A Significant Difference Between a Board of Directors and an Advisory

question 6

Multiple Choice

A significant difference between a board of directors and an advisory board is:

• A)the advisory board has unlimited liability for the actions of the company.
• B)the advisory board is made up only of insiders.
• C)the advisory board is required to meet quarterly, not annually.
• D)the advisory board has no legal authority over the owner or the company.

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Definitions:

Gross Profit

The difference between revenue and the cost of goods sold (COGS), indicating the profit a company makes before deducting operating expenses.

Cost of Goods Sold

Costs directly connected to the assembly of products sold by a business, covering materials and labor expenses.

Operating Income

The profit realized from a business's core business operations, excluding deductions of interest and tax.

Operating Expenses

Costs associated with running the day-to-day operations of a business which are necessary to keep the business functioning, excluding the cost of goods sold.