ENT 2113 Final
In the context of legal forms of business, which of the following is an area in which sole proprietorships differ from general partnerships? a. the possibility of bringing in new equity partners b. how the firm's income and losses are reported on tax forms c. where the liability for the firm's debts and finances rests d. how much responsibility the owner or owners have for making business decisions
a. the possibility of bringing in new equity partners
The owner must be aware of his or her own tolerance of risk and establish a business that is consistent with that tolerance. a. true b. false
a. true
The setting of goals for an employee allows an entrepreneur to judge how well the employee is performing. a. true b. false
a. true
Which of the following questions should a new business owner examine when considering leases? a. What exactly is the new business owner leasing? b. Is there an ability to renew the lease? c. Who is responsible for maintenance and improvements? d. All of the answers are correct
d. All of the answers are correct
During the 1970s and 1980s, the ________ occupied the dominant economic position in the world. a. Americans b. Germans c. Russians d. Japanese
d. Japanese
A critical element that an entrepreneur must solve for success is to develop the ability to generate consistent and growing sales. a. true b. false
true
A customer of a small business could be considered an important stakeholder to the success of a company. a. true b. false
true
Every business that has been documented in the Fortune 500 list began as a new venture by a single individual or a small group of people. a. true b. false
true
Heather Schuck, owner of Glamajama, is an example of how women can concentrate on more than one facet of life. a. true b. false
true
The presence of venture capital for start-ups is limited outside of the United States. a. true b. false
true
James and Mary own a business. When they pay themselves an advance in salary or a bonus, it is called a(n) ________. a. cash out b. draw c. expected outlay d. payout
b. draw
Which of the following laws established a minimum wage for workers? a. the Civil Rights Act b. the Sherman's Antitrust Act c. the Fair Labor Standards Act d. the Americans with Disabilities Act
c. the Fair Labor Standards Act
Investors can be a. a minority b. active c. passive d. all of these answers are correct
d. all of these answers are correct
A cash-based accounting system recognizes expenses as they are paid and recognizes revenue when it is generated. a. true b. false
a. true
While developing a quality business idea, what should potential business founders ideally do after evaluating their personal skill sets? a. brainstorm for potential business ideas with family b. interview successful entrepreneurs to generate business ideas c. carefully analyze the market and look for a gap d. propose a business idea to potential investors
c. carefully analyze the market and look for a gap
The government regulates the employment of children under the age of ________. a. 16 b. 18 c. 20 d. 21
a. 16
Identify a true statement about the process of generating new business ideas. a. As a business idea evolves, an entrepreneur must be willing to develop a new set of skills to make it successful. b. Entrepreneurs should focus on generating ideas and funding a new business based on them, but they must not become personally involved in its success. c. While generating business ideas, an entrepreneur needs to focus on exploitable market trends rather than use personal experience to inform the process. d. Family is generally the best source of ideas for a new business.
a. As a business idea evolves, an entrepreneur must be willing to develop a new set of skills to make it successful.
Which of the following was the outcome of the Great Depression of the 1930s? a. Entrepreneurial business as a percentage of the U.S. economic output began to decline. b. It was harder on larger more mature businesses than on entrepreneurial businesses. c. The government deregulated all small and medium-sized enterprises. d. It led to the initial development of a large industrial base in the United States.
a. Entrepreneurial business as a percentage of the U.S. economic output began to decline.
