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B&E 201 Final Questions and Correct Detailed Answers
(Verified Answers)
What is the purpose of the ratio statement?
Ans: To analyze how well a company is doing in relation to its competition and its
own goals
How are new issues of stocks and bonds first sold to investors or financial
institutions?
Ans: Through investment bankers engaged in underwriting
A _____________ order involves eating the stock broker use his or her professional
experience and judgement to determine the best time to make a security purchase
or sale
Ans: Discretionary
The purpose of financial accounting it to record and review a company's financial
information and then submit the findings to which of the following groups?
Ans: Decision makers outside an organization
The federal government
pg. 1
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What is a dividend?
Ans: A portion of a company's profits that is distributed to stockholders
Fees that most checking accounts charge:
Ans: Monthly service fee
Insufficient funds fee
Fees for exceeding the check writing limit
Types of investments that are suitable for income investment strategies:
Ans: Blue-chip stocks
Bonds
Preferred stocks
What are the four characteristics of financial statements, according to the General
Accepted Accounting Principles (GAAP)?
pg. 2
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Ans: Relevant
Reliable
Consistent
Comparable
Which activities are part of the recording step of the accounting process?
Ans: Financial data are entered into a journal or record book
Double-entry bookkeeping is used to check for errors
If your company takes out a long-term loan, what are you likely to encounter?
Ans: Your company's credit rating will be checked
The process of converting information about individual transactions into financial
statements for analysis is called the __________ process
Ans: Accounting
When accountants analyze items in a balance sheet, what do they obtain that is
helpful for managing a business?
pg. 3
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Ans: Financial ratios indicating the company's performance
What is the difference between current liabilities and long-term liabilities?
Ans: Current liabilities are due within one year or less, while long-term liabilities are
due in one year or more
An amount paid for a business beyond the value of its other assets is based on
characteristics such as the firm's reputation, loyal employees, and customer list is
called ________.
Ans: Goodwill
The phrase 'terms of trade' is used in which type of financing?
Ans: Trade credit
A promissory ____ is a written contract prepared by a buyer who agrees to pay a
seller a certain amount by a certain time.
Ans: Note
Assets that are pledged in order to secure a loan are known as __________.
pg. 4
B&E 201 Final Questions and Correct Detailed Answers
(Verified Answers)
What is the purpose of the ratio statement?
Ans: To analyze how well a company is doing in relation to its competition and its
own goals
How are new issues of stocks and bonds first sold to investors or financial
institutions?
Ans: Through investment bankers engaged in underwriting
A _____________ order involves eating the stock broker use his or her professional
experience and judgement to determine the best time to make a security purchase
or sale
Ans: Discretionary
The purpose of financial accounting it to record and review a company's financial
information and then submit the findings to which of the following groups?
Ans: Decision makers outside an organization
The federal government
pg. 1
, Click here- Nclex - Stuvia US
What is a dividend?
Ans: A portion of a company's profits that is distributed to stockholders
Fees that most checking accounts charge:
Ans: Monthly service fee
Insufficient funds fee
Fees for exceeding the check writing limit
Types of investments that are suitable for income investment strategies:
Ans: Blue-chip stocks
Bonds
Preferred stocks
What are the four characteristics of financial statements, according to the General
Accepted Accounting Principles (GAAP)?
pg. 2
, Click here- Nclex - Stuvia US
Ans: Relevant
Reliable
Consistent
Comparable
Which activities are part of the recording step of the accounting process?
Ans: Financial data are entered into a journal or record book
Double-entry bookkeeping is used to check for errors
If your company takes out a long-term loan, what are you likely to encounter?
Ans: Your company's credit rating will be checked
The process of converting information about individual transactions into financial
statements for analysis is called the __________ process
Ans: Accounting
When accountants analyze items in a balance sheet, what do they obtain that is
helpful for managing a business?
pg. 3
, Click here- Nclex - Stuvia US
Ans: Financial ratios indicating the company's performance
What is the difference between current liabilities and long-term liabilities?
Ans: Current liabilities are due within one year or less, while long-term liabilities are
due in one year or more
An amount paid for a business beyond the value of its other assets is based on
characteristics such as the firm's reputation, loyal employees, and customer list is
called ________.
Ans: Goodwill
The phrase 'terms of trade' is used in which type of financing?
Ans: Trade credit
A promissory ____ is a written contract prepared by a buyer who agrees to pay a
seller a certain amount by a certain time.
Ans: Note
Assets that are pledged in order to secure a loan are known as __________.
pg. 4
