BUSAD 250 EXAM 1

strategy for the use of government revenue collection and spreading to influence the business cycle

Fiscal Policy

an economic system in which decisions about what to produce and in what quantities are decided by the market's buyers and sellers

Free market

A team whose members come from a single functional department which is based on the organization's vertical structure

Functional team

Understand how individuals and groups utilize accounting information to evaluate the performance of a business.

GAAP and IFRS- because of Sarbanes-Oxley

Companies that create value by making "things," most of which are tangible (capital intensive)

Goods producing businesses

the 3 types of businesses

Goods producing businesses Service businesses Not for profit organizations

Identify the 5 various forms of economic systems

Economic System free market Capitalism Planned Socialism

Explain the 3 various roles and responsibilities of Accounting.

Financial Accounting: the area of accounting concerned with preparing financial information for users outside the organization Management accounting: the area of accounting concerned with preparing data for the use by manages within the organization Audit: formal evaluation of the fairness and reliability of a client's financial statements

Identify the elements of professionalism and understand how employees can practice professionalism in the workplace and avoid unprofessional behavior

1. Be Ethical Be Clear: listen actively, clarify expectations and responsibilities 2. Be Respectful: expected norms of behavior in any particular situation 3. Be a Team Player: showing loyalty to your organization and protecting your employer's reputation 4. Be Dependable 5. Be the best: energy, either positive or negative is contagious

Identify the 2 types of team conflict and pros and cons of each.

1. Constructive Conflict: Brings important issues into the open, increases the involvement of team members, and generates creative ideas for solving a problem 2. Destructive Conflict: Diverts energy from more important issues, destroys the moral of teams or individual team members, or polarizes or divides the team

Explain the stages of team development and characteristics associated with each stage

1. Forming 2. Storming 3. Norming 4. Performing 5. adjourning

Understand what a business model is and what insights it provides about a business

A concise description of how a business intends to generate revenue

a measure of the time a company takes to turn its accounts receivable into cash, calculated by dividing sales by the average value of accounts receivable for a period

Accounts receivable turnover ratio

Understand the advantages and disadvantages associated with working on a team.

Advantages: Higher quality decisions, Increased Diversity of views, Increased commitment to solutions and Changes, Lower levels of stress and destructive internal competition, Improved Flexibility and responsiveness Disadvantages: Inefficiency, groupthink, diminished individual motivation, structural disruption, excessive workloads

Explain what benefits are associated with an agile organization.

Agile organization: a company whose structure, policies, and capabilities allow employees to respond quickly to customer needs and changes in the business environment

Calculate the level of Assets, Liabilities or Owner Equity on a balance sheet using two balance sheet data points.

Assets: any things of value owned or leased by a business Liabilities: claims against a firm's assets by creditors Owners' equity: the portion of a company's assets that belongs to the owners after obligations to all creditors have been met Assets - Liabilities = owners' equity

Explain the various forms of financial statements prepared by accounting and how each is used.

Balance sheet: a statement of a firm's financial position on a particular date Income Statement: a financial record of a company's revenues, expenses, and profits over a given period of time. Statement of Cash flows: a statement of a firm's cash receipts and cash payments that presents information on its sources and uses of cash

Explain the 3 various types of business cycles and the characteristics of each.

Business cycles: fluctuations in the rate of growth that an economy experiences over a period of several years. Recession- a period during which national income, employment, and production all fall; defined as at least six months of decline in the GDP Unemployment rate: the portion of the labor force (everyone over 16 who has or is looking for a job) currently without a job

Understand what capital is and how it is used in a business.

Capital: the funds that finance the operations of a business as well as the physical, human-made elements used to produce goods and services, such as factories and computers

economic system based on economic freedom and competition

Capitalism

Identify the characteristics of an effective team.

Clear sense of purpose, open and honest communication, creative thinking, accountability, focus, decision by consensus

Understand the differences between a competitive advantage and a barrier to entry

Competitive Advantage- something that makes the product more appealing to customers, EX: Target has a footmark all around the nation because of how many stores they have Barrier to Entry- any resources or capability a company must have before it can start competing in a given market, a thing another company has that I don't, EX: Cash, Access, Knowledge

A team that draws together employees from different functional areas

Cross- functional team

a measure of a firm's short-term liquidity, calculated by dividing current assets by current liabilities

Current Ratio

Understand the 4 various forms for financial ratios

Current Ratio Quick ratios Inventory Turnover Ratio Accounts receivable turnover ratio

Explain the relationship between consumer demand for a product and price as it relates to the demand curve.

