BUSAD Exam 1 Full Answers

Which of the following refers to evaluating a company's performance and the economic implications of strategic decisions such as product pricing, employee benefits, and business acquisitions?

financial analysis

________ is defined as a pathway for the flow of authority from one management level to the next.

Chain of command

Which of the following is an indication of an economic change that has happened in the past?

lagging indicators

The profit earned, or the loss incurred by a firm, determined by subtracting expenses and taxes from revenues, is referred to as the ________.

net income

________ policy involves changes in the government's revenues and expenditures to stimulate a slow economy or dampen a growing economy that is in danger of overheating and causing inflation.

Fiscal

A(n) ________ is a framework of how a business intends to generate revenue.

business model

Organizations that focus decision-making authority near the top of the chain of command are said to be ________.

centralized organizations

The economic system that allows individuals the least degree of economic freedom is ________.

socialism

Which of the following terms refers to a formal evaluation of the fairness and reliability of a client's financial statements?

audit

Sales - Total Variable Costs = ________.

contribution margin

Which of the following is a leverage ratio?

debt-to-equity ratio

A ________ creates value by performing activities that provide benefit to the customer.

service business

A company has $20,000 in cash, $100,000 worth of land and other assets of $300,000. The firm has an outstanding loan of $200,000 and other liabilities adding up to $25,000. What is the owner's equity of the company?

$195,000

________ refers to some aspect of a product or company that makes it more appealing to target customers.

Competitive advantage

How can conflict be a positive experience for group members?

Conflict can increase the involvement of team members and generate creative ideas for problem solving.

________ are those activities in which a company excels and has the potential to create competitive advantages.

Core competencies

Which of the following is a characteristic of effective teams?

Disagreements are discussed in the interest of task accomplishment.

________ is the study of how a society uses scarce resources to produce and distribute goods.

Economics

Which of the following is a defining characteristic of a task force?

It is formed to work on a specific activity with a completion point.

________ refers to a company's target customers, the buying influences that shape the behavior of those customers, and competitors that market similar products to those customers.

Market environment

________ policy involves increasing or decreasing interest rates to control the nation's money supply.

Monetary

Which of the following activities is most likely to be considered unprofessional?

Posting critical comments regarding the employer in a personal blog.

________ is the quality of performing at a high level and conducting oneself with purpose and pride.

Professionalism

________ occurs when no single firm is large enough to influence prices and distort the workings of the free-market system.

Pure competition

Which of the following is an advantage of working in a team?

Teams improve flexibility and responsiveness.

A company whose structure, policies, and capabilities allow employees to respond quickly to customer needs and changes in the business environment is termed as a(n) ________.

agile organization

To analyze a firm's financial strengths in terms of its overall assets and liabilities, which of the following reports is best suited to estimate this on a particular date?

balance sheet

The term ________ is used to characterize the fluctuations in an economy's rate of growth over a period of several years.

business cycles

The money, equipment, and buildings that a business needs in order to produce goods and services are called ________.

capital

Businesses that need very large amounts of money, equipment, or other material resources in order to get started are ________ businesses.

capital-intensive

A(n) ________ reports to the CFO and is the highest-ranking accountant in a company, responsible for overseeing all accounting functions.

controller

When demand for goods and services drops, businesses reduce production, thereby requiring fewer workers. The unemployment resulting because of this phenomenon is known as ________ unemployment.

cyclical

A(n) ________ shows the relationship between the amount of product that buyers will purchase at various prices, all other factors being equal.

demand curve

The conditions that affect the cost and availability of goods, services and labor, and the behavior of buyers and sellers are BEST described as the ________ environment.

economic

In a ________, companies can decide what to produce, how to produce, whom to sell to, and at what price to sell.

free-market system

Grouping workers according to their similar skills, resource use, and expertise is called a ________ structure.

functional

Uniformity of thought that occurs when peer pressures cause individual team members to withhold contrary or unpopular opinions is called ________.

groupthink

The ________ is a financial record that represents a company's revenues, expenses, and profits over a given period of time.

income statement

A company issues $50,000 in bonds to generate money for expanding its business. This money is an example of a(n) ________.

long-term liability

A structure in which employees are assigned to both a functional group and a project team simultaneously is called a(n) ________.

matrix structure

If individuals and companies believe they can pursue rewards without facing the risks that should be attached to those pursuits, they are more likely to engage in irresponsible and even unethical behavior. This situation is known as a(n) ________.

moral hazard

Of all the alternatives not selected, the one with the highest value represents the ________ of the action taken.

opportunity cost

A diagram that shows how employees and tasks are grouped and where the lines of communication and authority flow is called a(n) ________.

organization chart

According to Tuckman's model of team development, in the ________ stage of team development, members of the team are fully committed to the team's objectives and the team achieves its full potential in terms of task accomplishment.

performing

Which of the following ratios is used to measure a firm's short-term liquidity?

quick ratio

The term ________ is defined as having two consecutive quarters of decline in the country's gross domestic product.

recession

The number of workers that a manager directly supervises is called the manager's ________.

span of management

All groups affected by a company's activities are referred to as its ________.

stakeholders

The __________ environment refers to forces resulting from the practical application of science to innovations, products, and processes.

technological

How do banks and suppliers use the accounting information generated by an organization?

to determine creditworthiness