1.02 Financial Planning I

When Alana prepares a report so that all financial data is clearly disclosed, she is ensuring that the information is:

• flexible.

• relevant.

• timely.

• transparent.

A manager is most likely to use financial information when:

• establishing lines of authority within an organization.

• researching the demographics of a new target market.

• determining resources available to fund a new project.

• calculating the number of on-the-job injuries in the past year.

Which is a way that businesses can use financial information?

• to identify trends

• to conduct focus groups

• to select selling strategies

• to create an economic system

Useful financial information is understandable to

• anyone who needs to use it

• accountants and managers

• anyone with a background in finance

• everyone

“Jargon” is a term used to describe specialized language that is known only by a specific group of people. Based on this definition, financial information that contains jargon would

• not be considered relevant

• be considered complete

• not be considered understandable

• be considered neutral

For financial information to be reliable, it must also be

• understandable

• relevant

• complete

• biased

For financial information to be comparable, it must also be

• current

• consistent

• private

• digital

In business, the most important application of financial information is

• getting to know the target market

• determining salaries

• trend identification

• business decision making

Which of the following is a reason that businesses might look at financial information from another company:

• To determine how to increase sales

• To monitor their company’s ongoing business activities

• To manage their company’s debt

• To see how their company compares to the competition

Businesses use financial information to create and adjust

• accounting standards

• mission statements

• budgets

• trends