Bus. ch. 1 - 16 quiz answers

gross domestic product

- Stolia is a North African country. The total value of all final goods and services produced in Stolia in the last fiscal year was 3.4% more than the year before that. This growth placed Stolia in a better position than most of its allies - In this scenario, the total value of all final goods and services through which the economic condition of Stolia was assessed is known as ________

best efforts

- Bridgestone Corporation plans to go for an initial public offering and, therefore, secure the help of JP Morgan investment bank in issuing the new securities - The bank agrees to help the company in finding potential buyers and providing advice on the pricing of the securities - but the bank does not guarantee that it will accomplish the task of selling all of the company's securities at a high price. In this scenario, the investment bank is using a _____ approach.

commercial paper

- Coca Cola Inc. is well known for having a stronger credit score than its competitors, so buyers are more willing to buy promissory notes from Coca Cola than its competitors - Which short-term financing option is being offered by Coca Cola Inc. in the given scenario?

Asset management ratios

- Dooney and Burke, an accessory manufacturing company, produces more than a thousand units of handbags and briefcases of a distinct design - In 2018, the company was able to sell all the units within five months of manufacture, prompting the company to produce an additional seven thousand units. Which financial ratio has most likely been analyzed in the given scenario?

exchange-traded fund

- Glengary SmallCap Growth is a fund that lets its investors buy ownership in a market basket that contains different securities - The fund's market basket has a composition that is similar to the composition of the Russell 2000 stock index. In this scenario, Glengary SmallCap Growth is an __________? (ch. 10)

leverage ratios

- Under Armour finances itself each year by procuring 30 percent of its yearly budget through long term loans acquired from Citibank - The remaining budget is covered by the company itself. This scenario would suggest that the firm most likely relies on measuring ________ to decide its capital structure

Trade credit

- Vera Wang buys raw materials from Frank Lloyd - Frank Lloyd allows Vera Wang to make the payment at a later date, as opposed to immediate payment. What short-term financing option is being used by Vera Wang in the given scenario? (ch. 9)

True

A benefit of using active voice in business communication is that is can create a deeper trust between the speaker and audience

Public accountants conduct external audits, whereas management accountants analyze the financial statements of their own organization

A difference between public accountants and managerial accountants is that

It takes into consideration both social and profit objectives.

A socially responsible business will often use the technique of evaluating a double bottom line to determine how well they are meeting their goals. Which of the following is true of this process?

Both their earnings are untouched by the Internal Revenue Service.

A sole proprietorship and a partnership have the following in common:

Countertrade

In the late 1990s, Folger, a coffee manufacturing company, entered the market of a developing country called Crimea. As there was a lack of hard currency in Crimea, Folger was involved in a barter system. It exchanged its coffee-based products for the local chocolate products of Crimea. This scenario illustrates that Folger had engaged in _________

being concise

Jeffery is asked by his supervisor to prepare a presentation on company policies for the orientation program. Jeffrey covers all essential topics and removes any unnecessary information to avoid confusion. In the given scenario, Jeffery is:

the equilibrium quantity

John owns a bakery. He makes exactly 300 chocolate cupcakes each day. These cupcakes are delivered to the 30 individuals who have placed an order with him. The quantity associated with such a demand and supply pattern is called _____

current liability

Laffy Taffy a candy company, purchases 45 pulling machines from a company called PorterPull on credit. Laffy Taffy is supposed to pay an amount of $82,000 to PorterPull. This amount is due within a year of the date on the balance sheet. In this scenario, the amount of credit that Laffy Taffy owes PorterPull is referred to as Laffy Taffy's _____________?

Distributionship

Lulu Lilly, a premium brand of women's wear introduces a new line of designer shoes and licenses its franchisees to sell this product. However, the brand retains the production rights. This scenario exemplifies a(n) ________

Independence

Maurice, a broker in an Wall Street Finance firm, was unhappy with the way his bosses handled some of the financial deals. For that reason, he quit his job and started his own company so that he is able to make all management decisions without interference from anyone. Which advantage of entrepreneurship is highlighted in the given scenario? (ch. 7)

securities broker

Mr. Elon wants to buy stocks of a local retail company. He needs help with market research and requires some investing advice, as well as someone to do the trading for him. Mr. Elon should contact a(n)

Partners capitalize on complementary skills

One of the benefits of running a general partnerships is

It takes sheer sweat equity to build a customer base

One of the drawbacks of starting a business from scratch is that

- Financial accounting is governed by a set of generally accepted accounting principles - managerial accounting uses procedures developed internally that are not required to follow generally accepted accounting principles

One of the major differences between managerial accounting and financial accounting is that (ch. 8)

protect domestic industry

One of the reasons a country will impose trade restrictions is to

Direct investments from owners

Oracle, a software development firm, invested on developing new products from the company's earnings from the previous year. What sources of long-term funds is being used by Oracle in the given scenario?

gender bias

Pegeen, the CEO of Pet-co, generally uses words such as "she" and "her" to refer to managers and other employees. She also uses feminine examples in her presentations to the entire company. As a result, the male employees of the company feel excluded. Given this information, it can be concluded that Pegeen shows ________

illegal but ethical

Pixar, a film production company in the United States, sells the distribution rights of a film to its distributors in under served areas at rock-bottom prices, while it sells the rights of the same film to distributors in other areas at normal prices. In the context of business behavior, Pixar's business practice is ________

legal but unethical

The Gap, an apparel company, is known to be a profit-hungry company. It lands in a controversy when it comes to light that the company pays almost nonliving wages to the workers in its manufacturing subsidiaries based in developing countries. In the context of business behavior, The Gap's business conduct is:

intangible asset

The Rolling Stones sell the copyright of one of their songs to a record company for $3 million. In this scenario, the sale of the copyright of the song exemplifies the sale of a(n)

inflation

The U.S. government uses the consumer price index (CPI) and the producer price index (PPI) to evaluate what?

Factoring

When customers of Caterpillar Inc. buy equipment on credit and then delay making payments, they receive a bill from a collection agency. Which sources for short-term financing is being used by Caterpillar Inc. in this scenario?

$65

Wild Trails Inc., an adventure resort in Texas, has 500 shares of outstanding common stock and has not issued any preferred stock. Its net income is $32,500. Wild Trails Inc.'s earnings per share (EPS) is

India's subscriber base for cell phones has grown explosively over the past five years

With respect to the BRIC countries, which of the following is a true statement:

Firms encourage a great level of mutual respect between employees and employers through open communication

With respect to the social environment of business, what is true of employees?

Capitalism

Worcester, a South African country follows an economic system that facilitates private ownership. The country's economy is based on economic freedom and fair competition. Given this information, the economic system followed by Worcester is __________

the permanence of business

An advantage a C corporation has over a sole proprietorships is:

the organizational structure is in place

An advantage of buying an established business over starting a business from scratch is

human resources

An aluminum mining company has employed around 300 miners who work 6-hour shifts every day. In the context of factors of production, the miners can be classified as ________

audiences can only absorb about two to four main points

Anne Gedde is planning a presentation on the best practices in communication. After much thought, she decides to restrict herself to just three key points. Anne most likely decides to stick to just three key points in her presentation because:

foreign outsourcing

Apple Inc., a company based in the US, contracts with a small-scale supplier in the country of Taiwan to manufacture its computers and tablets that are sold across the world. This strategy by Apple Inc. illustrates __________

Greater financial success

Bronson starts a food delivery business of his own and earns much more profit in the first year itself. His total earnings are more than what he used to earn as a salaried person. Which of the following advantages of entrepreneurship is highlighted in the given scenario?

savings and loan association

Butterfield Federal, a financial institution, acquires its funds primarily from the deposits of its customers, and then uses these funds to make mortgage loans for individuals interested in purchasing real estate properties - Butterfield Federal is a what?

investment bank

Cabernet Blanc is a financial intermediary that helps companies raise capital by assisting the companies in issuing new securities and making sure that the securities are sold out in the market. In this scenario, Cabernet Blanc is an ____________

Public accountant

Cher works for an accounting firm that performs external audits, provides consulting services, and does the tax preparation for other businesses and individuals. Given this information, Cher is most likely a _______

exploited a small but profitable market niche

Cobbler's Corner LLC is a small custom shoe store that competes effectively with much larger companies as its focus lies exclusively on selling shoes to senior citizens and patients with orthopedic ailments. The company has been successful as it has:

A European tourist can buy more goods and services in America

Consider an exchange rate situation in which 1 American dollar equals 0.40 Euros. Given this information, which of the following statements is true?

retention of control

Constance wanted to start her own business. She created a list of pros and cons related to owning a sole proprietorship. Which of the following would be considered a pro?

Cultural Barriers

David, a German, and Rohit, an Indian, are representing their respective countries in a global summit. Unaware of each other's social practices, both David and Rohit are not able to communicate properly with each other. During lunch, Rohit eats bread with his hand, whereas David uses a fork and knife. This further reinforces their negative impression of each other. What communication barriers are David and Rohit facing in the given scenario?

Sarbanes-Oxley Act

Deloitte Inc., an accounting firm in Louisiana, follows certain guidelines while providing consulting services to a firm. One such guideline is to limit the services it provides to the firms it audits. The CEO of Deloitte Inc. is also required to certify the validity of the company's financial statements. In this scenario, Deloitte Inc. most likely abides by the requirements of the _______

physical barriers

During his Business class, Tom was having a hard time focusing on the presentation given by Prof Watts because the classroom was freezing cold. Also, the professor's shoes were squeaking. In this scenario, both the cold atmosphere in the classroom and the squeaky shoes are _____ to communication

board of directors

Eli Lilly is a pharmaceutical corporation that has over 400 stockholders. It is not practical for so many stockholders to manage the company. Therefore, they elect a group of individuals to oversee the company's day to day operations and to represent their interests. In this scenario, the stockholders elect a _____

Voting rights

Esco Corp., a large earth moving equipment manufacturing firm, announces its plans to merge with another equipment manufacturing company - Caterpillar Corp. Elvis is a major stockholder in Esco Corp., and his experience suggests that the merger is not going to be a profitable one - What basic shareholder right must Elvis use to express his disapproval of the merger?

only pays taxes on his income as the owner

Fabio is the sole owner of an art studio and runs the business and handles most of the work himself. All earnings from the studio become Fabio's income. Given this information, Fabio:

Liquidity Ratios

Ferrari, a luxury sports car manufacturer, needs to pay off its loans to banks the following year. The company plans to sell its factories in Malaysia in order to pay its debts. In this scenario, Ferrari's ability to sell its factories in Malaysia to pay its debts is measured by calculating what?

Franchise

Hans and Franz sign a contract with the owner of Build You Up, a well-known fitness company, to start a gym in their city. They take permission from the owner to use the name and products of Build You Up. They also furnish their gym in Build You Up's trademark style. In this scenario, Hans and Franz are starting a ________

establish the ethics and social responsibility goals that the company seeks to achieve

Hugo Reyes in an employee at Tropicana Corp. He is asked to do a systematic evaluation of the company's adherence to its social and ethical standards. In this case, Hugo should first:

Depository Institutions

If you live in Australia you shouldn't have a difficult time acquiring a loan because the financial intermediaries of the country receive sufficient funds from individuals and businesses in the form of savings deposits. This enables them to turn the funds obtained into loans. - These financial intermediaries are a form of ?

sociocultural differences

In Japan, punctuality is considered a sign of integrity. On the other hand, in Argentina, punctuality is considered a sign of anxiety and is given less importance. This exemplifies:

the Fed is likely to increase the discount rate.

In response to inflation,

It shows the relationship between price and quantity from a customer standpoint

In the context of fundamental principles of a free market system, which of the following statements is true of a demand curve?

A low level of corruption

In the context of the economic environment of business, which of the following is most likely to reduce the risks of running a business? (ch. 1)

Unprecedented production efficiency

In the context of the history of American business, which of the following was a result of the industrial revolution?

macroeconomics

Prior to formulating its annual budget, the government of the South American country of Guyana employs a number of individuals to look into the overall productivity of the country. These individuals are also responsible for studying and revising some of the taxation policies and gauging the employment rate. Given this information, these individuals are studying ______________ (Ch. 2)

has a sole proprietorship

Rhonda just graduated from culinary school and wants to open her own restaurant. She takes a loan of $20,000 from the bank and starts a restaurant in her hometown. Of the possible forms of business, Rhonda most likely ________

human resources

River Valley Camp is a summer program for school children. It advertises that there is one counselor for every four children and that several other highly-trained professionals are part of its staff. River Valley Camp advertisements indicate that the program relies heavily on its _____ factor to provide its services.

from an angel investor

Robert wants to start an independent recording studio. In order to finance his start-up, Robert seeks help from Esther, a successful business magnate. Esther agrees to fund Robert's venture as long as she receives a 20% share of the profits made by Robert. In the given scenario, Robert receives the financial resources to start his business:

limit order

Ronaldo wants to buy shares of Soccer Emporium, a sporting goods manufacturing company, but he does not want to pay a high price for them. He asks his securities broker to only buy shares that are at or below $39. In this scenario, Ronaldo places a _____ with his broker.

Voluntary export restraints

Self-imposed limitations on the amount of specific products that one nation will sell to another nation are called

Inefficiencies and corruption

Socialist economic systems do not thrive because of

carbon footprint

Socially responsible companies can demonstrate their support for the environment by reducing their _____.

Crowdfunding

Star wants to make a documentary film on tragic treatment of albino elephants in South Africa. She has been unable to get a production company to fund her project, so she creates a website where she pitches her idea through a short video and asks viewers to donate money to cover the cost of production. In the given scenario, which of the following is Star using to get the capital for her film?

entrepreneur

Stella, along with John and Harry, decided to start a new sporting goods business. She invested her time, money, and efforts in the project, and she directly managed the business development process. In this scenario, Stella is most likely a(n) __________

True

T/F: Businesses help raise the standard of living through taxes

False

T/F: Disinflation is defined as a period of rapid average price decreases across an economy

True

T/F: If there is a disagreement between the long-term interests of stockholders and those of other stakeholders, the fiduciary duty required of financial managers leads them to make decisions that are in the best interest of the stockholders.

False

T/F: In the context of monetary policy, the money supply includes Visa and American Express credit cards

True

T/F: Michael Eisner, CEO of Pluton Inc., decides to check with his accountant as to how much money his company owes to the raw materials supplier. To determine this, Michael should ask the accountant to provide him with the company's balance sheet.

True

T/F: Nonprofits are technically not considered businesses, but are important. In the United States, they employ about one in ten workers, accounting for more paid workers than the entire construction industry, finance, insurance, and real-estate sectors combined.

False

T/F: Pixar uses top-down budgeting. Therefore the CFO of Pixar prepares the budget with input from middle and supervisory managers.

False

T/F: Return-on-assets indicates how much net income a firm earned per share of common stock outstanding

False

T/F: Some businessmen, called necessity entrepreneurs, launch their business because they believe they see the potential of their great new idea when other cannot.

False

T/F: Stakeholders refer to groups of people who have a malicious intent toward an organization and who often engage in unethical actions (Ch. 4)

True

T/F: Taking notes is a good idea because it helps one concentrate and listen better (ch.5)

False

T/F: The balance of trade is also referred to as the balance of payment (ch. 3)

False

T/F: The members of the Financial Accounting Standards Board (FASB) are appointed by the Small Business Administration.

