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Mitralaa
Unit 4
| Question | Answer |
|---|---|
| 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 |
| Buoy's Restaurant sets aside $400 a month to cover unexpected expenses. This represents a/n: | Contingency fund |
| Expenses that do NOT remain the same from month to month are: | Variable costs. |
| Deposits paid prior to opening the business to connect utility services for a new business are considered: | Start-up costs. |
| Expenses that are NOT affected by sales volume are called: | Fixed costs |
| One factor that affects start-up costs of a new business is: | Whether the business is a retail or wholesale organization. |
| Miscellaneous expenses incurred by the entrepreneur for clothing, travel and entertainment are: | Personal expenses. |
| Initial inventory for the business is which type of cost? | Start-up 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: | Start-up costs |
| Advertising and promotion expenses for an ongoing business are: | Variable costs. |
| Which is NOT a factor that affects start-up costs? | Number of customers who purchase goods/services on opening day |
| A short-term loan is repayable in: | One year. |
| When seeking a loan, an entrepreneur who has capacity: | Demonstrates the ability to repay the debt. |
| 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 |
| An advantage of using family and friends as sources of funding is: | The availability of money with little or no restriction. |
| A line of credit is: | A prearranged loan at an established rate available whenever the business owner needs it. |
| State-sponsored venture capital funds are provided to entrepreneurs by the state to encourage economic development and: | Create jobs. |
| Funding that is borrowed from family or friends is sometimes called: | Love money. |
| What is a disadvantage of using a partnership as a source of funding? | Loss of some of the control and ownership |
| The most common source of business financing is a: | Bank. |
| A source of funding that requires money borrowed to be paid back with interest is referred to as: | Debt. |
| One disadvantage of using personal savings as a source of funding is that it: | Provides unlimited liability. |
| What is trade credit? | A form of short-term financing from within the industry |
| What is collateral? | 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: | Discuss his/her business plan. |
| A loan that is granted to a bank's most credit-worthy customers and is not guaranteed by collateral is a/an: | Unsecured loan. |
| A federal agency that provides grants to cities for loans to private developers to help improve impoverished areas is: | HUD |
| Who are angels? | Wealthy individuals functioning as non-professional investors who are willing to invest in local businesses |
| 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: | SBA. |
| Ability and willingness to invest personally in a business venture satisfies the credit requirement for: | Capital. |
| The repayment of a long-term loan is expected to take: | More than one year. |
| Money invested in a business by private investors is: | Equity funding. |
| Capital contributed by the owner(s) of a business is: | Equity. |
| One advantage of using personal savings to fund a sole proprietorship is that: | The owner retains all the profits. |
| What are start-up costs? | One-time expenses incurred by the entrepreneur when beginning a business |
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