Anybody_s Business
By Barbara Van Syckle
Email: richard@qwconsultancy.com
Anybody’s Business TIF questions: Chapter 1 True/False 1) Whenever your standard of living goes up, so does your quality of life. Answer: FALSE Diff: Easy Page Ref: 4 Objective: Explain why financial statements matter to businesses and the people who own them, manage them, and work in them. 2) Net profit, when used alone, shows a company’s true financial health. Answer: FALSE Diff: Easy Page Ref: 7 Objective: Explain why financial statements matter to businesses and the people who own them, manage them, and work in them.
Formatted: English (United States)
Formatted: English (United States)
3) A budget quantifies all of a company’s expected inflows and outflows of cash. Answer: TRUE Diff: Easy Page Ref: 9 Objective: Recognize cash flow and how to interpret a cash flow statement. 4) Income and revenue are not the same thing. Answer: TRUE Diff: EASY Page Ref: 13 Objective: Recognize profit and how to interpret an income statement.
Formatted: English (United States)
5) Revenue can come from goods and services, but not from experiences that customers have. Answer: FALSE Diff: Easy Page Ref: 13 Objective: Recognize profit and how to interpret an income statement. 6) Not-for-profit organizations do not need net income. Answer: FALSE Diff: Easy Page Ref: 14 Objective: Recognize profit and how to interpret an income statement. 7) A company can still have cash flow problems if it is profitable. Answer: FALSE Diff: Easy Page Ref: 17 Objective: Recognize profit and how to interpret an income statement. Multiple Choice 8) Which of the following is NOT a financial statement? A) cash flow statement
Formatted: English (United States)
Formatted: English (United States)
B) general ledger C) income statement D) balance sheet Answer: B Diff: Easy Page Ref: 4 Objective: Explain why financial statements matter to businesses and the people who own them, manage them, and work in them. 9) Which of the following is NOT a factor affecting standard of living? A) your income B) the quality of goods and services available to you C) tour well-being D) the consumption patterns of the people in your community Answer: C Diff: Moderate Page Ref: 4 Objective: Explain why financial statements matter to businesses and the people who own them, manage them, and work in them. 10) A publicly traded company is A) a company that is family-owned and –founded. B) a company that is funded primarily through federal income taxes levied by the government. C) a company that is owned by its employees. D) a company that issues stock for people to buy on a stock exchange or other markets. Answer: D Diff: Easy Page Ref: 5 Objective: Explain why financial statements matter to businesses and the people who own them, manage them, and work in them. 11) An annual report is A) a description of a firm’s financials, distributed to everyone who owns stock in the firm. B) a statement describing market growth in a specific industry, such as automotive or telecommunications. C) a set of documents explaining trends and challenges in a nation’s economy. D) a booklet published by the Treasury Department each year outlining returns on Treasury bill investments. Answer: A Diff: Moderate Page Ref: 5 Objective: Explain why financial statements matter to businesses and the people who own them, manage them, and work in them. 12) Which of the following is NOT true about open book management? A) Employees are encouraged to suggest ways to improve the company’s performance.
B) Employees directly review their managers’ on-the-job performance. C) Employees have access to the firm’s financial statements and other information about the company’s performance. D) Employees see how their performance affects the company’s performance. Answer: B Diff: Moderate Page Ref: 5 Objective: Explain why financial statements matter to businesses and the people who own them, manage them, and work in them. 13) Which of the following is the most likely objection to open book management? A) Employees will feel disrespected by management if the company’s financial performance is poor. B) The company will be violating laws about keeping financial information confidential. C) The firm’s financial information will get into the hands of competitors. D) Employees will have difficulty seeing the connection between their performance and the company’s. Answer: C Diff: Moderate Page Ref: 6 Objective: Explain why financial statements matter to businesses and the people who own them, manage them, and work in them. 14) Open book management improves employees’ quality of life because A) it creates a work environment characterized by reduced stress. B) it ensures employees a steady paycheck. C) it enables employees to buy higher-quality goods and services. D) it frees employees from having to contribute ideas for improving the company’s performance. Answer: A Diff: Moderate Page Ref: 6 Objective: Explain why financial statements matter to businesses and the people who own them, manage them, and work in them. 15) The “bottom line” is A) the lowest possible revenue a company can earn without having to declare bankruptcy. B) the final decision a CEO makes regarding whether to sell the company or divest a division. C) an accounting calculation that figures out a company’s financial performance based on net profit. D) an equation showing how much market share a company lost during the previous fiscal year. Answer: C Diff: Easy Page Ref: 7 Objective: Explain why financial statements matter to businesses and the people who own them, manage them, and work in them.
16) Which of the following is a well-stated business goal? A) “Strengthen our ability to manufacture products without error.” B) “Enhance morale and engagement throughout our workforce.” C) “Improve our ability to innovate new products and services.” D) “Increase revenues twofold by the end of the fiscal year.” Answer: D Diff: Moderate Page Ref: 7 Objective: Explain why financial statements matter to businesses and the people who own them, manage them, and work in them. 17) In a company using open book management, which of the following incentives would likely motivate the majority of employees to improve their performance? A) vacations to resorts on distant, exotic locations B) gift certificates to local cultural and sports events C) a profit-sharing or equity-sharing program D) a bonus check that is a specific percentage of employees’ pay Answer: C Diff: Moderate Page Ref: 7 Objective: Explain why financial statements matter to businesses and the people who own them, manage them, and work in them. 18) Financial statements help managers and employees A) understand their company’s previous, current, and possibly future performance. B) improve their standard of living but not their quality of life. C) select other companies that may be worth investing in. D) distinguish differences between their company’s and rival companies’ offerings. Answer: A Diff: Moderate Page Ref: 8 Objective: Explain why financial statements matter to businesses and the people who own them, manage them, and work in them. 19) Which of the following are NOT reflected in a company’s cash flow statement? A) purchases of office supplies needed by the business B) payments from customers for products C) monies the company owes investors D) rent checks from a property the company is subleasing. Answer: C Diff: Challenging Page Ref: 9 Objective: Recognize cash flow and how to interpret a cash flow statement. 20) A budget A) spells out which vacant positions a company will need to fill with new hires. B) quantifies all of a company’s expected inflows and outflows of cash. C) shows the trends in a firm’s revenues and profits over the previous three years. D) depicts salary differences between executives, managers, and employees.