Business Quiz: Mastering Financial Management

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Susanjoypaul
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Quizzes Created: 6 | Total Attempts: 2,025
Questions: 10 | Attempts: 245

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Financial Management Quizzes & Trivia

Book reference for the quiz: Business (Pride, Hughes, & Kapoor, 2014)


Questions and Answers
  • 1. 

    One of the most important priorities for someone interested in a finance career is (select the best answer):

    • A. 

      Making money

    • B. 

      Dressing well

    • C. 

      Having a nice car

    • D. 

      Honesty

    Correct Answer
    D. Honesty
    Explanation
    See page 554 in Business (Pride, Hughes, & Kapoor, 2014).

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  • 2. 

    Short-term financing is money that will be used for five years or less. 

    • A. 

      True

    • B. 

      False

    Correct Answer
    B. False
    Explanation
    Short-term financing is money that will be used for one year or less. See page 554 in Business (Pride, Hughes, & Kapoor, 2014).

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  • 3. 

    The steps in financial planning include (check all that apply):  

    • A. 

      Establishing organizational goals and objectives

    • B. 

      Setting up a slush fund

    • C. 

      Budgeting for financial needs

    • D. 

      Identifying sources of funds

    Correct Answer(s)
    A. Establishing organizational goals and objectives
    C. Budgeting for financial needs
    D. Identifying sources of funds
    Explanation
    See pages 557-559 in Business (Pride, Hughes, & Kapoor, 2014).

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  • 4. 

    Short-term debt financing is usually easier to obtain than long-term debt financing because (select the best answer): 

    • A. 

      For the lender, the shorter repayment period means less risk of non-payment.

    • B. 

      The dollar amounts of short-term loans are usually smaller than those of long-term loans.

    • C. 

      A close working relationship normally exists between the short-term borrower and the lender.

    • D. 

      All of the above

    Correct Answer
    D. All of the above
    Explanation
    See page 559 in Business (Pride, Hughes, & Kapoor, 2014).

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  • 5. 

    Unsecured financing is financing that is not backed by collateral. 

    • A. 

      True

    • B. 

      False

    Correct Answer
    A. True
    Explanation
    See page 559 in Business (Pride, Hughes, & Kapoor, 2014).

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  • 6. 

    Sources of unsecured short-term financing include (check all that apply):

    • A. 

      Trade credit

    • B. 

      Promissory notes issued to suppliers

    • C. 

      Unsecured bank loans

    • D. 

      Commercial paper

    • E. 

      Inventory

    • F. 

      Accounts receivable

    • G. 

      All of the above

    Correct Answer(s)
    A. Trade credit
    B. Promissory notes issued to suppliers
    C. Unsecured bank loans
    D. Commercial paper
    Explanation
    Inventory and accounts receivable are sources of secured short-term financing. See pages 559-561 in Business (Pride, Hughes, & Kapoor, 2014).

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  • 7. 

    A factor is a firm that specializes in buying other firms’ (select the best answer): 

    • A. 

      Trade credit

    • B. 

      Promissory notes

    • C. 

      Inventory

    • D. 

      Accounts receivable

    Correct Answer
    D. Accounts receivable
    Explanation
    See page 562 in Business (Pride, Hughes, & Kapoor, 2014).

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  • 8. 

    An initial public offering (IPO) occurs when a corporation sells common stock to the general public for the first time.

    • A. 

      True

    • B. 

      False

    Correct Answer
    A. True
    Explanation
    See page 563 in Business (Pride, Hughes, & Kapoor, 2014).

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  • 9. 

    The secondary market is a market for existing financial securities that are traded between investors, and includes (check all that apply): 

    • A. 

      Initial public offerings

    • B. 

      Primary markets and investment banking firms

    • C. 

      Securities exchanges

    • D. 

      The over-the-counter (OTC) market

    • E. 

      All of the above

    Correct Answer(s)
    C. Securities exchanges
    D. The over-the-counter (OTC) market
    Explanation
    Initial public offerings and sale of stock by investment banking firms are part of the primary market. See pages 563-565 in Business (Pride, Hughes, & Kapoor, 2014).

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