Business Concepts Quiz

Assets are anything that a company owns that has value.

• True

• False

Revenue minus expenses equals profit.

• True

• False

Venture capital is a type of financing that usually requires the business to give up some ownership to investors.

• True

• False

What is the purpose of the Cash Flow Statement?

• To show revenue, expenses, and profit over time

• To track inflows and outflows of cash in the business

• To list assets, liabilities, and equity

• To calculate total profit or loss for the year

What is the current ratio calculation if a business has $50,000 in current assets and $40,000 in current liabilities?

• 1.25

• 1.50

• 0.80

• 1.00

Why might venture capital impact control over business decisions?

• It requires no repayment.

• It involves giving up a portion of ownership to investors.

• It offers lower interest rates.

• It is a short-term funding option.

If a business has a current ratio of 1.25, what does this suggest about its short-term obligations?

• The business cannot cover its short-term obligations.

• The business has just enough to cover its short-term obligations.

• The business has sufficient liquidity to cover its short-term obligations.

• The business is in financial distress.

What is the term for costs incurred by a business in its operations?

• Asset

• Liability

• Expense

• Revenue

What is something of value that a company owns?

• Asset

• Liability

• Revenue

• Expense

Which financial statement shows revenue, expenses, and profit over a period of time?

• Balance Sheet

• Cash Flow Statement

• Income Statement

• Return on Investment