ENT 2113 Test 2

9. Subchapter S and subchapter C Corporations take their names from subchapters in the ___________ code

Internal Revenue

10. A commission ____________

Is a payment based on a percentage of sales

Key Financial Issue

**Debt is secured before equity Chapter 7

7. Which of the following are common forms of debt for a new business?

Credit cards, Loans, Supplier credit

7. ___________ is a major source of nonequity financing and can come from banks, credit cards, or suppliers

Debt

7. If a firm needs to generate cash in the short run, accounts receivable can be sold at a discount via a technique known as

Factoring

7. True or false: Credit cards a form of equity investment

False

True or false: credit cards are a form of equity investment

False

10. Which of the following actions are considered to be acts of discrimination?

Firing based on gender, Hiring based on race, Promoting based on religious beliefs

Grants

Special funds, neither equity or debt, designed to aid businesses in specific areas. Chapter 7

An accrual-based accounting system

Subchapter C corporations, partnerships, or trusts use this system

10. Which of the following are part of the hiring process?

Writing a job description, Advertising a job description

Factoring

***The practice of selling accounts receivable at a discount to another company in order to receive immediate cash. Chapter 7

Licensing

-A license can be simple or specifically related to a function of the business -Examples: Business license, liquor license, occupancy permit, federal liquor license, sign permit, fire safety permit, OSHA permit for food handling -At the minimum companies will get a license to practice business in the region they are in, which is a simple process Chapter 9

10. The government closely regulates children who work under the age of __________

16

In the context of legal forms of business, identify a benefit of a Subchapter S Corporation over a Subchapter C Corporation.

A Subchapter S Corporation has limitations in the number and type of shareholders unlike a Subchapter C Corporation.

Asset-Based Lending

A loan provided for the purchase of a necessary asset for the business. Chapter 7

In the context of financing tools available to new businesses, identify a major disadvantage to asset leasing.

A new business might spend more money on leasing equipment over time than if it had bought the equipment outright

Salary

A set amount of compensation for a given time period. Chapter 10

Hybrid Compensation Program

A system employed by a small business where there is a salary along with commission. Chapter 10

An inventory record will include

A unit and total cost The quantity of the item an item number A description of the item

Americans with Disabilities Act of 1990

ADA, covers firms with 15+ employees, states companies must provide ramps, braille, etc Chapter 10

Currently under the ____________ firms with more than 50 employees are required to offer their employees insurance.

Affordable Care Act

9. Unlike a Subchapter C Corporation, a limited liability corporation (LLC)

Allows for the flexible treatment of profits from the organization

10. The __________ Act requires businesses to provide unfettered access to all disabled people

Americans With Disabilities

10. Negotiations are primarily a ___________

Art

10. An entrepreneurial firm's package of benefits has _____________ the compensation it offers to a job candidate

As much of an impact as

7. Which funding tool involves the leasing of equipment from manufacturers or a third-party reseller?

Asset lease

Other financing sources

Asset leasing, factoring, private equity Chapter 7

7. Which of the following are considered sources of debt for starting a new business?

Banks, Suppliers, Credit cards

10. Entrepreneurs should remember to ______________ when writing an advertisement for a new hire

Be concise and oriented toward the basic information needed

Which of the following items should be included on the payroll record?

Benefit deductions Base pay and overtime pay rate Number of hours worked Taxes

Credit Card

Card entitling the owner to use of revolving credit that is not tied to any particular asset, does not have a set repayment schedule, and is usually tied to a much higher relative interest rate. Chapter 7

Occupational Safety and Health Administration (OSHA)

Charged with protecting the health of workers, more lenient with small businesses Chapter 10

7. Which of the following key reports is the master system for tracking the activity of the business?

Chart of accounts

Trademark

Claim of intellectual property that is associated with a specific business. This may be the name of the firm, a symbol representing the firm, or its products. Chapter 9

9. Which of the following are trademarked by most large companies?

Company name, company symbols, company tag lines

7. Banks will lend money for the establishment and maintenance of inventory by arranging a revolving line of ______________

Credit

A(n) fund that is usually organized as a limited partnership and is organized to make significant equity investments in high-growth new ventures

venture capital

7. A key aspect of how the funding will be used is found in the information provided by the business, and that comes from:

Data flow management, The accounting system

7. Any form of capital infusion that must be paid back with interest is called ____________

Debt

7. In the event of a business failure, which of the following sources of funding must be paid back first?

Debt

7. What is a generic term used to describe any type of nonequity funding tied to the business?

Debt

7. Which of the following are sources of nonequity capital to start a business?

Debt, Grants

Job Description

Description of the duties involved in a job that is to be filled. Chapter 10

9. Which of the following elements is NOT required when forming a Subchapter C or Subchapter S Corporation

Details of the social responsibility policy

9. In new corporations, the shareholders and board of _____________ are often the same

Directors

9. A corporation pays a tax on its profits; then those after tax profits are paid as dividends to the owners, who then have to pay personal income taxes on the dividend income. This situation is referred to as ___________

Double taxation

7. Which of the following are potential business angels?

Entrepreneurs who have cashed out, Individuals with significant inheritances, Professionals such as doctors or lawyers, High-income executives of large organizations

7. An ______________ investment is funds received by a business in exchange for a percentage ownership of the business

Equity

10. The Fair Labor Standards Act _____________________

Established a minimum wage for workers

7. Banks have traditionally been a major source of funds for:

Established firms

Legal Issues with Pay

FLSA establishes minimum wage, if business is covered by FLSA it is also covered by the Equal Pay Act (men and women can't be paid differently for doing the same job) Chapter 10

10. The ____________ established a minimum wage for workers

Fair Labor Standards Act

10. Which of the following statements about recruiting companies are correct?

Fees can be a significant portion of the employee's first year salary, They generally provide employers with highly qualified employees, They typically charge a company fee

9. Which of the following is NOT one of the three basic types of legal business organization?

Franchise

9. Which class of partner in a limited partnership is considered the manager of the firm and has unlimited liability for any debts or judgements against the firm?

General

9. Which form of business involves two or more individuals sharing unlimited liability in a business venture?

General partnership

9. A sole proprietorship is very popular among individuals who:

Have a business where the costs and risks are very low, Have a very small business, Are unsure about their business idea.

10. Which of the following activities may be included when a candidate spends a full day at the company?

Having the applicant work with other employees, Allowing the applicant to see the day-to-day company environment, Allowing the applicant to have lunch with other workers

10. Marc and James were hired at the same time. They graduated from the same school with the same grade point average. They both work in the same department doing similar jobs. During their last review, bot received similar performance ratings. James is paid $500 more than Marc. According to equity theory, how would Marc feel if he found out?

