ENTRE ch 7 – Flashcards
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To create a pro forma cash flow statement, you will need to estimate your monthly revenues and monthly operating expenses.
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True
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A balance sheet shows the assets, liabilities, and capital of a business at a particular point in time.
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True
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The income statement shows expenses you have not received and start-up costs you have not paid yet.
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False
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A list of start-up costs includes one-time-only expenses that are paid to establish a business.
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True
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Depreciation is the raising of the value of an asset to reflect its current value
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False
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A worst-case scenario cash flow statement should project the highest revenues and highest expenses that your business is likely to have.
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False
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Pro forma financial statements are based on the actual performance of your business during the first year.
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False
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Your personal financial statement should consist of actual figures for your personal assets and liabilities.
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True
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Accounts receivable tracks payments due for products or services provided to customers.
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True
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SBICs are licensed by the SBA to make loans to and invest capital with entrepreneurs.
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True
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The only way to get equity capital is through people you know or through venture capitalists.
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False
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If you are turned down for a loan by a bank, the SBA may be able to help you get financing for your business.
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True
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Secured loans are a type of debt capital, and unsecured loans are equity capital.
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False
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The only way to prevent employee theft is to install surveillance systems.
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False
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Installing an electronic credit authorizer can prevent losses due to credit card fraud.
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True
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It is impossible for a retail business owner to prevent or reduce shoplifting.
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False
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Workers' compensation consists of payments to workers who are injured on the job, and businesses are required by law to provide it.
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True
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Before selecting a particular insurance company, you should talk to an agent who represents more than one insurer.
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True
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Insurance agents earn commissions on the amount of coverage they sell, so an agent will only suggest the amount of coverage you actually need.
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False
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Property insurance covers normal risks, including fire, floods, and storm damage, but does not cover robbery.
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False
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Pro forma financial statements are based on projections.
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True
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Which of the following is not a financial statement needed for potential lenders and investors?
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loss statement
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To prepare a pro forma cash flow statement, you must forecast your
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revenues and operating expenses
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The assets section of a balance sheet includes
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all of these
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Money loaned to a business with the understanding that the money will be repaid, with interest, in a certain time period is
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debt capital
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The reason a bank may turn down your loan application is
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your business plan is poorly written
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The SBA helps small businesses by
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guaranteeing loans made by commercial banks
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All businesses face the risk of
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robbery
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Installing mounted video cameras can help to
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all of these
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All of the following are important types of insurance for your business except
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casual insurance
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Your insurance agent should
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be someone you trust
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The liabilities section of a balance sheet includes
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loans payable
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Which of the following is not a financial statement needed for potential lenders and investors?
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statement of operating expenses
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Installing point-of-exit sensors can help to
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prevent or reduce shoplifting
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Which of the following is not an important type of insurance for your business?
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bankruptcy insurance
