Financial Terms and Concepts Quiz 1

What is the definition of break-even point?

• The point at which total cost and total revenue are equal

• The point at which a business starts making a profit

• The point at which a business starts incurring a loss

• The point at which a business reaches its maximum revenue

What is the definition of capital?

• The point at which total cost and total revenue are equal

• The wealth in the form of money or assets owned by a business or individual

• A future event or circumstance that is possible but cannot be predicted with certainty

• A loan that can be converted into equity at a later date

What is the definition of contingency?

• The point at which total cost and total revenue are equal

• The wealth in the form of money or assets owned by a business or individual

• A future event or circumstance that is possible but cannot be predicted with certainty

• A loan that can be converted into equity at a later date

What is the definition of convertible debt?

• The point at which total cost and total revenue are equal

• The wealth in the form of money or assets owned by a business or individual

• A future event or circumstance that is possible but cannot be predicted with certainty

• A loan that can be converted into equity at a later date

What is the definition of distribution?

• The method or process by which a product or service is delivered to customers

• The wealth in the form of money or assets owned by a business or individual

• A future event or circumstance that is possible but cannot be predicted with certainty

• A loan that can be converted into equity at a later date

What is the definition of due diligence?

• The point at which total cost and total revenue are equal

• The wealth in the form of money or assets owned by a business or individual

• An investigation or audit of a potential investment

• A loan that can be converted into equity at a later date

What is the definition of equity?

• The ownership interest in a company

• The wealth in the form of money or assets owned by a business or individual

• A future event or circumstance that is possible but cannot be predicted with certainty

• A loan that can be converted into equity at a later date

What is the definition of franchise?

• The point at which total cost and total revenue are equal

• The authorization given by a company allowing a third party to conduct certain commercial activities

• A future event or circumstance that is possible but cannot be predicted with certainty

• A loan that can be converted into equity at a later date

What is the definition of inventory?

• The point at which total cost and total revenue are equal

• The wealth in the form of money or assets owned by a business or individual

• The raw materials, work-in-process goods, and finished goods that a business has on hand

• A loan that can be converted into equity at a later date

What is the definition of leverage?

• The point at which total cost and total revenue are equal

• The wealth in the form of money or assets owned by a business or individual

• Using borrowed capital for an investment, expecting the profits made to be greater than the interest payable

• A loan that can be converted into equity at a later date