ENT 3003 EXAM 4 PRACTICE QUESTIONS WITH
ACCURATE SOLUTIONS
Before making a loan to a startup, banks look at ______. -- Answer ✔✔ capital assets,
collateral, and credit rating
What is a reason to seek an outside investment earlier than usual? -- Answer ✔✔ to
stave off competition
Getting sued by investors is a disadvantage of ______. -- Answer ✔✔ convertible debt
What angel investors want to be involved in ventures? -- Answer ✔✔
micromanagement
true or false: Unlike angel investors, venture capitalists are mostly professional money
managers. -- Answer ✔✔ true
What spawned the growth of a whole new generation of venture capitalist companies? -
- Answer ✔✔ smartphones and tablets
Potential investors tend to not invest when ______. -- Answer ✔✔ financial projections
are not believable
,What statement is a report that details the inflows and outflows of cash over a period
of time? -- Answer ✔✔ cash flow statement
What is the amount left over from revenue once all costs and expenses are subtracted?
-- Answer ✔✔ operating profit
true or false: The sale of stock is not included in the cash flow statement. -- Answer ✔✔
false
What is the financial statement that shows what the company owes, and what it owns,
including the shareholder's stake, at a particular point in time? -- Answer ✔✔ balance
sheet
What is the money owed to the company for goods or services provided and billed to a
customer? -- Answer ✔✔ accounts receivable
What is a financial report that measures the financial performance of your business on a
monthly or annual basis? -- Answer ✔✔ income statement
true or false: A backlog is an order that has been received but not delivered to the
customer. -- Answer ✔✔ true
The ending cash balance on the cash flow statement should match the cash on the
______. -- Answer ✔✔ balance sheet
,The number of days a company's cash is tied up in production is the ______ cycle. --
Answer ✔✔ cash conversion
To calculate average accounts payable, the company ______. -- Answer ✔✔ adds
beginning and ending accounts payable and then divides by 2
What is the measure of the average number of days it takes to sell the entire inventory
of a company? -- Answer ✔✔ DOI
true or false: A profitable company will have a cash conversion cycle of fewer than three
weeks. -- Answer ✔✔ false
The ______ method helps estimate sales by estimating the smallest unit of sales and
building from there. -- Answer ✔✔ bottom up
What is the type of research gathered by entrepreneurs through sources such as focus
groups, interviews, and surveys? -- Answer ✔✔ primary
What is the policy to decide the level of pay and benefits for each type of position in the
business? -- Answer ✔✔ compensation
What is the policy which manages the price and timing of raw materials and other goods
and services necessary to build, sell, and support products? -- Answer ✔✔ purchasing
true or false: Operating policies can greatly affect the speed at which cash makes its
journey back to the company. -- Answer ✔✔ true
, What is the policy dealing with the process and timing in which obligations to pay for
products and services sold will be billed and collected? -- Answer ✔✔ credit
true or false: The payables policy deals with the process and timing of paying for goods
and services bought by the business. -- Answer ✔✔ true
true or false: Assets should equal liabilities plus shareholder equity. -- Answer ✔✔ true
In many types of businesses, labor can account for ______ percent of operating costs. -
- Answer ✔✔ 75
When the company purchases a fixed asset what is deducted on the income statement?
-- Answer ✔✔ depreciation
If the company has no process to manage billing for products or services, it probably
does not have a(n) ______ policy. -- Answer ✔✔ payables
What helps entrepreneurs learn how to assess the viability of the company for making
money? -- Answer ✔✔ financial projections
To calculate average inventory, the business needs to know ______. -- Answer ✔✔
beginning and ending inventory
What is the first line on the cash flow statement? -- Answer ✔✔ net income
ACCURATE SOLUTIONS
Before making a loan to a startup, banks look at ______. -- Answer ✔✔ capital assets,
collateral, and credit rating
What is a reason to seek an outside investment earlier than usual? -- Answer ✔✔ to
stave off competition
Getting sued by investors is a disadvantage of ______. -- Answer ✔✔ convertible debt
What angel investors want to be involved in ventures? -- Answer ✔✔
micromanagement
true or false: Unlike angel investors, venture capitalists are mostly professional money
managers. -- Answer ✔✔ true
What spawned the growth of a whole new generation of venture capitalist companies? -
- Answer ✔✔ smartphones and tablets
Potential investors tend to not invest when ______. -- Answer ✔✔ financial projections
are not believable
,What statement is a report that details the inflows and outflows of cash over a period
of time? -- Answer ✔✔ cash flow statement
What is the amount left over from revenue once all costs and expenses are subtracted?
-- Answer ✔✔ operating profit
true or false: The sale of stock is not included in the cash flow statement. -- Answer ✔✔
false
What is the financial statement that shows what the company owes, and what it owns,
including the shareholder's stake, at a particular point in time? -- Answer ✔✔ balance
sheet
What is the money owed to the company for goods or services provided and billed to a
customer? -- Answer ✔✔ accounts receivable
What is a financial report that measures the financial performance of your business on a
monthly or annual basis? -- Answer ✔✔ income statement
true or false: A backlog is an order that has been received but not delivered to the
customer. -- Answer ✔✔ true
The ending cash balance on the cash flow statement should match the cash on the
______. -- Answer ✔✔ balance sheet
,The number of days a company's cash is tied up in production is the ______ cycle. --
Answer ✔✔ cash conversion
To calculate average accounts payable, the company ______. -- Answer ✔✔ adds
beginning and ending accounts payable and then divides by 2
What is the measure of the average number of days it takes to sell the entire inventory
of a company? -- Answer ✔✔ DOI
true or false: A profitable company will have a cash conversion cycle of fewer than three
weeks. -- Answer ✔✔ false
The ______ method helps estimate sales by estimating the smallest unit of sales and
building from there. -- Answer ✔✔ bottom up
What is the type of research gathered by entrepreneurs through sources such as focus
groups, interviews, and surveys? -- Answer ✔✔ primary
What is the policy to decide the level of pay and benefits for each type of position in the
business? -- Answer ✔✔ compensation
What is the policy which manages the price and timing of raw materials and other goods
and services necessary to build, sell, and support products? -- Answer ✔✔ purchasing
true or false: Operating policies can greatly affect the speed at which cash makes its
journey back to the company. -- Answer ✔✔ true
, What is the policy dealing with the process and timing in which obligations to pay for
products and services sold will be billed and collected? -- Answer ✔✔ credit
true or false: The payables policy deals with the process and timing of paying for goods
and services bought by the business. -- Answer ✔✔ true
true or false: Assets should equal liabilities plus shareholder equity. -- Answer ✔✔ true
In many types of businesses, labor can account for ______ percent of operating costs. -
- Answer ✔✔ 75
When the company purchases a fixed asset what is deducted on the income statement?
-- Answer ✔✔ depreciation
If the company has no process to manage billing for products or services, it probably
does not have a(n) ______ policy. -- Answer ✔✔ payables
What helps entrepreneurs learn how to assess the viability of the company for making
money? -- Answer ✔✔ financial projections
To calculate average inventory, the business needs to know ______. -- Answer ✔✔
beginning and ending inventory
What is the first line on the cash flow statement? -- Answer ✔✔ net income
