Intro to Business

When income is equal to expenses, a business is at:

Break-even.

The BOSI framework, as defined by Abraham, groups entrepreneurs into the following 4 categories:

Builder, Opportunist, Specialist, and Innovator.

What does the statement "an agreement that is enforceable by law" define?

CONTRACT

___ perform managerial accounting functions.

Cost Accountants

Which of these does research show is the best study technique?

Doing practice questions

Triangle.com has decided to implement a new, comprehensive Accounting system that takes advantage of cloud technology. Which of the following groups would be considered the primary stakeholder for this project?

finance dept

Leondra looks over her Algebra homework and says to herself "I'm probably not going to be able to do this - I'm just not a math person." Leondra is exhibiting a

fixed mindset

A patent awards the inventor with the exclusive right to make and sell an invention:

for a limited period of time

Which of the following items are included in The Code of Professional Ethics of the American Institute of Certified Public Accountants:

integrity and objectivity.

Which of the following are one of a company's most significant assets:

intellectual property

Accounting is used to communicate financial information to both internal audiences and external audiences. External users are:

investors

The "size standard" used to determine if a business can be classified as a Small Business:

is based on either number of employees or annual revenue based on the industry.

Cathy starts a mobile car detailing business. After some initial growth, she hires two workers to help her keep up with customer demand. Cathy supplies the materials (soap, wax, etc.) for the operation which, in addition to paying the employees, constitutes her operating expenses. Cathy's revenues exceed her expenses and she donates 10% of her profits from her bank account to the local Humane Society. Is Cathy's business a for-profit or nonprofit?

it is for profit

Your large business just issued bonds for $10 million. You are excited about utilizing the new funds to expand. As you create your budgets for the upcoming years you need to keep in mind that your company will need to:

Pay interest payments annually and repay the entire $10 million at the end of the bond term.

Registration of your business is one of the 10 steps to start your business. What are the items needed from Federal and State government in order for you to start your business according to the SBA?

Permits, licenses, and tax IDs.

Which of the following events can create the most significant shift the demand curve?

Population grows in a particular market area.

What is meant by the term "entrepreneurial DNA"?

The characteristics and traits of an entrepreneur.

A joint venture establishes a new business that is:

jointly owned by two or more otherwise independent businesses.

A body of rules with legal force and effect, prescribed, recognized and enforced by a controlling authority describes:

law

The idea that some products are inherently dangerous is acknowledged by the:

legal concept of strict liability

A business owner decides to take out a bank loan instead of issuing stock in order to raise funds for the business. Why might the owner have made that decision?

The current business owner retains complete ownership of the business

The primary purpose of the ________ is promoting economic and social progress in developing countries.

World Bank

The organization that is responsible for providing a forum for negotiations, agreements and settling disputes among nations is:

World Trade Organization.

If you are able to produce 1 piece of fine furniture or 10 birdhouses using the same resources, and your competitor is able to produce 5 pieces of fine furniture or 10 birdhouses using the same resources, who has the comparative advantage?

Your competitor in fine furniture

The Foreign Corrupt Practices Act made bribery of foreign public officials by American business enterprises:

a crime.

Which of the following is one of the three typical claims for a product liability case?

a design defect

A hotel guest goes down to the snack shop in the hotel lobby and purchases a candy bar and a soda. The guest has purchased what from the snack shop?

a good

Good friends Nick, Ricardo and Lauren start a private accounting firm together which they manage and own jointly. Their company may be set up as:

a partnership

When the price in some market is below its equilibrium price:

a shortage exists.

The author cites startup expert Anne Dwane who states that the most important quality an entrepreneur can have to start a business is:

adaptability.

The crucial role small business plays in the U.S. economy is demonstrated by the fact that small business is responsible for half of the Gross Domestic Product (GDP) and roughly half of:

all U.S. employees in the workforce.

According to the author, creativity, vision and ________ are the elements without which there is no entrepreneurial venture.

an ability to identify opportunities.

How do we define the term "business"?

any activity that provides goods or services to consumers for the purpose of making a profit

The heart of all financial accounting is the accounting equation, which is represented as:

assets = liabilities + owner's equity

Bitcoin is the most well known:

cryptocurrency

Which group outside of the business is affected in some way by the decisions of the business?

customers

Wells Fargo Bank recently took a big hit to its brand image and stock value when it was discovered that bank employees were opening new customer accounts without the consent or even knowledge of its' customers. Which of the external environments can this development be linked to?

legal enviornment

One powerful motivation for people to become entrepreneurs is that becoming one is not just a job, but a:

lifestyle.

