ENT Final - Bolen

In general, the greater the debt a business owner is willing to take on, the ___________ the risk tolerance.

higher

In the context of managing data flows, the ______________ of inventory control seeks to minimize excess capital investment in inventory

just-in-time method

When a company starts to decline, the first step is to _____________

retrench

Trilane Systems is a small business. Its owner, Myra, is also its only employee. She handles the business's operations herself and is responsible for all of the business's income and losses. In the context of the legal forms of business, Trilane Systems is a ___________________

sole proprietorship

__________ is the simplest form of a business to establish, as the person who owns it and the business itself are treated

sole proprietorship

T/F: A problem with having a line of credit to purchase inventory is that a business tends to carry old and outdated inventory on the books

True

T/F: According to the U.S. government, a small business is classified as any business with fewer than 500 employees.

True

T/F: As a Subchapter S Corporation, one of the advantages is having legitimacy in the market as a more established form of business

True

T/F: Assume that an opportunity exists in northern Minnesota. A customer needs a "hand warmer" packet. Mary, a new business owner decides she has the ability to address this gap because she knows how to produce hand warmer packets. This process is called gap analysis.

True

T/F: Attempting a turnaround is the best effort to reverse the decline of a business

True

T/F: Debt is a generic term that describes any type of nonequity funding tied to a business

True

T/F: Future business owners need to understand how their own version of rationality affects their decision making

True

T/F: One form of funding for new small businesses is grants from governmental and private foundation sources

True

T/F: The most important person in an entrepreneurial business is the founder.

True

A defining characteristic of one of the various forms of organization is that it allows other corporations to hold stock in the company. This type of organization is known as a a. Subchapter S b. Subchapter C c. sole proprietorship d. LLC

d. LLC

Which of the following personality tests is based on the philosophy of Carl Jung? a. Big Five b. Enneagram c. Insights d. Myers-Briggs

d. Myers-Briggs

Which of the following items is an example of things that can be trademarked? a. a symbol representing a firm b. the names of a firm's products c. the name of a firm d. all of the answers are correct

d. all of the answers are correct

Market capitalization is the value of a business as it exists a. in the future b. at the start of the business c. as of the first annual statement d. at present

d. at present

Credit cards have all of the following EXCEPT: a. high interest rate b. no set repayment schedule c. not being tied to a particular asset d. equity investment

d. equity investment

Which of the following is a document that describes a job that is to be filled? a. job analysis b. job plan c. job design d. job description

d. job description

What is the most widely accepted and the most insightful method of valuation?

discounted future net cash flow

T/F: Boards of advisors are composed of key employees who advise a firm.

False

T/F: Chapter 12 bankruptcy is used by sole proprietorships

False

T/F: Human resource management is not important in family businesses

False

T/F: In a Chapter 13 bankruptcy filing, the time to approval is typically slower that other bankruptcy filings, and a creditor committee is required

False

T/F: In an entrepreneurial business, a job description document is meant to be a formal, highly structured document as it might be in a large corporation

False

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

False

T/F: Patents are inexpensive and easy to obtain/maintain

False

T/F: The break-even point is the time when a new business starts to profit from incoming revenues.

False

T/F: The development plan of a venture capital start-up is oriented around positive cash flow.

False

T/F: When using a harvest plan, small companies are organized to grow rapidly, and they have no debt.

False

In a LLC, a firm can have more than ______ investors

100

_______________ states that individuals make decisions that maximize their own individual benefits

agency theory

(T/F) Gap analysis involves identifying an opportunity between the demand for a product or service and the availability of the product or service that you can buy from vendors to be resold to your customers.

False

A good way to generate new business ideas is to think about the things that frustrate you or cause you problems and then identify solutions.

