What are the responsibilities of the board of directors in a corporation a Hire and fire entry level employees b Amend the firm's corporate charter when necessary c Manage day to day operations d Hire and fire managers The primary goal of a publicly owned firm interested in serving its stockholders should be to Maximize the stock price per share a Minimize the chances of losses b Maximize expected EPS c Maximize expected total corporate profit d Maximize expected net income Which of the following statements is most correct Statement 1 In terms of revenues and profits, the corporation is by far the most important form of business organization in the Philippines Statement 2 The issues of corporate governance are really agency problems a Both statements b Neither of the statements c Statement 2 only d Statement 1 only Which of the following actions is NOT likely to reduce the agency problem between stockholders and managers a The board of directors has become more vigilant in its oversight of the company's management b None of the choices c Congress passes a law that severely restricts hostile takeovers d A manager receives a lower salary but receives additional shares of the company's stock Which of the following statements is not correct Statement 1 Financial management requires both short term activities as well as long term planning such as raising funds Statement 2 One of the primary disadvantages of maximizing shareholder value is that it only provides a short term perspective Statement 3 If a company has a written code of ethics, they will generally avoid ethical problems a Statement 2 only b Statement 1 only c Neither of the statements d Statement 3 only What should be the objective of a focus on stakeholders a In situations of conflict pick stakeholders' interests over shareholders' interests b Maximize the stakeholders' interests c Disregard shareholders' interests all together d Preserve stakeholders' interests Agency theory would imply that conflicts are more likely to occur between management and shareholders when a The company is owned and operated by the same person b Management acts in the best interests of maximizing shareholder wealth c The board of directors exerts strong and involved oversight of management d The chairman of the board is also the chief executive officer (CEO) Which of the following statements is false concerning the functions of management of an economic organization Statement 1 Planning requires management to look ahead and to establish objectives Statement 2 Directing and motivation involve coordinating the diverse activities and human resources of a company to produce a smooth running operation Statement 3 Controlling is the process of keeping the activities on track a Statement 1 only b All the statements are true c Statement 3 only d Statement 2 only Management accounting focuses primarily on providing for a External users by stockholders and creditors b External users by the Securities and Exchange Commission c Internal users by managers d External users by the Bureau of Internal Revenue The management of a business organization performs several broad functions They are a Planning, Directing, Organizing, and Selling b Planning, Manufacturing, Producing, Organizing, and Controlling c Planning, Producing, Organizing, and Directing d Planning, Directing, Organizing, and Controlling Which of the following is NOT a career opportunity in corporate finance a Cash manager b Mortgage banker c Financial analyst d Controller Which of the following statements is most correct Statement 1 The Internet impacts e commerce by creating a mechanism for improved communications between a business, its customers, and its suppliers Statement 2 The Internet has accounted for an acceleration of productivity for old economy firms a Both statements b Statement 1 only c Neither of the statements d Statement 2 only A controller is normally involved with a Managing investments b Safeguarding assets c Raising capital d Preparing financial statements Which of the following statement is most correct Statement 1 Agency theory assumes that corporate managers act to increase the wealth of corporate shareholders Statement 2 Timing is not a particularly important consideration in financial decisions a Neither of the statements b Statement 1 only c Both statements d Statement 2 only The development of just in time (JIT) methods of production focused on a Increasing customer service b Reducing operating expenses c Reducing inventories d Increasing product quality e Increasing sales revenue In recent years some firms have a None of the choices b Become less interested in managing risks arising from fluctuations in interest rates, commodity prices and currency prices c Become more focused on maximizing profits rather than stockholder wealth d Become more focused on keeping a broader group of stakeholders happy rather than just the stockholders The role of managerial accounting information in assisting management is a(n) a Financial directing role b Attention directing role c Problem solving role d Planning and controlling role e Organizational role Which of the following statements is most correct about the ethical climate of business a Unethical business behavior can have a negative impact on our economy b Greedy corporate executives are, in part, to blame for the relatively recent rash of corporate scandals c All of the choices d Corporate scandals have served as the accounting profession's wake up call to pay increased attention to ethical issues in the conduct of business Managerial accounting a Is governed by generally accepted accounting principles b Pertains to the entity as a whole and is highly aggregated c Places emphasis on special purpose information d Is limited to cost data Which of the following is a valid criticism concerning the goal of firms to maximize profits a Profit maximization is completely unrelated to shareholder wealth b There are no valid criticisms of profit maximizing firms c Profit maximization may ignore the timing of those profits d Profit maximization ignores expenses Which of the following is not one of the three basic activities of a manager Compiling management accounting reports Controlling Directing and motivating Planning Companies that have higher risk than a competitor in the same industry will generally have A higher cost of funds than its competitors All of the choices A lower relative stock price than its competitors To pay a higher interest rate than its competitors Which is not a duty of a financial manager Product research Investment analysis Financial forecasting Budgeting Maximizing profit as the manager's goal has several flaws, including Focusing on earnings does not mean that the firm will necessarily have enough cash on hand to pay its bills Risk is ignored All of the choices Earnings figures focus on past performance rather than current or future performance The timing of the profits may be ignored An approach used to reduce the cost associated with handling and holding inventory by reducing the amount of inventory on hand Value Chain Theory of Constraints Balanced Scorecard Just in Time Inventory Which of the following statement(s) about just in time (JIT) inventory management is (are) true Statement 1 The emphasis of JIT is on pull manufacturing Statement 2 Raw materials are purchased just in time to be used in production Statement 3 JIT is an inventory technique that focuses on reduction of both inventory and related inventory costs Statement 1 only Statement 3 only All of the statement Statement 2 only What is a basic guide for financial decision making Make decisions where the average benefits exceed the average costs Make decisions where the total benefits exceed the total costs Make decisions where the average benefits exceed the fixed costs Make decisions where the benefits exceed the costs Compared to financial accounting, managerial accounting DOES NOT place emphasis on The flexibility of information The timeliness of information None of the choices The precision of information Regarding risk levels, financial managers should Pursue higher risk projects because they increase value Focus primarily on market fluctuations Avoid higher risk projects because they destroy value Evaluate investor's desire for risk Which of the following is not a true statement about the goal of maximizing shareholder wealth It takes into account the timing of cash flows It considers risk as a factor It is a short run point of view which takes risk into account None of the choices Which of the following statement(s) about just in time (JIT) inventory management is (are) true Statement 1 The emphasis of JIT is on pull manufacturing Statement 2 Raw materials are purchased just in time to be used in production Statement 3 JIT is an inventory technique that focuses on reduction of both inventory and related inventory costs Neither of the statements Statement 1 only All of the statements Statement 2 only Statement 3 only Shareholders are said to have a residual claim on the firm's assets What does this mean Shareholders have limited liability in their investment Shareholders have priority in electing the board of directors for the firm Shareholders do not receive any payoff from the firm until all creditors are paid Shareholders are allowed to recover their investment first if the firm experiences financial distress A root cause of firm agency costs is Managerial carelessness A manager's concern for