Practice Exam - Fundamental Concepts

Iris Souza started the summer with $30. She took $10 and made signs for her dog walking service. She posted the signs all over her neighborhood. She used the other $20 to buy a stout leash and a pooper-scooper. At the end of the summer, after buying herself a new pair of shoes for $50 (she had worn her other shoes out walking dogs), she had $125 left. Calculate Souza's costs for her summer job?

$80

Which of the following is an example of a business?

all of the above

Things of value owned by a firm are called its:

assets

Which of the following calculations is a formal expression of the accounting equation?

assets = liabilities + owners' equity

The _____ summarizes an organization's financial status at the end of an accounting period.

balance sheet

Understanding the external business environment requires marketers to be aware of:

changes in the law which impact how business is conducted

Which of the following is NOT an example of a factor of production?

competition

To ensure accuracy and consistency in the way financial information is reported, accountants follow rules known as:

generally accepted accounting principles

According to the _____, a firm should first identify consumer needs and then produce the goods and services that will satisfy them.

marketing concept

As one of the factors of production, capital includes all of the following EXCEPT:

money

Another term for owners' equity is:

net worth

Which of the following is the BEST example of a current asset for a university bookstore?

pending credit card charges by book buyers

Which of the following terms equals the total profits of a company minus all dividends (distributions of profits) to stockholders?

retained earnings

Accounting involves the _____ of the financial activities for firms.

summarizing

In general, when a business is engaged in environmental scanning, it looks at all of the following external forces that might affect it EXCEPT:

suppliers

The _____ is a specific group of consumers toward which a firm directs its marketing efforts.

target market

In a mixed economy, the government is involved in the economic system through:

taxing, spending, and welfare activities

Which of the following is the best example of a good?

the birthday candles you purchased to go on your sister's birthday cake

Market equilibrium is:

the point at which quantity supplied equals quantity demanded

Which of the following factors would most likely result in a dramatic change in demand?

An expectation about future prices

_____ is the ratio of benefits to the sacrifice necessary to obtain those benefits.

Customer value

_____ is the process in which a firm continuously collects and evaluates information about its external environment.

Environmental scanning

_____ are workers who create, distribute, and apply knowledge.

Knowledge workers

Which of the following businesses provides its customers with a service?

a law office

Which of the following is an example of a demographic factor?

a person's age

Inputs, such as natural resources, labor, capital, and entrepreneurship, are known as:

factors of production

What is the primary difference between a good and a service?

A good is tangible, and a service is intangible.

Successful owners and managers must continually study which of the following elements of the environment to remain successful?

all of the above

Personal selling, advertising, public relations, and sales promotions are decisions made when planning the _____ strategy.

promotion

Which of the following is an example of an asset that might be owned by a minor league baseball team?

reputation as a winning team