True

In the context of good accounting practices, the organizational fund used for expenses too small to write a check for is known as a. a petty cash fund b. an expense account c. accounts payable d. venture capital

a. a petty cash fund

Which of the following activities is directly related to the establishment of the financial structure and record keeping of a new company a. all of the answers are correct b. maintenance of accounting records c. management of the paper/data flow of the new company d. funds and level of funding required for the new business

a. all of the answers are correct

In the context of supports for new businesses, why are established businesses often hesitant to buy from a start-up business? a. because it is not clear if the new business will be able to fulfill an order or service a product in the future b. because the supply structures of established businesses are resistant to incorporating new supply sources c. because it is more profitable for established businesses to fulfil any requirements through resources already present within their structures d. because small businesses are typically family-run establishments, making them unreliable

a. because it is not clear if the new business will be able to fulfill an order or service a product in the future

Which personality test believes that a person is the result of all experiences in his/her life? a. enneagram b. myers-briggs c. insights d. big five

a. enneagram

Which of the following statements is true of the Fair Labor Standards Act (FLSA)? a. it requires that all nonexempt employees who work over 40 hours a week should be paid at the rate of time and a half b. it allows an entrepreneur to employ children under the age of 15 years if he/she can establish the safety of the working environment c. it provides that each and every business must provide unfettered access to all disabled people d. it sets a minimum wage for all workers, including workers on a small farms and administrative employees

a. it requires that all nonexempt employees who work over 40 hours a week should be paid at the rate of time and a half

Which of the following entrepreneurial firms needs to pay special attention to OSHA guidelines regardless of their size? a. manufacturing firms b. small retail firms c. none of the answers are correct d. family wholesale firms

a. manufacturing firms

___________ economies are based on laws a. mature b. depressed c. emerging d. developing

a. mature

A type of gap analysis that compares the possibilities in the marketplace with an individual's competence to address those gaps is called a. opportunity analysis b. market analysis c. predictive analysis d. descriptive analysis

a. opportunity analysis

Which of the following is a benefit paid for by the company, such as vacations, vehicles, gifts, and loans? a. perquisites b. profits c. commissions d. salaries

a. perquisites

Small companies have flourished in the U.S. because they? a. respond more quickly to customer needs b. have better organizational policies/procedures c. often expand easily in mature industries d. employ more skilled people than large businesses

a. respond more quickly to customer needs

The development and implementation of a new business is part __________ & part ___________.

art and science

valuing a business is as much _______ as it is ______________

art, science

The time to begin thinking of harvesting the business is _____________________________

at the beginning

Richard has invested $5 million in a roof installation company. Because of some bad strategic decisions made by the company owners, the company runs into losses. It files Chapter 11 bankruptcy. The company owners and Richard reach a resolution, and Richard agrees to accept $3 million in the hope that the firm will regain its glory in the future. This reduction in the amount of money that Richard accepts is known as a(n) a. "slack" b. "haircut" c. "look-up" d. "workout"

b. "haircut"

Which of the following statements is true of the Civil Rights Act? a. It ensures that all individuals are judged according to the discretion of the entrepreneur b. It currently applies to all firms with more than 25 employees c. It provides that each and every business must provide unfettered access to all disabled people d. It allows for the promotion for the differently-abled employees irrespective of their performance

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

Which of the following laws states an employer cannot discriminate in pay to men and women who do the same job? a. The Affordable Care Act b. The Equal Pay Act c. The Social Security Act d. The Americans with Disabilities Act

b. The Equal Pay Act

Which of the following statements is true of a family business... a. issues of discrimination within a family business are eliminated if the firm is large b. a family business is generally run by and for the benefit of a particular family c. a family business gives no importance to human resource management d. managing family is quite easy as the individuals know each other well

b. a family business is generally run by and for the benefit of a particular family

A small business owner must possess all of the following except... a. an in-depth understanding of the market b. a sequential formula c. necessary skills to run the business d. passion for starting a business

b. a sequential formula

Investors can be... a. passive b. all of the answers are correct c. a minority d. active

b. all of the answers are correct

Which of the following questions should a new business owner examine when considering leases? a. is there an ability to renew the lease? b. all of the answers are correct c. who is responsible for maintenance and improvements? d. what exactly is the new business owner leasing?

