A Limited partnership that has units of ownership that can be traded on security exchanges

Master limited Partnership(MLP)

Which of the following is NOT an advantage of a corporation?

Difficulty and Expense of Formation

MC: What is cash flow?

Movement of money in and out of an organization

MC: Which of the following is the definition of an initial public offering (IPO)?

when a corporation sells common stock to the public for the first time

Money company takes out of its profits to pay stockholders

What is a personal income statement?

Something that lists your expenses and income for a certain amount of time.

financial statement that projects income and/or expenditure over a period

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Bizorg Unit 3 Review

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Questions 86

Answers

1
A bond that can be exchanged, for a specified number of shares of the corporation’s common stock is a
Sinking Fund
Maturity Date
Convertible bond
Bond Indenture
2
Which is NOT a disadvantage of a corporation?
Limited Liability
Conflict Within the Corporation
Difficulty and Expense of Formation
Double Taxation
3
A sole proprietorship is a business that is owned (and usually operated) by one person
True
False
4
What are the advantages of Mutual Funds?
None
professional management
diversification
All of the above
5
selling stock that an investor does not actually own but has borrowed from a brokerage firm & will repay at a later date
Buying on margin
Selling short
Buying long
none
6
a merger between firms that make and sell similar products or services in similar markets
Vertical merger
industrial merger
Conglomerate merger
Horizontal merger
7
A _______ is a fund containing money which is set aside/saved to pay off a debt or bond.
Bond Indenture
Sinking Fund
IPO
Maturity date
8
An automobile company joining with a parts supplier would be an example of a
Conglomerate merger
Horizontal merger
Vertical merger
industrial merger
9
purpose of a personal budget: make sure that the estimated income & expenses are correct & to make a surplus in the end
True
False
10
MC: A budget that estimates cash receipts and cash expenditures over a specified period is a …
Labor Budget
Operating Budget
Zero-Base Budget
Financial Budget
11
It is a corporation which is taxed as though it were a partnership.
S-Corporation
Syndicate
Limited Liability
Board of Directors
12
What is an example for a not-for-profit organization
Restaurants
Airlines
Retail stores
Public School
13
A Limited partnership that has units of ownership that can be traded on security exchanges
Sole Proprietorship
Limited Partner
General Partner
Master limited Partnership(MLP)
14
A market order is a request to buy or sell a stock at the current market value.
False
True
15
A stock split is the division of each outstanding share of a corporation’s stock into a greater number of shares
False
True
16
What is NOT a way that a firm may benefit from an IPO?
Lots of publicity
Higher valuation of shares
More ownership of company
Equity Capital raised from selling stock
17
Which of the following is NOT an advantage of a corporation?
Limited Liability
Ease of Raising Capital
Ease of Transfer of Ownership
Difficulty and Expense of Formation
18
MC: Which of the following is an example of a use of long term financing?
Business Start up Costs
Current Inventory Needs
Monthly Expenses
Cash Flow Problems
19
Income, growth, and liquidity create negative effects on the personal investment program by creating losses.
False
True
20
Which of these is not an advantage of a sole proprietorship?
Ease of Start-Up and Closure
Unlimited liability
Retention of All Profits
Pride of Ownership
21
buying a stock with the expectation that it will increase in value and then can be sold at a profit
Selling short
Buying long
buying on cash
Buying on margin
22
a corporation chartered by a foreign government and conducting business in the United States
Domestic corporation
Foreign corporation
S-Corporation
Alien corporation
23
MC: What is cash flow?
Movement of money in and out of an organization
Flow of cash from a firms investors
Movement of money into an organization
A firm’s liquidity
24
The pools the money of many investors—its shareholders—to invest in a variety of different securities
True
False
25
debt capital is money received from the owners or from the sale of shares of ownership in a business
False
True
26
Expansion of facilities is a use for short term financing.
True
False
27
MC: What is a distribution of earnings to the stockholders from profits of a corporation
