Business Finance
Review Questions
Course Introduction
Business Finance is a foundational course that examines the principles and practices involved in financial management within a business context. It covers key topics such as financial statement analysis, budgeting, working capital management, time value of money, investment decision-making, cost of capital, and the sources of business financing. Students learn how to assess the financial health of organizations, make informed financial decisions, and utilize analytical tools to plan for growth and sustainability. The course also explores the role of financial markets and institutions in supporting business operations, equipping students with the skills needed to contribute to effective financial strategy and management.
Recommended Textbook
MANAGERIAL ACCOUNTING Version 1.0 by
Kurt Heisinger and Joe Hoyle
Available Study Resources on Quizplus
13 Chapters
878 Verified Questions
878 Flashcards
Source URL: https://quizplus.com/study-set/3571 Page 2
Chapter 1: What Is Managerial Accounting
Available Study Resources on Quizplus for this Chatper
83 Verified Questions
83 Flashcards
Source URL: https://quizplus.com/quiz/70918
Sample Questions
Q1) All of the following statements about Enterprise Resource Planning systems (ERP)are true except:
A)ERP systems are designed to record and share information across functional areas such as accounting and marketing.
B)ERP systems are designed to record and share information across geographical areas such as a sales office in China and headquarters in New York.
C)ERP system information is updated in weekly in batches.
D)ERP system information can be organized in different formats to meet the needs of internal and external users.
E)None of the above.
Answer: C
Q2) Chief financial officer
Answer: A
Q3) Insurance costs for a production facility are best classified as selling costs. A)True
B)False Answer: False
Q4) Board of directors
Answer: B
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: How Is Job Costing Used to Track Production Costs
Available Study Resources on Quizplus for this Chatper
44 Verified Questions
44 Flashcards
Source URL: https://quizplus.com/quiz/70917
Sample Questions
Q1) If the Manufacturing Overhead account has a credit balance after overhead has been applied to products,manufacturing overhead:
A)has been closed.
B)has been applied incorrectly.
C)is underapplied.
D)is overapplied.
E)None of the answer choices is correct.
Answer: D
Q2) The overhead costs applied to jobs using a predetermined overhead rate are recorded by debiting Work in Process Inventory and crediting Manufacturing Overhead.
A)True
B)False
Answer: True
Q3) All account names for job costing systems in service organizations are the same as those used by manufacturing companies.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: How Does an Organization Use Activity-Based
Costing to Allocate Overhead Costs
Available Study Resources on Quizplus for this Chatper
71 Verified Questions
71 Flashcards
Source URL: https://quizplus.com/quiz/70916
Sample Questions
Q1) Which of the following statements best describes the major difference between activity-based costing (ABC)and activity-based management (ABM)?
A)ABC is only used in manufacturing companies,and ABM is only used in service companies.
B)ABC is used in managerial accounting,and ABM is used in financial accounting.
C)The goal of ABC is to accurately measure costs,and the goal of ABM is to manage costly activities.
D)ABC is only used in service companies,and ABM is only used by merchandising companies.
E)None of the answer choices is correct.
Answer: C
Q2) Companies who want to identify and eliminate non-value-added activities may implement:
A)Traditional costing.
B)Departmental costing.
C)activity-based costing (ABC).
D)activity-based management (ABM).
E)None of the answer choices is correct.
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: How Is Process Costing Used to Track
Production Costs
Available Study Resources on Quizplus for this Chatper
58 Verified Questions
58 Flashcards
Source URL: https://quizplus.com/quiz/70915
Sample Questions
Q1) In a process costing system,the department where production begins will never have transferred-in costs from another department.
A)True
B)False
Q2) The Molding Department at Miley Corporation had 10,000 units in process on July 1 and 6,000 units in process on July 31.During July,it started 46,000 units.The cost per equivalent unit produced in July was $2.50.If the equivalent units produced in July were 48,000,what were the costs incurred during the month?
A)$105,000
B)$115,000
C)$120,000
D)$150,000
E)None of the answer choices is correct.
