@PROFDOCDIGITALLIBRARIES
TEST BANK
Finance for Non-Financial Managers
Pierre Bergeron
7th Edition
PR
O
FD
O
C
,@PROFDOCDIGITALLIBRARIES
Table of Contents
Preface ....................................................................................................................... iv
CHAPTER 1 Overview of Financial Management ...................................................... 1-1
CHAPTER 2 Accounting and Financial Statements .................................................... 2-1
CHAPTER 3 Statement of Cash Flows ........................................................................ 3-1
CHAPTER 4 Financial Statement Analysis ................................................................. 4-1
CHAPTER 5 Profit Planning and Decision Making .................................................... 5-1
CHAPTER 6 Working Capital Management ............................................................... 6-1
PR
CHAPTER 7 Planning, Budgeting, and Controlling ................................................... 7-1
CHAPTER 8 Sources and Forms of Financing ........................................................... 8-1
CHAPTER 9 Cost of Capital, Capital Structure, and Financial Markets ................... 9-1
O
CHAPTER 10 Time-Value-of-Money Concept............................................................. 10-1
FD
CHAPTER 11 Capital Budgeting ................................................................................. 11-1
CHAPTER 12 Business Valuation ............................................................................... 12-1
O
C
,@PROFDOCDIGITALLIBRARIES
Chapter 1 Overview of Financial Management
MULTIPLE CHOICE
1. Which of the following statements describes an activity which is financial management?
a. Looking after trade payables and corporate accounting is not a responsibility of the
controller.
b. Monitoring the profit for the year which is the difference between revenue and
gross profit.
c. The treasurer raising funds.
d. Ensuring that the cost of borrowing is greater than the return on assets.
ANS: C PTS: 1 REF: 11 OBJ: LO 2
BLM: Higher Order
2. Which of the following statements describes a financial management activity?
a. Arranging internal financing is obtained from banks and investors.
PR
b. Ensuring liquidity by managing the payment of dividends.
c. Operating decisions dealing with better utilization of non-current assets.
d. The stability objective is related to the financial structure of a business.
ANS: D PTS: 1 REF: 15 OBJ: LO 4
BLM: Remember
O
3. Which of the following activities is NOT a financial management function?
a. The treasurer is responsible for corporate accounting.
b. External financing is obtained from investors.
FD
c. Internal financing is obtained from retained earnings and
depreciation/amortization.
d. Improving net profit through the use of productivity indicators and planned
downsizing.
O
ANS: A PTS: 1 REF: 11 OBJ: LO 3
BLM: Remember
4. What is the ultimate objective of financial management?
C
a. to ensure the ROA is higher than ROR
b. to obtain a higher ROR than ROA
c. to ensure that ROA is higher than the cost of financing
d. to collect trade receivables faster than the payment of trade and other payables
