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WorksheetsIntro to Business Test #3
Total questions: 38
Worksheet time: 20mins
Name
Class
Date
1.
What are assets?
a)
What a company owns; anything of value owned by a business.
b)
Costs of operating a business.
c)
Detailed plans for the financial needs of individuals, families, and businesses.
d)
Differences between actual and budgeted performance.
2.
What are liabilities?
a)
The money paid to employees.
b)
Costs of operating a business.
c)
The act of purchasing items.
d)
What a company owes.
3.
What is a budget?
a)
The money a company spends.
b)
All income a company receives over the course of time.
c)
The cost of operating a business.
d)
Detailed plans for the financial needs of individuals, families, and businesses.
4.
What is owner's equity?
a)
The value of the business after liabilities are subtracted from assets.
b)
What a company owes.
c)
Documents that are used to record and analyze the financial performance of a business.
d)
All income a company receives over the course of time.
5.
What is a balance sheet?
a)
The value of the business after liabilities are subtracted from assets.
b)
A report that lists a company’s assets, liabilities, and owner’s equity at a specific point in time.
c)
Detailed plans for the financial needs of individuals, families, and businesses.
d)
A fictitious report.
6.
What are financial performance ratios?
a)
A report of revenue, expenses, and net income or loss from operations for a specific period.
b)
A report that lists a company’s assets, liabilities, and owner’s equity at a specific point in time.
c)
Comparisons of a company’s financial elements that indicate how well it is performing.
d)
Documents that are used to record and analyze the financial performance of a business.
7.
What is an operating budget?
a)
A budget that plans income and expenses from the beginning of a new business or a major business expansion until it becomes profitable.
b)
Represents known expenses and forecasted future costs of the business for a specific period of time.
c)
Detailed plans for the financial needs of individuals, families, and businesses.
d)
A budget focused on equipment usage.
8.
All are profitability ratios except
a)
Gross profit margin
b)
Return on assets
c)
Leverage ratio
d)
Return on equity
9.
Which of the following is a liquidity ratio?
a)
Debt to equity ratio
b)
Current ratio
c)
Debtors turnover ratio
d)
Equity ratio
10.
The amount that the issuer of a bond must pay the buyer when it reaches maturity.
a)
par value
b)
best value
c)
coupon rate
d)
yield
11.
A condition in which securities prices are falling consistently coupled with widespread pessimism is considered a
a)
bull market
b)
tiger market
c)
lion market
d)
bear market
12.
The measurement of the value of a section of companies on the stock market.
a)
Price index
b)
Stock index
c)
Stock broker
d)
Stock market
13.
The rate of interest given to a bondholder.
a)
Coupon rate
b)
Maturity rate
c)
Par value rate
d)
Yield rate
14.
The due date for a bond to be repaid
a)
Par value date
b)
Coupon rate date
c)
Yield date
d)
Maturity date
15.
The profit made after selling stocks and bonds is a
a)
capital gain
b)
capital decrease
c)
capital increase
d)
capital loss
16.
An organized place to buy and sell securities is a(n)
a)
investment market
b)
stock and bond exchange
c)
auction
d)
stock exchange
17.
_________ is the possibility of loss.
a)
Return
b)
Retaliation
c)
Retribution
d)
Risk
18.
________________ is the practice of allocating funds across different asset classes or sectors.
a)
Divesting
b)
Combination
c)
Diversification
d)
Collaboration
19.
In this market firms offer new stocks and bonds to the public for the first time.
a)
Initial market
b)
Secondary market
c)
Primary market
d)
Money market
20.
The financial market in which previously issued financial instruments such as stock, bonds, options, and futures are bought and sold.
a)
Money market
b)
Secondary market
c)
Primary market
d)
Discount market
21.
This type of stock does not allow the holder to vote, but does pay out a share of the profit
a)
Variable stock
b)
Common stock
c)
Preferred stock
d)
Stock exchange
22.
A market in which share prices are rising, encouraging buying.
a)
Bear market
b)
Open market
c)
Money market
d)
Bull market
23.
The person who buys and sells securities on behalf of their clients.
a)
Stock broker
b)
Exchange manager
c)
Financial assistant
d)
Stock manager
24.
A debt investment in which an investor loans money to an entity (typically corporate or governmental) which borrows the funds for a defined period of time at a variable or fixed interest rate.
a)
Loan
b)
Share
c)
Future
d)
Bond
25.
The SEC does not require publicly traded corporations to provide comparative financial statements.
a)
True
b)
False
26.
Many accountants become certified fraud examiners due to the less rigorous requirements of becoming a certified public accountant.
a)
True
b)
False
27.
Net operating income is the difference between a firm's revenue and its cost of goods sold.
a)
True
b)
False
28.
The Banking Act of 1933 is also known as the Gramm-Bliley-Leach Act.
a)
True
b)
False
29.
The purpose of GAAP is to ensure that financial statements are relevant, reliable, consistent, and comparable.
a)
True
b)
False
30.
A securities exchange provides an organized venue for stockbrokers and securities dealers to trade listed stocks and other securities
a)
True
b)
False
31.
Expenses = Revenue - Net Income.
a)
True
b)
False
32.
It is mandatory for publicly traded firms in the United States to have an independent CPA firm perform an annual external audit of their financial statements.
a)
True
b)
False
33.
Joe’s accountant has asked him to determine the company’s direct and indirect costs. Joe would classify depreciation on the company’s copy machine and computers as indirect costs.
a)
True
b)
False
34.
Kale, Inc. uses accrual-basis accounting method. It can be said that Kale's revenue initially reflects as an increase in accounts receivable instead of an increase in cash.
a)
True
b)
False
35.
The Dow Jones Industrial Average and the S&P 500 are two of the best-known indices.
a)
True
b)
False
36.
The coupon rate on a bond expresses the annual interest payment as a percentage of the bond's par value.
a)
True
b)
False
37.
In general, the riskier an investment alternative is, the lower its expected return.
a)
True
b)
False
38.
A _______________ is an IOU issued by the U.S. government that typically matures between 1 and 10 years.
a)
Treasury Note
b)
Treasury Bill
c)
Treasury Bond
d)
Treasury Credit
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