Finance ICDC Prep 1

When preparing a statement of equity, what does a business deduct from its total net income to obtain its retained earnings?

• A. Dividends paid
• B. Depreciation of assets
• C. Sales tax payable
• D. Bad debt

One disadvantage of marginal analysis is that it does not account for

• A. outsourcing.
• B. sunk costs.
• C. qualitative factors.
• D. labor costs.

A company manager is making a decision concerning promotional strategy. What managerial accounting technique can assist in the implementation phase of her decision-making process?

• A. Budgeting expected revenue
• B. Recording and classifying transactions
• C. Comparing results to the budget
• D. Representing plans financially

The primary purpose of managerial accounting is to provide accurate data about a business's activities that help internal users

• A. control external factors.
• B. make informed decisions.
• C. obtain necessary loans.
• D. understand corporate policies.

A company purchases an expensive new software system and divides the cost of it between the two departments that will use the system. This is an example of cost

• A. dividing.
• B. accumulation.
• C. allocation.
• D. precision.

You want to have $8,000 in three years to purchase a car. You can earn 4% compound interest on your investment. How much should you invest today?

• A. $7,821.47
• B. $7,364.10
• C. $7,692.31
• D. $7,111.75

Banks limit their employees' and vendors' access to confidential financial information to

• A. protect their customers' privacy.
• B. maintain a safe working environment.
• C. safeguard cash drawers.
• D. ensure that collection procedures are followed.

Which of the following is a technological tool that businesses use to archive their financial records:

• A. Web-development programs
• B. Direct-response software
• C. Electronic data interchange
• D. Digital microfilm scanner

Seth's manager asked him to develop a report that compares their company's fourth-quarter performance with others in its industry. Which financial-analysis software feature should Seth use to generate information for his report?

• A. Forecasting
• B. Ratio analysis
• C. DuPont modeling
• D. Benchmarking

By analyzing a customer's financial information, a finance professional should be able to

• A. determine the customer's newest target market.
• B. declare Chapter 11 bankruptcy for the customer.
• C. protect the security of the customer's financial information.
• D. develop a financial strategy to help the customer.