Carla is a high-net-worth individual who was once an entrepreneur. She now financially invests in small start-ups and businesses. Though Carla funds their initial operations and advises them on the best way to develop their operations, she rarely interferes with their day-to-day operations. In the context of the various forms of equity funding, Carla is most likely a. a business angel b. an asset lender c. an investment banker d. a venture capitalist
a. a business angel
The development and implementation of a new business is part ________ and part ________. a. art; science b. luck; skill c. genius; hard work d. resources; hard work
a. art; science
In the context of business risks, how can an entrepreneur identify competitors to a new potential business? a. by observing what potential customers do to satisfy their current needs or wants b. by conducting a brainstorming session with other entrepreneurs c. by observing the market and identifying companies that have seen the maximum growth in the past quarter d. by performing a gap analysis evaluation to identify potential competitors
a. by observing what potential customers do to satisfy their current needs or wants
In general, the greater the debt a business owner is willing to take on, the ________ the risk tolerance. a. higher b. more predictable c. lower d. less predictable
a. higher
Some communities offer facilities that house new businesses and provide resources for them. These are called ________. a. incubators b. temporary business agencies c. holding facilities d. small business resource centers
a. incubators
Which of the following is not a personality dimension of the Big Five test? a. individualist b agreeableness c. conscientiousness d. extroversion
a. individualist
A ________ statement is a financial statement that summarizes the revenue, costs, and expenses incurred during a specific period of time. a. profit and loss b. balance c. liabilities owed d. pro forma
a. profit and loss
Small companies have flourished in the United States because they a. respond more quickly to their customers' needs b. have better organizational policies and procedures c. employ more skilled people than larger businesses d. often expand easily in mature industries
a. respond more quickly to their customers' needs
Which of the following types of firms do business incubators work best with? a. scientific firms b. tobacco products c. restaurants d. retail stores
a. scientific firms
A business that chooses to form a corporation must have a board of directors. In new small corporations, the board of directors and shareholders must be different individuals. a. true b. false
a. true
ADA stands for the Americans with Disabilities Act. a. true b. false
a. true
Any business needs to acquire a license to do business in the county or city where the firm will be operating. a. true b. false
a. true
Banks will lend money for the establishment and maintenance of inventory by arranging a revolving line of credit. a. true b. false
a. true
Equity theory argues that people judge how they are being treated relative to how they see others being treated. a. true b. false
a. true
Extra expenses, not counted on in the planning stage of a new business, can quickly eat up cash intended to grow the business. a. true b. false
a. true
Funding for a small business starts with the founders and their personal resources. a. true b. false
a. true
In a Subchapter C Corporation, it is possible to have a double taxation situation. a. true b. false
a. true
John takes out a loan for a necessary machine in his business. This type of loan would be called asset-based lending. a. true b. false
a. true
New business owners who have no passion for the business they have decided to start will not devote the time and energy necessary to make the business a success. a. true b. false
a. true
One of the negative aspects to being the owner of a family business has to do with firing a family member. a. true b. false
a. true
The Americans with Disabilities Act requires that there should be no discrimination in the hiring, management, or dismissal of employees with disabilities. a. true b. false
a. true
The Myers-Briggs test is used for personality evaluations. a. true b. false
a. true
The fourth column in a gap analysis is used to list the resources required for the successful operation of a business. a. true b. false
a. true
The insurance coverage obtained by a small business is directly proportional to the cost. As the coverage increases, the cost also increases. a. true b. false
a. true
When a potential business owner has several ideas for a business, he or she needs to identify one on which to perform a due diligence analysis. a. true b. false
a. true
Identify a true statement about the process of generating business ideas. a. Frequently, entrepreneurs end up finding an opportunity that matches their business concept exactly. b. After analysis, entrepreneurs may change their ideas even if they initially thought that their ideas would be successful. c. Entrepreneurs should limit themselves to generating business ideas based on their education and work experience. d. Individuals should quickly exploit opportunities they identify before competitors can identify the same gaps.
b. After analysis, entrepreneurs may change their ideas even if they initially thought that their ideas would be successful.
Which of the following statements is true of the Americans with Disabilities Act (ADA)? a. It is applicable to large business firms with a turnover of more than 10 million dollars. b. It provides that each and every business must provide unfettered access to all differently-abled people. c. It allows entrepreneurial businesses to exclude candidates who need physical adaptations to work at the firm. d. It covers those firms with 50 or more employees.
b. It provides that each and every business must provide unfettered access to all differently-abled people.
Which of the following statements is true of the Fair Labor Standards Act (FLSA)? a. It provides that each and every business must provide unfettered access to all disabled people. b. It requires that all nonexempt employees who work over 40 hours a week should be paid at the rate of time and a half. c. It allows an entrepreneur to employee children under the age of 15 years if he or she can establish the safety of the working environment. d. It sets a minimum wage for all workers, including workers on small farms and administrative employees.
b. It requires that all nonexempt employees who work over 40 hours a week should be paid at the rate of time and a half.
