Unit 4 Review

What accounting record would summarize a business’s profit or loss for a previous year?

• Bank statement
• Income statement
• Inventory record
• Balance sheet

A retail business looks at financial information to see if the company can afford to purchase a popular new item to add to its shelves. This is an example of using financial information to

• create a budget.
• increase sales.
• check on the competition.
• reduce expenses.

The finance function would definitely be involved in a decision regarding

• public relations and publicity.
• new business projects and strategies.
• personal selling.
• hiring.

Which of the following is an example of personal financial information:

• Sales invoice
• Accounts payable record
• Expense report
• Pay stub

How does the finance function relate to company spending?

• It plans and controls spending.
• It spends on investments only.
• It produces reports about spending.
• It does not relate to spending.

Which of the following is a reason that businesses might look at financial information from another company:

• To determine how to increase sales
• To monitor their company’s ongoing business activities
• To manage their company’s debt
• To see how their company compares to the competition

The finance function is usually responsible for which of the following processes:

• Budgeting
• Hiring
• Manufacturing
• Research

Money the business owes is known as

• equity.
• accounts payable.
• assets.
• accounts receivable.

Finance is the business function that involves managing

• information.
• marketing.
• money.
• production.

Which of the following refers to the amount of time it takes for an investment to become profitable?

• Financing
• Cash conversion cycle
• Capital budgeting
• Capital structure