Test Bank For Business Essentials
Canadian 8th Edition Ebert
To Get This Book Click On Below Download Button:
Ecadimi.com Page 1
,1.1 Multiple-Choice Questions
CHAPTER 1 — Understanding the
Canadian Business System
Multiple Choice
1. Profit is
Choices:
1. A) What remains after business expenses are subtracted from business revenues.
2. B) What remains after dividends have been paid to stockholders.
3. C) Equal to total revenue minus cash expenses.
4. D) What remains after income taxes have been paid.
5. E) Double the amount the company pays in.
Correct Answer:
A) What remains after business expenses are subtracted from business revenues.
Rationale:
Profit is the amount remaining after a business subtracts its expenses from the revenues it
generates. It represents the financial return earned from business operations.
Diff: 1
Type: MC
Page Ref: 5
Skill: Knowledge
Objective: 1.1
2. What are profits?
Choices:
1. A) Total money taken in by a corporation
2. B) Increases in income from year to year
3. C) Increases in a corporation's stock price
4. D) Revenue generated by goods and services
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, 5. E) Difference between revenues and expenses
Correct Answer:
E) Difference between revenues and expenses
Rationale:
Profit is the difference between the revenue a business earns and the expenses it incurs in
generating that revenue.
Diff: 1
Type: MC
Page Ref: 5
Skill: Knowledge
Objective: 1.1
3. Profit is
Choices:
1. A) The market value of shares of stock in a company.
2. B) The level of expenses divided by the firm's assets.
3. C) What remains after business expenses are subtracted from business revenues.
4. D) Gross revenue minus taxes a company pays.
5. E) Gross sales minus taxes a company pays.
Correct Answer:
C) What remains after business expenses are subtracted from business revenues.
Rationale:
Profit is calculated by subtracting business expenses from business revenues. Taxes are only one
type of expense and therefore do not define profit by themselves.
Diff: 1
Type: MC
Page Ref: 5
Skill: Knowledge
Objective: 1.1
4. This week, Abe's Muffler Shop had sales of $4,000, employees were paid
$1,000, the cost of goods was $1,500, and rent was $500. Profit for the week was
Choices:
Ecadimi.com Page 3
, 1. A) $3,000.
2. B) $1,000.
3. C) $4,000.
4. D) $2,500.
5. E) $500.
Correct Answer:
B) $1,000.
Rationale:
Profit equals revenue minus expenses. Total expenses are $1,000 + $1,500 + $500 = $3,000.
Therefore, profit is $4,000 − $3,000 = $1,000.
Diff: 2
Type: MC
Page Ref: 5
Skill: Application
Objective: 1.1
5. How are provincial universities in Canada different from business firms?
Choices:
1. A) They do not seek to make a profit.
2. B) They deal with people, not things.
3. C) Their organizational boundaries exclude business firms.
4. D) They do not produce goods or services.
5. E) They are more important to society than business firms.
Correct Answer:
A) They do not seek to make a profit.
Rationale:
Provincial universities are generally not-for-profit organizations. Their primary purpose is to
provide educational services rather than generate profits for owners.
Diff: 2
Type: MC
Page Ref: 5
Skill: Comprehension
Objective: 1.1
Ecadimi.com Page 4
Canadian 8th Edition Ebert
To Get This Book Click On Below Download Button:
Ecadimi.com Page 1
,1.1 Multiple-Choice Questions
CHAPTER 1 — Understanding the
Canadian Business System
Multiple Choice
1. Profit is
Choices:
1. A) What remains after business expenses are subtracted from business revenues.
2. B) What remains after dividends have been paid to stockholders.
3. C) Equal to total revenue minus cash expenses.
4. D) What remains after income taxes have been paid.
5. E) Double the amount the company pays in.
Correct Answer:
A) What remains after business expenses are subtracted from business revenues.
Rationale:
Profit is the amount remaining after a business subtracts its expenses from the revenues it
generates. It represents the financial return earned from business operations.
Diff: 1
Type: MC
Page Ref: 5
Skill: Knowledge
Objective: 1.1
2. What are profits?
Choices:
1. A) Total money taken in by a corporation
2. B) Increases in income from year to year
3. C) Increases in a corporation's stock price
4. D) Revenue generated by goods and services
Ecadimi.com Page 2
, 5. E) Difference between revenues and expenses
Correct Answer:
E) Difference between revenues and expenses
Rationale:
Profit is the difference between the revenue a business earns and the expenses it incurs in
generating that revenue.
Diff: 1
Type: MC
Page Ref: 5
Skill: Knowledge
Objective: 1.1
3. Profit is
Choices:
1. A) The market value of shares of stock in a company.
2. B) The level of expenses divided by the firm's assets.
3. C) What remains after business expenses are subtracted from business revenues.
4. D) Gross revenue minus taxes a company pays.
5. E) Gross sales minus taxes a company pays.
Correct Answer:
C) What remains after business expenses are subtracted from business revenues.
Rationale:
Profit is calculated by subtracting business expenses from business revenues. Taxes are only one
type of expense and therefore do not define profit by themselves.
Diff: 1
Type: MC
Page Ref: 5
Skill: Knowledge
Objective: 1.1
4. This week, Abe's Muffler Shop had sales of $4,000, employees were paid
$1,000, the cost of goods was $1,500, and rent was $500. Profit for the week was
Choices:
Ecadimi.com Page 3
, 1. A) $3,000.
2. B) $1,000.
3. C) $4,000.
4. D) $2,500.
5. E) $500.
Correct Answer:
B) $1,000.
Rationale:
Profit equals revenue minus expenses. Total expenses are $1,000 + $1,500 + $500 = $3,000.
Therefore, profit is $4,000 − $3,000 = $1,000.
Diff: 2
Type: MC
Page Ref: 5
Skill: Application
Objective: 1.1
5. How are provincial universities in Canada different from business firms?
Choices:
1. A) They do not seek to make a profit.
2. B) They deal with people, not things.
3. C) Their organizational boundaries exclude business firms.
4. D) They do not produce goods or services.
5. E) They are more important to society than business firms.
Correct Answer:
A) They do not seek to make a profit.
Rationale:
Provincial universities are generally not-for-profit organizations. Their primary purpose is to
provide educational services rather than generate profits for owners.
Diff: 2
Type: MC
Page Ref: 5
Skill: Comprehension
Objective: 1.1
Ecadimi.com Page 4
