1. The economic laws of supply and demand show that there is little to no impact on

the demand for low-skilled labor when the minimum wage is increased

1. True
2. False

2. The economic laws of supply and demand show that there is little to no impact on

the demand for low-skilled labor when the minimum wage is increased

1. True
2. False

3. Select all items below that threaten the long-term survival of a company according to

Warren Buffett.

a. Bureaucracy that slows efforts to develop new products and services.

b. Arrogance that leads to ignoring threats to core businesses.

c. Lack of investment in information technology.

d. Complacency in responding to the changing business environment.

e. Unionization of the workforce.

4. Any individual is limited in the amount of profit they earn by their own labor. The

only way to gain extreme wealth is by having people work for you.

1. True
2. False

5. Which of the following statements are challenges that resulted from the

development of mass production of goods? Select all that apply.

1. Environmental pollution
2. Lack of customization of products
3. Poor working conditions

6. Companies with large sales revenue have a higher net margin than companies with

lower sales revenue.

1. True
2. False

7. A company's net income can be used to pay out dividends to owners.

1. True
2. False

8. Which of the following are ways that a company can fund operations.

a) Selling ownership/shares in the company.

b) Investing in inventory.

c) Reinvesting profits.

d) Buying back stock.

e) Borrowing money.

9. Which of the following best describes the way in which a company can use its net

Income

a) To pay out as dividends to owners.

b) Pay out as dividends or build cash reserve.

c) To build cash reserve.

d) To pay out as dividends or build cash reserve but not both in the same year

10. Is money that a customers owe a company considered an asset?

1. Yes
2. No

11. The International Financial Reporting Standards (IFS) regulate accounting practices

in many non-U. S countries.

1. True
2. False

12. The Generally Accepted Accounting Principles (GAP) regulate accounting standards

in non-U.S. countries.

1. True
2. False

13. One method to deal with uncertainty in business decisions is to use bounding to

develop an estimate of best-case and worst-case results.

1. True
2. False

14. In the United States, the value of assets shown on balance sheets can be decreased

but not increased.

1. True
2. False

15. When listing liabilities on a balance sheet, long-term liabilities refer to what a

company must pay back in more than a year.

1. True
2. False

16. Accrual accounting provides a good picture of long-term profitability but does not

provide an accurate view of whether a company has sufficient cash.

1. True
2. False

17. Effective financial planning is important to making sure a business can grow and

without running out of cash.

1. True
2. False

18. An increasing net income means a company's available cash is also increasing

1. True
2. False

19. Under U.S. regulations, corporate bonds cannot be issued by a company to provide

financing.

1. True
2. False

20. In accrual accounting, revenues and expenses must match actual cash receipts and

payments.

1. True
2. False