If You Are Planning to Start a New Business, How

question 45

Multiple Choice

If you are planning to start a new business, how long should you realistically expect it to take for your business to earn a profit?

• A)six to twelve months
• B)one to two years
• C)three to five years
• D)more than five years

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Definitions:

Adjusting Entry

A record created at the conclusion of a financial period to distribute revenues and expenses to the timeframe they were truly incurred.

Supplies Expense

Costs incurred from the purchase of supplies that are used within the operation of a business.

Credit

An accounting entry that decreases assets or increases liabilities and equity on the company's balance sheet, or in the context of banking, the provision of funds or resources to a recipient.

Prepaid Expenses

Costs paid in advance for goods or services that will be used or consumed over time, recorded as assets on the balance sheet.