BUS 120 02 Final

A __________________ is a licensing arrangement under which one party allows another party to use its name, trademark, patents, copyrights, business methods and other property in exchange for monetary payments and other considerations. b. acquisition. c. merger. a. franchise d. partnership.

a.

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

a.

A key advantage of a sole proprietorship is that: a. it is easy and inexpensive to form this type of business. c. it is very easy to raise financial capital for this type of business. d. the business has perpetual life. b. the owner has limited liability for the debts incurred.

a.

Demographic segmentation divides the market: a. based on measurable characteristics about people. d. according to people's attitudes and lifestyles. b. according to where consumers live. c.. based on the behavior of people toward certain products.

a.

Small business start-ups are likely to find that getting commercial loans is: a. hard to do because commercial lenders are reluctant to loan to firms that don't have an established record of successful performance. b. the best way to obtain 100 percent of the financing they need, but only if they give the lender an ownership stake in the company. c. relatively difficult because the risks involved are great because they entail much higher financing costs when compared to other sources. d. one of the easiest and most flexible sources of financing because local bankers are ususally eager to establish relationships with new companies.

a.

_________________ refers to the cash spent by a firm to carry out business activities and generate revenue. b. Assets a. Expenses c. Revenues d. Dividends

a.

Cash flows from _____________________ activities show the cash a firm received from issuing additional shares of its own stock. d. diversiying c. investing b. financing a. operating

b.

New research shows that small businesses are: a. likely to use traditional thinking. d. unaffected by an economic crisis. c. likely to fail even after five years. b. the backbone of urban economies.

b.

Non-profits have no need to be concerned about the competitive environment. a. True b. False

b.

Small businesses have no need to be concerned about the global environment. a. True b. False

b.

Stockholders would most likely use accounting information provided by their firm to: d. obtain information needed to satisfy legal reporting requirements. a. make capital budgeting decisions and financial forecasts. b. gauge whether the firm has made a strong return on their investment c. determine whether the firm can repay them for the orders it places.

b.

Technological developments over the past two decades, such as the rise of the Internet and social media have: b. given small business owners more flexibility in business management. c. made it harder for small business to compete against large business. a. reduced the role of entrepreneurship in the national economy. reduced the independence small businesses have in managing a business.

b.

The ______________ is a financial statement that reports the revenue, expenses and net income that resulted from a firm's operations over an accounting period. a. balance sheet c. statement of cash flows b. income statement d. budget

b.

Tina is the owner of a dance studio. As a sole proprietor, any profit she earns is: a. taxed twice, once as a business and then again as Tina's income. b. treated as a personal income of Tina. c. not subjected to any tax. d. taxed only when she withdraws the money from a bank.

b.

A ________ is a legal business entity that offers limited liability to all of its owners. b. sole proprietorship. a. C corporation. d. general partnership. c. limited partnership.

a.

A key reason most sole proprietorships remain relatively small is that: b. they involve extensive paperwork and incur heavy costs. a. they have limited ability to raise funds needed to finance growth. c. heavy taxes are levied directly on their earnings as a business. d. their stockholders would rather receive dividends than have earnings reinvested to finance growth.

a.

Entrepreneurs must understand that no conventional lender, whether private or public, will: a. loan all of the startup's funding. b. work with large corporations. c. lend any money to start-ups. d. charge low interest for start-ups.

a.

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

a.

Fiscal policy refers to: c. methods that boost the economy by influencing interest rates. a. government efforts to influence the economy through taxation and spending. d. actions that shape the economy by increasing the supply of money. b. private efforts to encourage economic growth and entrepreneurship

a.

Generally accepted accounting principles (GAAP) is a set of accounting standards that is used in the: c. audit of a company's financial books. d. preparation of organizational budgets. b. preparation of a company's tax return. a. preparation of financial statements.

a.

Government regulations are likely to become stronger in the wake of _______________. a. an economic crisis like The Great Recession. b. budget deficits. d. fiscal cliff. c. Presidential elections.

a.

In low-income countries, a higher percentage of entrepreneurs are considered: d. voluntary entrepreneurs. a. necessity entrepreneurs. c. social entrepreneurs. b. lifestyle entrepreneurs.

a.

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

a.

Market research is used to monitor and predict customer behavior. a. True b. False

a.

Organizations generate long-term success by delivering unsurpassed value to their customers. a. True b. False

a.

Salaries and commissions to salespeople and advertising expenses are __________________. c. administrative expenses. a. selling expenses. b. general expenses. d. mediated expenses.

a.

