Question 1

A firm's profit margin, or return on sales, is computed by dividing:

Accepted Answer

A)  net income by net sales 
B)  gross profit by net sales 
C)  net income by gross profit 
D)  net income by cost of sales 
E)  operating income by gross profit 
A)  net income by net sales 
B)  gross profit by net sales 
C)  net income by gross profit 
D)  net income by cost of sales 
E)  operating income by gross profit

Question 2

Jamie Diehl has spent the past several days pouring over her historical financial statements and her projections for future sales periods based on forecasts. Jamie's objective is to develop a set of financial statements that she can show to an investor, which will reflect the projected financial status of her firm for the next two-three years. Jamie is working on creating a set of ________ financial statements.

Accepted Answer

A)  simulated 
B)  pro forma 
C)  improvised 
D)  ad-hoc 
E)  concurrent 
A)  simulated 
B)  pro forma 
C)  improvised 
D)  ad-hoc 
E)  concurrent

Question 3

A firm's ________ reflects the results of its operations over a specified period and shows whether it is making a profit or is experiencing a loss.

Accepted Answer

A)  statement of cash flows 
B)  income statement 
C)  forecast 
D)  balance sheet 
E)  operating budget 
A)  statement of cash flows 
B)  income statement 
C)  forecast 
D)  balance sheet 
E)  operating budget

Question 4

A firm's profit margin, or return on sales, is computed by dividing net income by net sales.

Accepted Answer

A) True 
 B)False

Question 5

The pro forma income statement shows the projected flow of cash into and out of the company during a specified period.

Accepted Answer

A) True 
 B)False

Question 6

Which financial statement records all of a firm's revenues and expenses for a given period and shows whether the firm is making a profit or experiencing a loss?

Accepted Answer

A)  balance sheet 
B)  owner's equity statement 
C)  statement of cash flows 
D)  forecast 
E)  income statement 
A)  balance sheet 
B)  owner's equity statement 
C)  statement of cash flows 
D)  forecast 
E)  income statement

Question 7

The four main financial objectives of a firm are:

Accepted Answer

A)  efficiency, effectiveness, strength, and flexibility 
B)  power, success, efficiency, effectiveness 
C)  control, effectiveness, liquidity, and power 
D)  success, strength, liquidity, and profitability 
E)  profitability, liquidity, efficiency, and stability 
A)  efficiency, effectiveness, strength, and flexibility 
B)  power, success, efficiency, effectiveness 
C)  control, effectiveness, liquidity, and power 
D)  success, strength, liquidity, and profitability 
E)  profitability, liquidity, efficiency, and stability

Question 8

Which of the following was not identified as one of the four main financial objectives of a firm?

Accepted Answer

A)  stability 
B)  efficiency 
C)  timeliness 
D)  liquidity 
E)  profitability 
A)  stability 
B)  efficiency 
C)  timeliness 
D)  liquidity 
E)  profitability

Question 9

________ are projections for future periods based on forecasts and are typically completed for two to three years in the future.

Accepted Answer

A)  Chronological financial statements 
B)  Pro forma financial statements 
C)  Ad-hoc financial statements 
D)  Concurrent financial statements 
E)  Historical financial statements 
A)  Chronological financial statements 
B)  Pro forma financial statements 
C)  Ad-hoc financial statements 
D)  Concurrent financial statements 
E)  Historical financial statements

Question 10

A statement of cash flows is a snapshot of a company's assets, liabilities, and owners' equity at a specific point in time.

Accepted Answer

A) True 
 B)False

Question 11

Describe the difference between historical and pro form financial statements.

Accepted Answer

Historical financial statements reflect

Question 12

Which of the following is an example of a long-term liability?

Accepted Answer

A)  accounts payable 
B)  real estate mortgage 
C)  accrued expenses 
D)  current portion of real estate mortgage 
E)  owner's equity 
A)  accounts payable 
B)  real estate mortgage 
C)  accrued expenses 
D)  current portion of real estate mortgage 
E)  owner's equity

Question 13

Which of the following statements about pro forma financial statements is incorrect?

Accepted Answer

A)  Pro form financial statements are projections for future periods based on forecasts. 
B)  Pro forma financial statements are typically completed for two to three years in the future. 
C)  Pro forma financial statements are required by the SEC. 
D)  Most companies consider their pro forma financial statements to be confidential and reveal them to outsiders only on a "need to know basis." 
E)  Pro forma financial statements are strictly planning tools. 
A)  Pro form financial statements are projections for future periods based on forecasts. 
B)  Pro forma financial statements are typically completed for two to three years in the future. 
C)  Pro forma financial statements are required by the SEC. 
D)  Most companies consider their pro forma financial statements to be confidential and reveal them to outsiders only on a "need to know basis." 
E)  Pro forma financial statements are strictly planning tools.

Question 14

Peggy Owens owns a store that sells exercise equipment. Each January 1, she makes a very accurate account of all her merchandise and products waiting to be sold that are in her store. On January 1, Peggy is taking account of her store's:

Accepted Answer

A)  long-term assets 
B)  owners' equity 
C)  accounts payable 
D)  accounts receivable 
E)  inventory 
A)  long-term assets 
B)  owners' equity 
C)  accounts payable 
D)  accounts receivable 
E)  inventory

Question 15

In the context of a firm's statement of cash flows, ________ include the purchase, sale, or investment in fixed assets, such as real estate, equipment, and buildings.