Retained earnings
Preferred Stock
Venture capital
Dividends
28
What is not a disadvantage of debt capital?
Collateral may be necessary
High interest rate
Cash Flow difficulties
Lose part of ownership of firm
29
What is meant by rate of return, or return on investment (ROI)?
A & B
Specific plan for income and expenses
Net loss of an investment over a specified time period
Net gain over a specified time period
30
MC: Which of the following is the definition of an initial public offering (IPO)?
the portion of a corporation’s profits not distributed to stockholders
when a corporation sells common stock to the public for the first time
a firm that specializes in buying other firms’ accounts receivable
the use of borrowed funds to increase the return on owners’ equity
31
What are dividends?
Comes from stockholders
Stockholders give company more money to make even more profits
Money company takes out of its profits to pay stockholders
Another example of current ratio
32
a financial statement that projects income, expenditures, or both over a specified future period
balance sheet
Equity capital
IPO
Budget
33
What types of investments are the most risky?
Derivatives
All of the above
Commodities
Stock options
34
MC: Which of the following is not a step in effective financial planning?
Establishing Organizational Goals and Objectives
Budgeting for Financial Needs
Identify Sources of Funds
Managing Credit Card Debt
35
stock whose owners don't have voting rights but claims on dividends and assets are paid before common-stock owners
Preferred stock
Common stock
IPO
bonds
36
T/F: Debt capital is a form of both short and long term financing.
True
False
37
A voluntary association of two or more persons to act as co–owners of a business for profit is a
Sole Proprietorship
Combined Alliance
Corporation
Partnership
38
borrowed money obtained through loans of various types
equity capital
Cash capital
Corporation capital
debt capital
39
What is a personal income statement?
Something that lists your expenses and income for a certain amount of time.
Specific plan for income and expenses
None of the above
Something that lists assets and liabilities
40
A person who invests money in a business but has no liability for losses beyond the amount he or she invested in
Sole Proprietorship
Limited Partner
Master limited Partnership(MLP)
General Partner
41
Ideal cash flow for a business: there is enough money coming into a firm to cover expenses for a certain period of time
True
False
42
A corporation organized to provide a social, educational, religious, or other service rather than to earn a profit.
Not-for-profit-corporation
Joint Venture
Profit Maximization
Cooperative
43
a corporation in the state in which it is incorporated
S-Corporation
Alien corporation
Domestic corporation
Foreign corporation
44
An artificial person created by law with most of the legal rights of a real person
Liability
Corporation
Joint Venture
Syndicate
45
What is a budget?
Financial statement that estimates a firm's expenditures for major assets
Financial statement that shows a firm’s income and expenses for last year
financial statement that estimates cash receipts and expenditure over time
financial statement that projects income and/or expenditure over a period
46
What is NOT a disadvantage of equity capital?
Firms owners lose part of their stake in company and therefore influence
Risk to investor
Only one IPO
High flotation costs from legal and registration fees when selling stock
47
A limit order is an order to buy or sell a stock at a specific price or better.
True
False
48
represents the most basic form of corporate ownership; can vote
bonds
IPO
Common stock
Preferred stock
49
takes place between firms in completely different industries.
Horizontal merger
industrial merger
Vertical merger
Conglomerate merger
50
Which of these is not a disadvantage of a sole proprietorship?
Lack of Continuity
Unlimited liability
Limited Management Skills
Retention of All Profits
51
an agreement between 2 or more groups to form a business entity to achieve a specific goal/operate for a specific period
Limited liability company
joint venture
Syndicate
Cooperative
52
the process of spreading your money among several different types of investments to lessen risk is asset allocation
False
True
53
Risk return ratio: more risk=more profit, less risk=less profit
False
True
54
What is a personal balance sheet?
List of assets and liabilities on certain date
All of the above
Difference between value of total assets and liabilities
Estimated income
55
Buying stock by borrowing part of the purchase price, usually from a stock brokerage firm
none
Selling short
Buying on margin
Buying long
56
A _______ budget estimates a firm’s expenditures for major assets(new product development, expansion of facilities, etc)
Cash budget
zero-base budgeting
Capital budget
business budget
57
T/F: An advantage of equity capital is a corporation is not legally obliged to pay interest
True
False
58
a budget that estimates a firm’s expenditures for major assets including and mergers and acquisitions.
Capital Budget
Activity-Based Budget
Static Budget
Zero-Based Budgeting
59
occurs when a corporation sells common stock to the general public for the first time
Final public offering
Sinking fund
Dividends
initial public offering (IPO)
60
a corporation in any state in which it does business except the one in which it is incorporated
Domestic corporation
Foreign corporation
S-Corporation
Alien corporation
61
Disadvantages of debt capital
Might need to sell assets if equity or debt capital cannot be found
none
All of the above
Growth opportunities limited
62
Disadvantages of equity capital?
Higher cost
Lower cost of capital
None of the above
More profit
63
Unlimited Liability is an advantage of a partnership
True
False
64
What is the goal of net worth?
Decrease liabilities
To increase value of assets
All of the above
To help determine current financial position
65
Which of these is a disadvantage of partnership?
Combined Business Skills and Knowledge
Frozen Investment
No Special Taxes
Availability of Capital and Credit
66
temporary association of individuals/ firms organized to perform a specific task that requires a large amount of capital
joint venture
Cooperative
Limited liability company
Syndicate
67
What is cash flow?
Movement of money in and out of an organization
Flow of cash from a firms investors
Movement of money into an organization
A firm’s liquidity
68
A person who assumes full or shared responsibility for operating a business
Limited Partner
Sole Proprietorship
General Partner
Master limited Partnership(MLP)
69
What types of investments are considered the safest?
Conservative investments
CD’s
All of the above
Blue-chips stocks
70
T/F: The ideal cash flow for a business is 3-6 months
False
True
71
A budget that estimates cash receipts and cash expenditures over a specified period
business budget
zero-base budgeting
Capital budget
Cash budget
72
Advantages of equity capital?
Does not take fund out of the business
All of the above
No need to make interest payments
Long-term finance
73
form of business ownership that combines benefits of corporation and partnership while avoiding some of the restrictions
Double Taxation
Limited Liability Company(LLC)
Mixed Ownership
S-Corporation
74
an association of individuals or firms whose purpose is to perform some business function for its members
Syndicate
Cooperative
Limited liability company
joint venture
75
a budgeting approach in which every expense in every budget must be justified.
business budget
Cash budget
zero-base budgeting
Capital budget
76
True or False : A maturity date is the date on which a corporation is to repay borrowed money
True
False
77
Articles of partnership refers to an agreement listing and explaining the terms of the partnership
False
True
78
MC: What is equity capital?
Money obtained by a firm through selling common stock to investors
Money obtained by a firm through selling stock to investors
Money obtained by a firm through issuing bonds
Money obtained by a firm through loans
79
T/F: Expansion of facilities is a use for short term financing.
True
False
80
According to the risk-return ratio, an investment of $1000 has potential for more profit than an investment of $100
False
True
81
How do the factors of safety and risk affect personal investment programs?
None of the above
Safety makes risk minimal, risk makes measure of uncertainty
All of the above
Safety is a factor full or risk, risk provides steady income
82
In what ways can individuals make money by buying common stock?
All of the above
Stock Splits
Increase in Dollar Value
Dividend Payments
83
Which of the following is an example of a use of long term financing?
Monthly Expenses
Cash Flow Problems
Current Inventory Needs
Business Start up Costs
84
A financial plan includes establishing goals and objectives, finding budget money, and identifying sources of funds.
False
True
85
Net Worth can be determined by subtracting your liabilities from total assets.
False
True
86
T/F: An advantage of debt capital is that collateral may be necessary
True
False

Bizorg Unit 3 Review Flashcards | StudBud