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Trades & Technology - Agriculture; Pre Quiz 9
1
Cost of goods sold divided by value of average daily goods on hand is known as
in
Trades & Technology
<p>a. a profitability ratio.
b. return on investment.
c. inventory turnover.
d. a liquidity ratio.
e. return on equity.</p>
agriculture
C
2
Which of the following would be viewed as a measure of the firm's ability to meet its
in
Trades & Technology
long-term financial obligations?</p>
<p>a. Liquidity ratio
b. Balance sheet ratio
c. Return on investment
d. Operating ratio
e. Debt ratio</p>
agriculture
E
3
Use the following information to compute the current ratio:Total
in
Trades & Technology
liabilities $ 18,000
Total assets 200,000
Current assets 80,000
Current liabilities 20,000
Owner's equity 60,000
Net income 120,000
Gross income 340,000</p>
<p>a. 0.25
b. 4.00
c. 4.40
d. 10.00
e. 6.00</p>
agriculture
B
4
You are a banker reviewing a loan application from a local business. Which of the following
in
Trades & Technology
ratios would you look at to get a quick measure of how good a credit risk the business is?</p>
<p>a. Liquidity ratio
b. Return on assets
c. Debt ratio
d. Current ratio
e. Liability ratio</p>
agriculture
C
5
You are looking at a document that has entries for such items as gross sales, cost of goods sold, operating profit, and interest expenses. What is the document?
in
Trades & Technology
a. Balance sheet
b. Revenue budget
c. Capital expenditure budget
d. Income statement
e. Master budget
agriculture
D
6
Which of the following financial documents shows a listing of all the organization's assets
in
Trades & Technology
and liabilities at a given point in time?</p>
<p>a. Balance sheet
b. Balance sheet budget
c. Income statement
d. Revenue budget
e. Capital expenditures budget</p>
agriculture
A
7
Which of the following is NOT a characteristic of the budget process outlined in the text?
in
Trades & Technology
<p>a. It is a bottom-up process.
b. It will more accurately reflect the needs of lower-level managers and their
departments.
c. It results in top management substantially losing control over the budgetary
process.
d. It should lead lower-level managers to substantially higher levels of commitment
to the budget.
e. It is a participative process.</p>
agriculture
C
8
The Bootery leases space in a mall for $15 per square foot. If sales exceed $100,000 in a
in
Trades & Technology
given month, the rate for that month goes up to $17 per square foot. This is an example of a</p>
<p>a. variable cost.
b. flexible cost.
c. semivariable cost.
d. fixed cost.
e. fractional cost.</p>
agriculture
C
9
The state legislature has just passed a law that imposes a value-added tax on manufacturers
in
Trades & Technology
For each unit a firm manufactures, it must pay the state a percentage of the value of the
item. What kind of cost is this?</p>
<p>a. Fixed
b. Variable
c. Semivariable
d. Inflexible
e. Unilateral</p>
agriculture
B
10
The accounts payable clerk at White Industries just received a bill for insurance on the plant
in
Trades & Technology
that must be paid despite the fact that the plant has been shut down for the past two months.
This is an example of what is called a</p>
<p>a. semivariable cost.
b. variable cost.
c. fixed cost.
d. unilateral cost.
e. inflexible cost.</p>
agriculture
C
11
Del is preparing a budget for allocating the number of machine and employee hours for next
in
Trades & Technology
quarter's production runs. What kind of budget is he preparing?</p>
<p>a. Capital expenditure
b. Master
c. Operating
d. Nonmonetary
e. Personnel</p>
agriculture
D
12
Which of the following is NOT an operating budget?
in
Trades & Technology
<p>a. Revenue
b. Balance sheet
c. Expense
d. Sales</p>
agriculture
B
13
The organizational budgets that outline quantities of product/service to be produced and
in
Trades & Technology
what resources will be used in the process are called
</p>
<p>a. operating budgets.
b. capital expenditure budgets.
c. revenue budgets.
d. cash-flow budgets.
e. nonmonetary budgets.</p>
agriculture
A
14
Which of the following is NOT a financial budget?
in
Trades & Technology
<p>a. Cash-flow
b. Capital expenditure
c. Balance sheet
d. Cash
e. Revenue</p>
agriculture
E
15
Tracy is looking at an overall budget that indicates that the organization is going to be
in
Trades & Technology
$200,000 in the red at the end of the year if all other budgets are met. She is very concerned
about this and decides that some changes will have to be made. What budget is Tracy
looking at?</p>
<p>a. Cash-flow
b. Balance sheet
c. Revenue
d. Capital expenditure
e. Operating</p>
agriculture
B
16
Which of the following financial budgets is also known as the ``master'' budget?
