2nd Semester Review: Financial Plan

As your cost of goods sold per unit decreases, your profit

• stays the same

• decreases

• depends on your variable and fixed costs

• increases

An example of a current asset would be

• buildings

• equipment

• inventory

• furniture

A retailer that sells sweaters would calculate a unit of sale based on

• the number of sweaters bought from the manufacturer

• each sweater sold to a customer at the regular price

• the number of sweaters bought from the wholesaler

• each sweater sold to a customer at the sale price

An example of a current liability would be

• bank loans

• state sales tax

• accounts payable

• all of the above

Income statements include

• net income or loss

• revenue

• expenses

• all of the above

A balance sheet answers what question?

• To whom does the company owe money?

• What does the company own?

• How much is the business worth?

• all of the above

Gross profit is calculated by

• subtracting the cost of goods sold from the operating expenses

• subtracting the cost of goods sold from the net sales

• adding the cost of goods sold to the total revenue

• adding the cost of goods sold to the pre-tax profit

How often should a small business prepare income statements and cash flow statements?

• monthly

• daily

• quarterly

• yearly

Owner’s equity is calculated by

• subtracting total liabilities from total assets

• adding assets to liabilities and subtracting profit

• subtracting total assets from total liabilities

• adding assets to liabilities

A financial document that summarizes a business’s income and expenses over a given time period and shows whether the business made a profit or took a loss is called a(n)

• balance sheet

• income statement

• cash flow statement

• none of the above