Biz Study Guide

One of the advantages of bootstrapping as a financing method is that the owner makes personal sacrifices.

• True

• False

Fixed costs for a business are easy to control.

• True

• False

Which of the following is a true statement about an IPO?

• The IPO process is highly regulated by the SBA.

• Companies can be considered publicly held without an IPO.

• The company does not need to publish audited financial statements.

• Owners lose part of their ownership of the business

Which of the following are considered fixed costs?

•   

  sales commissions

   

•  

  shipping costs

  
  

• supplies

• wages

Which of the following would not be considered an accounting transaction of the business?

• selling goods for cash

•  

  providing a sales offer

•  

  receiving payment for services

•  

  using loan proceeds to pay for raw materials

If you pay $4,250 toward an outstanding amount owed, the effect on the accounting equation is ________.

• decrease an asset and increase an asset

•  

  decrease an asset and decrease a liability

•  

  increase an asset and increase owner’s equity

•  

  decrease an asset and increase owner’s equity

The accounting equation may be expressed as ________.

•  

  Assets = Owner’s Equity − Liabilities

  
  

•  

  Assets + Liabilities = Owner's Equity

  
  

•  

  Assets = Profit − Liabilities

  
  

•  

  Assets – Owner’s Equity = Liabilities

  
  

Which of the following are considered assets? (Select all that apply.)

• inventory

• investments

• liabilities

•  

  owner's equity

Which of the following is most likely to obtain large amounts of investments by the issuance of stock?

• corporation

•  

  government entity

  
  

•  

  not-for-profit

  
  

• partnership

Which of the following occurs when customers pay for items before they are launched?

• bartering

• bootstrapping

•  

  crowdfunding

•  

  pre-ordering