Practice Test Geeks(ABA) American Barber Association Certified Practice Test
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Barbershop Business & Finance Flashcards

7 cards from real ABA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Barbershop Business & Finance flashcards as text

  1. What is 'working capital' for a barbershop?

    Answer: Current assets minus current liabilities

    Working capital is calculated as current assets (cash, inventory) minus current liabilities (short-term debts), measuring short-term financial health.

  2. A barbershop owner wants to track how efficiently barbers are using available appointment slots. Which metric is most useful?

    Answer: Chair utilization rate

    Chair utilization rate measures the percentage of available appointment slots that are actually filled, directly indicating scheduling efficiency.

  3. When a barbershop buys wholesale shaving cream in bulk at a discounted price, this is an example of reducing which type of cost?

    Answer: Cost of goods sold (COGS)

    Products purchased for use in services or resale are part of cost of goods sold, and buying in bulk reduces the per-unit COGS.

  4. What is the advantage of offering a prepaid service package (e.g., 10 haircuts for $300) to barbershop clients?

    Answer: It provides immediate cash flow and secures future client visits

    Prepaid packages generate upfront cash for the business and commit the client to future visits, improving both cash flow and retention.

  5. Under which business structure does the owner have unlimited personal liability for all business debts?

    Answer: Sole proprietorship

    In a sole proprietorship, there is no legal separation between the owner and the business, meaning personal assets can be used to satisfy business debts.

  6. A barbershop's total monthly expenses are $4,000 and each haircut generates $40 in revenue. How many haircuts must the shop perform monthly to break even?

    Answer: 100

    $4,000 in expenses ÷ $40 per haircut = 100 haircuts needed to cover all costs without profit.

  7. Which document legally establishes a booth rental agreement between a shop owner and an independent contractor barber?

    Answer: A booth rental lease contract

    A booth rental lease contract defines the terms, rental fee, duration, and responsibilities of both the shop owner and the independent barber contractor.