Which of the Following Is True of a Small Business

question 47

Multiple Choice

Which of the following is true of a small business?

• A) Its preferred funding source is other people's money.
• B) It sells more when it is facing bankruptcy.
• C) It considers sales as more important than marketing.
• D) It focuses more on effectiveness than on efficiency.

---

Definitions:

Variable Cost

A cost that varies, in total, in direct proportion to changes in the level of activity. A variable cost is constant per unit.

Fixed Cost

A cost that remains constant, in total, regardless of changes in the level of activity within the relevant range. If a fixed cost is expressed on a per unit basis, it varies inversely with the level of activity.

Planning Budget

A financial plan for a future period, outlining an organization's revenue and expenditures.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels.