Practice: Test-Banking and Accounting

Debt or financial obligations are called its:

• A. intangibles
• B. owners' equity
• C. tangibles
• D. assets
• E. liabilities

Things of value owned by a firm are called its:

• A. intangibles
• B. owners' equity
• C. tangibles
• D. assets
• E. liabilities

Any object or objects that a group of people use to buy and sell goods and services is called:

• A. a countertrade
• B. capital
• C. money
• D. revenue
• E. an earned deposit

_____ management is the art and science used to determine the most effective ways to acquire and use funds to achieve the firm's goals.

• A. Operations
• B. Financial
• C. Accounting
• D. Corporate
• E. Money

The primary goal of the financial manager is to:

• A. maximize the value of the firm to its owners
• B. concentrate on short-term growth strategies
• C. develop new goods and services for the company
• D. make sure all employees get paid on a regular schedule
• E. pay off all debt as quickly as possible

Financial managers constantly strive for a balance between:

• A. the opportunity for profit and the potential for loss
• B. cash and marketable securities
• C. economic responsibility and social responsibility
• D. common and preferred stock
• E. dividends paid out and interest payments

In seeking a balance between the opportunity for profit and the potential for loss, a financial manager is dealing with the concept of _____ trade-off.

• A. potential profit
• B. risk-return
• C. profit-loss
• D. sales-profit
• E. profit-budget

Funds invested in long-lived assets, such as land, buildings, machinery, and equipment, are called:

• A. manufacturing expenses
• B. operating expenses
• C. capital expenditures
• D. production costs
• E. material costs

_____ is the process of selecting the capital expenditures that offer the best returns and meet the goal of maximizing the firm's value.

• A. Capital evaluation
• B. Capital allocation
• C. Budget analysis
• D. Capital budgeting
• E. Budget allocation

A secured loan requires that the borrower pledge specific assets to secure the loan. These assets are

• A. collateral
• B. pledges
• C. intangible assets
• D. negotiable assets
• E. asset requirements