OLS 274 EXAM CHAPTERS 14-17 QUESTIONS
Assume a company buys a machine worth $1 million and pays for it by borrowing the
funds from a bank. The firm's assets will rise by $1 million and its liabilities will decrease
by $1 million. - Answer -False
In most firms the controller is the chief accounting manager. - Answer -True
Who is recognized worldwide as the body with sole responsibility and authority to issue
pronouncements on international accounting standards? - Answer -IASC
Milwaukee Fabrication has $80 million in assets and $50 million in owners' equity. How
much does the firm have in liabilities? - Answer -$30 million
________ activities provide the necessary funds to start a business and to expand it
after it begins operations. - Answer -Financing
Increasing leverage decreases management's flexibility in future financing decisions. -
Answer -True
In the secondary market, firms and governments issue securities and sell them initially
to the public. - Answer -False
Deposit insurance shifts most of the financial risk of bank failures from depositors to
________. - Answer -the federal government
When a company offers stock for sale to the general public for the first time, it is called
an initial public offering. - Answer -True
Aaron is sitting at his computer preparing a new sales brochure. The brochure
combines high-quality type, graphics, and photographs. What type of software is Aaron
likely using to create the brochure? - Answer -desktop publishing program
Major current assets include all of the following EXCEPT ________. - Answer -
stockholders' equity
Grid computing is a cost-effective solution for smaller-sized companies. - Answer -True
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
Which of the following represents the accounting equation? - Answer -Assets =
Liabilities + Owners' Equity
, Jeff wants to purchase a lower-risk bond. Therefore, he should buy a government bond.
- Answer -True
The Fed's only tool to enact monetary policy is open market operations. - Answer -
False
M2 includes ________ M1. - Answer -all of
Sales figures are an example of data. - 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
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
All short-term bank loans are secured, meaning that the borrower pledges specific
assets as collateral. - Answer -False
The price of a bond is affected by its interest rate. - Answer -True
________ tie geographic regions together using long-distance telephone lines or
satellite transmissions. - Answer -Wide Area Networks
All of the following are types of securities EXCEPT ________. - Answer -cash
A company's overall operating budget is a composite of many individual budgets for
separate units of the firm. - Answer -True
If a firm has a current ratio of 2.5, it means that for every $2.50 in ________ it has $1.00
in ________. - Answer -current assets; current liabilities
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
A(n) ________ is a transaction in which one company buys another. - Answer -
acquisition
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
Assume a company buys a machine worth $1 million and pays for it by borrowing the
funds from a bank. The firm's assets will rise by $1 million and its liabilities will decrease
by $1 million. - Answer -False
In most firms the controller is the chief accounting manager. - Answer -True
Who is recognized worldwide as the body with sole responsibility and authority to issue
pronouncements on international accounting standards? - Answer -IASC
Milwaukee Fabrication has $80 million in assets and $50 million in owners' equity. How
much does the firm have in liabilities? - Answer -$30 million
________ activities provide the necessary funds to start a business and to expand it
after it begins operations. - Answer -Financing
Increasing leverage decreases management's flexibility in future financing decisions. -
Answer -True
In the secondary market, firms and governments issue securities and sell them initially
to the public. - Answer -False
Deposit insurance shifts most of the financial risk of bank failures from depositors to
________. - Answer -the federal government
When a company offers stock for sale to the general public for the first time, it is called
an initial public offering. - Answer -True
Aaron is sitting at his computer preparing a new sales brochure. The brochure
combines high-quality type, graphics, and photographs. What type of software is Aaron
likely using to create the brochure? - Answer -desktop publishing program
Major current assets include all of the following EXCEPT ________. - Answer -
stockholders' equity
Grid computing is a cost-effective solution for smaller-sized companies. - Answer -True
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
Which of the following represents the accounting equation? - Answer -Assets =
Liabilities + Owners' Equity
, Jeff wants to purchase a lower-risk bond. Therefore, he should buy a government bond.
- Answer -True
The Fed's only tool to enact monetary policy is open market operations. - Answer -
False
M2 includes ________ M1. - Answer -all of
Sales figures are an example of data. - 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
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
All short-term bank loans are secured, meaning that the borrower pledges specific
assets as collateral. - Answer -False
The price of a bond is affected by its interest rate. - Answer -True
________ tie geographic regions together using long-distance telephone lines or
satellite transmissions. - Answer -Wide Area Networks
All of the following are types of securities EXCEPT ________. - Answer -cash
A company's overall operating budget is a composite of many individual budgets for
separate units of the firm. - Answer -True
If a firm has a current ratio of 2.5, it means that for every $2.50 in ________ it has $1.00
in ________. - Answer -current assets; current liabilities
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
A(n) ________ is a transaction in which one company buys another. - Answer -
acquisition
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
