FINANCE 301 Exam Study Set | 230 Questions
Solved 100% Correct | Verified Answers
Cash - ANSWER used to pay bills and make business decisions
Stakeholders - ANSWER anyone who has a claim on the cash flows (ex. investors,
employees, shareholders, creditors (someone you owe money to), IRS)
Productive Assets - ANSWER assets that produce cash flows (ex. renters for your condo)
Residual Cash Flows - ANSWER what is left over after the company has paid expenses,
taxes, and dividends (retained earnings)
earnings (from I/S) that have not been paid out as dividends
Capital Budgeting - ANSWER which productive long-term assets should we acquire?
Financing - ANSWER how shall we finance the capital expenditure? cash, loan?
Working Capital Management - ANSWER current assets - current liabilities
mismanaging it is #1 reason companies go under
Capital - ANSWER the means to make a company grow (cash)
Sole Proprietorship - ANSWER business owned by 1 person, total control, make all
decisions, don't share any profits, easy to form, unlimited liability, difficult to raise
capital
,Partnership - ANSWER a business owned by more than 1 person, harder to dissolve
because it's harder to divide assets (like a divorce), shared control
General Partnership - ANSWER unlimited liability
Limited Partnership - ANSWER "silent partner", no say on how partnership is run, only
loses money put into the company to start it (ex. If $20,000 is put in, then that would be
all they lose)
Corporation - ANSWER limited liability, indefinite life, greater access to capital because
they can issue stocks, double taxation, difficult/costly to establish
S Corp - ANSWER < 100 shareholders and only 1 class of stock
C Corp - ANSWER public - market is regulated by SEC
privately-held - not regulated
Limited Liability Partnership, LLP
Limited Liability Company, LLC - ANSWER limited liability, no double taxation
Shareholders/Stockholders - ANSWER elects Board of Directors
Board of Directors - ANSWER hires CEO
CEO - ANSWER hires CFO
CFO - ANSWER responsible for quality of financial reports
, treasurer, risk manager, controller, internal auditor, and external auditor report to this
position
Treasurer - ANSWER employee responsible for the management of a company's cash
Risk Manager - ANSWER identifies and corrects high-risk situations within the health
care field
Controller - ANSWER person who manages all of a firm's accounting activities (chief
accounting officer)
Internal Auditor - ANSWER reduces threats of fraud
External Auditor - ANSWER examines financial records of company
Maximize Market Share? - ANSWER no
reduces price
no profit
Maximize Profits? - ANSWER no
lower expenses
shoddy products
least workforce (cheap labor)
Maximize the Value of the Firm's Stock? - ANSWER yes
increase value of company
Solved 100% Correct | Verified Answers
Cash - ANSWER used to pay bills and make business decisions
Stakeholders - ANSWER anyone who has a claim on the cash flows (ex. investors,
employees, shareholders, creditors (someone you owe money to), IRS)
Productive Assets - ANSWER assets that produce cash flows (ex. renters for your condo)
Residual Cash Flows - ANSWER what is left over after the company has paid expenses,
taxes, and dividends (retained earnings)
earnings (from I/S) that have not been paid out as dividends
Capital Budgeting - ANSWER which productive long-term assets should we acquire?
Financing - ANSWER how shall we finance the capital expenditure? cash, loan?
Working Capital Management - ANSWER current assets - current liabilities
mismanaging it is #1 reason companies go under
Capital - ANSWER the means to make a company grow (cash)
Sole Proprietorship - ANSWER business owned by 1 person, total control, make all
decisions, don't share any profits, easy to form, unlimited liability, difficult to raise
capital
,Partnership - ANSWER a business owned by more than 1 person, harder to dissolve
because it's harder to divide assets (like a divorce), shared control
General Partnership - ANSWER unlimited liability
Limited Partnership - ANSWER "silent partner", no say on how partnership is run, only
loses money put into the company to start it (ex. If $20,000 is put in, then that would be
all they lose)
Corporation - ANSWER limited liability, indefinite life, greater access to capital because
they can issue stocks, double taxation, difficult/costly to establish
S Corp - ANSWER < 100 shareholders and only 1 class of stock
C Corp - ANSWER public - market is regulated by SEC
privately-held - not regulated
Limited Liability Partnership, LLP
Limited Liability Company, LLC - ANSWER limited liability, no double taxation
Shareholders/Stockholders - ANSWER elects Board of Directors
Board of Directors - ANSWER hires CEO
CEO - ANSWER hires CFO
CFO - ANSWER responsible for quality of financial reports
, treasurer, risk manager, controller, internal auditor, and external auditor report to this
position
Treasurer - ANSWER employee responsible for the management of a company's cash
Risk Manager - ANSWER identifies and corrects high-risk situations within the health
care field
Controller - ANSWER person who manages all of a firm's accounting activities (chief
accounting officer)
Internal Auditor - ANSWER reduces threats of fraud
External Auditor - ANSWER examines financial records of company
Maximize Market Share? - ANSWER no
reduces price
no profit
Maximize Profits? - ANSWER no
lower expenses
shoddy products
least workforce (cheap labor)
Maximize the Value of the Firm's Stock? - ANSWER yes
increase value of company
