Deck 5: Finances: How Will I Manage the Money

Question 1

Money loaned to entrepreneurs by relatives and friends is called:

A) sweat equity.
B) family fund equity.
C) personal equity.
D) love money.

Answer 1

D

Question 2

The Sales of a company minus its Cost of Goods Sold are equal to:

A) the operating expenses.
B) the gross profit.
C) the net profit.
D) the variable expenses.

Answer 2

B

Question 3

There is basically a single, precise accounting term for each accounting concept.

Answer 3

False

Question 4

Equity is:

A) the amount of claim an owner has on an asset.
B) how rich someone is.
C) the difference between assets and liabilities.
D) all of the above.

Question 5

The break-even point is where:

A) all of a company's overhead is covered.
B) a company starts to make net profit.
C) the income from sales is equal to all of a company=s costs and expenses.
D) all of the above.

Question 6

BDC stands for:

A) Business Department of Commerce.
B) Business Development Bank of Canada.
C) British Development Corporation.
D) Banking for Developing Companies.

Question 7

Almost all businesses have some seasonal fluctuation in sales.

Question 8

The amount of collateral required for a bank loan is negotiable.

Question 9

"Cash" is an example of a fixed asset.

Question 10

A new small business is only likely to sell shares through:

A) a stock exchange.
B) private placement.
C) the securities commission.
D) going public.

Question 11

A break-even number is a very precise financial tool.

Question 12

Assets can depreciate even if they are not being used in a business.

Question 13

Venture capital companies are particularly interested in providing start-up capital for new firms.

Question 14

Personal finance and business finance involve largely the same ideas.

Question 15

The Financial Statement that shows the financial position of a company at a particular moment in time is the:

A) balance sheet.
B) income statement.
C) cash flow statement
D) all of the above.

Question 16

Financial Statements that predict future performance of a company are called:

A) ad-hoc financial statements.
B) minimum value financial statements.
C) pro forma financial statements.
D) all of the above.

Question 17

Liabilities are:

A) legal debts.
B) nuisance situations.
C) negative personality attributes.
D) favours that you owe.

Question 18

Credit Bureaus:

A) are provincially regulated.
B) are owned by their members.
C) must allow individuals to see their own files.
D) all of the above.

Question 19

"Posted" interest rates at the bank are negotiable.

Question 20

Loans under the Canada Small Business Financing program are negotiated through regular chartered banks.

Question 21

Briefly explain the difference between "fixed" and "variable" expenses and give examples of each.

Question 22

A "profitable" business can still go bankrupt because of problems with .

Question 23

A bank loan in the form of an overdraft allowance is called a .

Question 24

The Accounting Equation is = + ,

Question 25

Discuss the process and need for cash-flow planning.

Question 26

The loss in value of an asset over time is called .

Question 27

Expenses that do not vary with sales are called expenses.

Question 28

Discuss the advantages and disadvantages for each of the major sources of start-up financing.

Question 29

Prepare a personal Balance Sheet for yourself.