his personal well being Government agency filing requirements A manager owning too much of his firm's stock Which type of finance position focuses on preparing firm financial plans and the evaluation of the firm's financial ratios Financial analyst Portfolio manager Cash manager Capital budgeting analyst You were just hired as the CEO of a company Your primary objective should be to eliminate the company's competitors to maximize the company's earnings to maximize profits to maximize the company's price of common stock Maximization of shareholder wealth is a concept in which Virtually all earnings are paid as dividends to common stockholders Increased earnings is of primary importance Profits are maximized on a quarterly basis Optimally increasing the long term value of the firm is emphasized Proper risk return management means that The firm must determine an appropriate trade off between risk and return The firm should value future profits more highly than current profits The firm should earn the highest return possible The firm should take as few risks as possible Wide spread adherence to ethical standards in an advanced market economy tends to result in all of the following except Higher quality goods and services Greater variety of goods and services available for sale Higher prices Safer products Which of the following is NOT an objective of managerial accounting Maximizing profits and minimizing costs Providing information for decision making and planning Assisting in directing and controlling operations Motivating managers toward the organization's goals Measuring the performance of managers and subunits The function of management that compares planned results to actual results is known as Directing and motivating Organizing Planning Controlling Which of the following is NOT a stakeholder Customers Competitors Tax collection agencies Suppliers Which of the following statements is most correct Statement 1 During the 1930s, financial practice revolved around such topics as the preservation of capital, maintenance of liquidity, reorganization of financially troubled corporations and bankruptcy Statement 2 In the mid 1950s, finance began to change to a more analytical, decision oriented approach Statement 1 only Both statements Neither of the statements Statement 2 only Justine Corporation recently implemented a Just in Time (JIT) production system along with a series of continuous improvement programs If the firm is now considering adopting a total quality management (TQM) program, it would likely find that TQM Is consistent with JIT but inconsistent with continuous improvement Is inconsistent with both JIT and continuous improvement Is consistent with continuous improvement but inconsistent with JIT Is consistent with both JIT and continuous improvement A financial manager's goal of maximizing current or short term earnings may not be appropriate because Earnings are subjective they can be defined in various ways such as accounting or economic earnings It fails to consider the timing of the benefits All of the choices Increased earnings may be accompanied by unacceptably higher levels of risk Which of the following statements is most correct Statement 1 The Internet is responsible for many new business models Statement 2 Businesses will increasingly rely on business to business internet applications to speed up the cash flows through their firms Statement 2 only Both statements Statement 1 only Neither of the statements The primary reason for adopting total quality management (TQM) is to achieve Reduced delivery charges Reduced delivery time Greater customer satisfaction Better managerial decisions Greater employee participation Why do shareholders bear most of the risk of running a firm They receive a salary from the company Shares can be taken away at any time without notice They are guaranteed a fixed payout each quarter They only have a residual claim on the firm's cash flows Future financial managers will need to understand International cash flows Computerized funds transfers International currency hedging strategies All of the choices Clear selection Which of the following statements is most correct A good goal for a corporate manager is maximization of expected EPS Most micro business in the Philippines is conducted by corporations corporations' popularity results primarily from their favorable tax treatment A good example of an agency relationship is the one between stockholders and managers Corporations and partnerships have an advantage over proprietorships because a sole proprietor is subject to unlimited liability, but investors in the other types of businesses arenot Firms in highly competitive industries find it easier to exercise social responsibility than do firms in oligopolistic industries What effect do some environmental laws have on businesses Require more employees Limit equipment purchases Control exterior landscapes Increase operating costs All of the following entities would have a need for managerial accounting information EXCEPT The BTS Fans Club San Miguel Corporation The University Canteen None of the choices, as all of these entities would use managerial accounting information An agent of a firm could be any of the following A supplier of the firm An employee who does not own any proportion of the firm The BIR agent in charge of auditing the firm's tax return 100 owner of the firm Which of the following statements is not correct Statement 1 Higher return always induces stockholders to invest in a company Statement 2 Social responsibility is an expense and thus should be avoided by financial managers because it will lead to loss of income Both statements Statement 1 only Neither of the statements Statement 2 only Corporate governance is the Governance of the company by the board of directors with a focus on social responsibility Relationship between the chief financial officer and institutional investors Operation of a company by the chief executive officer (CEO) and other senior executives on the management team Relationship and exercise of oversight by the board of directors of the company What do we call the possible conflict of interests between shareholders and management Shareholders' dilemma Stakeholder problem Agency problem Double taxation In the past, the study of finance has included Raising capital All of these Mergers and acquisitions Bankruptcy Which of the following typically does not relate to the role of a controller A controller oversees the preparation of reports required by governmental authorities A controller supervises the accounting department A controller safeguards an organization's assets None of the above Agency theory deals with the issue of The limitations placed on an employee acting as the firm's agent to obligate or bind the firm The conflicts that can arise between the viewpoints and motivations of a firm's owners and managers When to hire an agent to represent the firm in negotiations The legal liabilities of a firm if an employee, acting as the firm's agent, injures someone Which of the following statements is most correct Statement 1 Recently, the emphasis of financial management has been on the relationship between risk and return Statement 2 The first Nobel Prizes given to finance professors were for their contributions to capital structure theory and portfolio theories of risk and return Both statements Statement 2 only Neither of the statements Statement 1 only Which of the following scenarios could be considered an example of an agency problem The board of directors rewards management for the company's last year performance Management decides to go ahead with an expansion that is expected to benefit the company's value Management decides to close a plant to lower operating costs Management decides to purchase a Boeing 747 as a corporate plane According to the Theory of Constraints, improvement efforts should usually be focused on The work center with the highest total cost The work center that is the constraint Work centers that are not constraints The work center with the most obsolete equipment Which of the following represents career opportunities in finance Corporate finance Consulting Investment banking All of the choices The Internet has affected the financial markets by Creating more competition between markets All of the choices Pushing the cost of trading down Forcing brokerage companies to consolidate Financial accounting focuses primarily on reporting To parties outside of an organization To parties within an organization For financial institutions To financial institutions To an organization's board of directors The group of activities associated with providing a product or service Just in Time Inventory Theory of Constraints Balanced Scorecard Value Chain What is the primary goal of financial management Minimizing risk of the firm Maximizing cash flow Increased earnings Maximizing shareholder wealth Which of the following statements is not correct Statement 1 Money markets refer to those markets dealing with short term securities having a life of one year or less Statement 2 Capital markets refer to those markets dealing with short term securities having a life of one year or less Neither of the statements Statement 1 only Statement 2 only Both statements Which of the following can be linked to the relatively recent wave of corporate scandals Managers who make over reaching business deals All of the choices Greedy corporate executives Lack