Question 1

_____ is a source of financing that reaps tax advantages from selling shares to workers.

Accepted Answer

A)  Employee stock ownership plan 
B)  Small business investment company 
C)  Specialized small business investment 
D)  Small company offering registration 
A)  Employee stock ownership plan 
B)  Small business investment company 
C)  Specialized small business investment 
D)  Small company offering registration A

Question 2

In the context of small businesses, which of the following is true of preferred stock?

Accepted Answer

A)  It usually conveys no voting rights to its holder. 
B)  Preferred stock dividends must be paid after common stock dividends. 
C)  It represents the owners' interest. 
D)  It usually consists of many identical shares. 
A)  It usually conveys no voting rights to its holder. 
B)  Preferred stock dividends must be paid after common stock dividends. 
C)  It represents the owners' interest. 
D)  It usually consists of many identical shares. A

Question 3

_____ is extended by vendors on purchases of inventory, equipment, and/or supplies.

Accepted Answer

A)  Venture capital 
B)  Asset-based financing 
C)  Mortgage loan 
D)  Trade credit 
A)  Venture capital 
B)  Asset-based financing 
C)  Mortgage loan 
D)  Trade credit D

Question 4

What is the purpose of specialized small business investment companies?

Accepted Answer

A)  They extend credit by vendors on purchases of inventory, equipment, and supplies. 
B)  They allow small businesses to reap tax advantages by selling stock shares to workers. 
C)  They sell common stock to the public through a regulated board such as Nasdaq without the hassle of an initial public offering. 
D)  They assist socially and economically disadvantaged businesses with venture capital. 
A)  They extend credit by vendors on purchases of inventory, equipment, and supplies. 
B)  They allow small businesses to reap tax advantages by selling stock shares to workers. 
C)  They sell common stock to the public through a regulated board such as Nasdaq without the hassle of an initial public offering. 
D)  They assist socially and economically disadvantaged businesses with venture capital.

Question 5

The claims of common and preferred stockholders on the assets of a firm take preference over those of the creditors in the event of default on a contractual obligation.

Accepted Answer

A) True 
 B)False

Question 6

What is the procedure to be followed by a small business owner to get a guaranteed SBA loan?

Accepted Answer

The procedure to be followed is for the

Question 7

In the context of small businesses, which of the following is true of business incubators?

Accepted Answer

A)  They reap tax advantages from selling shares to workers. 
B)  They nurture young firms and help them survive. 
C)  They are run by the Federal Small Business Administration. 
D)  They require a substantial return as either equity or profit. 
A)  They reap tax advantages from selling shares to workers. 
B)  They nurture young firms and help them survive. 
C)  They are run by the Federal Small Business Administration. 
D)  They require a substantial return as either equity or profit.

Question 8

Venture capitalists insist on looking at the business plan rather than the executive summary to help them make investment decisions.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is true about small company offering registration (SCOR)?

Accepted Answer

A)  It is a form of debt security with a standard denomination. 
B)  It is a contract that permits use of someone else's property. 
C)  It is the sale of common stock to the public through a regulated board. 
D)  It is not permitted in most states. 
A)  It is a form of debt security with a standard denomination. 
B)  It is a contract that permits use of someone else's property. 
C)  It is the sale of common stock to the public through a regulated board. 
D)  It is not permitted in most states.

Question 10

In the context of small businesses, _____ comes from lenders who will be repaid at a specified interest rate within a specified time span.

Accepted Answer

A)  equity financing 
B)  debt financing 
C)  venture funding 
D)  stock market funding 
A)  equity financing 
B)  debt financing 
C)  venture funding 
D)  stock market funding

Question 11

_____ is a form of debt security with a standard denomination, method of interest payment, and method of principal repayment.

Accepted Answer

A)  Lease 
B)  Bond 
C)  Chattel 
D)  Mortgage 
A)  Lease 
B)  Bond 
C)  Chattel 
D)  Mortgage

Question 12

Which of the following is true about debt securities?

Accepted Answer

A)  Debt securities are usually in the form of preferred stocks. 
B)  When companies are growing faster than they can make money, many prefer asset-based financing. 
C)  Publicly issued debt (such as bonds or commercial paper) is more commonly used by smaller companies. 
D)  Financial institutions, such as insurance companies, prefer to make short-term loans. 
A)  Debt securities are usually in the form of preferred stocks. 
B)  When companies are growing faster than they can make money, many prefer asset-based financing. 
C)  Publicly issued debt (such as bonds or commercial paper) is more commonly used by smaller companies. 
D)  Financial institutions, such as insurance companies, prefer to make short-term loans.

Question 13

_____ is current assets, less current liabilities, that a firm uses to produce goods and services and to finance the extension of credit to customers.

Accepted Answer

A)  Debt capital 
B)  Equity 
C)  Fixed asset 
D)  Working capital 
A)  Debt capital 
B)  Equity 
C)  Fixed asset 
D)  Working capital

Question 14

Which of the following is true of small business investment companies (SBICs)?

Accepted Answer

A)  They are limited to the sale of debentures. 
B)  The SBA matches each dollar an SBIC puts into a loan. 
C)  They are prohibited from selling securities similar to preferred stock. 
D)  They cannot make qualified SBA loans. 
A)  They are limited to the sale of debentures. 
B)  The SBA matches each dollar an SBIC puts into a loan. 
C)  They are prohibited from selling securities similar to preferred stock. 
D)  They cannot make qualified SBA loans.

