SOM 306 Verified Multiple Choice and Conceptual
Actual Frequently Tested Exam Questions With
Reviewed 100% Correct Detailed Answers
Guaranteed Pass!!Current Update!!
1. What is a business plan?
A) A marketing presentation for investors
B) A document that outlines a proposed firm’s goals and how they will be
achieved
C) A company’s internal employee handbook
D) A list of company policies and procedures
2. What is a business model?
A) The organizational chart of the company
B) A description of how a firm will operate, meet customer needs, and
generate revenue
C) The physical design of the company’s building
D) A government-issued legal structure
3. Which of the following is a reason NOT to create a formal business plan?
A) When investors require one
B) When immediate action is needed, financing is secured, or confidentiality is
critical
C) When applying for a bank loan
D) When entering a new market
,4. Which of the following is NOT typically included in a business plan?
A) Financial projections
B) Market analysis
C) Company vacation schedule
D) Operational strategy
5. A business plan helps entrepreneurs primarily by:
A) Replacing financial reports
B) Providing a roadmap for goals, funding, and operational planning
C) Guaranteeing profits
D) Determining legal tax rates
6. What is the purpose of a cash flow statement?
A) To measure company equity
B) To show where money is coming from and how it’s being spent
C) To calculate sales tax
D) To report annual profits
7. Which financial statement shows a firm’s revenues and expenses for a specific
period?
A) Balance sheet
B) Income statement
C) Cash flow statement
D) Owner’s equity report
8. What are the four principal parts of an income statement?
A) Liabilities, assets, revenue, and expenses
B) Sales revenue, cost of goods sold, operating expenses, and net income
,C) Assets, equity, loans, and retained earnings
D) Gross profit, taxes, depreciation, and dividends
9. What does an income statement primarily show?
A) Company ownership and debt
B) Profit or loss during a specific time period
C) Daily employee productivity
D) Market share changes
10. What are operating expenses?
A) Employee wages only
B) Selling and administrative expenses incurred during business operations
C) One-time investment costs
D) Tax deductions and credits
11. Net sales are calculated as:
A) Gross sales + discounts
B) Gross sales – sales returns and allowances
C) Cost of goods sold + gross profit
D) Revenue – operating expenses
12. Gross sales refer to:
A) Sales after tax and deductions
B) Total funds received from all sales before any returns or allowances
C) Only international sales
D) Sales from company stock
, 13. Gross profit equals:
A) Net income – taxes
B) Net sales – cost of goods sold
C) Gross sales – inventory
D) Revenue – operating expenses
14. What is net income?
A) Revenue before expenses
B) Profit or loss after all expenses and income taxes
C) Cash reserves at year-end
D) Total sales before tax
15. Operating expenses equal:
A) Taxes + loan payments
B) Selling expenses + administrative expenses
C) Revenue – cost of goods sold
D) Payroll + dividends
16. What is common stock?
A) Short-term debt owed to lenders
B) The portion of ownership represented by shares allocated to company
owners
C) Employee bonus shares
D) Preferred shares with fixed returns
17. What are dividends?
A) Company expenses paid to suppliers
B) Part of a company’s profits distributed to shareholders
Actual Frequently Tested Exam Questions With
Reviewed 100% Correct Detailed Answers
Guaranteed Pass!!Current Update!!
1. What is a business plan?
A) A marketing presentation for investors
B) A document that outlines a proposed firm’s goals and how they will be
achieved
C) A company’s internal employee handbook
D) A list of company policies and procedures
2. What is a business model?
A) The organizational chart of the company
B) A description of how a firm will operate, meet customer needs, and
generate revenue
C) The physical design of the company’s building
D) A government-issued legal structure
3. Which of the following is a reason NOT to create a formal business plan?
A) When investors require one
B) When immediate action is needed, financing is secured, or confidentiality is
critical
C) When applying for a bank loan
D) When entering a new market
,4. Which of the following is NOT typically included in a business plan?
A) Financial projections
B) Market analysis
C) Company vacation schedule
D) Operational strategy
5. A business plan helps entrepreneurs primarily by:
A) Replacing financial reports
B) Providing a roadmap for goals, funding, and operational planning
C) Guaranteeing profits
D) Determining legal tax rates
6. What is the purpose of a cash flow statement?
A) To measure company equity
B) To show where money is coming from and how it’s being spent
C) To calculate sales tax
D) To report annual profits
7. Which financial statement shows a firm’s revenues and expenses for a specific
period?
A) Balance sheet
B) Income statement
C) Cash flow statement
D) Owner’s equity report
8. What are the four principal parts of an income statement?
A) Liabilities, assets, revenue, and expenses
B) Sales revenue, cost of goods sold, operating expenses, and net income
,C) Assets, equity, loans, and retained earnings
D) Gross profit, taxes, depreciation, and dividends
9. What does an income statement primarily show?
A) Company ownership and debt
B) Profit or loss during a specific time period
C) Daily employee productivity
D) Market share changes
10. What are operating expenses?
A) Employee wages only
B) Selling and administrative expenses incurred during business operations
C) One-time investment costs
D) Tax deductions and credits
11. Net sales are calculated as:
A) Gross sales + discounts
B) Gross sales – sales returns and allowances
C) Cost of goods sold + gross profit
D) Revenue – operating expenses
12. Gross sales refer to:
A) Sales after tax and deductions
B) Total funds received from all sales before any returns or allowances
C) Only international sales
D) Sales from company stock
, 13. Gross profit equals:
A) Net income – taxes
B) Net sales – cost of goods sold
C) Gross sales – inventory
D) Revenue – operating expenses
14. What is net income?
A) Revenue before expenses
B) Profit or loss after all expenses and income taxes
C) Cash reserves at year-end
D) Total sales before tax
15. Operating expenses equal:
A) Taxes + loan payments
B) Selling expenses + administrative expenses
C) Revenue – cost of goods sold
D) Payroll + dividends
16. What is common stock?
A) Short-term debt owed to lenders
B) The portion of ownership represented by shares allocated to company
owners
C) Employee bonus shares
D) Preferred shares with fixed returns
17. What are dividends?
A) Company expenses paid to suppliers
B) Part of a company’s profits distributed to shareholders
