OLS 274 EXAM 5 QUESTIONS & ANSWERS
Local area networks allow computers to share the same printers, documents, and
information. - Answer -True
A company's overall operating budget is a composite of many individual budgets for
separate units of the firm. - Answer -True
Mac downloaded some company information into a spreadsheet so that he could work
on it at home. When he returned to work, he inserted his memory card into his company
computer. Within minutes, all of his hard drive files were corrupted. The most likely
cause was a(n) ________. - Answer -Computer virus
A firm has total assets of $50 million and owner's equity of $40 million. What is the firm's
debt ratio? - Answer -20%
Camille is an accountant who works for a firm providing auditing services to other
businesses. Camille is a public accountant. - Answer -True
On a balance sheet, total assets must always equal the sum of liabilities and owners'
equity. - Answer -True
If the Fed pushes interest rates lower, policymakers at other nations' central banks will
most likely ________. - Answer -follow suit, and drop their rates as well.
The New York Stock Exchange (NYSE) is a secondary market. - Answer -True
When a firm receives goods or services from a supplier and agrees to pay for them at a
later date, this arrangement is called ________. - Answer -Trade credit
Miles is an accountant and works for a firm that provides tax planning and preparation
services to other businesses. Miles is a management accountant. - Answer -False
Decision support systems provide support to people making business decisions. -
Answer -True
Jeff wants to purchase a lower-risk bond. Therefore, he should buy a government bond.
- Answer -True
Kate is the Executive Director of a local food bank and is assessing the financial
situation of her not-for-profit organization. Kate uses a(n) ________ to determine
whether revenues from contributions and other sources will cover operating costs. -
Answer -Income statement
The price of a bond is affected by its interest rate - Answer -True
, Bonds with the highest level of risk are rated AAA. - Answer -False
The Fed's only tool to enact monetary policy is open market operations. - Answer -
False
A(n) ________ is a transaction in which one company buys another. - Answer -
Acquisition
________ activities provide the necessary funds to start a business and to expand it
after it begins operations. - Answer -Financing
When a company offers stock for sale to the general public for the first time, it is called
an initial public offering. - Answer -True
A firm has $15 million in assets and $5 million in owner's equity. Therefore, the firm
must also have $15 million in liabilities. - Answer -False
Drew purchases a new game for his computer. He will load the program onto the
computer's hard drive. Drew is buying ________. - Answer -Application software
Dana's office in south Florida was destroyed by a hurricane last year, and she lost
numerous company documents. After relocating, Dana took no chances and
implemented ________, in which she backed up her data in a secure online storage
service. - Answer -a disaster recovery plan
The ________ is a collection of financial markets in which previously issued securities
are traded among investors. - Answer -Secondary market
Which of the following represents the accounting equation? - Answer -Assets =
Liabilities + Owners' Equity
Grid computing is a cost-effective solution for smaller-sized companies. - Answer -True
Who is recognized worldwide as the body with sole responsibility and authority to issue
pronouncements on international accounting standards? - Answer -IASC
Sales figures are an example of data. - Answer -True
The process that periodically checks actual revenues and expenses against forecast
values is ________. - Answer -Financial control
Daily business decisions are generally unaffected by accounting information; long-term
decisions, however, are affected by accounting information and the interpretation of
financial reports. - Answer -False
Local area networks allow computers to share the same printers, documents, and
information. - Answer -True
A company's overall operating budget is a composite of many individual budgets for
separate units of the firm. - Answer -True
Mac downloaded some company information into a spreadsheet so that he could work
on it at home. When he returned to work, he inserted his memory card into his company
computer. Within minutes, all of his hard drive files were corrupted. The most likely
cause was a(n) ________. - Answer -Computer virus
A firm has total assets of $50 million and owner's equity of $40 million. What is the firm's
debt ratio? - Answer -20%
Camille is an accountant who works for a firm providing auditing services to other
businesses. Camille is a public accountant. - Answer -True
On a balance sheet, total assets must always equal the sum of liabilities and owners'
equity. - Answer -True
If the Fed pushes interest rates lower, policymakers at other nations' central banks will
most likely ________. - Answer -follow suit, and drop their rates as well.
The New York Stock Exchange (NYSE) is a secondary market. - Answer -True
When a firm receives goods or services from a supplier and agrees to pay for them at a
later date, this arrangement is called ________. - Answer -Trade credit
Miles is an accountant and works for a firm that provides tax planning and preparation
services to other businesses. Miles is a management accountant. - Answer -False
Decision support systems provide support to people making business decisions. -
Answer -True
Jeff wants to purchase a lower-risk bond. Therefore, he should buy a government bond.
- Answer -True
Kate is the Executive Director of a local food bank and is assessing the financial
situation of her not-for-profit organization. Kate uses a(n) ________ to determine
whether revenues from contributions and other sources will cover operating costs. -
Answer -Income statement
The price of a bond is affected by its interest rate - Answer -True
, Bonds with the highest level of risk are rated AAA. - Answer -False
The Fed's only tool to enact monetary policy is open market operations. - Answer -
False
A(n) ________ is a transaction in which one company buys another. - Answer -
Acquisition
________ activities provide the necessary funds to start a business and to expand it
after it begins operations. - Answer -Financing
When a company offers stock for sale to the general public for the first time, it is called
an initial public offering. - Answer -True
A firm has $15 million in assets and $5 million in owner's equity. Therefore, the firm
must also have $15 million in liabilities. - Answer -False
Drew purchases a new game for his computer. He will load the program onto the
computer's hard drive. Drew is buying ________. - Answer -Application software
Dana's office in south Florida was destroyed by a hurricane last year, and she lost
numerous company documents. After relocating, Dana took no chances and
implemented ________, in which she backed up her data in a secure online storage
service. - Answer -a disaster recovery plan
The ________ is a collection of financial markets in which previously issued securities
are traded among investors. - Answer -Secondary market
Which of the following represents the accounting equation? - Answer -Assets =
Liabilities + Owners' Equity
Grid computing is a cost-effective solution for smaller-sized companies. - Answer -True
Who is recognized worldwide as the body with sole responsibility and authority to issue
pronouncements on international accounting standards? - Answer -IASC
Sales figures are an example of data. - Answer -True
The process that periodically checks actual revenues and expenses against forecast
values is ________. - Answer -Financial control
Daily business decisions are generally unaffected by accounting information; long-term
decisions, however, are affected by accounting information and the interpretation of
financial reports. - Answer -False
