PoB Ch 12 Review

Sales and profits for a specific period are reported in a company’s income statement.

• True

• False

Business expansion plans typically occur in a short time period and do not require much expense.

• True

• False

A business should not compare its financial performance with that of similar companies.

• True

• False

Payroll taxes consist of income taxes, Social Security, Medicare, and unemployment taxes.

• True

• False

Managers and professionals usually earn an hourly wage.

• True

• False

Employee benefits (401k plans, insurance, etc) do not affect an employee's pay.

• True

• False

All of the following would be considered expenses EXCEPT

• wages paid to employees

• sales to customers

• purchases of supplies

• taxes

Most businesses include a(n) _______________ with the employee’s paycheck; this document usually includes information for the current pay period as well as the cumulative amounts for the year.

• earnings report or pay stub
• balance sheet
• payroll record
• income statement

Which of the following financial planning questions are asked when beginning a business?

• How much money will be needed to start the business?

• Where will financing come from?

• How will funds be obtained to operate until business is profitable?

• all of the above

Employers must make matching contributions to

• income taxes

• unemployment taxes

• FICA (Social Security and Medicare) taxes

• all of the above