Historical cost is an accounting principle that says what a company owns is originally recorded at which of the following
Question 1Historical cost is an accounting principle that says what a company owns is originally recorded at which of the following
Answers:
A. Appraised value
B. Purchase cost
C. Insured value
D. Market value
Question 2Generally accepted accounting principles include
Answers:
A. Revenue recognition
B. Matching revenues and expenses
C. Historical cost
D. Full disclosure
E. All of the above
Question 3Which of the following statements are
Answers:
A. Revenues are top line
B. Profits are bottom line
C. Both A and B
D. Costs are the same as expenses
Question 4The finance department has responsibility for which of the following
Answers:
A. Treasury function
B. Insurance and risk management
C. Mergers and acquisitions
D. All of the above
Question 5Cash appears on which of the following financial statements
Answers:
A. Statement of cash flows
B. Balance sheet
C. Both A and B
D. Income statement
Question 6The matching principle means which of the following
Answers:
A. Record cash as revenue when received
B. Record costs associated with producing revenue at the same time
C. Applies to accrual accounting
D. Both B and C
Question 7Which of the following issues domestic Generally Accepted Accounting Principles
Answers:
A. IFRS
B. SEC
C. NASDAQ
D. FASB
Question 8Solvency is the same as profitability
True
False
Question 9Finance is responsible for which of the following
Answers:
A. Internal control
B. Collecting data for financial reporting
C. Financial information used by other departments
D. All of the above
Question 10Which is a statement under the accrual method of accounting?
Answers:
A. A company recognizes revenue when it receives cash
B. A company recognizes expense when it pays cash
C. A company recognizes revenue when earned or it consummates a sale
D. A company matches cash received with cash paid
JWI530 FINANCIAL MANAGEMENT I
Week 2 Knowledge Check
Question 1Match each term with the definition.
Question
Liquidity
Insolvency
Leverage
Write-off
Question 2Financial Statements like the Balance Sheet are required to have standard titles and formats.
Match the phrases – in the sequence – with the 3 lines on a Balance Sheet for “Company ABC”:
Question
Line 1:
Line 2:
Line 3:
Question 3Top Rated Cars is a worldwide manufacturer of cars and trucks. They maintain a reserve on the balance sheet for future warranty claims. The balance in this account at December 31, 2015, 2016, 2017, and 2018 (in millions) was: $315.0, $329.0, $354.7 and $361.9 respectively. In addition, revenues for the same periods were (in millions): $10,000.8, $10,122.0, $10,098.6 and $9,999.6. From this data, one could surmise that the quality of their cars and trucks is improving.
Question 4Weather Bank Corporation shows the following selected items on its current balance sheet: (1) Total current assets of $123,487; (2) Total Current Liabilities of $98,459; (3) Total assets of $500,084 and (4) Total stockholders’ equity of $239,765. Remember A=L+E. What are the Total Liabilities?
Question 5Weather Bank Corporation shows the following selected items on its current balance sheet: (1) Total current assets of $123,487; (2) Total current liabilities of $98,459; (3) Total assets of $500,084; and (4) Total stockholders’ equity of $239,765. Remember, A = L + E. Based upon this information, the current ratio is:
Question 6Deliverance Corporation has annual credit sales of $56.0 million. Its CEO boasts of the fastest receivables turnover in the industry because he never has more than 36 days of sales in receivables. Is he , if receivables at the end of last quarter were approximately $8.0 million? Hint: Compute the dollar amount of daily sales.
Question 7Winston Land and Cattle Company is a large operator of cattle feedlots and steak restaurants. Its recent financial statements showed their real estate holdings to be in excess of $50.0 million. Winston recently had a company-wide appraisal done for insurance purposes, and the report showed real estate to have a current market value of $356.0 million. Jim Winston, the owner, requested that the firm’s auditors show that value on the financial statements, and the auditors declined his request because:
Question 8Deliverance Corporation has annual Cost of Goods Sold of $56.0 million and Average Inventory of $4,760,000. Its CEO boasts of the fastest Inventory Turnover of 8.5 times a year. Is he right?
