Exam 2_Chapter 16

Ted, a 46-year-old IT professional, recently attended a job interview at Acton Org. He was not offered the job. Ted tried to find the reasons for his disqualification and the company could not provide a satisfactory explanation. He later learned that he was refused the job due to his age as the job position was offered to a 23-year-old who had just graduated from college. Which of the following laws protect Ted from such discriminations?

ADEA

Ted's business, situated near the Missouri River, was partially destroyed when the river overflowed after a deluge. Which of the following measures would've helped Ted minimize the effect of the flood from interrupting the operations of his business?

Creating provisions for subcontracting work

Jacob often manipulates charges on his travel expenses to indicate higher amounts when he travels for the company he works for. Trent, the accounts manager, accepts fake bills and assists Jacob in deceiving the company. They split the profits made this way. This is an example of theft by:

Employee collusion.

All businesses within an industry have to pay the same amount, as decided by the state, as unemployment insurance.

F

Business risk is the probability that the future state of the business will be better than planned.

F

Copyrights, trademarks, and patents provide automatic full protection to small business owners.

F

Customers can never be a source of risk for businesses.

F

Everyone responds differently to risk. When it comes to business risk, small business owners are mostly risk seeking rather than risk averse.

F (False)

The ADA Technical Assistance Program provides inspection and affirmation services to help small businesses.

F (False)

The OSHA is a commission established to enforce the provisions of the Equal Employment Opportunity Act.

F (False)

The advantage of legal protection methods for intellectual property is that there are multiple government agencies in each area that will assist a small business owner in maintaining their legal rights.

F (False)

What statements is true of joint ventures?

It does not require its partners to lose more than what each partner has invested in it.

What is true of the ADA Technical Assistance Program?

It provides specific advice to a business concerning how to comply with the pertinent requirements.

Axion Inc. is a small business started by Robert. As the business grew, he decided to implement new company policies that would ensure that his employees are not encouraged to set up competition against Axion. Which of the following techniques should he adopt to achieve this?

Negotiate contracts with key employees that limit their freedom to go into competition

What should be included in an employee contract for a key employee?

Offer rewards for providing adequate termination notice

What should be undertaken in order to reduce a business's exposure to the risk of violating tax regulations?

Reconcile the cash register tape to the cash register contents every day

Martin, an employee at a boutique store, is required to handle store displays and also ensure that all the sales records tally at the end of each business day. However, he committed fraud by recording fake sales and then keeping the products to himself. Which of the following managerial concepts would have helped the store avoid this deception?

Separation of duties

A _____ is an agreement with an insurance or bonding company that will pay a specified amount in the event that the entity bonded fails to comply with specified contractual requirements.

Surety bond

Crux Inc. and Synapse Inc. are two competing businesses in the same city. They use the services of the same insurance company and have taken the same policy. Crux has a higher deductible than Synapse for the policy. Which of the following statements would be true in this case?

Synapse pays a higher premium than Crux.

Adverse possession occurs when an owner of real property does not enforce property rights and allows a non-owner to use the property as if it were his or her own.

T

Contractual provisions of insurance policies that specify what risks the insurance company is assuming are called coverages.

T

Employees whose experience and skills are critical to the success of a business are called key employees.

T

Identifying risks is the first task to be completed before a comprehensive insurance program can be developed for a business.

T

In managing risk from violation of tax regulations, small business owners should make paying taxes their first financial priority.

T

Managing risks to tools, equipment, inventory, and other physical assets is largely a function of developing and enforcing appropriate business policies and procedures.

T

Risk from loss of key personnel and former employees setting up competition against your business can be managed by negotiating employment contracts with those key employees.

T (True)

What is true of insurance?

The insurance company makes a profit by collecting premiums from many businesses for the same set of risks.

What is true of insuring the property of a business?

The value of the historical significance of a building often cannot be insured.

What statement represents the problem with legal protection methods for intellectual property?

There is no governmental agency that will assist small business owners in maintaining their legal rights.

_______ is collected by the IRS and state agencies as a percentage of tax upon payroll.

Unemployment insurance