Question 1

To determine sales revenue,the owner records sales revenue for the year and subtracts liabilities.

Accepted Answer

A) True 
 B)False

Question 2

To get the best results,an entrepreneur should track as many ratios as possible.

Accepted Answer

A) True 
 B)False

Question 3

The balance sheet is usually prepared on the ________ day of the month.

Accepted Answer

A)  first
B)  last
C)  15th
D)  None of the aboveE) B) and C)
F) None of the above

Question 4

A ratio greater than ________ days would indicate poor collection procedures.

Accepted Answer

A)  29
B)  40
C)  60
D)  90E) A) and D)
F) B) and C)

Question 5

When a company is forced into liquidation,owners are most likely to incur a loss when selling:

Accepted Answer

A)  accounts receivable.
B)  inventory.
C)  marketable securities.
D)  real estate.E) B) and C)
F) None of the above

Question 6

What are liquidity ratios and how are they used by the small business owner? Name and briefly explain the current and quick ratios.

Accepted Answer

Liquidity ratios tell whether a small bu...

Question 7

Total profits minus total expenses gives the company's net income.

Accepted Answer

A) True 
 B)False

Question 8

The most meaningful basis for comparing operating ratios is:

Accepted Answer

A)  other companies of similar size in the same industry.
B)  companies within the neighborhood.
C)  major corporations in the same industry.
D)  all publicly traded companies.E) All of the above
F) A) and B)

Question 9

Net profit on sales ratio = Net sales / Net income.

Accepted Answer

A) True 
 B)False

Question 10

The first section of a balance sheet lists:

Accepted Answer

A)  current and intangible assets.
B)  current liabilities.
C)  claims creditors have against the firm's assets payable within one year.
D)  the owner's equity in terms of initial capital invested and retained earnings.E) C) and D)
F) B) and D)

Question 11

What do leverage ratios measure? Name and explain three of them.

Accepted Answer

Leverage ratios measure the financing su...

Question 12

Explain the three basic financial reports that a business uses in building a financial statement: the balance sheet,the income statement,and the statement of cash flows.What information is contained in each,what is their value to the small business owner,and how are they used to build financial statements?

Accepted Answer

Entrepreneurs rely on three basic financ...

Question 13

Evaluates the firm's overall performance and show how effectively it is putting its resources to work.This is called:

Accepted Answer

A)  operating ratios.
B)  debt to equity ratio.
C)  accounts receivable turnover ratio.
D)  All of the aboveE) A) and B)
F) All of the above

Exam 7: Creating a Solid Financial Plan

What do leverage ratios measure? Name and explain three of them.

Correct Answer
verified
Leverage ratios measure the financing su...
View Answer

What are liquidity ratios and how are they used by the small business owner? Name and briefly explain the current and quick ratios.

Correct Answer
verified
Liquidity ratios tell whether a small bu...
View Answer

To get the best results,an entrepreneur should track as many ratios as possible.

Correct Answer
verified

Correct Answer
verified
Entrepreneurs rely on three basic financ...
View Answer

To determine sales revenue,the owner records sales revenue for the year and subtracts liabilities.

Correct Answer
verified

When a company is forced into liquidation,owners are most likely to incur a loss when selling:

Correct Answer
verified

The first section of a balance sheet lists:

Correct Answer
verified

The most meaningful basis for comparing operating ratios is:

Correct Answer
verified

Total profits minus total expenses gives the company's net income.

Correct Answer
verified

Net profit on sales ratio = Net sales / Net income.

Correct Answer
verified

Evaluates the firm's overall performance and show how effectively it is putting its resources to work.This is called:

Correct Answer
verified

The balance sheet is usually prepared on the ________ day of the month.

Correct Answer
verified

A ratio greater than ________ days would indicate poor collection procedures.

Correct Answer
verified

Exam 7: Creating a Solid Financial Plan

What do leverage ratios measure? Name and explain three of them.

Correct AnswerverifiedLeverage ratios measure the financing su...View AnswerShow Answer

What are liquidity ratios and how are they used by the small business owner? Name and briefly explain the current and quick ratios.

Correct AnswerverifiedLiquidity ratios tell whether a small bu...View AnswerShow Answer

To get the best results,an entrepreneur should track as many ratios as possible.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedEntrepreneurs rely on three basic financ...View AnswerShow Answer

To determine sales revenue,the owner records sales revenue for the year and subtracts liabilities.

Correct AnswerverifiedShow Answer

When a company is forced into liquidation,owners are most likely to incur a loss when selling:

Correct AnswerverifiedShow Answer

The first section of a balance sheet lists:

Correct AnswerverifiedShow Answer

The most meaningful basis for comparing operating ratios is:

Correct AnswerverifiedShow Answer

Total profits minus total expenses gives the company's net income.

Correct AnswerverifiedShow Answer

Net profit on sales ratio = Net sales / Net income.

Correct AnswerverifiedShow Answer

Evaluates the firm's overall performance and show how effectively it is putting its resources to work.This is called:

Correct AnswerverifiedShow Answer

The balance sheet is usually prepared on the ________ day of the month.

Correct AnswerverifiedShow Answer

A ratio greater than ________ days would indicate poor collection procedures.

Correct AnswerverifiedShow Answer

Correct Answer
verified
Leverage ratios measure the financing su...
View Answer

Correct Answer
verified
Liquidity ratios tell whether a small bu...
View Answer

Correct Answer
verified

Correct Answer
verified
Entrepreneurs rely on three basic financ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified