INSTITUTIONS, INVESTMENT BANKING, MONEY AND CAPITAL MARKETS, SECURITIES
ISSUANCE, MORTGAGE-BACKED SECURITIES, AND HISTORICAL U.S. FINANCIAL REGULATION.
DESIGNED TO STRENGTHEN UNDERSTANDING AND PREPARE STUDENTS FOR THE OBJECTIVE
ASSESSMENT (OA) IN THE 2025 ACADEMIC YEAR.
1) As a key participant in financial transactions, individuals are ________.
A net demanders of funds because they save more money than they borrow
B) net users of funds because they save less money than they borrow
C) net suppliers of funds because they save more money than they borrow
D) net purchasers of funds because they save more money than they borrow - CORRECT
ANSWER-C
2) Government is typically a ________.
A) net provider of funds because it borrows more than it saves
B) net demander of funds because it borrows more than it saves
C) net provider of funds because it can print money at will
D) net demander of funds because it saves more than it borrows - CORRECT ANSWER-B
3) Government can obtain funds ________.
A) by trading in equity market
B) by issuing financial instruments such as futures and options
C) through forex market
D) by selling debt securities - CORRECT ANSWER-D
,4) Firms that require funds from external sources can obtain them ________.
A) through financial institutions
B) from central bank directly
C) through forex market
D) by issuing T-bills - CORRECT ANSWER-A
5) Investment banks are institutions that ________.
A) perform all activities of commercial banks and retail banks
B) are exempted from Securities and Exchange Commission regulations
C) engage in trading and market making activities
D) are only limited to capital market activities - CORRECT ANSWER-C
) Which of the following serves as an intermediary channeling the savings of individuals, businesses,
and governments into loans and investments?
A) financial institutions
B) financial markets
C) Securities and Exchange Commission
D) OTC market - CORRECT ANSWER-A
7) Which of the following provides savers with a secure place to invest funds and offer both
individuals and companies loans to finance investments?
A) investment banks
B) securities exchanges
C) mutual funds
D) commercial banks - CORRECT ANSWER-D
8) Which of the following assists companies in raising capital, advise firms on major transactions
such as mergers or financial restructuring, and engage in trading and market making activities?
A) investment banks
B) securities exchanges
C) mutual funds
,D) commercial banks - CORRECT ANSWER-A
9) Most businesses raise money by selling their securities in a ________.
A) public offering
B) forex market
C) futures market
D) commodities market - CORRECT ANSWER-A
10) Which of the following is a means of selling bonds or stocks to the public?
A) private placement
B) public offering
C) organized selling
D) direct placement - CORRECT ANSWER-B
11) Which of the following is a forum in which suppliers and demanders of funds can transact
business directly?
A) shadow banking system
B) financial markets
C) commercial banks
D) financial institutions - CORRECT ANSWER-B
12) The sale of a new security directly to an investor or a group of investors is called ________.
A) arbitraging
B) short selling
C) a capital market transaction
D) a private placement - CORRECT ANSWER-D
13) The ________ market is where securities are initially issued and the ________ market is where
pre-owned securities (not new issues) are traded.
A) primary; secondary
B) money; capital
, C) secondary; primary
D) primary; money - CORRECT ANSWER-A
14) The over-the-counter (OTC) market is ________.
A) a highly liquid market as compared to NASDAQ
B) a market in which low risk-high return securities are traded
C) an organized market in which all financial derivatives are traded
D) a market where smaller, unlisted securities are traded - CORRECT ANSWER-D
15) Which of the following is true of a primary market?
A) It is an organized market in which all financial derivatives are traded.
B) It is regulated by The Sarbanes-Oxley Act.
C) It is a market where smaller, unlisted securities are traded.
D) It is the only market in which the issuer is directly involved in the transaction. - CORRECT
ANSWER-D
16) Which of the following is true of a secondary market?
A) It is a market for an unlisted company to raise equity capital.
B) It is a market where securities are issued through private placement
C) It is a market in which short-term money market instruments such as Treasury bills are traded.
D) It is a market in which preowned securities are traded - CORRECT ANSWER-D
17) Which of the following is true of preferred stock?
A) It has features of bonds and a common stock.
B) It has a claim on assets prior to creditors in the event of liquidation.
C) Its dividends can be paid only after paying dividends to the common stockholders.
D) It usually has a maturity of thirty years. - CORRECT ANSWER-A
18) The key securities traded in the capital markets are ________.
A) commercial papers and Treasury bills