of oversight by companies' audit boards and boards of directors Which of the following statements is most correct The ability of firms to engage in socially beneficial projects that involve voluntary costs is constrained by competition and the need of firms to attract capital at low cost The actions that maximize a firm's stock price are inconsistent with maximizing social welfare In a competitive market, if a group of firms do not spend resources making social welfare improvements, but another group does, in general, this will not affect the second group's ability to attract capital If government did not mandate socially responsible corporate actions, such as those relating to product safety and fair hiring practices, most firms in competitive markets would still pursue such policies voluntarily The concepts of social responsibility and ethical responsibility on the part of corporations are completely different and neither is relevant in maximizing stock price Which of the following would likely be considered an internal user of accounting information rather than an external user Consumer groups Lenders Middle level managers Stockholders Which of the following work to reduce agency conflicts between stockholders and bondholders Including restrictive covenants in the company's bond contract Providing managers with a large number of stock options The passage of laws that make it easier for companies to resist hostile takeovers None of the choices Shareholders can attempt to overcome agency problems by all BUT ONE of the following Paying the manager proportion of the profits that the firm generates Relying on market forces to exert managerial discipline Incurring costs to monitor managers Paying managers good salary Which of the following statements is most correct All of the statements are correct One advantage to remaining a sole proprietor is that you have limited liability Hostile takeovers are most likely to occur when a firm's stock is undervalued, relative to its potential, because of poor management In general, bondholders have a greater preference for riskier projects than do stockholders The field of accounting that depends on generally accepted accounting principles (GAAP) is called Financial Accounting Cost Accounting Managerial Accounting Responsibility Accounting International Accounting Which of the following statements is most correct Statement 1 Agency Theory examines the relationship between companies and their customers Statement 2 Institutional investors have had increasing influence over corporations with their ability to vote large blocks of stock and replace poor performing boards of directors Statement 2 only Neither of the statements Both statements Statement 1 only Career opportunities in commercial banking do NOT include Investment banker Credit analyst Corporate loan officer All of the choices are career opportunities in commercial banking Mortgage banker Which of the following are the disadvantages of Profit Maximization versus Shareholders Wealth Maximization, EXCEPT Ignores risk Ignores the shareholders' returns Emphasis the short term None of the choices Benefits of social responsibility often include Neither of the choices Higher short term earnings Lower expenses Better reputation The chief managerial and financial accountant of an organization is the Vice President of Accounting Chief Financial Officer (CFO) Internal Auditor Treasurer A performance measurement technique that attempts to consider and evaluate all aspects of performance using financial and nonfinancial measures in an integrated fashion Value Chain Balanced Scorecard Theory of Constraints Just in Time Inventory Which of the following statements is most correct Statement 1 As finance emerged as a new field, much emphasis was placed on mergers and acquisitions Statement 2 Inflation is assumed to be a temporary problem that does not affect financial decisions Statement 1 only Statement 2 only Neither of the statements Both statements Which of the following statements represents a similarity between financial and managerial accounting Both are solely concerned with historical transactions Both draw upon data from an organization's accounting system Both are useful in providing information for external users Both rely heavily on published financial statements Both are governed by GAAP The following are functions of financial management, EXCEPT Allocation of funds Effective and Efficient Utilization of funds Procurement of Funds Neither of choices Pizza Hut makes forty three kinds of pizza for takeout and delivery Which of the following could be the constraint at Pizza Hut The person who makes the pizza crust The person who puts toppings on the pizzas Any of the choices could be the constraint The pizza oven Which of the following statements is most correct Statement 1 The higher the profit of a firm, the higher the value the firm is assured of receiving in the market Statement 2 There are some serious problems with the financial goal of maximizing the earnings of the firm Statement 1 only Neither of the statements Both statements Statement 2 only The following factors influence a company's stock price, except None of the choices Stability and risk of earnings Timing and Risk of earnings Potential growth Which of the following is NOT true regarding the theory of constraints The theory of constraints does not apply to companies with multiple products because of capacity measurement difficulties In any profit seeking company, there must be at least one constraint Neither of the choices Constraints or bottlenecks stop organizations from selling an infinite number of units or services Which of the following actions are likely to reduce agency conflicts between stockholders and managers Paying managers large fixed salary Increasing the threat of corporate takeover All of the statements are not correct Placing restrictive covenants in debt agreements Agency theory examines the relationship between the Owners of the firm and the managers of the firm Shareholders and the firm's transfer agent Board of directors and large institutional investors Shareholders of the firm and the firm's investment banker Financial management has changed in recent years because of The advent of information technology Increased global competition The emergence of new industries All of the above factors Which of the following encourages managers to act in the shareholders' interests All of the choices Audits Performance based compensation Threat of hostile takeovers Which of the following statements is most correct One advantage to remaining a sole proprietor is that you have limited liability Hostile takeovers are most likely to occur when a firm's stock is undervalued, relative to its potential, because of poor management None of the statements is correct In general, bondholders have a greater preference for riskier projects than do stockholders Which of the following is NOT a function of the treasurer Being responsible for an entity's credit policy Raising capital Safeguarding assets Preparing financial statements Managing investments Which of the following statement is not correct Statement 1 Maximizing the earnings of the firm is the goal of financial management Statement 2 Because socially desirable goals can impede profitability in many instances, managers should not try to operate under the assumption of wealth maximization Statement 2 only Both statements Neither of the statements Statement 1 only As mergers, acquisitions, and restructuring have increased in importance, agency theory has become more important in assessing whether Managers are actually agents or only employees of the firm A stock repurchase should be undertaken Shareholder goals are truly being achieved by managers in the long run Managers and owners are actually the same people with the same interests Managers of firms should only take actions that They expect will increase the firm's share price All of the choices Increase the value of the firm's future cash flows Have benefits which are at least as great as the cost of those actions Managerial accounting Is primarily concerned with providing information to external users Is more future oriented than financial accounting Is more concerned with precision than timeliness Tends to summarize information more than financial accounting Which of the following functions is best described as choosing among available alternatives Budgeting Decision making Directing operational activities Controlling Planning Which of the following statements is not correct Statement 1 Social responsibility and profit maximization are synonymous Statement 2 Financial markets exist as a vast global network of individuals and financial institutions that may be lenders, borrowers, or owners of public companies worldwide Statement 1 only Both statements Statement 2 only Neither of the statements The delegation of decision making to lower levels in an organization is known as The planning and control cycle None of these Decentralization Controlling The day to day work of management teams will typically comprise all of the following activities EXCEPT Cost minimizing Controlling Planning Decision making Directing operational activities Ideally, how many units should be produced in a just in time manufacturing system Actual customer demand Budgeted customer demand for the following week Maximum production capacity for the current week Budgeted customer demand for the current week

