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Principles of Business - Objective 4.01
Financial Planning Review Questions
36
Business
Not Applicable
05/09/2011

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Term
A local bakery received $12,000 in cash payments and another $27,000 in credit card payments. This is an example of which financial planning principle?
a. Revenue
b. Expenses
c. Profit
d. Loss
Definition
Revenue
Term
Durham Public Schools spends $1.2 million on electricity each year. This is an example of which financial planning principle?
a. Profit
b. Loss
c. Revenue
d. Expenses
Definition
Expenses
Term
Coca-Cola earned $84 million in revenue and spent $26 million on operating expenses in 2010. This is an example of which financial planning principle?
a. Loss
b. Margin
c. Profit
d. Income
Definition
Profit
Term
A local bookstore earned $92,000 in revenue and spent $132,000 on operating expenses in 2008.
This is an example of which financial planning principle?
a. Loss
b. Margin
c. Profit
d. Income
Definition
Loss
Term
Which of the following is NOT a reason for financial planning?
a. Increases financial uncertainties
b. Increases control of financial activities
c. Provides a map of finances for business
d. Makes it easier to stick to financial processes and goals.
Definition
Increases financial uncertainties
Term
The chief financial officer for ADIDAS analyses the revenue and expense reports from last quarter to determine if the company is earning enough profit. This is an example of which phase of business?
a. Start-up
b. Operation
c. Progression
d. Expansion
Definition
Operation
Term
Tami projected from where funds would come to operate her business until a profit is made. This is an example of which phase of business?
a. Start-up
b. Operation
c. Progression
d. Expansion
Definition
Start-Up
Term
Which of the following is NOT a step in the budgeting process?
a. Prepare a list of income and expense items.
b. Gather accurate information from business records.
c. Conduct a budget meeting.
d. Communicate the budget to key employees in order to make sound business decisions.
Definition
Conduct a Budget Meeting
Term
Chipotle Mexican Grill is opening five new restaurants in North Carolina in 2011. This is an example of which phase of business?
a. Start-up
b. Operation
c. Progression
d. Expansion
Definition
Expansion
Term
Which of the following is NOT a step in the budgeting process?
a. Hire a financial planner.
b. Prepare a list of income and expense items.
c. Gather accurate information from business records.
d. Create the budget.
Definition
Hire a Financial Planner
Term
The owner of a local restaurant prepares a monthly financial plan that helps manage the restaurants ongoing business operations. This plan is an example of which type of budget?
a. Start-up budget
b. Operating budget
c. Cash budget
d. Marginal budget
Definition
Operating Budget
Term
Which of the following is NOT a step in the budgeting process?
a. Prepare a list of income and expense items.
b. Create the budget.
c. Prepare a budget proposal.
d. Communicate the budget to key employees in order to make sound business decisions.
Definition
Prepare a Budget Proposal
Term
A new business owner prepares a financial plan that identifies the income and expenses from the start of the new business until the business begins to earn a profit. This plan is an example of which type of budget?
a. Start-up budget
b. Operating budget
c. Cash budget
d. Marginal budget
Definition
Start-Up Budget
Term
Which of the following is NOT a step in the budgeting process?
a. Develop the process.
b. Gather accurate information from business records.
c. Create the budget.
d. Communicate the budget to key employees in order to make sound business decisions.
Definition
Develop the Process
Term
The chief financial officer of a major software production company prepares a report that estimates of the actual money that the company is predicted to receive and pay out for the month of July. This report is an example of which type of budget?
a. Start-up budget
b. Operating budget
c. Cash budget
d. Marginal budget
Definition
Cash Budget
Term
Which of the following is NOT a reason for financial planning?
a. Reduces financial uncertainties
b. Reduces control of financial activities
c. Provides a map of finances for business
d. Makes it easier to stick to financial processes and goals.
