1. You've decided to capitalize 100% of your new business by obtaining a loan from a local bank. Your initial funding will
A. include personal and equity financing.
B. include equity and start-up financing.
C. consist of personal financing.
D. consist of debt financing.
2. The practice of subcontracting work to other people or companies is called
A. in housing.
B. outsourcing.
C. project management.
D. downloading.
3. Which of the following components make up the Income statement?
A. Net Income, Expenses, and Net Gain/Loss
B. Net Income, Assets, and Liabilities
C. Expenses, Net Gain/Loss, and Assets
D. Expenses, Net Gain/Loss, and Owner's Equity
4. Locating dependable suppliers is part of the ______________ process.
A. creative thinking
B. research
C. investing
D. accounting
5. In the most basic terms, while working out the business process of production and marketing, you'll want to be continually prepared for
A. adapting to new conditions in the market and within your organization.
B. locating new blood to replace employees who don't work out.
C. finding innovative ways to reduce expenses.
D. balancing growth against the need for increasing your profits
6. When researching your prospective business, you must know your product and your
A. skills.
B. customer.
C. interests.
D. sales pitch.
7. An entrepreneur estimating costs for a new business tends to avoid looking at the
A. cost of capital equipment.
B. escalating costs of raw materials.
C. inevitability of things going wrong.
D. costs associated with hiring personnel.
8. You're in the process of setting up a business plan. In particular, you're thinking about how to work your plan. You need to focus on two process considerations. The first concerns organization of the business; the second concerns the operations of the business, such as
A. deciding who will do what and when.
B. thinking out your mission statement.
C. contacting potential investors.
D. working out a pricing scheme.
9. Assuming you own a home, where would the amount for the mortgage owed to the bank go in a personal balance sheet?
A. Under both the equity and the assets sections
B. Under liabilities
C. Under assets
D. Within the equity total
10. In thinking about the "color of money," which color would correspond to a DVD player charged on a department store credit card?
A. Green
B. Red
C. Gray
D. Blue
11. As you do your _______ when considering a business venture, you should consider factors such as your financial resources, your special skills, where you live, and what you like to do with your time.
A. evaluating
B. creative thinking
C. planning
D. marketing and production
12. The art of getting the greatest benefit from limited financial resources is called
A. marketing.
B. profit.
C. inflation.
D. financial management
13. You've decided that you want to get your household budget under control so you can increase the proportion of money you devote to savings. Your first step will be to
A. check out wise investments.
B. think about how you most enjoy spending your time.
C. keep track of your expenses for a period of time.
D. open a savings account.
14. Outlays of monies for items such as life insurance, car insurance, and medical insurance are considered
A. mandatory spending.
B. excessive spending.
C. security spending.
D. wasteful spending
15. When budgeting for your immediate needs, you should divide them into
A. fixed and immediate expenses.
B. discretionary and fixed expenses.
C. immediate and discretionary expenses.
D. fixed and intermittent expenses.
16. Which of the nine "P" questions related to planning deal with rating how well your business is doing?
A. Place
B. Purpose
C. Performance
D. Personnel
17. According to the discussion of the "color of money," blue money is
A. money set aside for emergencies and unexpected expenses.
B. money spent wisely.
C. currently expended green money.
D. invested for the long term.
18. As you manage your personal finances, you'll probably want to pay attention to general conditions in the economy. One general concern for most people managing their day-to-day finances would be
A. the international labor market.
B. good deals in major real estate ventures.
C. current interest rates.
D. the likelihood of a major depression
19. In ancient Greece, a group of people living together with the common purpose of taking care of each other through economic activity was called a
A. household.
B. tribe.
C. commune.
D. city.
20. The correct equation for the Balance Sheet is:
A. Expenses - Net Income = Owner's Equity
B. Assets - Liabilities = Owner's Equity
C. Net Income + Expenses = Owner's Equity
D. Liabilities + Assets = Owner's Equity.