Final Exam-Business X100

Debits must _________ credits.

equal

What is contingency planning?

"What-If" plans that address possible "downside and upside" economic and business scenarios.

What is the sequence of the accounting cycle?

1.) Collect and analyze transactions. 2.) Record the effects of the transactions. 3.) Classify and verify the effects of the transactions. 4.) Prepare and summarize the reports.

International trade now accounts for ___% of the global income.

20

Statistically, over ____% of new businesses can be expected to fail within their first ten years.

70

What is a small business?

A business that is independently owned & operated for profit and is not dominant in its field.

What is an earning per share (EPS)?

Amount of net income related to each share of stock outstanding during the period.

What is franchising? (Know difference between a franchisor and a franchisee)

An agreement between a franchisor & a franchisee, to market, sell or license products, services or concepts. franchisee pays fees to the franchisor.

What does the employment-at-will doctrine state?

An employer can hire and fire an employee at any time for any reason or no reason while and employee can quit at any time for any reason or no reason and without notice.

What is the accounting equation (balance sheet equation)?

Assets=Liabilities+Owner's Equity

What are the three leadership styles?

Autocratic Bureaucratic, Participative Democratic, Entrepreneurial.

What is the corporate organization levels of management?

Board of Directors, Officers and Top Management, Middle Management, First-Line Management, Employees/Associates.

What is a corporation known as if it is in the state it is incorporated in?

Domestic Corporation.

What are assets?

Economic resources that are owned or controlled by the company.

What are the non-tariff barriers?

Embargo, import quota, foreign exchange control, currency devaluation, bureaucratic "red tape".

What is planning?

Establishing the organization's mission, goals & objectives and developing strategies & plans to achieve them.

What is net income?

Excess of revenues over all expenses in a given time period.

What level of conflict is good for group performances?

Optimal.

_______________ _______________ refers to the number of layers or levels of management in an organization.

Organizational Height (Tall/Flat organization, Wide/Narrow span).

What is stockholder's equity?

Owners' equity section-'what's left over'.

What is the order of the Hierarchy of Corporate Structure?

Owners/Stockholders, Board of Directors, Officers, Managers, Employees.

What are the four types of competition?

Perfect Competition, Monopolistic, Oligopoly, and Monopoly.

What are the five steps of the management process?

Planning, Organizing, Leading & Motivating, Controlling, and Review & Modify.

Which management function is first because all other management functions rely on it?

Planning.

What are retained earnings?

Portion of a company's owners' equity that has been earned from profitable operations but has not been distributed to shareholders as dividends.

What is contributed capital?

Portion of owners' net equity contributed by investor (the owners) in exchange for shares of stock.

What is another name for the income statement?

Profit and Loss Statement.

What are dividends?

Profit distributions to the owners (stockholders).

What are the six-steps in the action-oriented decision making process?

Recognize, List, Rank, Select, Implement, Learn.

What happens in cash-based accounting?

Revenues and expenses are recognized as 'transactions' only when cash is received or payments are made.

What is the income statement equation?

Revenues-Expenses=Net Income

What are the disadvantages of having a small business?

Risk of failure, limited potential, limited ability to raise capital, and little "power".

What three industries are small businesses included in?

Service (48%), Distribution (33%), and Production (19%).

What are the three steps in controlling?

Setting goals and objectives, measuring actual performance, taking corrective action.

Which form of business is the most popular and is owned by a single person?

Sole Proprietorship

What are the four general categories of business ownership?

Sole proprietorship, Partnership, Corporations, and LLCs.

What is tactical planning?

Specific action-oriented objectives related to specific functions and departments (1-2 years).

What is another name for the balance sheet?

Statement of Financial Position.

What is a free enterprise?

System of business in which the individuals are free to decide what to produce, how to produce it and what to sell it for.

________ ___________________ is driven by the IRS and other tax regulations, which are different than GAAP.

Tax accounting

What are the characteristics of an effective team?

Team Size, Complementary Skills, The Team's Leadership, Team Flexibility, Team Charter.

What is absolute advantage?

The ability to produce a specific product more efficiently than any other nation.

What is comparative advantage?

The ability to produce a specific product more efficiently than any other product.

What is cost of goods sold?

The costs incurred to purchase or manufacture the merchandise sold during the period.

What is group cohesiveness?

The degree to which members are attracted to one another and share the group's goals.

What is strategic planning?

The fundamental longer-term strategies and key goals of the organization (3-4 years).

What is Vroom's expectancy theory?

The idea that motivation depends on how much people want something and on how likely they think they are to get it.

What are the steps in the delegation process?

The manager assigns responsibility, grants authority, and assigns accountability to the workers.

What are the three principles of GAAP?

The matching principle, revenue recognition, and the time period concept.

Define Business Ethics.

