Bus 190 Exam 1
What percentage of American businesses is considered small businesses?
99.7
Purchased land for $100,000 and has financed 50% of the cost using long-term debt. The effect on its balance sheet is
an increase in assets of $50,000, and an increase in liabilities of $50,000.
American growth oriented companies cannot ignore the world market since only _______ in every 22 of the world's population are US residents.
1
Approximately how many countries currently require, permit the use of, or have a policy of convergence with IFRS?
100
With set-aside programs for small businesses, up to ______ of certain government contracts are designated for small businesses.
23 percent
What percentage of small businesses survives the first five years of operations?
50 percent
Most manufacturing businesses are considered small if they employ fewer than __________ workers.
500
By the year 2030, the number of US workers ______ or older will reach 72 million - double what it is today - and many of them will be retiring from the workforce, taking their experience and expertise with them.
65
A legal organization with assets and liabilities separate from those of the owner is called:
A corporation
Which of the following is most likely to be a cooperative business operation? a. A limited liability corporation b. group of neighboring farm owners c. a mom-and-pop grocery store d. a chain of resturaunts
A group of neighboring farm owners
How does a partnership differ from a sole proprietorship?
A partnership is more difficult to dissolve than a sole proprietorship?
A partnership formed to create a competitive advantage for a business involved is an example of:
A strategic alliance
Which type of business is most likely to operate as a cooperative business
Agriculture
Which of the following of values of partnership with employees is now recognized by businesses? a. Creative thinking and problem solving b. Rewards innovation and risk taking c. Collaboration and team efforts d. All of these
All of these
Which of the following traits are needed by today's business managers a. Visionary skills b. Creativity and critical thinking c. Ability to lead change d. All of these
All of these
____ is anything of value owned or leased by a business.
An asset
The basic accounting equation is
Assets= Liabilities + Owner's Equity
___________ refers to the standards of conduct and moral values involving decisions made in the work environment.
Business Ethics
What is business?
Business consists of all profit-seeking activities that provide goods and services to an economic system.
__________ is an organization that provides temporary low-cost, shared facilities to small start-up ventures.
Business incubator
How is cash budget different from the accrual system?
Cash budgets reflect the timing of actual cash inflows and outflows; the accrual system matches expenses to the period when they occur.
According to the annual World Economic Forum's Global Risks Report, which of the following is NOT one of the top global risks that governments and businesses will need to address to maintain global competitiveness? a. Water supply crisis b. Mismanagement of population aging c. Drop in the levels of greenhouse gases d. Chronic fiscal imbalances
Chronic Fiscal Imbalances
Which form of unemployment can best be addressed by actions that lead to economic expansion?
Cyclical unemployment
The willingness and ability of buyers to purchase goods and services at different prices is called:
Demand
__________ typically slope downward, meaning that lower prices for a good or service attract larger purchases.
Demand curves
In the United States, _____ is primarily responsible for evaluating, setting, or modifying accounting guidelines.
FASB (Financial Accounting Standards Board)
Why is fair competition important in the private enterprise system?
Fair competition allows firms to compete in the marketplace, knowing that they won't be subjected to excessively aggressive practices that are designed to eliminate them.
Macroeconomics is the study of small economic units such as households and individual businesses.
False
True or False: Use of primary data in market research is much more cost effective and easier to obtain.
False
True or False: While financial ratios allow a business to make comparisons with the historical performance of that business, they do not help in attempting to compare performance with competitors.
False
Why are the four factors of production important?
Firms need to understand how to reduce the cost of production if they are going to be successful
________ consists of government spending and taxation decisions to control inflation, encourage economic growth, and balance the federal budget.
Fiscal Policy
_____ accountants focus on potential fraud in a variety of organizations
Forensic
Evelyn recently quit her marketing job as it was getting too monotonous. She is currently looking for a new job. Under which category of unemployment should Evelyn be grouped?
Frictional unemployment
Why do home-based businesses often have lower costs?
Funds that are not being used for leasing or warehouse space can be directed into the business
To provide reliable, consistent, and unbiased information to decision makers, accountants follow guidelines, or standards, known as
GAAP (generally accepted accounting principles)
Which industry listed below is NOT dominated by small businesses? a. Florists b. Hospitals c. Funeral Homes d. Hair salons
Hospitals
_____________ is described as an economic situation characterized by soaring prices
Hyperinflation
Why are more firms moving to International Financial Reporting Standards (IFRS)?
IFRS is easier to understand than GAAP
A few industries in the United States, like transportation, energy, and communications, were deregulated in the 1980's and 1990's to:
Improve customer service and reduce prices
Which of the following is true of inflation?
Inflation devalues money
In addition to creating jobs and selling products, entrepreneurship also is a great source of __________ in the economy.
Innovation
_____ ratios describe the extent to which a firm relies on debt to finance its operations.
Leverage
What characterizes a small business?
It is independently owned and operated and in not dominant in its field.
Which of the following is true of a franchiser? a. It is the small business person who purchases the franchise b. it incurs no risk in the transaction c. It guarantees profits to the purchaser d. It usually stipulates the purchase of certain ingredients or equipment, pricing, and marketing efforts.
It usually stipulates the purchase of certain ingredients or equipment, pricing, and marketing efforts.
The study of a country's overall economic issues is called:
Macroeconomics
During which era was consumer orientation developed
Marketing Era
Small-business loans often used to buy equipment or operate a business are called:
Microloans
_________ is formulated by the Federal Reserve System
Monetary policy
The market structure that is most likely to be regulated by a local, state, or federal government is:
Monopoly
Which is true about the movement of supply and demand curves?
Movement along the supply curve is opposite of movement along the demand curve
How are not=for-profit organizations different from profit-seeking businesses?
Not-for-profit organizations focus on goals other than generating profits.
The right to _______ is the most basic freedom under the private enterprise system
Private Property
Which of the following inputs would NOT be considered a factor of production?
Products
Which of the following is not one of the customary services of the Small Business Administration? a. Helping businesses apply for set-aside programs b. providing management training c. helping to write a business plan d. providing direct loans
Providing Direct Loans
In which of the following market structures there are a large numbers of buyers and sellers, each of whom has some significant control over price?
Pure competition
During which stage of the business cycle does unemployment rise and inflation fall
Recession
Which era emphasizes customer satisfaction and building long-term business relationships?
Relationship era
___________ is an admired management philosophy that believes in contributing to the community and protecting natural resources.
Social Responsibility
What is the most common form of business ownership?
Sole Proprietorship
Which of the following is a major drawback of a family owned business?
Succession
How does technology support relationship management?
Technology most often takes the form of communication to manage relationships with customers
For capitalism to operate effectively, the citizens of a private enterprise economy must have certain rights. Which of the following would NOT be considered part of the private enterprise system?
The age of industrial entrepreneurs
Which era of American business is called the "golden age" because it did so much to advance the US business system and raise the overall standard of living?
The era of industrial revolution
Identify the business era during which managers began to pay more attention to what consumers wanted and needed rather than simply to what a firm could produce.
The marketing era
Which of the following is true today regarding the business workforce? a. The workforce is adequate for business despite the aging population. b. The workforce is less mobile and less flexible. c. The workforce can expect more employer loyalty to a life-long career. d. The workforce is less independent and more collaborative in nature.
The workforce is less independent and more collaborative in nature.
What is an advantage of mergers?
They allow a company to diversity and increase their customer base
Which of the following is NOT a current global risk? a. They are all current global risks b. Rising Greenhouse Gas Emissions c. Water Supply Crisis d. Mismanagement of Population Aging
They are all current global risks
What rights do owners of common stock hold?
They have voting rights but only a residual claim on the firm's assets
Not-for-profit organizations do not face any of the challenges that profit-seeking business do.
True
There is a growing concern that as Baby Boomers retire the business workforce will fall short of actual needed workers
True
True or False: A CMA certification only requires a certain level of management experience.
True
True or False: Double-entry booking states that every accounting transaction must have an offsetting transaction.
True
True or False: Not-for-profit organizations operate in both the public and private sector.
True
True or False: Relationship marketing can enhance the ability of a business to compete with other businesses.
True
True or False: The IFRS has adopted the IASB
True
True or False: The demographic method of segmenting the market is concerned with region, population, and density.
True
True or False: The not-for-profit sector is one of the fastest growing segments of accounting practice.
True
What skills are the critical skills needed by a 21st century manager?
Visionary skills, Critical thinking, Creativity
Which of the following statements is true with regards to the rights of employees in mixed market economies? a. employees are never subjected to unemployment b. the government influences career decisions for all citizens c. workers are allowed to choose labor union membership d. the government prohibits citizens from working in private enterprises
Workers are allowed to choose labor union membership
A written document that provides a statement of a company's goals, methods for achieving goals, standards for measurements is called:
a business plan
Which of the following is not a benefit to the franchiser in a franchise agreement? a. a franchiser is in control of the daily operations of a much larger business b. a franchiser employs fewer direct employees c. a franchiser can make better buying deals because of quantity purchases. d. a franchiser can handle a larger, more complex business.
a franchiser is in control of the daily operations of a much larger business
Which of the following is NOT one of the several trends challenging American businesses? a. less diverse workforce b. flexibility and mobility c. outsourcing and offshoring d. the shrinking labor pool
a less diverse workforce
Which of the following is least likely to be a small business? a. restaurant b. a construction company c. a nursing home d. an auto repair shop
a nursing home
Amtrak is an example of:
a private ownership of a for-profit corporation
Why is accounting not considered an activity of business? a. Accountants report the results of business activities performed by the three basic activities b. Accounting is not a creative function. c. Accountants are employed by outside firms, not directly by the company being audited. Accountants only look past transactions; activities are current events.
a. Accountants report the results of business activities performed by the three basic activities
Which plan below outlines its marketing strategy and includes information about the target market, sales and revenue goals, the marketing budget, and the timing for implementing the elements of the marketing mix? a. Marketing plan c. Financial plan b. Environmental plan d. Customer-oriented plan
a. Marketing plan
______ is the process of collecting and evaluating information to help marketers make effective decisions. a. Marketing research c.Cause marketing b. Distribution strategy d.Segmenting
a. Marketing research
AT&T ensured a full crowd of spectators by signing Tiger Woods to host its AT&T National golf tournament, which also honored U.S. military members. Which one of the nontraditional categories applies below? a. Organization marketing c. Person marketing b. Place marketing d. Cause marketing
a. Organization marketing
Which type of accountant is called upon to provide unbiased advice about a firm's financial condition? a. Public accountant b. Government accountant c. Certified public accountant d. Management accountant
a. Public Accountant
Why do stockholders and potential investors use accounting information? a. To make investment decisions b. To evaluate credit ratings c. To plan and control d. To evaluate tax liabilities
a. To make investment decisions
______is the power of a good or service to satisfy a want or need. a. Utility b. Exchange c. Marketing d. Barter
a. Utility
The interpersonal determinants of consumer behavior include all BUT which of the following: a. end-use influences. b. social influences. c. family influences. c. cultural influences.
a. end-use influences
Accounting plays a key role in all of the following EXCEPT: a. interpreting macro and micro analyses to report changes in the economy b. investing activities to provide valuable assets required to run a business. c. financing activities to provide necessary funds to start and expand a business d. operating activities that focus on selling goods and services, along with ensuring sound financial management
a. interpreting macro and micro analyses to report changes in the economy
The ____ is a set of activities in converting information and individual transactions into financial statements.
accounting cycle
Inventory turnover describes how efficiently a firm is managing its sales and purchases of inventory. This is an example of a(n) _____ ration.
activity
An effective business plan should include: a. the vision of the founder(s) and its mission b. description of potential customers c. a description of what makes the company unique d. all of these answers are correct
all of these answers are correct
Small businesses often fail due to: a. all of these answers are correct b. management shortcomings c. difficulty dealing with government regulations d. inadequate financing
all of these are correct
Assets include (a. cash, b. land, c. patents, d. all the above)
all the above
Entrepreneurship is:
an integral part of the private enterprise system
. ________ is part of the broader field of business intelligence, which is the task of using computer-based technology to evaluate data in a database and identify useful trends. a. Data warehousing c. Segmentation b. Data mining d. Data analysis
b. Data mining
_____ influences on consumer behavior includes individual needs and motives, perceptions, attitudes, learned experiences, and self-concept.
