Bleeehhhh – Flashcard

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Balloon payment
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Is due when a loan cones due
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Net cash flow
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Is the difference btwn cash inflows and cash out flows
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Forecasting sales for a new venture
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Is extremely difficult
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A___is defined as a group of customers or potential customers who have purchasing power and unsatisified needs
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Market
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Failure to take cash discounts from suppliers
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Typically makes a big difference to a firms financial well being since a business pays a high rate for use of suppliers money
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The assets most commonly used for security by asset based lending companies are
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Accounts receivable and inventory
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Which of the following is not a right of a common stock holder (shareholder) of a corp.
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Attend board of directors meeting
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The purchase price of a business is determined by negation between
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Buyer and seller
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If bill Bailey owner had violated the convenants of his loan agreement
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The lender could have declared the loan due in full immediately
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Which of the following is marketing strategies was not discussed in leacture notes
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bivaruate strategy
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A firm that provides substancial profits to its owner is called a
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attractive small firm
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Accounts receivable financing might include
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pledging receivable and factoring
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In laws create complications in a famly business
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bc more family members become involved in the firm the more difficult the fairness issues becomes
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Cumulative deprecation expense is shown on the
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balance sheet
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a SWOT analysis can be described best as
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a concise overview of the firms strategic situation
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the “bottom line” of the income statement is affected by all of the following except
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dividend paid to owners
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The terms 3.10, net 30 offer
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a 3% discount on a purchase paid within 10 days
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Stakeholders in a business are made up of which of the followinf
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owners, customers, employees
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Which of the following is not directoly involved in a firms management of its working capital
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Fixed assets
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Individuals who have entered busines as a result of finincial hardship or other severe negative conditions are called ___ enterpreneurs
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reluctant
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Which of the following choices contains a C that is not one of ther traditional five Cs of credit
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capital, collateral, consistency
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The federal govet assists in providing funds to smalll businesses through
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the small business administration
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A business plan is best described as a
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game plan
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The debt ratio is determined by dividing the firms total debt by the total
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assets
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Ch. 1 states that an enterpreeur is a person who does all the following except
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manages a small business for a salary
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The 3 primary rewards or incentives for entrepreneures are
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independence, personal fulfillment and profit
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The __ shows the results of a firms operations over a period of tim, usually one year
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income statement
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Which of the following sequences of events reflects a portion of the accouncting/bookkeeping process or cycle
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Analyzing economic activities, journalizing transactions, post, preparing a trial balance and preparing finincail statements
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A leveraged buyout involves a high level of ___ financing
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debt
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a person who starts a bnusiness is classified as a
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founder
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If a firms current ratio imporves from 1.5 to 2.0 what has likely happened
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Current liabilities have decreased
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Compared to firms that provide a good lifestyle for the owner but little in the way of attractibe returns, a form with potential for high growth and large profits has ___possible sources of financing
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many more
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The following are key terms included in all bank loan agreeements except
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insurance coverage
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In order to derive a cash flow statement, starting with the income statement the owner must add back in
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depreciation expense
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The ratio that compares the toalt of all current assests with the total of all current liabilities
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Current ratio
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Small businesses that have great prospects for growth are called
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gazelles
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When a funeral dorector buys a hearse with 100% bank financing she would
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Dr. Hearse and Cr., Note payable
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Granting credit to customers
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directly affects a firms cash account
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In considering its marketing strategy a new venture will typically concentrate on
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a select few target markets or just one
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The excutive summary in a business plan should come
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at the beginning
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An entity or individual granted the right to conduct business according to specified methods and terms of another party is known as a
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franchisee
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Financial analysis
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two of the above
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An example of a current asset is
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inventories
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The executive summary part of a business plan should be written
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last
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The group of accounts which you credit to increase are
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liabilities and capital
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The process of preparing a family successor for leadership in the family business often takes
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a decade or longer
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Ethical issues
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are questions of right and wroing
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The group of accounts which you debit to increase are
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assets and expenses
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When bankers look for evidence of whether an existing business will be able to repay a loan they usually base their assessments of this on
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what the firm has done in the past
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An accounting year ending on some date other than Dec 31st is called
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fiscal year
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The income statements reports financial information related to the following broad areas of business except
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accumulated depreciation
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The major distinction between cash basis and accrual basis accounting is that the
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point of recognition of revenue and expenses is different
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Different types of small business ownership opportunities include all of the following except
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bailouts
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Business planning
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is an ongoing process
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A loan covenant is very unlikely to require
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a fixed business strategy
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The two broad syratigies for building a competitive advantage are the ___ stratigies
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cost based and differention based
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The ethical infludence of a leader of a small business is
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more pronounced than that o a leader of a large corporation
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In comparesion to the general population, entrepreneurs have a
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higher internal locus of control