Question 9 Which of the following is a liability?
Question 10Classify if the asset should be fixed or current
Question
Cash
Land
Inventory
Accounts Receivable
Long-Term Investments
JWI530 FINANCIAL MANAGEMENT I
Week 3 Knowledge Check
• Question 1 What are the different names for the income statement? Select all that apply:
A. Profit and Loss Statement
B. Gross Profit and Loss Statement
C. Net Margin Statement
D. Statement of income and expenses
Question 2 Which item is not depreciable?
A. Land
B. Furniture
C. Vehicles
D. Manufacturing Machinery
• Question 3Expenses are recorded when…
A. A purchase order is issued
B. A supplier agrees to goods and services ordered
C. At the end of the month
D. When the supplier acts on the promise to deliver
• Question 4 Which financial report most used by nonfinancial managers.
A. Balance Sheet
B. Cash Flow Statement
C. Income Statement
D. Statement of Retained Earnings
• Question 5 Which line item is not an expense?
A. Sales and Marketing
B. General and Administrative
C. Property, Plant, and Equipment
D. Training and Professional Development
• Question 6 Sales of services are called
A. Earnings
B. Cost of Goods Sold
C. Revenues
D. Sales Discounts
Question 7 Which cost does not represent cost of sales?
A. Direct Labor
B. Raw Materials
C. Commissions
D. Office Supplies
• Question 8 Gross Profit Margin is calculated as
Difference between sales and cost of sales (aka gross profit) divided by sales
A. Revenues plus cost of sales
B. Difference between sales discounts and sales expenses
C. Difference between sales and cost of sales (aka gross profit) divided by sales
D. Revenues less cost of sales
• Question 9 Net Profit Margin is calculated as
A. Revenues plus cost of sales
B. Difference between sales discounts and sales expenses
C. Difference between sales and all costs/expenses divided by sales
D. Revenues less cost of sales
• Question 10What is the result of net loss or net income allocated to each share of stock?
A. Earnings Per Share
B. Net Margin
C. Gross Profit
D. Earnings Before Interest, Taxes, Depreciation, and Amortizations
JWI530 FINANCIAL MANAGEMENT I
Week 4 Knowledge Check
Question 1The Cash Flow Cycle includes which of the following activities:
Answers:
A. Setup
B. Production
C. Sales
D. All of the above
Question 2Capital Expenditures is the amount spent for contract labor used in the business, and reported under Cash for Investing.
Answers:
True
False
Question 3Most small businesses, and all large ones, favor accrual basis books over cash basis books for all of the following reasons EXCEPT:
Answers:
A. They’re concerned about the profit margin on products they sell.
B. They want to know when they’re making money and when they’re not.
C. Accrual basis accounting always shows a higher profit than cash basis of accounting.
D. They’re required by lenders, investors or government authorities to report their activities using accrual basis accounting
Question 4Free Cash Flow is defined as:
Answers:
A. A measure of ongoing cash flow from normal business activities (including CapEx)
B. A list of dividend payments made to shareholders.
C. Any cash flow given as bonus compensation to executives.
D. Cash flows raised from debt and equity offerings.
Question 5Which of the following transactions does NOT lower Cash:
Answers:
A. Paying salaries
B. Paying for equipment
C. Paying off a loan balance
D. Receiving money from investors
Question 6The Pumice Stone Company has the following measurements ready for its Statement of Cash Flows:
Beginning Cash Balance $125,300
Acquisitions $400,000
Net cash flow from Operating Activities $297,600
Net cash flow from Investing Activities ($328,400) (negative/use)
Net cash flow from Financing Activities $250,000
Answers:
A. $344,500
B. $232,600
C. $55,700
D. ($205,100)
Question 7Earnings per Share is a more important financial measure than cash flow for private equity firms.
Answers:
True
False
Question 8The BesTest Sprinkler Company engaged in the following Financing Activities during the year 2020:
Issuance of new Debt $ 10,000,000
Repayment of Debt $7,000,000
Payment of Dividends $750,000
Sale of Stock $2,500,000
What are the Net Borrowings?