b. all of the answers are correct

Job advertisements written for a new hire should a. be similar to the generic advertisements placed every week b. be kept concise and should communicate the culture of the firm c. contain the current challenges faced by the industry d. give maximum information needed for a potential applicant

b. be kept concise and should communicate the culture of the firm

In the context of proper accounting practices, identify a major difference between cash-based and accrual-based accounting systems. a. cash-based systems must be used by large businesses, whereas accrual-based systems must only be used by the smallest businesses b. cash-based systems recognizes revenue as it is generates, whereas accrual-based systems record revenue only when it occurs c. cash-based systems are mostly used by publicly held corps, whereas accrual-based systems are mostly used by privately held corps d. cash-based systems are generally used with periodic inventory counting systems, whereas accrual-based systems are used primarily with perpetual inventory counting systems

b. cash-based systems recognizes revenue as it is generates, whereas accrual-based systems record revenue only when it occurs

Established businesses are often ___________ to buy from a start-up small business. a. sure b. hesitant c. quick d. determined

b. hesitant

In the context of proper accounting systems, which of the following best describes accrual-based accounting? a. it treats accounts payable, fixed assets, and current assets as expenses until they are fully paid out b. it records expenses and revenues when they actually occur, regardless of when the cash received c. it recognizes expenses as they are paid and recognizes revenue as it is generates d. it categorizes material assets that can quickly be converted to cash as a source of revenue

b. it records expenses and revenues when they actually occur, regardless of when the cash received

In the context of the initial developments of the industrial base in the United States, which of the following statements is true about robber barons? a. ensured that smaller corps. were effectively put out of business b. quickly came to dominate new sectors of the economy c. came to dominate industrial sectors that had existed historically d. were unable to take advantage of econ. of scale that were possible

b. quickly came to dominate new sectors of the economy

What term is used to describe individuals or other organizations that impact the success of a business? a. capitalists b. stakeholders c. corporate managers d. owners

b. stakeholders

The break-even point is defined as? a. the level where a firm starts to profit from the revenue it makes from its products b. the level where revenue coming into the firm is sufficient to cover expenses c. the time when a business must liquidate its holdings/declare bankruptcy d. the time when a firm experiences steady losses during its initial stages

b. the level where revenue coming into the firm is sufficient to cover expenses

When forming a sole proprietorship or partnership, the business debts are a. the responsibility of the firm's equity investors b. the responsibility of the owners c. paid the first day of the month d. paid by purchase order

b. the responsibility of the owners

_______________ is a fund that is organized as a limited partnership a. business angel b. venture capital c. asset capital d. equity

b. venture capital

An employee cannot sue a small business owner for injury, if the individual accepts __________ a. employment compensation b. workers' compensation c. unemployment compensation d. social security

b. workers' compensation

Years ago, economists mistakenly predicted that small businesses would

be replaced by a smaller number of big businesses

An entrepreneur identifies a gap in the market for camping goods. He gathers a group of his friends, many of whom go camping regularly, and asks them to generate ideas for the best application of ropes with high stress tolerances in camping. In this scenario, the entrepreneur...

conducts a brainstorming session

A ___________________ is a group formed at the discretion of the founders and composed of individuals outside the small business that advise the founders

board of advisors

_________________ are high net-worth individuals who invest in businesses not as a business, but as individuals

business angels

In the United States, where must a patent application be filed? a. The United States Invention Office b. The American Patent & Trademark Office c. The United States Patent & Trademark Office d. The patent and copyright office

c. The United States Patent & Trademark Office

In the context of entrepreneurship around the world, identify a true statement about microloans: a. The repayment rate on such loans is typically 50% b. Such loans typically see much lower repayment rate than most loans c. The success of such loans has been substantial, w/ great strides being made in many desperately poor nations d. The failure of such loans has resulted in a decr. dedication of the U.S. aid budget to microloans for developing nations

c. The success of such loans has been substantial, w/ great strides being made in many desperately poor nations

In the context of generating new business ideas, which of the following is an example of brainstorming? a. an entrepreneur brings his friends to a bar to celebrate the success of the first year of his business b. a family gathers after dinner to discuss the various small industries they can set up on their family land c. a family gets together over a meal to discuss the possibility of selling the family business to a larger player in the industry d. an author approaches a publisher with a list of ideas for a book he/she intends to write

c. a family gets together over a meal to discuss the possibility of selling the family business to a larger player in the industry

