Which of the Following Is a Drawback of Obtaining Money

question 11

Multiple Choice

Which of the following is a drawback of obtaining money from venture capitalists to start a small business?

• A)They are not interested in managing or controlling the business.
• B)They require the small-business owner to share the profits of the business with them.
• C)They require that the small business owner mortgage his or her personal property to obtain funds.
• D)They prefer to sell the stock at a low price after the business has grown successful.
• E)They are not interested in claiming ownership of the business.

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Definitions:

Australian Accounting Standards

The set of accounting principles and procedures that must be followed by companies operating in Australia.

Variable Costing

An accounting method that includes only variable production costs (materials, labor, and overhead) in the cost of goods sold and treats fixed overhead costs as period expenses.

Manufacturing Overhead Costs

Englobes the indirect costs related to manufacturing that are not directly tied to the production of specific units, such as utilities and rent for production facilities.

Factory Burden Costs

Costs associated with manufacturing operations that are not directly tied to a specific product, such as maintenance, utilities, and depreciation of factory equipment.