BUS 414 TEST 3 SMALL BUS MAN

When a business needs cash for marketing or cash for building inventory levels, their financial management needs are

financing for growth

Which of the following is true of theories based on the bounded rationality models?

it assumes that people are inefficient processors of information

In the accounting equation, assets equal

liabilities plus owners equity

________ is a measure of how quickly a company can raise money through internal sources by converting assets to cash.

liquidity

ways for a bus to increase their cash inflow

sales that are paid immediately for cash

factoring

selling the rights to collect accounts receivable to an entity outside your bus - borrowing money from a bank or financial institution for a loan with collateral or accounts receivable

In ________, products are sold to foreign buyers or distributors without any intermediaries.

direct exporting

________ uses creative and relatively inexpensive ways such as door-knob hangers, T-shirts, balloons, flyers under windshield wipers to reach customers.

guerilla marketing

Which of the following is an example of debt financing?

incubators

A charge for the use of money, usually figured as a percentage of the principal is called

interest

The first step in preparing a master budget is to prepare a ________ budget.

sales

Which of the following statements is true of service locations?

services at a remote location can be located anywhere in the world

The rule of thumb for evaluating current ratio is that the minimum acceptable ratio is

2.0

Sales promotion techniques used to introduce your brand to customers without an immediate call to purchase are ________ techniques.

contest

In breakeven analysis, the price of one unit minus the variable cost of one unit is called the

contribution margin

A legal "artificial" entity that is formed by filing specific documents with a state government is called a

corporation

Money contributed to businesses in return for part ownership of the business is called

equity capital

________ is a set of theories and techniques used to optimize the receipt and use of capital assets.

financial management

Uncertainty of returns in a business is referred to as

financial risk

grant

gift of money made to a bus for a specific purpose

The ________ layout has aisles running from the front of the store to the back like the typical grocery, discount, or convenience store.

grid

liabilities

legal obligations to give up things of value in the future

Any debt that must be paid in less than one year from the date of the financial statement on which it is reported is considered

short-term debt

Which of the following is more indicative of a business's financial strength?

short-term investments

Which of the following is defined as the practice of "pocketing" money from customers and hiding the theft by not recording the sale?

skimming

consignment

the practice of accepting goods for resale without taking ownership of them and without being responsible to pay prior to their being sold

what do small bus do to handle money shortages

use personal money

gift

valuable assets or services donated to the bus without any obligations to repay or give up any ownership interest

The difference between an actual and budgeted revenue or cost is called

variance

intermediaries

wholesalers and retailers are both ex as well as location Walmart

Which of the following is not an example of a direct sales method?

word of mouth

In microinventories, you try to buy your product or prepare your service after

you get an order

In ________, an advertisement is placed in a magazine, newspaper, radio, billboard, or television and includes an order blank with a phone number, e-mail, or snail-mail address with the intent of having customers place immediate orders.

direct repose advertising

________ uses agents, export management companies, or export trading companies as intermediaries to handle most of the exporting process.

indirect exporting

A ________ is a document issued by a bank that guarantees a buyer's payment for a specified period of time upon compliance with specified terms.

letter of credit

cash

money that is immediately available to be spent

Services at a ________ often have too much specialized equipment to be readily transported and a need for at least some client involvement.

mutually accessible location

overdraft

nothing Occurs when money is withdrawn from a bank account and the available balance goes below zero

Which of the following is a technique used by a small business to increase cash inflows?

offering discounts for prompt payments

Amounts owed to vendors for merchandise or services purchased on credit are called

payables

The accounts that are not revenue and expenses (such as cash, accounts receivable, notes payable, etc.) are called ________ and are kept in balance at all times.

permanent accounts

________ refers to family or friends letting you add your purchases with theirs in order to get lower prices.

piggybacking

direct response advertising

placing an advertisment in a magazine or newspaper on tv or radio or in any other media the ad contains an order blank with a phone number and email or regular mail address with the intent of having the customer place an immediate order

Which of the following layouts is most appropriate for low-volume, flexible manufacturing?

process layout

________ refers to amounts that are owed to a business for merchandise that was sold on credit.

receivables

After ________, the corrected bank balance and corrected book balance will be identical.

reconciling

Which of the following terms refers to the accounting process that identifies the causes of all differences between book and bank balances?

reconciling

A ________ is a concession which covers the time while you prepare your location prior to opening.

rent-free use period

A(n) ________ is a middleman business which sells to consumers or end-users of a product, typically in single or small quantities.

retailer

The sum of all profits and losses, less all dividends paid since the beginning of the business is called

retained earnings

Skimming

setting a price at the highest level the market will bear usually because there is no competition at the time Develop a new product and have price really high but when competitors join the market lower prices

discounting

discounted cash flows- cash flows that have been reduced in value because they are to be received in the future discounts for prompt payments - a reduction in sales price provided to credit customers for paying outstanding amounts in a timely manner

Revenue-producing tasks and activities related to, but not part of, the primary strategy of a business, are called

noncore projects

Which of the following accounting functions ensures that the employment taxes are kept current?

payroll records

The level of probability that an investment will not produce expected gain is called

risk

Which of the following statements is true of nondirect distribution?

A product's final price is more than the manufacturing cost if intermediaries are involved.

Which of the following accounting functions has been accurately described?

Accounts payable records help to make timely payments in order to capture prompt pay discounts and to maintain a good credit rating for the business.

Which of the following is true of high customer contact businesses?

Businesses providing a strong contrast to existing competition in the same area increase customer traffic.

Which of the following statements is true of low customer contact businesses?

Empowerment zones offer special support to companies locating there.

Legal obligations to give up things of value in the future are known as

LIABILITIES

To perform ________ analyses, only cash flows are considered.

NPV

Which of the following statements is true when setting up your accounting system?

The actual task of setting up an accounting system is quite easy if you understand accounting a bit.

Which of the following statements is not true of preparing pro forma financial statements for your business plan?

The financial projections in your business plan are not useful for day-to-day management of your business.

Which of the following is a difficulty that arises in understanding and interpreting the income statements?

There are disputes over when to recognize revenues.

credit reporting agency

a bus that collects collates and reports information concerning an entity use of debt

________ is a schedule of the amounts and timings of the cash coming into a business.

a cash receipts budget

interest

a charge for the use of money usually figured as a percentage of the principal

growth trap

a financial crisis that is caused by a bus growing faster than it can be financed

budget

a financial plan for the future based on a single level of operations a quantitative expression of the use of resources pessary to achieve a bus strategic goals

sales promotion

a form of communication that encourages the customer to act immediately such as coupons sales or contest

financial accounting

a formal rule-based set of accounting principles and procedures intended for use by outside owners investors banks and regulators

Which of the following answer options describes a target price set by a manufacturer for a product or service intended to provide profit for each intermediary in the distribution channel?

a manufacturer's suggested retail price

liquidity

a measure of how quickly a company can raise money through internal sources by converting assets to cash - how quickly you can get cash by taking other assets and turning it into cash

Markup Pricing

a pricing-setting method where an amount is added to the cost of a product to set the retail price and provide a profit ( take product then markup price for what you bought it for -if you plan to have discount soon- most commonly used pricing systems

Many businesses have either relatively few large sales events or highly seasonal sales that complicate forecasting cash inflows. Which of the following is not an example of such a company?

a restaurant

balance sheet

a statement of what a bus owns (assets) what it owes to others (liabilities) and how much value the owners have invested in it (equity)

income statement

a statement that lists revenues and expenses and shows the amount of profit a bus makes for a specified period of time

external reference price

an estimation of what a price should be based on information external to a consumer such as advise advertisements or comparison shopping price range in mind compared to competitors

wholesaler

an intermediary bus that buys (typically in large quantities ) and sells (typically in smaller quantities ) to bus rather than customers

Retailer

an intermediary bus that sells to consumers or end users of a product (typically in single or small quantities )

short term debt

any debt that must be paid in less than one year from the date of the financial statement on which it is reported

Financial management requires that you have some method to measure and compare your financial position and financial results. Your financial position is reflected on your ________, your financial results on your ________.

balance sheet, income statement

Putting two or more of the same or different products or services together and selling for a price somewhat under the products' individual prices is

bundling

Money that is immediately available to be spent is called

cash

A(n) ________ identifies when, how, and why money is expected to come into the business, and when, how, and why it is expected to leave.

cash budget

A reduction in the bank account of a merchant by a credit card company is termed

charge back

Something of value given or pledged as security for payment of a loan is called

collateral

Aaron, a businessman, has a method of keeping track of accounts receivable by sorting them into groups of those that are 30, 60, 90, and over 90 days past due. Aaron decides to sell long delinquent accounts to a collection agency. Which of the following actions will the collection agency which buys the delinquent accounts from Aaron do?

collect the entire amount owed and keep all the money it obtains

bundling

combining two or more products in one unit and pricing it less than if the units were sold separately EX- Amazon prime with other products and services

Restrictions imposed by loan contracts on the operations of a business, such as requiring that a specific minimum net worth be maintained, a specific debt-to-equity ratio not be exceeded, no dividends be paid to stockholders and so on, are known as

loan covenants

secured debt

loans that provide the lender with the legal right to seize specific assets in the event of nonpayment most automobile loans are secured debt and if you don't make your payments your car will be repossessed

________ is probably the most widely used of the many pricing methods available.

markup pricing

Which of the following are SBA-approved partners who offer guaranteed loans under $50,000 to eligible small businesses?

micro lender

collateral

something of value given or pledged as security for payment of a loan collateral may consist of finial instruments such as stocks bonds and negotiable paper or of physical goods such as trucks machinery land or buildings

________ is an accounting approach based on specific accounting requirements set by governmental taxing agencies.

tax accounting

Direct reductions in the amount of taxes that must be paid, dependent upon meeting some legal criteria are referred to as

tax credits

Which of the following is considered an investing activity?

the acquisition of equipment

risk

the level of probability that an investment will not produce expected gains

financial risk

uncertainty of returns of returns the probability of losing money

managerial accounting

accounting methods that are specificantly intended to be used by managers for planning directing and controlling a bus

payables

amounts owned to vendors for merchandise or services purchased on credit ( also receivables )

receivables

amounts that are owed to a bus for merchandise that was sold on credit

A business that collects, collates, and reports information concerning an entity's use of debt is referred to as a(n)

credit reporting agency

For a business to factor receivables, the ________ must have good credit ratings.

customers

________ make up most of the noncurrency cash which is available immediately.

demand deposits