Chapter 9 Business Funding

Question 1

1 business granting a line of credit to another business for the purchase of goods and services

Accepted Answer

trade credit

Question 2

equity financing is money borrowed from a bank

Accepted Answer

false

Question 3

The rule of 2 states that you should purchase 2 of every type of equipment so you have a spare

Accepted Answer

false

Question 4

The cash used to start a business

Accepted Answer

start-up capital

Question 5

When products sales exceed the cost to the bus. producing them is called bus. operating capital

Accepted Answer

false

Question 6

A lender may look at an owner's personal financial status along with the status of a business

Accepted Answer

true

Question 7

Equity financing options include all of the following except

Accepted Answer

banks and credit unions

Question 8

Debt financing is money that must be repaid with interest

Accepted Answer

true

Question 9

The amount of ownership a person has in a business is called

Accepted Answer

equity

Question 10

Money owed to a business by customers for goods or services delivered

Accepted Answer

accounts receivable

Question 11

A business plan must include paying an owner salary from the first month of operation

Accepted Answer

false

Question 12

The money needed to support day-to-day business operations

Accepted Answer

operating capital

Question 13

Accurate pricing of a product and services is crucial to a business success

Accepted Answer

true

Question 14

Borrowing money for business purposes

Accepted Answer

debt financing

Question 15

Microloans and 7(a) loans are examples of social lending

Accepted Answer

false

Question 16

Bootstrapping involves

Accepted Answer

cutting all unnecessary expenses

Question 17

Which of the following is not one of the five C's of banking

Accepted Answer

cosigner

Question 18

Which of the following is not an example of variable expenses

Accepted Answer

advertising

Question 19

The amount of revenue a business must generate in order to equal its expenses

Accepted Answer

break-even point

Question 20

Which of the following statements about a line of credit is not true

Accepted Answer

it's a loan of unlimited funds for an unlimited amount of $

Question 21

Money a business owes to suppliers for goods or services received

Accepted Answer

accounts payable

Question 22

The financial progress of a business is shown in the pro forma

Accepted Answer

income statement

Question 23

The difference between a company's assets and its liabilities

Accepted Answer

owner's equity

Question 24

Exchanging goods and services for other goods and services, with no money exchanged, is called

Accepted Answer

barter

Question 25

Another term for owner's equity is

Accepted Answer

net worth

Question 26

Raising money for a business in exchange for a percentage of ownership

Accepted Answer

equity financing

Question 27

The Small Business Administration does not loan money directly to business owners

Accepted Answer

true

Question 28

Cash invested in the business for the purpose of making a profit is called

Accepted Answer

equity capital

Question 29

Borrowing money from investors via a website

Accepted Answer

peer-to-peer lending

Question 30

Another term for venture capitalists is angel investors

Accepted Answer

false

Chapter 9 Business Funding

Questions 30

Chapter 9 Business Funding

Questions 30