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Jun 28, 2024

What are the responsibilities of the board of directors in a corporation? a. Hire and fire entry level employees. b. Amend the firm's corporate charter

What are the responsibilities of the board of directors in a corporation?

a. Hire and fire entry level employees.

b. Amend the firm's corporate charter when necessary.

c. Manage day-to-day operations.

d. Hire and fire managers.

The primary goal of a publicly-owned firm interested in serving its stockholders should be to Maximize the stock price per share.

a. Minimize the chances of losses.

b. Maximize expected EPS.

c. Maximize expected total corporate profit.

d. Maximize expected net income.

Which of the following statements is most correct? Statement 1. In terms of revenues and profits, the corporation is by far the most important form of business organization in the Philippines. Statement 2. The issues of corporate governance are really agency problems.

a. Both statements.

b. Neither of the statements.

c. Statement 2 only.

d. Statement 1 only.

Which of the following actions is NOT likely to reduce the agency problem between stockholders and managers?

a. The board of directors has become more vigilant in its oversight of the company's management.

b. None of the choices.

c. Congress passes a law that severely restricts hostile takeovers.

d. A manager receives a lower salary but receives additional shares of the company's stock.

Which of the following statements is not correct? Statement 1. Financial management requires both short-term activities as well as long-term planning such as raising funds. Statement 2. One of the primary disadvantages of maximizing shareholder value is that it only provides a short-term perspective. Statement 3. If a company has a written code of ethics, they will generally avoid ethical problems.

a. Statement 2 only.

b. Statement 1 only.

c. Neither of the statements.

d. Statement 3 only.

