BMG Hangout - Business Quiz

A variable cost increases/decreases in line with increase/decrease in quantity of goods produced or services rendered.

• True

• False

• Not sure

In a sole proprietorship, the business is deemed separate from the owner

• True

• False

• Not sure

If a company is liquid (i.e. has enough cash) it means that it will always be profitable

• True

• False

• Not sure

Answer explanation

Because liquidity refers to the availability of cash and profitability refers to the excess of income over expenses.

A Company can be liquid but not profitable and vice versa in the short term. However in the long term to survive, it must be both liquid and profitable. However, in the short term liquidity is prioritised.

To break even, a Company must be able to cover all its cost

• True

• False

• Not sure

Bank overdraft is a source of long term financing

• True

• False

• Not sure

Assets/Liabilities are what your business owes/owns respectively

• True

• False

• Not sure

Answer explanation

Trick question. Its the other way around.

An asset is what a business OWNS while a liability is what it OWES.

Your buyers have high purchasing power if an increase in your prices will make them abandon your products for other substitutes

• True

• False

• Not sure

In assessing your business, you must look at both the internal and external environment. True or False

• True

• False

To get your business registered in Nigeria, you need to go to

• Ministry of Business Incorporation and Legal Matters

• The Corporate Affairs Commission (CAC)

• Securities and Exchange Commission (SEC)

Good   sources   of   information   for   an   entrepreneur   about   competitors   can   be obtained from

• Websites

• Product information leaflets

• Company reports and published accounts

• All the above