An entrepreneur should use personality tests to determine his or her capability for starting a business. a. true b. false
b. false
Family members are in a unique position to keep an individual focused on pursuing the wrong approach to an issue. a. true b. false
b. false
Human resource programs for small companies are the same and have the same effects as large businesses. a. true b. false
b. false
If a job is more central to an organization and has higher required skill levels than other positions, then the importance of employee references decreases. a. true b. false
b. false
The first step in developing a quality business idea is to analyze the market. a. true b. false
b. false
The last column of a gap analysis is used to list the categories that are used to analyze each idea. a. true b. false
b. false
In the context of legal forms of business, a general partner in a limited liability partnership a. is not responsible for liabilities owed if the firm goes bankrupt b. has unlimited liability for any debts or judgments against the firm c. is not active in the management of the firm d. act as an independent external advisor to the firm
b. has unlimited liability for any debts or judgments against the firm
Before establishing a new business, the first thing founders should do is a. hire a lawyer b. list their personal skill sets c. analyze the market d. obtain financial support
b. list their personal skill set
A(n) ________ is needed regarding all employees, and the owner must be diligent in the attempt to assist a poorly performing employee. a. performance review b. paper trail c. audit profile d. firing document
b. paper trail
Human resources, as defined in economics, is the ________ and ________ of human effort directed toward producing goods and services. a. creation; utilization b. quantity; quality c. production; termination d. development; production
b. quantity; quality
Until the mid-1880s, almost all U.S. businesses were ________. a. indifferent b. small c. medium d. large
b. small
Which of the following can be a threat to operational financing? a. a team with a high asset base b. swift expansion plans c. low inventory needs d. low development costs
b. swift expansion plans
Which of the following is an advantage that family businesses enjoy over nonfamily-owned businesses? a. Family businesses are able to respond quickly to change around them, whereas nonfamily-owned businesses are often slow to react to changes. b. Family businesses have the ability to cheaply produce large numbers of a product, whereas nonfamily-owned businesses can only produce small volumes of a product. c. Individuals in family businesses are often willing to work at times and in conditions that employees in nonfamily-owned businesses would not accept. d. Family businesses can afford to fill niches within markets that nonfamily-owned businesses cannot afford to fill.
c. Individuals in family businesses are often willing to work at times and in conditions that employees in nonfamily-owned businesses would not accept.
In the context of legal forms of business, identify a true statement about sole proprietorship firms. a. These firms can have multiple founders with equal stakes so long as a single individual is considered to be the owner. b. Many communities discourage the formation of these firms because their operations are difficult to regulate. c. Laws governing business practices do not recognize other equity investors, which limits the growth potential of such firms. d. Because of the limited nature of the growth potential of such firms, any profits they make are exempt from federal taxation.
c. Laws governing business practices do not recognize other equity investors, which limits the growth potential of such firms.
Which of the following is true of robber barons in the context of the history of entrepreneurial businesses in the United States? a. They were responsible for the failure of several small businesses. b. They failed to take advantage of the economies of scale c. The indulged in great abuses in order to succeed in their business. d. They dominated those industrial sectors that were already well-established.
c. The indulged in great abuses in order to succeed in their business.
In the context of risks to new businesses, identify a true statement about risk tolerance. a. In new markets, entrepreneurs must be willing to put up with risks that outweigh their personal risk tolerance. b. Risks must be determined by entrepreneurs based on the findings of focus groups with other entrepreneurs in the same industry. c. What constitutes a risk is determined by an entrepreneur by observing his or her own tolerances. d. Entrepreneurs can avoid a majority of the risks associated with new start-ups by allowing competitors to invest in their new businesses.
c. What constitutes a risk is determined by an entrepreneur by observing his or her own tolerances.
Of the key accounting reports that a new businessperson should be prepared to generate, which of the following tracks the work times of hourly employees and attendance for salaried employees? a. an accounts payable record b. an expense account c. a payroll record d. a chart of accounts
c. a payroll record
A small business owner must possess all of the following except a. necessary skills to run the business b. an in-depth understanding of the market c. a sequential formula d. passion for starting a business
c. a sequential formula
________ is a rational decision-making process that is constrained by our experiences, history, and culture. a. constrained rationality b. unbounded rationality c. bounded rationality d. logic rationality
c. bounded rationality
Covore Inc., a start-up firm, receives the majority of the funds it requires to begin its operations from five individuals. In exchange for these funds, each individual receives a share of ownership in the firm. The funds provided to Covore Inc. by the individuals are an example of ________. a. asset-based lending b. crowdfunding c. equity investment d. debt
c. equity investment
All of the following are benefits of a Subchapter C Corporation EXCEPT a. health benefits paid by the corporation b. owners being treated as employees of the company c. fringe benefits being treated as income d. no limit to the number of shareholders
c. fringe benefits being treated as income
Established businesses are often ________ to buy from a start-up small business. a. determined b. quick c. hesitant d. sure
c. hesitant
Brainstorming works well in ________ groups. a. technical b. advisory c. informal d. formal
c. informal
________ can be described as a form of nonequity funding where one organization finances another organization's purchasing of physical assets and supplies. a. asset loaning b. factoring c. supplier credit d. angel investments
c. supplier credit
________ aid(s), counsel(s), assist(s), and protect(s) the interests of small business concerns. a. Medium-sized businesses b. Fortune 500 companies c. the U.S. Small Business Administration d. Stakeholders
c. the U.S. Small Business Administration
The break-even point is defined as a. the time when a business must liquidate its holdings and declare bankruptcy b. the level where a firm starts to profit from the revenue it makes from its products c. the level where revenue coming into the firm is sufficient to cover expenses d. the time when a firm experiences steady losses during its initial stages of operation
c. the level where revenue coming into the firm is sufficient to cover expenses
Identify a true statement about a large firm that has organizational slack. a. each employee is crucial to the survival of the firm b. the firm's knowledge is concentrated around a few key personnel c. the loss of an employee barely affects the abilities of its workforce d. the firm enjoys extreme financial flexibility and can survive huge annual losses if necessary
c. the loss of an employee barely affects the abilities of its workforce
Which of the following statements is true of worker's compensation? a. Once an employee accepts workers' compensation, he or she cannot sue the entrepreneur for the injury caused due to unsafe working conditions. b. Once an employee accepts workers' compensation, he or she cannot sue the entrepreneur for the injury caused due to unsafe working conditions. c. It is limited to partial wage replacement and medical bills acquired while treating the injury caused at the workplace. d. All of the answers are correct.
