Question 1

(p.129 (templates on Connect))A feasibility study can help a potential business owner determine the liquidity of future assets.

Accepted Answer

A) True 
 B)False  False

Question 2

The break-even point is affected by several factors,including your fixed and variable costs and your selling price.

Accepted Answer

A) True 
 B)False  True

Question 3

Which category of financial ratios measure the level of debt the business has incurred?

Accepted Answer

A) Leverage ratios 
B) Profitability ratios 
C) Liquidity ratios 
D) Asset ratios 
A) Leverage ratios 
B) Profitability ratios 
C) Liquidity ratios 
D) Asset ratios A

Question 4

The current ratio is an example of a(n):

Accepted Answer

A) Liquidity ratio 
B) Profitability ratio 
C) Asset ratio 
D) Leverage ratio 
A) Liquidity ratio 
B) Profitability ratio 
C) Asset ratio 
D) Leverage ratio

Question 5

Many retail businesses are:

Accepted Answer

A) Capital intensive 
B) Labour intensive 
C) Inventory intense 
D) Employee intense 
A) Capital intensive 
B) Labour intensive 
C) Inventory intense 
D) Employee intense

Question 6

Which of the following is considered a fixed asset?

Accepted Answer

A) Machinery and equipment 
B) Inventory 
C) Mortgages on land 
D) Raw materials 
A) Machinery and equipment 
B) Inventory 
C) Mortgages on land 
D) Raw materials

Question 7

The cost of goods sold:

Accepted Answer

A) Is the price of the goods sold,including selling and other expenses. 
B) Is the price of the goods sold,plus an estimated expense of carrying the inventory in the store or warehouse facility. 
C) Is just the price of the goods,not including selling and other expenses. 
D) Is a value that is not relevant when it comes to constructing the pro forma income statement. 
A) Is the price of the goods sold,including selling and other expenses. 
B) Is the price of the goods sold,plus an estimated expense of carrying the inventory in the store or warehouse facility. 
C) Is just the price of the goods,not including selling and other expenses. 
D) Is a value that is not relevant when it comes to constructing the pro forma income statement.

Question 8

What are the three sections in a typical cash flow statement?

Accepted Answer

There are three sections to a typical ca

Question 9

The break-even point indicates the level of operation of the business at which:

Accepted Answer

A) Fixed expenses equal variable expenses 
B) Current assets equal current liabilities 
C) Total costs equal total revenue 
D) Total revenue is greater than total costs 
A) Fixed expenses equal variable expenses 
B) Current assets equal current liabilities 
C) Total costs equal total revenue 
D) Total revenue is greater than total costs

Question 10

Which of the following is considered an operating expense?

Accepted Answer

A) Capital expenditures 
B) Equipment leasing 
C) Employees' wages 
D) The purchase of beginning inventory 
A) Capital expenditures 
B) Equipment leasing 
C) Employees' wages 
D) The purchase of beginning inventory

Question 11

The times interest earned ratio is an example of a(n):

Accepted Answer

A) Liquidity ratio 
B) Profitability ratio 
C) Asset ratio 
D) Leverage ratio 
A) Liquidity ratio 
B) Profitability ratio 
C) Asset ratio 
D) Leverage ratio

Question 12

Which of the following is a long-term liability?

Accepted Answer

A) bills from suppliers 
B) raw materials you will need for your initial inventory 
C) notes on machinery and equipment 
D) short-term loans from banks 
A) bills from suppliers 
B) raw materials you will need for your initial inventory 
C) notes on machinery and equipment 
D) short-term loans from banks

Question 13

Non-cash accounting entries that may show up on an income statement such as depreciation,amortization,and asset transfers are ignored in forecasting the cash flow statement.

Accepted Answer

A) True 
 B)False

Question 14

If the business carries an inventory of $25,000 and its overall net revenue is $150,000,inventory turnover is three times per year.

Accepted Answer

A) True 
 B)False

Question 15

(p.129 (templates on Connect))Which of the following is a comprehensive,objective evaluation of the viability of your new business venture?

Accepted Answer

A) A lean business plan 
B) A pro forma income statement 
C) A ratio analysis 
D) A feasibility study 
A) A lean business plan 
B) A pro forma income statement 
C) A ratio analysis 
D) A feasibility study

Question 16

What is the formula used to determine cash flow from operating activities?

