BFIN FINAL EXAM UPDATED
QUESTIONS AND CORRECT ANSWERS.
With good accounting knowledge, a financial manager can - ANS understand financial data of
the firm
Accounting can help financial managers: - ANS to interpret and use financial information in
allocating financial resources more efficiently
The field of finance is closely linked to: - ANS accounting and economics
The goal of financial management is: - ANS to maximize shareholder's wealth
Which of the following is not a drawback for profit-only focus? - ANS investors may receive a
higher dividend payout
Valuation of assets utilizes: - ANS the present value model and future expected cash flows
Agency theory describes: - ANS the potential conflicts between the goals of management
and that of shareholders
Fairness in financial management refers to all of the following with the exception of: -
ANS rewarding CEOs with excessive bonuses
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,The honesty of the management can be compromised under all the following conditions with
the exception of: - ANS when a manager complies with regulatory rules
One way to align management's interest with that of shareholder's is: - ANS granting stock
options to management
Which if the following forms exposes all owners to unlimited liability? - ANS both partnership
and proprietorships
Sole Proprietorship is characterized by all of the following except: - ANS high organizational
and operating costs
Select the pair of terms that indicates a correct match - ANS proprietorship; personal
taxation only
Markets that focus on short-term securities are: - ANS money markets
Markets that focus on securities having life longer than one year are: - ANS capital market
Which of the following statements is not correct about a firm laded with debt? - ANS the
firm is viewed by investors with high growth potentials
New common stock is sold by firms in the ________ market and individuals trade securities in
________ market. - ANS primary; secondary
On January 1, 2018, total assets for Jahara Corp were $136,000; on December 31, 2018, total
assets were $157,000. On January 1, 2018, total liabilities were $110,000; on December 31,
2018, total liabilities were $118,000. What is the amount of the change and the direction of the
change in Wininger Technologies' capital for 2019? - ANS increase of $13,000
In 1990, Dolomites Company purchased a building for $170,000. In 2020, a real estate
professional says the building has a fair value of $1,000,000. In 2020, a similar building down
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, the street recently sold for $900,000. What value, before consideration of accumulated
depreciation, is reported for the building on the balance sheet at December 31, 2020? -
ANS $170,000
The calculation of ending retained earnings considers the beginning retained earnings, current
period net income or net less, and subtracts dividends - ANS True
The calculation of ending retained earnings considers the beginning retained earnings, current
period net income or net loss, and stockholder's equity - ANS False
The financial statement that reflects the profitability of a firm over a period of the time is the: -
ANS income statement
The statement of cash flows identifies the sources and uses of the firm's cash: -
ANS between the beginning and the year end of the fiscal period
the statement of cash flows is composed of cash flow from operations, cash flow from financing
activities, and: - ANS cash flow from investing activities
Earnings that are retained: - ANS are used to purchase assets, pay liabilities and other
expenses
The value of a firm's land as a result of a golf course being built in the adjacent property: -
ANS is an increase in value to an economist
Accounting values are established primarily by: - ANS actual transactions
To an accountant, income that is gained or lost during a given period is: - ANS verifiable
The economists' value concept: - ANS does not include sunk costs
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
QUESTIONS AND CORRECT ANSWERS.
With good accounting knowledge, a financial manager can - ANS understand financial data of
the firm
Accounting can help financial managers: - ANS to interpret and use financial information in
allocating financial resources more efficiently
The field of finance is closely linked to: - ANS accounting and economics
The goal of financial management is: - ANS to maximize shareholder's wealth
Which of the following is not a drawback for profit-only focus? - ANS investors may receive a
higher dividend payout
Valuation of assets utilizes: - ANS the present value model and future expected cash flows
Agency theory describes: - ANS the potential conflicts between the goals of management
and that of shareholders
Fairness in financial management refers to all of the following with the exception of: -
ANS rewarding CEOs with excessive bonuses
1 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
,The honesty of the management can be compromised under all the following conditions with
the exception of: - ANS when a manager complies with regulatory rules
One way to align management's interest with that of shareholder's is: - ANS granting stock
options to management
Which if the following forms exposes all owners to unlimited liability? - ANS both partnership
and proprietorships
Sole Proprietorship is characterized by all of the following except: - ANS high organizational
and operating costs
Select the pair of terms that indicates a correct match - ANS proprietorship; personal
taxation only
Markets that focus on short-term securities are: - ANS money markets
Markets that focus on securities having life longer than one year are: - ANS capital market
Which of the following statements is not correct about a firm laded with debt? - ANS the
firm is viewed by investors with high growth potentials
New common stock is sold by firms in the ________ market and individuals trade securities in
________ market. - ANS primary; secondary
On January 1, 2018, total assets for Jahara Corp were $136,000; on December 31, 2018, total
assets were $157,000. On January 1, 2018, total liabilities were $110,000; on December 31,
2018, total liabilities were $118,000. What is the amount of the change and the direction of the
change in Wininger Technologies' capital for 2019? - ANS increase of $13,000
In 1990, Dolomites Company purchased a building for $170,000. In 2020, a real estate
professional says the building has a fair value of $1,000,000. In 2020, a similar building down
2 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
, the street recently sold for $900,000. What value, before consideration of accumulated
depreciation, is reported for the building on the balance sheet at December 31, 2020? -
ANS $170,000
The calculation of ending retained earnings considers the beginning retained earnings, current
period net income or net less, and subtracts dividends - ANS True
The calculation of ending retained earnings considers the beginning retained earnings, current
period net income or net loss, and stockholder's equity - ANS False
The financial statement that reflects the profitability of a firm over a period of the time is the: -
ANS income statement
The statement of cash flows identifies the sources and uses of the firm's cash: -
ANS between the beginning and the year end of the fiscal period
the statement of cash flows is composed of cash flow from operations, cash flow from financing
activities, and: - ANS cash flow from investing activities
Earnings that are retained: - ANS are used to purchase assets, pay liabilities and other
expenses
The value of a firm's land as a result of a golf course being built in the adjacent property: -
ANS is an increase in value to an economist
Accounting values are established primarily by: - ANS actual transactions
To an accountant, income that is gained or lost during a given period is: - ANS verifiable
The economists' value concept: - ANS does not include sunk costs
3 @COPYRIGHT 2025/2026 ALLRIGHTS RESERVED