He would feel that he is unfairly compensated compared to James

10. The _______________ process ends when the candidate returns a signed original offer letter

Hiring

General Partner

In an LLP, the individual is considered the manager of the firm, who, as such, has unlimited liability for any debts or judgments against the firm. Chapter 9

Board of Advisors

Individuals outside the small business that advise the firm; formed at the discretion of the founders (regardless of the legal form chosen). Chapter 9

9. The effective application of _________ is one means to limit liability concerns of the new venture

Insurance

Which of the following statements is true of the Civil Rights Act?

It currently applies to all firms with more than 25 employees.

9. Which of the following statements are true regarding liability insurance?

It helps protect against lawsuit judgements, It covers the business for accidents, It covers product negligence

7. Why do companies invest in a new venture with the idea of ultimately purchasing the venture?

It helps the companies maintain access to the latest thinking in the field, It is one of the least expensive means for the companies to try out new ideas

7. Which of the following statements are true about a venture capital fund?

It includes limited partners seeking high returns, It has a general partner who investigates and invests in each new business

Which of the following statements is true of the Americans with Disabilities Act (ADA)?

It provides that each and every business must provide unfettered access to all differentlv-abled people.

9. Identify the typical requirements for a new business to obtain a city or county business license

It should agree to report basic information about its performance on a set schedule, It should pay a set fee, which is usually less than $100.

10. Why should business owners retain employees who add value?

It takes time to bring each new employee to an acceptable level of performance, The hiring process consumes a lot of time and money.

10. A __________ description describes the skills and capabilities that a candidate should have.

Job

Process of Hiring Employees

Job Description-->Job Advertising-->Interview-->Testing-->The Offer Chapter 10

7. What method of inventory control seeks to minimize excess capital investment in inventory by having it present only shortly before it is used?

Just-in-time-inventory

9. In recent years, the ___________ has become one of the most popular forms of incorporation for new business

LLC

9. Which of the following are benefits of a Subchapter S Corporation?

Legitimacy in the market as a more established form of business, Relatively easy to form compared to Subchapter C, Limited liability for the owners, Consolidation of business and personal income for tax benefits

9. Which type of insurance helps protect a business against lawsuit judgements?

Liability

10. Which of the following are characteristics of good employment advertisement?

Make the advertisement stand apart to draw potential applicants' attention, Express excitement about the firm, Communicate the firm's culture

9. Which of the following are disadvantages associated with subchapter S corporations?

May require a lawyer to process paperwork, expensive and complex formation compared with sole proprietorships, limitation on the number of shareholders

7. Which of the following large firms have been a leading source of venture capital in the United States?

Microsoft, Intel, Cisco

Dismissal

Must have well documented reason for firing, leave a paper trail, provide verbal warnings and probation before termination Chapter 10

10. Which of the following statements about the FLSA requirements regarding nonexempt employees are correct?

Nonexempt employees who work over 40 hours per week must be paid time and a half, Firms that pay employees on a weekly basis cannot use compensatory time, Compensatory time is not typically allowed from one pay period to the next

9. Which of the following are examples of licenses and permits?

OSHA food-handling permits, Occupancy limits, Business licenses

Copyright

Ownership of creative materials the copyright holder has generated, such as books, magazines, advertising copy, music, artwork, or virtually any other creative product, whether published or unpublished. Chapter 9

9. What is the initial value at which the firm's shares are offered?

Par value

9. General and limited are two broad categories of

Partnership

10. Which of the following is a human resources issue for family firms?

Placement of family members can create an environment of discrimination, It is more difficult to fire or discipline a family member, One family member may make another mad, since they know that member's "hot buttons"

10. Employers may ask job candidates about their ___________, but not their ____________

Prior convictions; Arrest record

9. An advantage of the Subchapter __________ Corporation is that it allows the owners to report their income or losses on their personal income tax returns, thus avoiding double taxation.

S

10. A ____________ is a set amount of compensation for a given time period

Salary

10. Which of the following statements regarding a company's compensation system are correct?

Salary and benefits play an important role in maintaining employee morale, It needs to be fair and equitable for all employees, Employees often compare their salary with others at their company

9. An individual who is unsure of his business idea, plans to keep his business very small, or has a minimal amount of cost and risk is more likely to select a ___________ as a business form

Sole proprietorship

9. Which type of business organization is characterized by the fact that the person who owns the business and the business itself are treated as the same entity?

Sole proprietorship

9. Which type of legal business organization is the simplest form to establish?

Sole proprietorship

10. Identify the important pieces of information that need to be considered by an entrepreneur who seeks to place an advertisement on a job-placement website

Statistics on reply rates, Readership and viewership of the website, Rates charged for placing the advertisement

9. Which form of incorporation is required to pay an income tax?

Subchapter C

10. Which of the following statements are true about the Affordable Care Act?

The Act provides tax incentives for small entrepreneurial firms to encourage them to offer health insurance to their employees, One of the biggest beneficiaries of the Act are the entrepreneurs in a business that employs only themselves and their family.

Which of the following laws established a minimum wage for workers?

The Fair Labor Standards Act

Fair Labor Standards Act

The act that established a minimum wage for workers. 1934. Chapter 10

Hourly Wage

The amount paid per hour for work performed. Chapter 10

7. Identify the issues a new business uses to determine the quality of accounts receivable

The debtor's credit rating, The size of the transaction

Shrinkage

The difference between what is sold and what was brought into the business. Chapter 7

7. Where does funding typically start for most new businesses?

The founder's personal resources

7. Besides banks, finance companies, and friends and family, another source of nonequity loans comes from:

The founders

Workers Compensation

The provision by law of some type of compensation to employees who are disabled or injured while on the job. Chapter 10

Why are banks often quite restrictive in their lending to start-up firms

The risk is perceived to be too high

7. Which of the following is a typical disadvantage of having suppliers invest in a new business?

The suppliers' deal involves an exclusivity agreement

10. Which of the following statements regarding unemployment compensation are correct?

The tax is paid by the employer based in part on the company's history of unemployment, People are expected to look for employment while they are receiving unemployment compensation, It pays a set amount of money directly to the former employee

9. A __________ is a legal protection of the intellectual property that is associated with a specific business?

Trademark

9. Which of the following is NOT a common example of a license or a permit?

Trademark permit

10. True or false: An entrepreneur should keep continuous records of all advertisements that have been run wither a physical publication or on internet, who responded, and the criteria of the job