Demand Curve: a graph of the quantities of a product that buyers will purchase at various prices

the 5 business environments

Economic Environments Social Environments Legal and regulatory Environments Technological Environments Market Environment:

are we in a growth period? How is that going to translate into workers and need for my product? `

Economic Environments:

the policies that define a society's particular economic structure; the rules by which a society allocates economic resources

Economic System

target customers, buying influences, and competitors

Market Environments

Understand what a business stakeholder is and who they may be

Internal and external groups affected by a company's decisions and activities

a measure of the time a company takes to turn its inventory into sales, calculated by dividing cost of goods sold by the average value of inventory for a period

Inventory Turnover Ratio

Understand the difference between leading and lagging economic indicators.

Leading Indicators: early indicators showing economy is growing Lagging indicators: After the fact indicators proving that the economy did go up

minimize regulations on business and allow them to operate, since the banking crisis the regulations on the banks skyrocketed

Legal and regulatory Environments

government policy and actions taken by the Federal Reserve Board to regulate the nation's money supply

Monetary Policy

the two forms of policy utilized by the government to stabilize and stimulate the economy.

Monetary Policy Fiscal Policy

a situation in which many sellers differentiate their products from those of competitors in at least some small way

Monopolistic Competition:

a situation in which one company dominates a market to the degree that it can control prices

Monopoly

Organizations that provide goods and services without having a profit motive; these are also called nonprofit organizations

Not for profit organizations

a market situation in which a very small number of suppliers, sometimes only two, provide a particular good or service

Oligopoly

Explain the concept of opportunity costs and how it is used in the evaluation of investment alternatives.

Opportunity Cost: The value of the most appealing alternative not chosen

Identify what document is used to present an organizational structure and explain what would cause a business to change its structure

Organization chart: A diagram that shows how employees and tasks are grouped and where the lines of communication and authority flow

Understand the various types of organizational structures and associated terminology.

Organization structure: a framework that enables managers to divide responsibilities, ensure employee accountability, and distribute the decision-making authority (organization chart) Agile Organization: a company whose structure, policies, and capabilities allow employees to respond quickly to customer needs and changes in the business environment

Economic system in which the government control most of the factor of production and regulates their allocation

Planned

A team that meets to find ways of improving quality, efficiency, and the work environment

Problem solving team

5 types of business teams

Problem solving team Self-Managed Team Functional team Cross- functional team Virtual team

Identify the 4 various categories of competition in a free market system

Pure Competition Monopolistic Competition Monopoly Oligopoly

a situation in which so many buyers and sellers exist that no single buyer or seller can individually influence market prices

Pure Competition:

a measure of a firm's short-term liquidity, calculated by adding cash, marketable securities, and receivables, then dividing that sum current liabilities

Quick ratios

Define the following financial statement terms: Revenue, Gross Profit, Net income

Revenue: money that a company brings in through the sale of goods and services Expenses: costs created in the process of generating revenues Net Income: profit earned, or loss incurred by a firm, determined by subtracting expenses from revenues Gross Profit: the amount remaining when the cost of goods sold is deducted from net sales

A team in which members are responsible for an entire process or operation

Self-managed team

Companies that create value by performing activities that deliver some benefit to customers (labor intensive)

Service businesses

economic system characterized by public ownership and operation of key industries combined with private ownership and operation of less-vital industries

Socialism

Explain the relationship between supplier quantity offered for a product and price as it relates to the supply curve.

Supply Curve: a graph of the quantities of a product that sellers will offer for sale, regardless of demand, at various prices

When's the next technology going to come on the scene? You have to invest in your company to keep gaining on the market EX: Cell Phones

Technological Environments

Explain economics and how it is used in society.

The study of how a society uses its scarce resources to produce and distribute goods and services

A team that uses communication technology to bring together geographically distant employees to achieve goals

Virtual team

Explain business risk and reward and the consequences of decisions that contain excessive risk

a. page 8 of notes

Population trends, ethnic groups changing, how does that change the desire for my product?

social environments