d. All of the answers are correct.
In the context of proper accounting practices, identify a major difference between cash-based and accrual-based accounting systems. a. Cash-based systems are mostly used by publicly held corporations, whereas accrual-based systems are mostly used by privately held corporations. b. Cash-based systems are generally used with periodic inventory counting systems, whereas accrual-based systems are used primarily with perpetual inventory counting systems. c. Cash-based systems must be used by large businesses, whereas accrual-based systems must only be used by the smallest businesses. d. Cash-based systems recognize revenue as it is generated, whereas accrual-based systems record revenue only when it occurs.
d. Cash-based systems recognize revenue as it is generated, whereas accrual-based systems record revenue only when it occurs.
Identify a legal question that an employer can ask during an interview. a. Are you heterosexual or homosexual? b. Are you a Republican or a Democrat? c. Are you married? d. Do you have a Social Security number?
d. Do you have a Social Security number?
In the context of legal forms of business, identify an accurate statement about a general partnership. a. The partner with the largest equity stake makes decisions about the firm's operations. b. Owners report their shares of losses or profits independent of their interest in the firm. c. A single partner operates as the firm's manager and is directly responsible for any debts owed by the firm. d. Established partners can bring in new equity partners by surrendering a portion of their ownership position.
d. Established partners can bring in new equity partners by surrendering a portion of their ownership position.
In the context of legal forms of business, identify a true statement about limited liability partnership (LLP). a. General partners in a limited liability partnership are indirectly responsible for federal taxes owed by the firm. b. Limited partners in a limited liability partnership must be external advisors who do not have a stake in the ownership of the firm. c. All partners in a limited liability partnership are jointly responsible for any debts or judgments against the firm. d. In a limited liability partnership, limited partners can work at the firm but not be active in its management.
d. In a limited liability partnership, limited partners can work at the firm but not be active in its management.
Which of the following statements is true of the Civil Rights Act? a. It allows for the promotion of the differently-abled employees irrespective of their performance. b. It ensures that all individuals are judged according to the discretion of an entrepreneur. c. It provides that each and every business must provide unfettered access to all disabled people. d. It currently applies to all firms with more than 25 employees.
d. It currently applies to all firms with more than 25 employees.
Identify a true statement about credit cards from the following. a. They are usually tied to a particular asset. b. They do not have a set upper limit. c. They have low interest rates. d. None of the answers is correct.
d. None of the answers is correct.
Marsciva Technologies is an emerging business. The firm considers the owners to be employees of the firm and therefore pays them salaries and bonuses. To reduce corporate tax, the owners of Marsciva Technologies pay themselves nearly all the profits generated so that very little actual profits are reported by the firm. Based on these characteristics, Marsciva Technologies is most likely a a. sole proprietorship b. limited partnership c. Subchapter S Corporation d. Subchapter C Corporation
d. Subchapter C Corporation
Which of the following statements is true of a performance review in an entrepreneurial business? a. A complex form should be followed for all performance reviews that are given in writing to assure its validity. b. If a worker is not performing as expected, then the employer should give only positive feedback to boost the worker's morale. c. A new firm should wait for a year to give feedback, and newer generations of employees are looking for such feedback. d. The formal conversation with a worker who is doing a good job and appreciating his or her work is a form of compensation.
d. The formal conversation with a worker who is doing a good job and appreciating his or her work is a form of compensation.
