Final Assessment: Introduction to Financial Management

Liabilities are debts or obligations that an individual or organisation owes to themselves.

Assets are resources that do not have value and cannot be owned or controlled by an individual or organisation.

Loss occurs when revenue exceeds expenses.

Building wealth is not a benefit of personal financial management.

Personal financial management does not involve making informed financial decisions.

Saving involves using money to purchase assets with the goal of generating returns.

Certificates of deposit (CDs) offer higher interest rates than traditional savings accounts.

Money market accounts are a type of investment that represents ownership in a company.

Stocks tend to be riskier than bonds.

Mutual funds offer professional management and diversification but may also carry fees and risks.

The balance sheet includes information about assets, liabilities, and equity.

The purpose of ratio analysis is to provide insight into a company’s financial performance and position and inform decision making.

Equity financing involves borrowing money from lenders.

Debt financing allows businesses to obtain financing without giving up ownership.

Equity financing is often used to start a new business or to expand an existing one.

Which of the following is NOT a key task involved in financial management?

 Which of the following is NOT a type of debt financing?

Which of the following is NOT a financial asset that has the potential to grow in value over time?

Which of the following is NOT a way to save and invest for the future?

What is a budget used for in personal finance?

What is a budget used for in business finance?

 Which of the following is NOT a benefit of personal financial management?

Which of the following is NOT a way to manage money effectively?

Which of the following is NOT a way to build financial stability and security?

When reviewing and updating financial plans and budgets, which of the following may be necessary to do?

Which of the following is an example of a fixed expense?

Which of the following ratios measures a company’s ability to pay short-term obligations? 

Which of the following ratios measures the profitability of an investment or business?

Which of the following financial statements is NOT one of the three main financial statements used in business?

Which of the following is NOT a type of financial risk?