The motivating force of business behavior (often seen as impositions & constraints).

Define business.

The organized effort of individuals & organizations to produce & sell for a profit goods and services to customers that satisfy a society's needs.

What are expenses?

The other costs incurred in the normal course of business to generate revenue.

What is depreciation?

The process of cost allocation that assigns the cost of plant and equipment to the periods benefited.

What is controlling?

The process of evaluating and regulating ongoing activities to ensure that goals & objectives are set & achieved.

What is financial accounting?

The process of systematically collecting, analyzing and reporting financial information to provide management & other interested parties with the information they need to make good decisions.

What are accounts receivables?

A current asset representing money due for services performed or merchandise sold on credit.

What is operating income?

A non-GAAP income that highlights income from operating activities and typically excludes interest, tax and unusual expenses in a given time period.

What is Groupthink?

A pattern of faulty and biased decision making that occurs in groups, whose members strive for agreement among themselves, at the expense of accurately assessing information relevant to a decision.

What is a team?

A small number of people with complimentary skills who are committed to a common purpose, performance goals, and approach for which they hold themselves mutually accountable.

What is accrual accounting?

A system of accounting in which revenues & expense 'transactions' are recorded as they are EARNED and INCURRED, not necessarily when cash is received or paid.

What are accruals?

Adjustments needed to record revenues and expenses when they are earned or incurred (not necessarily when cash is received or paid).

What is a corporation called when it is chartered by another government and conducting business in the U.S.?

Alien Corporation.

What are the four key documents on a financial statement?

Balance sheet, income statement, statement of cash flow, and statement of stockholder's equity.

What are the three economic systems?

Capitalism, Socialism, and Communism.

In which economic system do individuals own and operate the majority of businesses?

Capitalism.

What are liabilities?

Claims of creditors on a company's assets.

What economy does a socialistic and communistic economic system have?

Command economy.

What are the key management skills?

Conceptual, analytical, interpersonal, technical, communication.

What are the characteristics of money?

Divisibility, Portability, Stability, Durability, and Difficulty of Counterfeiting.

What are accounts payable?

Dollar value owed by a firm to others.

What are the three types of accounting?

Financial, Managerial, and Tax.

What are the advantages of having a small business?

Flexibility, independence, service, simplified, and specialization.

What is a corporation known as in other states that it does business in?

Foreign Corporation.

What are the five stages of group development?

Forming, Storming, Norming, Performing ("Where the work gets done"), and Adjourning.

What does GAAP stand for?

Generally Accepted Accounting Principles.

What is the main disadvantage of decision-making?

Groupthink.

__________ intelligence leads to __________ decision risk.

Higher, lower.

What are the four fundamental business resources?

Human, Material, Informational, and Financial.

What are the two tariff barriers?

Import duty (tariff) and dumping.

What is revenue?

Increase in a company's resources from the sale of goods or services.

What are the three things that lead to ethical or unethical decisions in business?

Individual standards and values, social factors and influences, and opportunity codes and compliance.

Who is the audience of financial accounting?

Internal and external.

What do you ask yourself in order to evaluate a course of action?

Is it legal, ethical, economical, and practical?

Which form of business is simple, owned by one person, and has limited liability for the owner?

LLC

Debits are made on the ______ side and Credits are made on the _______ side.

Left, Right.

What are intangible assets?

Long-lived assets with no physical substance that are used in the business such as acquired goodwill, licenses, patents and franchises.

Who are the users of accounting information?

Management, Government Agencies, Stockholders and Investors, and Lenders and Suppliers.

Who is the main user of accounting information?

Management.

What are the functions of money?

Medium of exchange, measure of value, store of value.

What kind of economy does a capitalistic economic system have?

Mixed economy.

What is debt capital?

Money obtained through various types of loans.

What is equity capital?

Money received form the sale of shares of ownership in business.

Which competition uses product differentiation?

Monopolistic Competition.

What are the methods of entering international business?

Trading Companies, Exporting & Importing, Counter Trade, Foreign Licensing, Franchising, Strategic Alliances, Production Agreements, Joint Ventures, Totally Owned Facilities, and Multinational Companies. (Look at definitions)

What is operational planning?

Very short-term (weekly and daily) plans, budget, and performance expectations.

What are the four types of teams?

Virtual teams (permanent), Self-Managed Work teams (permanent), Problem-Solving teams (temporary), and Cross Functional teams (temporary).

What are the characteristics of a successful entrepreneur?

Vision, High energy level, Self-confidence, Optimism, Creativity, Tolerance for uncertainty, Tolerance for failure.

How do you convert data into intelligence?

You input data, collect and organize it in a database, process it, output information and statistics, and gain intelligence.

Owner's equity on the balance sheet is usually ___________ than the company's actual actual market value.

less

The auditor's responsibility is to express an ____________.

opinion