Chapter-14

____is a series of prescribed steps to be taken by a small business owner to ensure that a profit will be made A. budgeting B. Profit Planning C. Forecasting D. Profit sharing

B. Profit planning

This land, cash, account receivable, inventory, equipment, building and other things of value that a company owns are considered its____. A. profit B. assets C. revenues D. expenses

B. assets

Which of the following refers to a profit planning step of a small business? A. listing strategies for rapid growth B. determining the volume of sales revenue needed to reach profit goals C. listing strategies and possible alternatives to reduce production costs D. analyzing the diversification strategies of competitors

B. determining the volume of sales revenues needed to reach profit goals

Which of the following is an example of a current liability? A. account payable B. prepaid expense C. Inventory D. Mortgage payable

A. accounts payable

Acute Business Corp., a small business firm, has $500,000 in assets and $300,000 in liabilities. What is the value of the owners' equity in the accounting book of Acute Business Corp.? A. $1,500,000 B. $200,000 C. $175,000 D. $ 800,000

B. $200,000

The ___describes the relative proportions of a firm's assets, liabilities, and owners' equity. A. surplus value B. financial structure C. Economic quantity D. Purchase order

B. Financial structure

Which of the following is an example of a current asset? A. motor vehicles B. furniture C. inventory D. office equipment

C. inventory

_____ is the specific amount of profit one expects to achieve in a business. A. the breakeven point B. the sales income C. a profit goal D. a benchmark

C. profit goal

Which of following statements is true of profit planning? A. profit planning completely eliminate 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. Ones profit goal need not be a specific target value

C. profit planning must precede other panning activities because it establishes targets

The assets, liabilities, and equity account of a business, which are interrelated and interact with each other, represent: A. the benchmark 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

C. the financial structure of business

Cost of goods sold is : A. the target cost for all phase of design, development, and production of a product for each accounting period B. the sum of net income and accounts receivable C. the total cost in terms of raw materials, labor, and overhead of the business that can be allocated to production D. the difference between revenue earned and expenses incurred

C. the total cost in terms of raw materials, labor, and overhead of the business that can be allocated to production

The concept of ____sets cost target for all phases of design, development, and production of a product for each accounting period in a small business. A. activity-based costing B. contract costing C. batch costing D. kaizen costing

D. kaizen costing

____are the financial obligations of a business created by borrowing. A. current assets B. Fixed assets C. Equities D. Liabilities

D. liabilities

Which of the following is an example of a long-term liability? A. accounts payable B. accounts receivable C. accrued payable D.mortgage payable

D. mortgage payable

Gemini Inc. earned a net income of $250,000 in the year 2000. what is the revenue that Gemini Inc. earned in the year 2000 if its expenses for that year amounted to $50,000? A. $300,000 B. $250,000 C. $350,000 D. $200,000

A. $300,000

___are current assets resulting from selling a product on credit. A. account receivable B. Account payable C. liabilities D. owners' equity

A. account receivable

What will the net income of a company be if its revenue is $600,000 and its expenses are calculated to be $200,000? A. $800,000 B. $200,000 C. $400,000 D. $1,200,000

C. $400,000

____is referred to as the proprietors' share of (or net worth in) a business, after the liabilities are subtracted from the assets. A. breakeven expense B. operating expense C. owners' equity D. private equity

C. Owners' equity

____ shows a firm's financial position and reflect any changes in that position A. benchmarks B.standing orders C. profit goals D. accounting records

D. accounting records

A(n)____periodically chows revenues, expenses, and profit from a firm's operations. A. balance sheet B. statement of retained earnings C. income statement D. inventory statement

c. income statement

In the context of small business, which of the following is an alternative for improving profits? A. increasing the productivity of people and machines B. selling products on the basis of price alone C. buying all components of a product from the outside D. removing a summer product from a winter line of products

A. Increasing the productivity of the people and machines

A____ is a statement of a firm's assets, liabilities, and owners' equity at a given time. A. balance sheet B. purchase order C. profit goal D. sales forecast

A. balance sheet

_____ are expected to turn over- that is, to change from one form to another- within a year. A. current assets B.owner's equities C. accounts payable D. fixed assets

A. current assets

in the context of small businesses,____is the first step in the process of profit planning. A. establishing a profit goal B. estimating the volume of sales revenue C. determining the amount of expenses D. preparing a balance sheet

A. establishing a profit goal

Which of the following statement is true of benchmarking ? A. it involves setting up standards and then measuring performance against them B. it is a series of prescribed steps to be taken to ensure that a profit will be made C. it sets cost target for all phases of design, development, and production of a product for each accounting

A. it involves setting up standards and then measuring performance against them

____is the difference between revenue earned and expenses incurred. A. profit B.. liability C. Gap ratio D. Depreciation

A. profit

Which of the following statement is true of sales forecast? A. it is the value received by a firm in return for a good or service B. it is an estimate of the amount a firm expects to sell during a given period in the future C. it represents the difference between revenue earned and expenses incurred D. it is estimate of the owners' share of a business, after liabilities are subtracted from assets

B. it is an estimate of the amount a firm expects to sell during a given period in the future

which of the following statement is true of the breakeven point? A. it sets in advantage cost target in all aspects of product design and production B. it is the volume of sales where there is neither profit nor loss C. it is the amount of revenue expected from sales for a given period in the future D. it is specific amount one expects to achieve

B. it is the volume of sales where there is neither profit nor loss

____ are obligations to pay for goods and services purchased and are usually due within 30 or 60 days, depending on the credit terms. A. Purchase return B. Sales returns C. Accounts payable D. Owner's Equities

C. accounts payable

A well-managed small business is mostly likely to: A. place low importance on the balance sheet B. emphasize rapid growth instead of stability C. emphasize long-range planning D. be less liquid than a badly managed company

C. emphasize long-range planning