What Is the Advantage to a Small Business When Planning

question 16

Multiple Choice

What is the advantage to a small business when planning for shortfalls in cash flow?

• A) Financial resources can be saved in a savings account until needed.
• B) Banks are more likely to offer loans if they know when the money will be needed.
• C) Loans can be obtained in advance and minimize their costs.
• D) Lower interest loans can be sought for the needed time frame.
• E) Small businesses will appear more professional, resulting in favorable banking relationships.

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Definitions:

Molding Department

A specialized division within a manufacturing facility where the shaping and forming of products through molding processes take place.

Weighted-Average Method

A costing method that averages the costs of all units, both in progress and completed, over the period to determine the cost per unit.

Forming Department

A division within a manufacturing process where raw materials begin their transformation into finished products, typically through shaping or molding.

Materials Cost

The total expense of materials used in the production of a product, including direct materials and any additional materials necessary for production.