When a New Business Is Just Starting Up,which of the Following

question 82

Multiple Choice

When a new business is just starting up,which of the following must be done first?

• A)Generate positive cash flow through successful operations.
• B)Acquire the assets both long-lived and short-lived so they can operate.
• C)Acquire financing from issuance of shares and borrowing from creditors.
• D)These activities all occur simultaneously not sequentially.

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Definitions:

Net Credit Sales

Total sales made on credit minus returns and allowances, indicating the actual sales revenue expected to be collected.

Vertical Analysis

A method of financial statement analysis in which each line item is listed as a percentage of a base figure, facilitating comparison across different periods.

Financial Statement

A formal record of the financial activities and position of a business, individual, or other entity, which includes the balance sheet, income statement, and statement of cash flows.

Base Amount

The initial value or standard measure that is used as a reference point for calculations, comparisons, or adjustments.