,MULTIPLE CHOICE.
Choose the one alternative that best completes the statement or answers the question.
1) Which one of the following actions is the best example of an agency problem?
Paying management bonuses based on the number of store locations openedduring the year.
A) Basing management bonuses on the attainment of specific financial goals.
B) Accepting a project that enhances both management salaries and
the market value of the firm's stock.
C) Requiring stockholders approval of all management compensation decisions.
D) Paying management bonuses based on the current market value of the firm's stock.
Answer: A
Explanation:
2) Which one of the following best describes the primary advantage of being a limited 2)
partner rather than a general partner?
A) Entitlement to a larger portion of the partnership's income.
B) Liability for firm debts limited to the capital invested.
C) Greater management responsibility.
D) Ability to manage the day-to-day affairs of the business.
E) No potential financial loss.
Answer: B
Explanation: A)
B)
C)
D)
E)
3) Which of the following accounts does not relate to working capital management 3)
decisions?
A) Short-term debt.
B) Accounts receivable.
C) Long-term debt.
D) Inventory.
E) Accounts payable.
, Answer: C
Explanation: A)
B)
C)
D)
E)
A
4) The corporate officer generally responsible for tasks related to tax management,
n
cost accounting, financial accounting, and data processing is the: s
A)Chairman of the Board. w
e
B) Corporate Treasurer.
C) Director. r
D) Vice President of Operations. :
E) Corporate Controller.
E
Answer: E
Explanation: A)
B) E
C) x
D)
E) p
l
5) The corporate officer generally responsible for tasks related to cash a
and credit management, financial planning, and capital n
a
expenditures is the:
t
A)Corporate Controller. i
B) Chairman of the Board. o
C) Vice President of Operations. n
D) Corporate Treasurer.
:
E) Director.
Answer: D
Explanation: A)
B)
C)
D)
E)
6) The mixture of debt and equity used by the firm to finance its operations is
called:
A)Agency cost analysis.
B) Financial depreciation.
C) Capital budgeting.
D) Working capital management.
E) Capital structure.
, 4)
5)
6)
2
Choose the one alternative that best completes the statement or answers the question.
1) Which one of the following actions is the best example of an agency problem?
Paying management bonuses based on the number of store locations openedduring the year.
A) Basing management bonuses on the attainment of specific financial goals.
B) Accepting a project that enhances both management salaries and
the market value of the firm's stock.
C) Requiring stockholders approval of all management compensation decisions.
D) Paying management bonuses based on the current market value of the firm's stock.
Answer: A
Explanation:
2) Which one of the following best describes the primary advantage of being a limited 2)
partner rather than a general partner?
A) Entitlement to a larger portion of the partnership's income.
B) Liability for firm debts limited to the capital invested.
C) Greater management responsibility.
D) Ability to manage the day-to-day affairs of the business.
E) No potential financial loss.
Answer: B
Explanation: A)
B)
C)
D)
E)
3) Which of the following accounts does not relate to working capital management 3)
decisions?
A) Short-term debt.
B) Accounts receivable.
C) Long-term debt.
D) Inventory.
E) Accounts payable.
, Answer: C
Explanation: A)
B)
C)
D)
E)
A
4) The corporate officer generally responsible for tasks related to tax management,
n
cost accounting, financial accounting, and data processing is the: s
A)Chairman of the Board. w
e
B) Corporate Treasurer.
C) Director. r
D) Vice President of Operations. :
E) Corporate Controller.
E
Answer: E
Explanation: A)
B) E
C) x
D)
E) p
l
5) The corporate officer generally responsible for tasks related to cash a
and credit management, financial planning, and capital n
a
expenditures is the:
t
A)Corporate Controller. i
B) Chairman of the Board. o
C) Vice President of Operations. n
D) Corporate Treasurer.
:
E) Director.
Answer: D
Explanation: A)
B)
C)
D)
E)
6) The mixture of debt and equity used by the firm to finance its operations is
called:
A)Agency cost analysis.
B) Financial depreciation.
C) Capital budgeting.
D) Working capital management.
E) Capital structure.
, 4)
5)
6)
2
