MCVSD Business & Finance Fundamentals 3

Question 1

What does 'accounts receivable' represent for a business?

Accepted Answer

Money owed to the business by its customers

Answer

Accounts receivable represents money that customers owe to the business for goods or services already delivered.

Question 2

Which economic principle states that as price increases, consumer demand typically decreases?

Accepted Answer

Law of Demand

Answer

The Law of Demand states that as the price of a good rises, consumers tend to purchase less of it, all else being equal.

Question 3

In business, what is a 'budget'?

Accepted Answer

A financial plan estimating future income and expenses

Answer

A budget is a financial plan that estimates projected income and expenses over a specific period to guide spending decisions.

Question 4

What is the primary role of a credit score in personal finance?

Accepted Answer

To measure a person's creditworthiness for lenders

Answer

A credit score numerically represents a person's creditworthiness, helping lenders assess the risk of lending money.

Question 5

Which term describes total business expenses exceeding total revenues?

Accepted Answer

Loss

Answer

A loss occurs when a business's total expenses exceed its total revenues during a given period.

MCVSD - Monmouth County Vocational School District Practice Test