Q3) In a process costing system,partially completed units in Work-in-Process Inventory are typically converted to equivalent completed units.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 6
Chapter 5: How Do Organizations Identify Cost Behavior
Patterns
Available Study Resources on Quizplus for this Chatper
69 Verified Questions
69 Flashcards
Source URL: https://quizplus.com/quiz/70914
Sample Questions
Q1) The R-squared measure is used to measure the percent of variance in the dependent variable that is explained by the independent variable.
A)True
B)False
Q2) Variable costs such as direct labor and direct materials typically stay constant on a per unit basis.
A)True
B)False
Q3) Refer to Exhibit 5-2.What were the total fixed costs for the company's most recent fiscal year?
A)$145,000
B)$135,000
C)$70,000
D)$195,000
E)None of the answer choices is correct.
Q4) Per unit fixed costs change with changes in activity.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: How Is Cost-Volume-Profit Analysis Used for Decision Making
Available Study Resources on Quizplus for this Chatper
79 Verified Questions
79 Flashcards
Source URL: https://quizplus.com/quiz/70913
Sample Questions
Q1) Absorption costing treats all manufacturing costs as period costs.
A)True
B)False
Q2) Refer to Exhibit 6-4.Assume the sales mix remains the same at all levels of sales. How many units of each product must be sold to break even?
A)Plane 22,400 units;Boat 5,600 units
B)Plane 11,200 units;Boat 2,800 units
C)Plane 20,000 units;Boat 5,000 units
D)Plane 56,000 units;Boat 14,000 units
E)None of the answer choices is correct.
Q3) Refer to Exhibit 6-2.What would be the operating profit if total fixed costs decreases 20 percent?
A)$302,500
B)$135,000
C)$215,000
D)$315,000
E)None of the answer choices is correct.
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: How Are Relevant Revenues and Costs Used to
Make Decisions
Available Study Resources on Quizplus for this Chatper
76 Verified Questions
76 Flashcards
Source URL: https://quizplus.com/quiz/70912
Sample Questions
Q1) Refer to Exhibit 7-7.What is the contribution margin per unit of constrained resource for the Medium product?
A)$65
B)$100
C)$30
D)$900
E)None of the answer choices is correct.
Q2) In which of the following cases is a customer most likely to be dropped?
A)When the customer's variable costs are more than its total fixed costs.
B)When the customer's avoidable fixed costs are more than its contribution margin.
C)When the customer's total fixed costs are more than its contribution margin.
D)When the customer's contribution margin is more than its avoidable fixed costs.
E)None of the answer choices is correct.
Q3) Cost-plus pricing is often used by companies that produce custom products where market prices are not easily available.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: How Is Capital Budgeting Used to Make Decisions
Available Study Resources on Quizplus for this Chatper
71 Verified Questions
71 Flashcards
Source URL: https://quizplus.com/quiz/70911
Sample Questions
Q1) Most managers use spreadsheets to calculate the internal rate of return for an investment proposal.
A)True
B)False
Q2) The required rate of return is typically based on the company's cost of capital.
A)True
B)False
Q3) Refer to Exhibit 8-1.If taxes are ignored and the required rate of return is 10%,what is the project's net present value (rounded to the nearest dollar)?
A)$1,262,910
B)$1,020,000
C)$329,226
D)$344,409
E)None of the answer choices is correct.
Q4) When evaluating long-term investment proposals,firms that pay income taxes can ignore the impact these taxes have on cash flows.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: How Are Operating Budgets Created
Available Study Resources on Quizplus for this Chatper
68 Verified Questions
68 Flashcards
Source URL: https://quizplus.com/quiz/70910
Sample Questions
Q1) The first line that appears on the direct materials purchases budget is:
A)units to be produced.
B)projected sales in units.
C)quantity of direct materials to be purchased.
D)quantity of beginning direct materials ending inventory.
E)None of the answer choices is correct.
