partnership - ✅✅-An unincorporated business owned by two or more persons.
corporation - ✅✅-A legal entity created by a state, separate and distinct from its
owners and managers, having unlimited life, easy transferability of ownership, and
limited liability.
bylaws - ✅✅ -A set of rules drawn up by the founders of the corporation that
indicates how the company is to be governed; includes procedures for electing
directors, rights of stckholders, and how to change the bylaws when necessary.
corporate charter -✅✅ -A document filed with the appropriate department of the
state in which a business is incorporated that provides information about the
company, including its name, address, directors, and amount of capital stock.
limited liability company (LLC) -✅✅ -Offers the limited personal liability associated
with a corporation; however, the company's income is taxed like that of a partnership.
✅✅
limited liability partnership (LLP) - -A partnership wherein at least one partner is
designated as a general partner with unlimited personal financial liability, and the
other partners are limited partners whose liability is limited to amounts they invest in
the firm.
S corporation - ✅✅ -A corporation with no more than 100 stockholders that elects
to be taxed in the same manner as proprietorships and partnerships, so that
business income is only taxed once.
stockholder wealth maximization - ✅✅ -The appropriate goal for management
decisions; considers the risk and timing associated with expected cash flows to
maximize the price of the firm's common stock.
value -✅✅ -The present, or current, value of the cash flows that an asset is
expected to generate in the future.
agency problem - ✅✅ -A potential conflict of interest between outside shareholders
(owners) and managers who make decisions about how to operate the firm.
Business ethics - ✅✅ -A company's attitude and conduct toward its stakeholders
(employees, customers, stockholders, and community). Ethical behavior requires fair
and honest treatment of all parties.
,Hostile takeovers - ✅✅-The acquisition of a company over the opposition of its
management.
Corporate governance - ✅✅-Deals with the set of rules a firm follows when
conducting business; these rules identify who is accountable for major financial
decisions.
stakeholders - ✅✅ -Those who are associated with a business, including
managers, employees, customers, suppliers, creditors, stockholders, and other
parties with an interest in the firm's well-being.
proxy votes - ✅✅ -Voting power that is assigned to another party, such as another
stockholder or institution.
exchange rates - ✅✅-The prices at which the currency of one country can be
converted into the currencies of other countries.
multinational companies - ✅✅-Firms that operate in two or more countries.
industrial groups - ✅✅ -Organizations of companies in different industries with
common ownership interests, which include firms necessary to manufacture and sell
products; networks of manufacturers, suppliers, marketing organizations,
distributors, retailers, and creditors.
hostile takeover - ✅✅-The acquisition of a company over the opposition of its
management.
To be successful, a financial institution is required to - ✅✅-understand the cause of
rise and fall of interest rates.
✅✅
Coordination of the finance function and the marketing function is critical to the
success of a company, especially a small, newly formed firm because it - -is
necessary to ensure that sufficient cash is generated to survive.
✅✅
If any partner is unable to meet his or her pro rata claim in the event the partnership
goes bankrupt, the remaining partners - -must make good on the unsatisfied
claims.
✅✅
Which of the following must be filed by a limited liability company (LLC) with the state
in which the business is set up? - -Articles of organization
,Which of the following is a reason for profit-motivated, free-enterprise economies to
✅✅
be more successful than socialistic and communistic economic systems? -
-Actions that help a firm in a profit-motivated economy to increase the price of
its stock are also beneficial to the society at large.
✅✅
equals net income divided by the number of outstanding shares of common stock. -
-Earnings per share
✅✅
The Sarbanes-Oxley Act of 2002 requires a publicly traded corporation to have a
committee that consists of _____to oversee the firm's audits. - -outside
directors
✅✅
A company's attitude and conduct toward its employees, customers, community, and
stockholders is referred to as - -business ethics.
✅✅
Which of the following statements about corporations that are considered open is
true? - -Their stocks are widely dispersed among a large number of different
investors.
Which of the following statements about political risk is true? -✅✅-d. A nation is
free to place constraints on the transfer of corporate resources.
Corporation - ✅✅ -This entity, which is legally separate from its managers and
owners, is authorized by a state to conduct business.
Finance - ✅✅ -It addresses how money is raised and used by individuals,
businesses, and governments.
Stakeholder - ✅✅ -This term describes individuals and groups, both internal and
external to the company, whose support is critical to the success of the organization.
Value -✅✅ -This is the present worth of the future cash flows generated by an
asset or firm, discounted at a rate appropriate for the riskiness of the cash flows.
✅✅
Limited liability - -An investor's personal responsibility for the business's
liabilities can never be less than zero or more than the amount invested in the firm's
common shares.
, Alex, Susan, and Jose own an accounting firm in San Francisco. All share in the
profits of the firm proportionately and file taxes only at an individual level. According
✅✅
to their agreement, none of the owners will be held personally liable for the firm's
debts. This is an example of: - -An LLP/LLC
✅✅
Which of the following statements regarding a corporation's annual report is true? -
-The verbal statements in the report attempt to explain how management
expects the firm to perform in the future.
✅✅
Larger publicly traded firms must file a ___report with the Securities and Exchange
Commission (SEC). - -10-K
Inventory is an example of a(n) - ✅✅-current asset.
✅✅
The value of assets, liabilities, and equities outside of the firm in the marketplace is
the - -market value.
Which of the following statements about a firm's income statement is true? - -It✅✅
summarizes the revenue generated and the expenses incurred by a firm during the
accounting period.
On March 3 of the current year, a firm had a quick ratio of 2.0. Two days later, the
✅✅
firm purchased equipment for cash. Assuming all other things are equal, how will this
transaction affect the firm's quick ratio? - -The quick ratio will decrease.
✅✅
How does financial leverage affect the expected rate of return realized by
stockholders of a firm? - -Interest on debt is tax deductible.
Which of the following groups of ratios show the combined effects of liquidity
✅✅
management, asset management, and debt management on the operating results? -
-Profitability ratios
✅✅
When calculating ratios, a company can minimize the problems arising from
seasonal factors by - -using monthly averages for inventories.
Sapphire Industries Ltd. and Garnet Enterprises Ltd. are textile businesses. The
quick ratio of Sapphire is 0.5, and the quick ratio of Garnet is 1.0. As part of the
✅✅
window-dressing strategy, both firms will purchase inventory on credit. Which of the
following is true about the actual results of this transaction? - -The quick ratios
of both Sapphire and Garnet will decrease.
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