Answers:
A. $ 3,000,000
B. $ 5,500,000
C. $ 10,000,000
D. $ 4,750,000
Question 9A cash flow statement is basically a reconciliation of the company’s purchase log.
Answers:
True
False
Question 10The Cash Flow Statement measures “how much money, net of everything else, have I made this year, and how much will I have going forward next year”, according to Jack Welch.
Answers:
True
False
JWI530 FINANCIAL MANAGEMENT I
Week 5 Knowledge Check
Question 1According to the GAO Internal Controls article, the key elements of Internal Controls that should be a part of Enterprise Risk Management (ERM) includes which of the following components?
Answers:
A. Monitoring Activities
B. Control Activities
C. Risk Assessment
D. All Answers are
E. Control Environment
F. Information and Communication
Question 2You are a Division Manager and the administrative assistant, who is preparing an expense report for Frank, one of your direct reports, approaches you because she discovers that Frank used the company credit card to purchase jewelry for his wife. What is the best course of action to be taken by the Division Manager?
Answers:
A. Just ignore it since he exceeded his sales goal by more than a million dollars for the last 3 years straight.
B. Call Internal Controls and Human Resources to start the termination process.
C. Schedule a meeting with Frank to review this personal purchase that was made on his company credit, advise him that he will need to pay for it immediately, and reinforce the credit card policy as it relates to making personal purchases.
D. Schedule a meeting with Frank to let him know that you caught him red-handed however next time, you will overlook it, as long as he also purchases jewelry for you as well.
Question 3Larry is an employee of Cracker Jack Electronics, and he needs his business travel expenses reimbursed, but must have approval for payment. He completes an expense report and attaches all of his receipts and submits it. Suzanna is Larry’s supervisor, and the assistant controller for Cracker Jack Electronics, and she is responsible for verifying Larry’s expense report and signing off on it for approval for reimbursement. This arrangement is called:
Answers:
A. Separation of Functions
B. Labor-saving Productivity
C. Segregation of Duties
D. Both Separation of Functions and Segregation of Duties
E. Collusion
Question 4Which of the following is true as it relates to internal controls?
Answers:
A. It is a set of rules or procedures that a company puts in place for conducting its business
B. It ensures that there is a system of checks and balances in place
C. It is aimed at protecting the integrity of financial information and safeguarding company assets
D. Prevents waste and misuse of assets and resources
E. Ensure bills are paid timely and that accounting transactions are recorded ly
F. All of the Above
Question 5Who prepares, creates, and is solely accountable for the official Financial Statements of a publicly traded company?
Answers:
A. The receptionist in the CEO’s office
B. A third-party independent Auditor
C. Company Management
D. A CPA with at least 20 years of experience
E. The Securities and Exchange Commission (SEC)
Question 6Match the following terms with their definition.
Question Match Selected Match
10-K
EDGAR
Annual Report
10-Q
All Answer Choices
A. An annual report required by the SEC, generally in simple text/data format, which summarizes key financial and operational highlights.
B. SEC database in the U.S., where all required financial disclosures and publications are stored and available for free to the public.
C. A quarterly report required by the SEC, generally in simple text/data format, which summarizes key financial and operational highlights.
D. Yearly publication from a company that describes the operational and financial results. It often comes in booklet form with glossy pages and shareholder communications with pictures, graphs, and images. Contains the full financial statements, management disclosure, and notes to the financial statements.
Question 7When a company uses I.D. Badges, a security guard or even a receptionist to limit or control access to the company office building, which type of internal control does this refer to?
Answers:
A. Policies and Procedures
B. Separation of Duties
C. Barriers
D. Record Keeping
E. Inspection
Question 8You are the CEO of an organization, and you’re having a private, non-business dinner with a shareholder (who is not an employee but someone you have known since high school) one week before your company is expected to release its prior year financial results. In meeting with your CFO, you know there is a significant surprise profit shortfall coming from the Latin American organization. This shareholder says, “My kid is going off to college this fall, and things are really tight around my house since I just started my own business. I am so thankful your stock has been doing well. If it rises just a few more dollars in price, I am going to cash out so I can send her to school. Think we will see a boost in price after next week’s earnings release?” Which of the following is the best response?
