Business In Society Midterm Review

An effective business plan is usually

25-50 pages long and take about six months to write.

_____________ is a system for recognizing, analyzing and reporting about the financial transactions that affect and organization.

Accounting

Which of the following is used to verify the financial statements of a firm?

An independent auditor's report

__________________ are wealthy individuals who invest in startup companies with high growth potential in exchange for a share of ownership.

Angel investors

The accounting equation is

Assets = Liabilities + Owner's Equity

Which of the following types of business-to-consumer (B2C) market segmentation refers to dividing the market based on how people respond toward various products?

Behavioral segmentation

Which of the following is a similarity between venture capital firms and angel investors?

Both invest in startup companies with high growth potential in exchange for a share of ownership.

Small businesses have no need to be concerned about the global environment.

False

The technological environment is less important to small business than it is to large businesses.

False

_______________ accounting is the branch of accounting that addresses the needs of external stakeholders, including stockholders, creditors and government regulators.

Financial

Which of the following does a business plan provide a small business?

Focus

Which of the following business-to-business (B2B) market segmentation is especially common on an international basis, where variables such as language, culture, income, and regulatory differences can play crucial roles?

Geographic segmentation

___________ is the difference between a firm's revenue and its cost of goods sold.

Gross profit

Which of the following statements is most consistent with the marketing view of the relationship era?

It is much less expensive to retain an existing customer than to acquire new customers.

Which of the follow bodies assists entrepreneurs by guaranteeing loans from local commercial lenders?

Small Business Administration.

Which of the following is a reason why small businesses produce more patents per employee than large businesses?

Small businesses often display a refreshing lack of bureaucracy that allows new thinking to take hold.

Which of the following is not true about the impact of small business on the U.S. economy?

Small businesses provide greater employment stability than large firms in times of economic hardship.

___________________ is an economic system based on the principle that the government should own and operate key enterprises that directly affect public welfare.

Socialism

Which of the following is a difference between a socialist economic system and a pure communist economic system?

Socialism controls social welfare. Pure communism controls everything.

Which of the following is a reason why many members of the European Union have low entrepreneurship rates?

These nations provide a high level of employment protection and strong unemployment insurance.

A core goal for successful businesses is to deliver value to customers while generating long-term profits.

True

Even though nonprofit organizations are not in business for a financial gain, they are still businesses in every other sense.

True

Market research involves gathering, interpreting and applying information to uncover opportunities and challenges for business.

True

Fair competition among businesses

drives higher quality and lower prices in capitalism

Cash flows from _____________________ activities show the cash a firm received from issuing additional shares of its own stock.

financing

Small business start-ups are likely to find that getting commercial loans is

hard to do because commercial lenders are reluctant to loan to firms that don't have an established record of successful performance.

The ______________ is a financial statement that reports the revenue, expenses and net income that resulted from a firm's operations over an accounting period.

income statement

Laurie is starting a new business. She has to develop a marketing strategy by identifying similar characteristics, attributes, and behaviors of the target market and then group the customers according to these characteristics, attributes and behaviors. The term used to describe Laurie's strategy is:

market segmentation.

Brittany is the marketing manager for a large Midwest-based manufacturer of food products. She is in the process of developing the ___________________________, which takes into consideration the marketing strategies for product, price promotion and place (i.e., distribution).

marketing mix

When firms in B2C (business-to-consumer) markets divide up the potential market according to consumer attitudes, interests, values and lifestyles, they are making use of _______________________ segmentation.

psycho-graphic

Supply

the quantity of products that a producer will make for a specific price.

Which of the following refers to the claims that stockholders have against their firm's assets?

Owners' equity

The primary reason many people become entrepreneurs is to

make more money.

The amount of goods and services produced by an economy divided by the amount of resources used to make those goods and services equals

productivity

New research shows that small businesses are

the backbone of urban economies

Demand

the quantity of products consumers are willing to pay at different prices.

When entrepreneurs fail, they tend to

view failure as a chance to learn.

____________________ typically require accounting information of a firm to evaluate its ability to pay back its loans by analyzing the firms financial statements.

Creditors

Which of the following is a vital starting point for most marketers?

Demographics

_____________________ are people who risk their time, money, and other resources to start and manage a business.

Entrepreneurs.

_________________ refers to the cash spent by a firm to carry out business activities and generate revenue.

Expenses

Economic factors are not as important to non-profit organizations as they are to for-profits.

False

For profits are understandably less concerned about trends in the social environment.

False

Non-profits have no need to be concerned about the competitive environment.

False

Which of the following is an advantage of a business plan?

It is crucial to obtain outside funding.

_____________________ work with an organization, prepare reports and analyze financial information such as budgets and cost management.

Management accountants

__________________________ is an organizational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and it's stakeholders.

Marketing

___________________ refers to actions that shape the economy by influencing interest rates and the supply of cash.

Monetary policy

Capitalism, as an economic system, has many advantages and disadvantages. Describe some of these advantages and disadvantages.

One advantage to a capitalism system is that the private sector businesses are able to make their own choices in regards to what they produce, how much they charge, and who they will hire and/or fire in the long term. Having stated that, consumers are also "able to make their own choices and what they will buy, how much they are willing to pay, and where they will work." One disadvantage of capitalism is that if companies don't keep up with the value that the consumers want, the consumers can choose to go elsewhere and this would cause businesses, in short, to fail.

