Business test 3

question

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

Get instant access to
all materials

Become a Member