DIFFICULTY: EASY - True / False Note that there is an overlap betw...

Cengage Learning Testing, Powered by Cognero Page 1

True / False

Note that there is an overlap between the T/F and multiple-choice questions, as some of the T/F statements are used in multiple-choice questions.

Multiple Choice: True/False

• In most corporations, the CFO ranks under the CEO.
• True
• False

ANSWER: True

DIFFICULTY: EASY

REFERENCES: 1-1 What Is Finance?

QUESTION TYPE: True / False

PREFACE NAME: T/F

LEARNING OBJECTIVES: FOFM.BRIG.17.01.01 - What Is Finance?

NATIONAL STANDARDS: United States - BUSPROG.FOFM.BRIG.17.06 - Reflective thinking

STATE STANDARDS: United States - OH - DISC.FOFM.BRIG.17.06 - Finance function

TOPICS: Role of finance

KEYWORDS: Bloom's Knowledge

DATE CREATED: 6/23/2015 3:23 PM

DATE MODIFIED: 6/23/2015 3:23 PM

• The Chairman of the Board must also be the CEO.
• True
• False

ANSWER: False

DIFFICULTY: EASY

REFERENCES: 1-1 What Is Finance?

QUESTION TYPE: True / False

LEARNING OBJECTIVES: FOFM.BRIG.17.01.01 - What Is Finance?

NATIONAL STANDARDS: United States - BUSPROG.FOFM.BRIG.17.06 - Reflective thinking

STATE STANDARDS: United States - OH - DISC.FOFM.BRIG.17.06 - Finance function

TOPICS: Role of finance

KEYWORDS: Bloom's: Knowledge

DATE CREATED: 6/23/2015 3:23 PM

DATE MODIFIED: 6/23/2015 3:23 PM

• The board of directors is the highest ranking body in a corporation, and the chairman of the board is the highest ranking

individual. The CEO generally works under the board and its chairman, and the board generally has the authority to remove the CEO under certain conditions. The CEO, however, cannot remove the board, but he or she can endeavor to have the board voted out and a new board voted in should a conflict arise. It is possible for a person to simultaneously serve as CEO and chairman of the board, though many corporate control experts believe it is bad to vest both offices in the same person.

• True

Chapter 1 (Fundamentals of Financial Management (Concise Edition) 9e Eugene Brigham Joel Houston) (Test Bank all Chapters) 1 / 4

Chapter 01: An Overview of Financial Management

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• False

ANSWER: True

DIFFICULTY: EASY

REFERENCES: 1-1 What Is Finance?

QUESTION TYPE: True / False

LEARNING OBJECTIVES: FOFM.BRIG.17.01.01 - What Is Finance?

NATIONAL STANDARDS: United States - BUSPROG.FOFM.BRIG.17.06 - Reflective thinking

STATE STANDARDS: United States - OH - DISC.FOFM.BRIG.17.06 - Finance function

TOPICS: Role of finance

KEYWORDS: Bloom's: Knowledge

DATE CREATED: 6/23/2015 3:23 PM

DATE MODIFIED: 8/5/2015 1:34 PM

• Partnerships and proprietorships generally have a tax advantage over corporations.
• True
• False

ANSWER: True

DIFFICULTY: EASY

REFERENCES: 1-3 Forms of Business Organization

QUESTION TYPE: True / False

LEARNING OBJECTIVES: FOFM.BRIG.17.01.03 - Forms of Business Organization

NATIONAL STANDARDS: United States - BUSPROG.FOFM.BRIG.17.06 - Reflective thinking

STATE STANDARDS: United States - OH - DISC.FOFM.BRIG.17.06 - Finance function

TOPICS: Forms of organization

KEYWORDS: Bloom's: Knowledge

DATE CREATED: 6/23/2015 3:23 PM

DATE MODIFIED: 6/23/2015 3:23 PM

• A disadvantage of the corporate form of organization is that corporate stockholders are more exposed to personal

liabilities in the event of bankruptcy than are investors in a typical partnership.

• True
• False

ANSWER: False

DIFFICULTY: EASY

REFERENCES: 1-3 Forms of Business Organization

QUESTION TYPE: True / False

LEARNING OBJECTIVES: FOFM.BRIG.17.01.03 - Forms of Business Organization

NATIONAL STANDARDS: United States - BUSPROG.FOFM.BRIG.17.06 - Reflective thinking

STATE STANDARDS: United States - OH - DISC.FOFM.BRIG.17.06 - Finance function

TOPICS: Forms of organization

KEYWORDS: Bloom's: Knowledge

DATE CREATED: 6/23/2015 3:23 PM

DATE MODIFIED: 6/23/2015 3:23 PM

• / 4

Chapter 01: An Overview of Financial Management

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• An advantage of the corporate form of organization is that corporations are generally less highly regulated than

proprietorships and partnerships.