in
Trades & Technology
<p>a. Cash-flow
b. Capital expenditures
c. Balance sheet
d. Revenue
e. Profit</p>
agriculture
C
17
The owner of an electronics store is concerned about whether or not there will be sufficient
in
Trades & Technology
financial resources to meet current obligations. She decides to try to forecast how much she
will have coming in from weekly sales and what she will have in the way of weekly
obligations. What kind of financial budget has she developed?</p>
<p>a. Balance sheet
b. Sales
c. Cash-flow
d. Revenue
e. Operating</p>
agriculture
C
18
Which of the following financial budgets is designed to ensure that the organization is able to meet its current financial obligations?
in
Trades & Technology
a. Cash-flow
b. Revenue
c. Capital expenditure
d. Operating
e. Profit</p>
agriculture
A
19
Which of the following financial budgets deals with funding of major assets such as land
in
Trades & Technology
and plant and equipment?</p>
<p>a. Cash-flow
b. Cash
c. Capital expenditure
d. Revenue
e. None of these is correct.</p>
agriculture
C
20
Because of their quantitative nature, budgets help managers do many things. Which of the
in
Trades & Technology
following is NOT one of the uses for budgets?</p>
<p>a. Measure performance
b. Make comparisons between departments
c. Make comparisons between organizational levels
d. Make comparisons between time periods
e. Determine how to allocate resources</p>
agriculture
E
21
Which of the following is NOT one of the purposes of budgets?
in
Trades & Technology
<p>a. Assist managers in coordinating resources and projects
b. Help reduce conflict between organizational units
c. Provide clear guidelines about organizational expectations
d. Facilitate performance evaluation
e. Help define standards needed in all control systems</p>
agriculture
B
22
What is the foundation of most control systems?
in
Trades & Technology
<p>a. Strategic plans
b. Tactical plans
c. Budgets
d. Mission statement
e. Functional plans</p>
agriculture
C
23
The function of an external audit is to determine the efficiency of the organization's
in
Trades & Technology
financial and accounting procedures.</p>
Indicate whether the statement is true or false.
agriculture
F
24
Coverage ratios reflect the percentage of the organization's plant and equipment covered by
in
Trades & Technology
insurance.</p>
Indicate whether the statement is true or false.
agriculture
F
25
The current ratio is a measure of an organization's ability to pay its bills on time
in
Trades & Technology
Indicate whether the statement is true or false.
agriculture
T
26
The listing of an organization's assets and liabilities at a particular point in time can usually
in
Trades & Technology
be found in its profit and loss statement.</p>
Indicate whether the statement is true or false.
agriculture
F
27
One major advantage of the budgetary process is that it enhances interdepartmental
in
Trades & Technology
cooperation</p>
Indicate whether the statement is true or false.
agriculture
F
28
Freight charges on incoming raw materials (assuming the receiving organization pays them)
in
Trades & Technology
represent variable costs.</p>
Indicate whether the statement is true or false.
agriculture
T
29
Lease payments on a company's truck fleet represent a semivariable cost (assume no
in
Trades & Technology
mileage charges).</p>
Indicate whether the statement is true or false.
agriculture
F
30
A budget that allocates available machine hours to various products to be produced is an example of an operating budget
in
Trades & Technology
Indicate whether the statement is true or false.
agriculture
F
31
A sales budget focuses on the income an organization expects to receive from normal
in
Trades & Technology
operations.</p>
Indicate whether the statement is true or false.
agriculture
T
32
To determine how much money an organization plans to spend on plant and equipment in
in
Trades & Technology
the coming year, you should look at its operating budget</p>
Indicate whether the statement is true or false.
agriculture
F
33
One purpose of budgets is to help set the standards used in control systems
in
Trades & Technology
Indicate whether the statement is true or false.
agriculture
T
34
A factor common to all budgets is that budgets are expressed in financial terms
in
Trades & Technology
Indicate whether the statement is true or false.
agriculture
F
35
All of the following are affected by information systems except
in
Trades & Technology
<p>a. the performance of the organization.
b. the external environment.
c. the organizational structure.
d. the people within the organization.
e. All of these were discussed as effects of information systems.</p>
agriculture
B
36
Which of the following reflects the emerging consensus about the impact of information
in
Trades & Technology
systems on organizational performance?</p>
<p>a. Most experts are seriously questioning whether performance gains justify the cost.
b. Most experts think systems pay for themselves in a short period of time.
c. Some say the investment in information systems has been worth it, but most
disagree.
d. Most experts agree that information systems enhance performance.
e. Most experts feel that the people who are supposed to use the system never take
full advantage of it.</p>
agriculture
D
37
Which of the following is NOT a behavioral effect of information systems?
in
Trades & Technology
<p>a. Some employees feel isolated.
b. Some employees feel excited about having their jobs enriched.
c. Some employees will be able to work at home.
d. Some employees will form new groupings of personnel.
e. All of these are behavioral effects of information systems.</p>
agriculture
E
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