Intro to Business Final

Business bankruptcy can be

-Chapter 11 -involuntary -voluntary -Chapter 7

For a contract to be legally enforceable, all of the following elements must be present:

-Consideration -Capacity -Mutual assent -Legal form

Which statement describes the essence of pooling:

-The losses are shared by all the risk exposures who are part of the pool. -The bulk of premiums required by the insurer to assume risk is used to compensate those who incur covered losses. -Loss sharing is accomplished through premiums collected by the insurer from all insureds.

Under current copyright law, the copyright is issued for the _____________ the creator's death.

life of the creator plus 70 years after

A LAN is a:

network of computer systems that share the use of software and hardware

The Federal Deposit Insurance Corporation (FDIC):

-is an independent, quasi-public corporation -is backed by the full faith and credit of the United States government -oversees the National Credit Union Share Insurance Fund -insures deposits in commercial banks and thrift institutions up to a ceiling of $250,000 per account

Why would a company choose to engage in a conglomerate merger instead of a vertical or horizontal merger?

A conglomerate merger is done to reduce risk.

_____ are cash held in the form of coins and paper money.

Currency

Knowledge management is much easier than information management. (True or False)

False

Profitability ratios measure how well a firm uses its assets. (True or False)

False

Registration procedures for incorporation are uniform from state to state across the U.S. (True or False)

False

Which of the following statements about the partnership as a form of business ownership is true?

Formation of the partnership is simple.

A contract to smuggle drugs into a state for a specified amount of money would not be legally enforceable because it does not meet the __________ requirement.

None of these are the requirement

Which of the following statements about the taxation of partnerships is true?

Partnerships file tax returns but pass profits and losses on to partners who report them on their tax returns.

Individuals being involved in risky enterprises is referred to as:

Systems risk

A mortgage loan is a long-term loan that uses real estate as collateral. (True or False)

True

_____ is the process of buying securities from corporations and governments and reselling them to the public.

Underwriting

Articles of incorporation do NOT include:

a list of all stockholders' names

A mutual company may go through a process called demutualization and become a stock company for the following reason(s):

all are incorrect

________ involve attitudes of carelessness and lack of concern. As such, morale hazards increase the chance a loss will occur or increase the size of losses that do occur.

all are incorrect

Chez Dove is an independent coffeehouse/bookstore that went bankrupt only eight months after opening due to an unexpected demand for cash to fix a leaking roof. Better cash _____ might have allowed the business to continue operation.

management

Processing data as they become available is called _____ processing.

online

Environmental conditions that affect the frequency and/or severity of loss are

physical hazards

Which of the following is NOT a theory of recovery in a product liability claim?

poor recommendation

Which of the following is an example of an asset that might be owned by a minor league baseball team?

reputation as a winning team

_____ are two types of thrift institutions.

savings banks and savings and loan associations

On a statement of cash flows for a provider of tutoring services, the cash flows from financing activities would include:

the money borrowed to purchase the furniture in the tutorial area and the interest owed on that debt

Insurers try to prevent adverse selection by learning enough about applicants to identify their appropriate exposure group or including policy provisions.

to identify their appropriate, including policy provisions

Which type of information system is used only by operational managers?

transaction processing system

The merger of McKesson, the leading U.S. drug wholesaler, and HBOC, a producer of health-care inventory software, is an example of a(n) _____ merger.

vertical

A(n) _____ is an independent wholesaler who buys related product lines from many manufacturers and sells them to industrial users.

industrial distributor

Government insurance is involuntary under certain conditions for certain people. These include:

-Unemployment -Social Security -Workers Compensation

Net sales:

deducts sales discount and returns and allowances from gross sales deducting sales discount and returns and allowances from gross sales

According to the text, the three IT trends that are having the greatest impact on the IT environment are:

digital forensics, the distributed workforce, and grid computing

When The Bank of Bank County borrows funds from the Federal Reserve; the rate the Fed charges the commercial bank is called the _____ rate.

discount

hich of the following is NOT an element of the promotional mix?

distribution

The three major categories of applications supplied by application service providers are:

enterprise applications, collaborative applications, and applications for personal use

The Securities Investor Protection Corporation (SIPC):

insures the accounts of customers of brokerage firms for up to $500,000 against a firm failure

Hard Rock Cafe International and Sol Melia Hotels and Resorts have allied to develop a multimillion-dollar hotel. This relationship is a _____ because their alliance will end as soon as the hotel is completed.

joint venture

The Federal Deposit Insurance Corporation (FDIC) monitors the banking practices of the institutions that it insures. (True or False)

True

The corporation's board of directors elects the corporate officers. (True or False)

True

The functioning of society depends on the law, which protects the rights of people and businesses. (True or False)

True

The goal of all promotion is to stimulate action. (True or False)

True

With arbitration, the parties agree to present their case to an impartial third party and are required to accept the arbitrator's decision. (True or False)

True

When a bank collects deposits during the day, then deposits them all after banking hours, it is using a reserve processing system. (True or False)

False

Which of the following statements about the Federal Deposit Insurance Corporation (FDIC) is true?

