Unit Five Summative

The process of keeping the financial records of a business is known as

• accounting.
• controlling.
• financing.
• bookkeeping.

The overall purpose of accounting is to

• maintain accurate reports.
• compile the business’s expenses.
• keep track of sales.
• control the finances of the business.

A creditor is most likely to examine a business’s financial accounting records if the business is

• applying for a bank loan.
• selecting a new market.
• using cash accounting.
• complying with regulations.

Which of the following presents the first three steps in the accounting cycle in the correct order:

• Post, analyze, and journalize
• Analyze, post, and journalize
• Analyze, journalize, and post
• Post, journalize, and analyze

Which of the following financial reports provides estimates of when, where, and how much money will come into and out of a business next year:

• Balance sheet
• Cash flow statement
• Income statement
• Bank statement

Finance is the business function that involves managing

• information.
• money.
• marketing.
• production.

The goals of the finance function are to ensure profitability and

• advertise products.
• manufacture raw materials.
• give out information.
• reduce risks.

Decisions about financing refer to the

• accounts receivable.
• acquisition of funds.
• administration of assets.
• accounting department.

Determining which projects a business should invest in is known as

• return on capital.
• the cash conversion cycle.
• capital structuring.
• capital budgeting.

Which of the following is a measure of how well a business generates cash flow:

• Accounts receivable
• Capital structure
• Accounts payable
• Return on capital