ENTR 187 Chapter 13 and 14 Quiz

A company's goodwill is its best collateral. True False

False

Cash flow management is about keeping large sums of cash on hand at all times. True False

False

Factoring is a method of borrowing against payables. True False

False

Short-term debts are not transferable to other investors. True False

False

Taking deposits and progress payments and taking on noncore paying projects are two techniques for decreasing cash outflows. True False

False

________ exist for the purpose of addressing some identified social need that cannot be adequately met by market forces. Foundations Limited Liability Companies SBAs EDAs

Foundations

Which of the following statements concerning financial management is correct? The details of financial management are standard across businesses in different industries. Once a financial management system is in place it only requires periodic review. Financial management needs remain the same through the life of the company. Obtaining money for your start-up is only the beginning of financing a small business.

Obtaining money for your start-up is only the beginning of financing a small business.

Revenue is an accounting entry that is made when you sell your product or service, whether or not any money changes hands. True False

True

The majority of small business start-ups are funded by bootstrapping. True False

True

A(n) ________ identifies when, how, and why money is expected to come into the business, and when, how, and why it is expected to leave. cash budget charge back overdraft bearer

cash budget

The ________ is a schedule of the amounts and timings of payments of cash out of a business. comprehensive budget capital budget cash receipts budget cash disbursements budget

cash disbursements budget

Cash that can be obtained by selling the products and services of a business and collecting cash from customers is called cash flow from operations. cash flow from subsidy. cash from financing. cash flow from investing.

cash flow from operations.

Which of the following is an example of a cash equivalent? demand deposit currency traveler's check commercial paper

commercial paper

Tammy is talented at craft but lacks the cash flow management skills required to run a business. She opens a store, Tammy's Craft Corner, with the help of her son David—a business major—who manages the budgets and expenses of the business. Tammy receives a bulk order from a customer to make 100 paper roses for Valentine's Day. She charges 20 percent of the total sales price in advance and promises to deliver the order within 30 days. The advance payment that Tammy receives for the order before delivering the product is called deposit and progress payment. gaming the payment process. noncash incentive. discount payment.

deposit and progress payment.

Which of the following is an example of debt financing? incubators angels venture capitalists crowdfunding

incubators

Which of the following is true of financial management for a business exit? its main emphasis is to obtain increasing amounts of cash inflows to pay for added inventory its main emphasis is on maximizing the value of the business for successors its main emphasis is on increasing amounts of cash inflows to pay for added inventory, productive assets, and employees its main emphasis is on conserving what little cash the business has

its main emphasis is on maximizing the value of the business for successors

After successfully operating for five years, Tina plans to sell her computer service center. Which of the following would be Tina's main financial management need as she exits the business through sale? optimizing capital structure for profits conserving the money that the business has building her wealth and conserving assets obtaining increasing amounts of cash inflows

optimizing capital structure for profits

The ratio of debt to equity that provides the maximum level of profits is called cost of capital. declining financial leverage position. weighted average cost. optimum capital structure.

optimum capital structure.

When examining debt worthiness, lenders eagerly loan money to purchase capital equipment. finance ongoing operations. make up for financial failure. bring the debt-to-equity ratio above 50 percent.

purchase capital equipment.

The most common form of institutional gift financing is in the form of ________. state grants reduced taxes donated capital state loans

reduced taxes