Quality & Business Acumen Practice Test 1

Capital is another word for the money it takes to run a business and invest in its future.

• True

• False

It is not important for the manager of a department to be respected by his/her people since the business sets the environment in which they work.

• True

• False

B4T is the acronym for showing the profit of a business before the taxes are taken out.

• True

• False

In Adam Smith’s book The Wealth of Nations, he states that the work that individuals do in a business is purely for their own good.

• True

• False

A large inventory is a sign of a healthy business.

• True

• False

The customer is the ultimate determiner as to whether a business is successful or not.

• True

• False

Competition in business is good for the consumer since it drives down the prices for the same quality of goods.

• True

• False

Using the graph, select the most desirable production volume for the product.

• 3

• 5

• 6

• 8

• 10

Reports a company’s inflow and outflow of cash

• Balance sheet

• Cash flow statement

• Income statement

Shows a company owner's equity.

• Balance sheet

• Cash flow statement

• Income statement