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WorksheetsIntro to Business: Chapter 12 Review
Total questions: 40
Worksheet time: 20mins
Name
Class
Date
1.
All income that a business receives over a period of time is called profit.
a)
True
b)
False
2.
To prepare a budget, a business must be able to identify and predict the amount of each source of income and each type of expense.
a)
True
b)
False
3.
An accounts receivable record identifies the companies from which credit purchases were made and the amount purchased, paid and owed.
a)
True
b)
False
4.
Sales and profits for a specific period are reported in a company's income statement.
a)
True
b)
False
5.
Assets - Liabilities = Owner's Equity
a)
True
b)
False
6.
Payroll taxes consist of income taxes, Social Security, Medicare, and unemployment taxes.
a)
True
b)
False
7.
The company's liabilities divided by the owners' equity is the current ratio.
a)
True
b)
False
8.
At the end of the period covered by a budget, the business will prepare new financial statements.
a)
True
b)
False
9.
A business will make a profit if
a)
revenue equals expenses
b)
revenue is greater than expenses
c)
expenses decrease and revenue increases
d)
expenses are greater than revenue
10.
When a business expands,
a)
profits will increase
b)
employees will likely be fired
c)
marketing activities can temporarily be put on hold
d)
new factories and equipment may be needed
11.
For long-established businesses, the main source of budget information is
a)
the business's financial records
b)
the Internet
c)
the Small Business Administration
d)
business magazines and newspapers
12.
Which of the following is NOT generally a goal of a business budget?
a)
to determine the sources and amounts of income
b)
to reward investors if there is a profit
c)
to convince employees to take a big pay cut so the business can avoid bankruptcy
d)
to determine how income will be distributed to cover expenses
13.
The first step of the budget process is to
a)
prepare a list of each type of income and expense that will be part of the budget
b)
calculate each type of income, expense and the amount of net income or loss
c)
explain the budget to people who need to make financial decisions
d)
gather accurate financial information
14.
Which type of budget is an estimate of the actual money received and paid out for a specific period?
a)
an accounting budget
b)
a final budget
c)
a cash budget
d)
accounts payable records
15.
Which type of financial records identify the amount of assets have decreased in value due to their age and use?
a)
asset records
b)
depreciation records
c)
cash records
d)
accounts payable records
16.
In simple terms, ______ are what a company owns.
a)
assets
b)
profits
c)
owner's equity
d)
revenues
17.
Which of the following is NOT a long-term asset?
a)
land
b)
inventory
c)
buildings
d)
equipment
18.
Total Revenue - Total Expenses =
a)
Assets
b)
Owner's Equity
c)
Liabilities
d)
Net Income
19.
An income statement usually covers
a)
one to two years
b)
one week
c)
six months or a year
d)
five years
20.
All of the following would be considered expenses EXCEPT
a)
wages paid to employees
b)
interest earned on investments
c)
purchases of supplies
d)
taxes
21.
Which of the following is NOT a common way businesses pay employees?
a)
yearly
b)
monthly
c)
bi-weekly
d)
weekly
22.
Which of the following would NOT be considered a benefit?
a)
unpaid vacation
b)
health insurance
c)
paid vacation
d)
a salary
23.
Employers must make matching contributions to
a)
income taxes
b)
unemployment taxes
c)
FICA ( Social Security and Medicare) taxes
d)
all of the above
24.
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.
a)
earnings report or pay stub
b)
financial report
c)
payroll record
d)
income statement
25.
This shows how much profit is being made by each dollar of sales for the period being analyzed.
a)
current ratio
b)
debt to equity ratio
c)
return on equity ratio
d)
net income ratio
26.
The final step in the financial decision-making process is to
a)
prepare a budget
b)
make needed adjustments to the budget
c)
examine the budget for discrepancies
d)
check to see if the income and expenses are meeting budgeted amounts.
27.
The cost of operating a business are called
a)
expenses
b)
budget
c)
payroll
d)
ratios
28.
A detailed plan for a business's financial needs is called a(n)
a)
budget
b)
account
c)
inventory
d)
operating
29.
A(n) ____ budget plans income and expenses from the beginning of a new business or a major business expansion until it becomes profitable.
a)
start-up
b)
operating
c)
current
d)
payroll
30.
A(n) ____ budget describes the financial plan for ongoing functions of the business for a specific period.
a)
operating
b)
start-up
c)
cash
d)
payroll
31.
____ records are financial records that name the buildings and equipment owned by the business, their original and current value, and the amount owned if money was borrowed to purchase them.
a)
Asset
b)
Liability
c)
Payroll
d)
Accounts Payable
32.
Records of ______ identify all purchases and sales made using credit.
a)
accounts
b)
inventory
c)
payroll
d)
direct
33.
___ records identify types and number of products on hand for sale.
a)
Inventory
b)
Asset
c)
Current
d)
Liabilities
34.
A company reports its assets, liabilities, and owner's equity on the ________ sheet.
a)
balance
b)
asset
c)
income statement
d)
none of these
35.
___ assets include cash and those items that can be readily covered into cash.
a)
Current
b)
long-term
c)
payroll
d)
direct
36.
A(n) ____ is the financial record of employee compensation, deductions, and net pay.
a)
Payroll
b)
Inventory
c)
Accounts
d)
Ratios
37.
Financial performance ____ are comparisons of a company's financial elements that indicate how well the business is performing.
a)
ratios
b)
assets
c)
operations
d)
discrepancies
38.
Proprietors must pay _____- employment taxes, which are contributions to Medicare and Social Security.
a)
self
b)
account
c)
asset
d)
current
39.
With ____ deposit, an employer transfers net pay electronically into an employee's bank account.
a)
direct
b)
asset
c)
immediate
d)
total
40.
A(n) ____ is a difference between actual and budgeted performance.
a)
discrepancy
b)
inventory
c)
operating
d)
current
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