Answers:
A. Tell your friend you are very sorry, but you are not allowed to comment on pending financial results.
B. Since this is only an individual investor and not an employee, it is acceptable to share this information, provided the person promises not to act on it or share it with anyone else.
C. Being very careful not to disclose any specifics or details, tell the person to consider selling some shares now.
D. Stop the conversation immediately and contact the authorities to report a breach of insider trading laws by your friend for asking you the question.
Question 9Under the Sarbanes-Oxley Act of 2002, executives of publicly held companies are held to a very high standard of ethical conduct. Because it is not possible for an executive to be aware of all that is transpiring in the organization, the SEC decided that senior executives are exempt from liability if they were not aware that a subordinate was cooking the books.
True
False
Question 10Internal Controls will be very effective as long as the senior management follows the policies, even if all other employees do not?
Answers:
True
False
JWI530 FINANCIAL MANAGEMENT I
Week 6 Knowledge Check
Question 1Financial accounting is primarily externally directed, meaning financial accounting’s main function is informing external stakeholders such as lenders, shareholders and governmental agencies. Managerial accounting, on the other hand, is primarily internally directed, meaning managerial accounting is directed towards helping leadership and management operate the business on a day-to-day basis. Which of the following is NOT true?
Answers:
A. Variable or direct costing is allowed for financial reporting purposes under both GAAP and IFRS.
B. Managerial accounting is essential to determining product and service pricing.
C. Inventory is an asset to both financial and managerial accountants.
D. Standard costs are not very important to most financial accountants.
Question 2Match each term to its definition.
Question Match Selected Match
Job costing
Process costing
Bill of materials
Standard costing
All Answer Choices
A. A management tool that estimates the overall cost of production, assuming normal operations.
B. Collecting costs for a manufacturing process that’s geared to producing products in individual lots and assigning cost to those jobs.
C. Collecting all costs incurred in a continuous process, then averaging the costs over all units produced.
D. A list of all the parts and components that go into manufacturing a product, including any raw material.
Question 3Match each cost to its cost driver.
Question Match Selected Match
Cost of wood for wood-burning pizza oven
Cost of machine lubricants
Cost of round steel bars
Cost of jet fuel for an airliner
All Answer Choices
A. Baking pizzas
B. Flying the airliner
C. Producing Screws
D. Running machine
Question 4The ABC Company, maker of birdhouses is looking at different ways of allocating shared costs (overhead). The Cost Accountant has been provided the following data for the past month:
Birdhouse Models Quantity Produced Total Machine Hours Total Labor Hours
Basic 100 10 25
Standard 100 20 40
Deluxe 25 40 60
The Spend pools are provided as:
Material: $3000
Direct Labor: $5000
Overhead: $2000
If Overhead is allocated based on the activity of Quantity Produced, how much of the $2,000 cost will be allocated to the Deluxe Birdhouse?
A. $222
B. $888
C. $960
D. $1,142
Question 5Bill Williams is an engine tech for a Ford dealership and is assigned to the service department. Here is a table of costs associated with the dealership and Bill’s engine repair job today:
Engine parts $ 675
Gasket, oil, and other fluids $ 113
Standard Labor Costs $ 700
Expensible tools $ 48
Service Write Up Wages $ 1,366
Radio Advertising $ 850
Parking lot paving project $ 9,850
Quality Inspection Dept. $ 5,248
Which is of the following is not true?
Answers:
A. Direct costs on this job are $1,536.
B. The dealership is most likely using job costing.
C. Shared costs of $6,614 were incurred today.
D. All of the parking lot paving costs will be allocated to each vehicle repaired in the facility today.
Question 6Standard costing and budgeting systems create variances which enables managers to use management by exception principles. Which of the following is true about management by exception?