Supply is defined as: b. the number of consumers in a market with a low debt-income ratio. d. the number of products produced in a fiscal year. a. the quantity of products that a producer will make for a specific price. c. the quantity of products that consumers will buy at different prices.

a.

The accounting equation is: c. Assets = Liabilities - Owners' Equity d. Liabilities + Assets + Revenue b. Assets = Liabilities + Net Income. a. Assets = Liabilities + Owners' Equity

a.

The major responsibility of financial accounting is the preparation of the: a. balance sheet, income statement and statement of cash flows. d. management accounting practices, social audit and journal ledger. c. articles of incorporation, auditor's opinion and master budget. b. journal, ledger and cash budget.

a.

The marketing concept is a philosophy that makes __________________ the central focus of an entire organization now and in the future. d. product differentiation a. customer satisfaction c. ownership utility b. mass customization

a.

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. a. True b. False

a.

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

a.

Ultimate legal authority to set and enforce accounting standards in the U.S. lies with the __________. b. IRS c. FDA a. SEC d. CFTC

a.

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

a.

Which of the following best describes a key reason for starting your own business? b. Being one's own boss provides security and is statistically proven in a recent study conducted at Harvard. a. Running one's own business provides a level of challenge unmatched by many other endeavors. d. Most small businesses are taken public in the first five years, netting entrepreneurial founders huge profits. c. While starting up on'e own business actually crowds the schedule a little bit more, this lack of flexibility up front is worth it in the end.

a.

Which of the following best describes the document filed with a state government to establish the existence of a new corporation? d. Election of incorporation certificate. c. Registration statement. a. Articles of incorporation. b. Prospectus.

a.

Which of the following is a reason why small businesses produce more patents per employee than large businesses? a. Small businesses often display a refreshing lack of bureaucracy that allows new thinking to take hold. c. Small businesses often have more capital and people, their size allows them to focus on patents. d. Large businesses focus on existing products and focus less on new products because of cost. b. Large businesses always have too much of a market share to be concerned with new patents.

a.

Which of the following is a similarity between venture capital firms and angel investors? a. Both invest in startup companies with high growth potential in exchange for a share of ownership. d. Both will only finance large corporations that operate in universal and generic markets. c. Both require an entrepreneur to provide a minimum of twenty-five to thirty percent of the startup costs. b. Both charge very high interest rates and structure loans to be repaid in months rather than years.

a.

Which of the following statements is most consistent with the marketing view of the relationship era? d. A customer could purchase a product only in the color or size that a manufacturer made available. b. In this era of surging demand, the main focus should be on producing as much as possible. c. The key to success is to constantly expand the customer base by recruiting new buyers. a. It is much less expensive to retain an existing customer than to acquire new customers.

a.

Which of the following statements is true of formation of a general partnership? a. It is safer to get everything in writing and to seek expert legal assistance when drawing up an agreement. d. A general partnership is formed when partners enter into an involuntary partnership agreement. b. It is legally not possible to start a partnership on the basis of a verbal agreement. c. There is a limit on the number of partners who can participate in a general partnership.

a.

__________________ are wealthy individuals who invest in startup companies with high growth potential in exchange for a share of ownership. b. Commercial lenders. c. Private lenders. a. Angel investors. d. Alternative lenders.

a.

A basic characteristic of ____________ is that both producers and consumers are free to make their own economic decisions on many basic issues. c. communism d. mercantilism b. capitalism a. socialism

b.

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: a. keep the prices the same but move the jeans to another section of the store. c. raise the price of the jeans to make them ore exclusive. b. lower the price of the jeans so that demand will increase. d. put even higher priced jeans next to the $120 jeans.

b.

Compared to a sole proprietorship, a general partnership: c. has limited ability to attract and maintain employees. b. is likely to have a stronger financial base. a. has certainty regarding how long a business will last. d. is likely to have limited liability.

b.

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. a. product strategy d. distribution strategy b. promotion strategy c. demographic strategy

b.

Demand is defined as: a. the number of consumers in a market who have low debt to income ratios. b. the quantity of products consumers are willing to pay at different prices. c. the amount of products produced in high growth industries. d. The annual quantity of products sold by retailers as a % of GDP.

b.

Economic factors are not as important to non-profit organizations as they are to for-profits. a. True b. False

b.

For profits are understandably less concerned about trends in the social environment. a. True b. False

b.

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. d, relationship b. production c. selling a. marketing

b.

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. b. public a. fraud c. forensic d. government

b.

The technological environment is less important to small business than it is to large businesses. a. True b. False

b.

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. b. psychographic d. demographic a. behavioral c. customer-based

b.

