Entrepreneurship Chapter 10 Test Review

The stock ______ rate is the rate at which the inventory of a product is sold and replaced with new inventory

stock turnover rate

An organizational ______ is a plan that shows how the various jobs in a company relate to one another

structure

MATH: a business reported the following, net sales $300,000, cost of goods sold $210,000, operation expenses$40,000, taxes $35,000. Find gross profit *net sales - goods sold*

$90,000

MATH: A business reported the following, net income after taxes $25,000, and then the net sales was $200,000. Find the net profit on sales ratio. *net income/net sales (percent)*

12.5%

MATH: Appliance store had total sales of $194,000 last month, of that amount $36,860 came from the sale of refrigerators. Divide

19%

MATH: Michelle Conner owns a retail store, in her industry she needs to keep 3 months worth of inventory in stock at all times what is the stock turnover rate?

4

MATH: Time has a beginning inventory worth $500,000 on his computer software store and expects to sell $900,000 over a period of 6 months, he wants to have a $400,000 of inventory at the end on the 6 months

800,000 purchases

Management style in which employees are involved indecision making and the manager provides less direction is called:

A. democratic

Beginning inventory plus _______ minus sales equals ending inventory

purchases

Outlines for appropriate employee behavior and actions are called:

rules

Which of the following is a strategy that a business can use to encourage a faster payment:

B. offer discounts

all of following are concerns that the managers must address except:

B. reducing

the person in a business who is responsible for planning, organizing, etc. is a

C. manager

This type of budget shows the projections of your cash going in and going out:

Cash budget

which of the following is not generally thought of as part of the organizing function?

D. strategic planning

As a business owner it is important for you to never make exceptions to rules, policies, and procedures once they are established because if you do customers and employees will become confused.

False

Increasing payroll can improve a businesses cash flow

False

Rules are more specific than procedures

False

The 3 most important elements of a companies financial strength are its revenues, profits, and human resources

False

The cost of insurance tends to decrease as the value of inventory ensured increases

False

The perpetual inventory method keeps track of the inventory levels on a weekly basis

False

Two businesses with the same level of sales and expenses will have the same cash flow

False

Under no circumstances should the authoritative management style be used in modern day

False

The dollar amount of all sales with any returns subtracted from it is called:

Net sales

______ includes all of the activities involved in obtaining, training employees of a business

Staffing

A ______ is a paper inventory record for a single item

Stock card

Even if your business uses the perpetual inventory method you will need to take a physical inventory once or twice annually

True

Inspecting products and services to ensure they meet quality standards is an example of the controlling function of management

True

Organizing involves identifying and arranging the work and resources needed to achieve business goals

True

Successful inventory management involves balancing the cost of inventory with the benefits of having inventory in stock

True

The min amount of merchandise a business wants to keep in inventory is often referred to as the reorder point

True

offering discounts on bills paid right away is a good way to improve your businesses cash receipts

True

The cost of holding inventory are known as ______ costs

Varying cost

The _______ point is the volume of sales that must be made to cover all of the expenses in a business

break-even point

The level of inventory a business keeps in stock depends on 3 factors:

carrying cost, the cost of not having an item, and stock turnover rate

The process of setting standards for the operation of a business and ensuring those operations are met is called:

controlling

rules, policies, procedures, and budgets are important components of strategic planning

false

______ sales is the dollar amount of all sales

gross sales

Combining authoritative and democratic management styles is called _______ management

mixed

A _________ contains all of the rules, policies, and procedures a business should follow in order to function

operations manual

this inventory method keeps track of inventory levels on a daily bases

perpetual

What are 2 ways you can track inventory? Give brief description of each.

perpetual (daily) and periodic (weekly, monthly, yearly)

what is planning? name and describe the 3 types of planning commonly used in business

planning is all of the things that go into making the business move forward. strategic, intermediate range planning, and short term planning