Business Ownership & Entrepreneurship - Final Review #5

Things that you own are referred to as your

• liabilities

• assets

• equity

• net worth

An attractive layout is probably most important for a(n)

• on-site service business

• warehouse

• retail business

• manufacturing business

Most businesses need all of the following types of supplies and equipment except

• furniture

• office supplies

• heavy machinery

• fixtures

For this type of business, inventory consists of the parts that will go into producing the business's product as well as its finished goods.

• retail business

• on-site service business

• manufacturing business

• all of these

What does debt-to-equity measure?

• the difference between your assets and your liabilities

• the relation between your startup costs and your net worth

• the relation between the dollars you have borrowed and the dollars you have invested in your business

• the difference between your equity and your liabilities

Loans that are backed by collateral are called

• secured loans

• unsecured loans

• business loans

• short-term loans

What is a line of credit?

• money a bank invests in a business in return for a share in the profits

• an agreement by a bank to lend up to a certain amount of money whenever the borrower needs it

• a grant provided by the Dept of Housing and Urban Development to encourage business development in needy areas

• a short-term loan offered to new entrepreneurs that must be repaid within a year

Which of the following financial statements best shows how much money you have available to pay your bills?

• balance sheet

• income statement

• cash flow statement

• pro forma financial statement

An income statement can help a business owner do all of the following except:

• examine how sales, expenses, and income are changing over time

• identify his/her equity in the business

• analyze costs to determine areas that need to be cut back

• forecast how well the business can expect to perform in the future

The difference between revenue and cost of goods sold is

• gross profit

• cost of goods sold

• operating expenses

• net income before taxes