Chapter 17 Review
Worth 27 points Directions – Complete the follows questions/prompts based on your knowledge of the content
from this chapter. Use this a guide to help you prepare for the test. You will need to expand
beyond this handout for full test preparation. This outline will be collected before the test on
Wednesday, April 6th.
Vocabulary. Define and apply these terms for your test.
1. Financial Plan 2. Capital 3. Financial Forecast 4. Budget 5. Accounting 6. GAAP 7. Property 8. Assets 9. Current Assets 10. Accounts Receivable 11. Fixed Assets 12. Equity –
13. Liabilities 14. Accounts payable 15. Owner’s Equity 16. Accounting Equation 17. Financial Statements 18. Income Statement 19. Balance Sheet 20. Statement of Cash Flows –
Short Answer. Write your answer in the space provided.
1. Define the importance of a financial plan (compare to road map).
2. Explain why business owners use a budget. Be sure to refer to budget
variance. What is it and how is it used?
3. Explain the purpose and components of the three main financial statements of a business.
4. Write the accounting equation, in its entirety. (How does accounting help a business?)
a. Which financial statement outlines the accounting equation?
5. Why might an entrepreneur realize that he or she could not secure any investors after
developing a financial plan (use at least two vocabulary words in your answer)?
Other Study Resources
a. Read Ch. 17
b. You will have to identify accounts and determine the associated financial
statement.
c. You will have to complete an income statement and balance sheet.
d. Review all of the notes your 17.1 packet