Question 1

Which of the following is true of a sales forecast?

Accepted Answer

A)  It is the value received by a firm in return for a good or service. 
B)  It is an estimate of the amount a firm expects to sell during a given period in the future. 
C)  It represents the difference between revenue earned and expenses incurred. 
D)  It is an estimate of the owners' share of the business, after liabilities are subtracted from assets. 
A)  It is the value received by a firm in return for a good or service. 
B)  It is an estimate of the amount a firm expects to sell during a given period in the future. 
C)  It represents the difference between revenue earned and expenses incurred. 
D)  It is an estimate of the owners' share of the business, after liabilities are subtracted from assets.

Question 2

Rapid growth, instead of stability, is emphasized in a well-managed small business firm.

Accepted Answer

A) True 
 B)False

Question 3

Differentiate between revenue and expenses.

Accepted Answer

Revenue (also called sales income) is th

Question 4

Owners' equity is the owners' share of the business after financial obligations are subtracted from the things that the business owns.

Accepted Answer

A) True 
 B)False

Question 5

If a small business firm has $46,000 in revenue and $24,000 in expenses, its net profit is $70,000.

Accepted Answer

A) True 
 B)False

Question 6

A well-managed small business is most likely to:

Accepted Answer

A)  place low importance on the balance sheet. 
B)  emphasize rapid growth instead of stability. 
C)  emphasize long-range planning. 
D)  be less liquid than a badly managed company. 
A)  place low importance on the balance sheet. 
B)  emphasize rapid growth instead of stability. 
C)  emphasize long-range planning. 
D)  be less liquid than a badly managed company.

Question 7

What are the alternatives that a small business owner can consider in order to increase profits?

Accepted Answer

The alternatives that a small business o

Question 8

If your funds are invested in a fixed asset, they are not available for paying bills.

Accepted Answer

A) True 
 B)False

Question 9

A(n) _____ periodically shows revenues, expenses, and profits from a firm's operations.

Accepted Answer

A)  balance sheet 
B)  statement of retained earnings 
C)  income statement 
D)  cash flow statement 
A)  balance sheet 
B)  statement of retained earnings 
C)  income statement 
D)  cash flow statement

Question 10

In the context of small businesses, accounts payable result from giving credit to customers at a low interest rate.

Accepted Answer

A) True 
 B)False

Question 11

The income statement reflects both the revenue and the expenses of a firm.

Accepted Answer

A) True 
 B)False

Question 12

The profit margin indicates the relationship between revenues and expenses.

Accepted Answer

A) True 
 B)False

Question 13

Maintaining a high level of accounts payable requires a business to have a high level of current assets.

Accepted Answer

A) True 
 B)False

Question 14

____ is the specific amount of profit one expects to achieve.

Accepted Answer

A)  The breakeven point 
B)  A sales forecast 
C)  A profit goal 
D)  A benchmark 
A)  The breakeven point 
B)  A sales forecast 
C)  A profit goal 
D)  A benchmark

Question 15

Kaizen costing refers to a cost reduction method aimed at improving profits.

Accepted Answer

A) True 
 B)False

Question 16

Explain how a sales forecast is used to determine the sales volume for a small business.

Accepted Answer

A sales forecast is an estimate of the a

Question 17

Which of the following is an example of a fixed asset?

Accepted Answer

A)  Cash 
B)  Prepaid expense 
C)  Equipment 
D)  Inventory 
A)  Cash 
B)  Prepaid expense 
C)  Equipment 
D)  Inventory

Question 18

_____ show(s) a firm's financial position and reflect(s) any changes in that position.

Accepted Answer

A)  Benchmarks 
B)  Cost of goods sold 
C)  Profit goals 
D)  Accounting records 
A)  Benchmarks 
B)  Cost of goods sold 
C)  Profit goals 
D)  Accounting records

Question 19

Acute Business Corp., a small business firm, has $500,000 in assets and $300,000 in liabilities. What is the value of the owners' equity?

Accepted Answer

A)  $1,500,000 
B)  $200,000 
C)  $175,000 
D)  $800,000 
A)  $1,500,000 
B)  $200,000 
C)  $175,000 
D)  $800,000

Question 20

Which of the following is true of benchmarking?