b. Personal
The most common form of market segmentation is: a. geographic. b. demographic. c. product-related. d. psychographic.
b. demographic
The use of regional warehouses by big box retailers is a part of their _____ strategy. a. quantity b. distribution c. pricing d. promotional
b. distribution
When two parties benefit from trading things of value, they have entered into a(n) _____ process. a. conversion c. critical b. exchange d. production
b. exchange
Tom Colicchio, a successful restaurateur and judge on the reality series Top Chef, discovered that service preferences are different in California and New York. His product should be segmented based on: a. demographics. b. geography. c. product use. d. psychographics.
b. geography
The exchange process is an activity in which two or more parties give something of value to each other to: a. make the best deal. b. satisfy perceived needs. c. maintain client relationship. d. market products.
b. satisfy perceived needs
The financial document that shows how the company's finances are doing at a particular point in time is called a(n)
balance sheet
A __________ occurs when government spends more than it raises through taxes and fees.
budget deficit
Which of the following is not part of the marketing mix? a. Production b. Price c. Distribution d. Promotion
c. Distribution
The best marketers not only give consumers what they want but also: a. offer the lowest prices. b. create form utility. c. anticipate needs before those needs surface. d. sell items that are not needed.
c. anticipate needs before those needs surface
Marketing the Special Olympics is a form of: a. person marketing. b. place marketing. c. cause marketing. d. organization marketing.
c. cause marketing
A(n)_____ consists of two or more firms combined to form one company. a. sole proprietorship c. merger b. acquisition d. joint venture
c. merger
Which of the following nontraditional marketing forms would focus on a political candidate's campaign? a. Event marketing b. Cause marketing c. Person marketing d. Organization marketing
c. person marketing
Which strategy below includes decisions about package design, brand names, trademarks, warranties, product image, new-product development, and customer service? a. Distribution strategy c. Product strategy b. Promotional strategy d. Pricing strategy
c. product strategy
Accounting is the process of: a. developing a marketing plan. b. obtaining funds for the firm's operations. c. recording, measuring, and interpreting financial data. d. producing goods and services.
c. recording, measuring, and interpreting financial data.
The era in marketing history that believed creative advertising and selling would overcome consumers' resistance is _____. a. production b. marketing c. sales d. relationship
c. sales
The marketing mix consists of all the following EXCEPT: a. product. c. target. b. price. d. place.
c. target
The _____ budget tracks the firm's cash inflows and outflows
cash
The ultimate goal of relationship marketing is:
customer satisfaction
Which of the following is an example of ownership utility? a. A convenience store stays open 24 hours a day, seven days a week. b. A bank is located across the street from the largest employer in town. c. A restaurant allows customers to create their own menu combinations. d. A furniture store offers 90-days-same-as-cash financing to qualified buyers.
d. A furniture store offers 90-days-same-as-cash financing to qualified buyers
Which of these is NOT one of three basic activities of an organization? a. Operating b. Financing c. Investing d. Accounting
d. Accounting
Which of the following is NOT a part of the marketing mix? a. Price b. Promotion c. Product d. Practice
d. Practice
Which of the following is NOT a typical method of segmenting B2B markets? a. Geographic b. Demographic c. End-use d. Psychographic
d. Psychographic
Daron's washing machine has stopped working. He has looked at Consumer Reports, talked to friends and family, and gone to several retailers to look at new machines. This weekend he will sort through the information that he has already gathered. Daron is at what stage of the consumer buying process? a. Search b. Evaluation of alternatives c. Problem recognition d. Purchase decision
d. Purchase decision
Interpersonal and personal factors affect the consumer behavior process: a. during the problem recognition stage. b. when the customer is looking for information. c. immediately before the purchase act. d. at every step along the way.
