Question 1

A company's possessions are called liabilities.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is FALSE?

Accepted Answer

A)  The principal payment on a loan is not an operating expense. 
B)  Increases in inventory will not decrease net profit. 
C)  Depreciation decreases net profit but does not decrease cash. 
D)  The seasonality of a business will not affect cash flow. 
A)  The principal payment on a loan is not an operating expense. 
B)  Increases in inventory will not decrease net profit. 
C)  Depreciation decreases net profit but does not decrease cash. 
D)  The seasonality of a business will not affect cash flow.

Question 3

A lease deposit is often

Accepted Answer

A)  $500. 
B)  $1,000. 
C)  equal to two months rent. 
D)  equal to six months rent. 
A)  $500. 
B)  $1,000. 
C)  equal to two months rent. 
D)  equal to six months rent.

Question 4

Which of the following would be listed under "other assets?"

Accepted Answer

A)  Cash 
B)  Accounts receivable 
C)  Patents 
D)  Renovations 
A)  Cash 
B)  Accounts receivable 
C)  Patents 
D)  Renovations

Question 5

Start-up costs are the costs necessary to open the business.

Accepted Answer

A) True 
 B)False

Question 6

The opening day balance sheet corresponds closely with

Accepted Answer

A)  the income statement. 
B)  the cash flow statement. 
C)  the start-up costs. 
D)  retained earnings. 
A)  the income statement. 
B)  the cash flow statement. 
C)  the start-up costs. 
D)  retained earnings.

Question 7

Ongoing expenditures, such as general and administrative expenses, which occur in the process of selling and managing a company are known as

Accepted Answer

A)  cost of goods sold. 
B)  retained earnings. 
C)  gross margin. 
D)  operating expenses. 
A)  cost of goods sold. 
B)  retained earnings. 
C)  gross margin. 
D)  operating expenses.

Question 8

Prime rate

Accepted Answer

A)  is always below 5%. 
B)  is a benchmark rate that fluctuates depending on economic conditions in the country. 
C)  is set by venture capital firms. 
D)  does not affect small businesses. 
A)  is always below 5%. 
B)  is a benchmark rate that fluctuates depending on economic conditions in the country. 
C)  is set by venture capital firms. 
D)  does not affect small businesses.

Question 9

Liabilities are classified as current and long term.

Accepted Answer

A) True 
 B)False

Question 10

Machinery and equipment are current assets.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is not a category used for assets on the balance sheet?

Accepted Answer

A)  Current 
B)  Fixed 
C)  Other 
D)  Accrued 
A)  Current 
B)  Fixed 
C)  Other 
D)  Accrued

A company's possessions are called liabilities.

Which of the following is FALSE?

A lease deposit is often

Which of the following would be listed under "other assets?"

Start-up costs are the costs necessary to open the business.

The opening day balance sheet corresponds closely with

Ongoing expenditures, such as general and administrative expenses, which occur in the process of selling and managing a company are known as

Prime rate

Liabilities are classified as current and long term.

Machinery and equipment are current assets.

Which of the following is not a category used for assets on the balance sheet?

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Exam 3: Start-Up Costs and Financing

A company's possessions are called liabilities.

Which of the following is FALSE?

A lease deposit is often

Which of the following would be listed under "other assets?"

Start-up costs are the costs necessary to open the business.

The opening day balance sheet corresponds closely with

Ongoing expenditures, such as general and administrative expenses, which occur in the process of selling and managing a company are known as

Prime rate

Liabilities are classified as current and long term.

Machinery and equipment are current assets.

Which of the following is not a category used for assets on the balance sheet?

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