Accepted Answer

Cash flow from operating activities can

Question 17

Many new businesses take several months or even years before they operate "in the black."

Accepted Answer

A) True 
 B)False

Question 18

All of the following are examples of variable expenses,except:

Accepted Answer

A) Insurance premiums 
B) Salaries and commissions 
C) Advertising and promotion 
D) Travel costs 
A) Insurance premiums 
B) Salaries and commissions 
C) Advertising and promotion 
D) Travel costs

Question 19

Which of the following is not considered a soft cost?

Accepted Answer

A) Utility deposits 
B) Pre-opening advertising 
C) Promotion expenses 
D) Lease of furniture 
A) Utility deposits 
B) Pre-opening advertising 
C) Promotion expenses 
D) Lease of furniture

Question 20

Which of the following financial statements provides a "snapshot" of your business's health at one point in time?

Accepted Answer

A) Income statement 
B) Cash flow statement 
C) Balance sheet 
D) Pro forma income report 
A) Income statement 
B) Cash flow statement 
C) Balance sheet 
D) Pro forma income report

(p.129 (templates on Connect))A feasibility study can help a potential business owner determine the liquidity of future assets.

The break-even point is affected by several factors,including your fixed and variable costs and your selling price.

Which category of financial ratios measure the level of debt the business has incurred?

The current ratio is an example of a(n):

Many retail businesses are:

Which of the following is considered a fixed asset?

The cost of goods sold:

What are the three sections in a typical cash flow statement?

The break-even point indicates the level of operation of the business at which:

Which of the following is considered an operating expense?

The times interest earned ratio is an example of a(n):

Which of the following is a long-term liability?

Non-cash accounting entries that may show up on an income statement such as depreciation,amortization,and asset transfers are ignored in forecasting the cash flow statement.

If the business carries an inventory of $25,000 and its overall net revenue is $150,000,inventory turnover is three times per year.

(p.129 (templates on Connect))Which of the following is a comprehensive,objective evaluation of the viability of your new business venture?

What is the formula used to determine cash flow from operating activities?

Many new businesses take several months or even years before they operate "in the black."

All of the following are examples of variable expenses,except:

Which of the following is not considered a soft cost?

Which of the following financial statements provides a "snapshot" of your business's health at one point in time?

Buying a Franchise

Marketing

Financing Your Business and Accounting Practices

Business Plans

Cost and Profitability Assessment

Market Feasibility Study

Exploring Business Ideas and Opportunities

Assessing Your Potential for an Entrepreneurial Career

Buying a Business

Sales

Filters

Exam 4: Legal Considerations

(p.129 (templates on Connect))A feasibility study can help a potential business owner determine the liquidity of future assets.

The break-even point is affected by several factors,including your fixed and variable costs and your selling price.

Which category of financial ratios measure the level of debt the business has incurred?

The current ratio is an example of a(n):

Many retail businesses are:

Which of the following is considered a fixed asset?

The cost of goods sold:

What are the three sections in a typical cash flow statement?

The break-even point indicates the level of operation of the business at which:

Which of the following is considered an operating expense?

The times interest earned ratio is an example of a(n):

Which of the following is a long-term liability?

Non-cash accounting entries that may show up on an income statement such as depreciation,amortization,and asset transfers are ignored in forecasting the cash flow statement.

If the business carries an inventory of $25,000 and its overall net revenue is $150,000,inventory turnover is three times per year.

(p.129 (templates on Connect))Which of the following is a comprehensive,objective evaluation of the viability of your new business venture?

What is the formula used to determine cash flow from operating activities?

Many new businesses take several months or even years before they operate "in the black."

All of the following are examples of variable expenses,except:

Which of the following is not considered a soft cost?

Which of the following financial statements provides a "snapshot" of your business's health at one point in time?

Buying a Franchise

Marketing

Financing Your Business and Accounting Practices

Business Plans

Cost and Profitability Assessment

Market Feasibility Study

Exploring Business Ideas and Opportunities

Assessing Your Potential for an Entrepreneurial Career

Buying a Business

Sales

Filters