... Give correct answers and their explanations

SAMPLE FINANCE EXAM 1. What effect do some environmental laws have on businesses? A. Limit equipment purchases C. Control exterior landscapes B. Require more employees D. Increase operating costs 2. Limited liability is a characteristic of what form of business ownership? . Sole proprietorship C. Corporation B. Partnership D. Joint proprietorship 3. An important purpose of full-disclosure laws and regulations is to A. provide information to investors so they can make informed decisions. B. allow company employees to use inside information for personal gain. C. require companies to disclose all information about their operations. D. prevent a stock's par value from dropping below its market value. 4. Which of the following has the fiduciary responsibility to make decisions on behalf of a company's shareholders: A. The municipal court system C. The company's line staff B. The industry's professional organization D. The corporation's board of directors 5. Which of the following is an estate-tax deduction: A. Property passing directly to the surviving spouse B. Valuable art and collectibles left to children C. Charitable contributions that are unqualified D. Money left to friends or distant relatives 6. Last year, Mr. Mckinney gave a portion of his wages to a local charity and was not required to pay taxes on the amount of his donation. This is an example of a(n) A. investment disbursement. C. tax-deferred investment. B. estate allocation. D. tax deduction. 7. Michelle is a small business owner who has outdated customer information in her computer files. She has wasted a lot of time and money sending mail to customers who have moved or have received multiple copies of her mailings. What type of computer application should Michelle use to update her customer database? A. Tabulation analysis C. Data cleansing B. Electronic data interchange D. Environmental scanning 8. What are potential risks to a business that fails to follow government regulations? . Bankruptcy, higher sales, and lower stock values B. Penalties, higher stock values, and lower credibility C. Lower stock values, fines, and higher sales D. Fines, penalties, and bankruptcy 9. Which of the following reasoning processes does a virtual auditor use to identify financial system transactions that are very similar to each other but are not exactly alike: A. Cross-source reasoning C. Temporal reasoning B. Contextual reasoning D. Comparative reasoning 10. What type of technology do businesses use to inspect financial transactions and to ensure that they are in compliance with government regulations? A. Virtual auditors C. Domain computing B. Cyber mapping D. Simulation browsers 11. What type of information is often transmitted through upward communication? A. Suggestions C. Evaluations B. Instructions D. Corrections SAMPLE FINANCE EXAM 12. Businesses use technology to build positive customer relations by A. calling customers at home. C. placing pop-up advertisements on web sites. B. creating targeted marketing campaigns. D. sending unsolicited e-mails. 13. A positive result of handling customer complaints properly is that it . increase returns. C. foster objections. promote goodwill. Increase markdowns. 14. What do finance professionals need to do to build long-term relationships with their clients? A. Follow-up with clients every two years C. Be honest, open, and trustworthy B. Invest all clients' money conservatively D. Require clients to sign a short-term contract 15. When providing product information to clients, finance professionals should use A. technical terms. C. financial acronyms B. simple explanations. D. standard responses. 16. Rather than studying individual customer data, First Bell Bank is interested in analyzing groups of customers. Members of a group should be similar and markedly different from other customer groups. Which of the following Customer Relationship Management (CRM) activities should be used to prepare First Bell Bank's customer data for analysis: A. Regression C. Clustering B. Estimation D. Prediction 17. When financial institutions follow government regulations pertaining to the industry, the institutions are A. being independent C. in compliance. B. being ethical D. in mediation. 18. By deciding to buy or not to buy, consumers control what goods and services will be produced and at what price through their A. capital investment. C. limited wants B. gross income. D. economic votes. 19. What does utility reveal about consumers? A. Preferences C. Background . Income D. Influences 20. The market price is the actual price that prevails in a market A. at the beginning of each quarter. C. on the first of each month. B. at any particular moment. D. at the beginning of the fiscal year. 21. Businesses that contribute money to local educational, cultural, and training programs are showing social responsibility to their customers. communities. B. C. employees. stockholders. 22. Which of the following demonstrates the interrelationship among primary business activities: A. A new product is introduced, so business advertisements must adjust in response. B. A business changes its goals, so its strategies and tactics change, too. C. One business activity changes, so the others must adjust in response. D. A business manager becomes vice president, so his/her department must adjust to the change