Business 1301: Exam 2 Practice Questions
The assets of Prosian Italia, a marble and granite company, amount to $400 million, and its liabilities add up to $180 million. Based on the accounting equation, Prosian Italia's owners' equity is equal to _____.
$220 million
Which of the following is a difference between a C corporation and an S corporation?
A C corporation is double taxed, whereas an S corporation is taxed as a partnership.
When George, an American, went to represent his company in a global conference that was being held in Germany, he was unaware of the social practices of the host country. While talking to a German representative, he used the "ok" gesture, which created tension and uneasiness between him and the German representative. Which of the following communication barriers did George most likely face in the given scenario?
A cultural barrier
In the context of various funding options for small businesses, which of the following statements is a difference between angel investors and venture capital firms?
Angel investors are wealthy individuals, whereas venture capital firms are companies.
Bill, a marketing analyst in Godren Inc., is required to address all employees of the company on their sales targets for the next fiscal quarter. To help employees get a clear understanding of their targets and reduce any pressure on them, Bill decides to use several jokes and innuendos that are not received well by his supervisors. In the given scenario, which of the following communication guidelines does Bill not take into consideration?
Avoid slang.
Kenneth prepares a PowerPoint presentation for the board meeting by adding only the essential information and discarding any unnecessary details that could confuse the board members. He ensures to keep his sentences short but not at the expense of completeness. In the given scenario, which of the following communication guidelines is Jeffrey following?
Be concise.
Lawrence wants to pursue a law degree in a renowned law school in her city. She writes an application to the dean of the school. However, she is unsure if the dean is male or female, and therefore, she decides to address the dean by his or her official title. In this scenario, which of the following biases is Lawrence avoiding?
Gender bias
Howard is a young entrepreneur who is invested in creating a new form of social media. He is sure of his idea and believes that it will be successful in the long run. However, he is careful not to be overoptimistic about it and works on other ideas as well. In the given scenario, which of the following statements is true of Howard?
He is confident but not overconfident regarding his abilities.
In the context of limited partnerships, which of the following is an aspect that differentiates limited partners from general partners?
Participation in the management of a company
Which of the following statements is true of business emails?
Response to emails should be as prompt as possible.
Which of the following practices should ideally be followed when giving a business presentation?
Telling the audience the key points before launching into the body of the presentation.
Raoul is an illiterate who does not have proper skills for any job. As a result, he is unable to find permanent employment. As a last resort, Raoul starts a diner in his home to earn a regular income for his family. In the given scenario, Raoul most likely started the diner because it offered _____.
a chance of survival
A sole proprietorship is a form of business ownership in which:
a single owner actively manages the company.
Mixter Prix, a multinational company, wants to hire a new salesperson. It posts a job advertisement in a newspaper that states that the company is looking for an older individual who is creative and has a graduate degree in marketing. In the given scenario, Mixter Prix's advertisement shows _____.
age bias
The management of Minstrel Magik, an event management company, ensures to use gender-neutral language in its emails to both customers and employees. In the given scenario, it can be inferred that the management follows the business communication guideline of _____.
avoiding bias
Michael has excellent oratory skills. He is well-spoken and very innovative. However, people are often distracted by his odd mannerisms while speaking, such as his constant foot movement, his slouched posture, and his habit of biting nails. In the given scenario, people get distracted because of _____ to communication.
body language barriers
When writing high-impact messages, a _____ is an invaluable tool that you can use to engage your reader's attention whenever you have more than one of anything in your writing.
bulleted list
In the context of balance sheets, accounts receivable is an example of__________.
current assets
A premium brand of men's wear introduces a new range of dinner suits and licenses its franchisees to sell this product. However, the brand retains the production rights. This scenario exemplifies a(n) _____.
distributorship
People with an external locus of control:
feel buffeted by forces such as random luck.
Olivia, the CEO of a company, uses words such as "she" and "her" to refer to a manager or an employee in the general sense. She also uses feminine examples in all her emails to the entire company. As a result, the male employees of the company feel excluded. Given this information, it can be concluded that Olivia shows _____.
gender bias
CofBean Corp. and Coffeedust Inc. are leading producers and distributors of coffee beans. They join together to become the world's largest distributor of coffee. This association allows the amalgamated company to increase its size and market power within the coffee industry. This is an example of a(n) _____.
horizontal merger
IFGI Life Insurance, an insurance company, is one of the stockholders of a pharmaceutical company. Given this information, IFGI Life Insurance is most likely a(n) _____.
institutional investor
The employees of an information technology company complain that the company has been spending a lot of funds in wasteful activities, such as office renovation, instead of revising the employees' salaries. In this case, the company should hire a(n) _____ to keep a check on the company's expenses and prevent the problem from aggravating.
internal auditor
Fiona, an industrial psychologist, is asked to give a presentation on the benefits of healthy colleague relationships to the employees of a textile company. In her presentation, Fiona uses various technical terms, all related to the subject of psychology, because of which the employees find it difficult to understand her and quickly lose interest in the presentation. In the given scenario, the employees of the textile company face a(n) _____ to communication.
language barrier
FoodieGo, a catering company, is owned by foreign investors and local businessmen. Its earnings are equally divided among its members. It does not face the problem of double taxation as taxes are only levied on the personal income of the members. The owners of FoodieGo do not have personal liability for any debts incurred by the company. In the given scenario, FoodieGo is an example of a _____.
limited liability company
Sidney is a member of the Financial Accounting Standards Board (FASB) and is entrusted with the responsibility of establishing accounting principles in the United States. As a member of the board, Sidney:
must sever all ties with any firms or institutions that she served prior to joining the board.
