Ch 17 Review

The first step in financial management is purchasing assets like equipment and supplies.

• True

• False

What is an asset?

• an item of value for a business owner?

• process of recording your business’s finances

• person in charge of a business’s financial planning

• tells you how much money you need to run your business over a long time

What is the definition of accounting?

• an item of value for a business owner?

• process of recording your business’s finances

• person in charge of a business’s financial planning

• tells you how much money you need to run your business over a long time

What is the definition of a financial manager?

• an item of value for a business owner?

• process of recording your business’s finances

• person in charge of a business’s financial planning

• tells you how much money you need to run your business over a long time

What is an operating budget?

• an item of value for a business owner?

• process of recording your business’s finances

• person in charge of a business’s financial planning

• tells you how much money you need to run your business over a long time

The income statement for company ABC has total income of $102,000 and total expenses of $94,500. Does the company have a net income or a net loss?

• net loss

• net income

In July 2002, President George W. Bush signed into law this act which served to heighten the consequences for destroying, altering, or fabricating financial statements, and for trying to defraud shareholders.

• Patriot Act

• Americans with Disabilities Act

• Sarbanes-Oxley Act

• Civil Rights Act

LSF, Inc. filled a public offering of 1 million shares of common stock at $1/share. It paid Merrill Lynch a 5% commission for managing the public offering. How much did LSF pay in commission?

• $50,000

• $1,000,000

• $1,950,000

• $1,050,000

From the amount of Owners Equity on a Balance Sheet, if a portion of it is retained by the company to do as it pleases, what is normally done with the remaining balance?

• Issue stock dividends

• Given to charity

• Pay the company's expenses

• Buy more of the company's stock

What are the two major categories of values you would find in a budget?

• Income and Expenses

• Assets and liabilities

• Debits and credits

• Common stock and preferred stock