Chapter 1 Test Bank Questions with Correct
answers.
A financial analyst is responsible for maintaining and controlling a firm's daily cash balances. - Correct
Answer FALSE
Finance is concerned with the process institutions, markets, and instruments involved in the transfer of
money among and between individuals, businesses, and government. - Correct Answer TRUE
Financial managers administer the financial affairs of all types of businesses such as private and public,
large and small, and profit seeking and not for profit. - Correct Answer TRUE
Financial managers perform different tasks developing a financial plan or budget, extending credit to
customers, evaluating proposed large expenditures, and raising money to fund a firm's operations. -
Correct Answer TRUE
A capital expenditures analyst/manager is responsible for the evaluation and recommendation of
proposed asset investments. - Correct Answer TRUE
A controller administers a firm's credit policy by analyzing or managing the evaluation of credit
applications, extending credit, and monitoring and collecting accounts receivable. - Correct Answer
FALSE
In large companies, CEOs are legally responsible for coordinating the assets and liabilities of employees'
pension fund. - Correct Answer FALSE
A controller typically handles the accounting activities, such as tax management, data processing,
financial accounting, and cost accounting. - Correct Answer TRUE
Managerial finance is concerned with design and delivery of advice and financial products to individuals,
businesses, and governments. - Correct Answer FALSE
10) ________ is concerned with design and delivery of advice and financial products to individuals,
businesses, and governments.
,A) Managerial finance
B) Auditing services
C) Financial services
D) Cost accounting - Correct Answer C) Financial services
Managerial finance ________.
A) involves tasks such as budgeting, financial forecasting, cash management, and funds procurement
B) involves the design and delivery of advice and financial products
C) recognizes funds on an accrual basis
D) devotes the majority of its attention to the collection and presentation of financial data - Correct
Answer A) involves tasks such as budgeting, financial forecasting, cash management, and funds
procurement
Finance is ________.
A) the system of verifying, analyzing, and recording business transactions
B) the science of production, distribution, and consumption of goods and services
C) the art and science of managing money
D) the art of merchandising products and services - Correct Answer C) the art and science of managing
money
Which of the following is an area of career opportunities in financial services?
A) supply chain management
B) personal financial planning
C) auditing of financial statements
D) production planning - Correct Answer B) personal financial planning
Which of the following is an area of career opportunities in managerial finance?
A) investment
B) real estate and insurance
C) capital expenditures management
, D) personal financial planning - Correct Answer C) capital expenditures management
Which of the following is a duty of a financial manager in a business firm?
A) developing marketing plans
B) controlling the stock price
C) raising financial resources
D) auditing financial records - Correct Answer C) raising financial resources
A ________ is responsible for evaluating and recommending proposed long-term investments.
A) financial analyst
B) credit manager
C) pension fund manager
D) capital expenditures manager - Correct Answer D) capital expenditures manager
In partnerships, owners have unlimited liability and may have to cover debts of other less financially
sound partners. - Correct Answer TRUE
In partnerships, partners can readily transfer their wealth to other partners. - Correct Answer FALSE
A sole proprietor has unlimited liability; his or her total investment in a business, but not his or her
personal assets, can be taken to satisfy creditors. - Correct Answer FALSE
In a limited partnership, all partners' liabilities are limited to their investment in the partnership. -
Correct Answer TRUE
A treasurer is responsible for a firm's accounting activities, such as corporate accounting, tax
management, financial accounting, and cost accounting. - Correct Answer FALSE
Which of the following legal forms of organization is most expensive to organize?
A) sole proprietorships
answers.
A financial analyst is responsible for maintaining and controlling a firm's daily cash balances. - Correct
Answer FALSE
Finance is concerned with the process institutions, markets, and instruments involved in the transfer of
money among and between individuals, businesses, and government. - Correct Answer TRUE
Financial managers administer the financial affairs of all types of businesses such as private and public,
large and small, and profit seeking and not for profit. - Correct Answer TRUE
Financial managers perform different tasks developing a financial plan or budget, extending credit to
customers, evaluating proposed large expenditures, and raising money to fund a firm's operations. -
Correct Answer TRUE
A capital expenditures analyst/manager is responsible for the evaluation and recommendation of
proposed asset investments. - Correct Answer TRUE
A controller administers a firm's credit policy by analyzing or managing the evaluation of credit
applications, extending credit, and monitoring and collecting accounts receivable. - Correct Answer
FALSE
In large companies, CEOs are legally responsible for coordinating the assets and liabilities of employees'
pension fund. - Correct Answer FALSE
A controller typically handles the accounting activities, such as tax management, data processing,
financial accounting, and cost accounting. - Correct Answer TRUE
Managerial finance is concerned with design and delivery of advice and financial products to individuals,
businesses, and governments. - Correct Answer FALSE
10) ________ is concerned with design and delivery of advice and financial products to individuals,
businesses, and governments.
,A) Managerial finance
B) Auditing services
C) Financial services
D) Cost accounting - Correct Answer C) Financial services
Managerial finance ________.
A) involves tasks such as budgeting, financial forecasting, cash management, and funds procurement
B) involves the design and delivery of advice and financial products
C) recognizes funds on an accrual basis
D) devotes the majority of its attention to the collection and presentation of financial data - Correct
Answer A) involves tasks such as budgeting, financial forecasting, cash management, and funds
procurement
Finance is ________.
A) the system of verifying, analyzing, and recording business transactions
B) the science of production, distribution, and consumption of goods and services
C) the art and science of managing money
D) the art of merchandising products and services - Correct Answer C) the art and science of managing
money
Which of the following is an area of career opportunities in financial services?
A) supply chain management
B) personal financial planning
C) auditing of financial statements
D) production planning - Correct Answer B) personal financial planning
Which of the following is an area of career opportunities in managerial finance?
A) investment
B) real estate and insurance
C) capital expenditures management
, D) personal financial planning - Correct Answer C) capital expenditures management
Which of the following is a duty of a financial manager in a business firm?
A) developing marketing plans
B) controlling the stock price
C) raising financial resources
D) auditing financial records - Correct Answer C) raising financial resources
A ________ is responsible for evaluating and recommending proposed long-term investments.
A) financial analyst
B) credit manager
C) pension fund manager
D) capital expenditures manager - Correct Answer D) capital expenditures manager
In partnerships, owners have unlimited liability and may have to cover debts of other less financially
sound partners. - Correct Answer TRUE
In partnerships, partners can readily transfer their wealth to other partners. - Correct Answer FALSE
A sole proprietor has unlimited liability; his or her total investment in a business, but not his or her
personal assets, can be taken to satisfy creditors. - Correct Answer FALSE
In a limited partnership, all partners' liabilities are limited to their investment in the partnership. -
Correct Answer TRUE
A treasurer is responsible for a firm's accounting activities, such as corporate accounting, tax
management, financial accounting, and cost accounting. - Correct Answer FALSE
Which of the following legal forms of organization is most expensive to organize?
A) sole proprietorships
