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Unit Vocab 4
Unit 4
| Question | Answer |
|---|---|
| A local doughnut shop incurs a number of expenses during the month to keep the business running. Which is an expense that will change from week to week or month to month? | Cost of baking ingredients Insurance fees Office salaries Rent payments |
| Buoy's Restaurant sets aside $400 a month to cover unexpected expenses. This represents a/n: | Contingency fund. Inventory account. Personal savings account. Start-up fund. |
| Expenses that do NOT remain the same from month to month are: | Fixed costs. Fixed revenue. Variable costs. Variable sales. |
| Deposits paid prior to opening the business to connect utility services for a new business are considered: | Fixed costs. Living expenses. Start-up costs. Variable expenses. |
| Expenses that are NOT affected by sales volume are called: | Fixed costs. Fixed revenue. Variable costs. Variable sales. |
| One factor that affects start-up costs of a new business is: | Market share. Personal living expenses for the entrepreneur. The number of customers who make a purchase on opening day. Whether the business is a retail or wholesale organization. |
| Miscellaneous expenses incurred by the entrepreneur for clothing, travel and entertainment are: | Fixed costs. Income. Personal expenses. Start-up expenses. |
| Initial inventory for the business is which type of cost? | Fixed cost Personal cost Start-up cost Variable cost |
| As she prepared to open her new flower shop, Jamesia made several trips to talk with an accountant. The fees paid for those consultations would be classified as: | Fixed costs. Office expense. Start-up costs. Wages and salary |
| Advertising and promotion expenses for an ongoing business are: | Fixed costs. Sales revenue. Start-up costs. Variable costs. |
| Which is NOT a factor that affects start-up costs? | Nature of the business Number of customers who purchase goods/services on opening day Operating expenses that must be paid before cash is received from sales Size of the business |
| A short-term loan is repayable in: | One year. Two years. Five years. Twenty-five years. |
| When seeking a loan, an entrepreneur who has capacity: | Considers environmental conditions before applying for the loan. Demonstrates the ability to repay the debt. Has insurance to cover business losses. Has made a personal investment in the business. |
| One advantage of entering into a partnership with people or with other companies having compatible goods is that a partnership: | Increases the borrowing power of the business. Provides tax savings over a proprietorship. Provides unlimited liability. Reduces the amount of interest on loans. |
| An advantage of using family and friends as sources of funding is: | The availability of money with little or no restriction. The personal sacrifice required. The restrictions and formality of the loan arrangements. The unlimited liability provided. |
| A line of credit is: | A prearranged loan at an established rate available whenever the business owner needs it. An interest-free loan. An unsecured loan. Funding that requires no collateral. |
| State-sponsored venture capital funds are provided to entrepreneurs by the state to encourage economic development and: | Create jobs. Control the business operation. Increase tax revenue. Reduce business debts. |
| Funding that is borrowed from family or friends is sometimes called: | Collateral. Debt funding. Free money. Love money. |
| What is a disadvantage of using a partnership as a source of funding? | Increased borrowing power Loss of some of the control and ownership Risks and responsibilities are shared Tax deductions for interest and related costs |
| The most common source of business financing is a: | Bank. Credit union. Family member. Government agency. |
| A source of funding that requires money borrowed to be paid back with interest is referred to as: | Collateral. Debt. Equity. Revenue. |
| One disadvantage of using personal savings as a source of funding is that it: | Allows the owner to retain all of the profit. Provides larger amounts of money than other sources. Provides quick sources of funding. Provides unlimited liability. |
| What is trade credit? | A form of credit that allows the borrower to repay the debt anytime he/she has the money A form of long-term low interest credit through a financial institution A form of short-term financing from within the industry |
| What is collateral? | Evidence of a good financial plan Responsibility shown by repaying bills in the past Short-term financing Something of value that the lender can claim if the debt is not repaid |
| When an entrepreneur visits a bank to apply for a loan, he/she should be ready to: | Argue with the loan officer. Discuss his/her business plan. Provide shares of stock in the business for collateral. Write a check to cover interest on the loan. |
| A loan that is granted to a bank's most credit-worthy customers and is not guaranteed by collateral is a/an: | Grant. Long-term loan. Secured loan. Unsecured loan. |
Created by:
Jaquan2323
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