The Micram company, which makes plastic containers, decides to relocate its operations to another state. The company is moving because the new state offers new business investment credits. Which external stakeholders will be affected by Micram closing its current location?

local gov

A business incurs a ________ if its costs associated with the operation of the business exceed the total sales revenue.

loss

Overall, research on the effectiveness of highlighting as a study technique shows that highlighting has a ________ impact on student learning.

low

The Boston Tea Party was the result of:

export taxes.

Margo has an internet business selling jewelry. The internet has allowed her to sell the jewelry not only locally, but also internationally. Her sales to buyers outside the country are:

exports.

The field of economics that looks at the economy as a whole and focuses on broad issues such as growth, unemployment, inflation, and trade balance is:

macroeconomics

Linda opened a coffee shop that sells coffee and pastries. Linda's primary objective when she opened her business was to:

make a profit

At the time when products and services are produced or provided to customers, which functional area is responsible for ensuring that those products and services meet high quality standards?

operations

Which functional area of a business is responsible for converting the factors of production into goods and services?

operations

A man takes another man to court over a property disagreement. This is an example of what purpose of law?

resolving disputes

The purpose of a for-profit business is:

return profits to the owners

The terms "profit," "loss," and "value" can be described by the following, respectively:

rev exceeds cost; cost exceeds revenue; perceived benefits by a customer of the price to the time and money spent

The contribution margin ratio will show how much ________ a company will make on each dollar of sales.

revenue

External stakeholders consist of the following groups:

shareholders, customers, suppliers, community, govenment creditors, society

When it is discovered that Weeble Manufacturing has been polluting a local river by dumping its waste into the river, citizens and activists start to hold protest rallies at the front gate of the plant, demanding Weeble stop polluting and clean up the river. The management at Weeble will be reacting to changes in the ________ when it addresses these issues.

social

When a court orders a party to carry out their duties under the contract, it is called:

specific performance

A warranty is a guarantee that a product meets certain:

standards of performance

If Romania is seeking short-term capital to stabilize its currency as a result of a major economic disruption, it would turn to:

the International Monetary Fund.

In a market with an upward sloping supply curve and a downward sloping demand curve, when there is an excess supply:

the actual price must be higher than the equilibrium price.

The low cost of labor in other countries around the globe is a factor that business must consider because they are impacted by:

the global business environment.

Licensing and franchising both offer advantages for:

the involved parties.

When higher prices result in higher quantity supplied, economists call this relationship:

the law of supply.

Statutory law defines such things as:

the legal age for purchase of alcoholic beverages

Rule of Law is effective because of:

the majority of citizens who recognize the importance of adhering to the law

In order for a contract between two parties to be legally enforceable it must meet certain criteria such as:

the parties must agree to exchange something of value

Daniel has invented a clip that can be placed on an open bag of chips and keep them fresh for as long as 3 weeks. He knows that there is a market for his clip and takes a loan out on his home to finance a small start-up company in Blue Lake, Kansas. As an entrepreneur, Daniel's primary motivation for opening the business is:

the potential of making a profit if the business succeeds.

A lower burden of proof and negligence are characteristics of ________ law.

tort

A television commercial decides to use Pepsi without permission. This is an example of a:

trademark violation

All of these are considered to be external forces that affect business EXCEPT:

traditional enviornment

Which of the following is an example of a natural resource?

trees

The ________ rate generally rises during contractions and falls during expansions.

unemployment

According to the U.S. Government Accounting Office, a manufacturing company located in China is considered a sweatshop if they:

use children and pay them less than the minimum wage.

The primary goal of a nonprofit business is to:

use its revenues to provide a public service.

When the perceived benefits are greater than the amount that a customer paid for the goods or services, the customer would considered that he or she received a great:

value

What is an example of an external stakeholders in a business?

creditors

Which of the following are external stakeholders in a business?

creditors

Given a contribution margin of $20, if 10,000 units are produced at a cost of $400,000 what is the sales revenue in USD?

600 000

The global corruption data from Transparency International shows that bribes have:

increased.

A business producing packaged food products would have the following variable costs:

ingredients

What are the four factors of production needed by business to operate?

natural resources, capital, labor, entreprenueorship

Emotional, economic, and reputational damages may be awarded in:

negligence cases

Many ________ organizations are governed by board of trustees

non profit

________ is a business that provides goods or services to consumers but whose primary goal is not to return profit to the owners.

nonprofit business

Lid On It hat shop has an inventory turn ratio of 6.2, $1.55 million in annual sales, and $620,000 cost of goods sold for the same annual period. What is its average inventory?

62,000

How many sections are included in the Sarbanes Oxley (SOX) Act?

11

Sales revenue of $110,000 will achieve breakeven when the contribution margin is $30,000 and the fixed costs are:

110000

If the sales revenue is $150,000 and the margin of safety is $30,000, then the break-even sales will be:

120 000

The Sabian company manufactures drums and sells them to colleges for marching bands. This last quarter, Sabian sold $500,000 with fixed costs of $150,000 and a contribution margin of $150,000. What were Sabian's variable costs for the quarter?

