Question 1

Owner equity is the excess of all assets over all liabilities.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following would not be a current asset

Accepted Answer

A)  Certificates of deposit that mature in six months 
B)  Customer receivables 
C)  Cash 
D)  Supplier bills payable in 30 days 
A)  Certificates of deposit that mature in six months 
B)  Customer receivables 
C)  Cash 
D)  Supplier bills payable in 30 days

Question 3

Capital budgets project expenditures on new equipment,vehicles,computers,or new facilities.

Accepted Answer

A) True 
 B)False

Question 4

Depreciation is considered a source of funds because it does not represent an out-of-pocket expense.

Accepted Answer

A) True 
 B)False

Question 5

Using the ________ method of projecting cash flow,adjustments are made to net income based on the fact that cash may not actually be received or disbursed.

Accepted Answer

A)  indirect 
B)  break-even 
C)  direct 
D)  pro forma 
A)  indirect 
B)  break-even 
C)  direct 
D)  pro forma

Question 6

In projecting cash flows the most difficult problem is in determining the exact amount of monthly receipts and disbursements.

Accepted Answer

A) True 
 B)False

Question 7

________ is(are)added back to the pro forma sources and applications of funds statement because it does not represent and out-of-pocket expense.

Accepted Answer

A)  Inventory 
B)  Depreciation 
C)  Dividends 
D)  Equipment purchases 
A)  Inventory 
B)  Depreciation 
C)  Dividends 
D)  Equipment purchases

Question 8

In an Internet start-up,advertising costs will be extensive to create awareness of the website.

Accepted Answer

A) True 
 B)False

Question 9

Profit from the business will be included on the balance sheet in the assets section.

Accepted Answer

A) True 
 B)False

Question 10

Explain how to do a simple cost benefit analysis and explain how it helps the entrepreneur make important decisions.

Accepted Answer

Any significant capital expenditure or p

Question 11

Define break-even and apply the break-even formula to the following figures to determine the number of units that must be produced to reach the break-even point.
TFC = $424,000,SP = $6.00 VC/Unit = $2.00

Accepted Answer

Break-even is that volume of sales at wh

Question 12

Break-even is that volume of sales at which there are neither profits nor losses.

Accepted Answer

A) True 
 B)False

Question 13

The financial plan provides the short-term basis for budgeting control and helps prevent the most common problem for new ventures-lack of cash.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is likely to be a fixed cost

Accepted Answer

A)  Materials 
B)  Commissions 
C)  Depreciation 
D)  Direct labor 
A)  Materials 
B)  Commissions 
C)  Depreciation 
D)  Direct labor

Question 15

If disbursements are greater than receipts in anytime period,the entrepreneur must either borrow funds or have cash in a bank account to cover the higher disbursement.This is known as:

Accepted Answer

A)  negative cash flow. 
B)  cost of goods sold. 
C)  selling expense. 
D)  variable cost. 
A)  negative cash flow. 
B)  cost of goods sold. 
C)  selling expense. 
D)  variable cost.

Question 16

As the business grows:

Accepted Answer

A)  selling expenses should go down. 
B)  salaries and wages will go up as output increases. 
C)  the pro forma income statement becomes unimportant. 
D)  advertising expenses should go down. 
A)  selling expenses should go down. 
B)  salaries and wages will go up as output increases. 
C)  the pro forma income statement becomes unimportant. 
D)  advertising expenses should go down.

Question 17

Which of the following would be considered a variable expense

Accepted Answer

A)  Rent 
B)  Raw materials 
C)  Interest 
D)  Insurance 
A)  Rent 
B)  Raw materials 
C)  Interest 
D)  Insurance

Question 18

The marginal contribution is defined as:

Accepted Answer

A)  selling price per unit minus variable cost per unit 
B)  total fixed costs minus selling price per unit 
C)  variable cost per unit minus the selling price per unit 
D)  total fixed costs plus total variable costs 
A)  selling price per unit minus variable cost per unit 
B)  total fixed costs minus selling price per unit 
C)  variable cost per unit minus the selling price per unit 
D)  total fixed costs plus total variable costs

Question 19

Current liabilities are:

Accepted Answer

A)  those liabilities due for payment within a year. 
B)  everything owed to creditors. 
C)  everything of value owned by the company. 
D)  those liabilities that represent the excess over all assets. 
A)  those liabilities due for payment within a year. 
B)  everything owed to creditors. 
C)  everything of value owned by the company. 
D)  those liabilities that represent the excess over all assets.

Question 20

Any amount due within a year is considered a current liability.

Accepted Answer

A) True 
 B)False

Owner equity is the excess of all assets over all liabilities.

Which of the following would not be a current asset

Capital budgets project expenditures on new equipment,vehicles,computers,or new facilities.

Depreciation is considered a source of funds because it does not represent an out-of-pocket expense.

Using the ________ method of projecting cash flow,adjustments are made to net income based on the fact that cash may not actually be received or disbursed.

In projecting cash flows the most difficult problem is in determining the exact amount of monthly receipts and disbursements.

________ is(are)added back to the pro forma sources and applications of funds statement because it does not represent and out-of-pocket expense.

In an Internet start-up,advertising costs will be extensive to create awareness of the website.

Profit from the business will be included on the balance sheet in the assets section.

Explain how to do a simple cost benefit analysis and explain how it helps the entrepreneur make important decisions.

Define break-even and apply the break-even formula to the following figures to determine the number of units that must be produced to reach the break-even point. TFC = $424,000,SP = $6.00 VC/Unit = $2.00

Break-even is that volume of sales at which there are neither profits nor losses.

The financial plan provides the short-term basis for budgeting control and helps prevent the most common problem for new ventures-lack of cash.

Which of the following is likely to be a fixed cost

If disbursements are greater than receipts in anytime period,the entrepreneur must either borrow funds or have cash in a bank account to cover the higher disbursement.This is known as:

As the business grows:

Which of the following would be considered a variable expense

The marginal contribution is defined as:

Current liabilities are:

Any amount due within a year is considered a current liability.

The Entrepreneurial Mind-Set

Corporate Entrepreneurship

Generating and Exploiting New Entries

Creativity and the Business Idea

Identifying and Analyzing Domestic and International Opportunities

Protecting the Idea and Other Legal Issues for the Entrepreneur

The Business Plan: Creating and Starting the Venture

The Marketing Plan

The Organizational Plan

Sources of Capital

Informal Risk Capital, Venture Capital, and Going Public

Strategies for Growth and Managing the Implication of Growth

Accessing Resources for Growth From External Sources

Succession Planning and Strategies for Harvesting and Ending the Venture

Filters

Exam 10: The Financial Plan

Owner equity is the excess of all assets over all liabilities.

Which of the following would not be a current asset

Capital budgets project expenditures on new equipment,vehicles,computers,or new facilities.

Depreciation is considered a source of funds because it does not represent an out-of-pocket expense.

Using the ________ method of projecting cash flow,adjustments are made to net income based on the fact that cash may not actually be received or disbursed.

In projecting cash flows the most difficult problem is in determining the exact amount of monthly receipts and disbursements.

________ is(are)added back to the pro forma sources and applications of funds statement because it does not represent and out-of-pocket expense.

In an Internet start-up,advertising costs will be extensive to create awareness of the website.

Profit from the business will be included on the balance sheet in the assets section.

Explain how to do a simple cost benefit analysis and explain how it helps the entrepreneur make important decisions.

Define break-even and apply the break-even formula to the following figures to determine the number of units that must be produced to reach the break-even point. TFC = $424,000,SP = $6.00 VC/Unit = $2.00

Break-even is that volume of sales at which there are neither profits nor losses.

The financial plan provides the short-term basis for budgeting control and helps prevent the most common problem for new ventures-lack of cash.

Which of the following is likely to be a fixed cost

If disbursements are greater than receipts in anytime period,the entrepreneur must either borrow funds or have cash in a bank account to cover the higher disbursement.This is known as:

As the business grows:

Which of the following would be considered a variable expense

The marginal contribution is defined as:

Current liabilities are:

Any amount due within a year is considered a current liability.

The Entrepreneurial Mind-Set

Corporate Entrepreneurship

Generating and Exploiting New Entries

Creativity and the Business Idea

Identifying and Analyzing Domestic and International Opportunities

Protecting the Idea and Other Legal Issues for the Entrepreneur

The Business Plan: Creating and Starting the Venture

The Marketing Plan

The Organizational Plan

Sources of Capital

Informal Risk Capital, Venture Capital, and Going Public

Strategies for Growth and Managing the Implication of Growth

Accessing Resources for Growth From External Sources

Succession Planning and Strategies for Harvesting and Ending the Venture

Filters