Financial Management Exam Bank
Course Introduction
Financial Management is a foundational course designed to introduce students to the principles and practices involved in managing an organizations finances. The course covers essential topics such as financial analysis, budgeting, risk assessment, capital structure, and investment decision-making. Students will learn to interpret financial statements, apply time value of money concepts, assess funding options, and implement strategies for maximizing shareholder value. Through case studies and real-world examples, learners will gain practical skills in planning, controlling, and evaluating financial resources within both corporate and non-profit organizations.
Recommended Textbook
Introduction to Managerial Accounting 4th Canadian Edition by Peter C. Brewer
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14 Chapters
1654 Verified Questions
1654 Flashcards
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Page 2
Chapter 1: An Introduction to Managerial Accounting and Cost Concepts
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50 Verified Questions
50 Flashcards
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Sample Questions
Q1) Merchandising firms largely refer to retail and wholesale outlets that buy goods from suppliers and resell them to customers.
A)True
B)False
Answer: True
Q2) Control involves the process of instituting procedures and then obtaining feedback to ensure that all parts of the organization are functioning effectively and moving toward overall company goals.
A)True
B)False
Answer: True
Q3) Reduction in tariffs,quotas,and other barriers to free trade;improvements in global transportation system;and increasing sophistication in international trade markets,are several factors that have led to an increase in worldwide competition in many industries. A)True
B)False
Answer: True
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Page 3
Chapter 2: Systems Design: Job-Order Costing
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112 Verified Questions
112 Flashcards
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Sample Questions
Q1) In a manufacturing company,goods available for sale equals the sum of the cost of goods manufactured and the beginning finished goods inventory.
A)True
B)False
Answer: True
Q2) The cost of the raw materials used in production during the year (in thousands of dollars)was:
A) $170.
B) $190.
C) $240.
D) $250.
Answer: A
Q3) The cost of the raw materials used in production during the year (in thousands of dollars)was:
A) $90.
B) $150.
C) $160.
D) $190.
Answer: A
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Page 4
Chapter 3: Systems Design: Activity-Based Costing
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114 Verified Questions
114 Flashcards
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Sample Questions
Q1) A cost that has both the characteristics of fixed cost and variable cost is known as a?
A) mixed cost.
B) variable fixed cost.
C) sunk cost.
D) discretionary cost.
Answer: A
Q2) What is the best estimate of the company's variable operating expenses per unit?
A) $35.00 per unit.
B) $44.22 per unit.
C) $65.95 per unit.
D) $71.11 per unit.
Answer: A
Q3) What is the best estimate of the company's variable operating expenses per unit?
A) $0.24 per unit.
B) $0.71 per unit.
C) $0.90 per unit.
D) $4.17 per unit.
Answer: A
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5
Chapter 4: Systems Design: Process Costing
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126 Verified Questions
126 Flashcards
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Sample Questions
Q1) The direct materials cost in the November 1 Work in Process inventory account totalled:
A) $3,000.
B) $3,600.
C) $6,000.
D) $6,600.
Q2) Job-order costing would be more likely to be used than process costing in situations where many different products or services are produced each period to customer specifications.
A)True
B)False
Q3) Arthur Manufacturing Company produces a single product.The controller has asked your help in preparing a schedule of cost of goods manufactured for the month just ended.The following information is available:
1)Eleven thousand units were sold at $22 per unit.
2)Thirteen thousand units requiring one unit each of raw materials were produced.
3)Raw materials inventory at the beginning of the month was 1,100 units at $4 each.
4)During the month,two purchases of raw materials were made:
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6
Chapter 5: Cost Behavior: Analysis and Use
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103 Verified Questions
103 Flashcards
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Sample Questions
Q1) The equivalent units of production for materials for the month of May were?
A) 60,000 units.
B) 64,000 units.
C) 69,800 units.
D) 74,000 units.
Q2) Barker Inc.uses the weighted-average method in its process costing system.The following data concern the operations of the company's first processing department for a recent month.
Q3) What were the equivalent units of production for material costs for May?
A) 46,300 units.
B) 47,800 units.
C) 49,200 units.
D) 49,800 units.
Q4) The equivalent units of production for material for the month,using the weighted-average method,are?
A) 48,000 units.
B) 50,000 units.
C) 52,000 units.
D) 58,000 units.
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Chapter 6: Cost-Volume-Profit Relationships
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98 Verified Questions
98 Flashcards
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Sample Questions
Q1) The credits to the Manufacturing Overhead control account during the year (prior to closing out the balance)would have totalled:
A) $2,202,600.
B) $2,218,050.
C) $2,233,500.
D) $2,249,700.
Q2) The activity rate for the batch setup activity cost pool is closest to:
A) $26.10.
B) $29.40.
C) $70.40.
D) $234.90.
Q3) Parts administration is an example of a:
A) unit-level activity.
B) batch-level activity.
C) product-level activity.
D) facility-level activity.
Q4) The unit cost for Dept.F,using direct labour hours to assign overhead is?
Q5) The activity rate for Inspecting is?
Q6) What are the four categories of quality costs and which costs are included within each?
Page 8
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Chapter 7: Profit Planning
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117 Flashcards
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Sample Questions
Q1) The budgeted cash disbursements for December are:
A) $382,500.
B) $442,500.
C) $472,500.
D) $477,500.
Q2) If the company has budgeted to sell 25,000 units of Product SW in July,then the total budgeted selling and administrative expenses for July will be:
A) $56,250.
B) $78,000.
C) $123,250.
D) $134,250.
Q3) The cash disbursed for purchases during the second quarter (item c in thousands)is:
A) $9.
B) $13.
C) $21.
D) $55.