Answers:
A. Is the same as managing by walking around, which was pioneered by the Japanese.
B. Material price variances can be ignored unless exceptionally high.
C. Variances reduce the number of data points a manager must consider each day.
D. In a union facility, labor usage variances are not controllable.
Question 7The ABC Company, maker of birdhouses is looking at different ways of allocating shared costs (overhead). The Cost Accountant has been provided the following data for the past month:
Birdhouse Models Quantity Produced Total Machine Hours Total Labor Hours
Basic 100 10 25
Standard 100 20 40
Deluxe 25 40 60
The Spend pools are provided as:
Material: $3000
Direct Labor: $5000
Overhead: $2000
If Overhead is allocated based on the activity of Total Machine Hours, how much of the $2,000 cost will be allocated to the Deluxe Birdhouse?
Answers:
A. $1,142
B. $222
C. $960
D. $888
Question 8All costs are fixed in the short-term, and all costs are variable in the long-term.
Answers:
True
False
Explanation: Costs are expired expenditures. For example, raw material inventory is an expenditure classified on the balance sheet as an asset. It becomes a cost once used and enters into product. The reason this statement is true is that, even in the long-term, a lease on a production facility will expire. That expiration transforms what was a fixed cost into a variable cost again. Even direct costs, such as raw material, can be fixed in the short term. This is true because we may have entered into a purchasing contract specifying the price of a raw material for a period of time.
Question 9 Match each term to its corresponding definition.
Question Match Selected Match
Conversion costs
Variable costs
Fixed costs
Semi-fixed costs
All Answer Choices
A. Costs that increase in relation to sales but at a slower pace and have a combination of types of costs.
B. Costs that essentially remain unchanged even when sales increase.
C. Costs that increase in direct relation to sales volume.
D. The sum of all the direct labor and manufacturing overhead costs that belong to a department and process.
Question 10Match each cost with its corresponding definition.
Direct materials
Manufacturing Overhead
Direct Labor
All Answer Choices
A. Salary of Stamping Department Supervisor
B. Metal sheets for stamping truck fenders
C. Stamping machine operator producing truck fenders
JWI530 FINANCIAL MANAGEMENT I
Week 7 Knowledge Check
Question 1Variance analysis is a very important tool for financial analyses. As soon as the variance is computed, the exact reasons are for the variance are clear.
Answers:
True
False
Question 2Wilson is a cost analyst, and he has just received a standard cost report for October 2018. Wilson notes that the report shows a negative variance for materials – the annotation is 2,388 pounds used, 2,154 pounds standard. This illustrates what is called an unfavorable rate variance.
Answers:
True
False
Question 3Standards are the cost system that estimates costs incurred and time used and compares to actual costs.
Answers:
True
False
Question 4The Institute of Management Accountants (IMA) has promulgated an ethics code for management accountants called The Statement of Ethical Practice, which has four standards of ethical conduct. Which of the following is NOT one of those standards?
Answers:
A. Competence
B. Credibility
C. Continuing Education
D. Integrity
E. Confidentiality
Question 5Doc Jones owns Doc’s coffee shop, and his accountant has told him that his total fixed costs to run his business in a very nice upscale business-oriented neighborhood, excluding his salary, are $15,000 per month. Doc is in competition with a Seattle’s coffee shop just down the block. Consequently, his prices are about the same as theirs. He has calculated that the average cup of coffee cost him $1.87 cents, which includes the coffee, the cup and condiments, such as sugar, sweetener, creams, napkins, and stir sticks.
His average selling price is $4.85 per cup. He currently sells 8,000 cups of coffee per month. Doc has figured that if he lowers his price by $1.00 per cup, he would increase his sales to 11,000 cups per month and make more money. The amount he would increase his earnings is:
Answers:
A. Not enough information to answer the question.
B. $13,451
C. Doc would earn the same.
D. $4,289
E. Doc would earn less.
Question 6Activity-Based-Costing (ABC) is a cost allocation system that is designed to allocate overhead costs to activities and then assigns those costs to products. Which of the following is NOT associated with ABC?
