Which Statement Best Describes a Private Enterprise

question 34

Multiple Choice

Which statement best describes a private enterprise?

• A)Any entity that is not a publicly accountable enterprise.
• B)Any for-profit organization that is not a publicly accountable enterprise.
• C)An entity that holds assets in a legal capacity for a broad group of outsiders as one of its primary businesses.
• D)Any entity, excluding a not-for-profit organization.

Analyze and interpret the ratios of liabilities to stockholders' equity and their meaning for a company's financial health.

Distinguish between business and non-business transactions and their recording.

Grasp the flow of cash into and out of the company and its representation in financial statements.

Understand the principles of accounting and the equation.

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Definitions:

Contribution Margin Ratio

The contribution margin ratio is the ratio of the contribution margin (sales minus variable costs) to sales revenue, indicating the percentage of each sales dollar available to cover fixed costs and provide profit.

Fixed Monthly Expenses

Costs that do not vary from month to month, such as rent, loan payments, and insurance premiums.

Contribution Format Income Statement

An income statement format that separates fixed and variable costs to highlight the contribution margin of a business.

Unit Sales

The total number of individual units of a product sold by a company within a specific period of time.