If Chris takes the money from her paycheque and gives half of it to her landlord to pay last month's rent, how is she using the money? Select one' • a. As a store or value • b. As a standard of value • C. As a source of currency • d. As a unit of account • e. As a medium of exchange

Streeter & Sons is a regional service company that has been in business for a few years, but has not employed a controller or anyone else full-time to keep track of its financial state. The company needs to take a good look at its financial state to determine whether it needs to make any changes in its practices, in order to prevent possible financial meltdown. Which of the following questions would a balance sheet not be able to help answer about the current state of Streeter & Sons? Select one' • a. Is it a good time for the business to grow? • b. Can the company survive a season of low revenues? • c. Does the company have too many employees? • d. Can the company take on more debt? • e. What is the value of the company's assets?

What is the primary thing the inventory turnover ratio says about a business? Select one • a. How protitable it is • b. How risky it is • с. How much inventory it has • d. How much average inventory it has e. How often new merchandise replaces old merchandise

With fixed assets of $4 billion and current assets of $1.7 billion, Realm Company has long-term liabilities of $2 billion and current liabilities of $0.34 billion. What is Realm's current ratio? Select one: • a. 2 • b. 5 • c. 5.88 • d. 5.1 • е. 6.33

StarMart is a retail chain with more than 120 stores spread across the country. The company is keen to enter into a co-branding agreement with Axiom Financial Services. Under this agreement, StarMart's customers will be provided with an Axiom-Star credit card entitling them to reward points every time they swipe their credit cards at StarMart. Cardholders will be able to redeem points for special discounts, free merchandise, and exclusive services. StarMart is planning on a targeted direct marketing campaign using StarMart's knowledge of consumer buying patterns and Axiom's access to financial information. A senior manager argues that the negative perception associated with mounting credit card debt will affect StarMart. Which of the following would be the most effective measure StarMart could take to address this potential problem? Select one: • a. Extending the expiration date of StarMart reward points • b. Offering to forgive all debt more than 90 days old • C. Making it clear that StarMart is a different entity than Axiom-Star • d. Pointina out the records and practices of the worst-behaved credit companies • e. Extending credit only to those who are very likely to be able to pay their bills

Devaluing a country's currency decreases its exchange value, and this will make it less expensive for other countries to buy the country's products. Select one: • a. False • b. True

Short-term solvency ratios are used primarily to measure the profitability of a business firm, but they can also be used to measure long-term profitability. Select one' • a. True • b. False

______ratios give investors an idea of what returns they can expect on their investment; dividing______by total owners' equity is one such ratio. Select one: • a. Profitability; earnings per share • b. Long-term liquidity; net income • c. Activity; average inventory • d. Short-term liquidity; earnings per share • e. Profitability; net income

It a company does not produce accurate accounting information, the group that is hurt the most is investors. Select one: • a. True • b. False

The bank rate is the lowest rate a chartered bank charges to its borrowers. Select one: • a. True • b. False

Kershner says: "Our income statement should be looking good this year. We've been doing excellent business this year, so we have a lot of gross sales. The company should be in good shape."Michaels replies: "It remains to be seen how our income statement will look overall. In spite of strong sales revenue, the overall income statement might not be as good as we might hope." Which of the following does Kershner assume? Select one: • a. High revenues equate to a healthy income statement. • b. Many factors must be taken into account to calculate the income statement. • c. The company's revenue next year will be as good as this vear's • d. Operatina expenses have been relativelv nigh this year • e. Gross profit is much lower than gross sales

If the Bank of Canada wants to reduce inflation, it can sell government securities. Select one: • a. True • b. False

Banks are now making a larger proportion of their profits from fees than they formerly did, and this is blurring the traditional boundary between banks and securities firms. Select one' • a. False • b. True

The M-2 money supply includes everything that is in the M-1 money supply. Select one: • a. True • b. False

The law of one price ensures that no country's currency is overvalued. Select one: • a. False • b. True

Geoff works for a company that buys accounts receivables from a firm for less than face value, but collects the face value of the accounts. Geoff works for a Select one. • a. factoring company. • b. sales tinance companv. • C. credit union • d. consumer finance company. • e. trust company.