• True
• False

ANSWER: False

DIFFICULTY: EASY

REFERENCES: 1-3 Forms of Business Organization

QUESTION TYPE: True / False

LEARNING OBJECTIVES: FOFM.BRIG.17.01.03 - Forms of Business Organization

NATIONAL STANDARDS: United States - BUSPROG.FOFM.BRIG.17.06 - Reflective thinking

STATE STANDARDS: United States - OH - DISC.FOFM.BRIG.17.06 - Finance function

TOPICS: Forms of organization

KEYWORDS: Bloom's: Knowledge

DATE CREATED: 6/23/2015 3:23 PM

DATE MODIFIED: 6/23/2015 3:23 PM

• Some partners in a partnership may have different rights, privileges, and responsibilities than other partners.
• True
• False

ANSWER: True

DIFFICULTY: EASY

REFERENCES: 1-3 Forms of Business Organization

QUESTION TYPE: True / False

LEARNING OBJECTIVES: FOFM.BRIG.17.01.03 - Forms of Business Organization

NATIONAL STANDARDS: United States - BUSPROG.FOFM.BRIG.17.06 - Reflective thinking

STATE STANDARDS: United States - OH - DISC.FOFM.BRIG.17.06 - Finance function

TOPICS: Forms of organization

KEYWORDS: Bloom's: Knowledge

DATE CREATED: 6/23/2015 3:23 PM

DATE MODIFIED: 6/23/2015 3:23 PM

• One advantage of the corporate form of organization is that it avoids double taxation.
• True
• False

ANSWER: False

DIFFICULTY: EASY

REFERENCES: 1-3 Forms of Business Organization

QUESTION TYPE: True / False

LEARNING OBJECTIVES: FOFM.BRIG.17.01.03 - Forms of Business Organization

NATIONAL STANDARDS: United States - BUSPROG.FOFM.BRIG.17.06 - Reflective thinking

STATE STANDARDS: United States - OH - DISC.FOFM.BRIG.17.06 - Finance function

TOPICS: Forms of organization

KEYWORDS: Bloom's: Knowledge

DATE CREATED: 6/23/2015 3:23 PM 3 / 4

Chapter 01: An Overview of Financial Management

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DATE MODIFIED: 6/23/2015 3:23 PM

• It is generally harder to transfer one's ownership interest in a partnership than in a corporation.
• True
• False

ANSWER: True

DIFFICULTY: EASY

REFERENCES: 1-3 Forms of Business Organization

QUESTION TYPE: True / False

LEARNING OBJECTIVES: FOFM.BRIG.17.01.03 - Forms of Business Organization

NATIONAL STANDARDS: United States - BUSPROG.FOFM.BRIG.17.06 - Reflective thinking

STATE STANDARDS: United States - OH - DISC.FOFM.BRIG.17.06 - Finance function

TOPICS: Forms of organization

KEYWORDS: Bloom's: Knowledge

DATE CREATED: 6/23/2015 3:23 PM

DATE MODIFIED: 6/23/2015 3:23 PM

• One danger of starting a proprietorship is that you may be exposed to personal liability if the business goes bankrupt.

This problem would be avoided if you formed a corporation to operate the business.

• True
• False

ANSWER: True

DIFFICULTY: EASY

REFERENCES: 1-3 Forms of Business Organization

QUESTION TYPE: True / False

LEARNING OBJECTIVES: FOFM.BRIG.17.01.03 - Forms of Business Organization

NATIONAL STANDARDS: United States - BUSPROG.FOFM.BRIG.17.06 - Reflective thinking

STATE STANDARDS: United States - OH - DISC.FOFM.BRIG.17.06 - Finance function

TOPICS: Forms of organization

KEYWORDS: Bloom's: Knowledge

DATE CREATED: 6/23/2015 3:23 PM

DATE MODIFIED: 6/23/2015 3:23 PM

• If a corporation elects to be taxed as an S corporation, then it can avoid the corporate tax. However, its stockholders

will have to pay personal taxes on the firm's net income.

• True
• False

ANSWER: True

DIFFICULTY: EASY

REFERENCES: 1-3 Forms of Business Organization

QUESTION TYPE: True / False

LEARNING OBJECTIVES: FOFM.BRIG.17.01.03 - Forms of Business Organization

NATIONAL STANDARDS: United States - BUSPROG.FOFM.BRIG.17.06 - Reflective thinking STATE STANDARDS: United States - OH - DISC.FOFM.BRIG.17.06 - Finance function

• / 4