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UNIT 6 Practice Test

Total questions: 46

Worksheet time: 23mins

Name
Class
Date
1.

What does the term DATA mean?

a)

Numerical or verbal descriptions that usually result from some sort of measurement.

b)
Diving Among The Alligators
c)

Only numerical information that is used for a purpose.

d)

Numerical information organized around verbal information organized to its opposite.

2.

What does the term INFORMATION mean?

a)
Data that has been processed and organized to provide context, relevance, and purpose.
b)

Raw unprocessed data organized around a common belief or misconception

c)
Random facts
d)
Unreliable sources
3.

What is the best definition of a DATABASE?

a)
A collection of physical files stored in a filing cabinet
b)

Its the base after second in baseball.

c)

A structured set of data held in a computer and is used by an organization to make decisions

d)

A random assortment of data scattered across multiple devices that is accessible by computer network

4.

The term Management Information System (MIS) is best defined as...

a)
A system that provides information to support marketing functions within an organization.
b)
A system that provides information to support decision-making and management functions within an organization.
c)

A system that tracks employee attendance and payroll for purposes of management

d)
A system that focuses on inventory management in a retail setting.
5.

Which of these is not one of the five areas of management?

a)

Finance

b)

Operations

c)

Marketing

d)

Secretarial

6.

Human Resources deals with this area of management...

a)
Financial Management
b)
Supply Chain Management
c)
Marketing Management
d)
Personnel Management
7.

Accounting refers to the practice of...

a)
recording, summarizing, and forecasting financial transactions
b)
analyzing, interpreting, and presenting financial data
c)
tracking, organizing, and budgeting financial activities
d)
recording, analyzing, and reporting financial transactions
8.

The term ASSETS means...

a)
Intangible concepts
b)
Valuable resources owned by an individual or organization
c)

A type of liability which is quantifiable for tax purposes only

d)
Non-essential items
9.

The term LIQUIDITY means...

a)
The total value of a company's outstanding shares
b)
The amount of money a company has in its bank account
c)
The number of employees in a company
d)
The ease with which an asset or security can be converted into cash without affecting its market price.
10.

The term LIABILITIES means...

a)
Profits earned by a company
b)
Assets owned by a company
c)
Financial obligations or debts a company owes to outside parties.
d)
Revenue generated by a company
11.

A BALANCE SHEET shows...

a)
the weather forecast for the week
b)
the number of employees in a company
c)

the latest employee trends focusing on marketing analysis and unrealized gains or losses

d)
the financial position of a company at a specific point in time
12.

DEPRECIATION is a term that means...

a)
Maintenance cost of an asset
b)

Complete elimination of an asset due to asset sales or promotions involving employees

c)

apportioning the cost of a fixed asset over the period which it will be used

d)
Increase in value of an asset over time
13.

The meaning of the term RETAINED EARNINGS is...

a)
The amount of money a company has in its bank account
b)
The total revenue of a company in a given year
c)
The value of a company's physical assets
d)
The portion of a company's net income that is not distributed to shareholders as dividends.
14.

An INCOME STATEMENT is what for a business?

a)

A financial document showing a summary of a company's revenues and expenses over a specific period of time.

b)
A report on customer satisfaction
c)
A document showing a company's physical assets
d)

A summary of employee salaries and how each income affects employee satisfaction

15.

What does the term FINANCIAL MANAGEMENT mean?

a)
Financial management involves predicting the weather accurately
b)
Financial management involves managing financial resources efficiently to achieve financial goals.
c)
Financial management refers to the art of juggling finances while riding a unicycle
d)
Financial management is the process of organizing the company's lunch schedule
16.

A business uses FINANCING to...

a)
hire employees
b)

create marketing campaigns that focus solely on consumer satisfaction

c)

sell products and services to customers in foreign nations

d)
obtain funds for various purposes
17.

SHORT TERM FINANCING means what for a business?

a)

Borrowing money for a short period of time (one year or less) to meet immediate financial needs or obligations.

b)
Seeking financing for a period longer than 10 years
c)

Avoiding all forms of debt for a short period of time, less than one year for example

d)
Using long-term investments to cover short-term expenses
18.

For a business, CASH FLOW means...

a)
the movement of money in and out of the business
b)
the color scheme of the business logo
c)

the amount of debt the business has compared to employee income expenses

d)
the number of employees in the business
19.