False

T/F: To show that you are a good listener it is a good idea to begin speaking the moment the presenter stops talking.

False

T/F: Voice mail is an example of a communication channel with high channel richness.

limited partner

Tia and Tamara start a modern clothing boutique. While both invest equally in the store and are entitled to equal profits, it is Tamara who looks after the day-to-day business transactions and manages the store. Tia does not actively participate in managing the store, and her personal wealth is not at risk in case the business suffers losses. In this scenario, Tia is a _____. (ch. 6)

legal differences

Tiffany, an American jewelry manufacturing company, wants to import diamonds from Cabo Verde, an African country. However, the officials in charge of the trade in Cabo Verde agree to formalize the transaction only if they are paid a certain amount of money for their personal benefit. Since American businesses are prohibited from offering bribes to any foreign nation, Tiffany has to look to another exporter of diamonds. In the given scenario, Tiffany is most likely facing the barrier of _____.

are called necessary entrepreneurs

Tom's company just went through the process of downsizing. He is a middle-aged worker who was laid off and finds it difficult to find a new job. He decided to start his own businesses, when people like Tom start up their own business they:

Subtract the company's expenses from its revenues

Tony, a management accountant in a water ski manufacturing company (Wake Sport Inc.,) is asked by the CEO to calculate the profit or loss earned by the company in a given time period. To get the required data, Tony is most likely to

planned obsolescence

Toshiba, a hard drive manufacturer, is accused of deliberately creating flaws in its product design. News reports hint that the company has been doing this for years to reduce the time between consumer repurchases. In the context of social responsibility, Toshiba has been accused of _______

When deciding living wages, companies must bring together their own values with the laws of both the United States and their host countries

Tropicana is a multinational corporation, headquartered in the US. They take advantage of the lower cost of labor by manufacturing their products in other countries. Which of the following statements is true of it's responsibility to workers abroad?

Challenge

Trudy owns a dress shop that specializes in custom made gowns. She is a sought-after designer because of the quality and finesse of her products. Trudy believes that the pressure of living up to the expectations of her clients and delivering quality products always keeps her on the edge and helps her to deliver her best. Which of the following advantages of entrepreneurship is highlighted in the given scenario?

the price of the shares soared in the market

Uma buys 2000 shares in a sustainable cotton fabric company. Within a year, she receives a capital gain on her stocks. This means that...

entrepreneurship era

Wayne Gretzky, the owner of a small railroad company in the 1860s, started gaining more influence and money as his business started to flourish to a point where he began controlling the entire northern half of railroad services. He followed a ruthless and cunning business strategy that involved exploiting workers and decimating the environment. In the context of the history of American business, Wayne Gretzkyz most likely belonged to the _________

They are accumulated earnings reinvested in a company rather than being paid to the owners

What are retained earnings?

Unlike corporate philanthropy, corporate responsibility focuses on the actions of the business itself rather than donations

What is a difference between corporate philanthropy and corporate responsibility?

The economic environment

When Tom Brokaw wanted to start a new online news service, he was skeptical about investing in it because of the financial crisis in his country. However, he was put at ease after learning about the government's policy of levying low federal taxes on startup businesses. In this context, which dimension of the business environment is affected the most?

credit union

Zendaya, along with twenty of her colleagues, starts a financial cooperative to financially assist each other. The members pool their savings in the cooperative, and they can also take loans from it on a low interest rate. Members of the cooperative benefit from higher returns on savings and lower rates on loans. In this scenario, the cooperative started by Zendaya and her colleagues exemplifies a(n)

zoom meeting

_____ has high channel richness, and especially with state-of-the-art equipment, it conveys much of the richness of actually being there.

Balance of payments

includes foreign borrowing and lending