Entrepreneurship - Chapter 11 Financial Statements

Entrepreneurs should prepare income statements 

• daily
• monthly
• quarterly
• yearly 

In an income statement, subtracting the cost of goods sold from the net sales provides the 

• revenue
• net operating income
• gross profit
• net income

A cost of goods sold section is included in 

• merchandising business income statement
• service business income statement
• cash flow statement
• balance sheet

An entrepreneur should prepare a cash flow statement

• daily
• monthly
• quarterly
• yearly

The rate at which the business needs to spend cash to cover overhead costs before beginning to generate a positive cash flow is called the

• start up rate
• over head rate
• clash flow rate
• burn rate

The cash flow equation is 

• cash outflow - cash inflow = net profit 
• cash outflow - cash inflow = gross profit
• cash inflow - cash outflow = net cash
• cash inflow - cash outflow = net profit

A balance sheet includes 

• assets
• liabilities
• owner's equity
• All of these options

The amount owed by a business to its suppliers for credit purchases is called

• accounts receivable 
• accounts payable 
• merchandise payable
• purchases on account

Owner's equity is calculated by 

• subtracting total liabilities from total assets 
• dividing total liabilities by total assets 
• subtracting total assets from total liabilities
• dividing total assets by total liabilities 

Which of the following is not a current liability?

• accounts payable
• mortgage
• bank loan
• collected state sales taxes