Introduction to Entrepreneurship International Edition 9th Edition By Donald F. Kuratko – Test Bank

CHAPTER 11: FINANCIAL PREPARATION FOR ENTREPRENEURIAL VENTURES

TRUE/FALSE

1. Financial information pulls together all the information presented in the other seg-ments of the business.

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2. The set of assumptions on which financial projections are based have little meaning.

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3. It is typical for a firm to prepare an operating budget but not a cash budget.

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4. A budget is one of the most powerful tools that an entrepreneur can use in planning business operations.

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5. The cash-flow budget provides an overview of cash inflows and outflows for the budg-et period.

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6. The first type of expense to be estimated when preparing an operating budget is cost of goods sold.

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7. The first step in creating an operating budget is to prepare the sales forecast.

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8. Using regression analysis to estimate the relationship between expected sales and an-other variable is rarely used.

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9. After the operating budget has been prepared, an entrepreneur can proceed to the next phase of the budget process, the cash flow budget.

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10. The first step in the preparation of the cash flow budget is the identification and timing of cash outflows.

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