Question

write true or false next to each statement.

1. seed money is the money you invest after the business is already successful.
2. fixed assets include buildings and equipment.
3. variable assets change in value often and include inventory.
4. short - term liabilities are debts due within five years.
5. depreciation means an asset increases in value over time.
6. revenue is always more than cost in a profitable business.
7. a pro forma statement shows historical financial data only.

Explanation:

1. Seed money is initial investment, not post - success. False.
2. Fixed assets like buildings and equipment are long - term and not easily convertible to cash. True.
3. Variable assets such as inventory change in value frequently. True.
4. Short - term liabilities are due within one year, not five. False.
5. Depreciation is the decrease in an asset's value over time. False.
6. In a profitable business, revenue exceeds cost. True.
7. A pro forma statement shows projected, not just historical, data. False.

Answer:

1. False
2. True
3. True
4. False
5. False
6. True
7. False