Test 1 study guide - What are the three major decisions...

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What are the three major decisions that most concern financial managers? Selected Answer: Capital budgeting decision, financing decision, and working capital decision Answers: Inventory decision, expense decision, board of directors decision Capital structure decision, banking decision, salary decision Sales decision, operating decision, and financing decision Capital budgeting decision, financing decision, and working capital decision What are the two basic sources of funds for all businesses? Selected Answer: Debt and equity Answers: Cash and inventory Revenue and expenses Debt and equity Hope and change What is net working capital? Selected Answer: Current assets minus current liabilities Answers: Current assets minus current liabilities Total assets minus total liabilities Working assets plus working liabilities Total liabilities plus total equity What are the three main forms of business organization in the US?
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Selected Answer: Sole proprietorship, partnership, and corporation Answers: Corporation, LLC, and partnership Sole proprietorship, partnership, and corporation Sole proprietorship, partnership, accounting and law firms Accounting and law firms, LLC, S-corporation Which of the following is an advantage of the sole-proprietorship? Selected Answer: The owners keep all of the profits and do not have to share decision- making authority Answers: The owners keep all of the profits and do not have to share decision- making authority The sole proprietor has unlimited liability for the debts of the business The amount of capital that can be raised is unlimited by the owner's wealth It is very easy to transfer ownership in the company Who are the owners in a corporation and how is their ownership represented? Selected Answer: The owners of a corporation are its stockholders and the evidence of their ownership is represented by shares of common stock Answers: The owners of a corporation are its bondholders and the evidence of their ownership is represented by shares of common stock The owners of a corporation are its employees and the evidence of their ownership is represented by union contracts The owners of a corporation are its stockholders and the evidence of their ownership is represented by shares of common stock Both bondholders and stockholders are the owners of a corporation and the evidence of their ownership is given in the bond and stock indentures
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What is double taxation? Selected Answer: It means there are taxes on corporate profits AND dividends Answers: It means there are taxes on corporate interest AND dividends It means there are taxes on corporate profits AND dividends It means there are taxes on corporate profits AND interest It means there are taxes on corporate profits AND losses What is the primary responsibility of the corporate board of directors?
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  • Fall '14
  • Garrett
  • Balance Sheet, Current Assets, Generally Accepted Accounting Principles

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