Business test 3 – Flashcards
Unlock all answers in this set
Unlock answersquestion
The majority of businesses today are formed as____
answer
sole proprietorships
question
Sole proprietors have ___ for the debts of their companies
answer
unlimited liability
question
Historically, the three basic forms of business ownership in the United states have been the:___
answer
sole proprietorship, partnership, and corporation
question
Which of the following is not an accurate statement about a sole proprietorshi?
answer
legally the business is considered separate and distant from its owner
question
A ____ is a voluntary agreement betwee two or more people to jointly own a business
answer
partnership
question
A ____ is a oluntary agreement between two or more people to joiny own a business
answer
partnership
question
A ___ is a legal entity created by permission of a state or federal government
answer
corporation
question
____ are people willing to take the risk of starting, owning and operating a business
answer
Entrepreneurs
question
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
answer
30%
question
all of the following are entrepreneurial characteristics, EXCEPT
answer
aversion to risk
question
_____ are wealthy individuals who invest in new and growing fimrs
answer
Angel investors
question
Sources of start-up funding include:
answer
personal savings credit cards family and friends all of the sources in this list
question
Entrepreneurs must understand that no conventional lender, whether private or public, will:
answer
loan 100 percent of the start-up funding
question
In a business plan, a commercial lender would expect to find
answer
a description of the business, competitive analysis, operating procedures, and financial data
question
____ is a system for recognizing, recording, organizing, summarizing, analyzing and reporting information about the finacial transactionsthat affect an organization
answer
Accounting
question
Managers, stockholders, employees, and creditors are:
answer
all users of accounting information to assess a comany's finances
question
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?
answer
Balance sheets, income, statements and cash flow statements
question
____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
answer
Public
question
The major output of financial accouting is a set of statements including the:
answer
balance sheet, income statemnt and statement of cash flows
question
The____ summarizes a firm's sfinancial position at a specific point in time (i.e. a specific quarter or year)
answer
balance sheet
question
The income statement shows that:
answer
Revenue- Expenses = Net Income
question
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
answer
finance
question
Financial managers perform a number of functions including
answer
Planning wise use of financial resources, including working capital decisions and investment opportunity decisions
question
A ___ measures the ability to pay short-term liabilities as they come due
answer
liquidity ratio
question
A ____ measures the extent to which a firm relies on debt to meet its financing needs
answer
Leverage ratio
question
Financial planning asks all the following questions EXCEPT
answer
how does the firm determine its pricing strategy?
question
In its Narrowest sense, a firm's _____consists of its holdings of currency and demand deposis
answer
Cash
question
Firms that ____ may find that theycan achieve their objective by developing a relationship with a firm that offers factoring services
answer
Rely heavily on credit sales and want to speed up their receipt of cash
question
the three basic types of securities corporations issue to raise long-term financial capital are____
answer
common stock, preferred stock and bonds
question
___ are the after-tax distribution of profits to corporate owners
answer
Dividends
question
Common stockholders have all of the following rights except:
answer
the right to repayment of the principal
question
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
answer
Capital gain
question
An initial ____ is the first time a corporation issues stock that may be purchased by the general public
answer
public offering
question
Individula investors are not permitted to directly trade stockes on NYSE or NASDAQ. Therefore, individuals must seek the help of a____
answer
broker
question
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
answer
Accounting and CEO
