BUSI 1301 5-8

Angel investors are wealthy individuals, whereas venture capital firms are companies.

In the context of various funding options for small businesses, which of the following statements is a difference between angel investors and venture capital firms?

LLCs are neither corporations nor partnerships.

The owners of limited liability companies (LLCs) are called members because:

sales budget

The preparation of operating budgets begins with the development of a(n) ____

C corporation

The stockholders of a construction firm decide to start a steel company, but they want to have limited liability. After completing the business plan, they initiate the process of establishing the company by filing articles of incorporation and paying the filing fees to the state government. In this scenario, the stockholders of the firm want to start a ____

limited liability partnership.

Three brothers of a family own a furniture showroom. Each of them is actively involved in handling the day-to-day business activities. However, when the business suffered huge losses at the end of the last fiscal year, the personal wealth and assets of the brothers did not get affected. This is most likely because the brothers have a

Listening• Seeking and understanding feedback from one'saudience and responding appropriatelyLO 1

Transmission of information between asender and a recipient (two way)• Includes

Physica,l Language, Body language, Perceptual, Organizational, Cultural

Types of Communication Barriers

C corporation is double taxed, whereas an S corporation is taxed as a partnership.

Which of the following is a difference between a C corporation and an S corporation?

vertical merger

A large film production company merges with a popular sound processing studio, resulting in the formation of a new company out of the two previously independent firms. This is most likely an example of a ____

A flexible budget

A pharmaceutical company wanted to create a budget that was practical and that would enable its managers to make more accurate comparisons between actual costs and budgeted costs. Thus, the company created a budget that was developed over a range of possible sales levels and was designed to show the appropriate budgeted level of costs for each different level of sales. Given this information, which of the following budgets did the company create?

distributorship

A premium brand of men's wear introduces a new range of dinner suits and licenses its franchisees to sell this product. However, the brand retains the production rights. This scenario exemplifies a(n) _____.

business plan

A__________is a formal document that describes a business concept, outlines core business objectives, and details strategies and timelines for achieving those objectives.

essential to keep the relationship as professional as possible.

According to small business experts, while raising start-up funds from friends and relatives, it is:

qualified opinion

Andrew is performing an audit of the financial statements of a cosmetics company. While analyzing the financial statements, he identifies some minor concerns. However, he believes that on balance the company's statements are accurate and its accounting methods are consistent with the generally accepted accounting principles. In this scenario, the independent auditor's report will most likely offer a(n) ___

the budgeted income statement, the capital expenditure budget, and the cash budget.

Ashley, a manager at a toy manufacturing company, needs to create a financial document for the company that would show how the company's operating, investing, and financing activities are expected to affect the asset, liability, and owners' equity accounts. To prepare this document, Ashley needs to collect data from:

providing personal customer service

Bertha runs a fashion boutique. She prefers to personally interact with her customers to gauge the styles that would suit their personality. Her customers also prefer talking to her in person to share their preferences in colors, designs, styles, and fabric as they value her suggestions. The opportunity of _____ is highlighted in the given scenario.

retained earnings.

Daniel, the owner of a bookstore, decides to reinvest his personal profits from the current fiscal year toward renovating the store and expanding its inventory. In the context of owners' equity, the profits that Daniel reinvests in the bookstore are called:

Too little money

David wants to open a new gymnasium with state-of-the-art equipment and qualified trainers. However, he can only afford either of the two. He decides to get the equipment first to start the gym. However, without qualified trainers to operate the equipment, David loses his customers and is forced to shut down the gym. Which of the following threats is most likely highlighted in the given scenario?

limited liability company

FoodieGo, a catering company, is owned by foreign investors and local businessmen. Its earnings are equally divided among its members. It does not face the problem of double taxation as taxes are only levied on the personal income of the members. The owners of FoodieGo do not have personal liability for any debts incurred by the company. In the given scenario, FoodieGo is an example of a ____

It is a venture capital firm.

Gemini Inc., a large conglomerate, offered Timothy's new logistics company the much required financial support in exchange for a 40% ownership in the company. It also provided Timothy with an experienced group of people to help him make crucial decisions for the company. In the given scenario, which of the following statements is true of Gemini Inc.?

horizontal analysis

Harold, a financial accountant in a company, is asked to identify the changes in the company's account values between 2014 and 2016. To get the required information, he uses comparative financial statements, which state the figures for the two years side by side. These comparative financial statements make it easier for Harold to identify the changes that may have taken place during that period. In this scenario, Harold is most likely using _____ to get the required information.

necessity entrepreneurs

In low-income countries, a high percentage of entrepreneurs are considered______

current assets

In the context of balance sheets, accounts receivable is an example of_______

is designed to show the appropriate budgeted level of costs for each different level of sales.

In the context of budgeting, a flexible budget:

Participation in the management of a company

In the context of limited partnerships, which of the following is an aspect that differentiates limited partners from general partners?

are called necessity entrepreneurs.

In the event that a large company has to downsize, the middle-aged workers who are laid off find it difficult to find new jobs. When such workers decide to start their own businesses, they:

personal resources

Julian wants to open a bakery. He uses his savings and borrows some funds from his family to start his business. In the given scenario, Julian uses _____ to fund his business.

public accountant.

Luke works in an accounting firm that offers services such as tax preparation and external auditing to corporate companies. Luke is currently providing consultation to a client that deals in automobile parts. In this scenario, Luke is most likely a:

S corporation

Mikhail, a Korean, wishes to be a stockholder in an airline company in the United States. However, he is told that he cannot buy shares of the company as he is neither a U.S. citizen nor a permanent resident of the country. Besides this, he can become a stockholder only if any of the current stockholders decide to sell their shares as the company already has 100 stockholders. Given this information, it can be assumed that Mikhail wants to be a stockholder of a(n) ___

having lower overhead costs

Olivia runs a spa for women. She employs only two helpers and one receptionist. This enables her to focus most of her resources on procuring products required to provide comfort and high-quality services to customers. The opportunity of _____ is highlighted in the given scenario.

A spin-off

Sarcosine Chemicals Corp. issues stock in one of its operating units and sets it up as a separate company called Prussic Corp., with its own board of directors and corporate officers. Sarcosine Chemicals Corp. then distributes the stock in Prussic Corp. to its existing stockholders. Which of the following forms of divestitures does this scenario exemplify?

identify specific activities that create indirect costs and determine the factors that drive the costs of these activities.

The first stage in activity-based costing is to: