Principles of Business Test 4

Which form of technology creates tangible prototypes and products?

3D printing

Which of the following is a true statement:

Bookkeeping records business transactions.

What kind of conversion process is being used in an automated assembly line that produces soft drinks?

Capital-intensive

Which of the following is an example of an employee-assistance program:

Career and education planning

Which of the following influences the process of determining price:

Customers' perception of value

In what way might an HR manager be involved in employee benefits?

Determining eligibility and costs

Which of the following activities is an aspect of marketing a service:

Determining how much to charge for a haircut

Which production activity issues work orders telling employees what their job assignments are?

Dispatching

Which of the following companies is most likely to purchase raw materials and components to convert into finished products:

Ford

Which of the following items cannot be marketed:

Hopefulness

Which of the following is a step in the purchasing process:

Identifying needs

Which of the following is an advantage of using the divisional organizational structure:

It can create better customer experiences.

Why is production important to businesses?

It creates goods and services businesses can sell.

Which of the following describes the functional organizational structure:

It includes traditional departments, such as sales and marketing.

Which of the following describes the matrix organizational structure:

It is a combination of two other organizational structures.

Which of the following is a true statement about information:

It is data put into a useful form.

Overall, what does marketing allow us to do?

Live our daily lives

Deciding how to transport goods is part of which operations activity?

Logistics

Carson is a staff accountant, and he needs to look at last year's tax return. However, he can't find it anywhere. Which information management guideline is not being followed in this situation?

Make sure that information is retrievable.

If a purchasing specialist and a supplier discuss potential issues and ways to resolve them prior to making a purchase, what are the two parties doing?

Negotiating

Every business must accomplish which of the following:

Produce or provide goods/services

What is one way in which purchasing specialists play an important role in the success of a business?

Providing a flow of goods

Which of the following is a measure of how well a business generates cash flow:

Return on capital

Why is routing an important production activity?

Routing establishes the production path of inputs

Which principle of organizational design states that authority should flow in a clear, unbroken line from the top of an organization to the bottom?

Scalar principle

Which of the following is an example of communicating with customers:

Sponsoring a charity event

Which management function is described in the following situation: Christy Chen determines the type of workers she needs, locates qualified applicants, selects those to be hired, and assigns the new hires to a work area.

Staffing

What is an acceptable reason to select a supplier offering the best value versus the lowest price?

The lowest priced product is of inferior quality.

Why do top-level managers usually receive high salaries?

Their decisions affect the entire company.

Which of the following is a reason that the role of HR management is changing:

There is greater diversity in the workforce.

In an overall sense, where does marketing occur?

Wherever customers are

Which management function is described in the following situation: James Crane has created a team atmosphere among the members of his sales department. When the team exceeded their monthly sales goal, James rewarded them with a celebratory dinner out and a five-percent bonus.

a. Directing

Janelle's Creative Supplies is opening an additional location on the other side of town. To successfully operate the new location, Janelle primarily needs

additional employees.

Operations managers must work closely with managers and employees in

all other parts of the business.

A clothing manufacturer builds quality into its operating system, placing responsibility on each employee. This process is known as quality

assurance.

A risk involved with information management is being unprepared for a government

audit.

Appropriate information management helps a business build a good reputation by

being consistent.

Doormats, carpeting, telephones, and cleaning chemicals are all items that an office might buy for

business use.

Jaron, the district technology coordinator for Abington City Schools, is responsible for pur-chasing new computers for the district. He recently sent out a request for price quotes to five different computer companies, and he is waiting to hear what the various suppliers' proposed prices will be. Jaron is conducting

competitive bidding.

A small-business manager who considers how a one-person reduction in office staff could impact the rest of his/her company is demonstrating

conceptual skills.

Information management can be a challenge because the business world is

constantly changing.

A manager evaluates the production output of a department by checking it against the production goals for that time period. This is an example of the ______________ function of management.

controlling

One of the benefits of production to consumers is that production

creates form utility.

Maintenance and repairs is an operations activity that includes

custodial work.

A banking institution is well-suited for a divisional organizational structure broken down by

customer type.

Marketing links producers to

customers

The operations function consists mainly of activities that are performed on a __________ basis.

daily

Nathan is a project manager in charge of four other employees. He has divided up responsibilities and assigned them to specific team members to work on. This is known as

delegation.

The first task in the HR management activity of staffing is

determining need.

t a hair salon, one employee washes customers' hair, another employee cuts it, and another dries and styles it. This allows the employees to make the most efficient use of their time and illustrates an organizational principle known as

division of labor.

Operations managers have two main goals in mind—efficiency (keeping costs low) and

effectiveness (keeping customers satisfied).

Information usually comes in either physical form or __________ form.

electronic

The money it takes to keep inventory in stock is called __________ cost.

holding

Wireless networks are now more common due to

increased distribution of the workforce.

The specific resources used in a company's production are called

inputs.

A clothing manufacturer checks one pair of pants out of every shipment to ensure the quality of its product. This process is known as quality

inspection.

Because operations managers control so much of a business's money, they must focus on

keeping costs low.

The amount of teamwork included in an organizational design is often referred to as

lateral relations.

Mason is the vice president of marketing at his company. He directly supervises everyone who works in the department. Mason has __________ authority.

line

Information management can be a challenge because

many people don't understand what it is.

Finance is the business function that involves managing

money.

Brynn manages employees who are new on the job and need quite a bit of supervision. Therefore, she can only supervise a few employees at once. Brynn's span of control is

narrow.

The finance function would definitely be involved in a decision regarding

new business projects and strategies.

The saying "form follows function" indicates that organizational design must fit with organizational

objectives.

A business can be described as a(n)

organized effort to produce goods and services

Which of the following is an on-boarding activity:

orientation

Businesses use organizational design to structure their

people, information, and technology.

A manufacturing company is well-suited for a divisional organizational structure broken down by

process.

Operations activities vary depending on a business's

product

The foundation of the operations function is

production planning.

The production activity used to obtain all the resources needed for production to take place is

purchasing.

Accounting is distinct from finance because its main focus is on

record keeping activities.

A benefit of informed decisions is that they

reduce a business's risk.

An operations manager must determine the sequence materials will take through the pro-duction process. This activity is known as

routing.

Checks, receipts, invoices, and purchase orders are examples of

source documents.

Keri works as a public relations consultant for a large corporation. She reviews issues and makes recommendations to managers. Keri has __________ authority.

staff

When HR management executives participate in a company's long-range planning efforts, they are taking part in

strategic management.

A well-planned organizational design helps a business to better compete because

the business is more productive.

Why do all businesses need financial resources?

to pay operating expenses

Molly purchases raw materials for a factory that changes the shape or appearance of those materials through a process known as

transformation.

A company's current balance of assets and liabilities falls under the focus of

working capital management.

Which of the following demonstrates the interrelationship among primary business activities:

One business activity changes, so the others must adjust.

Which of the following behaviors demonstrates the primary business activity of strategic management:

Planning and organizing for the future

Which of the following is a purpose of an exit interview:

To gain constructive suggestions for improvement

True or false: All employees make an impact on a business.

True; all employees make either a positive or negative impact on a business.

The overall purpose of accounting is to

control the finances of the business.

Marketing is described as creating

exchanges

An example of performing business activities in an "out of the ordinary" way is when a business

hires an outside firm to perform its marketing.

The part of staffing that involves seeking out and attracting qualified potential job candidates is called

recruiting.

Accounting records for a business show that the week's total sales revenues were $125,000. Cash sales accounted for $50,000 and credit sales, $75,000. This is an example of

the accrual method of accounting.

A creditor is most likely to examine a business's financial accounting records if the business is

applying for a bank loan.

Assets a company already owns and can use to finance a new venture are called

equity.

The goals of the finance function are to ensure profitability and to

reduce risks.

What accounting record would summarize a business's profit or loss for a previous year?

Income statement

Which of the following is a trend in information management:

Increased compliance laws and regulations

A manager studies the business's previous sales statistics as well as the sales forecast before making purchasing decisions. What type of resource is the manager using?

Information

Which of the following is a true statement about the matrix organizational structure:

It is useful for most types of organizations

What management function is being described in the following situation: David Thomas, a top-level manager, identifies jobs to be performed, assigns responsibility for them, establishes departments to handle the jobs, and determines how many and which employees mid-level managers will supervise.

Organizing

Which of the following is a method used to communicate with customers:

Personal selling

What provides the basis for all marketing goals and actions?

Planning

Which of the following are examples of top-level management job titles:

President, senior vice president, and chief executive officer

Which of the following is an example of production:

Providing home security

Which operations activity is also referred to as procurement?

Purchasing

Suzette purchases sporting goods from several different manufacturers and sells the items in her shop, Suzy's Sports. What kind of buyer is Suzette?

Retail

Which of the following is a way to evaluate supplier performance after the purchased goods or services have been delivered:

Review the invoice

What type of production would most likely be used to produce prescription glasses?

Unit

Which of the following is a detail that a buyer should know prior to placing an order for raw materials:

Whether the company has storage space for the raw materials

Jeremiah purchases sterling silver necklaces and bracelets from Native American artisans and sells the items to jewelry stores and gift shops. What kind of buyer is Jeremiah?

Wholesale

The process of keeping the financial records of a business is known as

accounting.

Money the business owes is known as

accounts payable.

Money owed to the business is known as

accounts receivable.

For an accounting system to be useful to the business, the accounting information it contains must be

accurate and up to date.

Decisions about financing refer to the

acquisition of funds.

Riley is an employee of the federal government who studies the financial reports of major businesses in a specific industry. The government's purpose in assigning this task to Riley is to

identify trends in the industry.

A risk involved with information management is leaving customers unprotected from

identity theft.

Managing information regarding copyrights and trademarks helps a company to preserve its

identity.

Because of a business's organizational design, its employees are able to work together to come up with a brand-new product. The business's employees are engaged in

innovation.

According to the marketing concept, keeping company goals in mind means

maintaining the firm's purpose.

A business that exists to fulfill a specific mission or undertaking is called a __________ business.

nonprofit

Marketing encourages people from different countries to __________ frequently.

trade

In production, the purpose of the conversion process is to

turn inputs into products.

Efficient production enables businesses to

turn out the most products at the least cost.

A business creates an organizational design in which no employee has to report to more than one manager at a time. This is following an organizational principle called

unity of command.

Steve manages employees who are highly skilled and need little supervision. Therefore, he can supervise quite a few employees at once. Steve's span of control is

wide.

Which of the following is a marketing activity:

Communicating with customers

Which of the following is the most common reason for businesses to search for ways to make their products better and cheaper:

Competition

Which of the following outputs is considered an industrial good:

A freezer purchased by a restaurant owner

Which of the following is an example of a type of information a business must manage:

Accounting records

Which of the following makes comparisons of the financial conditions at multiple organizations possible:

Accounting standards

What type of accounting method would most likely be used by a large business that has a large number of outstanding loans and customer charge accounts?

Accrual method

Which of the following presents the first three steps in the accounting cycle in the correct order:

Analyze, journalize, and post

Which of the following categories of information are found on a balance sheet:

Assets, liabilities, owner's equity

What must managers be able to do if they want employees to understand the business's goals and be productive?

Communicate clearly

A bank denies a business owner's application for credit saying, "We feel that you would be unable to make the monthly payments because of your other debts." What financial report did the bank review?

Balance sheet

Which of the following is a true statement about scheduling:

Both manufacturers and service businesses rely on scheduling

The finance function is usually responsible for which of the following processes:

Budgeting

How does appropriate information management affect a business's relationship with its customers?

Businesses serve customers more effectively.

Which of the following are examples of middle-management job titles:

District manager, department head, and regional sales manager

When Caring Companions and Smiling Pets merged two years ago, what was the most likely effect on the primary business activities of both companies?

Each primary business activity combined with the matching activity of the other firm.

Labor-union negotiations are part of which HR management activity?

Employee relations

Which of the following do many businesses believe to be their most important resource:

Employees

Which of the following is an example of one of a business's inputs:

Employees

Which of the following U.S. laws relates to information management:

The Sarbanes-Oxley Act

Which of the following activities demonstrates the primary business activity of marketing:

The business meets customers' needs by offering appropriate products.

Which of the following is a true statement about production activities:

They vary depending on the product being created.

Which of the following is the main purpose of management:

To accomplish the business's goals

Why should a purchasing specialist evaluate supplier performance?

To determine whether s/he should use the supplier again

What type of accounting method would most likely be used by a small business owner who does not offer credit?

Cash accounting method/Cash method

Which of the following is a key component of managing working capital:

Cash conversion cycle

Which of the following financial reports provides estimates of when, where, and how much money will come into and out of a business next year:

Cash flow statement

True or false: Companies without an HR department do not participate in HR management activities.

False; in companies without HR departments, other managers and supervisors participate in HR management activities.

TeJuan's Fishing Shack demonstrates effective information management by

accessing a list of fishing equipment appropriate for a particular customer.

Of the following, which is a durable good:

coffee mug

After a company's training needs are determined, what is the next step in training and development?

Determining what training resources are available

For the long-term success of the business, Stacey's Coffee House has decided to add a self-serve laundromat. Which of the following behaviors describes the business activity that Stacey's Coffee House was likely engaged in before making this decision:

Determining what will put it in reach of its goals

According to the marketing concept, which option demonstrates customer orientation?

Finding out what a buyer wants

Which of the following business trends affects HR management:

Globalization

Which of the following is a capital investment decision:

How to finance investments

Two employees used a business's computerized accounting system to change some records. They were able to steal $50,000 from the business because the accounting system lacked which of the following:

Protection from theft and fraud

According to the marketing concept, which option shows company commitment?

Setting aside funds to research what customers want

Which of the following workplace-related safety and health issues would most likely be regulated by law:

Storage and disposal of chemicals

Which of the following activities demonstrates information management:

Storing and retrieving information

To keep communication flowing with other departments, the finance function depends on

information systems.

Appropriate information management saves businesses time and money by

maintaining higher levels of productivity.

The difference between service providers' and manufacturers' operations activities is that service providers produce __________ outputs.

intangible

Which of the following statements about first-line management is true:

Businesses typically hire their first-line managers from inside the company.

In the marketing concept, whose point of view matters most?

Buyer's

What are three types of buying?

Buying for resale, buying for transformation, and buying for business use

Which of the following is a common way for a divisional organizational structure to be bro-ken down:

By territory

Which of the following actions is a part of information management:

Disseminating information

Which of the following terms refers to the flow of authority within an organization:

Chain of command

Which of the following are examples of first-line management job titles:

Collections supervisor, crew chief, and production supervisor

Who is responsible for information management?

Everyone in the organization

Making sure that a business has enough of a product in stock without having too much on hand is the goal of

inventory management.

Which of the following is an advantage of the matrix organizational structure:

It makes good use of organizational resources.

Which of the following is a true statement about a management information system (MIS):

It may be one part of a business's overall information management program.

Which of the following is a characteristic of mass production:

It often uses assembly lines.

How does the finance function relate to company spending?

It plans and controls spending.

Which of the following is a benefit of using the functional organizational structure:

It reduces the duplication of certain activities.

Which of the following is a requirement for a good accounting system:

It should provide needed information quickly.

Which of the following is a disadvantage of the matrix organizational structure:

It violates the unity of command principle.

Financial analysis occurs when a business

Keeps accurate expense records

Which of the following is a follow-up activity in production:

Making sure that production deadlines were met

Which of the following groups makes regular use of a business's managerial accounting information:

Managers

Which of the following behaviors best describes the primary business activity of operations:

Producing goods and services

Which of the following represents a primary business activity:

Marketing

Which of the following is not a main factor in a business's site selection decision:

Media

Who is normally responsible for purchasing the proper material resources for workers to use in doing their jobs?

Middle managers

Which of the following is a compliance issue:

Minimum wage

The administration of assets refers to decisions about

investments.

Franco's Bread Shop is introducing a new type of sandwich bread to the community this week. Which of the following describes the business activity that the bread shop will likely partake in before the release:

Promoting the new bread through advertising

After a purchasing specialist has determined that s/he has selected the right supplier for a job, what do s/he and the supplier develop?

Purchase agreement

Nina oversees the buying of goods and services for her company. Which business department does she likely work in?

Purchasing

Complying with environmental laws is part of which operations activity?

Safety and security

Which of the following is a disadvantage of using the divisional organizational structure:

Support staff may not have a permanent "home."

Which of the following activities demonstrates human resources management:

The business takes care of the responsibilities associated with having employees.

What are two things that a purchasing specialist should consider when making a make-or-buy decision?

The company's production capabilities and the cost of making the needed parts

What is production?

The creation of goods and services from economic resources

Annika, the purchasing specialist for Dottie's Donut Shop, just located a new, less expensive sugar supplier. Dottie does not plan to lower donut prices. If Annika buys the shop's sugar from this cheaper supplier, what is likely to happen?

The profit margin for donuts will increase.

When the Pretty Pictures framing business underwent internal restructuring last year, how would its primary business activities have reacted?

They adjusted according to the internal changes.

Why are accurate accounting records important to a business?

They show the business how it is doing.

Why should managers know how to do the work of the workers they supervise?

To have realistic expectations for workers

Why should purchasing specialists develop positive relationships with their suppliers?

To help ensure that the suppliers will follow through on their promises

Why do many businesses follow up after production to ensure that products meet standards set by outside organizations?

To remain competitive

Which of the following is an important function of mid-level management:

To serve as a link between top-level and first-line management

Managing information for business continuity is important in case of

a disaster.

The cash conversion cycle should be

as short as possible.

The purpose of communicating with customers is to

attract customers' interest

Running out of inventory can result in

lost sales.

Determining which projects a business should invest in is known as

capital budgeting.

A commission or bonus is an example of a form of

compensation

Making sure a company follows laws and regulations describes the HR management activity of

compliance.

When return on capital is positive, the company is

growing in value.

The people who work to produce goods and services are known as

human resources.

The finance function ensures that the company's financial goals are

in line with organizational priorities.

Without marketing, producers and customers would be

disconnected from each other.

Employees who are involved in production scheduling are responsible for

estimating how long each step in production will take.

Within a local pizza shop, financial analysis is most likely used to

obtain funding for supplies.

Avery, who manages a silk-screening and embroidery business, has set a goal of increasing sales by 15% in the next six months. To reach his goal, he has increased the business's advertising budget. This is an example of the ______________ function of management.

planning

Planning the quantities to produce is an important part of production planning because it helps to

prevent losses to the business.

In addition to purchasing, Sherita's job responsibilities include developing partnerships and alliances with suppliers, watching for business threats and opportunities, and looking for ways to improve processes. Sherita is involved in

strategic planning.

A manager who helps an employee count the money in a cash drawer and prepare a bank deposit is demonstrating

technical skills.

An intermittent production process is a method of production in which

the process stops and then restarts.

A job specification is an explanation of

the skills, knowledge, and characteristics required for a job.

Human resources are a company's most important resources because

they control all other company resources.