Question 15

If a business has an operating history, its future needs can be estimated with relative accuracy, even with substantial growth.

Accepted Answer

A) True 
 B)False

Question 16

A _____ is debt backed by some physical asset other than land, such as machinery, equipment, or inventory.

Accepted Answer

A)  mortgage loan 
B)  common equity 
C)  preferred equity 
D)  chattel mortgage loan 
A)  mortgage loan 
B)  common equity 
C)  preferred equity 
D)  chattel mortgage loan

Question 17

In the context of small businesses, what is the purpose of business incubators?

Accepted Answer

Business incubators nurture young firms

Question 18

_____ have a superior claim to the firm's profits.

Accepted Answer

A)  Common stockholders 
B)  Insurance companies 
C)  Commercial banks 
D)  Preferred stockholders 
A)  Common stockholders 
B)  Insurance companies 
C)  Commercial banks 
D)  Preferred stockholders

Question 19

Working capital is an owner's share of the assets of a company.

Accepted Answer

A) True 
 B)False

Question 20

Most asset-based loans are financed against accounts receivable.

Accepted Answer

A) True 
 B)False

_____ is a source of financing that reaps tax advantages from selling shares to workers.

In the context of small businesses, which of the following is true of preferred stock?

_____ is extended by vendors on purchases of inventory, equipment, and/or supplies.

What is the purpose of specialized small business investment companies?

The claims of common and preferred stockholders on the assets of a firm take preference over those of the creditors in the event of default on a contractual obligation.

What is the procedure to be followed by a small business owner to get a guaranteed SBA loan?

In the context of small businesses, which of the following is true of business incubators?

Venture capitalists insist on looking at the business plan rather than the executive summary to help them make investment decisions.

Which of the following is true about small company offering registration (SCOR)?

In the context of small businesses, _____ comes from lenders who will be repaid at a specified interest rate within a specified time span.

_____ is a form of debt security with a standard denomination, method of interest payment, and method of principal repayment.

Which of the following is true about debt securities?

_____ is current assets, less current liabilities, that a firm uses to produce goods and services and to finance the extension of credit to customers.

Which of the following is true of small business investment companies (SBICs)?

If a business has an operating history, its future needs can be estimated with relative accuracy, even with substantial growth.

A _____ is debt backed by some physical asset other than land, such as machinery, equipment, or inventory.

In the context of small businesses, what is the purpose of business incubators?

_____ have a superior claim to the firm's profits.

Working capital is an owner's share of the assets of a company.

Most asset-based loans are financed against accounts receivable.

Starting Your Small Business

Family-Owned Businesses

Forms of Ownership of Small Businesses

Maintaining Good Government Relations and Business Ethics

Becoming the Owner of a Small Business

Planning, Organizing, and Managing a Small Business

Developing Marketing Strategies

Promoting and Distributing

How to Obtain and Manage Human Resources and Diversity in Small Companies

How to Maintain Relationships With Your Employees and Their Representatives

Obtaining and Laying Out Operating Facilities

Purchasing, Inventory, and Quality Control

Basic Financial Planning

Budgeting and Controlling Operations and Taxes

Using Computer Technology in Small Businesses

Risk Management, Insurance, and Crime Prevention

Filters

Exam 7: How to Obtain the Right Financing for Your Business

_____ is a source of financing that reaps tax advantages from selling shares to workers.

In the context of small businesses, which of the following is true of preferred stock?

_____ is extended by vendors on purchases of inventory, equipment, and/or supplies.

What is the purpose of specialized small business investment companies?

The claims of common and preferred stockholders on the assets of a firm take preference over those of the creditors in the event of default on a contractual obligation.

What is the procedure to be followed by a small business owner to get a guaranteed SBA loan?

In the context of small businesses, which of the following is true of business incubators?

Venture capitalists insist on looking at the business plan rather than the executive summary to help them make investment decisions.

Which of the following is true about small company offering registration (SCOR)?

In the context of small businesses, _____ comes from lenders who will be repaid at a specified interest rate within a specified time span.

_____ is a form of debt security with a standard denomination, method of interest payment, and method of principal repayment.

Which of the following is true about debt securities?

_____ is current assets, less current liabilities, that a firm uses to produce goods and services and to finance the extension of credit to customers.

Which of the following is true of small business investment companies (SBICs)?

If a business has an operating history, its future needs can be estimated with relative accuracy, even with substantial growth.

A _____ is debt backed by some physical asset other than land, such as machinery, equipment, or inventory.

In the context of small businesses, what is the purpose of business incubators?

_____ have a superior claim to the firm's profits.

Working capital is an owner's share of the assets of a company.

Most asset-based loans are financed against accounts receivable.

Starting Your Small Business

Family-Owned Businesses

Forms of Ownership of Small Businesses

Maintaining Good Government Relations and Business Ethics

Becoming the Owner of a Small Business

Planning, Organizing, and Managing a Small Business

Developing Marketing Strategies

Promoting and Distributing

How to Obtain and Manage Human Resources and Diversity in Small Companies

How to Maintain Relationships With Your Employees and Their Representatives

Obtaining and Laying Out Operating Facilities

Purchasing, Inventory, and Quality Control

Basic Financial Planning

Budgeting and Controlling Operations and Taxes

Using Computer Technology in Small Businesses

Risk Management, Insurance, and Crime Prevention

Filters