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| entrpernerurs in ventures in which there is little likelihood of liabilites being created often are advised there is no need to incoporate |
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| As the corporation pays more and more of its "profits" to the founder as compensation, he or she runs a risk of the IrS declaring the salary unreasonable and taxing it as though it were a corporate dividend. |
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| The S corporation has many advantages when the corporation is losing money |
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| One of the most significant disadvantages of a sole proprietorship is |
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| The ____form of organization is mainly used for one-shot finite deals, such as a real estate syndication, etc |
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| ______is neither a corporation nor a partnership. |
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| One of the most significant disadvantages of a C corporation is |
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| The S corporation is limited by |
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Definition
E. Strict requirements on who can be shareholders/which states have statutes to permit its formation
a and b/above |
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| If an investor is really concerned about getting his or her money back, should the venture go sour, let him or her own the assets |
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Definition
| D-receive stock in proportion to the value of the assets |
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| Non-profit organizations qualify for exemption from |
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| Budgeting is one of the two major control tools for a business. THe other is the cash flow plan |
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Definition
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| The fewere budget accounts utilized, the more effective the budget |
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Definition
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| Program budgets allocate large sums of money to programs with the actual allocation left up to the program manager |
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Definition
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| The flexibility in a budget depends greatly on how much time is involved between the expenditure of funds and the receipt of sales dollars from those expenditures |
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| Most lenders recommend that entrepreneurs have a minimum of 3 months operating capital on hand |
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Term
| The _______approach to forecasting sales identifies what scales are required for the business to stay viable |
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Term
| At the heart of most budget systems is a basic philosophy called |
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Definition
| Management by percentages-A |
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Term
| Comparing planned budget expenditures with actual expenditures is an example of utilizing the budget as |
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| The process of begins with |
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| THe _____upon which the budget is based should be clearly stated in the budget |
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| Financial statements are a reflection of management decisions over a period of time |
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Definition
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Term
| Items such as borrowings from banks and other lenders and payments to the owners of the business (dividends or draws) are reflected on the income statement |
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Definition
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Term
| The INcome statement says little about what the business is worth |
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Definition
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Term
| The two primary business objectives of every company are |
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Definition
| D-a and b above=profitability/solvency |
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| The ______helps identify federal and state tax obligations |
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Definition
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Term
| The ______shows the worth of a abusiness at a given point in time |
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Definition
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| The need for the______comes from the time discrepancy that usually exists between the time funds are expended to generate salles and the time it takes to actually achieve the cash from the sales |
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Term
| An increase in sales (relfected on the income statement) will typically result in _____in accounts receivables (reflected on the balance sheet) |
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| The______reflects the profitability of a business during a specific period of time |
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| Entrepneurs can effectively manage cash flow by |
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Definition
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| Both the balance sheet and income statement are needed to calculate the most commonly used financial ratios. |
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| A current ratio of 1.2 to 1 would indicate financial strength |
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| Bankers typically use financial ratios to analyze a business for a bank loan |
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| Financial Ratios remain consistent regardless of the industry |
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Term
| The profit a company enjoys on the goods it sells after direct costs have been subtracted out is called |
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Definition
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Term
| A company's ability to pay its short-term obligations is measured by the |
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Definition
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| _______Measures the proportion of assets that are financed by creditors' funds |
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| _______ratios measure and help control expenses |
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Definition
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| ________ratios measure what portion of the company is leveraged or financed (how much the owners could lose to creditors) |
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Definition
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| ______ratios tell how well business is being conducted |
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