Answers:
A. Cost objects
B. Activity center
C. Full absorption
D. Cost driver
Question 7The use of a standard cost system is a great employee motivator because each negative variance causes the employee to work harder, especially if management is very diligent about follow-up punitive measures.
Answers:
True
False
Question 8Cost allocation is in the process of spreading or assigning indirect costs to a finished product. Assume that the cost of an overhead item is $100. There are 3 products that benefit from this overhead item and during this period 10 units of A, 20 units of B, and 70 units of C are produced.
If the allocation of the overhead expense is based on units of production, which product will absorb the most of the $100?
Answers:
A. Product A
B. Product B
C. Product C
D. All products will receive the same amount of overhead (called “fair share”)
Question 9Susie owns a belt store and her fixed costs are $2500 per month. She sells each of her belts for $30 and they each cost her $10 each to buy. How many belts does Susie have to sell to break even?
Answers:
A. 1,250
B. 125
C. 25
D. 140
Question 10Jane’s New Cosmetics is considering opening a new store and has determined that total monthly fixed costs will be $23,500. Jane’s average contribution margin rate is 32.4%. Her breakeven for the projected new store would be approximately:
Answers:
A. $72,530 per month
B. $82,600 per month
C. $1,400,000 per year.
D. None of the above.
JWI530 FINANCIAL MANAGEMENT I
Week 8 Knowledge Check
Question 1The present value is the sum of money received in the future.
Answers:
True
False
Question 2The PV factor for a cash flow in 3 years using an 8% discount rate is:
Answers:
A. .7894
B. .6405
C. 1.08
D. .7938
Question 3The weighted cost of capital does not include which of the following?
Answers:
A. Capital employed by the business
B. Capital obtained from trade credit
C. Risk Premium
D. Percent of Stock Buy Backs
Question 4Hamilton Corporation has decided to seek outside financing. The CFO is attempting to compute Hamilton’s weighted average cost of capital. You have been provided the following information.
Capital Structure Weight Cost
Debt 30.00% 11.60%
Preferred 15.00% 12.10%
Common Equity 55.00% 16.70%
The weighted average cost of capital for Hamilton is:
Answers:
A. 14.5%
B. 11.3%
C. 22.0%
D. 10.1%
Question 5The time value of money theory consists in four beliefs: (1) Investment risk is important; (2) money today is worth more than money tomorrow; (3) inflation must be considered when making investment decisions; and (4) investment opportunity costs must be considered.
Answers:
True
False
Question 6The payback period is the time it takes to earn back the initial investment plus interest.
Answers:
True
False
Question 7Chester Franks is considering installing solar panels on his house to decrease his electricity costs. Chester has a proposal that will cost $25,450 for a complete installation. Engineers have estimated that Chester will save an average of 26% from his electricity usage from the grid. Also, engineers have projected that Chester will be able to put power back into the grid 10% of the time, which will further reduce his electricity bill by 7.6%. Chester’s current average monthly bill for electricity is $656.00. Chester has his liquid funds invested in a small cap account that earns 9.93%. The funds for this investment would come from this account. The estimated life of the solar panels is 55 years. Which of the following are ?
Answers:
A. Payback is 9 years, 7 months
B. The projected annual savings is $2,645
C. One of the most widely used techniques in CBA is discounted cash flow (DCF)
D. All answers are
Question 8The capital budgeting process requires four steps to complete: (1) Finding new investment opportunities; (2) Collecting the relevant data; (3) Evaluation and decision making; and (4) Reevaluation and adjustment to plans as necessary.
Answers:
True
False
Question 9Karen Smith is 22 years old, and her grandmother has remembered Karen in her will, which is now being probated. Karen has been bequeathed either a cash payment today of $35,000 or a cash payment on her birthday six years from now of $75,000. Assuming an annual interest rate of 5%, Karen should take the cash and run.
Answers:
True
False
Question 10As a general rule, Nominal Payback will always occur sooner than a Discounted Payback.
