The Final Step in Defining Required Assets Before Opening a Business

question 66

Multiple Choice

The final step in defining required assets before opening a business involves ______.

• A) evaluating fixed costs and other expenses
• B) subtracting the dollar value of the owner's equity from the total dollar value of the required assets
• C) evaluating the situation to determine exactly what has to be in place for the business to operate effectively
• D) determine financing requirements

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Definitions:

Credit Sales

Sales made by a business where the customer purchases goods or services on credit and payment is received at a later date.

Finished Goods Inventory

The stock of completed products that are ready for sale but have not yet been sold.

Variable Manufacturing Overhead

Costs that vary with the level of production, such as utilities for manufacturing premises and wages for hourly production workers.

Finished Goods Inventory

Finished goods awaiting purchase that have not been sold to consumers yet.