Entrepreneurship of Financial Statements and Projections for Startups MCQ
Entrepreneurship of Financial Statements and Projections for Startups MCQ
1. ______ is a measure of the number of days it takes you to pay your bills.
Answer
Correct Answer:
DPO
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2. ______ expenses are the expenditures that the company makes to generate income.
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Correct Answer:
Operating
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3. When conducting a ______, a minimum of three scenarios is recommended: best case, worst case, and likely case.
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Correct Answer:
sensitivity analysis
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4. ______ is a measure of the number of days it takes to collect on accounts receivable.
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Correct Answer:
DSO
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5. Using comparable data that you gathered during your research to compare with financial statements of existing businesses allows you to conduct the ______.
Answer
Correct Answer:
reasonableness test
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6. In many types of businesses, the people who work for the business (i.e., labor) can account for ______ of operating costs.
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Correct Answer:
75–85%
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7. In determining which market(s) to enter, Manny’s Cookies examined publicly available demographic data, including census reports and other local government data to ascertain whether a given market had a sufficient customer base. The type of research Manny’s Cookies was conducting is called ______.
Answer
Correct Answer:
secondary
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8. The ______ is a financial report that shows what the company owes, and what it owns, including the shareholders’ stake, at a particular point in time.
Answer
Correct Answer:
balance sheet
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9. ______ is determined by accounting principles and includes accruals and noncash items such as depreciation and amortization. ______ only deals with actual cash transactions.
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Correct Answer:
Net income; Cash flow
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10. Which of the following is true with respect to financial projections for startups?
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Correct Answer:
Often entrepreneurs build their financial projections based on third-party data sources that are misinterpreted.
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11. The ______ (also known as the profit and loss statement) is a financial report that measures the financial performance of your business on a monthly or annual basis.
Answer
Correct Answer:
income statement
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12. ______ refers to the number of days a company’s cash is tied up in the production and sales process.
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Correct Answer:
Cash conversion cycle
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13. A ______ financial statement gives one an idea of how the actual statement will look if the underlying assumptions hold true.
Answer
Correct Answer:
pro forma
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14. Which of the following relationships between financial statements is accurate?
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Correct Answer:
The ending cash balance on the cash flow statement is equal to the cash on the balance sheet.
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15. Which is true with respect to building pro forma financial statements?
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Correct Answer:
Pro forma financial plans must be both strategically compelling and operationally achievable.
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16. In Short-Term Debt the portion of long-term debt that must be paid within a year.
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Correct Answer:
True
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17. In shareholder equity the money that has been ________ plus the cumulative net profits and losses the company has generated.
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Correct Answer:
invested in the business
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18. Secondary research refers to data gathered from _______ such as industry publications, websites, government agencies, and so on.
Answer
Correct Answer:
Secondary Research
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19. Definition of Retained Earnings
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Correct Answer:
The cumulative amount of profit retained by the company and not paid out in the form of dividends to owners.
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20. The price and timing of raw materials and other goods and services necessary to build, sell, and support productsThis statement relate to
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Correct Answer:
Purchasing Policy
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21. Primary research refers to data gathered by yourself through sources such as focus groups, interviews, and surveys
Answer
Correct Answer:
True
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22. How pricing will be determined for your products and services.
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Correct Answer:
Products & services.
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23. Which statement is true about Prepaid Expenses?
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Correct Answer:
The payments the company has already made for services not yet received.
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24. The process and timing in which obligations to pay for goods and services received by the business will be paid is known as
Answer
Correct Answer:
Payables Policy
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25. Short-term liabilities that do not fall into a specific category, such as
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Correct Answer:
Sales text & income text
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26. In operating profit the amount left over from revenue once all costs and expenses are subtracted
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Correct Answer:
True
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27. Net Income indicates:
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Correct Answer:
what is left after all costs, expenses, and taxes have been paid.
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28. Long-Term Investments assets that are
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Correct Answer:
more than 1 year old
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29. Obligation for debt that is due to be repaid in more than 12 months is best statement for
Answer
Correct Answer:
Long-Term Debt
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30. Economic obligations of the company, such as money owed to lenders, suppliers, and employees is best statement for
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Correct Answer:
Liabilities
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31. Inventory moves from the _____
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Correct Answer:
business to the customer.
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32. Which of the correct statements is interest expense?
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Correct Answer:
The extent of the company’s debt burden as well as representing any interest owed on borrowed money.
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33. In intangible assets the value of patents, software programs, copyrights, trademarks, franchises, brand names, or assets that cannot be physically touched.
Answer
Correct Answer:
True
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34. A financial report that shows revenue, expenses, and profit for a period of time, typically a month, quarter, or year is known as
Answer
Correct Answer:
Income Statement
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35. DSO measures the number of days that it takes to collect on accounts receivable.
Answer
Correct Answer:
True
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36. A measure of the number of days it takes you to pay your bills is best statement for
Answer
Correct Answer:
Days Payable Outstanding
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37. DOI stand for in Entrepreneurship
Answer
Correct Answer:
Days of Inventory
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38. Bills that must be paid within 1 year of the date of the balance sheet is best statement for___.
Answer
Correct Answer:
Current Liabilities
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39. _______ assets that can be converted into cash within a year.
Answer
Correct Answer:
Current Assets
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40. which process obligations to pay for products and services sold will be billed and collected.
Answer
Correct Answer:
Credit Policy
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41. In compensation policy The level of compensation and benefits for each type of position in the business.
Answer
Correct Answer:
True
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42. A financial report that details the inflows and outflows of cash for a company over a set period of time are called ?
Answer
Correct Answer:
Cash Flow Statement
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43. The number of days a company’s cash is tied up in the production and sales process is known as
Answer
Correct Answer:
Cash Conversion Cycle (CCC)
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44. In capital Stock the original amount the owners paid into the company plus any additional paid-in capital to purchase stock in the company.
Answer
Correct Answer:
True
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45. Estimating revenues and costs from the smallest unit of sales, such as a day is known as ?
Answer
Correct Answer:
Bottom-Up Method
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46. Backlog shows what the company owes, what it owns, including the shareholder’s stake, at a particular point in time ?
Answer
Correct Answer:
Balance Sheet
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47. Orders that have been received but not delivered to the customer are called ?
Answer
Correct Answer:
Backlog
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48. In accrued expenses costs incurred by the company for which no payment has been made.
Answer
Correct Answer:
True
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49. Which of correct statement about Accounts Receivable?
Answer
Correct Answer:
Money owed to the company for goods or services provided and billed to a customer.
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50. Money owed by a business to its suppliers.
Answer
Correct Answer:
Accounts Payable
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