Q2) Dryer Company's policy is to keep 25% of the next month's sales in ending inventory.If Dryer meets its ending inventory policy at the end of April and sales are expected to be 24,000 units in May and 41,000 units in June,how many units need to be produced in May?
A)19,750 units
B)28,250 units
C)40,250 units
D)34,250 units
E)None of the answer choices is correct.
Q3) An operating budget is similar to a capital budget in that both are long-term budgets.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: How Do Managers Evaluate Performance Using Cost Variance Analysis
Available Study Resources on Quizplus for this Chatper
69 Verified Questions
69 Flashcards
Source URL: https://quizplus.com/quiz/70909
Sample Questions
Q1) Refer to Exhibit 10-4.Based on this information,what is the variable overhead efficiency variance?
A)$48,000 favorable
B)$48,000 unfavorable
C)$9,000 unfavorable
D)$9,000 favorable
E)None of the answer choices is correct.
Q2) The materials quantity variance is defined as the difference between the actual quantity of materials purchased at the actual price and the actual quantity of materials purchased at the standard price.
A)True
B)False
Q3) Refer to Exhibit 10-5.What is the variable overhead spending variance for the product testing activity?
A)$8,000 unfavorable
B)$8,000 favorable
C)$3,800 favorable
D)$3,800 unfavorable
E)None of the answer choices is correct.
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: How Do Managers Evaluate Performance in
Decentralized Organizations
Available Study Resources on Quizplus for this Chatper
63 Verified Questions
63 Flashcards
Source URL: https://quizplus.com/quiz/70908
Sample Questions
Q1) Refer to Exhibit 11-4.What is the ROI for the Chair Division (rounded to the nearest tenth of a percent)?
A)66.7%
B)14.0%
C)33.3%
D)9.3%
E)None of the answer choices is correct.
Q2) The cost-plus approach is the best approach for establishing transfer prices for all companies.
A)True
B)False
Q3) The term decentralized organization refers to an organization that delegates decision-making and operational responsibilities to managers of each segment of the organization.
A)True
B)False
Q4) Operating assets would include office buildings leased to other companies.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: How Is the Statement of Cash Flows Prepared and Used
Available Study Resources on Quizplus for this Chatper
65 Verified Questions
65 Flashcards
Source URL: https://quizplus.com/quiz/70907
Sample Questions
Q1) The issuance of common stock would be included in the financing activities
A)True
B)False
Q2) Free cash flow measures:
A)the company's ability to generate enough cash from investing activities to cover capital expenditures,and determines how much cash is remaining to invest elsewhere in the company.
B)the company's ability to generate enough cash from daily operations to cover capital expenditures,and determines how much cash is remaining to invest elsewhere in the company.
C)the company's ability to generate enough cash from daily operations to cover current liabilities.
D)the company's ability to generate enough cash from financing operations to cover current liabilities.
E)None of the answer choices is correct.
Q3) When preparing the operating activities
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: How Do Managers Use Financial and
Nonfinancial Performance Measures
Available Study Resources on Quizplus for this Chatper
62 Verified Questions
62 Flashcards
Source URL: https://quizplus.com/quiz/70906
Sample Questions
Q1) Assume that Crimson Company's market price per share remains at $20 over a two-year period.Over the same two-year period,Crimson sells an additional 100,000 shares of stock to investors.Net income was the same for both years.The issuance of additional shares will have the following effect for the company over the two-year period:
A)Market capitalization will decrease.
B)Market capitalization will increase.
C)Market capitalization will stay the same.
D)Earnings per share will increase.
E)None of the answer choices is correct.
Q2) All of the following are nonfinancial measures that might be used by transportation companies such as FedEx except:
A)percentage of damage-free goods.
B)percentage of on-time deliveries.
C)average collection period.
D)hours of employee training.
E)None of the answer choices is correct.
Q3) In general,managers prefer the profit margin ratio to decrease over time.
A)True
B)False
Page 15
To view all questions and flashcards with answers, click on the resource link above.