CF topic 1

1. The corporate controller is generally responsible for which one of these functions?

• A) Capital expenditures
  

• B) Cash management
  

• C) Tax reporting

• D) Financial planning

2. A firm's capital structure refers to the firm's:

• A) mixture of various types of production equipment.
  

• B) investment selections for its excess cash reserves.
  

• C) combination of cash and cash equivalents.
  

• D) proportions of financing from current and long-term debt and equity.

3. Short-term finance deals with:

• A) the timing of cash flows.

• B) acquiring and selling fixed assets.

• C) financing long-term projects.
  

• D) capital budgeting.

4. The process of planning and managing a firm's long-term assets is called:

• A) working capital management.
  

• B) cash management.
  

• C) cost accounting management.

• D) capital budgeting.

5. The cheapest business entity to form is typically the:

• A) limited liability company.
  

• B) sole proprietorship.
  

• C) general partnership.

• D) limited partnership.

6. A business owned by a single individual is called a:

• A) corporation.
  

• B) sole proprietorship.
  

• C) general partnership.

• D) limited partnership.

7. Which one of the following statements concerning a sole proprietorship is correct?

• A) A sole proprietorship is difficult to form.

• B) The business profits are taxed twice at the federal level.
  

• C) The business profits are taxed separately from the personal income of the owner.

• D) The owner may be forced to sell his/her personal assets to pay company debts.

8. A partnership:

• A) is taxed the same as a corporation.
  

• B) terminates at the death of any limited partner.
  

• C) creates an unlimited liability for all general partners for the partnership's debts.

• D) has the same ability as a corporation to raise capital.

9. One advantage of a partnership is the:

• A) personal liability for all of the firm's debts.
  

• B) limited life of the entity.
  

• C) limited liability protection for all of the partners.

• D) relatively low formation cost.
  

10. Which one of the following statements is correct?

• A) Both partnerships and corporations incur double taxation.
  

• B) Sole proprietorships and partnerships are taxed in a similar fashion.
  

• C) Partnerships are the most complicated type of business to form.
  

• D) Both partnerships and corporations have limited liability for general partners and