Financing Difficulties of Small Business Are Often

question 2

Multiple Choice

Financing difficulties of small business are often:

• A) a symptom of small business as a cause of unemployment.
• B) a symptom of management problems.
• C) because there are too many small businesses.
• D) due to bias against entrepreneurs.

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Definitions:

Effective-Interest Method

A method of calculating the amortized cost of a bond and the interest expense over the life of the bond by applying a constant interest rate to the carrying value of the bond.

GAAP

Stands for Generally Accepted Accounting Principles, which are the standard framework of guidelines for financial accounting in a particular jurisdiction.

Straight-Line Method

A method of depreciation where an asset's cost is evenly reduced over its useful life.

Market Interest Rate

Market Interest Rate refers to the prevailing rate at which interest is paid by borrowers for loans or earned by investors in the market.