Q4) Prepare the cash budget for October,taking into consideration any financing or investing.
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Chapter 8: Standard Costs
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160 Flashcards
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Sample Questions
Q1) If revenues are $1,000,000,variable costs are $400,000,and fixed costs are $480,000,what is the contribution margin ratio?
Q2) At a break-even point of 400 units sold,variable expenses were $4,000 and fixed expenses were $2,000.What will the 401<sup>st</sup> unit sold contribute to profit?
A) $0.
B) $5.
C) $10.
D) $15.
Q3) The ratio of fixed expenses to the unit contribution margin is the:
A) break-even point in unit sales.
B) profit margin.
C) contribution margin ratio.
D) margin of safety.
Q4) At the end of its fifth year of operation,Oates Tannery experienced the following:
Q5) What is the breakeven point for this seashell necklace business?
Q6) Tanner Company's most recent contribution format income statement is presented below:
Q7) Based on the information above,What are the break-even sales in units?
Page 10
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Chapter 9: Flexible Budgets and Overhead Analysis
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Sample Questions
Q1) If by dropping a product a firm can avoid more in fixed costs than it loses in contribution margin,then the firm is better off economically if the product is dropped.
A)True
B)False
Q2) A plant operating at capacity would suggest that most likely:
A) every machine and person in the plant is working at the maximum possible rate.
B) only some specific machines or processes are operating at the maximum rate possible.
C) fixed costs will need to change to accommodate increased demand.
D) managers should produce those products with the highest contribution margin in order to deal with the constrained resource.
Q3) Opportunity costs are recorded in the accounts of an organization.
A)True B)False
Q4) Managers will always seek to eliminate all unprofitable product lines.
A)True
B)False
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11
Chapter 10: Decentralization
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113 Flashcards
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Sample Questions
Q1) White Company's required rate of return on capital budgeting projects is 12%.The company is considering an investment opportunity which would yield a cash flow of $10,000 in five years.What is the most that the company should be willing to invest in this project?
A) $2,774.
B) $5,670.
C) $17,637.
D) $36,050.
Q2) The cost of capital is the average rate of return a company must pay on its short-term bank borrowings.
A)True
B)False
Q3) Which of the statements below is correct about an increase in the discount rate?
A) Will increase the present value of future cash flows.
B) Will have no effect on net present value.
C) Will reduce the present value of future cash flows.
D) Is one method of compensating for reduced risk.
Q4) Monson Company is considering three investment opportunities with cash flows as described below:
Q5) The following data concern an investment project:
Page 12
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Chapter 11: Relevant Costs for Decision Making
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163 Flashcards
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Sample Questions
Q1) The fixed overhead volume variance is due to:
A) inefficient or efficient use of whatever the denominator activity is.
B) inefficient or efficient use of overhead resources.
C) a difference between the denominator activity and the standard hours allowed for the actual output of the period.
D) a shift in the amount of hours required to produce the actual output.
Q2) A static budget is geared toward a single level of activity.
A)True
B)False
Q3) The variable overhead efficiency variance is:
A) $430 U.
B) $740 F.
C) $950 U.
D) $1,120 F.
Q4) Which department is usually held responsible for an unfavourable materials quantity variance?
A) Marketing.
B) Purchasing.
C) Engineering.
D) Production.
Page 13
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Chapter 12: Capital Budgeting Decisions
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Sample Questions
Q1) Division A's residual income is?
A) $20,000.
B) $30,000.
C) $35,000.
D) $45,000.
Q2) The performance of the manager of Division A is measured by residual income.Which of the following would increase the manager's performance measure?
A) Increase in average operating assets.
B) Decrease in average operating assets.
C) Increase in minimum required return.
D) Decrease in net operating income.
Q3) All other things being equal,a company's return on investment (ROI)would generally increase when:
A) average operating assets increase.
B) sales decrease.
C) operating expenses decrease.
D) operating expenses increase.
Q4) Jimbob Co.has three operating divisions with the following information for the most recent fiscal year.
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Chapter 13: How Well Am I Doing Statement of Cash Flows
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223 Verified Questions
223 Flashcards
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Sample Questions
Q1) March Company's acid-test (quick)ratio at the end of 20 × 6 was closest to:
A) 0.39 to 1.
B) 0.53 to 1.
C) 0.95 to 1.
D) 1.90 to 1.
Q2) Harris Company,a retailer,had cost of goods sold of $290,000 last year.The beginning inventory balance was $26,000 and the ending inventory balance was $24,000.The company's inventory turnover was closest to:
A) 5.80 times.
B) 11.15 times.
C) 11.60 times.
D) 12.08 times.
Q3) Marcial Company's current ratio at the end of 20 × 6 was closest to:
A) 0.35 to 1.
B) 0.38 to 1.
C) 1.22 to 1.
D) 1.83 to 1.
Q4) Financial statements for Qiang Company appear below:
Q5) Calculate the inventory turnover for 20 × 4
Q6) Calculate the return on total assets for 20 × 4
Page 15
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Chapter 14: How Well Am I Doing Financial Statement Analysis
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Sample Questions
Q1) Accounts receivable increased by $100,000 and accounts payable decreased by $50,000.What will be the net result in terms of cash flow?
A) Cash increased by $50,000.
B) Cash decreased by $50,000.
C) Cash increased by $150,000.
D) Cash decreased by $150,000.
Q2) Short-term highly liquid investments such as treasury bills which may be included on the balance sheet within marketable securities will be considered cash in preparation of the cash flow statement.
A)True
B)False
Q3) Cash flow from operating activities was?
A) $343,000
B) $353,000
C) $383,000
D) $393,000
Q4) Financial statements for Larned Company appear below:
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