Question 1

Which of the following is not a current asset?

Accepted Answer

A)  Cash 
B)  Vehicles 
C)  Inventory 
D)  Prepaid expenses 
A)  Cash 
B)  Vehicles 
C)  Inventory 
D)  Prepaid expenses

Question 2

Computers, cash registers, and copiers would be listed in start-up costs under

Accepted Answer

A)  inventory. 
B)  supplies. 
C)  machinery and equipment. 
D)  prepaid expenses. 
A)  inventory. 
B)  supplies. 
C)  machinery and equipment. 
D)  prepaid expenses.

Question 3

A first step in calculating breakeven is to

Accepted Answer

A)  separate fixed and variable expenses. 
B)  identify current and fixed assets. 
C)  complete a balance sheet. 
D)  determine cash flow. 
A)  separate fixed and variable expenses. 
B)  identify current and fixed assets. 
C)  complete a balance sheet. 
D)  determine cash flow.

Question 4

Which of the following is not an accounting method?

Accepted Answer

A)  Cash basis 
B)  Accrual basis 
C)  Completed-contract method 
D)  Calculation basis 
A)  Cash basis 
B)  Accrual basis 
C)  Completed-contract method 
D)  Calculation basis

Question 5

The cash basis of accounting is the simplest and easiest to use.

Accepted Answer

A) True 
 B)False

Question 6

Items that the entrepreneur buys and resells to customers are

Accepted Answer

A)  supplies. 
B)  inventory. 
C)  deposits. 
D)  prepaid expenses. 
A)  supplies. 
B)  inventory. 
C)  deposits. 
D)  prepaid expenses.

Question 7

Those who provide financing in exchange for ownership are equity investors.

Accepted Answer

A) True 
 B)False

Question 8

Collateral consists of personal and business assets, which the bank will sell if the loan is not repaid.

Accepted Answer

A) True 
 B)False

Question 9

The money that is taken by a proprietor for his or her wages is not a tax deductible expense.

Accepted Answer

A) True 
 B)False

Question 10

Depreciation affects cash but does not affect profit.

Accepted Answer

A) True 
 B)False

Question 11

Cost of goods sold

Accepted Answer

A)  includes any costs for products, material, or labor that are directly related to the sale. 
B)  in a retail firm will be the cost paid to suppliers for inventory. 
C)  in a service firm will include labor costs. 
D)  all of the above. 
A)  includes any costs for products, material, or labor that are directly related to the sale. 
B)  in a retail firm will be the cost paid to suppliers for inventory. 
C)  in a service firm will include labor costs. 
D)  all of the above.

Question 12

A company's possessions are called

Accepted Answer

A)  debts. 
B)  assets. 
C)  liabilities. 
D)  accounts. 
A)  debts. 
B)  assets. 
C)  liabilities. 
D)  accounts.

Question 13

Current assets are those that are easily converted into cash.

Accepted Answer

A) True 
 B)False

Question 14

Venture capital firms

Accepted Answer

A)  provide debt financing but not equity financing. 
B)  invest in companies that have the potential to grow quickly. 
C)  usually invest less than $500,000 in a small business. 
D)  all of the above. 
A)  provide debt financing but not equity financing. 
B)  invest in companies that have the potential to grow quickly. 
C)  usually invest less than $500,000 in a small business. 
D)  all of the above.

Question 15

Those who provide financing in exchange for ownership are called

Accepted Answer

A)  debt financing. 
B)  equity investors. 
C)  bank loans. 
D)  prepaid investments. 
A)  debt financing. 
B)  equity investors. 
C)  bank loans. 
D)  prepaid investments.

Question 16

The proprietor's wages and loan principal appear on the cash flow statement.

Accepted Answer

A) True 
 B)False

Question 17

The cash basis of accounting records a sale when the payment is received from a customer.

Accepted Answer

A) True 
 B)False

Question 18

The minimum level of sales necessary for the company's survival is the

Accepted Answer

A)  cash flow. 
B)  break-even point. 
C)  retained earnings. 
D)  equity. 
A)  cash flow. 
B)  break-even point. 
C)  retained earnings. 
D)  equity.

Question 19

Which of the following accounting methods is the simplest and easiest to use?

Accepted Answer

A)  Cash basis 
B)  Accrual basis 
C)  Completed-contract method 
D)  All of the above 
A)  Cash basis 
B)  Accrual basis 
C)  Completed-contract method 
D)  All of the above

Question 20

Finance companies may provide loans to businesses that are

Accepted Answer

A)  considered a high risk. 
B)  in industries with high failure rates. 
C)  in a marginal financial condition. 
D)  all of the above. 
A)  considered a high risk. 
B)  in industries with high failure rates. 
C)  in a marginal financial condition. 
D)  all of the above.

Which of the following is not a current asset?

Computers, cash registers, and copiers would be listed in start-up costs under

A first step in calculating breakeven is to

Which of the following is not an accounting method?

The cash basis of accounting is the simplest and easiest to use.

Items that the entrepreneur buys and resells to customers are

Those who provide financing in exchange for ownership are equity investors.

Collateral consists of personal and business assets, which the bank will sell if the loan is not repaid.

The money that is taken by a proprietor for his or her wages is not a tax deductible expense.

Depreciation affects cash but does not affect profit.

Cost of goods sold

A company's possessions are called

Current assets are those that are easily converted into cash.

Venture capital firms

Those who provide financing in exchange for ownership are called

The proprietor's wages and loan principal appear on the cash flow statement.

The cash basis of accounting records a sale when the payment is received from a customer.

The minimum level of sales necessary for the company's survival is the

Which of the following accounting methods is the simplest and easiest to use?

Finance companies may provide loans to businesses that are

Introduction

Management and Personnel

The Legal Section

Insurance

Suppliers

Entrepreneurship Today

The Entrepreneur

Starting a New Business

Buying an Existing Business

Franchising

Women-Owned and Minority-Owned Businesses

Home-Based Businesses

Family Businesses

New Product Development

Business Growth and the Entrepreneur

Global Business

Filters

Exam 3: Start-Up Costs and Financing

Which of the following is not a current asset?

Computers, cash registers, and copiers would be listed in start-up costs under

A first step in calculating breakeven is to

Which of the following is not an accounting method?

The cash basis of accounting is the simplest and easiest to use.

Items that the entrepreneur buys and resells to customers are

Those who provide financing in exchange for ownership are equity investors.

Collateral consists of personal and business assets, which the bank will sell if the loan is not repaid.

The money that is taken by a proprietor for his or her wages is not a tax deductible expense.

Depreciation affects cash but does not affect profit.

Cost of goods sold

A company's possessions are called

Current assets are those that are easily converted into cash.

Venture capital firms

Those who provide financing in exchange for ownership are called

The proprietor's wages and loan principal appear on the cash flow statement.

The cash basis of accounting records a sale when the payment is received from a customer.

The minimum level of sales necessary for the company's survival is the

Which of the following accounting methods is the simplest and easiest to use?

Finance companies may provide loans to businesses that are

Introduction

Management and Personnel

The Legal Section

Insurance

Suppliers

Entrepreneurship Today

The Entrepreneur

Starting a New Business

Buying an Existing Business

Franchising

Women-Owned and Minority-Owned Businesses

Home-Based Businesses

Family Businesses

New Product Development

Business Growth and the Entrepreneur

Global Business

Filters