Accepted Answer

A)  operating activities 
B)  investing activities 
C)  capital activities 
D)  financing activities 
E)  liquidity activities 
A)  operating activities 
B)  investing activities 
C)  capital activities 
D)  financing activities 
E)  liquidity activities

Question 16

If a firm's debt-to-equity ratio gets to low, it may have trouble meeting its obligations and securing the level of financing needed to fuel its growth.

Accepted Answer

A) True 
 B)False

Question 17

Money owned to a company by its customers is referred to as:

Accepted Answer

A)  accounts obtainable 
B)  accounts payable 
C)  accounts receivable 
D)  inventory 
E)  accounts collectable 
A)  accounts obtainable 
B)  accounts payable 
C)  accounts receivable 
D)  inventory 
E)  accounts collectable

Question 18

Describe each of the four primary financial objectives of firms.

Accepted Answer

The four primary financial objectives of

Question 19

The income statement records all the revenues and expenses for a given period and shows whether the firm is making a profile or is experiencing a loss.

Accepted Answer

A) True 
 B)False

Question 20

A firm's working capital is defined as its fixed assets minus its long-term liabilities.

Accepted Answer

A) True 
 B)False

A firm's profit margin, or return on sales, is computed by dividing:

A firm's ________ reflects the results of its operations over a specified period and shows whether it is making a profit or is experiencing a loss.

A firm's profit margin, or return on sales, is computed by dividing net income by net sales.

The pro forma income statement shows the projected flow of cash into and out of the company during a specified period.

Which financial statement records all of a firm's revenues and expenses for a given period and shows whether the firm is making a profit or experiencing a loss?

The four main financial objectives of a firm are:

Which of the following was not identified as one of the four main financial objectives of a firm?

________ are projections for future periods based on forecasts and are typically completed for two to three years in the future.

A statement of cash flows is a snapshot of a company's assets, liabilities, and owners' equity at a specific point in time.

Describe the difference between historical and pro form financial statements.

Which of the following is an example of a long-term liability?

Which of the following statements about pro forma financial statements is incorrect?

Peggy Owens owns a store that sells exercise equipment. Each January 1, she makes a very accurate account of all her merchandise and products waiting to be sold that are in her store. On January 1, Peggy is taking account of her store's:

In the context of a firm's statement of cash flows, ________ include the purchase, sale, or investment in fixed assets, such as real estate, equipment, and buildings.

If a firm's debt-to-equity ratio gets to low, it may have trouble meeting its obligations and securing the level of financing needed to fuel its growth.

Money owned to a company by its customers is referred to as:

Describe each of the four primary financial objectives of firms.

The income statement records all the revenues and expenses for a given period and shows whether the firm is making a profile or is experiencing a loss.

A firm's working capital is defined as its fixed assets minus its long-term liabilities.

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Writing a Business Plan

Industry and Competitor Analysis

Developing an Effective Business Model

Preparing the Proper Ethical and Legal Foundation

Building a New Venture Team

Getting Financing or Funding

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Franchising

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Exam 8: Assessing a New Venture's Financial Strength and Viability

A firm's profit margin, or return on sales, is computed by dividing:

A firm's ________ reflects the results of its operations over a specified period and shows whether it is making a profit or is experiencing a loss.

A firm's profit margin, or return on sales, is computed by dividing net income by net sales.

The pro forma income statement shows the projected flow of cash into and out of the company during a specified period.

Which financial statement records all of a firm's revenues and expenses for a given period and shows whether the firm is making a profit or experiencing a loss?

The four main financial objectives of a firm are:

Which of the following was not identified as one of the four main financial objectives of a firm?

________ are projections for future periods based on forecasts and are typically completed for two to three years in the future.

A statement of cash flows is a snapshot of a company's assets, liabilities, and owners' equity at a specific point in time.

Describe the difference between historical and pro form financial statements.

Which of the following is an example of a long-term liability?

Which of the following statements about pro forma financial statements is incorrect?

Peggy Owens owns a store that sells exercise equipment. Each January 1, she makes a very accurate account of all her merchandise and products waiting to be sold that are in her store. On January 1, Peggy is taking account of her store's:

In the context of a firm's statement of cash flows, ________ include the purchase, sale, or investment in fixed assets, such as real estate, equipment, and buildings.

If a firm's debt-to-equity ratio gets to low, it may have trouble meeting its obligations and securing the level of financing needed to fuel its growth.

Money owned to a company by its customers is referred to as:

Describe each of the four primary financial objectives of firms.

The income statement records all the revenues and expenses for a given period and shows whether the firm is making a profile or is experiencing a loss.

A firm's working capital is defined as its fixed assets minus its long-term liabilities.

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Feasibility Analysis

Writing a Business Plan

Industry and Competitor Analysis

Developing an Effective Business Model

Preparing the Proper Ethical and Legal Foundation

Building a New Venture Team

Getting Financing or Funding

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Franchising

Filters