Entrepreneurship Final

The rule of thumb is that perks should take no more than ________ of the annual personnel budget.

3 Percent

Design patent

A 14-year patent for a new, original, and ornamental design for an article of manufacture.

Arbitration

A dispute resolution process held instead of court cases in which both sides present their case to a legal official

Mediation

A dispute resolution process held instead of court cases in which both sides present their case to a neutral third party who is not a judge. Unlike arbitration and court decisions, mediation decisions are not binding on the two parties.

SOX Act

A federal law describing the steps publicly traded businesses must take to protect and provide their key financial information

Retainer

A fee paid by a client to an attorney to engage the attorney's services.

Leasing

A formal agreement, reduced to writing that specifies the terms and conditions that must be met to allow one entity to use a specified asset of the other.

Litigation

A formal dispute resolution method that operates using the court system, typically with a lawyer representing each party

Capital leases

A lease in which at the end of the lease period the asset becomes the property of the lessee, possibly with an additional payment.

Operating leases

A long term rental in which ownership of the asset never passes to the person paying for the lease.

Nepotism

A management philosophy of selecting and promoting based on family ties.

Flat fees

A method of billing for lawyers in which a fixed amount is paid for a certain task.

Quality

A product's or service's fitness for use, is measured by durability, reliability, serviceability, style, ease of use, and dependability.

Which of the following businesses should be most concerned with property, plant, and equipment?

A rancher

Civil rights act of 1991

A series of acts by congress that prohibit discrimination on the basis of race, color, religion, sex, or national origin.

Internal control

A set of rules and procedures that work to limit the opportunity for employee theft or malfeasance.

Economic Order Quantity (EOQ)

A statistical technique that determines the quantity of inventory that a business must hold to minimize total inventory cost.

pull through system

A term for just-in-time inventory systems in which product is ordered and placed into production only after a sale has been completed.

Hold harmless

A type of waiver in which a party agrees not to hold another party responsible for certain events.

Rehabilitation Act of 1973

An act of Congress that provides training for workers who are injured on the job.

Trademarks

Distinctive word, slogan, or image that identifies a product and it's origin

Efficiency

Doing more with less

On the job training

Employee training at the place of work while he or she is doing the actual job. Includes apprenticeship, internships, assistantships, job rotation, and coaching

All business contracts have to be in writing to be enforceable.

False

Fair labor standards act

Federal law that establishes a minimum wage and requirements for overtime pay and child labor

Contingency fees

Fee paid by a client to an attorney for legal services that is dependent upon the outcome of a case.

_______ repay employers for losses caused by dishonest or negligent employees.

Fidelity bonds

Assumed name filing

Filing made with a state(s) in which the business operates disclosing the trade name or assumed name of the business along with the owners of the business.

Outflows

Funds being paid to others by a firm

In a(n) ________ , all partners are equally and fully responsible for the business's obligations.

General Partnership

Which of the following answer options is not one of the most commonly identified sources of U.S. business risk small businesses face?

Government instability

Point of sale systems

Hardware and software combinations that integrate inventory management directly into accounting software.

OSHA

Occupational Safety and Health Administration, a government agency in the Department of Labor to maintain a safe and healthy work environment

Which of the following should be included in an employee contract for a key employee?

Offer rewards for providing adequate termination notice.

Product liability

Payment for injury or damage that occurs during the use of a business' products

Insurable value

The amount of an asset for which a company will write an insurance policy.

Process

The business activities necessary to convert inputs into desired outputs

Plantiff

The one who files the lawsuit

Defendant

The party that is being sued

Just in time delivery

The practice of purchasing and accepting delivery of inventory only after it has been sold to the final customer

Fair market value

The price at which goods and services are bought and sold between willing sellers and buyers in an arm's-length transaction.

Feedback

The process of communicating within or to the organization about how the outputs worked or were received.

Operations

The process of transforming materials, labor, and energy into goods and services

In a C corporation and S corporation, the IRS expects the owner to pay himself or herself a salary that is roughly at market rates.

True

Can two or more businesses use the same name?

