Business Exam 3

Which of the following is an example of a financial transaction?

A firm purchases a fire insurance policy

An important difference between accounting and other business functions, such as marketing and management, is that:

Accounting offers us insight into whether the business is financially sound

An effective budget requires:

Accurate forecasts

Which of the following statements best describes the distinction between production management and operations management? Production management involves:

Activities managers perform to help create goods while operations management is a broader term that involves the activities involved in producing services as well as goods

The purpose of a trial balance is to:

Affirm whether the figures in the account ledgers are correct and balanced

A(n) _________ is a yearly published statement of the financial condition, progress and expectations of an organization.

Annual Report

A(n) __________ puts together components to make a product.

Assembly Process

. __________ involves the review and evaluation of the records that are used to prepare the organization's financial statements.

Auditing

The accounting profession is divided into 5 key working areas, two of which are:

Auditing and managerial accounting

As a first step in the accounting cycle, _________ involves the recording of business transactions.

Bookkeeping

Operations management is a specialized area in management that converts resources into:

Both goods and services

Akiko realizes the importance of developing a ________ for her interior design business. Akiko understands the importance of appropriately allocating resources in order to achieve the goals of her firm.

Budget

Max Weber used the term ________ to describe middle managers whose job was to implement the orders of top management:

Bureaucrats

Which of the following shows a firm's spending plans on fixed assets such as large equipment?

Capital budget

A _________ forecast predicts the future cash inflows and outflows in future periods.

Cash flow

Carlos is the manager of Oh! Canada Sporting Goods. During the past six months, his cash expenditures have exceeded his cash receipts. Oh! Canada is suffering from a(n) ________ problem.

Cash flow

In a(n) _____________ organization, decision-making authority is concentrated at the top level of management.

Centralized

Organizations that require consistent production standards to help create a high quality public image would tend to favor:

Centralized authority

Fairview Community College is a multi-district college with four campuses. Each campus has one president, two vice presidents, five deans, 12 department chairs, over 100 faculty members, and several persons in support roles. The presidents from each campus report to four vice-chancellors and the vice-chancellors report to the chancellor. It is clear that Fairview has a well-defined _____________.

Chain of command

The line of authority that moves from the top of a hierarchy to the lowest level is called the:

Chain of command

Which of the following management positions is responsible for getting the right information to other managers to enable them to make better decisions?

Chief information officer (CIO)

Flavio, CEO of Fabulous Frozen Custard believes that alternate plans are almost as important as the primary operational plans because external circumstances such as the weather, competitor moves, and even economic conditions make it important to have a "Plan B" Flavio endorses:

Contingency planning

A production process characterized by long production runs to turn out finished goods over time is known as a(n):

Continuous Process

When managers determine that an organization is not making sufficient progress toward achieving its goals and objectives and they develop corrective measures, they are involved in:

Controlling

Gangsta Industries produces a variety of anti-crime and safety products such as burglar alarms, smoke detectors, surveillance cameras, and specialty locks. Gangsta sells to households, businesses, and government agencies. They have found that each market requires a different marketing strategy. Gangsta would probably benefit from departmentalization by:

Customer type

__________ is choosing among two or more alternatives.

Decision-making

For most service businesses the quality standard has become:

Delighting customers by anticipating their needs

At Green Acres Fencing Company, eight employees each perform various aspects of the company's work. One person does sales, four perform installation; one purchases materials; one does billing; one performs after-sales inspections. This type of organization reflects Fayol's principle of:

Division of labor

Fayol's ____________ principle says that tasks should be divided into areas of specialization.

Division of labor

__________ is the accounting practice of recording each transaction in two places in the accounting journal.

Double-entry bookkeeping

The concept of ____________ suggests that as a firm produces more, the average cost of goods produced goes down.

Economies of scale

The downsizing that has occurred in recent years has __________ middle managers in many organizations.

Eliminated the jobs of some

n recent years, large organizations have tried to improve their efficiency in communication and decision making by:

Eliminating several layers of management

The revolution in management that is currently underway suggests that the most effective managers of the future will

Emphasize team work

One advantage of a bureaucratic organization is that:

Employees know they are expected to follow the rules and regulations

_____________ means giving employees the authority and responsibility to respond quickly to customer requests.

Empowerment

If a firm sells shares of stock, it is financing with ________.

Equity

With plans to build a $50 million theme park, Extreme Entertainment, Inc. intends to finance this project through the sale of additional shares of ownership in their firm. Selling new shares of stock represents ___________ financing.

Equity

Fayol's ____________ principle says that workers' attitudes would create an environment of pride and loyalty within an organization.

Esprit de corps

_____________ is the function in business that is responsible for acquiring funds for the firm, and managing funds within the firm.

Finance

A(n) _____________ job includes forecasting, budgeting, cash flow analysis, cost control, taxes, and credit management.

Financial Manager's

The preparation of financial statements for people outside the firm (creditors, unions, suppliers, and others) is the goal of:

Financial accounting

An organization with only a few layers of management is known as a(n):

Flat Organization

In __________, machines are designed to do multiple tasks so that they can produce a variety of products.

Flexible manufacturing

The first step in the financial planning process is:

Forecasting financial needs

___________ utility is the value added by the creation of finished goods and services using raw materials, components, and other inputs.

