Corporate Finance Review
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Course Introduction
Corporate Finance focuses on the principles and practices that guide financial decision-making within corporations. The course covers topics such as capital budgeting, financial analysis, valuation, capital structure, risk management, and dividend policy. Students learn how firms raise capital, invest resources, and manage financial risks to maximize shareholder value. Through case studies and practical exercises, the course equips students with analytical tools and strategic frameworks critical for making informed financial decisions in corporate settings.
Recommended Textbook
Managerial Accounting The Cornerstone of Business Decision Making 7th Edition by Maryanne M.
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2443 Verified Questions
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Chapter 1: Introduction to Managerial Accounting
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Sample Questions
Q1) The _____________________ is the set of activities required to design, develop, produce, market and deliver products and services as well as provide support services to customers.
Answer: value chain
Q2) The managerial activity of monitoring a plan's implementation and taking corrective action as needed is referred to as ______________.
Answer: controlling
Q3) The purpose of the Certificate in Public Accounting is to provide minimal professional qualification for external auditors.
A)True
B)False
Answer: True
Q4) To promote ethical behavior by managers and employees, organizations commonly establish a__________________________.
Answer: code of conduct
Q5) Time is not a crucial element in all phases of the value chain.
A)True
B)False
Answer: False
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Chapter 2: Basic Managerial Accounting Concepts
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216 Flashcards
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Sample Questions
Q1) A fixed cost is a cost that does not increase in total as output increases and does not decrease in total as output decreases.
A)True
B)False
Answer: True
Q2) Materials in the raw materials account do not become direct materials
A) until they are withdrawn from inventory for use in production.
B) until the finished product is sold.
C) until they are purchased from a vendor.
D) none of these are correct.
Answer: A
Q3) Professional sports franchise
A)Tangible
B)Intangible Answer: B
Q4) Assembly line worker's wages
A)Period
B)Product Answer: B
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Chapter 3: Cost Behavior, Cost Forecasting, and Segmented Income Statements
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261 Verified Questions
261 Flashcards
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Sample Questions
Q1) is a statistical method
A)high-low method
B)scatter-graph method
C)method of least squares
Answer: C
Q2) Total variable costs
A) increases as output increases.
B) decreases as output decreases.
C) equal a variable rate × amount of output.
D) all of these are correct.
Answer: D
Q3) What is the February ending inventory for Steele Corporation using the absorption costing method?
A) $39,000
B) $45,000
C) $135,000
D) $300,000
Answer: C
Q4) The ___________________ income statement groups expenses according to function.
Answer: absorption-costing
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Chapter 4: Job-Order Costing and Normal Cost Overhead Application
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175 Flashcards
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Sample Questions
Q1) The use of normal costing means that actual overhead costs are assigned directly to jobs.
A)True
B)False
Q2) Which of the following is reflected in the labor cost flows of a company?
A) Direct labor cost
B) Overtime labor cost
C) Administration cost
D) Both indirect and direct labor cost
E) Administration cost and indirect cost
Q3) In a normal costing system, actual overhead is used to arrive at the cost of goods manufactured.
A)True
B)False
Q4) If the overhead variance is immaterial, it is allocated among the ending balances of Work in Process, Finished Goods, and Cost of Goods Sold.
A)True
B)False
Page 6
Q5) In a _______________________________ costs are accumulated by job.
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Chapter 5: Activity-Based Costing and Management
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Sample Questions
Q1) Activity drivers should be classified as either unit-level or nonunit-level.
A)True
B)False
Q2) Which is not a component of process value analysis?
A) driver analysis
B) velocity
C) activity analysis
D) performance measurement
E) None of these.
Q3) A focus on cost reduction instead of cost assignment and emphasizing the maximization of systemwide performance is known as
Q4) Compute the velocity in units per hour.(Note: Round answer to two decimal places.)
A) 16.50 units per hour
B) 15.50 units per hour
C) 14.44 units per hour
D) 18.45 units per hour
Q5) _________________________ assigns costs to activities and then costs to cost objects.