Planned economies have their advantages and disadvantages, as do free market economies. Why do global economists believe that most global economic powers are moving towards "mixed economies"?

One reason why most global economic powers are now moving towards a "mixed economies" is because A pure economy fall short when attempting to meet the needs of the citizens that it is serving and it does not create enough value in the long run. A mix economy also allows for governments to own numerous enterprises that provide an abundance of jobs for the government. It also allows for the simulation within the government for competition and protects the governments consumers and workers.

Why must organizations of all kinds be open to changes that are taking place in the "business environment"?

Organizations must be open to change as a way to stay innovative. When organizations are innovative, it allows the, to not only stay relevant in the business environment but also allows them to positively contribute to society.

Which of the following would be listed in the owners' equity section of a balance sheet?

Retained earnings

__________ refers to increases in a firm's assets that result form the sale of goods, provision of services or other activities intended to earn income.

Revenue

Which of the following best describes a key reason for starting your own business?

Running one's own business provides a level of challenge unmatched by many other endeavors.

Ultimate legal authority to set and enforce accounting standards in the U.S. lies with the __________.

SEC

Chelsea currently works as a manager at a major corporation but has been thinking about quitting her job and starting her own business. Which of the following reasons would most likely explain Chelsea's interest in making this major career change.

She want to have more independence and flexibility than her corporate position allows.

Market research is used to monitor and predict customer behavior.

True

Organizations generate long-term success by delivering unsurpassed value to their customers.

True

Through the Web, marketers can tap into communities of users that yield valuable information about their problems, interests and needs and the goods and services that they prefer.

True

Through the use of technology, marketers can lower costs and deliver greater value to consumers.

True

Value is the relationship between the price of a good or a service and the benefit that the service offers to the customer.

True

Which of the following would be listed as liabilities on a balance sheet?

Wages payable

Government regulations are likely to become stronger in the wake of _______________.

an economic crisis like The Great Recession.

The major responsibility of financial accounting is the preparation of the

balance sheet, income statement and statement of cash flows.

The ____________ summarizes a firms financial position at a specific point in time by listing its assets, liabilities and owners' equity.

balance sheet.

Demographic segmentation divides the market:

based on measurable characteristics about people.

The primary way that "central banks", like the U.S. Federal Reserve Bank, controls the supply of money is by

buying and selling government securities (i.e., treasure bond, notes and bills) in open market operations.

A basic characteristic of ____________ is that both producers and consumers are free to make their own economic decisions on many basic issues.

capitalism

To encourage fair competition and protect both consumers and workers, the federal government

creates regulations to intervene in the free market.

The marketing concept is a philosophy that makes __________________ the central focus of an entire organization now and in the future.

customer satisfaction

According to marketing research conducted by Danielle & Associates, Inc., spending habits of female college students between the ages of 18 and 21 differ from most other consumers. For this reason, the company's marketing team has developed marketing strategies for this specific group. This scenario exemplifies the

demographic segmentation in the business-to-consumer market.

Stockholders would most likely use accounting information provided by their firm to

gauge whether the firm has made a strong return on their investment

Technological developments over the past two decades, such as the rise of the Internet and social media have

given small business owners more flexibility in business management.

Fiscal policy refers to

government efforts to influence the economy through taxation and spending.

Entrepreneurs must understand that no conventional lender, whether private or public, will

loan all of the startup's funding

Ann is a manager at a store that sells casual clothing and accessories for both men and women. She notices that the jeans priced at $120 aren't selling very well. She wants to increase sales of these jeans before next season. The approach Ann should take to achieve this is to

lower the price of the jeans so that demand will increase.

In low-income countries, a higher percentage of entrepreneurs are considered

necessity entrepreneurs

A venture capital firm is interested in investing in a

new company with the potential for rapid growth.

Customer Relationship Management (CRM) works best when marketers combine marketing communication with _______________.

one-on-one personalization

In a statement of cash flows, cash from ____________________ show the amount of cash that flows into a company form the sale of goods and services.

operating activities

Generally accepted accounting principles (GAAP) is a set of accounting standards that is used in the:

preparation of financial statements.

Breshe works in the marketing department of a smartphone manufacturing firm. She is currently working on new package design ideas for the company's latest range of smartphones. In the context of the company's marketing mix, her ideas contribute to the ___________________.

product strategy

Henry Ford's famous quote "You can have your Model T in any color that you want as long as it's black" best reflects marketing attitudes during the ______________________ era.

production

The ultimate benefit that most businesses seek from marketing is long-term ____________________.

profitability

Decisions about advertising, personal selling, sales promotion, public relations, word-of-mouth, and product placement are all part of the ____________________ in a firm's marketing mix.

promotion strategy

Jane has completed 150 semester hours of college and has passed a rigorous four part accounting exam. She also has a year's experience of working as an assistant accountant for a fashion company. She provides management consultancy for multiple organizations on a fee basis. Given her qualifications and experience, Jane is a certified _______________ accountant.

public

Salaries and commissions to salespeople and advertising expenses are __________________.

selling expenses.

The ________________________ identifies a firm's sources and uses of money in a given accounting period on the firm's operating, investing and financing activities

statement of cash flows.