Module 2 Flashcards
(14 cards)
A retailer is involved in a…
Merchandising business
A videogame software development company that sells its products directly to customers through its advertising and internet website would be considered a (Choose all that apply)
This company would be considered both a manufacturing and a retail business
Successful businesses typically require (Choose all that apply)
Effective management, Capital, and Products or services that can be sold to customers at a profit
Non-profit businesses typically do NOT require capital.
False
Which of the following represents a form of capital for a business? (Choose all that apply)
Money loaned to a business from a bank, Money contributed to a business by an investor, Supplies purchased for a business using an owner’s personal credit card, A truck contributed to a business by the business owner
A wholesale distribution business is typically involved in
product distribution
Which of the following is a key advantage of debt financing?
No sacrifice of ownership rights
Which type of organizations do NOT require any capital to operate?
All of these businesses require capital to operate
Who is responsible for the preparation of a company’s financial statements?
The company’s management team
Who invests capital in a corporation?
Shareholders
Which ONE of the following is a characteristic of EQUITY financing?
A right to have a say in the affairs of the business
Which of the following financial statements are REQUIRED for companies that adhere to GAAP?
The Statement of Cash Flows, Balance Sheet, and Income Statement
Ford Motor Company is generally considered to be what kind of business?
Manufacturing business
Which ONE of the following is a characteristic of DEBT financing?
A right to force the business into bankruptcy if interest is not paid
