BUSINESS FINANCE 25 QUESTIONS

QUESTIONS :

 

1. A good marketing strategy should carry a product through all stages of the product life cycle.

True
False

2. A person who works as a sales representative for a manufacturer or wholesaler and gets paid a commission on any sales is a(n):

 

  A. broker
  B. merchandiser
  C. merchant wholesaler
  D. agent
  E. distribution captain

 

3. A(n) _____ is the legally exclusive design, name, or identifying mark associated with a company’s brand.

 

  A. branding sign
  B. maste5 brand
  C. brand symbol
  D. trademark
  E. emblem

 

4. An accounting journal is a chronological list of transactions, each assigned to a particular account.

True
False

5. Another term for owners’ equity is:

 

  A. assets
  B. liabilities
  C. net worth
  D. gross worth
  E. gross sales

 

6. By lowering the reserve requirement, the Federal Reserve tries to make more money available for loans and stimulate the economy

True
False

7. Chez Dove is an independent coffeehouse/bookstore that went bankrupt only eight months after opening due to an unexpected demand for cash to fix a leaking roof. Better cash _____ might have allowed the business to continue operation

 

  A. maintenance
  B. capitalization
  C. targeting
  D. management
  E. administration

 

8. Federal Reserve banks must hold a certain portion of their deposits in reserve. This percentage is called the:

 

  A. reserve requirement
  B. prime monetary percentage
  C. discount requirement
  D. interest rate average
  E. margin requirement

 

9. Finance companies make loans to people who could not get credit anywhere else. To compensate for taking this extra risk, finance companies:

 

  A. are 100 percent covered by the FDIC
  B. charge higher interest rates than commercial banks do
  C. sell government bonds
  D. raise the customers’ discount rates
  E. have a high reserve requirement

 

10. Grainger Distribution Company sold Long Electronics ten circuit breakers for $179.00 each. Long Electronics will be allowed thirty days to pay the bill. Grainger will carry the $1790.00 on its books as a(n):

 

  A. account payable
  B. current liability
  C. account receivable
  D. fixed liability
  E. marketable security

 

11. In which stage of the product life cycle are you most likely to find the manufacturer using a line extension strategy?

 

  A. introduction
  B. development
  C. maturity
  D. growth
  E. decline

 

12. Integrated marketing communications (IMC):

 

  A. is a careful coordination of all promotional activities
  B. produces a consistent and unified advertising message
  C. produces a customer-focused advertising message
  D. is typically overseen by a marketing communications director
  E. is accurately described by all of the above

 

13. Lines of credit are short-term loans that are secured by collateral.

True
False

14. Municipal bonds are attractive to investors because interest earned on them is exempt from federal income tax

True
False

15. Price skimming is often used as an inducement to get consumers to switch brands or companies.

True
False

16. The balance sheet summarizes a firm’s financial position over a period of time, for instance 3 months or a year.

True
False

17. The four major groupings of consumer products are:

 

  A. limited, generic, specialty, and unsought
  B. shopping, durable, limited, and nondurable
  C. unsought, convenience, shopping, and specialty
  D. brand, specialty, shopping, and generic
  E. convenience, brand, generic, and manufacturer

 

18. The Securities Investor Protection Corporation (SIPC):

 

  A. protects stock brokers from bad-risk investors
  B. is a mutual fund that invests in only profitable securities
  C. is like an insurance company for online stock exchanges that sometimes experience technological difficulties beyond their control
  D. protects investors up to $10,000 in the event of a bear market
  E. insures the accounts of customers of brokerage firms for up to $500,000 against a firm failure

 

19. The _____ is a series of marketing entities through which goods and services pass on their way from producers to end-users

 

  A. industrial channel
  B. distribution channel
  C. consumption channel
  D. inventory control process
  E. vertical integration process

 

20. The _____ summarizes an organization’s financial status at the end of an accounting period

 

  A. trial balance
  B. income statement
  C. cash flow statement
  D. balance sheet
  E. accounts payable ledger

 

21. Watts Regulator makes hydroponic pressure valves used in water pumps and water heaters. Watts had $100,000 in net sales for the month. Cost of goods sold was $42,000. On an income statement, the remaining $58,000 would be classified as: here]

 

  A. gross revenues
  B. net income
  C. general income
  D. net revenues
  E. gross profit

 

22. When Nissan sells a new Sentra and receives the proceeds, the transaction is similar to the _____ market. When the same Sentra is traded in the used car market, the transaction is similar to the _____ market.

 

  A. seller’s; buyer’s
  B. private; public
  C. buyer’s; seller’s
  D. primary; secondary
  E. investment; trading

 

23. Which of the following is an activity performed by the Federal Reserve System as it carries out its monetary policy?

 

  A. insuring credit card balances
  B. providing tax refunds
  C. distributing currency
  D. loaning money to consumers
  E. controlling the stock exchange

 

24. Which of the following statements about the accounting profession is true?

 

  A. Most CPAs first work for public accounting firms and later become private accountants or financial managers.
  B. Managerial accountants become a certified management accountant when they meet the requirements of the professional certification program.
  C. Public accountants serve individuals and organizations on a fee basis.
  D. Private accountants are also called corporate accountants.
  E. All of the above statement about the accounting profession are true.

 

25. _____ is the system used to record a firm’s financial transactions in a routine and clerical process.

 

  A. Accounting
  B. Record keeping
  C. Bookkeeping
  D. Auditing
  E. Financial management

 

 

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