Question 1

Many Canadians believe that Ontarians pay the highest HST rates in Canada, however, which of the following provinces actually pays more than those living in the province of Ontario?

Accepted Answer

A)   Saskatchewan
B)   New Brunswick
C)   British Columbia
D)   Nova Scotia D

Question 2

It is estimated that between 75 and 85 percent of new startups use some form of bootstrapping to help finance themselves.

Accepted Answer

A) True 
 B)False  True

Question 3

Why is "capacity" considered the most critical of the 5 C's of credit?

Accepted Answer

The lender will want to know exactly how you intend to repay the loan. They will consider the current or expected level of income from the business and your income that may come from any other sources.

Question 4

The rate of interest that banks charge their "best customers" is called:

Accepted Answer

A)   The bank rate
B)   The prime rate
C)   The discount rate
D)   The coupon rate

Question 5

Collateral is a secondary source for repayment of the loan if your cash flow from the business in insufficient to fulfill the obligation

Accepted Answer

A) True 
 B)False

Question 6

______ is when a business raises money by selling stock to investors.

Accepted Answer

A)   Debt financing
B)   Equity financing
C)   Share financing
D)   Stock financing

Question 7

Which industries are increasingly using crowdfunding to raise funds?

Accepted Answer

A)   Textiles
B)   Technology and media
C)   Transportation
D)   Telephone

Question 8

Explain the concept of "bootstrapping".

Accepted Answer

The answer of Explain the concept of "bootstrapping"....

Question 9

Capital is the cash and other liquid assets you personally have or are prepared to invest in the business; it is undoubtedly the most critical of the five factors.

Accepted Answer

A) True 
 B)False

Question 10

By registering for an HST or GST account on income before it reaches $30,000 your business is able to claim for the HST/GST refund that you have paid on your purchases.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following sources of financing is used most frequently by entrepreneurs?

Accepted Answer

A)   Commercial credit cards
B)   Leasing
C)   Personal savings
D)   Trade credit

Question 12

Debt financing is when a firm raises money by selling all of the following, except:

Accepted Answer

A)   Bonds
B)   Bills
C)   Notes
D)   Shares

Question 13

The ______ of the loan is the total amount of money you have been loaned.

Accepted Answer

A)   Obligations
B)   Principal
C)   Summation
D)   Capital cost

Question 14

______ is the cash and other liquid assets you personally have or are prepared to invest in the business.

Accepted Answer

A)   Character
B)   Capital
C)   Collateral
D)   Capacity

Question 15

All provinces in Canada are required to participate in the harmonized sales tax (HST) program.

Accepted Answer

A) True 
 B)False

Question 16

Bank loans, both operating and term loans, are demand loans so that regardless of the term, the bank can and will demand they be paid back if it feels the company is getting into trouble.

Accepted Answer

A) True 
 B)False

Question 17

The problem with using debt to finance business activities is that it can be difficult to service and a burden on your cash flows.

Accepted Answer

A) True 
 B)False

Question 18

What are the 5 C's of Credit?

Accepted Answer

The answer of What are the 5 C's of Credit?...

Question 19

The supplies of real property (e.g., land, buildings, and interests in such property) are exempt from GST in Canada.

Accepted Answer

A) True 
 B)False

Question 20

Describe the advantages of using debt to raise money for capital expenditures.

Accepted Answer

The answer of Describe the advantages of using debt to...

Exam 7: Financing Your Business and Accounting Practices

Many Canadians believe that Ontarians pay the highest HST rates in Canada, however, which of the following provinces actually pays more than those living in the province of Ontario?

It is estimated that between 75 and 85 percent of new startups use some form of bootstrapping to help finance themselves.

Why is "capacity" considered the most critical of the 5 C's of credit?

The rate of interest that banks charge their "best customers" is called:

Collateral is a secondary source for repayment of the loan if your cash flow from the business in insufficient to fulfill the obligation

______ is when a business raises money by selling stock to investors.

Which industries are increasingly using crowdfunding to raise funds?

Explain the concept of "bootstrapping".

Capital is the cash and other liquid assets you personally have or are prepared to invest in the business; it is undoubtedly the most critical of the five factors.

By registering for an HST or GST account on income before it reaches $30,000 your business is able to claim for the HST/GST refund that you have paid on your purchases.

Which of the following sources of financing is used most frequently by entrepreneurs?

Debt financing is when a firm raises money by selling all of the following, except:

The ______ of the loan is the total amount of money you have been loaned.

______ is the cash and other liquid assets you personally have or are prepared to invest in the business.

All provinces in Canada are required to participate in the harmonized sales tax (HST) program.

Bank loans, both operating and term loans, are demand loans so that regardless of the term, the bank can and will demand they be paid back if it feels the company is getting into trouble.

The problem with using debt to finance business activities is that it can be difficult to service and a burden on your cash flows.

What are the 5 C's of Credit?

The supplies of real property (e.g., land, buildings, and interests in such property) are exempt from GST in Canada.

Describe the advantages of using debt to raise money for capital expenditures.