What should be the objective of a focus on stakeholders?

a. In situations of conflict pick stakeholders' interests over shareholders' interests.

b. Maximize the stakeholders' interests.

c. Disregard shareholders' interests all together.

d. Preserve stakeholders' interests.

Agency theory would imply that conflicts are more likely to occur between management and shareholders when

a. The company is owned and operated by the same person.

b. Management acts in the best interests of maximizing shareholder wealth.

c. The board of directors exerts strong and involved oversight of management.

d. The chairman of the board is also the chief executive officer (CEO).

Which of the following statements is false concerning the functions of management of an economic organization? Statement 1. Planning requires management to look ahead and to establish objectives. Statement 2. Directing and motivation involve coordinating the diverse activities and human resources of a company to produce a smooth-running operation. Statement 3. Controlling is the process of keeping the activities on track.

a. Statement 1 only.

b. All the statements are true.

c. Statement 3 only.

d. Statement 2 only.

Management accounting focuses primarily on providing for

a. External users by stockholders and creditors.

b. External users by the Securities and Exchange Commission.

c.Internal users by managers.

d.External users by the Bureau of Internal Revenue.

The management of a business organization performs several broad functions. They are

a. Planning, Directing, Organizing, and Selling.

b. Planning, Manufacturing, Producing, Organizing, and Controlling.

c. Planning, Producing, Organizing, and Directing.

d. Planning, Directing, Organizing, and Controlling.

Which of the following is NOT a career opportunity in corporate finance?

a. Cash manager

b.Mortgage banker

c. Financial analyst

d. Controller

Which of the following statements is most correct? Statement 1. The Internet impacts e-commerce by creating a mechanism for improved communications between a business, its customers, and its suppliers. Statement 2. The Internet has accounted for an acceleration of productivity for "old economy" firms.

a. Both statements.

b. Statement 1 only.

c. Neither of the statements.

d. Statement 2 only.

A controller is normally involved with

a. Managing investments.

b. Safeguarding assets.

c. Raising capital.

d. Preparing financial statements.

Which of the following statement is most correct? Statement 1. Agency theory assumes that corporate managers act to increase the wealth of corporate shareholders. Statement 2. Timing is not a particularly important consideration in financial decisions.

a. Neither of the statements.

b. Statement 1 only.

c. Both statements.

d. Statement 2 only.

The development of just-in-time (JIT) methods of production focused on

a. Increasing customer service.

b. Reducing operating expenses.

c. Reducing inventories.

d. Increasing product quality.

e. Increasing sales revenue.

In recent years some firms have

a. None of the choices

b. Become less interested in managing risks arising from fluctuations in interest rates, commodity prices and currency prices

c. Become more focused on maximizing profits rather than stockholder wealth

d. Become more focused on keeping a broader group of stakeholders happy rather than just the stockholders

The role of managerial accounting information in assisting management is a(n)

a. Financial-directing role.

b. Attention-directing role.

c. Problem-solving role.

d. Planning and controlling role.

e. Organizational role.

Which of the following statements is most correct about the ethical climate of business? *

a. Unethical business behavior can have a negative impact on our economy.

b. Greedy corporate executives are, in part, to blame for the relatively recent rash of corporate scandals.

c. All of the choices.

d. Corporate scandals have served as the accounting profession's wake-up call to pay increased attention to ethical issues in the conduct of business.

Managerial accounting

a. Is governed by generally accepted accounting principles.

b. Pertains to the entity as a whole and is highly aggregated.

c. Places emphasis on special-purpose information.

d. Is limited to cost data.

Which of the following is a valid criticism concerning the goal of firms to maximize profits?

a. Profit maximization is completely unrelated to shareholder wealth

b. There are no valid criticisms of profit maximizing firms

c. Profit maximization may ignore the timing of those profits

d. Profit maximization ignores expenses

Which of the following is not one of the three basic activities of a manager?

Compiling management accounting reports.

Controlling.

Directing and motivating.

Planning.

Companies that have higher risk than a competitor in the same industry will generally have

A higher cost of funds than its competitors.

All of the choices.

A lower relative stock price than its competitors.

To pay a higher interest rate than its competitors.

Which is not a duty of a financial manager?

Product research

Investment analysis

Financial forecasting

Budgeting

Maximizing profit as the manager's goal has several flaws, including:

Focusing on earnings does not mean that the firm will necessarily have enough cash on hand to pay its bills

Risk is ignored

All of the choices

Earnings figures focus on past performance rather than current or future performance

The timing of the profits may be ignored

An approach used to reduce the cost associated with handling and holding inventory by reducing the amount of inventory on hand.

Value Chain.

Theory of Constraints.

Balanced Scorecard.

Just-in-Time Inventory.

Which of the following statement(s) about just-in-time (JIT) inventory management is (are) true? Statement 1. The emphasis of JIT is on "pull" manufacturing. Statement 2. Raw materials are purchased just in time to be used in production. Statement 3. JIT is an inventory technique that focuses on reduction of both inventory and related inventory costs.

Statement 1 only.

Statement 3 only.

All of the statement.

Statement 2 only.

What is a basic guide for financial decision making?

Make decisions where the average benefits exceed the average costs.

Make decisions where the total benefits exceed the total costs.

Make decisions where the average benefits exceed the fixed costs.

Make decisions where the benefits exceed the costs.

Compared to financial accounting, managerial accounting DOES NOT place emphasis on

The flexibility of information.

The timeliness of information.

None of the choices.

The precision of information.

Regarding risk levels, financial managers should

Pursue higher risk projects because they increase value.

Focus primarily on market fluctuations.

Avoid higher risk projects because they destroy value.