When a small business owner pays a commission in addition to a basic salary, it is called... a. a tax b. an hourly wage c. a hybrid compensation system d. a benefit

c. a hybrid compensation system

In the context of start-ups, new businesses need to be aware of which of the following issue(s)? a. how information flows in the business b. the establishment of an accounting system c. all of the answers are correct d. funding and funding level of the firm

c. all of the answers are correct

What does a potential entrepreneur need to consider when starting a new business? a. prior experience b. personality orientation c. all of these answers are correct d. risk tolerance

c. all of these answers are correct

Which chapter of bankruptcy allows a firm to be reorganized in 90 days? a. 7 b. 13 c. 12 d. 11

d. 11

You should not use a cookie-cutter business plan program because: a. a good plan is best developed by the individual contemplating the business, not by a paid consultant b. each business plan should have its own voice, feel, & presentation c. all of these answers are correct d. potential investors are often family members, which makes it critical that the entrepreneur seeks to ensure the chances of the success by doing thorough planning/thinking

c. all of these answers are correct

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

c. asset leasing

What term is used to describe Walmart's ability to purchase more advertising space at a lower cost per ad? a. buying bonus b. volume excess c. economies of scale d. advertising bonus

c. economies of scale

What term is used to describe the process of systematically examining the difference between what is expected and what occurs? a. difference analysis b. economic analysis c. gap analysis d. gap slack analysis

c. gap analysis

Dura Steel Inc. is a steel manufacturing company, and the owners want to sell the company as most of them are in their early 80s. They do not want to sell it to their competitors as the company owns a lot of cutting-edge technologies and patents. They decide to list the company as a public entity in the public equities market. This listing is known as a(n) a. private investment in public equity (PIPE) b. reverse merger takeover (RMT) c. initial public offering (IPO) d. alternative public offering (APO)

c. initial public offering (IPO)

Which of the following statements is true of the Americans with Disabilities Act (ADA)? a. it allows entrepreneurial businesses to exclude candidates who need physical adaptations to work at the firm b. it covers those firms with 50 or more employees c. it provides that each and every business must provide unfettered access to all differently-abled people d. it is applicable to large business firms with a turnover of more than 10 million dollars

c. it provides that each and every business must provide unfettered access to all differently-abled people

In the context of business designs, one of the advantages of a corporation is that when it suffers losses, the founders will... a. be absolved of responsibility for the debts of the company b. surrender control of the company to investors c. lose only their investment in the business rather than their life savings d. be expected to pool their personal finances to rescue the business

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

________ occur(s) in large companies that have excess resources such as equipment and employees. a. limited boundaries b. unlimited boundaries c. organizational slack d. organizational resources

c. organizational slack

Which of the following terms means a set amount of compensation for a given time period? a. bonus b. commission c. salary d. profit

c. salary

Which of the following types of firms do business incubators work best with? a. retail stores b. tobacco products c. scientific firms d. restaurants

c. scientific firms

Owning a small business provides a means to meet varied demands that individuals face in society. Which of the following is not a need mentioned in the discussion of how society benefits from small business ownership? a. all of these answers choices are correct b. entrepreneurs prefer the flexibility to deal w/ the needs of family/kids that business ownership provides c. small business owners have greater ability to attract financing from venture capital firms d. small business owners leave big businesses because of the lack of promotion opportunities

c. small business owners have greater ability to attract financing from venture capital firms

Miriam starts a new boutique that specializes in fashionable clothing made from environmentally friendly materials. She prices her products competitively to attract customers. However, she discovers that the revenue earned from each piece of clothing the boutique sells barely makes back its labor and material costs. In this scenario, the threat to business success experienced by Miriam's boutique is a. threat to operational financing b. threat from competitors c. threat to profit margin d. threat to sales generation schemes

c. threat to profit margin

________________ is performed by taking the earnings (net profit) of an organization; subtracting or adding any unusual items that the lender or investor believes are not customary, normal, or usual items; and dividing that figure by a capitalization rate

capitalization of earnings valuation

In the context of proper accounting techniques, the system that recognizes expenses when they are paid for and recognizes revenue as it is generated is known as _______________.

cash-based accounting

A small business founder needs to plan for the type of sale that will ___________ their returns

maximize

The success of entrepreneurial business occurs partially because they are ___________.

more focused than their large corporate counterparts

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

paper trail

A ________________ is a claim of intellectual property that is associated with a specific business

trademark