SBA SBA Business Operations & Management 2

Question 1

What is a break-even analysis used for in small business management?

Accepted Answer

Determining the sales volume needed to cover all costs

Answer

A break-even analysis calculates the level of sales a business must achieve to cover all its fixed and variable costs, resulting in neither profit nor loss.

Question 2

Which inventory management method assumes the most recently purchased items are sold first?

Accepted Answer

LIFO (Last In, First Out)

Answer

LIFO (Last In, First Out) is an inventory accounting method where the most recently acquired inventory is assumed to be sold first.

Question 3

What is the purpose of an Employer Identification Number (EIN) for a small business?

Accepted Answer

Identify the business for federal tax purposes

Answer

An EIN (Employer Identification Number) is a federal tax ID issued by the IRS to identify a business entity for tax reporting and banking purposes.

Question 4

What does accounts receivable represent on a small business balance sheet?

Accepted Answer

Money owed to the business by customers for goods or services delivered

Answer

Accounts receivable represents the amounts owed to a business by its customers for products or services that have been delivered but not yet paid for.

Question 5

Which metric measures how efficiently a business converts sales into profit after all expenses?

Accepted Answer

Net profit margin

Answer

Net profit margin measures the percentage of revenue remaining after all expenses, taxes, and costs are deducted, showing overall profitability.

(SBA) Small Business Administration Certified Business Practice Test

(SBA) Small Business Administration Certified Business Practice Test

SBA SBA Business Operations & Management 2