Which of the following best describes capital?

The monetary funds invested in a project

Which of the following best describes a credit union?

cooperative created by labor unions or groupsof employees

Which of the following is a disadvantage of equity capital?

You must contend with the investor as a co-owner of thebusiness

Which of the following accurately describes a balance sheet?

A summary of a business’s assets, liabilities and equity

Which of the following is TRUE of external theft?

It is the costliest human risk to businesses

Which of the following accurately describes a franchise?

To operate a business in the name of an established company

Advantages of entrepreneurship include which of the following?

Getting to set your own work schedule

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ICEV Financial Aspects of Business

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Questions 25

Answers

1
Sources of capital include which of the following?
All of the above
Previous owners of the business
Suppliers
Banks and credit unions
2
Which is NOT a criterion banks use for evaluating loan applicants?
Capability
Capital
Control
Circumstances
3
Which of the following best describes capital?
The monetary funds invested in a project
What equipment a business needs
The level of experience the manager of a business has
What a business is worth
4
Which of the following best describes a credit union?
A public establishment for the custody, loan and exchange of funds
cooperative created by labor unions or groupsof employees
foundation created to improve people’s credit, the credit of business owner
A organization providing business owners with education and donations
5
Which of the following is the least common form of business organization?
Corporation
Franchise
Sole proprietorship
Partnership
6
Which of the following is NOT a type of business risk?
Natural risk
Economic risk
Human risk
Routine risk
7
Which of the following is NOT an example of an economic risk?
Competition
Product obsolescence
Recession
Customer dishonesty
8
Ron opened the first McDonald’s® in his small hometown. This is an example of what type of business?
Took over the family business
Purchased a franchise
Started his own business
Purchased an existing business
9
Which of the following is an example of a natural risk?
Competition
Employee error
Fire
Customer dishonesty
10
A successful entrepreneur does NOT necessarily need which of the following?
D. A strong support system
Superior organizational skills
Strong coaching abilities
Tremendous drive
11
Which of the following is a disadvantage of equity capital?
You must offer collateral in the form of valuable property
You must repay or face the possibility of bankruptcy
You must contend with the investor as a co-owner of thebusiness
Your credit standing may be lowered by the use of equity capital
12
A formal proposal which provides detailed descriptions of a new business to potential investors and lenders.
A business support initiative
A company summary
An entrepreneurial manual
A business plan
13
Which of the following accurately describes a balance sheet?
A summary of a business’s assets, liabilities and equity
An explanation of how a business spends and earns money
A description of a business’s products and services
A guide to a business’s pricing policies
14
Which of the following is TRUE of external theft?
It is a routine risk which is always preventable
It is an economic risk and should be covered by insurance
It is the costliest human risk to businesses
It is the only risk which businesses have full control over
15
Businesses can handle risks through which of the following?
Avoiding risks
Controlling risks
Transferring risks
D. All of the above
16
Some businesses avoid risks by doing which of the following?
Only doing business online
Considering market research
Purchasing multiple insurance policies
Keeping records of all transactions and customers
17
The factors of a start-up cost estimate include which of the following?
Size of the business
Type and amount of inventory needed
Operating expenses which must be paid before any revenue isreceived
All of the above
18
Colin is borrowing money from his uncle to start his business. To avoid misunderstandings, what should he do?
Involve other family members as witnesses
Hire a lawyer
Hire his uncle as the financial director of the business
Put all agreements in writing
19
Which of the following is the most complicated form of business?
Sole proprietorship
Partnership
Corporation
Franchise
20
Which of the following accurately describes a franchise?
A business which is developed by a group of people through socialmedia
A nonprofit organization created to improve relations among businessowners
A company which sells no products, but a large variety of services
To operate a business in the name of an established company
21
Which type of risks occur from fluctuations in business conditions?
Natural risks
Human risks
Routine risks
Economic risks
22
Employee screening and training are considered which method of handling risk?
Risk transfer
Risk retention
Risk avoidance
Risk prevention and control
23
Advantages of entrepreneurship include which of the following?
All of the above
Increased cash flow due to business revenue
Getting to set your own work schedule
Putting in less hours than a regular job
24
Which of the following are the largest lending agencies in the United States?
Suppliers
Business owners
Banks
Credit unions
25
Raising your credit standing is an advantage of equity capital.
False
True

ICEV Financial Aspects of Business Flashcards | StudBud