Yes

Patent

a grant by the federal government giving an inventor the exclusive right to develop, use, and sell an invention for a set period of time

Meritocracy

a system in which promotion is based on individual ability or achievement

perpetual inventory

a system of recording the receipt and sale of each item as it occurs

Arm's Length Transaction

a transaction between two parties that have no relationship with each other and who are negotiating on behalf of their own best interests. A fairly negotiated transaction and reasonably representative of market value.

Surety bonds

an agreement with an insurance or bonding company that will pay a specified amount in the event that the entity bonded fails to comply with specified contractual requirements

Book value

the difference between the cost of a depreciable asset and its related accumulated depreciation

Outputs

the goods, services, and ideas that result from the conversion of inputs

Employee fit

the match between the needs, expectations, and culture of the small business with the expectations and the skills of the individual employee

Joint ventures

when two or more companies join forces - sharing resources, risks, and profits, but not actually merging companies - to pursue specific opportunities

Utility patents

A 20-year patent covering a process, machine, article of manufacture, composition of matter, or any new or useful improvement of an existing one.

Hourly fees

A basis for legal charges in which the rate is based on a price per hour. Often lawyers will charge for fractions of an hour.

Legal entity

A being, human or nonhuman, such as a corporation, that is recognized as having rights and duties, such as the right to own property.

Insurance

A contract between two or more parties in which one party agrees, for a fee, to assume the risk of another.

Best practices

Activities identified by authoritative bodies as examples of optimal ways to get things done in a particular industry, profession, or trade

ADEA

Age Discrimination Employment Act—forbids discrimination against any person aged 40 or older in hiring, firing, promotion, or other aspect of employment.

articles of partnership

Agreement between the partners of a firm on matters pertaining to the formation and operation of the partnership.

Safety stock

An amount of inventory carried to ensure that you will not run out of inventory because of fluctuating levels of sales.

Outsourcing

Contracting with people or companies outside your business to do work for your business

Coverages

Contractual provisions of insurance policies that specify what risks the insurance company is assuming.

Exculpatory clause

Part of a contract in which a party to the contract states that he or she will not be responsible for certain actions.

Noncompete clause

Part of a contract in which a person agrees not to open a certain type business or seek employment doing certain things in a particular area for a period of time.

Independent contractors

Persons working to achieve a certain goal without being subjected to substantial controls by another.

Inventory

Products that are held for sale to customers

Productivity

The ratio measure of how well a firm does in using it's inputs to create outputs.

Procedure

The step by step method by which the process is completed

Whole of life costs

The sum of all costs of capital assets, including acquisition, ownership, operation, and disposal

Trade secrets

confidential information or knowledge that has commercial value and is not in the public domain and for which steps have been taken to keep it secret

Periodic inventory

process of physically counting business assets on a set schedule

PPE

property, plant, and equipment

Work instructions

specific guidance for completing steps in a process

Subcontract

A contract by which a new party agrees to perform a duty that one of the original parties to a contract was already legally obligated to perform.

co-insurance

A contract stipulation that requires a policyholder to carry insurance in an amount equal to a stated minimum percentage of the market value of the property insured.

Disability insurance

A type of insurance paid to an individual if he/she is injured and is unable to work for a specified length of time.

Separation of Duties

A type of internal control that separates the physical control of an asset from the person accounting for that asset.

Americans with Disabilities Act of 1990

An act of congress that requires that businesses make provisions for access for people with disabilities.

Renting

An agreement between two entities that allows one to use assets of the other in return for a specified payment or series of payments

Deductible

An amount of loss that will not be paid by an insurance company

Capital assets

Assets that are expected to provide economic benefits for periods of time greater than one year.

Fidelity bonds

Bonds, also called dishonesty bonds, that repay employers for losses caused by dishonest or negligent employees.

Assets

Cash, Inventory, machinery, buildings, and land

Torts

Civil wrongs

Which of the following factors refers to providing meaningful work for employees, which gives them the feeling or belief that the day's work had a valuable impact to the company and that they made a difference?

Contribution

Which of the following is the cost incurred in financing, insuring, taxing, or tracking an asset?

Cost of owning

Physical inventory

Count of all the inventory being held for sale at a specific point in time.

Key employees

Employees whose experience and skills are critical to the success of a business

EEOC

Equal Employment Opportunity Commission, Enforces laws to prevent unfair treatment on the job due to sex, race, color, religion, national origin, disability, or age.

Copyright

Exclusive right given to the creator of a literary or artisitc work to make use of that work

Copyright involves the expression of ideas as well as the ideas themselves.

False

Disposal value is based on determining the price of either a new asset or a used asset for which there is an organized market.

False

For a small business, the amount and type of inventory held for resale is not important because the supply of inventory and demand of customers can be matched at all times.

False

For small firms, business risk is caused by accepting or providing debt.

False

In employee leasing, the leased employees actually work for the hiring company rather than the leasing company.

False

Lines of communication means having a way for the person who has failed to meet a metric, or made a mistake, or is facing firing to have their side of the story heard.

False

Off-the-job training includes coaching

False

Providing credit to your customers accelerates the receipt of cash.

False

Reviewing employees' performance is a one-time process done after the probationary period.

False

Small businesses are not eligible to obtain government subsidies.

False

Some business owners are risk-adverse, although most small business owners are risk seeking.

False

There are three general types of events that cause business risk, one of which arises from your capital structure.

False

Vicarious (indirect) liability

Indirect liability or responsibility for the actions of another.

Regulation of the workplace

Laws and governmental rules that limit the freedom of business owners to manage their businesses as they please.

Tax codes

Laws and regulations that specify the requirements of taxation.

The regular court system and small-claims court are both considered

Litigation

Employee theft

Misappropriation of business property by employees of that business.

Accounts receivable

Money owed to your business by it's customers

Barcoding

Obtaining a universal barcode number and scan-ready visual tag, and printing it on the product or its packaging. Bar codes can then be scanned and recognized by others.

Which of the following is an advantage of providing credit to customers?

Reduces costs of selling

Which of the following statements concerning small business and law is not true?

State laws applicable to small business are standard in all fifty states.

Which of the following is the last step in crafting a job description?

State special requirments

Protected classes

States of being that are expressly prohibited from suffering discrimination: race, color, religion, sex, national origin, gender, age, or disability.

Optimum stocking level

The amount of inventory that results in the minimum cost, when considering the cost of lost sales resulting from running out of stock, the number of units sold per day, and the number of days required to receive inventory Also known as the reorder point

Replacement value

The cost incurred to replace one asset with an identical asset

Costs of disposition

The costs incurred in the activities necessary to get rid of an asset.

Costs of operating

The direct cost incurred in using an asset for the purpose it was intended

Piercing the veil

The dissolution of a corporate form, making it back into a sole proprietorship or general partnership, if the court finds that the owner carelessly mixed up personal and business assets or finances.

Inputs

The materials, labor, and energy put into the production of a good or service

Disposal value

The net amount realized after subtracting the costs of getting rid of an asset from its selling price.

Acquisition cost

The total cost of acquiring an asset, including such costs as purchase price, transportation, installation, testing, and calibrating in order to ready it for its first productive use.

Replacement cost

The total cost of replacing an asset with an essentially identical asset.

Trade name or doing business as name

The under which a business is operated

Depreciation is based on which of the following assumptions?

The value of an asset declines in a predictable manner over the period of utility

Probationary period

Trial period in which an employee has temporary status before a formal offer to work full time is presented. 30-180 days

Adding employees in a firm increases both the amount of work that can be done and the demands on the owner.

True

Clients and attorneys start with a natural conflict of interest related to money.

True

Intangibility, inseparability, and perishability are the three characteristics of services that impact operations choices and decision making.

True

The name of a business can be called its doing business as (dba) name.

True

The practice of acquiring inventory only in response to a completed sale is called a pull-through system.

True

A(n) ________ is part of a contract in which a party intentionally gives up legal rights or claims

Waiver

Credit insurance

covers abnormal losses from credit customers not paying their bills

Inventory valuation

determination of the amount of assets held by the firm for sale or production

Pledging receivables

giving a third party legal rights to debts owed your business in order to provide assurance that borrowed money will be repaid

Key person insurance

protects against the loss of a key employee or key executive by making the business the beneficiary if a key person dies. The business is the owner, premium payor, and beneficiary.

Factoring

selling the rights to collect accounts receivable to an entity outside your business