Which of the following statements is true about venture capital start-ups? a. They refrain from developing operations in multiple locations very shortly after the initial investment. b. They ensure that the business is oriented toward the personal goals of the founders. c. They have a management structure designed to take advantage of the skills of the founder or founders. d. They are funded by angel investors who invest more than $2 million and expect extraordinary returns.
d. They are funded by angel investors who invest more than $2 million and expect extraordinary returns.
In the context of identifying new business opportunities, which of the following is the definition of brainstorming? a. a simple process of systematically examining the difference between what is expected in a business and what actually occurs during its operation b. a creative process whereby an individual is asked to develop ideas based on gaps in a market identified by venture capitalists c. a rational process by which a group of an entrepreneur's peers evaluates his or her business ideas based on several parameters, such as financial risk and capability gaps d. a creative process whereby a group of individuals are brought together and asked to generate numerous ideas, with little or no effort made to evaluate the potential for each idea
d. a creative process whereby a group of individuals are brought together and asked to generate numerous ideas, with little or no effort made to evaluate the potential for each idea
In the context of start-ups, new businesses need to be aware of which of the following issue(s)? a. the establishment of an accounting system b. funding and funding level of the firm c. how information flows in the business d. all of the answers are correct
d. all of the answers are correct
A common form of debt for a small business can be classified as ________. a. loans b. supplier credit c. credit cards d. all of these answers are correct
d. all of these answers are correct
What does a potential entrepreneur need to consider when starting a new business? a. prior experience b. risk tolerance c. personality orientation d. all of these choices are correct
d. all of these choices are correct
Potential owners should examine all of these specific areas before choosing a business idea except a. education b. family history c. work experience d. financial history
d. financial history
The process of generating ideas should occur in a(n) ________ manner and not in a(n) ________ fashion. a. linear; process b. linear; interactive c. process; interactive d. interactive; linear
d. interactive; linear
Carla and John enter into a partnership and form a business. Under the partnership agreement, Carla is directly responsible for the management of the firm and its liabilities. John has a minor financial stake in the firm and works there, but he is not held responsible for the taxes and debts owed by the firm. In the context of the legal forms of business, Carla and John have formed a ________, a. general partnership b. Subchapter C Corporation c. sole proprietorship d. limited liability partnership
d. limited liability partnership
A(n) ________ is an index wage that requires the minimum wage to be at least what someone who works 40 hours a week needs to stay out of poverty. a. wage ceiling b. efficiency wage c. wage ratio d. living wage
d. living wage
The success of entrepreneurial businesses occurs partially because they are ________. a. characterized by corporate layers of management b. responsbile to public stockholders c. invested heavily in policies and procedures d. more focused than their large corporate counterparts
d. more focused than their large corporate counterparts
One of the accounting records maintained by Visors Inc. lists the number of regular work hours worked by its employees, the overtime hours worked by various employees, and the firm's overtime pay rate. This record also tracks salary checks issued to each employee. This record is most likely a(n) ________. a. expense account b. inventory account c. accounts payable record d. payroll record
d. payroll record
The potential entrepreneur needs to consider ________ when starting a new business. a. capital b. education c. rationality d. prior experience
d. prior experience
Borealis Computing is a small start-up firm that needs to purchase essential equipment and supplies to begin operations. Gencent LLC, a larger firm, offers to finance Borealis Computing's purchases. Under their agreement, Borealis Computing will repay Gencent LLC overtime at a specified interest rate. In the context of nonequity funding, Gencent LLC's financing of Borealis Computing's purchases is an example of ________. a. equity investment b. crowdfunding c. factoring d. supplier credit
d. supplier credit
In the context of evaluating entrepreneurial orientation, which of the following personality tests has a bias that adults will not change their personality over time and instead hold on to the personality they develop during childhood? a. the Big Five test b. the Myers-Briggs test c. the Rorschach test d. the Enneagram test
d. the Enneagram test
The United States Small Business Administration (SBA) was organized as a part of a. the Small Business Agency of 1960 b. the Small Business Administration Law c. the Small Business Act of 1950 d. the Small Business Act of July 30, 1953
d. the Small Business Act of July 30, 1953
When a small business owner is advertising for a job, the company needs to attract ________ pool of applicants to choose from. a. the most educated b. the rarest c. the smallest d. the largest
d. the largest
When forming a sole proprietorship or a partnership, the business debts are a. paid the first day of the month b. paid by purchase order c. the responsibility of the firm's equity investors d. the responsibility of the owners
d. the responsibility of the owners
Microloans have been in existence for years; they are most commonly made directly to ________ for self-development. a. young adults b. men c. Hispanics d. women
d. women
