Test Bank for Business Essentials, 11th Canadian Edition by Ronald J. Ebert

The chapters in this document are displayed in reversed order, with the last chapter appearing first.
This change ensures all chapters are included in the test bank. Chap 15 to 1



Business Essentials, 11Ce (Ebert)
Chapter 15 Financial Decisions and Risk Management Chap 1 to 15 Included ✅

LO 15.1: Describe the responsibilities of a financial manager.

1) The business activity concerned with determining a firm's long-term investments, obtaining
the funds to pay for those investments, and conducting the firm's everyday financial activities is
______.
A) bookkeeping
B) corporate finance
C) investment brokers
D) chartered banks
E) money markets
Answer: B
Diff: 2 Type: MC
Skill: Knowledge
Objective: 15.1

2) What is the overall objective of financial managers?
A) To ensure the company has enough funds to purchase materials needed to produce goods and
services
B) To ensure the company has enough money to pay its debts
C) To increase the money supply for the economy
D) To increase the value of the firm and thus increase shareholder wealth
E) To manage the firm's cash flow
Answer: D
Diff: 2 Type: MC
Skill: Knowledge
Objective: 15.1

3) When a firm ensures it always has enough funds to purchase the materials and human
resources needed to produce goods and services, it is exercising______.
A) cash flow management
B) government tax reporting
C) accounting
D) financial planning
E) financial control
Answer: A
Diff: 2 Type: MC
Skill: Knowledge
Objective: 15.1




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,4) All of the following are responsibilities of the financial manager except______.
A) determining a firm's long-term investments
B) obtaining funds to pay for those investments
C) developing the firm's financial statements
D) conducting the firm's everyday financial activities
E) managing the risks the firm takes
Answer: C
Diff: 1 Type: MC
Skill: Comprehension
Objective: 15.1

5) Tony is responsible for planning and controlling the acquisition and dispersal of the
company's financial assets. What is Tony's job title?
A) Management information systems manager
B) Financial manager
C) Purchasing manager
D) Accounting manager
E) Chief risk manager
Answer: B
Diff: 1 Type: MC
Skill: Comprehension
Objective: 15.1

6) A ________ is essentially a description of how a business will reach a desired future financial
position; it includes projections for sources and uses of funds.
A) cash flow management plan
B) financial plan
C) leveraging plan
D) budget plan
E) financial control
Answer: B
Diff: 1 Type: MC
Skill: Comprehension
Objective: 15.1

7) The three basic areas of responsibility for financial managers are______.
A) cash flow management, financial control, and financial planning
B) risk management, portfolio diversification, and cash flow management
C) credit policy, cash flow management, and policy decisions on equity vs. debt financing
D) short-term, medium-term, and long-term financing
E) none of these
Answer: A
Diff: 1 Type: MC
Skill: Comprehension
Objective: 15.1



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,8) A ________ is an important financial control measure; it is the "measuring stick" against
which performance is evaluated.
A) budget
B) cash flow statement
C) financial plan
D) balance sheet
E) debt statement
Answer: A
Diff: 1 Type: MC
Skill: Knowledge
Objective: 15.1

9) Which of the following best describes the business function that involves making decisions
about a firm's long-term investments and obtaining the funds to pay for those investments?
A) Accounting
B) Banking
C) Acquisitions
D) Commerce
E) Finance
Answer: E
Diff: 1 Type: MC
Skill: Knowledge
Objective: 15.1

10) Which of the following is one of the four responsibilities involved in the business activity
known as corporate finance?
A) Managing the risks that the firm takes
B) Determining a firm's short-term investments
C) Managing the firm's stock portfolio
D) Conducting the firm's everyday accounting activities
E) Buying stocks and bonds for the firm
Answer: A
Diff: 1 Type: MC
Skill: Knowledge
Objective: 15.1

11) Financial planning, cash-flow management, and financial control are the responsibility of
which type of manager?
A) Accounting manager
B) Financial manager
C) Investment manager
D) Portfolio manager
E) Accounts manager
Answer: B
Diff: 1 Type: MC
Skill: Knowledge
Objective: 15.1

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, 12) CFO stands for which of the following?
A) Chief financial officer
B) Certified fiduciary officer
C) Certified financial officer
D) Chartered financial officer
E) Chartered fiduciary officer
Answer: A
Diff: 1 Type: MC
Skill: Knowledge
Objective: 15.1

13) What is the overall objective of a financial manager?
A) To manage the company's payroll and expenditures
B) To ensure the company pays the least amount of tax
C) To coordinate the flow of money coming into versus going out of the firm
D) To increase a firm's value and stockholders' wealth
E) To make sure there is enough money to pay all the bills
Answer: D
Diff: 1 Type: MC
Skill: Knowledge
Objective: 15.1

14) What is the term for managing the pattern in which cash flows into a firm as revenue and out
of a firm as debt payments?
A) Income and expense management
B) Financial control
C) Cash-flow management
D) Financial planning
E) Asset allocation
Answer: C
Diff: 1 Type: MC
Skill: Knowledge
Objective: 15.1

15) What is the term for checking actual performance against plans to ensure that the desired
financial status is achieved?
A) financial control
B) financial planning
C) cash-flow management
D) performance monitoring
E) budget oversight
Answer: A
Diff: 1 Type: MC
Skill: Knowledge
Objective: 15.1


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