Deck 10: The Finance Plan: How Much Money Do You Need

Question 1

Although you may operate your business as you desire, federal, state, and/or local government take a portion of each dollar you generate in the form of taxes.

Answer 1

True

Question 2

_______ assets are items, also owned, that cannot be seen, such as patents or copyrights.

A)Tangible
B)Current
C)Intangible
D)Net
E)Receivable

Answer 2

C

Question 3

_______ are changes made to the building or property to facilitate doing business.

A)Inventory items
B)Owner's equity
C)Accounts payable
D)Liability improvements
E)Leasehold improvements

Answer 3

E

Question 4

_______ reflects profits or losses.

A)Net worth
B)Gross worth
C)Assets
D)Liabilities
E)Suspected worth

Question 5

_______ are sales minus cost of goods sold and minus operating expenses.

A)After tax income
B)Profits or losses
C)Assets
D)Liabilities
E)Net worth

Question 6

Which of the following are types of claims against assets?

A)Claims of competitors
B)Claims of creditors
C)Claims of family members
D)Claims of owners
E)Claims of previous owners

Question 7

Which of the following are considered current assets?

A)Cash
B)Buildings
C)Any asset that can be converted to cash in less than one year
D)Accounts receivable
E)Land

Question 8

Which of the following are true about pro forma statements?

A)They are used prolifically in large companies but rarely used in small companies.
B)They do not give accurate information.
C)They are key to determining the financial needs of the organization.
D)They are guidelines against which one can measure how given assumptions relate to reality.
E)They are only an estimate of what might happen given a certain defined set of circumstances and the validity of your assumptions.

Question 9

Which of the following are types of taxes a company must pay?

A)Unemployment tax
B)Sales tax
C)Property tax
D)Excise tax
E)Social Security tax

Question 10

Explain the importance and purpose of an accounting system.

Question 11

Identify the importance of a balance sheet and an income statement and their three parts.

Question 12

Compare and contrast elements of the balance sheet and elements of the income statement.

Question 13

What are the components of breakeven analysis?

Question 14

Describe the most common forms of taxation.

Question 15

_______ assets are those items that can be seen such as land, cash, equipment and buildings.

A)Receivable
B)Accountable
C)Intangible
D)Accumulated
E)Tangible

Question 16

Which of the following is NOT a reason an entrepreneur should understand and use accounting information?

A)Know if the business is making a profit
B)Intimidate competitors
C)Project future performance
D)Compare firm's results with that of other firms in the industry.
E)Make informed decisions about what future actions your firm should take.

Question 17

It is not really necessary to keep records in your business.

Question 18

A chart of accounts translates your vision of how to financially measure the company into various accounts.

Question 19

Yearly depreciation is not tax deductible.

Question 20

The balance sheet always balances because its right-hand side (liabilities plus equity) tells you how the company has been financed while the left (asset) side tells you how the funds have been invested.

Question 21

Cost of goods sold represents the cost to you of your purchases from all sources for resale either in the same form as you bought it or in a modified form.

Question 22

Cash flow problems cause little trouble with creditors because they calculate you will eventually make enough income to pay accrued debts.

Question 23

A breakeven point shows the relationship between cost and volume.

Question 24

Income taxes are the only form of tax businesses must be concerned with.

Question 25

Sales taxes are determined by a percentage of the sales price of goods or services purchased.

Question 26

The S corporation and the LLC permit you to pass through the corporate structure all revenues and expenses accruing to the corporation so that they can be taxed on your individual income tax return.

Question 27

The existing business should already have an existing accounting system in place.

Question 28

A _______ is a snapshot view of the financial value of the firm's assets, liabilities, and net worth at a particular point in time.

A)income statement
B)net worth statement
C)balance sheet
D)performance report
E)inventory account

Question 29

_______ depreciation is the amount of a fixed asset's value that has been written off over time due to wear and tear.

A)Accumulated
B)Reused
C)Yearly
D)Hourly
E)Reserved

Question 30

List at least five common tax deductions.