In low-income countries, a high percentage of entrepreneurs are considered__________.
necessity entrepreneurs
The management of a sugar manufacturing company sets aside a sum of $50,000 in its budget for the purchase of new machinery that would double the production. In the given scenario, the management is in the process of planning the _____ of the company.
operating budget
Callie, an assistant supervisor in an automobile company, wants to actively contribute to the growth of the company by suggesting some changes in its administrative policies. However, she does not get the opportunity to do so because of a high power distance in the company. In the given scenario, Callie faces a(n) _____.
organizational barrier
The employees of Marconium Inc. often feel that they cannot comment on the management of the company even though there is no rule that prevents them from being critical about the management. In the given scenario, the employees of Marconium Inc. are facing a(n) _____.
organizational barrier
Bertha runs a fashion boutique. She prefers to personally interact with her customers to gauge the styles that would suit their personality. Her customers also prefer talking to her in person to share their preferences in colors, designs, styles, and fabric as they value her suggestions. The opportunity of _____ is highlighted in the given scenario.
providing personal customer service
Luke works in an accounting firm that offers services such as tax preparation and external auditing to corporate companies. Luke is currently providing consultation to a client that deals in automobile parts. In this scenario, Luke is most likely a:
public accountant.
Miguel has an idea for a new project management software application that can enhance the efficiency of his unit's operations. His supervisor has asked him to present his ideas to the entire unit. Miguel is excited about the opportunity, however, he is a little nervous because he has never presented in front of a big audience, such as his project unit. To mitigate his speech anxiety, Miguel should:
remind himself that his project unit wants him to succeed.
Lucile, the head of a project, starts her presentation on the project by comparing each team member's work to that of a mountaineer climbing the highest peak in the world. In the given scenario, Lucile uses a(n) _____ to open her presentation.
simile
Ashley, a manager at a toy manufacturing company, needs to create a financial document for the company that would show how the company's operating, investing, and financing activities are expected to affect the asset, liability, and owners' equity accounts. To prepare this document, Ashley needs to collect data from:
the budgeted income statement, the capital expenditure budget, and the cash budget.
Brian has decided to supplement his job application to Wendenlt Corporation with a cover letter to the senior manager of human resources. However, he knows neither the name nor the gender of the senior manager he wishes to address. In this scenario, which of the following is the most appropriate way Brian can address the recipient without displaying gender bias?
"Dear Senior Manager of Human Resources"
Which of the following is a difference between limited partnerships and limited liability partnerships?
In limited liability partnerships, all the partners actively participate in the management of the company, whereas in limited partnerships, only the general partners actively manage the company.
In the context of creating and delivering successful verbal presentations, which of the following statements is true of dynamic delivery?
It begins and ends with preparation.
Gemini Inc., a large conglomerate, offered Timothy's new logistics company the much required financial support in exchange for a 40% ownership in the company. It also provided Timothy with an experienced group of people to help him make crucial decisions for the company. In the given scenario, which of the following statements is true of Gemini Inc.?
It is a venture capital firm.
The owners of limited liability companies (LLCs) are called members because:
LLCs are neither corporations nor partnerships.
David wants to open a new gymnasium with state-of-the-art equipment and qualified trainers. However, he can only afford either of the two. He decides to get the equipment first to start the gym. However, without qualified trainers to operate the equipment, David loses his customers and is forced to shut down the gym. Which of the following threats is most likely highlighted in the given scenario?
Too little money
Timothy wanted to start a coffeehouse. However, he could not buy a space to start his business because of lack of funds. Which of the following threats is highlighted in the given scenario?
Too little money
The total assets of a dairy products manufacturing company are calculated. However, a sum of $5 million from the value of the company's property, plant, and equipment assets is not taken into account as the machinery is bound to become unusable after a certain period of time. In the context of balance sheets, the amount of $5 million that is subtracted from the original value of the total assets is called _____.
accumulated depreciation
In the event that a large company has to downsize, the middle-aged workers who are laid off find it difficult to find new jobs. When such workers decide to start their own businesses, they:
are called necessity entrepreneurs.
In the context of balance sheets, resources owned by a firm are known as__________.
assets
Before starting his presentation on the benefits of taxi services, Mark engages the spectators by asking them to imagine themselves driving in a drunken state. He goes on to ask them the possible outcomes that they can imagine. This exercise ensures that Mark gets the spectators' complete attention. In the given scenario, Mark uses _____ to open his presentation.
audience involvement
Maverk, a human resources manager at a multinational company, has to explain the ethical policies of the company to a batch of new employees. To convey that the company has a low power distance, he says, "The manager who loses his temper must apologize." From the given statement, it can be inferred that Maverk does not follow the business communication guideline of _____.
avoiding bias
Three brothers of a family own a furniture showroom. Each of them is actively involved in handling the day-to-day business activities. However, when the business suffered huge losses at the end of the last fiscal year, the personal wealth and assets of the brothers did not get affected. This is most likely because the brothers have a:
limited liability partnership.