150 000

The Golden Braid Bookstore has a quick ratio (Acid Test) of 4.75:1, $40,000 in accounts receivable, and liabilities totaling $80,000. How much cash do they have?

340,000

If ACTII Costumes has a current ratio of 12:1, its liabilities total $40,000, and its cash and accounts receivable total $140,000, how much inventory do they have?

340000

If you purchase stock in a firm, you become:

A shareholder of the firm

At the end of the week, Carla receives her paycheck and goes directly to the bank after work to make a deposit into her savings account. The bank keeps the required reserve and then loans out the remaining balance to a qualified borrower named Malik as a portion of his small business loan. Malik uses the loan to buy a tractor for his construction business and makes small monthly payments to the bank to payback the principal balance plus interest on the loan. The bank profits from a portion of the interest payment received and also passes some of the interest back to Carla in the form of an interest payment to her savings account. In this example, the bank is acting:

As an intermediary between the saver (Carla) and the borrower (Malik).

Which trade measurement includes services, foreign investments, loans and foreign aid, financial capital, and financial transfers?

Balance of Payments

What is the first section to be included in a business plan as recommended by the SBA?

Executive Summary.

Jeff monitors his credit on an ongoing basis and would like to request a copy of and verify the accuracy of his credit files annually. Which legislation would support him in this?

Fair Credit Reporting Act

"Unfair methods of competition" are banned by the:

Federal Trade Commission Act

Information needed by external entities in order to evaluate business performance is provided by:

Financial Accountants

The following condition describes the economic term "scarcity":

Global oil reserves are limited.

Which of the following statements describe(s) a free market?

Government does not intervene in any way.

GNI refers to a country's:

Gross National Income per capita.

The international monetary community created the ________ because the two organizations create an important division of labor.

IMF and the World Bank

The author cites Carol Denbow in stating this as the primary reason for small business failure:

Lack of planning.

According to the SBA list of 10 steps to start a business, which of these would be among the last tasks to do on the list?

Open a bank account for your business.

In a tiny village, on the coast of South America, early inhabitants used sea shells, as money. Some of these shells were very beautiful and fragile. Everyone agreed that the shells were valuable and the people utilized them in much the same way we use money today. The fragility of the shells and the fact that a shell is difficult to split into smaller denominations would make these sea shells unfit to act as money today because sea shells do not act as a:

Medium of Exchange

The following are disadvantages of owning your own small business EXCEPT:

No boss to answer to.

The barter system is rarely used today because:

Of the necessity for both parties to want something the other can provide at the same time.

In which class setting has research shown that students report feeling less threatened in reaching out for help from peers or their teacher?

Online environment

If you were given the task of totalling all the M2 money (excluding M1) in circulation in the US, which of the following would you include in your calculations?

Savings accounts

If a business owner wants to know how much total cash has come into the business during this quarter she will look at the:

balance sheet

The accounting equation for a given point in time can be calculated using which financial statement?

balance sheet

The statement of owner's equity provides users of the financial statements with a reconciliation of the company's ________ and ________ equity accounts.

beginning, ending

When a supplier fails to perform their obligations in a contract, it is called a:

breach of contract

A(n) ________ is any activity that provides goods or services to consumers for the purpose of making a profit.

business

The law of demand states that as the price of a good increases:

buyers desire to purchase less of it.

Due to limits on our time, money, and effort, we are best off when we allocate those things:

by constantly assessing the opportunity costs of our choices.

Both for-profit and nonprofit organizations:

can earn revenue

Shelly is interested in buying a used Jeep from a private individual. She would really like to have some type of warranty, however this sale would be covered by the principle of:

caveat emptor ("buyer beware")

Economies of scale and specialization are characteristics of:

comparative and absolute advantage.

Payment for damaged property and/or mental suffering are usually considered:

compensatory damages

The Unilever Corporation sources the raw materials it buys from the global farming and forestry industries. Their initiative to source 100% of its agricultural raw materials sustainably, is an example of:

corporate social responsibility in global trade.

When ________, a typical firm will supply a higher quantity at any given price for its output, and the supply curve will shift to the right.

costs of production fall

Privacy laws include governing:

data collection, storage, use and permissions.

