Finance Questions
Explore questions in the Finance category that you can ask Spark.E!
Who ultimately controls a corporation?A) StakeholdersB) Chairman of the boardC) StockholdersD) Chief executive officerE) Board of directors
A store receives cash when a customerA) buys an item using store credit.B) exchanges one item for another at the same price.C) pays their bill from the store.D) places an item on layaway with no deposit.E) returns an item purchased with cash.
Which one of the following actions by a financial manager leastmeets the goal of financial management?A) Increasing current costs in order to increase the market value of the stockholders' equityB) Agreeing to expand the company at the expense of stockholders' valueC) Refusing to lower selling prices if doing so will reduce the net profitsD) Agreeing to pay bonuses based on the market value of the company stockE) Refusing to borrow money when doing so will create losses for the firm
Which one of the following statements concerning a sole proprietorship is correct?A) A sole proprietorship is often structured as a limited liability company.B) The owner of a sole proprietorship may be forced to sell personal assets to pay company debts.C) The owners of a sole proprietorship share profits as established by the partnership agreement.D) The profits of a sole proprietorship are taxed twice.E) A sole proprietorship is difficult to create.
Which one of the following statements is correct?A) All types of business formations have limited lives.B) Partnerships are the most complicated type of business to form.C) Sole proprietorships and partnerships are taxed in a similar fashion.D) General partnerships and corporations provide limited liability for all owners.E) Both partnerships and corporations incur double taxation.
Which one of the following business types is best suited to raising large amounts of capital?A) Sole proprietorshipB) Limited liability companyC) Limited partnershipD) General partnershipE) Corporation
A business entity operated and taxed like a partnership, but with limited liability for the owners, is called aA) limited liability company.B) general partnership.C) limited proprietorship.D) sole proprietorship.E) corporation.
Capital structure refers to theA) determination of the ideal mix of current versus long-term assets.B) methods by which fixed assets are used to produce a tangible product.C) mix of current assets and current liabilities.D) acquisition or disposition of a building or other long-term asset.E) decisions related to long-term debt and equity financing.
The process of planning and managing a firm's long-term investments is referred to asA) capital budgeting.B) agency cost analysis.C) financial depreciation.D) working capital management.E) capital structure.
Art purchased 2,500 shares of Delta stock. His purchase represents 10 percent ownership in the firm. His shares have increased in value from the $12 a share he originally paid to today's market value of $13 a share. Assume Delta goes bankrupt and owes $450,000 more in debts than the firm can pay after liquidating all of its assets. What is the maximum loss per share Art will incur on this investment?A) $0 a shareB) $12 a shareC) $12.50 a share, computed as ($12 + $13) / 2D) $13 a shareE) $18 share, computed as (10% × $450,000) / 2,500 shares
Which type of business organization has all the respective rights and privileges of a legal person?A) Sole proprietorshipB) CorporationC) General partnershipD) Limited partnershipE) Limited liability company
A limited partnership generallyA) has less of an ability to raise capital than a proprietorship.B) has 10 or more limited partners and no general partners.C) permits limited partners to sell their ownership interest without the partnership terminating.D) is taxed the same as a corporation.E) provides for the transfer of a general partner's ownership interest to any outside party.
The rules by which corporations govern themselves are calledA) indenture provisions.B) indemnity provisions.C) bylaws.D) charter agreements.E) articles of incorporation.
The owners of a limited liability company preferA) being taxed like a corporation.B) having liability exposure similar to that of a sole proprietor.C) being taxed personally on all business income.D) having liability exposure similar to that of a general partner.E) being taxed like a corporation with liability like a partnership.
A general partnerA) cannot lose more than the amount of his/her equity investment.B) has less legal liability than a limited partner.C) faces double taxation whereas a limited partner does not.D) has more management responsibility than a limited partner.E) is the term applied only to corporations that invest in partnerships.
Current assets includeA) inventory and cash.B) cash and buildings.C) inventory and machinery.D) equipment and cash.E) buildings and inventory.
Which one of these is an advantage of a general partnership?A) Limited life of the firmB) Personal liability for firm debtC) Greater ability to raise capital than a sole proprietorshipD) Ease of transferring partnership interestE) Limited liability
Which form(s) of business is a treated as a distinct legal entity separate from its owners?A) Limited partnershipB) Sole proprietorshipC) General partnershipD) CorporationE) Both a limited partnership and a corporation
Which one of these is a corporate document that sets forth the intended life of the firm?A) Federal charterB) Articles of incorporationC) Corporate bylawsD) Indenture contractE) State charter
A business entity formed by two or more individuals who each have unlimited liability for business debts is called aA) corporation.B) sole proprietorship.C) general partnership.D) limited partnership.E) limited liability company.