What does the term SPECULATIVE PRODUCTION mean for a business?

a)
Creating goods or services in anticipation of future demand
b)
Manufacturing products without considering future trends
c)

Creating goods based on current demand and then slowing to adjust for trending consumer attitudes and government policies

d)
Producing goods without any market research
20.

For a business, the term RISK-RETURN RATIO means...

a)
The location of a business
b)

The number of employees in a business who engage in risky financial decisions in order to maximize their return investment

c)
The amount of money a business is willing to invest
d)
Balance between potential return on investment and level of risk
21.

In business, what is a FINANCIAL PLAN?

a)

A financial plan is a plan for obtaining and using the money needed to implement an organization's goals

b)
A financial plan is a short-term budget for a business
c)
A financial plan is a marketing strategy for a company
d)
A financial plan is a document outlining employee benefits
22.

In business, what is a BUDGET?

a)
A budget is a financial plan that outlines expected income and expenses over a specific period of time.
b)

A budget is a type of car expense that companies incur when employees travel

c)
A budget is a type of fruit
d)
A budget is a type of animal
23.

In business, what is a CASH BUDGET?

a)

A cash budget is a type of investment account where cash is put in proportion to profits and losses at any given time

b)
A cash budget is a detailed plan showing how cash resources will be acquired and used over a specific time period.
c)
A cash budget is a marketing strategy for increasing sales
d)
A cash budget is a financial statement showing total assets
24.

What is ZERO-BASED BUDGETING for a business?

a)
Zero-based budgeting for a business is a method where all expenses must be justified for each new period, starting from a zero base.
b)
Zero-based budgeting is a method where expenses are justified based on the previous year's budget
c)
Zero-based budgeting is a method where expenses are only justified once a year
d)
Zero-based budgeting is a method where expenses are not tracked at all
25.

In business, what is a CAPITAL BUDGET?

a)
A capital budget is a plan for the acquisition of long-term assets and investments that will generate revenue in the future.
b)

A capital budget is a plan for employee salaries over the course of time

c)

A capital budget is a plan for marketing strategies along with employee salaries over the course of time

d)
A capital budget is a plan for short-term expenses only.
26.

What is meant by the term EQUITY CAPITAL?

a)
The amount of money a company owes to its creditors
b)
Funds raised by a company in exchange for ownership interest
c)

The total assets of a company divided by its shareholder liabilities and assets combined.

d)
The profit generated by a company in a fiscal year
27.

In business, what is meant by the term DEBT CAPITAL?

a)
Money invested by shareholders in a company
b)
Assets owned by a company
c)
Revenue generated from sales
d)
Funds borrowed by a company that must be repaid over time, typically with interest.
28.

What is a CERTIFICATE OF DEPOSIT?

a)
A Certificate of Deposit is a type of credit card
b)

A Certificate of Deposit is a type of mortgage that is certified by an institution, such as a bank or savings and loan

c)
A Certificate of Deposit is a type of insurance policy
d)
A Certificate of Deposit is a type of time deposit offered by banks and credit unions that locks in the deposited funds for a specific period of time at a fixed interest rate.
29.

What is meant by a LINE OF CREDIT?

a)
A line of credit is a one-time loan with a fixed interest rate.
b)
A line of credit is a type of insurance policy.
c)
A line of credit is a preset borrowing limit that can be used at any time.
d)
A line of credit is a form of cryptocurrency.
30.

What does the term COLLATERAL mean for a business?

a)
A type of business insurance
b)

A form of employee compensation that is lateral to other employee compensation

c)
Assets pledged as security for a loan
d)
A method of marketing strategy
31.

Which one of these is not a part of the Basics of Getting a Business Loan?

a)

Checking with competitors to see their opinions of your business.

b)

Checking your firm's credit rating

c)

Submitting current financial statements prepared by an independent accountant.

d)

Filling out a loan application and providing a current business plan.

32.

What does the term UNSECURED FINANCING mean?

a)
Unsecured financing means loans that are backed by collateral.
b)
Unsecured financing means credit that is backed by collateral.
c)
Unsecured financing means loans that are not backed by credit.
d)
Unsecured financing means loans or credit that is not backed by collateral.
33.