Credit unions lend money to consumers, but not to businesses. Select one: • a. False • b. True

If a corporation has gross profit of $151 660 and total operating expenses of $130 685, then net income is $20 975. Select one' • a. True • b. False

Which of the following is not part of the M-1 supply? Select one: • a. Currency available through a debit card • b. Currency at hand • c. Currency value of time deposits. • d. Currency amount of written cheques • e. Currency in chequing accounts

Marlin wants to calculate the inventory turnover ratio for his company. He has the following information: beginning inventory = $30 000; ending inventory = $20 000; the cost of goods sold = $100 000. From this he concludes that the inventory turnover ratio is 4.0. Select one: • a. True • b. False

The Greenmax beverage company has built a successful business, having secured a small but consistent slice of the energy drink market. The company is preparing to go global with its brand and market its product overseas. Greenmax's chief financial officer likes the idea of expanding into markets in the southern hemisphere because he argues that this will help the company generate a consistent year-round cash flow. Which of the following, if true, would strengthen the CFO's argument? Select one: • a. The energy drink market in the southern hemisphere is dominated by the biggest name brands. • b. Greenmax has tapped about as much of the energy drink market share in Canada as it can get. • c. Demand for energy drinks is much greater in developed countries than in emerging markets. • d. Demand for energy drinks is heavily seasonal, with products selling much better at the hottest times of the year than others. • e. Energy drinks are popular in many different parts of the world.

At Lexi Corp., sales revenue is $20 million, the cost of goods sold is $14 million, operating expenses are $3 million, and income taxes are $1 million. What is the company's gross profit? Select one: • a. $6 million • b. $17 million • c. $16 million • d. $2 million • e. None of these

______are operated by investment companies that bring together pools of assets from many investors and purchases a collection of short-term, low-risk financial securities. Select one' • a. Pension funds • b. Schedule B banks • c. Global development funds • d. All mutual funds • e. Money market mutual funds

How is the return on equity ratio calculated? Select one. • a. Operation income divided by retained earnings • b. Net income divided by retained earnings • c. Net income divided by total owners' equity • d. Operating income divided by total owners' equity • e. Net income divided by common stock

A chartered bank is a privately owned, profit seeking business firm. Select one: • a. True • b. False

Retained earnings equal net profits plus dividend payments to stockholders. Select one: • a. True • b. False

The financial statement that shows the status of assets, liabilities, and owners' equity at a particular point in time is the balance Select one: • a. True • b. False

Which of the following is designed primarily for internal use by a company's managers (e.g., the production manager)? Select one: • a. Income statements • b. Statement of retained earnings • c. Budget • d. Balance sheets • e. Statements of cash flow

An audit involves an examination of a firm's accounting system to determine whether the financial reports fairly present its Tinancial operations Select one. a. True b. False

A pool of funds managed to provide retirement income for its members is called a(n) Select one: • a. pension fund. • b. insurance company. • c. factoring company. • d. trust service. • e. finance company.

According to the Big Mac index select one' • a. the price of a Big Mac is used to determine if a given currency is overvalued or undervalued. • b. Big Mac's are priced the same all over the world. • c. Big Mac's must be priced higher in China than in Canada. • d. Big Mac's are always cheaper in France than they are in Canada. • e. Big Mac's are better than Mom's homemade hamburgers.

Which of the following influences the value of money? Select one: • a. Divisibility • b. The supply of money • c. Barter • d. Durability • e. Portability

______calls attention to problems and helps managers carry out the planning, decision making, and controlling functions. Select one: • a. Budgeting • b. Financial accounting • c. Auditing • d. Managerial accounting • е. Generally accepted accounting principles

One feature of time deposits is that advance notice is required to make a withdrawal. Select one: • a. False • b. True

Which of the following is not one of the "four financial pillars"? Select one: • a. Trust companies • b. Life insurance companies • c. Chartered banks • d. Credit card companies • e. A investment dealers

Which of the following is an intangible asset? Select one: • a. An inventory level of 1000 copies of a book • b. The copyright for a textbook • c. A printing press used in the publication of a book • d. A $1000 Canada Savings Bond • e. The building in which a book was printed

Depreciation is used to recognize the cost of an asset in the year in which it is purchased. Select one: • a. True • b. False

The M-2 measurement of the money supply includes everything in M-1 plus Select one: • a. money market mutual funds. • b. corporate stocks, money market mutual funds, and corporate bonds. • c. time deposits, money market mutual funds, and savings deposits. • d. corporate bonas. corporate stocks. and commercial paper • e. time deposits

Madeline wants to determine operating income for her company. To do so, she must subtract both the cost of goods sold and all operating expenses from gross sales revenue Select one' • a. True • b. False

Which of the following is correct with regard to auditing? Select one: • a. An audit focuses specifically on whether the inventory the company claims it has is actually there. • b. Companies do not normally have to supplv audited financial statements when they apply for loans or when selling stock. • c. Audits determine if the firm has controls in place to prevent errors or fraud from going undetected. • d. Auditors generally do not have to examine documents such as cancelled cheques, payroll record, and cash receipts in order to conduct their audit. • e. Auditors ensures that the financial state of the company will be accurately reported.