Study Guide and Quiz

Question 1

If you wanted to make sure a company has enough money available to pay its bills, which financial statement would be most helpful?

Revolt · Accepted Answer

Cash flow statement

Question 2

If you want to know whether a company had a profit or a loss during a specific period of time, which financial statement would be most helpful?

Revolt · Accepted Answer

Income statement

Question 3

What is the opportunity cost of an investment?

Revolt · Accepted Answer

The value of the next most valuable opportunity

Question 4

Money that your company has in the bank in case of unexpected financial needs or in case sales slow down is called ____________.

Revolt · Accepted Answer

A cash reserve

Question 5

Which of the following statements describes GAAP?

Revolt · Accepted Answer

GAAP recommends accrual basis accounting.

Question 6

The costs of running a business are called ___________.

Revolt · Accepted Answer

Operating expenses

Question 7

In the accounting equation, assets are equal to which two things?

Revolt · Accepted Answer

Liabilities + equity

Question 8

Which of the following is a type of liability?

Revolt · Accepted Answer

Accounts payable

Question 9

Which type of risk is most likely to be insurable?

Revolt · Accepted Answer

Pure risk

Question 10

Which of the following tips can hurt your cash flow?

Revolt · Accepted Answer

Pay your bills early.

Study Guide and Quiz Answers