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The amount of the business owners initial investiment owners later investment in the business and retailed earings comprise
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owners equity
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Drawbacks of selling stick as a source of funds include
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loss of voting control of the company
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Money paid for the use of money is called
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intrest
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Which of the following is/are vaild techniques for valuing a company
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Asset-based valuation, market-comparable valuation and cash flow based valuation
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The title of an account that normally has a credit balance is
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accounts payable
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Net cash flow and net profit are
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different
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The bok value of a depreciable assest
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decreases over time
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The method of determining an average that applies more weight to the most recent year and less weuight to each preceding year is callled
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recency weighted average method
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To retain control over his business, an enterpreneur should seek initially to secure __ financing
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debt
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The purches of office supplies on credit is recorded by
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Dr, office supplies and Cr. accounts pay
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The tradeoffs that must be understoof between debt or equity financing include the following except
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return on assests
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The process of recording information in the ledger is called
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posting
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Managment of working capital focuses attention on
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cashe, accts receivable, inventory and accts pay
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The primary advantage an enterpreneur gains by leasing raher than buying facilities is
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a decrease in investment risk
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Which of the foloiwing is not one if the basic objectives of the businessw plan
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it outlines the approaches other emterpreneurs have taken in the same industry
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In a fmaily business the interests of the family and the interests of the business are best described as
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overlapping
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The equation “sales – expense = profits” would reperesent which finicial statement
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cash flow
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If a firms current ration __, its liquidity ___
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Increases; decreases
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When a business sells its accounts receivable to a finance company, this is called
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factoring
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Lifestaye businesses are so caled bc they achieve all but which one of the following
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promote an easy going, unstressful lifestyle
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Instead of corrowing money from equipment suppliers or a bank to purchase equipment, an increasing number of small businesses are
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chosing to lease the equipment
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In terms of willingness to assume risks, entrepreneurs show
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moderate risk taking propensity
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A primary benifit deriving from the strength of family relationships is the willingness of fmaily member
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sacrifice salaries and dividens when necessary
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Primary data collection methods are often classified as
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observational or questioning
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Slow paying credit accounts
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tie up the sellers working capital
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Which would be an example of an employee acting unethically toward an employer
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Taking unjustified sick leave
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The accounting concept of Materiatly is
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measured by whether or not the manner in which the item is treated or reflected
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Internal control policies and procedures are designed to
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Encourage adherence to the policies established by management
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Assuming that cash is avaliable payment for an acct pay with terms of 3/10 net 30 should be made on day
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10
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The accounting equation is best described as
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Assests plus expenses plus dividens plus losses eaquals liabitiles…
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Which of the following groups would be most interested in a business plan for a new venture
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bankers
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An example of a type C startup idea is
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baby stroller that pushes more easily and diffulct to over turn
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Which of the following dose not indicate a focus strategy
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Concentration on a single product
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The triditional physical store is sometimes referred to as the __ store
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bricks and mortar
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If a firm finances with equity rather than debt, net income will be greater bc
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There is no interest expense
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As described in the textbook, a type A idea involved
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providing customers with a product or service absent in their market but avaliable elsewhere
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Opportunistic entrepreneurs exhibit which one of the following traits
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plan for future growth
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Fixed assets include
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land
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An example of a fixed asset is
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a delivery truck used by a grocer to deliver merch to customers
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Harvesting refers to
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exiting a busines
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On the balance sheet, for every dollar of assets there must be a dollar of financing in the form of debt or
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owners equity
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Accts pay __ cash avaliable for the firm
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increase the amount of
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Which of the following is a true statement about location decisions
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Location decisions have an enduring effect on business operations
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The finincial statement showing what is owned, what is owed and the owners equity on a specific date is
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balance sheet
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The __ shows all cash receipts and payments involved in operation the business and managing its finincial activities
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cashe flow statement
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The marketing plan should innclude
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a competitor analysis
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An over view of the significant points of a business plan appear in the
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executive summary
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The type of finincial statement analysis that utilizes more that one year of finincial data is/are
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Horozontal analysis
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The liquidity of a firm is
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often measured by a ration of current assests to current liabilities
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Temptations and pressures to act unethically are such that small firms are
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more bulnerable that large fimrs
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The totaling of a column in a hournal or ledger account is called
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footing
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A family retreat is desigened to
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bring fmailuies together to discuss business matters
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As long as a fimrs rate of return is greater than the cost of the debt the owners rate of return on equity will __ as the firm uses more bedt
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increases
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Other assets include
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goodwill
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Which of the following is classified as an entrepreneur
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An owner manager who bought out the founder of a firm
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Accordiung to lecture if a business has an average collection oeriod of accounts receivable of 45 days the business should have a current ration of at least
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1.7 : 1
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After their first day Ashely and Canmeroin profits were $45 but their cash increased by only $30 bc their __ also increased
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accts. receivable

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