What is the PRIME INTEREST RATE?

a)

The PRIME INTEREST RATE is the interest rate that commercial banks charge for a short term loan to their most creditworthy customers.

b)

The PRIME INTEREST RATE is the interest rate that central banks charge commercial banks for any loans that are invested in capital equity only.

c)
The PRIME INTEREST RATE is the interest rate that credit unions charge their customers.
d)
The PRIME INTEREST RATE is the interest rate that mortgage lenders charge their customers.
34.

What are LOANS SCURED BY INVENTORY?

a)
Loans secured by intellectual property
b)
Loans secured by inventory are loans that are backed by the borrower's inventory of goods.
c)
Loans secured by real estate
d)
Loans secured by employee salaries
35.

What are LOANS SECURED BY RECEIVABLES?

a)
Loans secured by inventory
b)
Loans secured by equipment
c)

Loans secured by real estate and money received only in local rent operations dealing with equity

d)
Loans secured by receivables are loans backed by the borrower's accounts receivable.
36.

What does the term INITIAL PUBLIC OFFERING (IPO) mean?

a)
The final sale of a company's stock to the public
b)
The process of buying back shares from the public
c)
The act of merging two companies into one entity
d)
The first time a company's stock is offered to the public for purchase.
37.

What is the PRIMARY MARKET?

a)
The PRIMARY MARKET is where new securities are issued and sold for the first time directly from the issuer to the investor.
b)
The PRIMARY MARKET is where investors trade commodities directly with the government.
c)
The PRIMARY MARKET is where securities are bought and sold after they have been issued in the secondary market.
d)
The PRIMARY MARKET is where stocks are traded between investors without involving the issuing company.
38.

What is the SECONDARY MARKET?

a)
The SECONDARY MARKET is where investors borrow money from banks.
b)
The SECONDARY MARKET is where investors buy and sell securities they already own.
c)
The SECONDARY MARKET is where investors create new securities.
d)
The SECONDARY MARKET is where investors store their cash.
39.

What does the term COMMON STOCK mean?

a)
Common stock is a type of soup
b)
Common stock is a type of bond
c)
Common stock represents ownership in a company.
d)
Common stock is a type of currency
40.

What does the term VENTURE CAPITAL mean for a business?

a)
Venture capital refers to investing in well-established companies with low growth potential.
b)
Venture capital is a government grant given to any business that applies for it.
c)
Venture capital involves providing short-term loans to businesses in financial distress.
d)
Venture capital is a type of financing provided to startups and small businesses that are deemed to have high growth potential.
41.

In terms of the Stock Market, what is meant by the MARKET CAP

a)
Amount of money a company has in its bank account
b)

Number of employees in a company divided by the salary total each makes

c)
Total value of a company's outstanding shares of stock
d)

Total value of a company's debt in ratio to its capital equity and losses

42.

In terms of the Stock Market, what is meant by an UNREALIZED GAIN or LOSS?

a)
An UNREALIZED GAIN or LOSS is the increase or decrease in the value of an investment that has not been sold yet.
b)

An UNREALIZED GAIN or LOSS is the tax paid on an investment that is subtracted from capital equity funds and added to accounts receivable

c)
An UNREALIZED GAIN or LOSS is the profit or loss realized from selling an investment.
d)
An UNREALIZED GAIN or LOSS is the interest earned on an investment.
43.

Where should a P/E Ratio be for a stock you are considering investing in?

a)

Higher the better

b)

Higher than 40 but lower than 60

c)

About 41 but not over

d)

Between 17 and 30 or 20 -25

44.

In the stock market, what is meant by having a DIVERSIFIED PORTFOLIO?

a)
Investing all funds in a single company's stock
b)
Investing in a variety of assets to reduce risk by spreading investments across different industries, sectors, and types of securities.
c)
Putting money into a single industry without considering other sectors
d)
Focusing solely on high-risk investments without any balance
45.

What is a MUTUAL FUND?

a)
A mutual fund is an investment vehicle consisting of a portfolio of stocks, bonds, or other securities managed by a professional investment company.
b)
A mutual fund is a type of bank account
c)
A mutual fund is a type of insurance policy
d)
A mutual fund is a type of cryptocurrency
46.

In terms of Financing, what is a CORPORATE BOND?

a)
A corporate bond is a type of equity financing
b)
A corporate bond is a short-term financing option for individuals
c)

A corporate bond is a type of long-term debt financing where a corporation borrows money from investors by issuing bonds it promises to pay back.

d)
A corporate bond is a form of government-issued debt

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