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A100 IU Exam 2 Latest Update Exam | Questions and Verified Answers
| 100% Correct | Grade A +
Business activities activities - ANSWER Operating, Investing, and
Financing
Sources of funds - ANSWER liabilities and stockholders equity
Uses of funds - ANSWER assets
Equity Investors - ANSWER Owners/shareholders
Care about earnings retained from profitable business
operations
Legal rights of stockholders - ANSWER Ownership, hope for
profit
Benefits of stockholders - ANSWER Increased value of shares,
possible dividends
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Risks of stockholders - ANSWER May not receive ROI, can lose
some or all investment, may not receive dividend
Debt Investors - ANSWER Creditors (banks, leasing, bond
holders)
reported as liability
principle and interest must be paid
Legal rights of debt investors - ANSWER Interest and principle
must be paid
able to demand payment , confiscate items, or "call the note"
Benefits of Debt investors - ANSWER Earn a return greater than
that of the borrowed funds, net benefits retained by the owners
Risks of debt investors - ANSWER Financial risks
may have to liquidate assets
could cause bankrupcy
A100 IU Exam 2 Latest Update Exam | Questions and Verified Answers
| 100% Correct | Grade A +
Business activities activities - ANSWER Operating, Investing, and
Financing
Sources of funds - ANSWER liabilities and stockholders equity
Uses of funds - ANSWER assets
Equity Investors - ANSWER Owners/shareholders
Care about earnings retained from profitable business
operations
Legal rights of stockholders - ANSWER Ownership, hope for
profit
Benefits of stockholders - ANSWER Increased value of shares,
possible dividends
, 2|Page
Risks of stockholders - ANSWER May not receive ROI, can lose
some or all investment, may not receive dividend
Debt Investors - ANSWER Creditors (banks, leasing, bond
holders)
reported as liability
principle and interest must be paid
Legal rights of debt investors - ANSWER Interest and principle
must be paid
able to demand payment , confiscate items, or "call the note"
Benefits of Debt investors - ANSWER Earn a return greater than
that of the borrowed funds, net benefits retained by the owners
Risks of debt investors - ANSWER Financial risks
may have to liquidate assets
could cause bankrupcy