ANS: C PTS: 1 REF: 7 OBJ: LO 2
BLM: Remember
, @PROFDOCDIGITALLIBRARIES
5. Which activity is the controller responsible for?
a. general accounting
b. tax administration
c. investor relations
d. analyzing short- and long-term borrowing sources
ANS: A PTS: 1 REF: 11 OBJ: LO 3
BLM: Remember
6. What is considered an "efficiency" financial objective?
a. the ability to meet short-term financial commitments
b. the ability minimize the cost of borrowed funds
c. the return on trade receivables
d. the return on revenue
ANS: D PTS: 1 REF: 13 OBJ: LO 4
BLM: Remember
PR
7. What does the profit for the year pay for?
a. executive bonuses
b. interest on debt
c. dividends
d. employee salaries
O
ANS: C PTS: 1 REF: 17 OBJ: LO 5
BLM: Remember
FD
8. Which of the following is a source of internal financing?
a. revenue
b. depreciation/amortization
c. mortgages
d. long-term borrowings
O
ANS: B PTS: 1 REF: 16 OBJ: LO 5
BLM: Remember
C
9. What do investing decisions deal with?
a. the cost of borrowed funds
b. planned downsizing
c. buying non-current assets
d. the financing mix
ANS: C PTS: 1 REF: 19 OBJ: LO 5
BLM: Remember
TEST BANK
Finance for Non-Financial Managers
Pierre Bergeron
7th Edition
PR
O
FD
O
C
,@PROFDOCDIGITALLIBRARIES
Table of Contents
Preface ....................................................................................................................... iv
CHAPTER 1 Overview of Financial Management ...................................................... 1-1
CHAPTER 2 Accounting and Financial Statements .................................................... 2-1
CHAPTER 3 Statement of Cash Flows ........................................................................ 3-1
CHAPTER 4 Financial Statement Analysis ................................................................. 4-1
CHAPTER 5 Profit Planning and Decision Making .................................................... 5-1
CHAPTER 6 Working Capital Management ............................................................... 6-1
PR
CHAPTER 7 Planning, Budgeting, and Controlling ................................................... 7-1
CHAPTER 8 Sources and Forms of Financing ........................................................... 8-1
CHAPTER 9 Cost of Capital, Capital Structure, and Financial Markets ................... 9-1
O
CHAPTER 10 Time-Value-of-Money Concept............................................................. 10-1
FD
CHAPTER 11 Capital Budgeting ................................................................................. 11-1
CHAPTER 12 Business Valuation ............................................................................... 12-1
O
C
,@PROFDOCDIGITALLIBRARIES
Chapter 1 Overview of Financial Management
MULTIPLE CHOICE
1. Which of the following statements describes an activity which is financial management?
a. Looking after trade payables and corporate accounting is not a responsibility of the
controller.
b. Monitoring the profit for the year which is the difference between revenue and
gross profit.
c. The treasurer raising funds.
d. Ensuring that the cost of borrowing is greater than the return on assets.
ANS: C PTS: 1 REF: 11 OBJ: LO 2
BLM: Higher Order
2. Which of the following statements describes a financial management activity?
a. Arranging internal financing is obtained from banks and investors.
PR
b. Ensuring liquidity by managing the payment of dividends.
c. Operating decisions dealing with better utilization of non-current assets.
d. The stability objective is related to the financial structure of a business.
ANS: D PTS: 1 REF: 15 OBJ: LO 4
BLM: Remember
O
3. Which of the following activities is NOT a financial management function?
a. The treasurer is responsible for corporate accounting.
b. External financing is obtained from investors.
FD
c. Internal financing is obtained from retained earnings and
depreciation/amortization.
d. Improving net profit through the use of productivity indicators and planned
downsizing.
O
ANS: A PTS: 1 REF: 11 OBJ: LO 3
BLM: Remember
4. What is the ultimate objective of financial management?
C
a. to ensure the ROA is higher than ROR
b. to obtain a higher ROR than ROA
c. to ensure that ROA is higher than the cost of financing
d. to collect trade receivables faster than the payment of trade and other payables
ANS: C PTS: 1 REF: 7 OBJ: LO 2
BLM: Remember
, @PROFDOCDIGITALLIBRARIES
5. Which activity is the controller responsible for?
a. general accounting
b. tax administration
c. investor relations
d. analyzing short- and long-term borrowing sources
ANS: A PTS: 1 REF: 11 OBJ: LO 3
BLM: Remember
6. What is considered an "efficiency" financial objective?
a. the ability to meet short-term financial commitments
b. the ability minimize the cost of borrowed funds
c. the return on trade receivables
d. the return on revenue
ANS: D PTS: 1 REF: 13 OBJ: LO 4
BLM: Remember
PR
7. What does the profit for the year pay for?
a. executive bonuses
b. interest on debt
c. dividends
d. employee salaries
O
ANS: C PTS: 1 REF: 17 OBJ: LO 5
BLM: Remember
FD
8. Which of the following is a source of internal financing?
a. revenue
b. depreciation/amortization
c. mortgages
d. long-term borrowings
O
ANS: B PTS: 1 REF: 16 OBJ: LO 5
BLM: Remember
C
9. What do investing decisions deal with?
a. the cost of borrowed funds
b. planned downsizing
c. buying non-current assets
d. the financing mix
ANS: C PTS: 1 REF: 19 OBJ: LO 5
BLM: Remember