Accepted Answer

A)  It involves setting up standards and then measuring performance against them. 
B)  It is a series of prescribed steps to be taken to ensure that a profit will be made. 
C)  It sets cost targets for all phases of design, development, and production of a product for each accounting period. 
D)  It describes the relative proportions of a firm's assets, liabilities, and owners' equity. 
A)  It involves setting up standards and then measuring performance against them. 
B)  It is a series of prescribed steps to be taken to ensure that a profit will be made. 
C)  It sets cost targets for all phases of design, development, and production of a product for each accounting period. 
D)  It describes the relative proportions of a firm's assets, liabilities, and owners' equity.

Which of the following is true of a sales forecast?

Rapid growth, instead of stability, is emphasized in a well-managed small business firm.

Differentiate between revenue and expenses.

Owners' equity is the owners' share of the business after financial obligations are subtracted from the things that the business owns.

If a small business firm has $46,000 in revenue and $24,000 in expenses, its net profit is $70,000.

A well-managed small business is most likely to:

What are the alternatives that a small business owner can consider in order to increase profits?

If your funds are invested in a fixed asset, they are not available for paying bills.

A(n) _____ periodically shows revenues, expenses, and profits from a firm's operations.

In the context of small businesses, accounts payable result from giving credit to customers at a low interest rate.

The income statement reflects both the revenue and the expenses of a firm.

The profit margin indicates the relationship between revenues and expenses.

Maintaining a high level of accounts payable requires a business to have a high level of current assets.

____ is the specific amount of profit one expects to achieve.

Kaizen costing refers to a cost reduction method aimed at improving profits.

Explain how a sales forecast is used to determine the sales volume for a small business.

Which of the following is an example of a fixed asset?

_____ show(s) a firm's financial position and reflect(s) any changes in that position.

Acute Business Corp., a small business firm, has $500,000 in assets and $300,000 in liabilities. What is the value of the owners' equity?

Which of the following is true of benchmarking?

Starting Your Small Business

Family-Owned Businesses

Forms of Ownership of Small Businesses

Maintaining Good Government Relations and Business Ethics

Becoming the Owner of a Small Business

Planning, Organizing, and Managing a Small Business

How to Obtain the Right Financing for Your Business

Developing Marketing Strategies

Promoting and Distributing

How to Obtain and Manage Human Resources and Diversity in Small Companies

How to Maintain Relationships With Your Employees and Their Representatives

Obtaining and Laying Out Operating Facilities

Purchasing, Inventory, and Quality Control

Budgeting and Controlling Operations and Taxes

Using Computer Technology in Small Businesses

Risk Management, Insurance, and Crime Prevention

Filters

Exam 14: Basic Financial Planning

Which of the following is true of a sales forecast?

Rapid growth, instead of stability, is emphasized in a well-managed small business firm.

Differentiate between revenue and expenses.

Owners' equity is the owners' share of the business after financial obligations are subtracted from the things that the business owns.

If a small business firm has $46,000 in revenue and $24,000 in expenses, its net profit is $70,000.

A well-managed small business is most likely to:

What are the alternatives that a small business owner can consider in order to increase profits?

If your funds are invested in a fixed asset, they are not available for paying bills.

A(n) _____ periodically shows revenues, expenses, and profits from a firm's operations.

In the context of small businesses, accounts payable result from giving credit to customers at a low interest rate.

The income statement reflects both the revenue and the expenses of a firm.

The profit margin indicates the relationship between revenues and expenses.

Maintaining a high level of accounts payable requires a business to have a high level of current assets.

____ is the specific amount of profit one expects to achieve.

Kaizen costing refers to a cost reduction method aimed at improving profits.

Explain how a sales forecast is used to determine the sales volume for a small business.

Which of the following is an example of a fixed asset?

_____ show(s) a firm's financial position and reflect(s) any changes in that position.

Acute Business Corp., a small business firm, has $500,000 in assets and $300,000 in liabilities. What is the value of the owners' equity?

Which of the following is true of benchmarking?

Starting Your Small Business

Family-Owned Businesses

Forms of Ownership of Small Businesses

Maintaining Good Government Relations and Business Ethics

Becoming the Owner of a Small Business

Planning, Organizing, and Managing a Small Business

How to Obtain the Right Financing for Your Business

Developing Marketing Strategies

Promoting and Distributing

How to Obtain and Manage Human Resources and Diversity in Small Companies

How to Maintain Relationships With Your Employees and Their Representatives

Obtaining and Laying Out Operating Facilities

Purchasing, Inventory, and Quality Control

Budgeting and Controlling Operations and Taxes

Using Computer Technology in Small Businesses

Risk Management, Insurance, and Crime Prevention

Filters