Business Finance 101

Business Finance 101

Are you ready to test your knowledge about business finance? This ten-question multiple-choice quiz will explore some fundamentals regarding budgets, SBA loans, and funding options. After completing all ten questions, click "Grade Me!" at the end of the quiz to see how you did.

Correct!

Incorrect. You answered "". But the correct answer is "". Please make sure and read the information at the bottom to better understand the answer.

Sales and other revenues, total costs and expenses, and profits are essential components of a _______.
A budget consists of three essential components: sales and other revenues, total costs and expenses, and profits. The more accurate your sales and other revenue estimates are, the easier it will be to prepare for the following year's finances. If you are a new company, it is best to look at your industry's financial health and growth. The second part of a budget looks at the business's total costs and expenses, which includes identifying fixed, variable, and semi-variable expenses. The last part of the budget focuses on profits. You can use two formulas to determine if you made a profit: sales = total cost + profit or sales - total cost = profit.

Correct!

Incorrect. You answered "". But the correct answer is "". Please make sure and read the information at the bottom to better understand the answer.

What do budgets help you with?
Budgets help you manage cash flow and keep up with payments to vendors, employees, and suppliers. It is the best way to strengthen your relationship and credibility with other parties by making timely payments. Delinquent payments can have severe repercussions, such as losing vendors, employees, or suppliers.

Correct!

Incorrect. You answered "". But the correct answer is "". Please make sure and read the information at the bottom to better understand the answer.

What does an SBA loan stand for?
An SBA loan is a small business loan partially guaranteed by the government (the Small Business Administration). It eliminates some of the risks for the financial institution that is issuing the loan.

Correct!

Incorrect. You answered "". But the correct answer is "". Please make sure and read the information at the bottom to better understand the answer.

Which financial statement identifies the income, expenses and profit for your business?
The Income Statement, or Profit and Loss Statement, gives you a look at your company in net profits or loss during a particular reporting period.

Correct!

Incorrect. You answered "". But the correct answer is "". Please make sure and read the information at the bottom to better understand the answer.

Which of these is NOT considered a best practice for managing your account receivables?
Your customers have a budget and must manage money just like you. To take care of their cash concerns, they may put off paying you in a timely manner. When you are establishing a business relationship, understand your customer's budget and make sure it is in line with what you are charging. If you're quoting more than they can afford, you'll encounter problems in obtaining payment.

Correct!

Incorrect. You answered "". But the correct answer is "". Please make sure and read the information at the bottom to better understand the answer.

Assets, liabilities, and equity are components of a ______.
A balance sheet is a statement of a business's assets, liabilities, and equity that demonstrates how a company is financially. It is typically prepared at the end of set periods of time, like quarterly or annually. A balance sheet is made of two columns, the left being assets of the company while the right lists the liabilities and the owner's equity.

Correct!

Incorrect. You answered "". But the correct answer is "". Please make sure and read the information at the bottom to better understand the answer.

What is one of the top ways for funding a new business in the U.S.?
Credit cards are one of the top ways to fund a new business in the U.S. One of the biggest advantages of a line of credit is that you have control over your business. A business line of credit saves you from using your own personal funds, credit cards, or asking your friends or family for help. It also helps you build a positive credit history.

Correct!

Incorrect. You answered "". But the correct answer is "". Please make sure and read the information at the bottom to better understand the answer.

What is a positive aspect of using a credit card for business?
One of the most impactful aspects of using a credit card for business is having instant access to working capital. Utilizing other aspects of funding could lead to delays in access to direct capital.

Correct!

Incorrect. You answered "". But the correct answer is "". Please make sure and read the information at the bottom to better understand the answer.

What item(s) do you need to set up a payment system?
There are three important steps for setting up your payment system for your business. The first thing you need to do is obtain a business bank account. It is not good to mix your business finances with your personal finances, especially for tax purposes. The next step is to request a tax ID number. The last step is to apply for a fictitious name that needs to be registered locally and at the state level to distinguish your business from your personal accounts.

Correct!

Incorrect. You answered "". But the correct answer is "". Please make sure and read the information at the bottom to better understand the answer.

What do you need to do to accept debit and credit cards?
A merchant account will allow you to accept Visa, MasterCard, American Express, Discover, and other types of cards. The merchant account service provider is a middleman between your business and your customer. It will process payments, debit the money from the customer's card, and deposit it into your business account.

You scored out of 10.

What's my grade?

Copyright