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Unit Vocab 4

Unit 4

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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