Business Degree Business Education Basic 2

Question 1

Which financial statement shows a company's revenues and expenses over a specific period?

Accepted Answer

Income statement

Answer

The income statement (profit and loss statement) reports revenues, expenses, and net income over a period such as a quarter or year.

Question 2

What does 'accounts payable' represent on a company's balance sheet?

Accepted Answer

Money the company owes to suppliers

Answer

Accounts payable is a current liability representing amounts a company owes to its suppliers or vendors for goods and services received.

Question 3

In business, what is 'opportunity cost'?

Accepted Answer

The value of the next best alternative foregone

Answer

Opportunity cost is the potential benefit given up when choosing one option over the next best alternative.

Question 4

What is the primary purpose of a business plan?

Accepted Answer

To guide business strategy and attract investors

Answer

A business plan outlines goals, strategies, market analysis, and financial projections to guide operations and convince investors or lenders.

Question 5

Which pricing strategy sets a price below competitors to quickly gain market share?

Accepted Answer

Penetration pricing

Answer

Penetration pricing uses a low initial price to attract customers and build market share before gradually increasing prices.

Business Degree Practice Test