Evaluate investor's desire for risk.

Which of the following is not a true statement about the goal of maximizing shareholder wealth?

It takes into account the timing of cash-flows.

It considers risk as a factor.

It is a short-run point of view which takes risk into account.

None of the choices.

Which of the following statement(s) about just-in-time (JIT) inventory management is (are) true? Statement 1. The emphasis of JIT is on "pull" manufacturing. Statement 2. Raw materials are purchased just in time to be used in production. Statement 3. JIT is an inventory technique that focuses on reduction of both inventory and related inventory costs.

Neither of the statements.

Statement 1 only.

All of the statements.

Statement 2 only.

Statement 3 only.

Shareholders are said to have a residual claim on the firm's assets. What does this mean?

Shareholders have limited liability in their investment.

Shareholders have priority in electing the board of directors for the firm.

Shareholders do not receive any payoff from the firm until all creditors are paid.

Shareholders are allowed to recover their investment first if the firm experiences financial distress.

A root cause of firm agency costs is

Managerial carelessness.

A manager's concern for his personal well-being.

Government agency filing requirements.

A manager owning too much of his firm's stock.

Which type of finance position focuses on preparing firm financial plans and the evaluation of the firm's financial ratios?

Financial analyst

Portfolio manager

Cash manager

Capital budgeting analyst

You were just hired as the CEO of a company. Your primary objective should be

to eliminate the company's competitors.

to maximize the company's earnings.

to maximize profits.

to maximize the company's price of common stock.

Maximization of shareholder wealth is a concept in which

Virtually all earnings are paid as dividends to common stockholders.

Increased earnings is of primary importance.

Profits are maximized on a quarterly basis.

Optimally increasing the long-term value of the firm is emphasized.

Proper risk-return management means that

The firm must determine an appropriate trade-off between risk and return.

The firm should value future profits more highly than current profits.

The firm should earn the highest return possible.

The firm should take as few risks as possible.

Wide-spread adherence to ethical standards in an advanced market economy tends to result in all of the following except

Higher quality goods and services.

Greater variety of goods and services available for sale.

Higher prices.

Safer products.

Which of the following is NOT an objective of managerial accounting?

Maximizing profits and minimizing costs.

Providing information for decision making and planning.

Assisting in directing and controlling operations.

Motivating managers toward the organization's goals.

Measuring the performance of managers and subunits.

The function of management that compares planned results to actual results is known as

Directing and motivating.

Organizing.

Planning.

Controlling.

Which of the following is NOT a stakeholder?

Customers

Competitors

Tax collection agencies

Suppliers

Which of the following statements is most correct? Statement 1. During the 1930s, financial practice revolved around such topics as the preservation of capital, maintenance of liquidity, reorganization of financially troubled corporations and bankruptcy. Statement 2. In the mid-1950s, finance began to change to a more analytical, decision-oriented approach.

Statement 1 only.

Both statements.

Neither of the statements.

Statement 2 only.

Justine Corporation recently implemented a Just-in-Time (JIT) production system along with a series of continuous improvement programs. If the firm is now considering adopting a total quality management (TQM) program, it would likely find that TQM

Is consistent with JIT but inconsistent with continuous improvement.

Is inconsistent with both JIT and continuous improvement.

Is consistent with continuous improvement but inconsistent with JIT.

Is consistent with both JIT and continuous improvement.

A financial manager's goal of maximizing current or short-term earnings may not be appropriate because

Earnings are subjective; they can be defined in various ways such as accounting or economic earnings.

It fails to consider the timing of the benefits.

All of the choices.

Increased earnings may be accompanied by unacceptably higher levels of risk.

Which of the following statements is most correct? Statement 1. The Internet is responsible for many new business models. Statement 2. Businesses will increasingly rely on business-to-business internet applications to speed up the cash flows through their firms.

Statement 2 only.

Both statements.

Statement 1 only.

Neither of the statements.

The primary reason for adopting total quality management (TQM) is to achieve

Reduced delivery charges.

Reduced delivery time.

Greater customer satisfaction.

Better managerial decisions.

Greater employee participation.

Why do shareholders bear most of the risk of running a firm?

They receive a salary from the company.

Shares can be taken away at any time without notice.

They are guaranteed a fixed payout each quarter.

They only have a residual claim on the firm's cash flows.

Future financial managers will need to understand

International cash flows.

Computerized funds transfers.

International currency hedging strategies.

All of the choices.

Clear selection

Which of the following statements is most correct?

A good goal for a corporate manager is maximization of expected EPS.

Most micro-business in the Philippines is conducted by corporations; corporations' popularity results primarily from their favorable tax treatment.

A good example of an agency relationship is the one between stockholders and managers.

Corporations and partnerships have an advantage over proprietorships because a sole proprietor is subject to unlimited liability, but investors in the other types of businesses arenot.

Firms in highly competitive industries find it easier to exercise "social responsibility" than do firms in oligopolistic industries.

What effect do some environmental laws have on businesses?

Require more employees

Limit equipment purchases

Control exterior landscapes

Increase operating costs

All of the following entities would have a need for managerial accounting information EXCEPT

The BTS Fans Club.

San Miguel Corporation.

The University Canteen.

None of the choices, as all of these entities would use managerial accounting information.

An agent of a firm could be any of the following:

A supplier of the firm

An employee who does not own any proportion of the firm

The BIR agent in charge of auditing the firm's tax return

100% owner of the firm

Which of the following statements is not correct? Statement 1. Higher return always induces stockholders to invest in a company. Statement 2. Social responsibility is an expense and thus should be avoided by financial managers because it will lead to loss of income.