d. at every step along the way
Long-term customers buy more, require less service, and provide valuable feedback to a marketer. These elements contribute to a high: a. propensity to consume. b. relationship c. brand loyalty. d. lifetime value of a customer
d. lifetime value of a customer
Marketing creates all of the following types of utility EXCEPT: a. form. b. time. c. place. d. ownership.
d. ownership
The marketing concept: a. works best during a seller's market. b. is ineffective in the age of Internet transactions. c. focuses on producing products at a reasonable cost in large batches. d. refers to a companywide customer orientation to promote long-run success.
d. refers to a companywide customer orientation to promote long-run success
The Census Bureau is a major source of ______ data for marketers. a. primary b. internal c. proprietary d. secondary
d. secondary
A merger between two companies in different levels of the production and marketing of a product is called a(n) _____ merger. a. joint b. industry-dominate c. horizontal d. vertical
d. vertical
If labor hours increase, the amount of natural resources used remains the same, and output remains constant, productivity is said to have:
decreased
Cooperatives allow members to: a. share equipment b. benefit from group purchasing discounts c. share of other efforts such as marketing d. do all of these
do all of these
What does a corporation have to incur that a partnership and sole proprietorship do not?
double taxation on corporate earnings
Core inflation rate is the inflation rate of an economy after _______ and ______ prices are removed
energy; food
An ___________ is a risk taker in the private enterprise system
entrepreneur
How many shareholders does a S corporation have?
fewer than 100
Natural resources include all of the following EXCEPT: a. building sites b. land c. mineral deposits d. financial capabilities
financial capabilities
A corporation that is doing business in states other than the state in which it has filed incorporation papers is called a:
foreign corporation
Donna is a forensic accountant who has been hired by the local district attorney to investigate a possible case of embezzlement. She found boxes of records that suggest several thousands of dollars of vendor payments might have been falsified. The effect of those false transactions would probably show up as
higher expenses on the income statement
A _____ combines firms of the same industry that wish to diversify, increase their customer base, cut costs, or offer expanded product lines
horizontal merger
Many former owners of failed firms blame ______ for their company's failure.
inaccurate budgeting
A firm's ability to meet its short-term obligations is measured by
liquidity ratios
Which of the following risks does the franchiser take on in a franchise agreement? a. loss of money for several years. b. loss of control over every aspect of the business c. loss of absolute control of operations d. all of these answers are right
loss of absolute control of operations
Capital Includes:
money that a firm raises for expansion
A cash budget is usually prepared once a _____
month
To cover the budget deficit, the government of a country borrows money by selling Treasury bills, Treasury notes, Treasury bonds to investors. All of this borrowing is referred to as the _______.
national debt
The US Postal Service and the American Heart Association are called __________
not-for-profit organizations
New competitors are discouraged in an oligopoly primarily because:
of the high start-up costs that form barriers to entry
Small businesses account for nearly ________ of US exports to the World Market
one third
The internet has made possible another business tool for staffing flexibility: __________, or using outside vendors to produce goods to fulfill services and functions that were previously handled in-house or in-country.
outsourcing
What does managing customer relationships instead of focusing on transactions do?
requires added personnel and reduces organizational flexibility
A ___________ reduces the money supply to curb rising prices, over-expansion, and concerns about overly rapid economic growth.
restrictive monetary policy
Which of the following does not grant direct loans to small businesses? a. commercial banks b. small business investment companies c. small business administration c. private lenders
small business administration
A(n) _____ shows the change in net worth from the end of last fiscal year to the end of the current one
statement of owner's equity
A __________ is a partnership formed to create competitive advantages for the businesses involved
strategic alliance
The procedure by which accountants convert data about individual transactions to financial statements is called
the accounting cycle
Economics is the study of:
the choices people and governments make when allocating scarce resources.
The financial statement that describes a firm's financial performance over a specified period of time is
the income statement
Who owns the corporation?
the shareholders
Small businesses are more likely than large ones to hire:
the youngest workers
The primary purpose for developing a business plan is:
to obtain financing for the business
_______ out of every three new jobs are created by small business.
two
Because of the boom in worldwide trade, there is a need for comparability and ______ in international accounting rules.
uniformity