Part 2: Business Finance Semester 1 Exam Review

If a business owner want to know whether the amount of available cash for their business is increasing or decreasing, they would probably consult the cash flow statement.

• True

• False

If liabilities increase in relation to the value of assets, owner's equity declines.

• True

• False

An operating budget corresponds to a company's cash flow statement.

• True

• False

Business financial goals establish direction for the financial plans of a business.

• True

• False

If a small business does not eventually grow into a large business, it must be considered a failure.

• True

• False

The general increase in the price of all goods and services over time is inflation.

• True

• False

Pressure on corporate management to maintain a high rate of return for investors sometimes leads to poor financial decisions.

• True

• False

The amount of money borrowed is your interest.

• True

• False

The amount paid for the privilege of borrowing money is known as the principal.

• True

• False

A financial ____________ is a projected financial statement for a specific future time.

• discount

• balance

• budge

• discount