Bus 1750 Midterm Study Guide
Questions with All Actual Answers
2025-2026 Updated.
Because all governments restrict businesses in some way (such as regulating pollution and
enforcing safety regulations), there is no completely free economic system in the world -
Answer True
In the United States, the Sherman Anti-trust act protects consumers from the development of
monopolies - Answer True
It is difficult to launch a small business and have it be successful, but large, established
companies rarely fail - Answer False
On average, nearly half of all new businesses fail within 5 years of starting - Answer True
Which of he following makes precious metals a good choice as a material for money - Answer
Acceptability, Durability, and Divisibility
Double taxation occurs when a company pays taxes on net income before distributing dividends,
which are then taxed - Answer True
Companies with large sales revenue have a higher net margin than companies with lower sales
revenue - Answer False
Which of the following best describes the way in which a company can use its net income -
Answer Pay out as dividends or build cash reserve
The fundamental financial report for determining a company profitability is - Answer Income
Statement
Contract manufacturing is beneficial in the following circumstances - Answer Start ups,
particular in the food industry where investment costs and regulations can prevent success
&
,To show the value of an aging asset on a balance sheet, the purchase price is listed along with
the accumulated depreciation as well as the purchase price minus the accumulated
depreciation - Answer True
On a balance sheet it is always true that Liablilties=Assets+Owners Equity - Answer False
In the U.S, the value of assets shown on balance sheets can be decreased but not increased -
Answer True
When listing liabilities on a balance sheet, long-term liabilities refer to what a company must
pay back in more than a year - Answer True
In accrual accounting, revenues and expenses must match actual cash receipts and payments -
Answer False
Because marketable securities are readily converted to cash, they are viewed as similar to cash
and are refereed to as a cash equivalents - Answer True
Statements of cash flows do not include cash flows from financing activities - Answer False
Depreciation recognizes that an asset is generating income but will also need to be replaced at
some point in the future and therefore loses value over time - Answer True
Marketable securities are financial investments that can only be bought or sold in private
transactions - Answer False
A monopoly can result when a company buys up competitors and makes exclusive deals with
critical suppliers - Answer True
As the basis for large economies, bartering is inefficient and unwieldy - Answer True
Which of the following are examples of government regulation of businesses in the US - Answer
Worker safety, environmental regulations, prohibiting discrimination in hiring employees
, Which of the following statements are challenges that resulted from the development of mass
production of goods - Answer Environmental pollution, lack of customization poor working
conditions
Depreciation is a non-cash expense - Answer True
To calculate and determine prices for products, you must understand costs and profit goals -
Answer True
Which of the following are arguments in favor of double taxations - Answer A, B, and C (net
profit margin, income statement)
Which of the following statements defines how net profit is calculated - Answer Gross profit
minus all of the businesses expenses, including taxes
Assets include which of the following - Answer Cash a company can use to make purchases,
products that are not yet sold, patents, equipment
The business adage "You can't pay bills with accounts receivable" refers to the fact that while
accounts receivable are shown as an asset on the balance sheet, it is not the same as cash -
Answer True
The true monetary value of something can only be determined when it is sold in the
marketplace - Answer True
When facing business decisions, a company can use bounding-best case worst case scenarios to
help what should be done - Answer True
The IFRS regulate accounting practices in many non-US countries - Answer True
When listing liabilities on a balance sheet, current liabilities refer to what a company must pay
within 1 year - Answer True
Many investors examine a company cash flow statements over time because it is difficult to
produce a misleading cash flow statement and the ability of a company to generate cash is a
Questions with All Actual Answers
2025-2026 Updated.
Because all governments restrict businesses in some way (such as regulating pollution and
enforcing safety regulations), there is no completely free economic system in the world -
Answer True
In the United States, the Sherman Anti-trust act protects consumers from the development of
monopolies - Answer True
It is difficult to launch a small business and have it be successful, but large, established
companies rarely fail - Answer False
On average, nearly half of all new businesses fail within 5 years of starting - Answer True
Which of he following makes precious metals a good choice as a material for money - Answer
Acceptability, Durability, and Divisibility
Double taxation occurs when a company pays taxes on net income before distributing dividends,
which are then taxed - Answer True
Companies with large sales revenue have a higher net margin than companies with lower sales
revenue - Answer False
Which of the following best describes the way in which a company can use its net income -
Answer Pay out as dividends or build cash reserve
The fundamental financial report for determining a company profitability is - Answer Income
Statement
Contract manufacturing is beneficial in the following circumstances - Answer Start ups,
particular in the food industry where investment costs and regulations can prevent success
&
,To show the value of an aging asset on a balance sheet, the purchase price is listed along with
the accumulated depreciation as well as the purchase price minus the accumulated
depreciation - Answer True
On a balance sheet it is always true that Liablilties=Assets+Owners Equity - Answer False
In the U.S, the value of assets shown on balance sheets can be decreased but not increased -
Answer True
When listing liabilities on a balance sheet, long-term liabilities refer to what a company must
pay back in more than a year - Answer True
In accrual accounting, revenues and expenses must match actual cash receipts and payments -
Answer False
Because marketable securities are readily converted to cash, they are viewed as similar to cash
and are refereed to as a cash equivalents - Answer True
Statements of cash flows do not include cash flows from financing activities - Answer False
Depreciation recognizes that an asset is generating income but will also need to be replaced at
some point in the future and therefore loses value over time - Answer True
Marketable securities are financial investments that can only be bought or sold in private
transactions - Answer False
A monopoly can result when a company buys up competitors and makes exclusive deals with
critical suppliers - Answer True
As the basis for large economies, bartering is inefficient and unwieldy - Answer True
Which of the following are examples of government regulation of businesses in the US - Answer
Worker safety, environmental regulations, prohibiting discrimination in hiring employees
, Which of the following statements are challenges that resulted from the development of mass
production of goods - Answer Environmental pollution, lack of customization poor working
conditions
Depreciation is a non-cash expense - Answer True
To calculate and determine prices for products, you must understand costs and profit goals -
Answer True
Which of the following are arguments in favor of double taxations - Answer A, B, and C (net
profit margin, income statement)
Which of the following statements defines how net profit is calculated - Answer Gross profit
minus all of the businesses expenses, including taxes
Assets include which of the following - Answer Cash a company can use to make purchases,
products that are not yet sold, patents, equipment
The business adage "You can't pay bills with accounts receivable" refers to the fact that while
accounts receivable are shown as an asset on the balance sheet, it is not the same as cash -
Answer True
The true monetary value of something can only be determined when it is sold in the
marketplace - Answer True
When facing business decisions, a company can use bounding-best case worst case scenarios to
help what should be done - Answer True
The IFRS regulate accounting practices in many non-US countries - Answer True
When listing liabilities on a balance sheet, current liabilities refer to what a company must pay
within 1 year - Answer True
Many investors examine a company cash flow statements over time because it is difficult to
produce a misleading cash flow statement and the ability of a company to generate cash is a