Definition
Reduces control of financial activities
Term
Companies are required by law to withhold a percentage of each employee’s salaries and wages for federal and state income taxes. Which financial record will contain this information?
a. Depreciation records
b. Cash records
c. Payroll records
d. Tax records
Definition
Tax Records
Term
Walter needs to know the current value of his company’s equipment. Which financial record will contain this information?
a. Asset records
b. Depreciation records
c. Inventory records
d. Records of accounts
Definition
Asset records
Term
At the end of each week, Tyson Production Company calculates the total number of products produced and stored at their storage facility. Which financial record will contain this information?
a. Asset records
b. Depreciation records
c. Inventory records
d. Records of accounts
Definition
Inventory Records
Term
A local company orders office supplies from Staples and makes full payment using a company credit card. Which financial record will contain this information?
a. Asset records
b. Depreciation records
c. Accounts Receivable
d. Accounts Payable
Definition
Accounts Payable
Term
The human resources manager maintains a list of the employees that work for her company; as well as their salary and benefit information. Which financial record will contain this information?
a. Depreciation records
b. Cash records
c. Payroll records
d. Tax records
Definition
Payroll records
Term
Jeremiah needs to know the value that has been lost due to the old age of his tractor. Which financial record will contain this information?
a. Asset records
b. Depreciation records
c. Accounts Receivable
d. Accounts Payable
Definition
Depreciation records
Term
A small convenience store only accepts cash payments in order to eliminate the cost of purchasing the machines necessary for processing credit card payments. Which financial record will contain this information?
a. Depreciation records
b. Cash records
c. Payroll records
d. Tax records
Definition
Cash records
Term
A majority of the customers pay for gasoline at a local gas station using a credit card. Which financial record will contain this information?
a. Asset records
b. Depreciation records
c. Accounts Receivable
d. Accounts Payable
Definition
Accounts Receivable
Term
A local trucking company owns eight trucks and two full-service garages. This is an example of which financial element?
a. Assets
b. Employees
c. Liabilities
d. Owner’s equity
Definition
Assets
Term
A local seafood restaurant owes a shipping company $1,200 for daily shrimp delivery. This is an example of which financial element?
a. Assets
b. Employees
c. Liabilities
d. Owner’s equity
Definition
Liabilities
Term
A local printing company is worth $1.6 million. This is an example of which financial element?
a. Assets
b. Revenue
c. Liabilities
d. Owner’s equity
Definition
Owner’s equity
Term
The chief financial officer for a major textile company analyzes the revenue, expenses, and net income from the first quarter of the fiscal year. Which financial statement contains this information?
a. Income statement
b. Balance sheet
c. Financial statements
d. Sales
Definition
Income Statement
Term
The board of directors for a major software development company reviews all of the assets and liabilities of the company at the annual board meeting. Which financial statement contains this information?
a. Income statement
b. Balance sheet
c. Financial statements
d. Current liabilities
Definition
Balance Sheet
Term
Tom can find the revenue and expenses of his business at the end of year on which type of financial statement?
a. Balance sheet.
b. Budget
c. Income statement
d. Owner’s equity
Definition
Income Statement
Term
Amy’s business collected $398,000 in sales last year and paid $103,000 in expenses. Which is the net income/net loss amount for the business?
a. $25,000 net income
b. $95,000 net loss
c. $295,000 net income
d. $9,000 net loss
Definition
$295,000 net income
Term
Which financial report would the chief financial officer of a major retail company use to analyze financial data to evaluate the performance of the company?
a. Financial Records
b. Financial Statements
c. Financial Performance Ratios
d. Financial Discrepancy Reports
Definition
Financial Performance Ratios
Term
Which financial ratio will John use if he wants to determine the amount of profit earned on each dollar of sales for the second quarter of the fiscal year?
a. Current
b. Debt to equity
c. Net income
d. Return on equity
Definition
Net income
Term
Which financial ratio would Bradley use if he wants to compare current company assets to the current liabilities of the company?
a. Net income Ratio
b. Current Ratio
c. Return on Equity Ratio
d. Debt to Equity Ratio
Definition
Current Ratio
Term
Miranda divides the total liability of her company by her equity to determine how much borrowed money is being used to operate her company. This is an example of which financial ratio?
a. Net income Ratio
b. Current Ratio
c. Return on Equity Ratio
d. Debt to Equity Ratio
Definition
Debt to Equity Ratio
Term
Juliana divides the net profit of her company by her equity to determine how much money she is earning on her original investment. This is an example of which financial ratio?
a. Return on Equity Ratio
b. Net income Ratio
c. Current Ratio
d. Debt to Equity Ratio
Definition
Return on Equity Ratio
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