Business Finance Vocabulary Test

What is an example of a personal asset?

• jewelry

• Office building

• Raw materials

• Accounts payable

What does the term 'liability' refer to?

• Money owed by a person or company

• Money spent on marketing

• Money received from sales

• Money invested in stocks

What does 'Owner's Equity' represent?

• Amount of money that would be returned to shareholders

• Amount of money spent on operating expenses

• Amount of money owed to creditors

• Amount of money invested in assets

Who are shareholders of a company?

• Debtors

• Creditors

• Suppliers

• Owners

What are units of stock called?

• Bonds

• Shares

• Securities

• Assets

What do 'Accounts Payable' refer to?

• Gross profit

• Cost of goods sold

• Short-term obligations owed to creditors

• Money due from customers

What does 'Accounts Receivable' represent?

• Cost of goods sold

• Gross profit

• Short-term obligations owed to creditors

• Money due from customers

What is 'Wage Expense'?

• Cost incurred by businesses for investment purposes

• Gross profit

• Cost of goods sold

• Cost incurred by businesses to pay their hourly employees

What does 'Capital' refer to?

• Cost of goods sold

• Money due from customers

• Money owed to creditors

• Cash put to work for investment purposes

What is the Debt to Equity Ratio used to evaluate?

• Company's financial leverage

• Company's operating expenses

• Company's net income

• Company's revenue