True

10. True or false: recruiting companies do an extremely good job recruiting and placing people with companies that have unique skill requirements

True

7. True or false: When considering funding, a firm needs to evaluate not only the amount provided but also the sources of that funding

True

9. True or false: If a corporation suffers substantial losses, the founders will lose only his or her investment in the business

True

10. Which of the following is not considered a benefit but is mandated by the law?

Unemployment insurance

Characteristics of venture capital

Usually a limited partnership, invest seeking high returns, seeking high growth businesses that have an opportunity to cash out with an IPO (initial public offering) or sale to a larger company Looking to make 2 million or more, not a source of funding for very many start ups Chapter 7

Living Wage

Wage worked at 40hr/week to stay out of poverty Chapter 10

9. Which of the following questions should be considered by a new business owner before entering into a lease contract?

Who is responsible for maintenance and other facilities issues?, Who would be responsible for making improvements to the facility?, Who has to carry the liability insurance and at what level? Can the business owner renew the lease after the term expires?

10. Unemployment compensation is financial assistance for some period for people ___________________

Who lose their jobs through no fault of their own

9. Which form of insurance covers liability for workers who are injured on the job?

Workers' compensation

10. Business owners should ___________

Write a job ad that sells the job and business honestly

10. Which of the following is the first step in the hiring process?

Writing a job description

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

9. A copyright can be claimed on creative materials generated, such as:

books, unpublished music, advertising copy, artwork

James and Mary own a business. When they pay themselves an advance in salary or a bonus, it is called a(n)

draw

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

equity

When accounts receivable are sold by a company to receive immediate cash, it is referred to as

factoring

10. True or false: entrepreneurs typically do not have the right to fire employees

false

: In the context of business licenses, a business is required to pay a business license tax that is determined by the number of employees it has

false

A contract must always be in written form, and it must be signed by the parties involved

false

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

fringe benefits being treated as income.

10. Equity theory states that employees judge

how well they are treated in the context of how well others are being treated

10. Promoting a drug-free workplace may be made more difficult in states like Colorado or Washington State where ____________

marijuana laws and drug-free workplace programs may conflict

Commission compensation systems can be abused and .

may be a source of frustration for both the employees and employer.

Debt is a form of ________ funding

nonequity

A cash-based accounting system

only the smallest businesses use this system

10. Entrepreneurs should ask applicants to submit their _____________ and list of references by the deadline

resume

A job offer is finalized by ________.

the candidate signing the offer

When a small business owner is advertising for a job, the company needs to attract _____________ pool of applicants to choose from.

the largest

Accepting supplier credit limits a company's ability to shop around for a cheaper source of goods

true

Accounting within the business

-Must decide if accrual or cash based accounting -Cash based= Recognizes expenses as they are paid, revenue as it is generated, only small businesses can use this -Accrual based= Records revenues and expenses when they occur, regardless of when cash is received (most common) must be used if your business is a C-Corporation, partnership, trust, has inventory, if you have to report financial statements Chapter 7

Contract

An agreement between two parties to perform certain activities for some consideration. Chapter 9

Private Equity Fund

**A series of funds intended to provide capital to invest in existing businesses that the investors believe can leverage their resources to improve the entrepreneurial venture. Chapter 7

A program that allows employees to contribute to their retirement on a tax-free basis is

401(k)

Patent

A claim of intellectual property that covers a specific innovation. Chapter 9

10. Which of the following is the next step in the hiring process after the job description has been created?

Advertising the position

10. Employees who earn an hourly wage ___________

Are only paid for those hours they perform work

9. What type of insurance can be purchased to cover losses from employee embezzlement?

Bonding

9. ___________ insures businesses from damages caused by workers in the performance of their jobs.

Bonding

7. Which form of equity investors refers to high-net-worth individuals that invest widely in business?

Business angels

10. Which of the following aspects listed below are part of retaining employees?

Compensation and benefit systems, wages and hours requirements, performance reviews

9. A ____________ is an agreement between two parties to perform certain activities for some consideration

Contract

7. Which of the following is NOT true with regard to managing the flow of data?

Data management methods must be complex

Which of the following statements regarding performance reviews are correct?

Employees should be given praise as well as details of areas of improvement They are for a specific time frame, often one year They review an employee's performance against a set of goals

10. Which of the following statements regarding the Occupational Safety and Health Administration are correct?

Fines are lower for businesses that have fewer than 25 employees, Small firms with less than 10 employees do not have the record-keeping regulations that larger firms have, It has tried to be more lenient toward small businesses.

9. In which of the following business forms do the business debts flow directly to the owner?

General partnership, Sole proprietorship

10. Which of the following describe the roles that human resources management plays in business?

Hiring new employees, Inspiring employees, Managing employees

10. ____________ resources is the quantity and quality of human effort directed toward producing goods and services

Human

10. One of the most important issues between a typical entrepreneurial start up and a family business are issues related to _____________

Human resources due to some of the employees being family members

10. It is perfectly acceptable for companies to test their job candidates _____________

If there is a direct link between performance on the test and the skills required for success on the job.

Job Benefits

Includes a 401K, PTO, medical care, retirement plan. Medical care & retirement plan most expensive but also most desired. Under the Affordable Care Act, more than 50 employees require benefits. Chapter 10

HR within a family business

Issues of discrimination still exist if outside members are hired, HR issues dealt with by a "family counselor", line of succession needs to be decided to avoid issues Chapter 10

9. Identify the true statements about a Subchapter C Corporation.

It considers the owners as employees and pays them salaries and bonuses, profits that are not paid out for such items as salaries are retained for future expansion *

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

7. Which of the following statements are true regarding supplier credit?

It ties firms to a specific supplier, It limits the firm's ability to shop around, The rates are more competitive than bank sources, The terms can be quite generous

9. ____________ are the least expensive corporation types to form

Limited liability corporations

7. A _______________ involves a contractual agreement whereby the business receives some amount of money that must be repaid over a specified period of time at a specified interest rate

Loan

9. Which of the following elements are required when forming a Subchapter C or S Corporation?

Location of the corporate headquarters, General nature of the business, Names, addresses, and titles of all founders

10. _____________ is one of the most expensive costs for any business and the most desired benefits for employees

Medical Care

7. It is important to record and balance the company account on at least a ___________ basis

Monthly

Which of the following statements is true of a performance review in an entrepreneurial business?

