Entrepreneurship and Small Business Management Exam
An employee is comparing income statements from the past three years to evaluate changes and trends in the business's revenue. What type of business analysis is the employee conducting?
Financial
Which of the following pairs of businesses are examples of direct competitors:
Hot n' Spicy Wings and Southern Fried Chicken House
Which of the following is an example of a durable good:
House
Which of the following is most likely to be dynamic element of a business's external environment:
Increase in competition
Which of the following is an example of a fixed operating expense:
Insurance
Which of the following employees would most likely be described as "innovative" by his/her supervisor:
Jake, because he is always willing to adapt to changes during a project
When determining financing needs, what factor should businesses consider that will help decide whether they can repay the debt
Liquidity
For which of the following markets would producers use a short channel of distribution:
Local consumers
Which of the following is a potential risk of implementing enterprise risk management (ERM) software:
Loss of data during the transfer
James needs to hire a bookkeeper for his growing business. To determine the new employee's salary, James obtained pay data from five companies in his industry that are similar in size. The research indicated the following: Company A pays $31,205; Company B pays $29,995; Company C pays $34,800; Company D pays $42,500; and Company E pays $36,500. James decided to set his bookkeeper's salary at $35,000. What measure of central tendency did James use to set his new employee's salary?
Mean
What type of software do many business require be installed on computer systems as a security feature?
Media
Which management function lays the groundwork for all of the other management functions?
Planning
Chad is buying a new car. Although the first car is a great deal and a more practical choice, he just loves the look of the second car. As a result, he decides to purchase the second car. His decision is based on which of the following internal factors:
Emotion
Which of the following is the most critical component of a business plan:
Executive summary
Which of the following is an example of a manager developing a policy that impacts customer relations:
Extending business hours on weekends
True or false: In determining the selling price of a good or service, most of the factors to be considered by the seller are internal to the business.
False, most factors affecting price are not controlled by the firm.
Determine if the following statement is true or false: When developing an exit strategy for an entrepreneurial venture, the most important consideration is finding a suitable buyer.
False, there are many factors to consider, such as company valuation and personal goals.
Which of the following is a true statement regarding the relationship between a business's supply chain management and its performance:
Poor supply chain management can result in customer dissatisfaction.
Which of the following statements is true about new venture risk-taking:
When an entrepreneur seeks a high profit, the risk is usually higher.
Which of the following are public relations activities:
Writing press releases, distributing company newsletters, and sponsoring events
Business often obtain cash to produce and sell goods by borrowing against their
accounts receivable.
Time management helps to reduce stress because it
allows adequate time for personal and professional activities.
The cost of employing product inspectors is a(n)
appraisal cost.
One way that managers can promote ethical behavior on the part of everyone in the business is by encouraging employees to
avoid social situations.
If employees are fired because their conduct is in serious violation of company policies, they are being terminated for
cause.
Samples, premiums, and advertising specialties are examples of __________ used in sales promotion.
communications channels
Basic torts relating to businesses often involve disputes concerning
contracts.
Limited liability, indefinite length of life, ease of expansion, legal entity, and transfer of ownership are considered advantages of a ________.
corporation.
In managerial accounting, the number of hours that a business runs its machinery during the production process is classified as a(n)
cost driver.
A product idea is feasible if it
creates a competitive advantage.
Managers are more likely to be able to persuade employees to follow new procedures if the managers have
credibility.
A business manager who wants to increase the number of items the business offers needs to decide whether the new items will be compatible with the business's
current product mix.
An advantage to using direct marketing to communicate product information is that the business can
customize the messages.
To determine their human resource needs, new business owners often find it helpful to
list all the tasks involved in operating the business.
Channels of distribution benefit consumers by_____________.
making a variety of products available to them.
If a business considers where the consumers are and who they are before selecting a channel of distribution, the business is considering the _____________ factor.
market
Products that appeal to the majority of costumers are often sold through __________ marketing efforts.
mass
Terry, a company buyer, has the job of choosing a particular assortment of products that will meet the market's needs and the company's goals. Terry is responsible for the company's product
mix.
To effectively manage a supply chain, companies should
monitor the performance of all supply chain partners.
During the month of July, sales at Handy's Shoe Mart totaled $2,500. The cost of the shoes was $1,025. The owner paid out $866 for supplies, insurance, rent, and utilities during the month. The $609 left over represents the owner's
net profit.
To develop repeat business and customer loyalty, a business owner might
offer a new service.
One reason why it is important to accurately forecast sales for a marketing plan is because the forecast is the basis of other
operational activities.
When a supervisor evaluates an employee's performance, the evaluation should be based on the __________ standards.
organization's
Hill industries uses specific criteria to evaluate vendor performance, including on-time delivery rate, return rate, and number of customer complaints. These metrics are also known as
performance indicators.
A business converts inputs into outputs through its ____________ activities.
production
Non-corporations are taxed as pass-through entities, meaning that ___________
profits and losses are claimed on owners' personal tax returns.
The FPD Company keeps copies of its brochures, catalogs, and flyers on file for future reference. This is an example of a company that is maintaining _________ records.
promotional
An organization should include independent members on its board of directors because they
provide an objective perspective.
