Business Degree Business Education Basic 3

Question 1

What is 'working capital' in business finance?

Accepted Answer

Current assets minus current liabilities

Answer

Working capital is current assets minus current liabilities, measuring a company's short-term liquidity and operational efficiency.

Question 2

Which business structure provides limited liability to all owners while avoiding double taxation?

Accepted Answer

Limited Liability Company (LLC)

Answer

An LLC offers limited liability protection to its members while allowing profits to pass through to personal tax returns, avoiding corporate double taxation.

Question 3

What is 'gross profit'?

Accepted Answer

Revenue minus cost of goods sold

Answer

Gross profit is revenue minus the cost of goods sold (COGS), representing profit before operating expenses are deducted.

Question 4

In marketing, what does the '4 Ps' framework include?

Accepted Answer

Product, Price, Place, Promotion

Answer

The 4 Ps of the marketing mix are Product, Price, Place (distribution), and Promotion, forming the foundation of marketing strategy.

Question 5

What is 'depreciation' in accounting?

Accepted Answer

The allocation of an asset's cost over its useful life

Answer

Depreciation systematically allocates the cost of a tangible asset over its expected useful life, matching the expense to the periods benefited.

Business Degree Practice Test

Business Degree Practice Test

Business Degree Business Education Basic 3