The formal conversation with a worker who is doing a good job and appreciating his or her work is a form of compensation

Discrimination in HR

Title VII prevents discrimination in hiring process. Make sure to use non-discriminatory language. Applies to firms with more than 25 employees Chapter 10

Managing information flow

Well established firms use just in time (JIT) inventory to minimize excess capital investment in inventory, seeking inventory shortly before it is needed -New firms don't have the same set of complex information to be able to do this system but should follow similar ideas -Small, fast pace batches Chapter 7

When are credit cards a good method of managing cash flow?

When used as a tracking system for individual expenses within the company When paid off each month When used on a short-term basis

7. A loan provided for the purchase of a necessary asset for the business is called _____________ lending

asset-based lending

10. Hiring a family member ___________ discrimination issues for larger family businesses

does not eliminate

The government regulates the employment of children under the age of

16

What is the major difference between a board of directors and a board of advisors?

A board of directors have fiduciary responsibility, whereas a board of advisors advise the firm.

Loan

A contractual agreement whereby the firm receives some amount of money that must be repaid over a specified period of time at a specified interest rate. Chapter 7

Profit & Loss Statement

A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period of time. Chapter 7

Characteristics of grants

Governmental and private source foundations, neither equity not debt, usually target disadvantaged groups, economic issues, or groups like veterans and women-owned businesses Chapter 7

Banks will lend money for the establishment and maintenance of inventory by arranging a revolving line of credit

true

Performance Review

Review by the small business owner of an employee's goals and the outcomes over some given time period. Chapter 10

9. True or false: a partnership will be governed by either the Uniform Partnership Act or the Revised Uniform Partnership Act if the partnership agreement is not developed and signed.

True

Bonus systems are as well defined as profit sharing and the level of reward is independent of the discretion of an entrepreneur.

false

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

has unlimited for any debts or judgments against the firm.

Large firms can absorb bad employees easier than small businesses because they have organizational slack.

true

9. Which of the following are the results of violating a trademark?

Be required to change the name, Be required to pay monetary damages

7. Which form of debt is almost always tied personally to the founders, thus exposing them to personal bankruptcy?

Credit cards

9. For tax purposes, all business must have a ____________

Employer identification number

7. What are special funds that are neither equity or debt funds that are designed to aid businesses in specific areas?

Grants

Discrimination

Hiring, dismissal, setting levels of pay, or basing promotions on factors that include but not limited to race, color, gender, religious beliefs, or national origin of the employee. Such actions are prohibited by federal and state laws. Chapter 10

9. Which of the following are types of corporations developed by the U.S. legal system?

LLC, Subchapter C, Subchapter S

Performance Reviews

Reviews employee's performance and outcome over a period, praise good things but list deficiencies. Poor performing employees have triple the impact on the company. Chapter 10

10. Which of the following statements regarding drug testing employees are correct?

Some states offer discounts on workers' compensation insurance for businesses that have a drug-free workplace program, The employees' privacy rights can come into conflict with a drug-free workplace policy, Business owners have a right to insist on drug testing

7. ___________________ credit is a form of nonequity funding for physical assets as well as the actual supplies purchased

Supplier

7. Accepting _____________ __________________ can limit a firm's ability to shop around for a cheaper source

Supplier credit

Identify the typical advantages of having suppliers invest in a new business

Suppliers refrain from trying to run the business Suppliers to not aim to take the business over if it does particularly well

Unemployement Compensation

The provision of financial assistance for some period of time to those people who lose their jobs through no fault of their own; every state has a law providing such assistance. Chapter 10

7. Which of the following are true regarding the accounts payable?

The record should include date paid, amount paid, and check number or tracking number, All invoices received should be recorded, A record of payment toward each invoice should be included

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

7. Which of the following are characteristics of credit cards as a form of nonequity investment?

They typically have a set upper limit, They are generally tied to a much higher interest rate than that of a bank loan

Initial Funding Calculation

To calculate the maximum amount to be attained through outside funding, calculate entire cash flow projections without adding any equity investment and look for the point where the ending cash balance is at its lowest point, safe rule of thumb is multiply that number by 150, that number is the # recommended for initial equity Chapter 7

Equity Funding Types

Venture Capital, Crowdfunding, Business Angels Chapter 7

7. Which of the following is NOT a common form of debt for a new business?

Venture capital

Corporations

Viewing the business as not synonymous with the owners but as a separate entity. If the corporation suffers losses, founders only lose their investment. Typically, small businesses form a simple protected corporate form ( S Corporation), while a larger business would form a C Corporation. The limited liability corporation (LLC) has become the predominant form of business in the US. Chapter 9

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

The insurance coverage obtained by a small business is directly proportional to the cost. As the coverage increases, the cost also increases.

true

Which form of funding is used by a business to conserve cash and maintain the latest versions of whatever equipment is available?

Asset lease

7. The accounting system and the data flow management provide information on how the ______________ will be used by the business

Funding

Crowdfunding

Funds received by a business by soliciting a large number of very small investors usually via the Internet. EX: Gofundme, Kickstart Chapter 7

10. Which of the following are compensation options that a small business owner may employ to pay employees?

Salary, Commission, Hourly wage

7. A chart of accounts is simply a listing of each type of asset within the company. Rank the categories of accounts from first to last associated with a chart of accounts

1. Income category 2. Expense category 3. Asset category

10. An employee who earns a salary is paid ____________

A set amount of money that is paid without regard to how many hours worked within a given period

Characteristics of factoring

Accounts receivable sold at a discount Quality of receivables is based on: Who owes the new business money? The debt age The size of the transaction The debtors credit rating The more risky/higher chance you won't get paid back, the more discounted the rate is Advantage- Entrepreneur gets cash for accounts receivable immediatley Disadvantage- New business will not receive the full amount of debt that is due to it Chapter 7

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

All of the answers are correct

C Corporation

An organizational form that treats the firm as a unique entity responsible for its own taxes. There are no limitations to shareholder participation and the "owners" are protected beyond their equity investment. Chapter 9

7. What type of lending involves the bank estimating the residual value of the equipment if the bank had to repossess the equivalent and then lend the business a percentage of the difference between that number and the sale price?

