Entrepreneurship Final Exam

Which leadership style is characterized by limited discussion of new ideas and is best used in groups who are not well acquainted with each other ? A. Autocratic B. Democratic C. Laissez faire D. Needs-based

A. Autocratic

Which of the following is the roadmap of where the business is going? A. Business plan B. Business agenda C. Executive plan D. Executive agenda

A. Business plan

____________ is the most critical of the "Five Cs" of credit analysis because it refers to how exactly the borrow intends to repay the loan. A. Capacity B. Character C. Capital D. Conditions

A. Capacity

Which of the following is NOT an example of a liability? A. Cash B. Equipment loans C. Charge accounts D. Rental fees

A. Cash

Which of the following is NOT an example of an asset? A. Children B. Cash C. Equipment D. Buildings

A. Children

Which of the following is a type of business which operates as a separate legal entity? A. Corporation B. Franchise C. Partnership D. Sole partnership

A. Corporation

Which of the following is defined as the process of the receiver breaking down the message received and interpreting the message? A. Decoding B. Encoding C. Transitioning D. Reinforcing

A. Decoding

Which management style is characterized by the manager trusting the employees work ability and is best used with employees know how to do their job? A. Delegating B. Participating C. Telling D. Reinforcing

A. Delegating

Rent is an example of a __________ expense. A. Fixed B. Variable

A. Fixed

Groups of individuals who invest money in various types of companies in search of making a profit are known as which of the following? A. Investors B. Capitalists C. Socialists D. Investing entrepreneurs

A. Investors

Which of the following is the correct order of organizational levels? A. Operative employees, supervisors, middle managers, top management B. Operative employees, middle managers, supervisors, top management C. Middle managers, operative employees, supervisors, top management D. Middle managers, supervisors, operative employees, top management

A. Operative employees, supervisors, middle managers, top management

Angel investors are wealthy individuals who seek high returns through private investments. A. True B. False

A. True

If a customer's request is unreasonable, it is all right to say no. A. True B. False

A. True

Net worth = assets - liabilities A. True B. False

A. True

Telling management works best when employees are not willing and/or able to do the job. A. True B. False

A. True

Which of the following is an example of an intermediate-term loan? A.Automobiles B.Houses C.Credit cards D.IOUs

A.Automobiles

Which of the following is NOT a source of credit? A.Checking accounts B.Mortgage companies C.Credit unions D.Credit card companies

A.Checking accounts

Credit allows for purchases without cash. A.True B.False

A.True

Who should develop business plans? A. Current business owners B. Anyone wanting to start a business C. Former business owners D. Employees of a business

B. Anyone wanting to start a business

Which of the following describes the business type, the products offered and the philosophy of the business? A. Executive agenda B. Business description C. Marketing plan D. Financial plan

B. Business description

Which law required automobile makers to modify engines to meet higher emission standards? A. Air and Water Pollution Act B. Clean Air Act C. Automobile Emission Act D. Modified Engine Act

B. Clean Air Act

Which of the following is an example of a middle manager? A. Teller at a bank B. Director of marketing C. Chief executive officer D. Salesperson in a retail store

B. Director of marketing

Employees deserve less respect than customers. A. True B. False

B. False

Most people complain if they have a problem. A. True B. False

B. False

_________ is a fee for borrowing which is a set percentage of the amount borrowed. A. Financing B. Interest C. Equity D. Collateral

B. Interest

What is the first step of the handling complaints cycle? A. Analyze the complaint B. Listen to the customer C. Confirm the complaint D. Identify the complaining customer

B. Listen to the customer

Which of the following is the process of issuing loans in small amounts? A. Macrolending B. Microlending C. Granting D. Leasing

B. Microlending

A _________ is a legal agreement between two or more people and is the least common form of business. A. Franchise B. Partnership C. Sole proprietorship D. Corporation

B. Partnership

With what office do owner(s) register the businesses name? A. Office of Comptroller B. Secretary of State C. Small Business Administration D. Courthouse

B. Secretary of State

Which of the following is defined as a business which is owned and operated by one individual? A. Partnership B. Sole proprietorship C. Entrepreneurship D. Franchise

B. Sole proprietorship

Which of the following is NOT a type of credit? A.Loans B.Debit cards C.Revolving credit accounts D.Credit cards

B.Debit cards

When using credit, the purchase amount becomes what once the payment agreement is made? A.Loan B.Debt C.Mortgage D.IOU

B.Debt

Credit is free. A.True B.False

B.False

Which of the following is NOT part of the analysis for the creditworthiness of borrowers? A.Judgment B.Family interviews C.Formal credit scoring models D.Risk assessment worksheets

B.Family interviews

On average, one complaint will be known by how many people? A. 33 people B. 41 people C. 67 people D. 88 people

C. 67 people

Which of the following is NOT an example of an organization? A. An international corporation B. A private school C. A group of friends D. A community non-profit affiliation

C. A group of friends

Which of the following is NOT a suggested tip for handling complaints? A. Keep your temper down B. Be polite and respectful C. Argue with the customer D. Listen with an intent to resolve the complaint

C. Argue with the customer

The ____ give a snapshot of the borrower's business at a specific time. A. Personal financial statement B. Profit and loss statement C. Balance sheet D. Statement of cash flows

C. Balance sheet

In the event that the borrower is unable to repay the loan, the _________ which was pledged toward the loan will be taken as payment. A. Interest B. Capital C. Collateral D. Conditions

C. Collateral

Which agency enforces laws concerning air and water pollution? A. USDA B. FDA C. EPA D. CDC

C. EPA

Which of the following is NOT a type of business ownership? A. Partnership B. Sole proprietorship C. Entrepreneurship D. Franchise

C. Entrepreneurship

Which of the following is NOT one of the considerations to determine if you "have what it takes" to start a business? A. Finances B. Support C. Experience D. Family life

C. Experience

How many steps are in the handling complaints cycle? A. Three B. Four C. Five D. Six

C. Five

The two basic parts of a budget are __________ and __________. A. Wants; Needs B. Equity; Debt C. Income; Expenses D. Resources; Consumption

C. Income; Expenses

__________ structures are laid-back and undefined. A. Matrix B. Learning C. Informal D. Staff

C. Informal

Small businesses are sometimes referred to as which of the following? A. Father and son businesses B. Family owned and operated C. Mom and pop businesses D. All in the family businesses

C. Mom and pop businesses

What is the equation used to calculate profit and loss? A. Sales + cost of goods sold - other expenses B. Collateral + sales - expenses C. Sales - cost of goods sold - other expenses D. Sales - collateral - expenses

C. Sales - cost of goods sold - other expenses

All of the following are traits of a good leaders EXCEPT which of the following ? A. Motivated B. Hard-working C. Selfish D. Good listener

C. Selfish

Proper telephone etiquette requires the phone to be answered within how many Rings? A. Five B. Four C. Three D. Two

C. Three

What is the highest credit score number? A.750 B.800 C.850 D.900

C.850

A borrower's interest rate can be determined using which of the following? A.Loan amounts B.Loan terms C.Credit scores D.Repayment schedules

C.Credit scores

What type of loan would one need to buy a house? A.Short-term B.Intermediate C.Long-term D.None of the above

C.Long-term

Small businesses are responsible for what percentage of sales in the U.S.? A. 17 percent B. 27 percent C. 37 percent D. 47 percent

D. 47 percent

According to a recent study, what percentage of complaints went untold? A. 49 percent B. 68 percent C. 81 percent D. 96 percent

D. 96 percent

Money invested in the business by the borrower is ______________. A. Interest B. Collateral C. Credit D. Capital

D. Capital

Which of the following is NOT one of the five Cs of credit? A. Character B. Capacity C. Collateral D. Counsel

D. Counsel

Which of the following is NOT one of the considerations when selecting a business structure? A. Size of the business or organization B. Worker skills and responsibilities C. Business purpose D. Customers' demographics

D. Customers' demographics

What is the first and primary question you should ask yourself before starting a small business? A. Am I business savvy B. Where will I get the money C. Where should my business be located D. Do I have what it takes

D. Do I have what it takes

Which of the following is NOT one of the five sections of a business plan? A. Financial plan B. Supporting documents C. Organization and marketing plan D. Executive description

D. Executive description

Money needed to expand for additional inventory, equipment, marketing cost, employees, etc. is known as which of the following? A. Competitive risk B. Market analysis C. Marketing D. Expansion capital

D. Expansion capital

Which of the following is NOT a common environment for handling complaints? A. Over the phone B. At a store C. Over the Internet D. In a meeting

D. In a meeting

Employees are known as __________ customers. A. Potential B. Happy C. Easy D. Internal

D. Internal

Which of the following is NOT one of the four basic organizational levels? A. Supervisors B. Middle managers C. Top management D. Lower managers

D. Lower managers

Which of the following is a disadvantage of a franchise? A. Requires assistance from a parent company B. Name recognition C. Shared advertising expenses D. Must follow the parent company's business structure

D. Must follow the parent company's business structure

Which of the following is NOT a leadership style? A. Autocratic B. Democratic C. Laissez faire D. Needs-based

D. Needs-based

Which of the following is NOT a management style? A. Delegating B. Participating C. Telling D. Reinforcing

D. Reinforcing

Which section of the business plan should be the bulk of the plan? A. Marketing and sales B. Organization and management C. Market analysis D. Service and/or product line

D. Service and/or product line

Recruiting a new customer costs how many times more than keeping an existing customer? A. Three times B. Four times C. Five times D. Six times

D. Six times

When starting a new business, you should be prepared for which of the following? A. Six-hour workdays four to five days each week B. Eight-hour workdays five to six days each week C. Ten-hour workdays five to six days each week D. Twelve-hour workdays six to seven days each week

D. Twelve-hour workdays six to seven days each week