Burkett BB42 Objective 5 Review

What types of financial information are most useful to businesses?

• vague and logical

• sensitive and external

• transferable and creative

• timely and understandable

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.

• deciding if resources are 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

For financial information to be comparable, it must also be:

• consistent.

• current.

• digital.

• private.

A company looks at financial information and learns that it could save money by switching to a different Internet provider. This is an example of using financial information to:

• create a budget.

• reduce expenses.

• plan business expansion.

• create a communication plan.

When a business decides to pay a loan off early due to a cash surplus, how is this business using financial information?

• to manage debt

• to increase sales

• to create budgets

• to make purchases

Which is a factor that might cause a business to adjust its budget figures?

• local elections

• economic trends

• sales procedures

• operating policies

What is the relationship between a business’s goals and its budget?

• Goals are established after the budget so that they are realistic.

• Goals state the big picture and are unrelated to a detailed budget.

• Budgets reflect real business activity while goals are usually unrealistic.

• Budgets translate a business’s goals into actual means for accomplishing them.

The master budget for Aubrey's Day Care Center is made up of information from:

• the previous year’s budget, with a 10% increase.

• internal sales forecasts and the probable level of competition.

• specialized budgets that are handed down from management.

• specialized budgets that are generated by individual departments.

The owners of C&G Auto regularly review their budget to determine whether they are:

• offering loans to employees.

• paying interest to customers.

• following their financial plans.

• receiving discounts from vendors.