D076 OA EXAM QUESTIONS AND COORRECT
ANSWERS
A company's officers and board of directors are selling their stocks in the firm at
higher prices due to false accounting reports that made the stock seem more
valuable than it truly was. Which ethical issue is occurring in this situation?
Conflict between work and personal affairs
Maximizing shareholder value
Pursuing individual interest over client interests
Agency problem due to conflicting interests - ANS✅✅Agency problem due to
conflicting interests
A firm had sales of $100,000 this month. However, the firm received only $90,000
in cash from sales. Why would the firm receive $10,000 less cash than its monthly
sales?
Because the firm purchased inventory on credit this month
,Because the firm paid cash for inventory purchased
Because the firm paid down $10,000 on a loan
Because the firm did not make all sales on cash - ANS✅✅Because the firm did
not make all sales on cash
What are the main services offered by financial institutions?
A. Soliciting charitable donations and then managing the distribution of these
funds
B. Accepting a wide variety of deposits, offering investment products, providing
loans, and brokering financial transactions
C. Deciding which assets to invest in to create wealth in the future
D. Evaluating sources of funding for a business project, the capital structure of a
firm, or actions managers could take to increase the value of the firm -
ANS✅✅B. Accepting a wide variety of deposits, offering investment products,
providing loans, and brokering financial transactions
What is the main objective of personal financial goals?
A. To maximize stock investments
, B. To maximize individual utility
C. To maximize charity donations
D. To maximize owner wealth - ANS✅✅B. To maximize individual utility
Which task does the financial manager of a firm perform that involves the
issuance of new stocks and bonds?
A. Making financing decisions
B. Managing working capital
C. Deciding on accounting standards
D. Making investing decisions - ANS✅✅A. Making financing decisions
Why is understanding the definition of finance important in managing personal
finances?
A. It helps individuals compare the costs and benefits of an action to determine
whether to take that action.
B. It helps individuals act ethically with regard to finances.
ANSWERS
A company's officers and board of directors are selling their stocks in the firm at
higher prices due to false accounting reports that made the stock seem more
valuable than it truly was. Which ethical issue is occurring in this situation?
Conflict between work and personal affairs
Maximizing shareholder value
Pursuing individual interest over client interests
Agency problem due to conflicting interests - ANS✅✅Agency problem due to
conflicting interests
A firm had sales of $100,000 this month. However, the firm received only $90,000
in cash from sales. Why would the firm receive $10,000 less cash than its monthly
sales?
Because the firm purchased inventory on credit this month
,Because the firm paid cash for inventory purchased
Because the firm paid down $10,000 on a loan
Because the firm did not make all sales on cash - ANS✅✅Because the firm did
not make all sales on cash
What are the main services offered by financial institutions?
A. Soliciting charitable donations and then managing the distribution of these
funds
B. Accepting a wide variety of deposits, offering investment products, providing
loans, and brokering financial transactions
C. Deciding which assets to invest in to create wealth in the future
D. Evaluating sources of funding for a business project, the capital structure of a
firm, or actions managers could take to increase the value of the firm -
ANS✅✅B. Accepting a wide variety of deposits, offering investment products,
providing loans, and brokering financial transactions
What is the main objective of personal financial goals?
A. To maximize stock investments
, B. To maximize individual utility
C. To maximize charity donations
D. To maximize owner wealth - ANS✅✅B. To maximize individual utility
Which task does the financial manager of a firm perform that involves the
issuance of new stocks and bonds?
A. Making financing decisions
B. Managing working capital
C. Deciding on accounting standards
D. Making investing decisions - ANS✅✅A. Making financing decisions
Why is understanding the definition of finance important in managing personal
finances?
A. It helps individuals compare the costs and benefits of an action to determine
whether to take that action.
B. It helps individuals act ethically with regard to finances.
