BUS 220 Janice!

In the context of legal forms of business, a general partner in a limited liability partnership

has unlimited liability for any debts or judgments against the firm.

A _____ statement is a financial statement that summarizes the revenue, costs, and expenses incurred during a specific period of time.

profit and loss

Accepting _____ ties a firm to the supplier and usually stops the firm from shopping around for a lower price.

supplier credit

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 non-equity funding, Gencent LLC's financing of Borealis Computing's purchases is an example of _____.

supplier credit

Which of the following statements is true of the commission compensation system?

It creates frustration when a firm either does or does not change a commission program to reflect the growth of the firm.

Which of the following is a document that describes a job that is to be filled?

Job description

A company seeks to have inventory present only shortly before it is used. This method of inventory control is called

Just-in-time inventory

In the context of ratio analysis, identify the scenario that best illustrates a leverage ratio analysis.

The owner of Aurvive Inc. measures the firm's finances to make sure that it can generate sufficient funds to repay loans.

In the context of legal forms of business, which of the following is an area in which sole proprietorships differ from general partnerships?

The possibility of bringing in new equity partners

The _____ ratio measures the percentage of the assets of a firm that are owned by the creditors

debt-to-assets

In an interview, an interviewer can ask questions about

prior convictions

Another term for Cost of Goods Sold

variable costs

Microloans have been in existence for years; they are most commonly made directly to _____ for self-development

women

The largest group of new business owners is _____.

women

Which of the following information should be obtained in the application/interview process?

work history education and training social security

All of these are harvest plan strategies EXCEPT:

Franchising

Revenue - COGs =

Gross Profit

Contribution margin is the same as?

Gross profit

What are the advantages of leasing equipment for a new business?

-Ability of the business to trade up as newer, higher-quality machines become available -No hassles of an aging asset -Beginning operations with a minimum cash outlay

Which of the following represents the impact of a poor employee on the functioning of a small business?

-The problems may bleed over to other employees. -The organization does not fully benefit from the employee. -The owner's time is lost.

A marketing plan should include

-establishing a pricing policy. -developing promotions. -identifying a potential market.

benefits of a Subchapter C corp

-health benefits paid by the corporation. -no limit to the number of shareholders. -owners being treated as employees of the company

In a limited liability corporation, a firm can have more than _____ investors.

100

In the context of determining pricing models, which of the following best defines cost-plus pricing?

A model in which a desired profit margin is added to the cost of a product as deemed appropriate

What is a marketing plan?

A plan developed by a business to specify who the customers are and how they will be attracted to the company

Several successful business people establish a partnership with each other. They combine their financial resources and use the resultant pool of resources to make equity investments in various high-growth new ventures. In the context of equity funding, the partnership and the pooled resources of the businesspeople are best described as

A venture capital fund

Entrepreneurial business resources are more _____ than venture capital-backed businesses.

Constrained

In the context of non-equity funding, identify a true statement about loans

Debt holders have a right to a firm's assets if the firm fails to pay off their loans.

_____ is a metric that examines how fast a company turns credit sales into cash.

Account receivable turnover

_____ measure the efficiency with which an entrepreneur can handle his or her business's resources

Activity ratios

Established businesses are willing to make _____ investments in other start-up firms.

Equity

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 _____.

Equity investment

Which one of these large companies started out as a small business?

Apple Hewlett-packard & Facebook

Sonor Designs is a small business that makes greeting cards. Because of the small scale of the firm's operations, it cannot afford to purchase the expensive printers it needs to make greeting cards. Instead, it rents the printers from another organization. In the context of business financing, Sonor Designs renting essential business equipment from another company is an example of

Asset leasing

A bank provides John money for the necessary hamburger maker for his business. This is called _____.

Asset-based lending

_____ have traditionally been a major source of funds for established firms but are quite restrictive in their lending to start-up firms, as the risk is perceived to be too high.

Banks

_____ are high-net-worth individuals who invest in business not as a business, but as an individual.

Business angels

_____ are used to measure the level of indebtedness of a small business.

Leverage ratios

A common form of debt for a small business can be classified as _____.

Loans, supplier credit & credit cards

Which of the following activities is directly related to the establishment of the financial structure and record keeping of a new company?

Maintenance of accounting records, The funds and the level of funding required for the new business & Management of the paper/data flow of the new company

Promoting a product or service is considered to be a part of

Marketing

The success of entrepreneurial businesses occurs partially because they are _____.

More focused than their large corporate counterparts

Operating profit - taxes ++ =

Net profit

Gross profit - fixed costs =

Operating income/profit

Characteristics of a small business start-up include all EXCEPT which one of the following?

Over 100 employees

Investors can be

Passive, a minority or/& active

A harvest plan for a small business means the owner is

Planning to exit a small business

_____ examine the performance of a business and its ability to make economic returns over and above its costs.

Profitability ratios

Human resources is defined in economics terms as the _____ and _____ of human effort directed toward producing goods and services.

Quantity; quality

_____ is a series of ratios along four areas of company performance (liquidity, activity, leverage, and profitability) that provides a picture of the health of the company.

Ratio analysis

In the context of promotions, _____ is a term for all the efforts made to increase the visibility and placement of business information on the Web.

Search Engine Optimization (SEO)

Identify a long-term benefit of developing accurate cash flow statements.

They provide a significant float that allows a company great financial flexibility.

In the context of equity funding, identify a characteristic of venture capital funds.

They tend to invest in high-growth business that can cash out by being bought out by a larger company within a set period of time.

The assets minus the liabilities of a firm reflected on the balance sheet should total

To zero

What is the difference between venture capital funds and business angels?

Venture capital companies usually invest in large businesses, whereas business angels usually invest in small businesses

What is the difference between venture capital funds and business angels?

Venture capital companies usually invest in large businesses, whereas business angels usually invest in small businesses.

In the context of good accounting practices, the organizational fund used for expenses too small to write a check for is known as

a petty cash fund.

The quick ratio is sometimes referred to as the _____.

acid test

Years ago, economists mistakenly predicted that small businesses would

be replaced by a smaller number of big businesses

A _____ projects all the expenses incurred by a business over a specified period of time.

budget

A cash flow statement is the exact opposite of a _____.

budget

A job offer is finalized by _____.

candidate signing the offer

When a small business owner pays an individual a percentage of sales, this is called a _____.

commission

Credit cards have all the following EXCEPT

equity investment.

In the context of financial tools, a business can quickly generate cash in the short run by selling accounts receivable at a discount to another company. This is a technique known as _____.

factoring

In the Numi Organic Tea case study, Numi Organic Tea was founded based on the principles of

fair trade.

Break even analysis unit # is (how many units you need to sell)

fixed/contribution margin

All of the following are benefits of a Subchapter C Corporation EXCEPT

fringe benefits being treated as income

The _____ ratio measures the overall profits that are obtained from all sales during a given period.

gross-profit margin

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 _____,

limited liability partnership

A _____ is a contractual agreement where a business receives money that must be repaid over a period of time.

loan

In the context of business designs, one of the advantages of a corporation is that when it suffers losses, the founders will

lose only their investment in the business rather than their life's savings.

In the context of pricing models, a _____ is a product or service that is sold at a nonoperating loss to simply get customers in the store

loss leader

Compared to large corporations, entrepreneurial businesses

play just as important a part in our economy

The _____ ratio estimates the number of times that a business could repay the current interest owed on its debt.

times-interest-earned