Asset-based lending

7. A _________________ is like a master system for tracking the activity of a business

Chart of accounts

Characteristics of loans

Contractual agreement where company receives money and must repay it over specific time at specific rate, relationship with banks is critical to obtain financing, banks can lend money for the establishment and maintenance of inventory by arranging a revolving line of credit, a lender will periodically check the inventory to ensure it is being accounted for properly Chapter 7

7. Which of the following are considered alternative sourcing tools for funding a business?

Crowdfunding, Crowdsourcing

Human Resources

Defined in economics as the quantity and quality of human effort directed toward producing goods and services. Chapter 10

10. The __________ requires that employers not discriminate in pay to man and women who do the same job

Equal Pay Act

7. True or false: The founder should avoid personally lending money to the new business because it is an unsecured investment

False

7. True or false: there is no need to treat a loan from family as a contractual agreement

False

9. True or false: The greater the insurance coverage obtained by a new business , the lower the cost

False

Business Angels

High-net-worth individuals who invest in businesses; a business angel does so not as a business but as individuals. Chapter 7

10. Some major cities pay what has been called a ______________ wage that is indexed to what someone who works 40 hours per week needs to stay above the poverty line

Living

Unemployement Compensation

Provides financial assistance for those who lost their job at no fault of their own, person is required to look for a job while getting this money, businesses pay an unemployment tax to help fund this system Chapter 10

Characteristics of asset leasing

Similar to leasing a car, but leasing equipment from a third party **Advantages- New business can acquire assets it needs with minimal cash flow, not stuck with an aging asset, can trade up for newer equipment **Disadvantages- Over time the business could spend more money leasing than it would've if it bought the equipment outright Chapter 7

Characteristics of supplier credit

Suppliers can provide credit on physical assets and actual supplies purchased, offers can be quite generous, but can be a liability for some companies, accepting supplier credit can tie you to that supplier, limiting your ability to shop around for cheaper options Chapter 7

7. Which of the following is NOT a source of nonequity capital to start a business?

Venture capital

___________ 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

It is illegal for sole proprietors to run their business by deducting business expenses from their business incomes.

false

Title Vll of the Civil Rights Act currently applies to firms with more than 10 employees.

false

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

supplier credit

One action a small business owner might take to establish that the firm is not discriminatory would be to advertise the job widely in several publications

true

9. Many regulations enacted by the federal government do not apply to businesses with fewer than _____________ employees

50

Workers Compensation

A form of insurance paid by the employer providing cash benefits to workers injured or disabled in the course of employment. Usually based on state rates, industry size and firm. Payments are usually given even if it wasn't the owners fault. Chapter 10

Asset Lease

A form of lease tied to a particular asset used by a business to conserve cash and maintain the latest versions of whatever equipment is available. Chapter 7

10. A __________ is where a sales commission is paid in addition to a basic salary

Hybrid compensation system

In the context of legal forms of business, identify a true statement about sole proprietorship firms

Laws governing business practices do not recognize other equity investors, which limits the growth potential of such firms

7. In the long run, the cost of capital for nonequity funding is generally _______________ that of equity investment

Less than

Business as Equity Investors

Two scenarios: One where the company intends to buy out the start up and one where the investor wants to have an exclusivity deal **Company wants to buy out the start up= Invest and reduces need to generate in-house ideas, can purchase the company if successful, downside is owner might not be ready to sell when the company wants it **Investor wants an exclusivity deal= doesn't want to buy out the company, has an exclusivity deal with the suppliers products, causes restriction Chapter 7

Which one of the following is a key report that a new business owner should be prepared to generate?

all of the answers are correct a check register a chart of accounts an expense account

A(n) ____________ is needed regarding all employees, and the owner must be diligent in the attempt to assist a poorly performing employee.

paper trail

One of the accounting records maintained by Visors Inc. lists the number of regular work hours worked by its employees, the overtime hours worked by various employees, and the firm's overtime pay rate. This record also tracks salary checks issued to each employee. This record is most likely a(n)

payroll record

9. True or false: a Subchapter C Corporation treats fringe benefits that paid out as income for employees

False

9. An important feature of a Subchapter C corporation is that there are no limits to ____________

The number of shareholders that an organization can obtain

Nonequity Funding Types

Debt, Loans, Credit Cards, Supplier Credit, Grants Chapter 7

7. What are the key financial issues involved with starting a business?

The funding and the funding level of the firm, The establishment of an accounting system, The flow of information in the new business

7. Grant funding typically comes from:

The government, A nonprofit agency

7. Identify a disadvantage of asset leasing for a new business

The new business may spend more money for the equipment over time than if if it had bought the new unit outright

9. Which of the following are the characteristics of limited partners in a limited liability partnership?

They are typically allowed to work for the firm, They are considered passive investors, Their liability is limited to their investment in the business

10. Business owners should provide the interviewee with a realistic preview of the job company _______________

To set appropriate expectations for the potential employee

Characteristics of credit cards

Type of credit, not tied to any specific asset and not on a specific repayment schedule, short term method of managing cash flows especially during early time peak periods, can provide a good financial tracking system and unique positive cash flow situation Chapter 7

10. Which of the following need to be avoided by a business owner, or an interviewer, to provide a job candidate with a realistic preview of the job and company?

Underselling the job expectations, Overpromising what the job will be

Which of the following statements about succession are true

When the parent retires, he or she should let the child run the business on his or her own. A successor should be selected and the person should be prepared early Parents often wait too long before creating a formal succession plan.

Carla is a high-net-worth individual who was once an entrepreneur. She now financially invests in small start-ups and businesses. Though Carla funds their initial operations and advises them on the best way to develop their operations, she rarely interferes with their day-to-day operations. in the context of the various forms of equity funding, Carla is most likely

a business angel

In the case of business failure, debt does not need to be repaid

false

A company's compensation system is

of the highest importance for employees

Draws

**Distributions of funds from the business. They are usually in the form of a cash dispersion in advance of salary, bonus, expected year-end distribution, and the like. Chapter 9

Sole Proprietorship

-Simplest form of business because owner and business owner are same person -Fairly easy process for getting a license -All income and losses are reported on income statement -Benefits: Easy to form and dissolve -Drawbacks: Can only have one founder, can't have outside investors, only option for obtaining funding is through taking personal debt or go through process of changing the legal form, all liability falls on the owner, issue of legitimiacy because of how easy it is to dissolve Popular among people who: 1. Are unsure of the business idea and want to test it out, if it is successful they will change to another business form 2. Very small businesses with time limitations that will restrict the growth of the business 3.Have a business where the cost of equipment are low, and therefore so is risk. Chapter 9

10. Title VII of the Civil Rights Act applies to firms with more than __________ employees

25

10. According to the Bureau of Labor Statistics, medical benefits cost _________ % of total compensation costs for an employee

31.4%

Profit Sharing

A firm's offer to share a percentage of the profits at the end of the year or some other period of time with the employees. This is used, for example, in a hybrid system, in which the firm may set some relatively low level for salary. Chapter 10

Debt

A generic term to describe any type of non equity funding tied to the business. Chapter 7

7. Which of the following are potential outcomes of a poorly managed credit card?

An increase in the interest rate, Possible bankruptcy of a firm

Characteristics of debt

Any capital infusion that must be paid back with interest, allows new businesses to manage cash flows through various peaks and valleys by handling the disparity between when goods must be purchased and when money will be paid from customers for the goods Chapter 7

9. A business owner hires a mechanic to work on cars owned by the customers. The mechanic makes a mistake that leads to significant and costly damage to a customer's car. Which type of insurance can be purchased to cover the damages?

