chapter 12, small business

Question 1

must have at least two of four characteristics to be called small

Answer 1

capital is supplied and the ownership is held by an individual or a small group
the area of operation is mainly local

Question 2

two types of capital used to start a business

Answer 2

owner capital
creditor capital

Question 3

things owned by the business, including the claims against others

Answer 3

assets

Question 4

statement of financial position

Answer 4

balance sheet

Question 5

assets that can be converted quickly to cash or used up within one year or one operating cycle

Answer 5

current assets

Question 6

are all assets that are not current assets, such as buildings, land, equipment, and furnishings

Answer 6

fixed assets

Question 7

ratios indicating the businesses ability to pay its bills

Answer 7

current and quick ratio

Question 8

list the income received, the expenses incurred, and the net profit or list over a stated period of time

Answer 8

earnings statement

Question 9

amount of income left after expenses have been paid

Answer 9

net profit