Both statements.

Statement 1 only.

Neither of the statements.

Statement 2 only.

Corporate governance is the

Governance of the company by the board of directors with a focus on social responsibility.

Relationship between the chief financial officer and institutional investors.

Operation of a company by the chief executive officer (CEO) and other senior executives on the management team.

Relationship and exercise of oversight by the board of directors of the company.

What do we call the possible conflict of interests between shareholders and management?

Shareholders' dilemma

Stakeholder problem

Agency problem.

Double taxation

In the past, the study of finance has included

Raising capital.

All of these.

Mergers and acquisitions.

Bankruptcy.

Which of the following typically does not relate to the role of a controller?

A controller oversees the preparation of reports required by governmental authorities.

A controller supervises the accounting department.

A controller safeguards an organization's assets.

None of the above.

Agency theory deals with the issue of

The limitations placed on an employee acting as the firm's agent to obligate or bind the firm.

The conflicts that can arise between the viewpoints and motivations of a firm's owners and managers.

When to hire an agent to represent the firm in negotiations.

The legal liabilities of a firm if an employee, acting as the firm's agent, injures someone.

Which of the following statements is most correct? Statement 1. Recently, the emphasis of financial management has been on the relationship between risk and return. Statement 2. The first Nobel Prizes given to finance professors were for their contributions to capital structure theory and portfolio theories of risk and return.

Both statements.

Statement 2 only.

Neither of the statements.

Statement 1 only.

Which of the following scenarios could be considered an example of an agency problem?

The board of directors rewards management for the company's last year performance.

Management decides to go ahead with an expansion that is expected to benefit the company's value.

Management decides to close a plant to lower operating costs.

Management decides to purchase a Boeing 747 as a corporate plane.

According to the Theory of Constraints, improvement efforts should usually be focused on

The work center with the highest total cost.

The work center that is the constraint.

Work centers that are not constraints.

The work center with the most obsolete equipment.

Which of the following represents career opportunities in finance?

Corporate finance

Consulting

Investment banking

All of the choices

The Internet has affected the financial markets by

Creating more competition between markets.

All of the choices.

Pushing the cost of trading down.

Forcing brokerage companies to consolidate.

Financial accounting focuses primarily on reporting

To parties outside of an organization.

To parties within an organization.

For financial institutions.

To financial institutions.

To an organization's board of directors.

The group of activities associated with providing a product or service.

Just-in-Time Inventory.

Theory of Constraints.

Balanced Scorecard.

Value Chain.

What is the primary goal of financial management?

Minimizing risk of the firm.

Maximizing cash flow.

Increased earnings.

Maximizing shareholder wealth.

Which of the following statements is not correct? Statement 1. Money markets refer to those markets dealing with short-term securities having a life of one year or less. Statement 2. Capital markets refer to those markets dealing with short-term securities having a life of one year or less.

Neither of the statements.

Statement 1 only.

Statement 2 only.

Both statements.

Which of the following can be linked to the relatively recent wave of corporate scandals?

Managers who make over-reaching business deals.

All of the choices.

Greedy corporate executives.

Lack of oversight by companies' audit boards and boards of directors.

Which of the following statements is most correct?

The ability of firms to engage in socially beneficial projects that involve voluntary costs is constrained by competition and the need of firms to attract capital at low cost.

The actions that maximize a firm's stock price are inconsistent with maximizing social welfare.

In a competitive market, if a group of firms do not spend resources making social welfare improvements, but another group does, in general, this will not affect the second group's ability to attract capital.

If government did not mandate socially responsible corporate actions, such as those relating to product safety and fair hiring practices, most firms in competitive markets would still pursue such policies voluntarily.

The concepts of social responsibility and ethical responsibility on the part of corporations are completely different and neither is relevant in maximizing stock price.

Which of the following would likely be considered an internal user of accounting information rather than an external user?

Consumer groups.

Lenders.

Middle-level managers.

Stockholders.

Which of the following work to reduce agency conflicts between stockholders and bondholders?

Including restrictive covenants in the company's bond contract.

Providing managers with a large number of stock options.

The passage of laws that make it easier for companies to resist hostile takeovers.

None of the choices.

Shareholders can attempt to overcome agency problems by all BUT ONE of the following:

Paying the manager proportion of the profits that the firm generates

Relying on market forces to exert managerial discipline

Incurring costs to monitor managers

Paying managers good salary

Which of the following statements is most correct?

All of the statements are correct.

One advantage to remaining a sole proprietor is that you have limited liability.

Hostile takeovers are most likely to occur when a firm's stock is undervalued, relative to its potential, because of poor management.

In general, bondholders have a greater preference for riskier projects than do stockholders.

The field of accounting that depends on generally accepted accounting principles (GAAP) is called

Financial Accounting.

Cost Accounting.

Managerial Accounting.

Responsibility Accounting.

International Accounting.

Which of the following statements is most correct? Statement 1. Agency Theory examines the relationship between companies and their customers. Statement 2. Institutional investors have had increasing influence over corporations with their ability to vote large blocks of stock and replace poor performing boards of directors.

Statement 2 only.

Neither of the statements.

Both statements.

Statement 1 only.

Career opportunities in commercial banking do NOT include

Investment banker

Credit analyst

Corporate loan officer

All of the choices are career opportunities in commercial banking

Mortgage banker

Which of the following are the disadvantages of Profit Maximization versus Shareholders Wealth Maximization, EXCEPT

Ignores risk.

Ignores the shareholders' returns.

Emphasis the short term.

