ENTREPRENEURSHIP

CHAPTER 9 QUIZ

Name:___________________________ Date:___________

I. Matching Type. Match each statement with the term that best defines it.

A. account I. debt-to-equity ratio

B. accrual method J. equity capital
C. balance sheet K. income statement
D. cash flow statement L. journals
E. cash method M. net worth
F. check register N. payroll
G. collateral O. transaction
H. debt capital P. venture capitalists

M 1. The difference between what you own and what you owe.
K 2. A financial statement that shows a business’s revenues and expenses
incurred over a period of time.
J 3. Money invested in a business in return for a share in the profits of the
business.
N 4. A list of people who receive salary or wage payments from a business.
D 5. A financial statement that describes the way that cash flows into and out of
your business.
O 6. Any business activity that changes assets, liabilities, or net worth.
G 7. Property that the borrower forfeits if he or she defaults on a loan.
E 8. Recording transactions when the revenue is actually received or the
expenses are actually paid.
H 9. Money loaned to a business with the understanding that the money will be
repaid.
I 10. The relation between the dollars you have borrowed and the dollars you
have invested in your business
P 11. Individuals or companies that make a living investing in startup
companies
C 12. A financial statement that lists what a business owns, what it owes, and how
much it is worth at a particular point in time

II. Multiple choice

13. Which of the following would be a startup cost?

A. computer for a business
B. monthly utility bill
C. monthly rent expense
D. weekly payroll
14. You have decided to try to finance your business with equity financing. Whom should
you approach to invest in your business?
A. local bank
B. Small Business Administration
C. friends and family
D. Department of Housing and Urban Development

15. Which of the following would most likely be accepted as collateral for a secured loan
for $25,000?
A. $32,000 automobile that is paid for
B. $12,000 of home equity
C. $2,500 computer system
D. apartment that you rent
16. Which of the following is not a reason that a bank may reject your loan application?
A. business is a startup
B. owner invested $30,000
C. business plan is sloppy
D. owner has no experience

17. . Which of the following would not be included on a cash flow statement?
A. sale to customer on account
B. payment received from a customer on account
C. payment for new equipment
D. funds of $4,000 received from bank loan

18. True or False. Taxes that you withhold from employees’ paychecks are deposited into
your bank account until the employee files an income tax return.
19. True or False. If your cash receipts are less than your cash disbursements your
business has a negative cash flow.
20. True or False. The Small Business Administration offers loans to businesses in the
same way that a commercial bank does