Bonding

10. Business owners should ____________

Check as many of the candidates' references as possible

7. Which of the following are true with regard to managing the flow of data?

Data are tied to the strategic needs of the business, Data are obtained in a timely manner

7. Which of the following are typically recommended before seeking outside funding?

Determine the percentage of ownership reserved for investors, Determine the percentage of ownership for each founder, Determine a fair and valid estimation of the value of the firm

7. Which of the following are typically the targets of grants?

Disadvantaged groups, Economic areas, Particular industries

10. Which of the following statements regarding changing the commission system as the company grows are correct?

Existing salespeople do not like changes to compensation systems that decrease commissions, Business owners need to think about the sales commission long term when creating it, New hires do not think it is fair to be paid a lower commission than older sales staff

10. True or false: Issues surrounding succession are never a problem in a family run business

False

7. True or false: To calculate the maximum amount to obtain in outside financing, it is advisable for an entrepreneur to calculate the entire cash flow projection by adding in all equity investments

False

Formation of C or S corporation

Formation requires: -A corporate name -Location of corporate headquarters -General nature of business -Names, addresses, and titles -Time horizon for firms existence -Authorized stock and capital -By-laws of the organization Chapter 9

Characteristics of business angels

High net worth individuals who invest in start ups, more readily available than vc, investors can be a source of advise and expertise, seek individuals with knowledge not just money Chapter 7

9. Which of the following are the characteristics of a Subchapter C corporation?

It does not provide any protection for the owners beyond their equity investment, It does not have any limits on shareholder participation

LLC

Limited liability company Chapter 9

9. A more complex business form that has two or more people sharing unlimited liability in a new business venture is called a general _________________

Partnership

7. Which accounting record tracks time for hourly workers and attendance for salaried employees?

Payroll

10. A ___________ examines employee's goals and the outcome of those goals over a particular given time period

Performance review

7. Which account should be used when there is an expense too small to write a check for when a check is simply inappropriate?

Petty cash register

Which account operates much like a bank savings account using a register to track the amount in the box?

Petty cash register

Payroll characteristics

Record for every employee, record should include date, check #, hours worked, base pay, overtime, taxes, benefits deductions, net pay Chapter 7

10. Which of the following should an advertisement ask an applicant to submit?

Resume, List of references

10. Which of the following questions should be included on a job application?

Social Security Number, Work History, Name, Address, Telephone Numbers

7. Inventory should be taken at scheduled times during the year and an exact match should be completed between:

Starting inventory, Units sold, Ending inventory

9. Which of the following forms of incorporation is required to pay income tax, which results in double taxation?

Subchapter C Corporations

7. Which of the following are advantages of asset leasing for a new business?

Th business is able to acquire the assets that it needs to begin operations with a minimal cash outlay, The company is not stuck with an aging asset as the entrepreneur is able to trade up.

10. The hiring process ends when ________________

The candidate returns a signed original of the offer letter

7. What form of debt financing allows for a unique positive cash flow situation by allowing up to a 25 day delay in payment?

Credit cards

7. Funding received by a business by soliciting a large number of very small investors usually via the Internet is called _______________

Crowdfunding

Board of advisors

-Board of Advisors: Formed at discretion of founders, individuals outside the firm who will be advisors. -We suggest choosing advisors with experience in: -licensing requirements for type of industry -regulations for specific industry -new start up experience and success -financial and accounting background with start ups -human resources experience -Recommended as less than 6 people Chapter 9

What report creates a listing of all checks that have been written and all that have been cleared through the bank?

Check Register

Characteristics of crowdfunding

Either an equity approach or an in-kind exchange Websites such as gofundme, kickstart Owners make a pitch on the internet and investors can choose to invest in return for equity or more often a gift Chapter 7

10. Which of the following statements regarding commission compensation systems are correct?

Employees may make sales to customers who are financially weak and do not pay their bill, They sometimes cause employees to focus on commission instead of the overall good for the firm, Sometimes, employees figure out how to abuse the system

7. Which of the following are key reports a business should generate?

Petty cash, Expense account, Accounts payable, Payroll

10. ___________ is an example of a hybrid compensation system where the employee is paid a small salary but earns a percentage of the profits at the end of the year

Profit sharing

9. Two related entities that can help the business owner foresee the potential legal labilities are:

Board of advisors, board of directors

7. Which of the following are the benefits of factoring for a new business?

The business does not have to spend time and effort trying to collect the accounts receivable, The business gets the money from the accounts receivable immediately

C Corporation

-Limited liability for owners, but the corporation pays an income tax -Corporation pays taxes on profits, these profits after taxes are dividends, these dividends get taxed, leads to double taxation -Possible to mitigate the effects of double taxation by viewing salaries and bonuses as cost to the business, owners pay themselves profits and little actual profit is reported so there is little corporate tax owed. -Profits not paid out as salaries, bonuses, dividends are retained by the company for future expansion -Has the benefit of fringe benefits not treated as income for employees, so owners can have health insurance and other benefits paid by the corporation, which then expenses these as a cost of the business. -No limits to the number of shareholders. Recommend par value is set low so lots of shares are sold Shares in the firm must have an initial value at which they are offered, a "par" value -Floor Value= Par value x number of shares distributed = shareholder equity -Authorizing more shares, holding annual board meetings, and reporting standards to authorities are required -Corporations have higher administration cost than a sole proprietorship or partnership Chapter 9

S Corporation

-Protects the owner by treating the firm as a separate entity -Allows the owners to treat the firm's income as they would if it were a sole proprietorship or partnership -Owners report losses and revenues on their personal income tax return -Benefits: Limited liability for owners, potential to consolidate financial statements of business and personal income for tax benefits, relatively easy formation, legitimacy of the business as more established (adding Inc. to name) -Drawbacks: More expensive to form than sole proprietorship or partnership, limited number of shareholders allowed (historically capped at 100) which can be a big limitation for a company thinking about going public or growing quickly Chapter 9

Characteristics of private equity

-Tend to invest in businesses needing funding to expand rather than startups -Aim to provide substantial support to their portfolio -PE firms work to professionalize the operations of a business with the goal of ultimately selling the business to a larger organizations Chapter 7

7. What form of debt financing allows for a unique positive cash flow situation by allowing up to a 25-day delay in payment?

