OLS 274 Exam 5 Questions and Answers Latest Update

OLS 274 Exam 5 Questions and Answers Latest Update A firm has $15 million in assets and $5 million in owner's equity. Therefore, the firm must also have $15 million in liabilities. True False - Answers False Depreciation is reported as an expense on the firm's income statement but does not involve any actual cash. True False - Answers True The ________ is a collection of financial markets in which previously issued securities are traded among investors. Secondary market Government market Super market Primary market - Answers Secondary Market Owners of common stock expect returns on their investment in the form of cash dividend payments, expected price appreciation, or both. True False - Answers 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. Income Statement Statement of Cash Flows Accrual Accounting Balance Sheet - Answers Income Statement When a company offers stock for sale to the general public for the first time, it is called an initial public offering. True False - Answers True A company's overall operating budget is a composite of many individual budgets for separate units of the firm. True False - Answers True On a balance sheet, total assets must always equal the sum of liabilities and owners' equity. True False - Answers True ________ are investment companies that raise funds from wealthy individuals and institutional investors and use the funds to make investments in both public and private companies. Private placements Hedge funds Venture capitalists Private equity funds - Answers Private Equity Funds All short-term bank loans are secured, meaning that the borrower pledges specific assets as collateral. True False - Answers False Hedge funds are private investment companies open only to qualified large investors.