If an entrepreneur obtains a commercial bank loan to finance a new venture, s/he is often required to
provide collateral.
Motives, perception, attitude, lifestyle, personality, and abilities are _____________ factors influencing consumer behavior.
psychological
Because __________ measures of risk can be too general, it is also useful to perform __________ assessment of risk.
qualitative; quantitative
A manufacturing company is required by the local government to dispose of its waste in an environmentally safe way. This is an example of how process design can be affected by __________ factors.
regulatory
The entrepreneurial discovery process that involves finding a way to meet an existing demand by inventing new products from available is based on
science.
An example of an internal change that could affect a business's sales forecast is a change in the
size of the sales force.
Small-business owners develop and use operating procedures so that everyday tasks are performed in a(n) ______________ way.
standard
Business goals are accomplished by means of marketing
strategies.
Salespersons should have good communication skills, but the sales presentation should not include too many __________ words.
technical
Dan is in the process of determining the types of computer software and telephone service that will best suit his new business and get it up and running. Dan is considering his business's
technical needs.
One of the goals of change management is
to obtain buy-in from stakeholders.
The ski shop manager set an objective to increase sales by 10% over the previous year even though the forecast was for a mild and rainy winter. The manager's objective was
unrealistic.
Ethan is developing common-size financial statements so that he can compare financial performance across several different companies. Ethan is conducting __________ analysis.
vertical
The future that you desire to create is known as a
vision.
Jana noticed a problem while reviewing her company's monthly income statement. She verified that the total revenue was $4,590 and the total expenses were $1,452. However, the income statement showed a net income total of $1,383. Which of the following reflects the correct net income:
$3,138
Which of the following payback periods in a cost/benefit analysis would businesses prefer if all other things were equal:
1 year
Which of the following is an example of an intangible asset:
Accounts receivable
Which of the following is a situation in which a business could use the budget information to make operating changes:
Accounts receivable are on target.
Which of the following situations describes a business process changing due to technological factors:
A manufacturing company purchases a new software program to run its machines.
Which of the following is a strategy for linking performance measures to financial outcomes:
Analyzing click-through rates
What information does a business always need to have when it conducts a break-even analysis?
Variable costs and fixed costs
Which of the following is a risk a business might face if it obtains a long-term loan from a financial institution and pays off the loan before it is due:
Being charged a penalty
Which of the following is one way that freedom in a private enterprise system is limited by laws:
Certain occupations must be licensed.
After writing your personal vision, what must you do to achieve it?
Commit to your vision through hard work and dedication.
What should a successful brand promise be able to do?
Communicate an appealing benefit
Which of the following is a characteristic of a business-format franchise:
Continuous assistance is provided by the franchisor.
Which of the following should a business consider when negotiating a service or maintenance contract on a piece of equipment:
Does the cost of the contract exceed the cost of possible repairs?
What type of promotional media is a business using when it sends out a postcard telling customers who recently purchased products that the business is adding a new line of products?
Direct mail
Which of the following activities is an example of preparing before attempting to sell an idea:
Determining the details of your idea
Ariel, who designs and sells a line of purses and tote bags, recently sent free totes bag to local female news anchors. Ariel's goal is to have others see the local celebrities carrying the tote bags to generate interest in her product. What form of word-of-mouth marketing is Ariel using?
Product seeding
Ryan keeps a list of goals to remind himself of what he's working toward. Which tip for smart goal setting is Ryan following?
Putting goals in writing
What do business employees often need to do before they are able to write proposals?
Research the problem
What do many businesses identify and strive to improve in order to attract customers and be competitive?
Service standards
Which of the following is a characteristic of a profit-and-loss statement:
Summarizes expenses and revenue from sales
Who typically reviews and approves the guidelines for running a corporation, which are also known as corporate governance policies?
The board of directors
What is the relationship between shareholders and the board of directors?
The board of directors represents the shareholders.
Which of the following statements is true about business startup requirements:
The financial needs to start a new business depend on the nature of the venture.
Why is it important for entrepreneurs to talk with industry experts when developing new business concepts?
The industry experts typically provide useful information.
Which of the following is a characteristic of the data collection step in marketing research:
The step in which the most mistakes are made
Why do interviewers usually focus on asking questions that are related to a job applicant's performance?
To determine qualifications
Why is it often necessary to provide employees with additional training?
To identify sensitivity
What is often the role of management in the achievement of quality in a business?
To lead the effort
Why do some businesses sponsor local events?
To obtain publicity
Which of the following is one way that businesses use marketing information:
To predict change
Why do lending institutions carefully evaluate how well a business meets certain criteria before making a loan?
To reduce risk
Which of the following is a type of intangible business property by law:
Trademark
Before assigning a new project to her employees, Joanna establishes the steps that her staff needs to take to complete the project. Joanna is utilizing
business process thinking.
When buyers and sellers have agreed on a value for a product, they have established the
exchange price.
An important part of a market analysis involves collecting _______ information.
geographic
By joining a community organization, such as the local chamber of commerce, an entrepreneur can network with others to
identify new venture opportunities.
The type of capital resources that a startup business needs to begin operating usually depends on the
industry.
Ali wants to negotiate with her boss to take on more job responsibilities. Before approaching her boss, Ali needs to determine her boss's position and
interests.