Credit cards

7. ______________ involves entrepreneurs making a pitch on an Internet site and letting potential investors know what they will receive for their funding , which might be equity but is often a product, service, or gift

Crowdfunding

Partnerships

General or Limited -2 or more people involved in founding -if no agreement signed, General: -2 or more people involved in founding -it will be governed by either the Uniform Partnership Act or the Revised Uniform Act. These are suggested formats and are adopted by each state adopting it. Rules in these acts are relatively effective means to handle the basics of partnership, but rarely match what each owner would prefer for the business. -shares and losses reported on personal income tax statement in proportion to their interest in the firm -Drawbacks: Partners are held jointly liable for debts, this debt becomes your responsibility if your partner fails to meet obligations. Partners have the responsibility to watch out for the best interest of each other. -Unlike sole proprietorship, there is a window for accepting investors, but it requires each owner to surrender a portion of their ownership position. This occurs when the new partner "buying out" a portion of the existing partners in a transaction, adds financial muscle to the organization. New agreement is required with each new partner, and there are some limitations on the number of partners you can have. Limited: -At least 2 individuals who are partners in a venture, but there are two classes of partners -First is the general partner, who is considered the manager of the firm and has unlimited liability for all judgements and debts against the firm -Other partners are considered to be passive partners (limited investors) and are only liable for their investment in the company; these can work in the firm but might not be active in management. -The only requirement of an LLP is one partner is general. -Same positives and negatives as a general partnership. Chapter 9

10. Which of the following steps are included in a systematic employee review?

Plans for future employee growth through experience and training, Defined objectives for the next year, How employees perform related to their objectives

10. Which of the following are elements of human resources?

Retaining employees, Hiring employees, Dealing with difficult employees

Characteristics of equity funding

Selling a percentage of the business to outside parties, should be done with a well versed attorney, critical to outline rights and expectations of investors as business grows, sources of equity investments include: other firms, venture capitalist, and business angels, adds a dimension of accountability Chapter 7

A grant, a form of non-equity funding, is expected to be repaid at a predetermined interest rate once a beneficiary firm begins to profit from its operations.

false

Supplier Credit

**Another form of non equity funding that is available. Suppliers often will provide credit on both physical assets (refrigerators, molding equipment, etc.) and the actual supplies provided. Chapter 7

7. The _____________ system of a firm is a powerful asset that should be used as a fine-grained tool to provide data about when and how inventory is needed

Accounting

10. Which of the following are examples of questions that employers may not ask?

Age, Religion, Gender

9. Which law requires that there be no discrimination in the hiring, management, or dismissal of employees with disabilities?

Americans with Disabilities Act

S Corporation

An organizational form that treats the firm as an entity separate from the individuals. This allows the owner(s) to treat the income as they would if the firm were a sole proprietorship or a partnership. It has limitations in the number and type of shareholders. Chapter 9

In the context of proper accounting practices, identify a major difference between cash-based and accrual-based accounting systems

Cash-based systems recognize revenue as it is generated, whereas accrual-based systems record revenue only when it occurs

9. Which of the following are excellent sources of information regarding regulatory requirements?

Chamber of commerce, Small business assistance centers, Local department of economic development, Small business administration

Board of directors

-Business that forms as a corporation MUST have a board of directors, which is made up of individuals who have a responsibility to the shareholders of the organization. In new corporations shareholders and directors are often the same people. Chapter 9

Role of insurance

-Insurance is a means to limit liability -The more extensive the insurance and its coverage, the higher the cost -Liability Insurance- Protect against lawsuit judgements (covers accidents, not acts of malice per say) -Bonding- Type of insurance that covers businesses in case employees cause any damage in the performance of their work. Can cover cost for employee embezzlement. Chapter 9

Venture Capital Fund

A fund that is organized to make significant equity investments in high-growth new ventures. Chapter 7

10. An entrepreneur of a retail store looks to hire billing executives. The job requires the executives to greet and interact with a large number of customers every day. In this scenario, which of the following are perfectly acceptable to test the job candidates?

A personality test, A test on basic mathematics

Bonus

A reward is offered to employees based on their performance; similar to profit sharing. Typically, bonus systems are not as well defined as profit sharing; instead, the level of reward is left to the discretion of the small business owner. Chapter 10

10. Which of the following statements regarding equity theory are correct?

Employees will accept that someone who has been with the company longer may earn more, Employees need a clear understanding of how their compensation compares to peers', Employees judge the fairness of their compensation based on others in a similar situation

7. Which option traditionally involves selling a percentage of the business to an outside party?

Equity investment

7. Which of the following statements are true regarding equity investment

In the case of dissolution, each investor is entitled to a percentage of the break-up value equal to their investment percentage, The founder must clearly outline what rights and expectations each investor has as the business grows, Equity investment involves selling a percentage of the business to an outside party

In a lease, a landowner can enter a business premises for all the following reasons EXCEPT

Whenever the landowner wants to

7. Which of the following typically issue grants?

Private foundations, Government

Title VII of the Civil Rights Act prohibits employers from discriminating in hiring, dismissing, determining the level of pay based on .

Race

10. Under which of the following conditions are examples of when a business owner should conduct a more comprehensive reference check?

When the employee might be in a position to put the business or its customers at risk, When the employee will be driving a company or personal car for business reasons, When the position requires the employee to visit customers' homes

Sole Proprietorship

The simplest form of business organization characterized by the fact that the person who owns the business and the business itself are treated as the same entity. Chapter 9

Equity Theory

The theory that we all judge how we are treated relative to how we see others being treated. Chapter 10

10. Identify the true statements about workers' compensation laws in the United States.

They aim to provide some type of wages to employees who are disabled or injured while on the job, They provide workers' compensation insurance that is regulated by each state

7. Identify the characteristics of loans as a source of funding for a new business

They are secured by assets or a personal guarantee, They are often repaid monthly from cash flow

10. Which of the following statements regarding bonus systems are correct?

They are similar to profit sharing, They are not as well defined as profit sharing, They are based on the employee's performance

7. True or false: Both a check register and a petty cash register are required by an entrepreneur to form an annual record of all expenses

True

7. True or false: Funding for almost any new business begins with the founder and his or her personal resources

True

9. Which of the following are types of patents?

Utility, Plant, Design

American with Disabilities Act (ADA)

Comprehensive legislation that is designed to protect individuals with disabilities against discrimination. Chapter 9

9. The critical issues of personal liability and the desire to limit exposure to the original equity investment led to the development of corporations. A corporation addresses both drawbacks by _____________.

