Business Quiz Questions and Answers
Questions: 16 · 10 minutes
1. Which equation must a correctly prepared balance sheet satisfy?
Revenue minus expenses equals assets.
Assets plus liabilities equals equity.
Cash equal revenue plus profit.
Assets equal liabilities plus equity.
2. What is the usual purpose of limited liability for owners of a corporation?
It guarantees that the company will never make a loss.
It removes the company's obligation to repay its debts.
It generally limits an owner's exposure to the amount invested.
It allows owners to ignore contracts signed by the company.
3. A retailer earns $120,000 in sales revenue and reports $70,000 in cost of goods sold. What is its gross profit?
$120,000
$70,000
$50,000
$190,000
4. A software company identifies independent bookstores as a customer group with shared inventory needs, then creates campaigns specifically for that group. Which marketing practice is this?
Product diversification
Mass distribution
Cost-plus pricing
Market segmentation
5. A business owner uses a vacant building for a warehouse instead of renting it to another company. In this decision, what is the forgone rental income?
A sunk cost
An opportunity cost
A variable cost
A depreciation charge
6. In a SWOT analysis, a well-funded new competitor entering the market would normally be classified as what?
A threat
A weakness
An opportunity
A strength
7. A factory can produce 60 units per hour, but its packaging station can handle only 40. Demand is 50 units per hour. Which change most directly increases the system's current maximum output?
Increase production capacity to 70 units per hour.
Increase packaging capacity above 40 units per hour.
Reduce finished-goods storage space.
Order more raw material without changing either station.
8. A business has $90,000 in current assets and $55,000 in current liabilities. What is its working capital?
$35,000
$55,000
$90,000
$145,000
9. A product sells for $50 per unit, has a variable cost of $30 per unit, and carries $30,000 in total fixed costs. How many units must be sold to break even?
600 units
1,000 units
3,000 units
1,500 units
10. A company raises a product's price by 10%, and quantity demanded falls by 20%, with other relevant factors unchanged. What does this suggest about demand over that change?
Demand is perfectly inelastic.
Demand is price elastic.
Demand increased with price.
Demand is unit elastic.
11. Which situation best illustrates economies of scale?
Total costs rise whenever production increases.
Demand falls after a business raises its price.
Average cost per unit falls as output expands.
A company adds more product varieties to its range.
12. During a competitive supplier selection, a manager is offered an expensive personal gift by one bidder. What is the most appropriate response?
Decline or report it under company policy and disclose the potential conflict.
Accept it only after the winning supplier has been informally chosen.
Keep it but avoid telling colleagues so the process is not disrupted.
Accept it if the manager believes personal judgment will remain impartial.
13. Which financial statement is primarily used to show cash received and cash paid during a period?
Income statement
Cash flow statement
Balance sheet
Statement of changes in equity
14. Which goal best follows the SMART approach to goal setting?
Raise the repeat-purchase rate from 25% to 30% by September 30.
Improve customer loyalty as much as possible.
Become the most respected company in the market.
Encourage the sales team to perform better soon.
15. An investment has a positive net present value after all relevant projected cash flows are discounted at the required rate. What does that indicate?
The project has no uncertainty.
The project's accounting profit is guaranteed each year.
Its discounted expected inflows exceed its outlay and other included costs.
Its initial cost is greater than the present value of its expected inflows.
16. A company spends $12,000 on a campaign and gains 300 new customers attributed to it. What is the campaign's customer acquisition cost?
$12,300 per customer
$300 per customer
$3,600 per customer
$40 per customer