The purpose of a nonprofit business is:

direct profits to charitable causes

Bank Of The North issued many large loans to their customers. An audit of the bank's records shows that the bank is now below the Federal Reserve's minimum reserve requirement. The Fed lends the bank the amount necessary to bring its reserves up to the required level. Bank Of The North will have to pay interest on the money that it borrowed from the Fed. The interest rate that is paid to the Fed on this loan is called the:

discount rate

If the process of producing a good or service is broken into a number of tasks each performed by a different individual instead of one person performing all of the tasks, this is known as:

division of labor

A business established a website. Now their customers can order products online without visiting the store, they are engaged in:

e-commerce

Burr Architecture is a commercial architecture firm founded by two brothers. As the company grew they took on additional partners and eventually sold stock in the company. By 2010 they had six employees, $500,000 in annual revenue, five projects underway, and plans to reinvest profits to fund expansion of the business. Based on the information provided about the company, what type of organization is Burr Architecture?

for profit

Sasha, a business manager, must consider many external factors that could affect her business. As she considers the low cost of labor in other countries around the globe when making business decisions, Sasha is considering:

global business enviornment

Technical, cultural, and economic advances are key drivers in the advancement of:

globalization.

When a guest in a hotel purchases a toothbrush and toothpaste from the gift shop, the guest has purchased what from the hotel?

good

Alice takes her car to the dealership for a routine scheduled maintenance i.e., oil change, filter change, lubrication, and tire rotation. Alice receives a call from the dealership later that day stating that the technician discovered serious wear in her two front tires during the rotation and recommends replacing the tires. Alice agrees and tells the dealership that she will purchase two new tires and asks if they can be installed by the time she picks up her vehicle. Has the dealership provided a good or a service for Alice?

good and service

Capital is the only resource that:

has been produced

From the examples below, which is a for-profit business?

home depot

Human intellect and creativity falls into which of the following four factors of production?

human resources

A product must do what it is supposed to do. The consumer is protected if the product does not do what it is supposed to do under the:

implied warranty of merchantability

Which financial statement is the first one prepared by a company, in order to complete all other remaining statements:

income statement

The Generally Accepted Accounting Principles, or GAAP, require companies to prepare the following four financial statements:

income statement, balance sheet, statement of cash flows, and statement of owner's equity.

Caplin Construction is a construction company founded in 2005. Most of Caplin's clients are government entities such as local city and state government agencies. The company has little experience bidding on, or designing projects, for private businesses or industries. Recently budgets for government projects have been cut and the company now sees that they must begin to pursue contracts with private businesses and industries. The company has learned about a new large hotel chain entering the state. Caplin knows the hotel chain will need parking structures and parking lots for all of the new hotel properties and Caplin would like to bid (and hopefully win!) the contract. Which function of Caplin Construction would have PRIMARY responsibility for defining a business strategy that would create success for the company in this environment?

management

Varvitsiotis Architecture is a commercial architecture company founded in 1996. Their primary client base is private businesses and industries. They have little experience bidding on or designing projects for government entities, such as the Department of Defense or the State of Alabama. Recently, the U.S. government announced an economic stimulus program that is intended to jumpstart construction. However, these funds were allocated to public (government) projects where the firm currently does not have a presence. Which function in Varvitsiotis Architecture would have primary responsibility for defining a business strategy that would create success for the company in this environment?

management

Sea-Worthy is an ocean-shipping company. The company decided to develop their own internal ERP (Enterprise Resource Management) system since none of the existing commercial packages met the specific needs of their unique business segment. Halfway into development by their IT department, the company came to the realization that this system could be licensed to their competitors to offset their development cost and fund future enhancements. Which functional area of the company would be responsible for creating revenue from this internal system?

marketing

A function is responsible for aligning products and services to customer needs. Which function is driving this alignment?

marketing/sales

An implied warranty of ________ assures that a product is a reasonably fit for ordinary use.

merchantability

Foreign Direct Investment is the ________ approach that a business can use to reach a foreign market.

most intensive

Caitlin is a gourmet chef who operates a seaside organic restaurant. Caitlin prefers to utilize only ingredients that she grows herself and she has decided to produce her own sea salt for her recipes. This would require the following four factors of production: Labor, in the form of her staff gathering and boiling; capital, in the form of buckets, filters, jars and stoves; entrepreneurship, in the form of Caitlin initiating the production of her own sea salt, and; ________, in the form of sea water and sun.

natural resource

During an economic ________, business is booming, prices are high, and it is difficult to hire new workers because virtually everyone who wants to work is already employed.

peak

According to the Clayton Act companies must notify the government in advance to:

plan large mergers or acquisitions

New decisions that bind future courts establish:

precedent

A demand curve shows the graphical relationship between price and:

quantity demanded.

A supply curve is a graphical illustration of the relationship between price, shown on the vertical axis, and ________, shown on the horizontal axis.

quantity supplied

In the Financial Projections section, the SBA recommends this for the projections for the first year:

quarterly or monthly projections.

The Federal Reserve has tools at its disposal to help regulate the financial system. Which tool might they use to help stabilize prices?

regulation of interest rates