None of the choices.

Benefits of social responsibility often include

Neither of the choices.

Higher short-term earnings.

Lower expenses.

Better reputation.

The chief managerial and financial accountant of an organization is the

Vice-President of Accounting.

Chief Financial Officer (CFO).

Internal Auditor.

Treasurer.

A performance-measurement technique that attempts to consider and evaluate all aspects of performance using financial and nonfinancial measures in an integrated fashion.

Value Chain.

Balanced Scorecard.

Theory of Constraints.

Just-in-Time Inventory.

Which of the following statements is most correct? Statement 1. As finance emerged as a new field, much emphasis was placed on mergers and acquisitions. Statement 2. Inflation is assumed to be a temporary problem that does not affect financial decisions.

Statement 1 only.

Statement 2 only.

Neither of the statements.

Both statements.

Which of the following statements represents a similarity between financial and managerial accounting?

Both are solely concerned with historical transactions.

Both draw upon data from an organization's accounting system.

Both are useful in providing information for external users.

Both rely heavily on published financial statements.

Both are governed by GAAP.

The following are functions of financial management, EXCEPT

Allocation of funds.

Effective and Efficient Utilization of funds.

Procurement of Funds.

Neither of choices.

Pizza Hut makes forty-three kinds of pizza for takeout and delivery. Which of the following could be the constraint at Pizza Hut?

The person who makes the pizza crust.

The person who puts toppings on the pizzas.

Any of the choices could be the constraint.

The pizza oven.

Which of the following statements is most correct? Statement 1. The higher the profit of a firm, the higher the value the firm is assured of receiving in the market. Statement 2. There are some serious problems with the financial goal of maximizing the earnings of the firm.

Statement 1 only.

Neither of the statements.

Both statements.

Statement 2 only.

The following factors influence a company's stock price, except

None of the choices.

Stability and risk of earnings.

Timing and Risk of earnings.

Potential growth.

Which of the following is NOT true regarding the theory of constraints?

The theory of constraints does not apply to companies with multiple products because of capacity measurement difficulties.

In any profit-seeking company, there must be at least one constraint.

Neither of the choices.

Constraints or bottlenecks stop organizations from selling an infinite number of units or services.

Which of the following actions are likely to reduce agency conflicts between stockholders and managers?

Paying managers large fixed salary.

Increasing the threat of corporate takeover.

All of the statements are not correct.

Placing restrictive covenants in debt agreements.

Agency theory examines the relationship between the

Owners of the firm and the managers of the firm.

Shareholders and the firm's transfer agent.

Board of directors and large institutional investors.

Shareholders of the firm and the firm's investment banker.

Financial management has changed in recent years because of

The advent of information technology.

Increased global competition.

The emergence of new industries.

All of the above factors.

Which of the following encourages managers to act in the shareholders' interests?

All of the choices.

Audits.

Performance based compensation.

Threat of hostile takeovers.

Which of the following statements is most correct?

One advantage to remaining a sole proprietor is that you have limited liability.

Hostile takeovers are most likely to occur when a firm's stock is undervalued, relative to its potential, because of poor management.

None of the statements is correct.

In general, bondholders have a greater preference for riskier projects than do stockholders.

Which of the following is NOT a function of the treasurer?

Being responsible for an entity's credit policy.

Raising capital.

Safeguarding assets.

Preparing financial statements.

Managing investments.

Which of the following statement is not correct? Statement 1. Maximizing the earnings of the firm is the goal of financial management. Statement 2. Because socially desirable goals can impede profitability in many instances, managers should not try to operate under the assumption of wealth maximization.

Statement 2 only.

Both statements.

Neither of the statements.

Statement 1 only.

As mergers, acquisitions, and restructuring have increased in importance, agency theory has become more important in assessing whether

Managers are actually agents or only employees of the firm.

A stock repurchase should be undertaken.

Shareholder goals are truly being achieved by managers in the long run.

Managers and owners are actually the same people with the same interests.

Managers of firms should only take actions that

They expect will increase the firm's share price.

All of the choices.

Increase the value of the firm's future cash flows.

Have benefits which are at least as great as the cost of those actions.

Managerial accounting

Is primarily concerned with providing information to external users.

Is more future oriented than financial accounting.

Is more concerned with precision than timeliness.

Tends to summarize information more than financial accounting.

Which of the following functions is best described as choosing among available alternatives?

Budgeting.

Decision making.

Directing operational activities.

Controlling.

Planning.

Which of the following statements is not correct? Statement 1. Social responsibility and profit maximization are synonymous. Statement 2. Financial markets exist as a vast global network of individuals and financial institutions that may be lenders, borrowers, or owners of public companies worldwide.

Statement 1 only.

Both statements.

Statement 2 only.

Neither of the statements.

The delegation of decision making to lower levels in an organization is known as

The planning and control cycle.

None of these.

Decentralization.

Controlling.

The day-to-day work of management teams will typically comprise all of the following activities EXCEPT

Cost minimizing.

Controlling.

Planning.

Decision making.

Directing operational activities.

Ideally, how many units should be produced in a just-in-time manufacturing system?

Actual customer demand.

Budgeted customer demand for the following week.

Maximum production capacity for the current week.

Budgeted customer demand for the current week.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

Step: 3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Information Systems Controls And Processes

Authors: Leslie Turner, Andrea B Weickgenannt, Mary Kay Copeland

4th Edition

★★★★★

7. Also complete the following sentence: This core value is important to me when I ________________________. This is the situation this core value is important to you we are looking for here.

Answered: 1 week ago

Previous Question Next Question