Business Expenses
Fixed vs. Variable
Finance
Equity
Debt
100
What are start-up costs?   1-Fees paid to support television, magazine, or other advertising of a franchise ?2-Money left over at the end of the first year of operation to be used to begin the next year ?3-One-time expenses incurred by the entrepreneur when beginning a business ?4-Payments made at the beginning of each month
3-One-time expenses incurred by the entrepreneur when beginning a business ?
100
One advantage of entering into a partnership with people or with other companies having compatible goods is that a partnership:   1-Increases the borrowing power of the business. ?2-Provides tax savings over a proprietorship. ?3-Provides unlimited liability. ?4-Reduces the amount of interest on loans.
1-Increases the borrowing power of the business. ?
100
When seeking a loan, an entrepreneur who has capacity:   1-Considers environmental conditions before applying for the loan. ?2-Demonstrates the ability to repay the debt. ?3-Has insurance to cover business losses. ?4-Has made a personal investment in the business.
2-Demonstrates the ability to repay the debt. ?
100
What is a disadvantage of using a partnership as a source of funding?   1-Increased borrowing power ?2-Loss of some of the control and ownership ?3-Risks and responsibilities are shared ?4-Tax deductions for interest and related costs
2-Loss of some of the control and ownership
100
A loan that is granted to a bank’s most creditworthy customers and is not guaranteed by collateral is a/an:   1-Grant. ?2-Long-term loan. ?3-Secured loan. ?4-Unsecured loan.
4-Unsecured loan.
200
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?   1-Cost of baking ingredients ?2-Insurance fees ?3-Office salaries ?4-Rent payments
1-Cost of baking ingredients
200
Expenses that are NOT affected by sales volume are called:   1-Fixed costs. ?2-Fixed revenue. ?3-Variable costs. ?4-Variable sales.
1-Fixed costs.
200
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:   1-Fixed costs. ?2-Office expense. ?3-Start-up costs. ?4-Wages and salary
3-Start-up costs. ?
200
Who are angels?   1-Non-professional investors who provide funds only to a business whose ownership is female ?2-Professional investors who prepare business plans and financial records ?3-Professional investors who spend money to make money ?4-Wealthy individuals functioning as nonprofessional investors who are willing invest in local businesses
?4-Wealthy individuals functioning as nonprofessional investors who are willing invest in local businesses
200
A federal agency that provides grants to cities for loans to private developers to help improve impoverished areas is:   1-HUD ?2-IRS. ?3-SBA. ?4-SCORE.
1-HUD
300
Deposits paid prior to opening the business to connect utility services for a new business are considered:   1-Fixed costs. ?2-Living expenses. ?3-Start-up costs. ?4-Variable expenses.
3-Start-up costs.
300
Expenses that do NOT remain the same from month to month are:   1-Fixed costs. ?2-Fixed revenue. ?3-Variable costs. ?4-Variable sales.
3-Variable costs. ?
300
Buoy’s Restaurant sets aside $400 a month to cover unexpected expenses. This represents a/n:   1-Contingency fund. ?2-Inventory account. ?3-Personal savings account. ?4-Start-up fund.
1-Contingency fund.
300
Capital contributed by the owner(s) of a business is:   1-Debt. ?2-Equity. ?3-Income. ?4-Revenue.
2-Equity.
300
The repayment of a long-term loan is expected to take:   1-Six months. ?2-Less than one year. ?3-More than one year. ?4-At least ten years.
3-More than one year.
400
One factor that affects start-up costs of a new business is:   1-Market share. ?2-Personal living expenses for the entrepreneur. ?3-The number of customers who make a purchase on opening day. ?4-Whether the business is a retail or wholesale organization.
4-Whether the business is a retail or wholesale organization.
400
Advertising and promotion expenses for an ongoing business are:   1-Fixed costs. ?2-Sales revenue. ?3-Start-up costs. ?4-Variable costs.
4-Variable costs.
400
One advantage of using personal savings to fund a sole proprietorship is that:   1-Investments are tax deductible. ?2-The chances of personal loss decrease. ?3-The owner has unlimited liability. ?4-The owner retains all the profits.
4-The owner retains all the profits.
400
Money invested in a business by private investors is:   1-Capital gain. ?2-Debt funding. ?3-Equity funding. ?4-Income.
3-Equity funding.
400
Ability and willingness to invest personally in a business venture satisfies the credit requirement for:   1-Capacity. ?2-Capital. ?3-Character. ?4-Condition.
2-Capital.
500
Miscellaneous expenses incurred by the entrepreneur for clothing, travel and entertainment are:   1-Fixed costs. ?2-Income. ?3-Personal expenses. ?4-Start-up expenses
3-Personal expenses.
500
Which is NOT a factor that affects start-up costs?   1-Nature of the business ?2-Number of customers who purchase goods/services on opening day ?3-Operating expenses that must be paid before cash is received from sales ?4-Size of the business
2-Number of customers who purchase goods/services on opening day
500
A short-term loan is repayable in:   1-One year. ?2-Two years. ?3-Five years. ?4-Twenty-five years.  
1-One year.
500
One disadvantage of using personal savings as a source of funding is that it:   1-Allows the owner to retain all of the profit. ?2-Provides larger amounts of money than other sources. ?3-Provides quick sources of funding. ?4-Provides unlimited liability.
4-Provides unlimited liability.
500
A government agency that uses a commercial bank to make loans to businesses and then guarantees up to 90% of the loan if the business fails is the:   1-FTC. ?2-HUD. ?3-IRS. ?4-SBA.
4-SBA.
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