Sophia BUSN100 Unit 4 Milestone Latest 2022 September

BUSN100 Basics of Business

Unit 4 Milestone

1Select the item below that would NOT be included in the M2 money supply.

•             Cash

•             Certificate of deposit

•             Common stock

•             Savings account

2Riley had a checking account and a savings account with a bank. She used online access to her account to move $50 each month from her checking account to her savings account.

Which of the following does this scenario illustrate?

•             An electronic funds transfer

•             An automatic teller machine

•             An automated clearing house

•             A point of sale terminal

3Which of the following describes a speculative risk?

•             A retail store loses all inventory as a result of a flood.

•             An investor loses money after investing in a startup business.

•             A restaurant burns to the ground because of a grease fire.

•             A farmer loses all of his crops due to a season-long drought.

4A balance sheet provides which of the following?

•             A record of the company's operating expenses

•             A snapshot of a company's financial situation

•             The amount of cash going in and out of a business

•             The money earned or lost by a business for a set time period

5Which of the following is an indicator to the Federal Reserve that the economy is healthy?

•             High investment rates

•             Steady inflation rates

•             Low inflation rates

•             High reserve requirements

6Which of the following correctly describes a discount rate control?

•             The amount charged to consumers that borrow from banks

•             The amount charged to businesses that borrow from the Federal Reserve

•             The amount charged to banks that borrow from the Federal Reserve

•             The amount charged to businesses that borrow from banks

7Darren believed in saving money and followed a strict monthly budget. He wanted to invest his savings in a safe option that paid more than his savings account and he was content with earning a lower, consistent amount of money. He did not want to worry about losing any money with market changes.

Which type of investment below should Darren consider?

•             New stock offerings

•             Junk bonds

•             CDs

•             Business startups

8A company created a set of policies and procedures for a manufacturing facility to reduce the likelihood of workplace accidents.

Which of the types of risk management below does this scenario describe?

•             Risk retention

•             Risk transfer

•             Risk avoidance

•             Risk control

9Select the item below that is commonly used as collateral by companies when obtaining short term financing.

•             Production supplies

•             Common stock

•             Accounts payable

•             Inventory on hand

10Which of the following is the purpose of managerial accounting?

•             Report financial activities to potential investors

•             Follow financial guidelines created by the SEC

•             Support decision-making processes within an organization

•             Create factual reports about the past performance of a company

11Which statement describes a savings and loan association?

•             Focuses primarily on serving the needs of its cooperative membership

•             Focuses primarily on loans rather than deposits

•             Focuses primarily on commercial business loans

•             Focuses primarily on earning a profit through taking deposits and offering loans.

12Which of the following does a high debt to owner's equity ratio signal?

•             The company assumes too much risk.

•             The company is able to pay off current debts.

•             The company is not credit worthy.

•             The company relies too much on debt.

13When a credit-worthy business takes on an unsecured, short term loan, which kind of interest rate below will it likely be charged?

•             Annual percentage rate

•             Discount rate

•             Prime percentage rate

•             Prime percentage rate plus a percent

14Which of the following can investors use to evaluate a company's potential earning power?

•             Earnings per share

•             Asset to liabilities ratio

•             Debt to owner's equity ratio

•             Current ratio

15A large home improvement retail chain planned to expand its business to include several stores focused on high-end home furnishings and fixtures. The management knew the chosen financing option would be more expensive to administer and take more time to arrange. However, the company felt it could benefit from the longer repayment period of at least 20 years.

Which of the following types of financing did the company use?

•             Corporate bond

•             Long term loan

•             Stock offering

•             Venture capitalist

16Loraine was a successful businesswoman who earned her initial wealth in the real estate market. She was also an avid outdoor enthusiast, particularly water sports. She invested her own money in a startup business that created a new type of lightweight kayak.

Which of the following investor types is Loraine?

•             Lending institution

•             Angel investor

•             Personal investor

•             Venture capitalist

17Which of the following is true about a budget?

•             It is used to monitor the costs of potential business risks.

•             It is used to compare the assets of a business to its liabilities.

•             It is shared with investors to verify the financial health of a business.

•             It is used to balance financial priorities with organizational goals.

18Which of the following scenarios illustrates a capital gain?

•             Warren was paid an extra 15 shares in the company stock at the end of the second quarter based on the earnings the company posted.

•             Warren bought 100 shares of stock for $10 per share. He sold the stock three months later for $12 per share.

•             Warren was paid $.25 a share in cash at the end of the first quarter from the earnings the company posted.

•             Warren bought 100 shares of stock for $10 per share. He sold the stock three months later for $8 per share.

19Which of the following involves a business purchasing and obtaining goods from a supplier by agreeing to pay the supplier within 60 or 90 days?

•             Line of credit

•             Letter of credit

•             Trade credit

•             Promissory note

20Kirsten was the financial manager for a chain of ladies' apparel stores. She reviewed the weekly operating activities, such as buying inventory, paying employees to work in retail stores and paying rent on the retail spaces.

Which responsibility of a financial manager below does this scenario describe?

•             Overseeing day-to-day financial activities

•             Getting funds for investment opportunities

•             Determining long term investments

•             Managing risks taken by the business