WGU :: C708 :: Principles of Finance Exam Questions And Answers.
1. The credit manager for a company is responsible for setting the company's credit policy regarding
availability and limits for customers. What is one of the additional responsibilities of this credit
manager?
A. Purchasing insurance
B. Collecting past-due accounts
C. Monitoring accounts payable
D. Investing excess cash - B. Collecting past-due accounts
2. Which activity is financial management responsible for?
A. Researching different products to bring to market
B. Reporting past earnings for shares of stock
C. Ensuring sufficient financing is available
D. Verifying the balance sheet is properly constructed - C. Ensuring sufficient financing is available
3. What is one of the main areas of the financial environment?
A. Human resources
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,B. Marketing
C. Investments
D. Foreign relations - C. Investments
4. What is a common challenge in the world of finance?
A. It causes investor anxiety due to a volatile stock market
B. It generally operates with a high degree of uncertainty
C. It is difficult to abide by generally accepted accounting principles. (GAAP)
D. It has to comply with banking regulations that are subject to change - B. It generally operates with
a high degree of uncertainty
5. Which variable must be considered when a corporation's finance department is determining the
best strategy for financing a project?
A. The amount of trade credit from suppliers for the project
B. Recent changes to the federal funds rate
C. The bid-ask spread for the company's stock
D. The amount of debt and equity financing currently in use - D. The amount of debt and equity
financing currently in use
6. An individual is interested in establishing a lawn care business as a sole proprietorship. What will
be a disadvantage of choosing this business model?
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, A. Frozen investments
B. Unlimited liability
C. Government regulations
D. Management disagreements - B. Unlimited liability
7. What is one benefit of a sole proprietorship?
A. The owner has uninterrupted control of the business
B. The company can continue to exist with the death of the owner
C. The business is taxed separately from the owner's personal taxes
D. The personal assets of stockholders are protected - A. The owner has uninterrupted control of the
business
8. What is a disadvantage of a general partnership?
A. Owner's personal assets are not protected against claims of creditors
B. Annual reports must be filed to shareholders
C. Losses from the business are deductible on an individual's tax return
D. Complex business filing paperwork is required - A. Owner's personal assets are not protected
against claims of creditors
9. What is one advantage of an LLC?
https://www.stuvia.com/
1. The credit manager for a company is responsible for setting the company's credit policy regarding
availability and limits for customers. What is one of the additional responsibilities of this credit
manager?
A. Purchasing insurance
B. Collecting past-due accounts
C. Monitoring accounts payable
D. Investing excess cash - B. Collecting past-due accounts
2. Which activity is financial management responsible for?
A. Researching different products to bring to market
B. Reporting past earnings for shares of stock
C. Ensuring sufficient financing is available
D. Verifying the balance sheet is properly constructed - C. Ensuring sufficient financing is available
3. What is one of the main areas of the financial environment?
A. Human resources
https://www.stuvia.com/
,B. Marketing
C. Investments
D. Foreign relations - C. Investments
4. What is a common challenge in the world of finance?
A. It causes investor anxiety due to a volatile stock market
B. It generally operates with a high degree of uncertainty
C. It is difficult to abide by generally accepted accounting principles. (GAAP)
D. It has to comply with banking regulations that are subject to change - B. It generally operates with
a high degree of uncertainty
5. Which variable must be considered when a corporation's finance department is determining the
best strategy for financing a project?
A. The amount of trade credit from suppliers for the project
B. Recent changes to the federal funds rate
C. The bid-ask spread for the company's stock
D. The amount of debt and equity financing currently in use - D. The amount of debt and equity
financing currently in use
6. An individual is interested in establishing a lawn care business as a sole proprietorship. What will
be a disadvantage of choosing this business model?
https://www.stuvia.com/
, A. Frozen investments
B. Unlimited liability
C. Government regulations
D. Management disagreements - B. Unlimited liability
7. What is one benefit of a sole proprietorship?
A. The owner has uninterrupted control of the business
B. The company can continue to exist with the death of the owner
C. The business is taxed separately from the owner's personal taxes
D. The personal assets of stockholders are protected - A. The owner has uninterrupted control of the
business
8. What is a disadvantage of a general partnership?
A. Owner's personal assets are not protected against claims of creditors
B. Annual reports must be filed to shareholders
C. Losses from the business are deductible on an individual's tax return
D. Complex business filing paperwork is required - A. Owner's personal assets are not protected
against claims of creditors
9. What is one advantage of an LLC?
https://www.stuvia.com/