Form

Production creates:

Form utility

HipHop Music Company assigns workers to departments based on similar skills. Currently, the company has a marketing department, a production department, a finance department, and a human resources department. This suggests that HipHop departmentalizes by:

Function

Vaughn Studios organizes its operations by activity, such as production, marketing, accounting, and finance. Vaughn utilizes _____________ departmentalization in order to maximize their efficiency:

Functional

Production management is the traditional term used to describe all the activities managers do to help their firms create:

Goods

Vinnie wants to become a manager in his company, but he has always been a bit shy and has a hard time interacting with co-workers. In order for Vinnie to succeed as a manager, he will need to work on his:

Human Relations Skills

When a firm makes use of the SWOT analysis, one of its objectives is to:

Identify the things it does well as an organization and the things it needs to improve

Undercapitalization refers to the problem of:

Insufficient start-up funds

A production process characterized by a short production run and frequent adjustments to machines so that different products can be produced is known as a(n):

Intermittent Process

Most new manufacturing facilities use:

Intermittent processes

A(n) __________ is responsible for verifying that the accounting procedures within a firm are consistent with established accounting principles

Internal auditor

Accountants record, classify, and ____________ the results of the financial information they gather.

Interpret

The accounting book or computer program where each day's transactions are first recorded is called a:

Journal

___________ is the management function of creating a vision for the organization and guiding, training, coaching, and motivating employees to help achieve the goals and objectives of the organization.

Leading

A __________ is a specialized accounting book, where transactions are categorized according to type. For example, all utility transactions are recorded in the same category.

Ledger

A _________ forecast predicts the revenues, costs, and expenses a firm will incur for a period longer than one year.

Long-term

f a company secures a three year bank loan, it is considered __________.

Long-term financing

n the past, the idea behind mass production was to:

Make large quantities of limited variety off products at very low cost

When Preferred Pet Care Inc, a mobile veterinary care company, first started operations, it extended three months of credit to customers. It soon began to experience a cash flow problem. A finance professional was hired to:

Manage accounts receivable

______________ means tailoring products to meet the needs of a large number of individual customers.

Mass customization

General and divisional managers, plant managers, and deans and department heads at colleges are classified as:

Middle Management

Employees often work with managers to develop a(n) __________ that outlines the fundamental purposes of their organization.

Mission Statement

Jenna Raiter, the president and CEO of AutoMotion Auto Service Centers, has asked several managers and employees to help establish a statement to outline the fundamental purposes of their company. The result of this effort is likely to be a document known as a(n):

Mission Statement

Money has a time value because:

Money earns interest over time

A(n) __________ would be used by a department manager as a tool for making daily and weekly assignments:

Operational Plan

The Ritz-Carlton hotel offers restaurants with the finest service, elevators that run smoothly, and a front desk that processes people quickly. Many times fresh-cut flowers are in the lobbies and dishes of fruit are in each room. __________ is responsible for implementing these customer benefits.

Operations Management

__________ is the specialized area of management that converts or transforms resources into goods and services.

Operations management

When Bret started his auto mechanic shop his business plan included a(n) _______________ that showed the relationship among employees in his organization and the lines of authority and responsibility.

Organization Chart

A(n) __________ is used by an organization to show who is accountable for the completion of specific work and who reports to whom.

Organization chart

Managers who listen to their subordinates and allow them to participate in decision-making are using the ____________ style of leadership.

Participative

The rationale behind offering customers credit is:

Permitting customers to pay with credit cards or on credit makes it easier for them to buy, and it also attracts new customers

Once a trial balance has been prepared, the next step of the accounting cycle involves:

Preparing financial statements such as the balance sheet, income statement, and statement of cash flows.

n ____________, materials are physically or chemically changed to produce a product.

Process manufacturing

__________ is the creation of goods and services using land, labor, capital, entrepreneurship, and knowledge.

Production

A(n) __________ provides accounting services to individuals or firms on a fee basis.

Public accountant

n the course of their jobs, bookkeepers:

Record business transactions

The effective management of accounts receivable requires financial managers to:

Review the credit history of new customers

A bookkeeper's first task is to:

Separate all of the firm's transactions into meaningful categories

CAD/CAM makes it possible to custom-design products to meet the needs of __________ with __________.

Small markets; very little increase in cost

___________ involves recruiting, hiring, motivating, and retaining the best people available to accomplish the company's objectives.

Staffing

One of the key financial statements prepared in the fifth step of the accounting cycle is:

Statement of cash flows

As an accountant, Joe Billing's responsibilities include:

Summarizing and interpreting financial information needed by his firm's managers

After working for eleven years as a production line worker, Hollis recently was made a foreman. In his new position, Hollis will rely on:

Technical skills and human relations skills more than conceptual skills

Organization theorists emerged during the era of mass production, meaning:

The development of ways to produce a large quantity of product efficiently

Mike prepared a paper for his class about organizational styles used in business. He found that one reason the traditional bureaucratic style is less popular than in the past is that:

Today's workforce is better educated and prefers a greater amount of decision-making involvement in their jobs.

A _________ summarizes all the data from the account ledgers to verify that they are correct and balanced.

Trial balance

Susan started a cake decorating business that failed. She is convinced that she lacked the necessary funds to promote her business and get it off the ground. Susan experienced:

Undercapitalization

Fayol's _____________ principle states that each worker should report to one, and only one, boss.

Unity of command

In manufacturing, one way to compete with cheap labor is to:

Use robots

Monica was hired by the Misty Mount Corporation to take over as the new chief executive officer. Her initial impression is that the company is in disarray, primarily because the employees do not have a sense of purpose or a common set of values. Monica's observations suggest that she needs to provide a(n) _________ for Misty Mount.

Vision

Which of the following correctly identifies the explanation behind the unity of command principle of management?

Workers can become frustrated and confused if they have more than one boss.

CAD has __________ productivity in many firms

increased

A(n) ___________ is an evaluation and unbiased opinion of the accuracy of a firm's financial statements.

independent audit