Business and Personal Finance © 2007

Chapter 17: Developing a Business Plan

Practice Tests

1
A(n) _______ is an economic system in which people can choose what they buy, what they produce and sell, and where they work.
A)free enterprise system
B)inventory
C)business plan
D)market
2
The amount of money earned over and above the amount spent to keep the business operating is called _______.
A)assets
B)liability
C)budget
D)profit
3
Effective _______ help companies to maintain sales.
A)marketing plans
B)strategic plans
C)financial plans
D)budgets
4
The first step in writing a strategic plan is _______.
A)identifying steps to achieve your goals
B)setting goals
C)purchasing assets
D)choosing promotions
5
The systematic process of recording and reporting the financial position of a business is called _______.
A)a transaction
B)cash flow
C)a budget
D)accounting
6
A standard set of guidelines used in recording and reporting financial changes is known as _______.
A)generally accepted accounting principles (GAAP)
B)a financial plan
C)a budget
D)accounting
7
Negative cash flow is a situation that occurs when a business _______.
A)spends more money than it receives
B)receives more money than it spends
C)applies GAAP
D)earns high profits
8
The merchandise retailers have for sale is called _______.
A)promotions
B)reserve funds
C)inventory
D)assets
9
A(n) _______ occurs each time a business records a purchase.
A)cash flow
B)transaction
C)negative cash flow
D)inventory
10
A business's _______ are often used to repair equipment.
A)assets
B)operating costs
C)cash reserves
D)investments
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