-All member banks in the Federal Reserve must be insured by the FDIC. -Each bank insured by the FDIC pays a fixed percentage of the bank's domestic deposit as its premium. -The FDIC reviews the financial records and management practices of banks it insures at least once a year. -The ceiling on the size account insured by the FDIC is $250,000.

Which of the following statements does NOT describe an advantage inherent in equity financing?

Interest is tax-deductible

In a transaction processing system the database can be updated in two ways. They are _____ processing.

batch and on-line

Virtual private networks (VPNs):

connect two or more private networks using a public network

Insurance is provided both by _____ owned organizations and by ______ and ______ agencies.

private, state, federal

A retailer would separate children's clothing purchased from Carter's into various sizes and types of clothing, such as size 6 shirts, size 2T shorts, and size 4T sun dresses. This process is called:

sorting out

Abercrombie & Fitch stores are aimed at college-aged consumers. The parent company also operates retail clothing stores under the name Hollister, which are targeted to 14- to 18-year-olds and under the name Abercrombie, which sell children's wear. Abercrombie & Fitch operate:

specialty stores

A term that means that business damages and/or debts can also be attached to the personal assets of the owners is ______ liability.

unlimited liability

The Federal Deposit Insurance Corporation (FDIC) only insures deposits at commercial banks. (True or False)

False

With insurance, the risk is transferred from an individual or entity (insured) to a third party (insurer). (True or False)

True

Fixed assets are property and buildings that a firm expects to use for more than:

one year

Money market deposit accounts and certificates of deposit are officially called ______ deposits.

Demand

_____ management is the art and science used to determine the most effective ways to acquire and use funds to achieve the firm's goals.

Financial

The sporting goods store sold $75,000 worth of merchandise in June. The retailer gave no discounts and had no returns. Which of the following statements accurately describes the information seen on the company's income statement?

Gross sales equal net sales.

Which of the following statements describes an advantage that personal selling has over other forms of promotion?

-Personal selling can be directed only to qualified prospects. -The sales message can be varied according to the motivations and interests of each prospect. -Personal selling is considerably more effective at creating a satisfied customer than other forms of promotion. -Personal selling costs can be adjusted by controlling the size of the sales force.

Manufacturer's negligence may take the form of _____.

-failure to warn -negligence per se -negligent design

Accounting provides a framework for looking at:

-financial performances of different firms -past performance -current financial health -possible future performance

A ________ is an exclusive right given to a writer, artist, composer, or playwright to use, produce, and sell her or his creation. Works protected by copyright include printed materials (books, magazine articles, lectures), works of art, photographs, and movies.

Copyright

The oldest and largest organized securities exchange in the United States is the:

New York Stock Exchange

_____ are deposits at a bank or other financial institution that pay interest but cannot be withdrawn on demand without penalty.

Time deposits

Accounts receivable or inventory usually secures short-term secured loans. (True or False)

True

Earnings per share (EPS) is the dollar amount earned by each share, not the actual amount given to stockholders in the form of dividends.

True

Hazards are conditions that increase the cause of losses. (True or False)

True

Sales promotions are marketing events or sales efforts that stimulate consumer buying. (True or False)

True

The idea behind _____ is the need that criminal investigators have for examining evidence on computer hard drives such as in e-mails or databases in order to build cases against embezzlers and others.

digital forensics

Victorinox is the name of the company that manufacturers Swiss army knives. The _____ channel the company utilizes to get its knives to market is to wholesalers, than to retailers, and finally to consumers.

distribution

What is the final step in the selling process?

following up on sales

Many large investors are now handling trades without Wall Street's services. Through the use of computer technology, they are making direct transactions. This relatively new development is called the _____ market.

fourth

Which of the following is a type of sales promotion that can be used if the organization's goal is to increase brand loyalty?

frequent-buyer programs

The Art Institute, a school for training artists to be financially self-sufficient, has a debt-to-equity ratio of 120 percent. This means the school has:

more debt than equity

Consumerism is the struggle for power between buyers and sellers. Buyers' rights and powers include the following:

-formulate any message provided that it is not misleading or dishonest in content or execution -introduce into the marketplace any product, in any size and style, that is not hazardous to personal health or safety, or if it is hazardous, to introduce it with the proper warnings and controls -price the product at any level they wish, provided they do not discriminate among similar classes of buyers -spend any amount of money to promote the product, so long as the promotion does not constitute unfair competition

What type of business organization generates the most total sales?

Corporation

_____ are debts that are to be paid within twelve months.

Current liabilities

_____ are investment professionals who are paid to manage other people's money.

Institutional investors

The _____ characteristic of money is revealed by the fact that a dollar can be converted into four quarters or ten times.

divisibility