Business 101 exam 2

Which of the following are advantages of sole proprietorships?

- Because all earnings are treated as personal income, the only taxes that need to be paid are the individual federal, state and local income taxes. - The owner has complete decision-making control of the business operations - The sole proprietor keeps all of the profits if the business is successful.

Which of the following are disadvantages of corporations

- double taxation - difficult/expensive to set up - additional gov regulations

Which of the following are advantages of franchises

- established brand name - support from franchisor - access to capital - national advertising

Which of the following are purposes of the World Trade Organization?

- facilitate a harmonious flow of global trade - maintain lower political barriers to trade - provide a forum for nations to negotiate the rules of international trade - settle disagreements related to the implementation of trade agreements

Which of the following are disadvantages of franchises

- initial/ongoing fees - rules/regulations - limited control/flexibility - maintain continuity

leniency

One of the most pervasive and insidious of all performance appraisal biases

Which of the following are advantages partnerships

combined skills, easy to start up, no double taxation, share profits/losses

Firms are able to access global markets through which one of the following techniques?

franchsies

a ___ is an owner of a corporation

shareholder

Which of the following are advantages of corporations

- limited liability for shareholders - raise funds - transfer of ownership - longevity - ease of attracting human capital

franchisor is franchisee is

- owner of the trademark - buy the right to use the trademark

limited partnerships

- shared profits/losses - joint ownership - no involvement in decision making - limited liabilty

in corporations

- shareholders avoid liability - corporations liable for debt/liabilities

general partnerships

- shares profits and losses - joint ownership - shared financial responsilbity - shared running of business - unlimited liability

reasons why countries pursue in trade protection

- to protect domestic jobs - to protect small domestic companies - to remove any price advantage a foreign good may have in the domestic marketplace

Which of the following are disadvantages of sole proprietorships?

- unlimited liability (have burdens, personal assets at risk) - hard to raise funds - hard to attract human capital (employees) - lack of permanence

disadvantages of partnerships

- unlimited liability for general partner - risk of disagreement - difficult to end

IFRS (International Financial Reporting Standards)

A standardized set of rules and practices in business accounting used in many countries (principles based)

difference between s and c corporation

An S corporation is limited to no more than 100 owners, while a C corporation may have an unlimited number of owners.

financial budget

Project the expected cash flow and the capital expenditures for the business.

operating budget

Projects the revenues that will be brought in through sales and the costs that are required to meet the sales projections.

Auditing

Reviewing and evaluating the information used to prepare a company's financial statements.

Financial Accounting

The field of accounting that focuses on providing information for external decision makers.

GAAP (Generally Accepted Accounting Principles)

The standards and rules that accountants follow while recording and reporting financial activities in the US (rules-based)

master budget

Ties each individual budget together to provide a unified representation of a firm's future expectations and it guides the best course of action.

c corporations s corporations

c - double taxation s - avoid corporation tax, tax like partnership

current ratio

current assets/current liabilities (liquidity)

qualifications

education, skills, and work experience needed to do a particular job

contract manufacturing

entering into contract, you own factory, but original firm owns goods

employer attractiveness

envisioned benefits that a potential employee sees in working for a specific organization

High-Preformance Work System

focusing on strategies that capitalize on people

foreign direct investment

high risk, high reward, avoid costs and tariffs

360-Degree Performance Appraisal

include the ratings from two or more raters to determine if it is legally defensible

The general openness of a country to trade can be seen by

looking at the sum of exports and imports as a share of the country's gross domestic product.

what % are partnerships and what % do they account for in sales in U.S

make up 10% , 15% in sales

what % are coproations and what % do they account for in sales in U.S

make up 20% , accounts for 80% of sales receipts

what % are sole proprietorship and what % do they account for in sales in U.S

make up 70% , less than 5% in sales

return on assets

net income/total assets

international franchising

produce and sell goods in another country with exporting the good

Profitablity Ratios

ratios used to evaluate the earnings performance of a business during the accounting period

SEC (Securities and Exchange Commission)

responsible for detecting and preventing accounting fraud

Managerial Accounting

the internal use of accounting statements by managers in planning and directing the organization's activities

validated selection tools

tools that have been shown to predict various aspects of performance

A positive balance of trade is also known as a

trade surplus

One of the potential drawbacks of international trade is the loss of a national identity as a divergence grows between those who benefit from trade and those who don't.

true

Safety or environmental regulations often serve as non-tariff barriers to trade

true

The balance of trade measures whether a country exports more to other countries or imports more from other countries

true

you want more exports than imports

true