Answers:
True
False
JWI530 FINANCIAL MANAGEMENT I
Week 9 Knowledge Check
Question 1A Financing Plan is a special version of a Strategic Plan written to attract top talent to a company.
Answers:
True
False
Question 2Creating the forward-looking view of financial performance is a surprisingly effective way to transform the financial future of your company. It will:
Answers:
A. Help you drive growth, profitability and cash flow higher.
B. Create confidence and clarity about where your business is going financially.
C. Provide the roadmap for turning your vision and strategy for your business into a crystal-clear view of what success should look like financially.
D. All of the above.
Question 3Assume that you make an investment of $100,000 in 2015 that has a value of $122,504 3 years later in 2018. What is the compound annual growth rate (CAGR) of your investment?
Answers:
A. 22.5%
B. 7%
C. 5.6%
D. 1.8%
Question 4A business uses week-by-week sales data to predict sales for the coming week using moving averages. This is an example of:
Answers:
A. Moving average times series forecasting method
B. Experiential smoothing
C. Delphi method
D. Market research
Question 5Which of these approaches is NOT a commonly accepted forecast approach?
Answers:
A. Can’t Wait Approach
B. Can’t Miss Approach
C. 50/50 Approach
D. Stretch Forecast Approach
Question 6The Monthly Financial Rhythm model includes all of the following phases EXCEPT:
Answers:
A. Sponsor
B. Adjust
C. Target
D. Monitor
Question 7A SWOT Analysis includes WHICH of the following advantages or obstacles that a business faces in the future:
Answers:
A. Strengths
B. Websites
C. Optimums
D. None of the above
Question 8It’s a good practice to prepare a forecast using ranges, when possible, as a signal that it is indeed a forecast, and no one can perfectly predict the future.
Answers:
True
False
Question 9Strategy involves a series of action plans, no way contradictory to each other because a common theme runs across them.
Answers:
True
False
Question 10Forecasting a business plan only requires the input of people within the Finance and Accounting departments.
Answers:
True
False
JWI530 FINANCIAL MANAGEMENT I
Week 10 Knowledge Check
Question 1Rachel is the Division Controller for an Environmental Consulting firm that performs environmental services for a number of government agencies. All regional groups roll up their budget to her and she is responsible for finalizing it, disbursing to everyone for review, and providing an analysis of variances once the actual results are available. Last month, while reviewing the actual results, she noticed that the revenue planned for the engineering group was $350K less than what they had planned for. As a result, it caused the entire Division to significantly miss their net income profit goal for the month as well. Linda has to prepare her analysis of results for their next executive management meeting and wants to ensure that she adequately explains why they did not meet the planned profit goals. What should she do:
Question 2Which of the following are goals of the Budgeting Process:
Question 3Differences that exist between the planned budget and actual results are referred to as what?
Question 4Budgets are estimates and educated guesses about the future.
Question 5Archer Electronics is preparing its annual budget, and your department is working on the cash flow budget. Here is selected information you have:
Description June July August
Sales $348,000 $438,000 $450,000
The company makes 10% of its sales for cash and 90% on credit. Of the credit sales, 20% are collected in the month after the sale and 80% are collected two months after. The cash receipts for August are:
Question 6When preparing the annual budget, an organization is going to use a number of the concepts and tools discussed in this course. From the following list, select the tool or concept that does not apply.
Question 7When actual revenue is greater than planned and actual cost is less than planned, we have a favorable variance.
Question 8Of the following budgeting techniques, which approach starts each budgeting year fresh, by wiping the slate clean and requires department managers to justify the budget needed to run their departments in the upcoming year.
Question 9Regardless of the size of the organization, creating a budget consists of several distinct steps involving different functions or departments of the organization. Which of the following is NOT one of the typical steps in the budgeting process?
Question 10You are the CFO for a big-box retail store and you just completed your annual budget for the upcoming year. Almost immediately something happens that impacts the entire population creating unprecedented foot traffic into your stores, causing the sales to increase dramatically, far exceeding what you had planned. Which of the following accounts will be impacted by this enormous increase in sales?
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