20 MCQ's

1. Which Supreme Court decision was the basis for establishing legal racial discrimination in the South after 1896, the one that was overturned in 1954?
(A) Marbury v. Madison
(B) Griswold v. Connecticut
(C) Plessy v. Ferguson
(D) Standard Oil v. United States
(E) Brown v. Board of Education

2. Suburban growth in the US accelerated between 1945 and 1980 for all of the following reasons EXCEPT
(A) mass immigration from Southern and Eastern Europe
(B) much higher birth rates than in previous periods in US history
(C) the movement of industries outside of city centers
(D) the use of prefabricated materials to construct housing on relatively cheaper land
(E) the use of low-interest government-backed loans to make it easier to buy a home

3. Which was NOT an effect of the American Housing Act of 1949?
(A) The successful integration of Blacks into middle class White communities
(B) The opening up of the suburbs to the American working-class and lower middle class
(C) The availability of cheap land for real estate companies and industrial concerns
(D) The policy of building high-rise public housing in densely populated urban areas
(E) The emergence of the suburbs as the cultural center of the American nuclear family

4. One of the principal reasons for the failure of McCarthyism was
(A) the return of the Socialist Party as a prominent political force
(B) the inability of Hollywood to make movies about Communism
(C) the refusal of White progressives to support McCarthy in 1954
(D) the failure of teachers in the South to sign loyalty oaths
(E) the waning of support for unsubstantiated accusations from both political parties

1) Maximization of shareholder wealth is a concept in which
A. profits are maximized on a quarterly basis.
B. virtually all earnings are paid as dividends to common stockholders.
C. increased earnings is of primary importance.
D. optimally increasing the long-term value of the firm is emphasized.


2) What is the primary goal of financial management?
A. Maximizing cash flow
B. Maximizing shareholder wealth
C. Increased earnings
D. Minimizing risk of the firm


3) One of the major disadvantages of a sole proprietorship is
A. the simplicity of decision making.
B. low organizational costs.
C. that there is unlimited liability to the owner.
D. low operating costs.


4) The statement of cash flows does NOT include which of the following sections?
A. cash flows from sales activities
B. cash flows from investing activities
C. cash flows from operating activities
D. cash flows from financing activities

1) Which of the following is not a primary source of capital to the firm?
A.-common stock
B.-preferred stock
C.-assets
D.-bonds


2) Which account represents the cumulative earnings of the firm since its formation, minus dividends paid?
A.-Common stock
B.-Accumulated depreciation
C.-Paid-in capital
D.-Retained earnings


3) The most rigorous test of a firm's ability to pay its short-term obligations is its
A.-quick ratio.
B.-times-interest-earned ratio.
C.-current ratio.
D.-debt-to-assets ratio.


4) In examining the liquidity ratios, the primary emphasis is the firm's
A.-overall debt position.
B.-ability to earn an adequate return.
C.-ability to effectively employ its resources.
D.-ability to pay short-term obligations on time.

1) Which of the following is not considered to be a profitability ratio?
A.-times interest earned
B.-return on assets (investment)
C.-profit margin
D.-return on equity
 

2) In general, the larger the portion of a firm's sales that are on credit, the
A.-higher will be the firm's need to borrow.
B.-more the firm can buy raw materials on credit.
C.-lower will be the firm's need to borrow.
D.-more rapidly credit sales will be paid off.


3) In financial statements, the number of units shown in cost of goods sold as compared to the number of the units actually produced
A.-is lower.
B.-can be either higher or lower.
C.-is higher.
D.-is the same.


4) In order to estimate production requirements, we
A.-add projected sales in units to desired ending inventory and subtract beginning inventory.
B.-add beginning inventory to desired ending inventory and subtract projected sales in units.
C.-add beginning inventory to projected sales in units and subtract desired ending inventory.
D.-add beginning inventory to desired ending inventory and divide by two.

1) The key initial element in developing pro forma statements is
A.-an income statement.
B.-a sales forecast.
C.-a cash budget.
D.-a collections schedule.


2) A firm has beginning inventory of 300 units at a cost of $11 each. Production during the period was 650 units at $12 each. If sales were 700 units, what is the cost of goods sold (assume FIFO)?
A.-$8,000
B.-$7,700
C.-$9,000
D.-$8,100


3) The difference between total receipts and total payments is referred to as
A.-beginning cash flow.
B.-net cash flow.
C.-cumulative cash flow.
D.-cash balance.

 
4) The concept of operating leverage involves the use of __________ to magnify returns at high levels of operation.
A.-variable costs
B.-marginal costs
C.-fixed costs
D.-semi-variable costs