Question: Acute Business Corp. has $500 000 in assets and $300 000 in liabilities. What is the value of the owners’ equity?
Answer Choices: A. $1 500 000 B. $200 000 C. $175 000 D. $800 000
Answer: B. $200 000.
Question: Working capital can be calculated by subtracting current assets from total assets.
Answer Choices: True False
Answer: False.
Question: What is the advantage of using multiple sources of supply?
Answer Choices: A. During shortages, better services can be received. B. Discounts can be obtained with low‑volume buying. C. The cost of ordering is low. D. Greater variety of goods can be obtained.
Answer: A. During shortages, better services can be received.
Question: Gemini Inc. earned a net income of $250 000 in the year 2000. What was its revenue if expenses were $50 000?
Answer Choices: A. $300 000 B. $250 000 C. $350 000 D. $200 000
Answer: A. $300 000.
Question: What is the significance of a variable work schedule?
Answer Choices: A. It permits employees to work at times other than the standard five 8‑hour days. B. It allows employees to adapt to a standard working time while performing various kinds of work. C. It grants only minimal responsibilities to workers, leading to higher productivity. D. It ensures that workers carry out a variety of duties within a specific time span.
Answer: A. It permits employees to work at times other than the standard five 8‑hour days.
Question: Uncollectable accounts receivable can be written off by small businesses to decrease business‑income‑tax liability.
Answer Choices: True False
Answer: True.
Question: Which of the following best describes a collection‑period ratio?
Answer Choices: A. Long‑term liability divided by working capital B. Accounts receivable divided by average daily credit sales C. Net income divided by average shareholders’ equity D. Net profit divided by net sales
Answer: B. Accounts receivable divided by average daily credit sales.
Question: Which of the following statements is a characteristic of apprenticeship training?
Answer Choices: A. It blends on‑the‑job training with learning of theory in the classroom. B. It combines education at a school or college with on‑the‑job training at a cooperating business. C. It involves workers learning many job skills so they are more versatile. D. It is used specifically for prospective managerial employees for marketing positions.
Answer: B. It combines education at a school or college with on‑the‑job training at a cooperating business.
Question: Which of the following is one of W. Edwards Deming’s 14 points of management philosophy and techniques?
Answer Choices: A. Adopt the old philosophy. B. Depend on mass inspection. C. Award business on the basis of a price tag. D. Break down barriers between departments.
Answer: D. Break down barriers between departments.
Question: _____ is the percentage of net profit the owners’ equity earns, before taxes.
Answer Choices: A. Return on net assets B. Surplus value C. Return on equity D. Profit margin
Answer: C. Return on equity.
Question: Which of the following statements is a characteristic of a cash‑flow budget?
Answer Choices: A. It allocates expenses for achieving the sales target. B. It tells whether arrangements need to be made for external sources of cash, such as borrowing or owner investments. C. It contains a forecast of the amounts and sources of sales income and the materials that will be needed to achieve the sales forecast. D. It plans and controls revenue to obtain desired profits.
Answer: B. It tells whether arrangements need to be made for external sources of cash, such as borrowing or owner investments.
Question: The assets, liabilities, and equity accounts of a business, which are interrelated and interact with each other, represent:
Answer Choices: A. the benchmarks of the business. B. the surplus value of the business. C. the financial structure of the business. D. the profit realization rate of the business.
Answer: C. the financial structure of the business.
Question: _____ control is the careful planning and control of all financial activities of a firm.
Answer Choices: A. Budgetary B. Auditing C. Production D. Functionary
Answer: A. Budgetary.
Question: What will the net income of a company be if its revenue is $600 000 and its expenses are $200 000?
Answer Choices: A. $800 000 B. $200 000 C. $400 000 D. $1 200 000
Answer: C. $400 000.
Question: An operating budget forecasts sales and allocates expenses to meet them.
Answer Choices: True False
Answer: True
Question: Which of the following statements is true of profit planning?
Answer Choices: A. Profit planning completely eliminates the risk of failure in a small business. B. Typically, determining the volume of sales revenue is not required for profit planning. C. Profit planning must precede other planning activities because it establishes targets. D. One’s profit goal need not be a specific target value.
Answer: C. Profit planning must precede other planning activities because it establishes targets.
Question: Which of the following is an example of a long‑term liability?
Answer Choices: A. Accounts payable B. Accounts receivable C. Accrued payable D. Mortgage payable
Answer: D. Mortgage payable.