Business test 3 – Flashcards
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A ____ is a voluntary agreement betwee two or more people to jointly own a business
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partnership
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A ____ is a oluntary agreement between two or more people to joiny own a business
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partnership
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A ___ is a legal entity created by permission of a state or federal government
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corporation
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____ are people willing to take the risk of starting, owning and operating a business
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Entrepreneurs
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A true entrepreneur, Steve Jobs of APPLE aimed to change the world through the introduction of blockbuster business concept. Most people who launch new firms expect to better themseves, but only ____ expect huge transformative growth on the order of Walmart
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30%
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all of the following are entrepreneurial characteristics, EXCEPT
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aversion to risk
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_____ are wealthy individuals who invest in new and growing fimrs
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Angel investors
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Sources of start-up funding include:
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personal savings credit cards family and friends all of the sources in this list
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Entrepreneurs must understand that no conventional lender, whether private or public, will:
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loan 100 percent of the start-up funding
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In a business plan, a commercial lender would expect to find
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a description of the business, competitive analysis, operating procedures, and financial data
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____ is a system for recognizing, recording, organizing, summarizing, analyzing and reporting information about the finacial transactionsthat affect an organization
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Accounting
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Managers, stockholders, employees, and creditors are:
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all users of accounting information to assess a comany's finances
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Tiny Timber Tree Farms applied to United bank for a business loan. Which financial statements would the loan officer of the bank be most likely to request?
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Balance sheets, income, statements and cash flow statements
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____accountatnts provide individuals and businesses a wide variety of services on a fee basis, including income tax preparation, external audtiting services, and consultation on a variety of accouting issues and problems
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Public
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The major output of financial accouting is a set of statements including the:
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balance sheet, income statemnt and statement of cash flows
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The____ summarizes a firm's sfinancial position at a specific point in time (i.e. a specific quarter or year)
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balance sheet
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The income statement shows that:
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Revenue- Expenses = Net Income
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The function of ___ is to determine the types of assets needed to achieve the goals of the organization and to determine the best way to ovtain the funds needed to acquire those assets
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finance
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Financial managers perform a number of functions including
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Planning wise use of financial resources, including working capital decisions and investment opportunity decisions
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A ___ measures the ability to pay short-term liabilities as they come due
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liquidity ratio
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A ____ measures the extent to which a firm relies on debt to meet its financing needs
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Leverage ratio
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Financial planning asks all the following questions EXCEPT
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how does the firm determine its pricing strategy?
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In its Narrowest sense, a firm's _____consists of its holdings of currency and demand deposis
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Cash
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Firms that ____ may find that theycan achieve their objective by developing a relationship with a firm that offers factoring services
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Rely heavily on credit sales and want to speed up their receipt of cash
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the three basic types of securities corporations issue to raise long-term financial capital are____
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common stock, preferred stock and bonds
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___ are the after-tax distribution of profits to corporate owners
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Dividends
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Common stockholders have all of the following rights except:
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the right to repayment of the principal
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A stockholder will recognize a __ if upon selling his shares, he receives a higher price/hsare than the original price/ share that he paid for the stock
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Capital gain
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An initial ____ is the first time a corporation issues stock that may be purchased by the general public
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public offering
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Individula investors are not permitted to directly trade stockes on NYSE or NASDAQ. Therefore, individuals must seek the help of a____
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broker
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As owner of your company, you are condisdering expansion. Two options you might explore would be leasing a building or buying a building. You ask your finance Officer to explore the options. Your Finance Officer is liely to talk to
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Accounting and CEO
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