Quiz Submissions – Session 1 HW Actions for Quiz Submissions – Session 1 HW
Jameel Austin (username: JAUSTIN32)
Attempt 1
Written: Sep 18, 2016 4:21 AM – Sep 18, 2016 4:31 AM
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Question 1
What are the two basic sources of funds for all businesses?
Debt
Equity
Both debt and equity
None of the above
Question 2
True or False
Working capital management is the management of current
assets, such as inventory, and current liabilities, such as money owed to
suppliers.
True
False
Question 3
What are the forms of business organization discussed in
this chapter?
Sole Proprietorship
Partnership
Corporation
All of the above
Question 4
What is meant by stockholders’ limited liability?
That the stockholder’s legal liability extends to all
personal assets as well.
That the stockholder’s legal liability extends only to the
debt owed.
That the stockholder’s legal liability extends only to the
capital contributed or the amount invested.
None of the above
Question 5
What is double taxation?
The employees of a corporation are subject to double
taxation–first when they get their paychecks and then when they pay state and
federal income tax.
The owners of a corporation are subject to double
taxation—first at the corporate level and then again at a personal level when
they are given dividends.
The suppliers of a corporation are subject to double
taxation—first when the corporation pays their invoices and then again when
they have to pay federal taxes.
None of the above
Question 6
What are some of the regulations pertaining to boards of
directors that were put in place to reduce agency conflicts?
The majority of board members must be outsiders.
A separation of the CEO and chairman of the board positions
is recommended.
The CEO and CFO must certify all financial statements.
All of the above
Question 7
Which one of the following mechanisms helps to align
management interests with those of its shareholders?
A well designed management compensation package
An efficient managerial labor market
The Sarbanes-Oxley Act of 2002
All of the above
Question 8
One of the best ways to reduce agency conflict is by
designing an effective compensation package
instituting severe penalties for bad decisions
hiring outside monitors to keep track of the manage’s
decisions
having managers report to the board of directors
Question 9
Which of the following factors or activities can be
controlled by the management of the firm?
The level of economic activity
Stock market conditions
Capital budgeting
The level of interest rates
Question 10
Current Liabilities are liabilities that will be converted
to cash within a year
True
False
