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WorksheetsChapter 12 Financial Management
Total questions: 30
Worksheet time: 15mins
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
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 accounts receivable record identifies the companies from which credit purchases were made and the status of each account.
True
False
Assets - Liabilities = Owner's Equity
True
False
Sales, expenses, and profits or losses for a specific period are reported in a company's income statement.
True
False
Payroll taxes consist of income taxes, Social Security, Medicare, and unemployment taxes.
True
False
At the end of the period covered by a budget, the business will prepare new financial statements.
True
False
Which of the following would NOT be considered an expense?
wages paid to employees
interest earned on investments
taxes
purchases of supplies
The company's liabilities divided by the owner's equity is the current ratio.
True
False
A majority of employees in most businesses receive a weekly or monthly salary.
True
False
A business will make a profit IF
revenue equals expenses
revenue is greater than expenses
expenses decrease and revenue increases
expenses are greater than revenue
Which type of budget is an estimate of the actual money received and paid out for a specific period?
accounting budget
final budget
cash budget
balanced budget
a difference between actual and budgeted performance
ratio
discrepancy
budget
expense
What type of assets include cash and those items that can be readily converted into cash?
long-term
current
expensed
depreciated
What type of records identify the type and number of products on hand for sale?
payroll
asset
current
inventory
What type of budget describes the financial plan for ongoing functions of the business for a specific period?
direct
balance
start-up
operating
What type of budget plans income and expenses from the beginning of a new business or a major business expansion until it becomes profitable?
direct
balance
start-up
operating
a detailed plan for a business' financial needs
expenses
budget
inventory
accounts
the costs of operating a business
expenses
budget
inventory
accounts
Which of the following is NOT a common way businesses pay employees?
yearly
monthly
weekly
bi-weekly
Which of the following would NOT be considered a benefit?
unpaid vacation
health insurance
paid vacation
salary
Which taxes must employers make matching contributions to?
income taxes
unemployment taxes
FICA (Social Security and Medicare) taxes
all of the above
What time period does an income statement usually cover?
1-2 years
1 week
3-6 months or less
5 years
what a company owns
assets
owner's equity
profits
revenue
Which of the following is usually NOT a long-term asset?
land
inventory
buildings
equipment
Which type of financial records identify the amount assets have decreased in value due to their age and use?
asset records
depreciation records
cash records
accounts payable records
What is the first step in the budgeting process?
prepare a list of each type of income and expense that will part of the budget
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
gather accurate financial information
For businesses that have operated for several years, the main source of budget information is
the businesses' financial records
the Internet
the Small Business Administration
business magazines and newspapers
What happens when a business expands?
profits will increase
employees will likely be fired
marketing activities can be put on hold forever
new factories and equipment may be needed