Q6) Activities necessary to remain in business are known as
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Chapter 6: Process Costing
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Sample Questions
Q1) Units started and completed in Planet Corporation's second department during June would be:
A) 48,280.
B) 37,000.
C) 49,350.
D) 55,000.
Q2) Firms that offer services cannot have work-in-process inventories.
A)True
B)False
Q3) Since transferred-in material is treated as a separate material category for calculating equivalent units, the department receiving transferred-in goods would have:
A) four input categories.
B) two input categories.
C) three input categories.
D) five input categories.
Q4) _____________________ checks to see if the costs to account for are exactly assigned to inventories.
Q5) The number of physical units is multiplied by the _____________________ to calculate equivalent units.
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Chapter 7: Cost-Volume-Profit Analysis
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154 Flashcards
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Sample Questions
Q1) Most firms would like to earn operating income equal to the break-even point.
A)True
B)False
Q2) Which of the following equations is true?
A) Contribution margin = Sales revenue × Variable cost ratio
B) Contribution margin ratio = Contribution margin / Variable costs
C) Contribution margin = Fixed costs
D) Contribution margin ratio = 1 Variable cost ratio
Q3) The impact on a firm's income resulting from a change in the number of units sold can be assessed by multiplying the unit contribution margin by the change in units sold assuming that fixed costs remain the same.
A)True
B)False
Q4) The linear equation for revenue is price multiplied by fixed cost.
A)True
B)False
Q5) The quantity at which two systems produce the same operating income is referred to as the ___________________.
Q6) __________ is the relative combination of products being sold by a firm.
Page 9
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Chapter 8: Tactical Decision-Making and Relevant Costing
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164 Flashcards
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Sample Questions
Q1) Which of the following is a key point considered in a special order decision?
A) Additional irrelevant costs associated with the special order
B) Avoidable sunk costs associated with the special order
C) The estimated benefits associated with the special order
D) The preparation of segmented income statements of the special order
Q2) The decision on whether to produce a product internally or purchase it from a supplier is an example of a _______________.
Q3) What is the contribution margin per hour of machine time for a fancy lamp?
A) $21
B) $42
C) $13
D) $8
E) $6
Q4) A sunk cost is always relevant.
A)True
B)False
Q5) On a segmented income statement, fixed costs are broken down into direct fixed costs and common fixed costs.
A)True
B)False
10
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Chapter 9: Profit Planning and Flexible Budgets
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Sample Questions
Q1) The _________________ is the comprehensive financial plan for the organization as a whole.
Q2) The controller of the company usually serves as the __________________.
Q3) Which of the following is true of flexible budgets?
A) They serve only the control needs of management of an organization.
B) They enable firms to compute expected costs for a range of activity levels.
C) They allow managers to develop financial results for only one potential scenario.
D) They do not require the managers to know the cost behavior pattern of each item in the budget.
E) All of these are correct.
Q4) Which of the following is true of a static budget?
A) It is considered a good choice for benchmarks in preparing a performance report.
B) It divides costs into those that vary with units of production and those that are fixed with respect to unit-level drivers.
C) It provides a measure of the efficiency of a manager.
D) It provides expected cost for a given level of activity.
E) None of these are correct.
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Chapter 10: Standard Costing and Variance Analysis
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Sample Questions
Q1) The _____ shows the quantity of each input that should be used to produce one unit of output.
A) standard cost sheet
B) production budget
C) time sheet
D) operator budget
E) None of these is correct.
Q2) What is James' materials price variance assuming that materials purchased equals materials used?
A) $750,000 F
B) $700,000 F
C) $700,000 U
D) $750,00 U
Q3) The sources of quantitative standards include
A) historical experience.
B) engineering studies.
C) input from operating personnel.
D) historical experience, engineering studies, and input from operating personnel.
E) None of these.
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Page 12
Chapter 11: Performance Evaluation and Decentralization
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140 Flashcards
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Sample Questions
Q1) Which of the following is not an advantage of ROI?
