Midterm

Question 1

Stages of Exchange Development

Answer 1

1st stage - Direct Appropriation stage
2nd stage- Direct/Barter
3rd stage - the use of Commodity as Money
4th stage - credit money

Question 2

What early man’s need was provided by its natural resources

Answer 2

1st stage - Direct Appropriation stage

Question 3

Exchange of Goods and services directly exchange for other goods and services

Answer 3

2nd stage- Barter/direct

Question 4

Some goods, because of its usefulness, beauty, scarcity, and rarity commands a wide acceptance as medium of exchange

Answer 4

3rd stage- the use of commodity as money

Question 5

Money whose monetary value is more than its material or commodity value

Answer 5

4th stage - credit money

Question 6

Money comes from what word?

Answer 6

Greek

Question 7

Greek word of Money

Answer 7

moneta

Question 8

anything which is used as a medium of exchange and is widely accepted as payment

Answer 8

money

Question 9

a mandatory law that.make money acveptec as payment

Answer 9

Legal Tender power

Question 10

it give money its Purchasing Power

Answer 10

Legal Tender Power

Question 11

Functions of Money

Answer 11

as a medium of exchange
As a standard unit of value
As a standard of deferred payment
As a store of value

Question 12

money serves as a common medium or tool of exchange

Answer 12

As a medium of exchange

Question 13

money serves as a mesuring device in which value of goods and services can be expressed

Answer 13

as a standard unit of value

Question 14

money can be use to pay for debts and obligations

Answer 14

as a standard of deferred payments

Question 15

Money has the quality to be kept or stored for future use

Answer 15

As a store of value

Question 16

characteristics of money

Answer 16

general acceptance
Stability
Durability
Portability
Malleability
Divisibility
Uniformity
Homogeneity
Cognizability

Question 17

Accepted by anyone kn exchange for goods and services

Answer 17

general acceptance

Question 18

Value must not change every now and then

Answer 18

stability

Question 19

money is made ligjt, to be easily carried

Answer 19

Portability

Question 20

Design should not only aesthetically beautiful but also difficult to counterfeit

Answer 20

cognizability

Question 21

money must withstand longer period of time agains wear and tear

Answer 21

Durability

Question 22

Divisible into small parts and likewise posaible to recombine these small parts into bigger denominations

Answer 22

Divisibility

Question 23

money can be melted and beaten inti desired shape to conform to the specification of the government

Answer 23

Malleability

Question 24

Money must conform to certain standard to avoid confusion (siz, shape, and color)

Answer 24

uniformity

Question 25

material used must be uniform in composition throughout

Answer 25

homogeneity

Question 26

Forms of money

Answer 26

Commodity Money Currency (bills and coins) Check

Question 27

money that is made up of precious metal or another value such as non metallic money and metallic money or gold/silver

Answer 27

Commodity money

Question 28

domestic currency can only be used in its country of origin

Answer 28

currency

Question 29

generally used in business and persons in conducting business, as well.as personal transaction

Answer 29

Check

Question 30

relate to decisions concerning stocks and bonds and inclue a number of activities such as security analysis, portfolio theory, market analysis

Answer 30

investments

Question 31

Is a system that includes the circulation of money, the granting of credit, the making of investments and the provision of banking facilities

Answer 31

Finance

Question 32

Also called as corporate finance. Focuses on decision relatinh to how much and what types of assets to buu

Answer 32

financial.management

Question 33

relate to the markets where interest rates, along with stock anr bond prices are determined

Answer 33

capital markets

Question 34

A business owned by one individual

Answer 34

sole proprietorship

Question 35

A business owned by two or more.person

Answer 35

partnership

Question 36

A legal entity created by a stage, separate and distinc from its owner and managers

Answer 36

Corportation

Question 37

Advantage of sole proprietorship and parnership (familiarized)

Answer 37

Ease of formation Subject to few regulation No corporate income taxes

Question 38

Disadvantage of sole proprietorship and parnership (familiarized)

Answer 38

difficult to raise capital Unlimited liability Limited life

Question 39

Advantage of Corporation (familiarized)

Answer 39

unlimited life Easy to tranfer ownership Limited liability Ease to raise capital

Question 40

Disadvantage of Corporation (familiarized)

Answer 40

Double taxation Cost to setup and report filing

Question 41

Means planning, organizing, directing, and controlling the financial activities

Answer 41

Financial Management

Question 42

Applying general management principles to financial resources of th enterprise

Answer 42

financial management

Question 43

It may be defined as the area or function in an organization which is concerned with profitability, etc

Answer 43

Financial management

Question 44

Generally cincered with short term working capital management

Answer 44

Financial management

Question 45

objective of Financal management

Answer 45

generally concerned with procurement, allocation, and control of financial resources

Question 46

function of financal management

Answer 46

estimation of capital requirements Determination of capital composition Choice of sources of funds Investment of funds Disposal of surplus Management of cash Financial control

Question 47

a finance manager has to make estimation with regards to capital requirements of the company. This will depend upon expected cost and profits

Answer 47

estimation of capital requirements

Question 48

the capital structure have to be decider. This involves short term and long term dept equilty analysis

Answer 48

Determination of capital composition

Question 49

a company has manu choices like issue of shares and debentures, loans to be taken from banks and financial institution, public deposits to be drawn like in form of bonds

Answer 49

choice of sources of funds

Question 50

The finance manager has to decide to allocate funds into profitable ventures

Answer 50

investement of funds

Question 51

the net profits decision have to be made by financial management

Answer 51

Disposal of surplus

Question 52

type of disposal that includes indentifying thr rate of dividends and other benefits like bonus

Answer 52

dividend declaration

Question 53

Tyoe of disposal that the volume has to be decided which will depend upon expansional, innovational, diversification plans of the company

Answer 53

retailed profits

Question 54

Finance manager has to make decision in regard to cash management

Answer 54

management of cash

Question 55

It is required for many purposes like payment of waged and salaries, etcs

Answer 55

cash

Question 56

The finance manager has not only to plan, procure, and utilize the funds but he also has to exercuse control over finance

Answer 56

financial control

Question 57

Perform data analysis and advise senior managers on profit maximizing ideas

Answer 57

Financial managers

Question 58

The produce financial reports, direct investments activities and develop strategies and plans

Answer 58

financial manager

Question 59

task of financial manager

Answer 59

raising funds Allocation of funds Profit planning Understanding capital market

Question 60

In order to meet the obligation of the business it is important to have enough cash and liquidity. It is the responsibility of finance manager to decide the ratio between depts and equity

Answer 60

Raising of funds

Question 61

the funds should allocate in such manner that they are optically use

Answer 61

Allocation of funds

Question 62

is one of the prime function of any business organization

Answer 62

Profit planning

Question 63

It is important of survival and sustenance of any organization

Answer 63

profit earning

Question 64

it arises due tomany factors such as pricing, etc

Answer 64

Profit

Question 65

It is incurred by the use of fixed factors of production such as land and machinery

Answer 65

fixed cost

Question 66

It must be calculated in order to replaced those factors of production which us gone thrown wear abd tear

Answer 66

Opportunity cost

Question 67

A clear understanding of capital market is impirtant function of a financial manager

Answer 67

Understanding capital market