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WorksheetsPrinciple of Bus. 12 Financial Management
Total questions: 35
Worksheet time: 20mins
All income that a business receives over a period of time is called profit.
True
False
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.
True
False
An operating budget will determine if a business has adequate financial resources on hand to pay bills as they become due or if it will need to borrow money.
True
False
An accounts receivable record identifies the companies from which credit purchases were made and the status of each account.
True
False
Sales, expenses, and profits or losses for a specific period are reported in a company’s income statement.
True
False
Assets – Liabilities = Owner’s Equity.
True
False
A majority of employees in most businesses receive a weekly or monthly salary.
True
False
Payroll taxes consist of income taxes, Social Security, Medicare, and unemployment taxes.
True
False
The company’s liabilities divided by the owners’ equity is the current ratio.
True
False
At the end of the period covered by a budget, the business will prepare new financial statements.
True
False
A business will make a profit if
.
expenses decrease and revenue increases.
expenses are greater than revenue
revenue is greater than expenses.
revenue equals expenses.
When a business expands,
.
marketing activities can be put on hold temporarily
employees will likely be fired.
new factories and equipment may be needed
profits will increase.
For businesses that have operated for several years, the main source of budget information is
the Small Business Administration.
the Internet.
business magazines and newspapers.
he business’s financial records.
All of the following are private businesses that collect and publish financial information on similar businesses and industries EXCEPT
the National Federation of Independent Business.
Value Line.
Standard and Poor’s.
Dun and Bradstreet.
Which of the following generally is NOT a goal of a business budget?
to determine the sources and amounts of income
to predict the types and amounts of expenses for the business
to determine how income will be distributed to cover expenses
to convince employees to take a big pay cut so the business can avoid bankruptcy
The first step of the budgeting process is to
prepare a list of each type of income and expense that will be part of the budget.
gather accurate financial information
calculate each type of income, expense, and the amount of net income or loss
explain the budget to people who need to make financial decisions
Which type of budget is an estimate of the actual money received and paid out for a specific period?
a balanced budget
an accounting budget
a cash budget
a final budget
An operating budget is usually planned for
three months
six months
one year.
all of the above time frames
Which type of financial records identify the amount assets have decreased in value due to their age and use?
depreciation records
cash records
asset records
accounts payable records
In simple terms, ___ are what a company owns.
profits
revenues
owner's equity
assets
Which of the following usually is NOT a long-term asset?
inventory
equipment
land
buildings
Revenue > Expenses =
Owner’s Equity
Liabilities
Net Income
.
Assets
An income statement usually covers
five years
one week
one to two years
three to six months or less
All of the following would be considered expenses EXCEPT
wages paid to employees
taxes
interest earned on investments
purchase of supplies
Which of the following is NOT a common way businesses pay employees?
monthly
weekly
bi-weekly
yearly
Which of the following would NOT be considered a benefit?
a salary
health insurance
unpaid vacation
paid vacation
Employers must make matching contributions to
income taxes
unemployment taxes
FICA (Social Security and Medicare) taxes
all of the above
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
financial report
payroll record.
income statement.
This shows how much profit is being made by each dollar of sales for the period being analyzed.
debt to equity ratio
current ratio
.
return on equity ratio
net income ratio
The final step in the financial decision-making process is to
prepare a budget.
check to see if income and expenses are meeting budgeted amounts.
examine the budget for discrepancies
.
make needed adjustments to the budget.
A detailed plan for a business’s financial needs is called a(n)
(a)
A(n)_budget plans income and expenses from the beginning of a new business or a major business expansion until it becomes profitable.
(a)
A(n) (a) budget describes the financial plan for ongoing functions of the business for a specific period.
_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)
_records identify the type and number of products on hand for sale.
(a)