A) It encourages managers of departments with high ROIs to invest in average ROI projects.
B) It encourages managers to pay careful attention to the relationships among sales, expenses, and investment.
C) It encourages cost efficiency.
D) It discourages excessive investment in operating assets.
Q2) _________________ is found by dividing sales by average operating assets.
Q3) _______________ indicate the minimum ROI necessary to accept an investment.
Q4) The company's minimum rate of return is 15%.What is the residual income for the Stock Division with the additional project?
A) $40,000
B) $6,000
C) $13,750
D) $4,200
E) $25,600
Q5) ___________________ is after-tax operating income minus the dollar cost of capital employed.
13
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Chapter 12: Capital Investment Decisions
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Sample Questions
Q1) Aqua Shop is considering the purchase of a used printing press costing $15,000.The printing press would generate a net cash inflow of $6,000 per year for four years.At the end of four years, the press would have no salvage value.The company's cost of capital is 12%.The company uses straight-line depreciation with no mid-year convention. What is the accounting rate of return on the original investment in the press to the nearest percent, assuming no taxes are paid?
A) 20 %
B) 15%
C) 41%
D) 9%
Q2) If the net present value of an investment is zero, the investment earns less than the minimum required rate of return.
A)True
B)False
Q3) The difference between the present value of the cash inflows and the outflows associated with a project is known as the ___________________.
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Chapter 13: Emerging Topics in Managerial Accounting:
Sustainability, Quality Cost, Lean Accounting, International
Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting
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128 Verified Questions
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Sample Questions
Q1) As per PricewaterhouseCoopers' survey of 1,409 CEOs from across 83 countries, the stakeholders who had the greatest impact on an organization's strategy are:
A) customers and clients.
B) speculators.
C) lobbyists.
D) nongovernment organizations.
Q2) Outsourcing is a payment made by a company for a business function formerly done in house.
A)True
B)False
Q3) When U.S.dollars weaken relative to euros, it reflects that:
A) U.S.dollars have appreciated against euros.
B) U.S.dollars have same purchasing power as euros.
C) U.S.dollars can buy fewer euros.
D) U.S.dollars can buy more euros.
Q4) _________ is the external verification that an independent party provides concerning the content of a corporate sustainability report and/or the process used in preparing a corporate sustainability report. Page 15
Q5) A _________ is one that does not conform to quality specifications.
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Chapter 14: Statement of Cash Flows
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Sample Questions
Q1) Which one of the following affects cash during a period?
A) payment of an account payable
B) declaration of a cash dividend
C) write-off of an uncollectible account receivable
D) recording depreciation expense
Q2) Which balance sheet accounts are affected by financing activities?
A) current assets and current liabilities.
B) long-term assets.
C) long-term liabilities.
D) intangible assets.
Q3) Decrease in accounts payable during a period.
A)Added to net income
B)Deducted from net income
C)Cash outflow--investing activity
D)Cash inflow--investing activity
E)Cash outflow--financing activity
F)Cash inflow--financing activity
G)significant noncash investing and financing activity
Q4) ________________ are the ongoing, day-to-day, revenue-generating activities of an organization.
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Chapter 15: Financial Statement Analysis
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Sample Questions
Q1) The _________________ uses the income statement to assess a company's ability to service its debt.
Q2) Nickel Store had net credit sales of $15,000,000 and cost of goods sold of $5,000,000 for the year.The Accounts Receivable balances at the beginning and end of the year were $875,000 and $375,000 respectively.The accounts receivable turnover ratio was:
A) 15 times.
B) 10 times.
C) 11 times.
D) 24 times.
Q3) A company has an account receivable turnover ratio of 4.The average accounts receivable during the period is $200,000.What is the amount of net sales for the period?
A) $220,000
B) $800,000
C) $520,000
D) $740,000
Q4) _____________________ expresses a line item as a percentage of some other line item for the same period.
Q5) ______________ and ____________ are the two major sources of capital.
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