Which of the following is an advantage of a business plan? c. It helps attract quality talent from the market. b. It is crucial to obtain outside funding. d. It is an effective tool in problem-solving. a. It assists in public relations and marketing.

b.

Which of the following is not true about the impact of small business on the U.S. economy? b. Small businesses provide greater employment stability than large firms in times of economic hardship. d. Small businesses tend to introduce new innovations at a much higher rate than their larger counterparts. c. Small businesses have created the majority of the net new jobs in the U.S. over the past 18 years. a. Small businesses generate 46% of U.S. private sector output.

b.

Which of the following refers to the claims that stockholders have against their firm's assets? b. Owners' equity d. Explicit costs c. Liabilities a. a. Loans payable.

b.

Which of the following statements is true of a franchise? c. The franchisee sends out newsletters and provides Internet support to the franchisor. b. The franchisor normally provides the franchisee with extensive training and support. d. The franchise agreement usually requires the franchisor to follow the franchisee's procedures to the letter. a. The franchisor pays royalties and fees to the franchisee.

b.

___________________ refers to actions that shape the economy by influencing interest rates and the supply of cash. b. Monetary policy a. Fiscal policy d. Deficit policy c. Revenue policy

b.

_____________________ are people who risk their time, money, and other resources to start and manage a business. b. Entrepreneurs. c. Stakeholders. d. Venture capitalists. a. Stockholders.

b.

__________________________ is an organizational function and a set of processes for creating, communicating and deliverying value to customers and for managing customer relationships in ways that benefit the organization and it's stakeholders. d. Finance b. Marketing a. Production c. Operations

b.

A key advantage of a C corporation is: d. requirement for less paperwork and presence of more secrecy. a. ease with which it can be formed and operated. c. ability to raise large amounts of financial capital. b. ability to avoid double taxation.

c.

A similarity between a general partnership and a sole proprietorship is: c. their ability to avoid double taxation. a. their ability to pool in financial resources. b. their ability to share responsibilities. d. the limited liability the owners enjoy.

c.

A venture capital firm is interested in investing in a: a. large, well-established company that has fallen on hard times. c. new company with the potential for rapid growth. b. large, successful company with several assets that can be sold for a profit. d. new company with slow but long-term growth.

c.

An effective business plan is usually: b. 100 pages long and takes about one year to write. d. 1-5 pages long and takes about a week to write. c. 25-50 pages long and take about six months to write. a. 15 - 20 pages long and takes about a month to write.

c.

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 ___________________. a. pricing strategy d. promotion strategy b. distribution strategy c. product strategy

c.

Liz, Ashley and Selena started an interior design/renovation business where they all actively manage the company while protecting their personal assets from unlimited liability. They don't like formality and don't want to hold regular board meetings, etc. They should most likely form a ___________________. a. nonprofit corporation. c. limited liability corporation. b. limited partnership. d. general partnership.

c.

Sole proprietorships have _______________________ for the debts of their companies. b. limited liability. c. shared liability. a. no liability. c. unlimited liability.

c.

The ____________ summarizes a firms financial position at a specific point in time by listing its assets, liabilities and owners' equity. c. balance sheet. a. statement of cash flows. d. budget. b. income statement.

c.

The ________________________ identifies a firm's sources and uses of money in a given accounting period on the firm's operating, investing and financing activities. d. income statement. a. balance sheet. b. statement of retained earnings. c. statement of cash flows.

c.

The primary reason many people become entrepreneurs is to: b. avoid risk uncertainty. a. obtain a stable income. c. make more money. d. revolutionize business model.

c.

The primary way that "central banks", like the U.S. Federal Reserve Bank, controls the supply of money is by: d. allowing banks to borrow more money from the US Treasury b. changing the reserve requirement as per prevailing economic conditions. a. establishing the amount of currency the US Treasury is allowed to print. c. buying and selling government securities (i.e., treasure bond, notes and bills) in open market operations.

c.

The ultimate benefit that most businesses seek from marketing is long-term ____________________. a. segmentation. c. profitability. b. mass customization. d. ownership utility.

c.

To encourage fair competition and protect both consumers and workers, the federal government: d. creates business systems to meet the needs of all consumers. c. creates regulations to intervene in the free market. b. places limits on intentional trade in order to stimulate domestic production a. place heavy taxes on firms in monopolistic competition

c.

When entrepreneurs fail, they tend to: a. frequently label themselves as losers. b. become even more averse to risk. c. view failure as a chance to learn. d. cut their losses and get regular jobs.

c.

Which of the follow bodies assists entrepreneurs by guaranteeing loans from local commercial lenders? b. Patent and Trademark Office. c. Small Business Administration. a. Federal Reserve. d. Department of the Treasury

c.

