OpenStax Entrepreneurship Test Bank
Chapter 9: Entrepreneurial Finance and Accounting
Chapter 9: Entrepreneurial Finance and Accounting
* = Correct answer
Multiple Choice/Fill in the Blank
1. Which of the following represents the correct order of a business’s lifecycle?
A. early stage, maturity, seed-stage
B. early stage, seed-stage, maturity
C. seed-stage, early stage, maturity*
D. seed-stage, maturity, early stage
Difficulty: Easy
2. Which of the following could be considered collateral for a loan? (Select all that apply.)
A. buildings*
B. inventory*
C. machinery*
D. wages
Difficulty: Easy
3. Which of the following is a true statement about an IPO?
A. The IPO process is highly regulated by the SBA.
B. Companies can be considered publicly held without an IPO.
C. The company does not need to publish audited financial statements.
D. Owners lose part of their ownership of the business.*
Difficulty: Easy
4. Which of the following do not have to be repaid by the business?
A. crowdfunding
B. grants*
C. investments
D. no interest loan
Difficulty: Easy
5. The accounting equation may be expressed as ________.
A. Assets = Owner’s Equity − Liabilities
B. Assets + Liabilities = Owner's Equity
C. Assets = Profit − Liabilities
D. Assets – Owner’s Equity = Liabilities*
Difficulty: Easy
Page 1 of 10
, OpenStax Entrepreneurship Test Bank
Chapter 9: Entrepreneurial Finance and Accounting
6. Which of the following are considered assets? (Select all that apply.)
A. inventory*
B. investments*
C. liabilities
D. owner’s equity
Difficulty: Easy
7. Which of the following occurs when customers pay for items before they are launched?
A. bartering
B. bootstrapping
C. crowdfunding
D. pre-ordering*
Difficulty: Easy
8. Which of the following is true about assets?
A. Liabilities are always more than the assets of a business.
B. Assets of a business are equal to owner’s equity less liabilities.
C. Expenses and assets are the same since they are both acquired with cash.
D. Owners and/or creditors finance the assets of a business.*
Difficulty: Easy
9. The statement of cash flows is not useful for ________.
A. planning future investing
B. determining if the business can pay its debt
C. determining if the business is building cash from operations
D. calculating the overall value of the business*
Difficulty: Easy
10. Which of the following is considered a liability?
A. accounts receivable
B. accounts payable*
C. returns and allowance
D. service revenue
Difficulty: Easy
11. Charitable missions include all of the following except
A. advancing education
B. collecting taxes for a government body*
C. defending human rights
D. protecting the environment
Page 2 of 10
Chapter 9: Entrepreneurial Finance and Accounting
Chapter 9: Entrepreneurial Finance and Accounting
* = Correct answer
Multiple Choice/Fill in the Blank
1. Which of the following represents the correct order of a business’s lifecycle?
A. early stage, maturity, seed-stage
B. early stage, seed-stage, maturity
C. seed-stage, early stage, maturity*
D. seed-stage, maturity, early stage
Difficulty: Easy
2. Which of the following could be considered collateral for a loan? (Select all that apply.)
A. buildings*
B. inventory*
C. machinery*
D. wages
Difficulty: Easy
3. Which of the following is a true statement about an IPO?
A. The IPO process is highly regulated by the SBA.
B. Companies can be considered publicly held without an IPO.
C. The company does not need to publish audited financial statements.
D. Owners lose part of their ownership of the business.*
Difficulty: Easy
4. Which of the following do not have to be repaid by the business?
A. crowdfunding
B. grants*
C. investments
D. no interest loan
Difficulty: Easy
5. The accounting equation may be expressed as ________.
A. Assets = Owner’s Equity − Liabilities
B. Assets + Liabilities = Owner's Equity
C. Assets = Profit − Liabilities
D. Assets – Owner’s Equity = Liabilities*
Difficulty: Easy
Page 1 of 10
, OpenStax Entrepreneurship Test Bank
Chapter 9: Entrepreneurial Finance and Accounting
6. Which of the following are considered assets? (Select all that apply.)
A. inventory*
B. investments*
C. liabilities
D. owner’s equity
Difficulty: Easy
7. Which of the following occurs when customers pay for items before they are launched?
A. bartering
B. bootstrapping
C. crowdfunding
D. pre-ordering*
Difficulty: Easy
8. Which of the following is true about assets?
A. Liabilities are always more than the assets of a business.
B. Assets of a business are equal to owner’s equity less liabilities.
C. Expenses and assets are the same since they are both acquired with cash.
D. Owners and/or creditors finance the assets of a business.*
Difficulty: Easy
9. The statement of cash flows is not useful for ________.
A. planning future investing
B. determining if the business can pay its debt
C. determining if the business is building cash from operations
D. calculating the overall value of the business*
Difficulty: Easy
10. Which of the following is considered a liability?
A. accounts receivable
B. accounts payable*
C. returns and allowance
D. service revenue
Difficulty: Easy
11. Charitable missions include all of the following except
A. advancing education
B. collecting taxes for a government body*
C. defending human rights
D. protecting the environment
Page 2 of 10