Considering the business and the individual separate entities.

Sea Waves Tours and Avis Travels enter into a formal agreement with each other. Under this agreement, over the next year, Sea Waves Tours will recommend Avis Travels to all its customers. Avis Travels will pay a small commission for every new customer they gain as a result of this recommendation. In this scenario, Sea Waves Tours and Avis Travels have

signed a contract with each other

Several successful businesspeople 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 undertakings. In the context of equity funding, the partnership and the pooled resources of the business people are best described as

a venture capital fund.

In a sole proprietorship, all the income and losses are reported on schedule D of the 1040 tax form.

false

OSHA has attempted to shape its regulations to be more lenient in its regulations on large businesses than on small businesses

false

The founders of an entrepreneurial business must avoid personally lending money to the business, as such debts are considered to be unsecured investments that need not be paid back, should the business fail.

false

Limited Liability Company (LLC)

-Very popular in recent years -Limited liability feature, risk is only equal to amount invested -Allowed to have new investors, allows other corporations to hold stock in the company -Profits can be handled flexibility, owners are allowed to flow profits through personal returns to avoid double taxation. -Lots of flexibility regarding the amount of income designated for each individual, it does NOT have to be in proportion to owners holdings -Cost is relatively low because you just need to submit paperwork and have a charter issued. -Limits in some states, in some lawyers and accountants can't form LLC's Chapter 9

9. The Americans with Disabilities Act (ADA) applies fully to any business with more than _________ employees and in some communities has been applied to all businesses

15

7. Match the types of accounting systems used by businesses with their descriptions

A cash based accounting system - Only the smallest businesses use this system An accrual-based accounting system - Subchapter C corporations

Partnership

A category of business formation that includes both general and limited types. Chapter 9

10. The business owner should do which of the following to determine which candidates to interview?

Directly compare the applications with the job description, Focus first on those candidates who closely match the job description, Immediately reject those candidates who do not have the minimum position requirements

7. Besides banks, finance companies, and the founders, another source of nonequity loans comes from:

Friends and family

9. Which of the following must be formally addressed by both Subchapter C and Subchapter S Corporations?

Holding annual board meetings, reporting standards to local, state, and federal authorities, authorization of more shares of stock

Equity Investment

Funds received by the business in exchange for a percentage ownership of the business. Chapter 7

9. Which form of business has at least two individuals who are partners in a venture but only one person declares a full pass through of all income on his or her federal taxes and assumes unlimited liability?

Limited liability partnership

LLP

Limited liability partnership Chapter 9

10. The ___________ is charged with protecting the health of workers

Occupational Safety and Health Administration

9. Identify a characteristic of a general partnership that is different from that of a sole proprietorship.

Partners are generally held to be jointly liable for all debts incurred by the partnership

9. Which of the following are the three basic types of legal business organization?

Partnership, corporation, sole proprietorship

9. Because it is expensive to obtain and maintain, a patent should only be obtained if it contributes to the sustainable competitive advantage of the organization

Patent

9. Which form of intellectual property protection is the most complex and expensive and covers a specific innovation?

Patent

10. Business owners who offer profit sharing ________________

Pay employees a small salary but offer a percentage of the profits that the company earns

7. A seperate accounts __________________ record should be maintained for each creditor

Payable

Types of legal business organizations

Sole proprietorship, partnership (both limited and general liability), and corporation (C, S, and limited liability corporation) Chapter 9

Comission

Some percentage of sales is paid by the small business owner and typically associated with the compensation of sales representatives. Chapter 10

Marsciva Technologies is an emerging business. The firm considers the owners to be employees of the firm and therefore pays them salaries and bonuses. To reduce corporate tax, the owners of Marsciva Technologies pay themselves nearly all the profits generated so that very little actual profits are reported by the firm. Based on these characteristics, Marsciva Technologies is most likely a

Subchapter C Corporation

10. Which of the following statements regarding the minimum wage requirements of the Fair Labor Standard Act are correct?

The Act covers virtually all workers, States may set a minimum wage higher than set by the FLSA, The Act does not cover workers on small farms

OSHA (Occupational Safety and Health Administration)

The Occupational Safety and Health Administration, which is charged with protecting the health of workers. Chapter 10

10. Which of the following statements about record keeping are correct?

The company should keep track of records in case someone alleges that the company discriminates in its hiring practices, The company should keep track of all advertisements that have been run whether a physical publication or on the Internet, The company should maintain a record of who responded and the job's criteria

10. Identify the key issues that entrepreneurial businesses should consider when trying to retain employees who add value

The compensation and benefits offered to the employees, The means of reviewing the performance of employees

9. Which of the following is true regarding a board of advisors?

The group is formed at the discretion of the founder, The group is composed of individuals outside the business, The group advises the founder on key issues

10. The last step in the employee hiring process is _____________

The job offer

9. Which of the following are drawbacks to sole proprietorships?

The lack of legitimacy with suppliers and customers, the formation is limited to a single founder, the liability of the business is the responsibility of the single owner

10. Which of the following statements about human resources is NOT true?

The most important role of human resources is to meet basic legal requirements

10. Which of the following statements regarding negotiating the deal with a job candidate are correct?

The offer should require a fairly prompt response from a candidate, The business owner should decide the points for which he or she is willing to negotiate, The business owner should finalize the agreed offer in writing

9. Which of the following is a characteristic of general partnerships that is similar to that of sole proprietorships?

The owners report their shares of losses or profits on their own personal income tax returns in proportion to their interest in the firm.

10. Which of the following are likely to affect a small business when an employee becomes a problem?

The problem may cause other employees to have problems, The organization does not fully benefit from the unhappy employee, The owner loses time dealing with the situation

10. Ways that entrepreneurs can ensure that they avoid discrimination or the appearance of discrimination are to do which of the following?

Write job descriptions so they do not include terms such as "handyman," "salesman," "young," or "counter girl", Give everyone an equal opportunity to be considered, Advertise jobs widely to include many potential groups

In the context of legal forms of business, a Subchapter S Corporation

allows the owners to treat the income or the firm as part or their personal incomes