Which one of the following statements concerning a sole proprietorship is correct?
  • The owner of a sole proprietorship is personally responsible for all of the company's debts.
Which one of the following is a working capital management decision?
  • determining whether to pay cash for a purchase or use the credit offered by the supplier
The decision to issue additional shares of stock is an example of which one of the following?
  • capital structure decision
Which one of the following is a capital structure decision?
  • determining how much debt should be assumed to fund a project
Which one of the following is a capital budgeting decision?
  • deciding whether or not to purchase a new machine for the production line

Which one of the following correctly defines the upward chain of command in a typical corporate organizational structure?

  • The treasurer reports to the vice president of finance.

Which one of the following functions should be the responsibility of the controller rather than the treasurer?

  • daily cash deposit
  • income tax returns
  • equipment purchase analysis
  • customer credit approval
  • income tax returns
A stakeholder is:
  • any person or entity other than a stockholder or creditor who potentially has a claim on the cash flows of a firm.

Which one of the following terms is defined as a conflict of interest between the corporate shareholders and the corporate managers?

  • agency problem

A business partner whose potential financial loss in the partnership will not exceed his or her investment in that partnership is called a:

  • limited partner.

A business formed by two or more individuals who each have unlimited liability for all of the firm’s business debts is called a:

  • general partnership.
A business owned by a solitary individual who has unlimited liability for its debt is called a:
  • sole proprietorship.
Which one of the following is defined as a firm’s short-term assets and its short-term liabilities?
  • working capital
Which one of the following terms is defined as the mixture of a firm’s debt and equity financing?
  • capital structure
Which one of the following terms is defined as the management of a firm’s long-term investments?
  • capital budgeting
The production function in the above table exhibits decreasing marginal returns to capital over what output range?
  • Between 2,391 and 3,048
The production function in the above table exhibits negative marginal returns to capital over what output range?
  • Between 3,016 and 2,945