QUESTION A business model is A) a corporation’s strategy for gathering information about competitors. B) a prototype for a new product or service a company wants to develop. C) a physical rendering of how a company’s facilities will be constructed. D) an organization’s plan for creating value for its stakeholders. ANSWER D
QUESTION A legal obligation that an individual or company has to pay back is a(n) _______, a. inventory b. liability c. owners’ equity d. asset ANSWER b
QUESTION The goal of a not-for-profit organization is to A) eventually advance to for-profit status. B) earn a profit for its owners. C) use any money it makes to further the cause or association it promotes. D) deliver products or services that benefit corporations. ANSWER C
QUESTION ________ consist of credit that is extended to a business for necessary purchases. a. Accounts receivable b. Accounts payable c. Intangible assets d. Retained earnings ANSWER b
QUESTION The assets you keep after you have paid off all your liabilities make up your ________. a. current assets b. net worth c. balance sheet d. long-term assets ANSWER b
QUESTION The goal of a for-profit organization is to A) eventually advance to not-for-profit status. B) earn a profit for its owners. C) use any money it makes to further the cause or association it promotes. D) deliver products or services that only benefit charities. ANSWER B
QUESTION Which two types of income statements are allowed under GAAP? A) cash and accrual B) inflow and outflow C) credit and debit D) receivable and payable ANSWER A
QUESTION In your business, you record revenue when money comes in from customers, and record expenses when you pay bills. What basis of accounting are you using? A) cash B) income C) accrual D) debit ANSWER A
QUESTION Owners’ equity can be also known as ________ equity. a. current b. long-term c. shareholders’ d. asset ANSWER c
QUESTION In your business, you record income when you deliver a good or provide a service, and record expenses when they are incurred, not necessarily when you pay the bills. What basis of accounting are you using? A) cash B) income C) accrual D) debit ANSWER C
