Intro to Business

True or False. Consumer consumption patterns have not changed very much over time.

False; Consumer consumption patterns are radically changing and marketers must adapt their efforts accordingly.

True or False: Digital media refers to media available via computers alone; not mobile or smart phones.

False; Digital media refers to media available via computers alone; not mobile or smart phones.

True or False: E-business means carrying out the goals of business exclusively through the use of physical retail stores.

False; E-business means carrying out the goals of business through the use of the Internet.

True or False: Illegal sharing of Internet content is not considered an intellectual property problem.

False; Illegal sharing of Internet content is a large intellectual property concern.

True or False: Digital media make it easy for companies to add benefits and services to enhance products.

True.

True or False: Digital technology has had much more impact in certain industries where the cost of business and customer transactions has been very high.

True.

True or False: Intellectual property is technically protected by laws and regulations, but companies still suffer billions of dollars in losses related to intellectual property theft each year.

True.

True or False: Online social networks are a valuable part of marketing because they change the way consumers communicate with each other and with firms.

True.

True or False: The Internet has helped marketers to reach target markets that were previously inaccessible to many businesses.

True.

True or False: The correct blend of traditional and new digital media marketing will vary depending on the business, its size, and its target market.

True.

True or False: The most flexible element of the marketing mix is price.

True.

True or False: The phenomenal growth of digital media has provided new ways of conducting business.

True.

True or False: The surest way to ensure that you do not fall prey to scams or identity theft online is never to divulge important personal information online.

True.

True or False: With customer-generated video content increasingly available, some companies are using it instead of professional advertising firms.

True.

Which of the following is a liability in a balance sheet?

Accounts payable.

Which of the following is an asset in the balance sheet?

Accounts receivable.

_____ is an account showing money owed to a company by its clients or customers.

Accounts receivable.

All of a firm's unpaid financial obligations are occasionally consolidated into an account called:

Accrued expenses.

CPA stands for:

Certified Public Accountant.

Accounting refers to a process of:

Recording, measuring, and interpreting financial data.

The information presented in an income statement could be described using the following equations:

Revenues - expenses = net income

An income statement shows:

Revenues, expenses, and net income over a period of time.

Billy Banker has to decide whether to lend the Safe Toy Company $10,000 to pay suppliers. He will:

Review the company's financial statements.

An accounting term that is synonymous with revenue is:

Sales.

True or False: Companies sometimes utilize Facebook and similar sites to help generate interest about new products.

True.

True or False: Consumers' tendency to trust other consumers over corporations is one factor behind the rise of consumer-generated information.

True.

True or False: Digital marketing can enhance the value of products.

True.

True or False: Digital media are more consumer-driven than traditional media.

True.

Do-It-Yourself Home Repair Shop started the accounting period with $10,000 worth of shovels in inventory. During the accounting period, it purchased $5,000 worth of shovels and sold $7,500 worth. What is its cost of goods sold in this scenario?

$7,500

What is the last step that must be done before a firm's books can be closed for an accounting cycle?

A CPA must attest that good principles were used in the preparation of the document.

All of the following represent assets EXCEPT:

A bank loan.

What is meant by the term owners' equity?

All the money that the firm has that does not need to be paid back

A forensic accountant:

Analyzes financial documents in search of fraudulent entries or financial misconduct.

The financial document that has been likened to a snapshot of how the company's finances are doing at that moment is called a(n):

Balance sheet.

Unlike an income statement, the _____ represents an accumulation of all of a company's transactions.

Balance sheet.

A company's assets that can be easily converted into cash are called:

Current assets.

A company's short-term financial obligations are called its:

Current liabilities.

Maurice was asked to extend trade credit to a restaurant she hadn't serviced before. She asked to see its balance sheet to determine if it could pay its bills. She divided its current assets by current liabilities to get its:

Current ratio.

Derek, an accountant, allocates the cost of a piece of earth-moving equipment over a specific period of time. According to this information, it can be concluded that Derek is implementing

Depreciation.

The process of spreading the costs of long-lived assets such as buildings and equipment over the total number of accounting periods in which they are expected to use is called _____.

Depreciation.

Net income is:

Earnings after all taxes and other expenses are paid.

Which of the following is the first step in the accounting cycle?

Examine source documents.

The net income of a company is equal to the total revenue minus:

Expenses and taxes.

True or False: Internet markets are more different from traditional markets than they are similar

False; Internet markets are more similar to traditional markets than they are different. Thus, successful e-business strategies, like traditional business strategies, focus on creating products that customers need or want, not merely developing a brand name or reducing the costs associated with online transactions.

True or False: With digital media, it is no longer important for marketers to achieve the right marketing mix.

False; One aspect of marketing that has not changed with digital media is the importance of achieving the right marketing mix. Product, distribution, promotion, and pricing are as important as ever for successful online marketing strategies.

True or False: One of the greatest drawbacks of digital marketing is the inability of marketers and customers to share information with ease.

False; One of the most important benefits of digital marketing is the ability of marketers and customers to easily share information.

True or False: Crowdsourcing is a scam in which con artists counterfeit a well-known website and send out e-mails directing victims to it.

False; Phishing is a growing scam whereby con artists counterfeit a well-known website and send out e-mails directing victims to it. Once there, visitors find instructions to reveal sensitive information such as their credit card numbers.

True or False: Shopping in a store raises more privacy concerns than shopping online

False; Shopping online raises more privacy concerns than shopping in a store.

True or False: The Internet often impedes business transactions, making them slower and less efficient.

False; The Internet facilitates business transactions, allowing companies to network with manufacturers, wholesalers, retailers, suppliers, and outsource firms to serve customers more quickly and efficiently.

True or false: The internet is not considered a distribution channel.

False; The Internet is a new distribution channel for making products available at the right time, at the right place, and in the right quantities.

The accounting cycle includes all of the following, EXCEPT:

Generating annual reports.

Asset utilization ratios are used to measure:

How efficiently the firm uses its assets to generate $1 in sales.

Profitability ratios are used to measure:

How much income (net or operating) a firm generates relative to its assets, equity, and sales.

According to the scenario presented in the text, the debts Anna's Flowers owes to the Small Business Administration and her company's suppliers represent _____.

Liabilities.

All of the following are outsiders who rely on information from an organization's financial statements EXCEPT:

Managers.

Which of the following equations is equivalent to the accounting equation?

Owners' equity = assets - liabilities.

The owners' contributions to a company and all earnings retained to finance continued growth and product development are

Owners' equity.

Which of the following is considered as an owners' equity account?

Preferred stock.

Which of the following equations is correct?

Profit margin = net income/sales.

Return on assets and return on equity are examples of _____ ratio.

Profitability.

The ratio that reflects a company's liquidity after excluding inventory is _____ ratio.

Quick.

Information found on the company's income statement and balance sheet is extracted from these documents and examined more closely through the use of:

Ratio analysis.

The financial statement that explains how a firm's cash changed from the beginning of the accounting period to the end is called the:

Statement of cash flows.

One of the best ways to analyze a company's financial performance is to compare its ratios with those of:

The companies in the same industry.