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? a. Customer-based segmentation d. Demographic segmentation c. Geographic segmentation b. Product-use-based segmentation

c.

Which of the following does a business plan provide a small business? a. Knowledge c. Focus d. Connections. b. Reputation

c.

Which of the following is a vital starting point for most marketers? d. Sociology c. Demographics a. Psychographics b. Cognitive dissonance

c.

Which of the following is an advantage of a sole proprietorship? a. Ease of pooling financial resources. b. Ability to attract talented employees. d. Limited liability c. Retention of control.

c.

Which of the following statements best describes an S corporation? c. It is a form of corporation that avoids double taxation by having its income taxed as if it were a partnership. d. It is a form of corporation that can have only institutional investors as stockholders. b. It is a form of corporation that does not seek to earn a profit and differs in several fundamental ways from a C corporation. a. It is a form of corporation with limited number of owners that operates under simpler, less formal rules than a C corporation.

c.

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? b. Demographic segmentation c. Behavioral segmentation d. Psychographic segmentation a. Customer-based segmentation.

c.

Which of the following would be listed as liabilities on a balance sheet? d. Net income. b. Common equity. c. Wages payable. a. Retained earnings.

c.

__________ 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. d. Expense b. Net income a. Dividend. c. Revenue

c.

_____________ are the most common types of corporations. a. S corporations. b. Closed corporations. c. C corporations d. Nonprofit corporations.

c.

___________________ is an economic system based on the principle that the government should own and operate key enterprises that directly affect public welfare. d. Anarchism c. Socialism b. Capitalism a. Laissez-faire

c.

_____________________ work with an organization, prepare reports and analyze financial information such as budgets and cost management. b. Government accountants a. Public accountants d. Forensic accountants c. Management accountants

c.

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. b. She wants access to more benefits such as health insurance and a steadier income. c. She doesn't like the risk associated with working in the corporate environment. a. She wants a job with fewer responsibilities and smaller span of duties. d. She want to have more independence and flexibility than her corporate position allows.

d.

Fair competition among businesses: b. is a primary feature of a communist economic system. c. ensures that everyone is a winner. d. drives higher quality and lower prices in capitalism. is consistent with the goals of socialism.

d.

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. d. operating activities a. auxiliary activities. c.investing activities b. financing activities

d.

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: b. customer relationship marketing. d. market segmentation. c. cognitive dissonance. a. target marketing.

d.

Stockholders are the ______________ of the corporation. c. marketers. a. creditors. d. owners. b. employees.

d.

The amount of goods and services produced by an economy divided by the amount of resources used to make those goods and services equals: c. inflation d. productivity b. the budget deficit. a. the consumer price index.

d.

Which of the following is a difference between a socialist economic system and a pure communist economic system? b. Socialism mandates that the government run and own more enterprises. d. Socialism controls social welfare. Pure communism controls everything. a. Socialism has lower taxes. c. Communism is more efficient than Socialism.

d.

Which of the following is a reason why many members of the European Union have low entrepreneurship rates? a. These nations are yet to develop niche markets because their markets are far from the maturity phase. d. These nations provide a high level of employment protection and strong unemployment insurance. b. These nations have a high per capita income and high rates of such necessity entrepreneurship. c. These nations do not have well developed property rights, making it much riskier to form new businesses.

d.

Which of the following is true of nonprofit corporations? b. Earnings of non profit corporations are exposed to federal and state income taxes. a. Members of nonprofit corporations have unlimited liability. d. Nonprofit corporations cannot distribute dividends to members. c. Even individuals who contribute money to nonprofit corporations cannot take a tax deduction.

d.

Which of the following is used to verify the financial statements of a firm? a. An activity-based costing portfolio. b. An accrual-basis accounting system. c. A stockholder's equity rulebook. d. An independent auditor's report.

d.

Which of the following would be listed in the owners' equity section of a balance sheet? c. Net income a. Revenue d. Retained earnings b. Expenses

d.

___________ is the difference between a firm's revenue and its cost of goods sold. c. Net operating profit a. Wages payable d. Gross profit b. Out of pocket cost

d.

_____________ is a system for recognizing, analyzing and reporting about the financial transactions that affect and organization. b. Trading d. Accounting c. Benchmarking a. Pricing

d.

_______________ accounting is the branch of accounting that addresses the needs of external stakeholders, including stockholders, creditors and government regulators. b. Investigative d. Financial c. Managerial a. Forensic

d.

____________________ typically require accounting information of a firm to evaluate its ability to pay back its loans by analyzing the firms financial statements. c. Suppliers b. Employees d. Creditors a. Managers

d.