True/False Indicate whether the
statement is true or false.
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1.
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If your cash receipts are less than your cash disbursements, your business has a
negative cash flow.
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2.
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The Small Business Administration offers to guarantee your loan up to 75% if the
amount is less than $150,000.
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3.
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Peer-to-Peer lending is also known as social lending.
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4.
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The break-even point tells you the amount of revenue you need to generate in
order to cover your expenses.
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5.
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A lender checks an applicant’s credit report and discovers that the
applicant is missing payments on a previous loan. This action would be evaluted under the 3
C’s of Credit known as Capital.
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6.
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The Rule of Two guides you to expect everything to cost twice as much and take
twice as long as you will think it will.
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7.
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Applying for a loan from a bank or a credit union would fall under the the art
of bootstrapping.
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8.
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Fixed expenses include advertising and utilites.
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9.
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Typical start up codes include acquiring furniture and equipment.
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10.
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Financial statements reporting projections of financial data are called
Preemptive Statements.
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Multiple Choice Identify the
choice that best completes the statement or answers the question.
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11.
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Cash invested in the business for the purpose of making a profit is
called...
a. | Equity Capital | c. | Debt Financing | b. | Trade Credit | d. | Peer-to-Peer
Lending |
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12.
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Bootstrapping involves...
a. | Operating on as much cash as possible | b. | Using your business finances for personal
reasons | c. | Keeping your personal and business assets separately | d. | Cutting all
unnecessary expenses |
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13.
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The amount of ownership a person has in a business is called...
a. | Fixed Assets | c. | Equity | b. | Liquid Assets | d. | Trade Credit |
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14.
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Equity financing options include alll the following except...
a. | Personal Savings | c. | Banks and Credit Unions | b. | Venture
Capitalists | d. | Family and
Friends |
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15.
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Exchanging goods and services for other goods and services, with no money
exchanged, is called...
a. | Bootstrapping | c. | Venture Capital | b. | Bartering | d. | Equity Capital |
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16.
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Which of the following statements about a line of credit is not true?
a. | It is a loan of unlimited funds for an unlimited time. | b. | It is a loan of a
specific amount of money. | c. | It has a specific interest
rate. | d. | It must be paid off in regular installments. |
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17.
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Which of hte following is not an example of variable expenses?
a. | Utilities | c. | Advertising | b. | Office Supplies | d. | Insurance |
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18.
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The financial progress of a business is shown in the pro forma...
a. | Cash Flow Statement | c. | Balance Sheet | b. | Income Statement | d. | Financial
Statement |
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19.
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Which of the following is not one of the five C’s of business?
a. | Cash Flow | c. | Co-Signor | b. | Collateral | d. | Conditions |
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20.
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Another term for owner’s equity is...
a. | Net Worth | c. | Marginal Benefit | b. | Marginal Cost | d. | Liability |
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21.
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Which of the following is NOT typically required for a small business loan
application?
a. | Business Plan | c. | Recent Utility Bill | b. | Income Tax Statements | d. | Bank Statements |
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22.
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A person who signs a loan with an applicant and takes on equal responsibility
for repaying the loan is commonly referred to as a...
a. | Co-Signor | c. | Capital Architect | b. | Contributor | d. | Co-Conspirator |
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23.
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When lenders evaluate a loan applicant, they often look at the economy with
regards of the potential growth of a business. In the 5 C’s of credit, this is referred
to as...
a. | Capital | c. | Capacity | b. | Conditions | d. | Collateral |
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24.
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One large start up cost for an inventory based business is the assortment of
items a business has on hand to sell to customers. The term used for these items is...
a. | Product | c. | Sellable Item | b. | Service | d. | Inventory |
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25.
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Which of the following C’s does NOT apply to business loans?
a. | Cash Flow | c. | Capacity | b. | Character | d. | Capital |
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26.
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A history of a loan applicants ability to create and pay debts is evaluated
under the 5 C’s of Credit under...
a. | Capital | c. | Cash Flow | b. | Conditions | d. | Character |
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27.
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Liquid assets are..
a. | Items easily turned into cash. | b. | Items used in the operation of the
business. | c. | Items found in a company warehouse. | d. | None of the
above. |
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28.
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Operating expenses whose amounts can change from month to month are known
as...
a. | Fixed Expenses | c. | Daily Expenses | b. | Variable Expenses | d. | Overall
Expenses |
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29.
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It is important to have enough start up capital to remain in business for at
least a year without making a profit.
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30.
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It is only after the break even point is reached that profits are earned.
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Matching
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Read the numbered definitions. Choose the correct term from the list and
record the letter next to the correct definition. a. | Accounts Payable | f. | Operating
Capital | b. | Accounts Receivable | g. | Owner’s Equity | c. | Break-Even Point | h. | Peer-To-Peer Lending | d. | Debt
Financing | i. | Start-Up
Capital | e. | Equity Financing | j. | Trade Capital |
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31.
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Borrowing money for business purposes.
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32.
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The amount of revenue a business must generate in order to equal its
expenses.
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33.
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Borrowing money via a website.
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34.
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One business granting a line of credit to another business for the purchase of
goods and services.
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35.
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The money needed to support day-to-day operations.
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36.
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Money owed to a business by customers for goods and services.
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37.
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The difference between assets and liabilities.
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38.
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The cash used to start a business.
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39.
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Money a business owes to suppliers for goods and services received.
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40.
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Raising money for a busienss in exchange for a percentage of ownership.
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Read the numbered definitions. Choose the correct term from the list and
record the letter next to the correct definition. a. | Cash Flow | f. | Operating | b. | Financial Plans | g. | Profit Margin | c. | Income
Statement | h. | Pro
Forma | d. | Marginal Benefit | i. | Sales Forecasting | e. | Marginal Cost | j. | Start Up Costs |
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41.
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A statement reports anticipated flow of cash into and out of the
business.
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42.
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Reports the financial progress of a business.
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43.
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Financial statemetns based on the best estimate of future revenue and
expenses.
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44.
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The goal of this document.is to project revenue and to make sure the business
has enough products to sell.
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45.
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A summary of where a business is financially at the present time and future
expectations.
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46.
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Teh initial expenses necessary to open the doors of a business.
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47.
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Day to day costs accrued in daily operations of the business.
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48.
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The amount by which the product sales exceed the cost of the busienss to
produce them.
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49.
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Measuring potential gains of producing one more product that may sell.
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50.
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Measuring potential losses of producing one more product that might not
sell.
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