BUS 165 Final

Lily, a restaurant owner, is planning to invest in a multi-purpose ZS-13 baking oven. The oven costs $20,000 and will have a useful life of 10 years. The payback each year is $8,000. Assuming that the money is received evenly across the year, what will be the payback period if she decides to purchase the oven?

2 yrs 6mos

The rule of thumb for evaluating current ratio is that the minimum acceptable ratio is:

2.0

The Immigration Reform and Control Act of 1986 is applicable to _____.

All employers

What is a challenge of the resource maturity stage?

Avoiding complacency

According to the five factors most valuable to employees, which of the following is a reason employees leave a company?

Being denied professional development and learning opportunities to expand their job responsibility

What is true of exporting?

Insurance is essential for export payments to overcome the risk of default.

Juan has an accounting philosophy according to which he keeps the loans borrowed from the business separate from the loans he takes from banks for his own purposes. Which of the following basic accounting concepts is reflected in Juan's accounting philosophy?

The business entity idea

What is true of insurance?

The insurance company makes a profit by collecting premiums from many businesses for the same set of risks.

What is true of financial statements?

The overall content and form of financial statements have been made standard by long usage.

What is true of using internal audits to manage risk?

The owner should provide sufficient authority to the auditor to ensure that he or she can accomplish the goals of the audit.

Depreciation is based on which of the following assumptions?

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

What is a common idea among the different models for the life cycle of the small business firm?

There are multiple stages in all models of the life cycle of the small business firm.

What is true of government agencies that issue grants?

They publish RFPs that specify the conditions of a grant.

What is true of limited partnerships?

They require filings with the state in order to be set up and maintained legally.

What federal employment law prohibits discrimination with respect to any condition of employment based on race, color, sex, religion, or national origin, except where religion, sex, or national origin is a bona fide occupational qualification which is reasonably necessary to the conduct of a particular business?

Title VII of the Civil Rights Act of 1964

What is true of payment procedures?

Up-front cash payment is a risk to the customers.

Responsibility for the actions of another is referred to as:

Vicarious liability

The "business entity" concept of accounting indicates that:

a business has an existence that is separate from its owner.

The "going concern" concept states that:

a successful business will stay in business.

The information that the account holder knows about his or her account, but the bank does not know, includes:

any deposits the holder has made after bank closing.

Skygull, Inc. is planning to launch a new generation of cell phones. Being the first entrant in this market makes it difficult for the company to decide the means to reach its potential customers, the advertising medium to use, and the optimum price for each cell phone. Skygull, Inc. can best tackle this problem by conducting a(n) _____.

marketing research

Restaurants, clothing retailers, barbers, and beauticians face relatively low risks of loss from nonpayment because:

most of them provide credit only by accepting credit cards, which reduces the risk of nonpayment.

Economic order quantity (EOQ) helps a business to think in terms of:

ordering costs and carrying costs

Independent contractors who provide specialized business services or support from a distance, through different methods of communication are known as:

virtual employees

Sue, the owner of a small business which bakes and sells homemade butter cookies, plans to close down the business and leave the country. If Sue arranges to pay off all debts after the business is officially closed, what method of business termination is being used here?

workout

The two largest governmental grant programs that are specifically intended for small business are:

SBIR and STTR

What is a characteristic of the growth stage of the product life cycle?

Sales and profits during this stage grow at higher rates than at any other part of the product life cycle.

What practice should be adopted to ensure that a computer is kept secure?

Setting a PC to lock itself up after a few minutes of inactivity

Profits which are not taken in the form of money are known as:

Slack resources

What type of business form is the most popular for start ups?

Sole proprietorship

What attribute is most likely to be associated with the existence stage of a small business life cycle?

A clear set of overhead costs

Bill runs a small business and is in the process of revising out his company's compensation plan. After researching the market and determining the salary range, Bill starts to plan how much of an increase in pay he can offer each employee subsequently. In the context of increasing pay, what is the most appropriate course for Bill to follow?

Bill should determine this based on an employee's performance, value, and contribution to the small business.

What statement points out the similarity between a product life cycle and a service life cycle accurately?

Both products and services will take a little time to attract customers.

What business requires a stake in the company and is good for brainstorming with other entrepreneurs?

Business incubator

Maya runs a home-based apparel business called Round Polka catering only to the needs of pregnant women. Identify the type of marketing strategy involved.

Concentrated strategy

What section of the job description will list the level of education required to perform a particular job mentioned?

Credentials and experience

What ratio is used to estimate the liquidity of a business?

Current ratio

In what stage do businesses try to cut costs and pare back their product lines?

Decline stage

What is the first step of a business's marketing plan?

Discussing the target market of the business

What international strategy is usually inexpensive, quick to start, easy to change, and less risky than others?

Exporting

Anderson and Anderson is a law firm that has been handed a job to take care of patent issues for Gantar Labs. Anderson and Anderson charges a fixed amount for patent-related cases. What type of fee will Gantar be paying Anderson and Anderson?

Flat fees

What component, as suggested by Zig Ziglar, involves staying in touch with customers on a regular basis via visits, phone calls, emails, newsletters, and so on?

Frequency

In general, all forms of business organization can be categorized based on the owners' responsibilities for the organization's liabilities, and _____.

How the business is taxed

What explains the difference between limited liability partnership and general partnership?

In general partnerships, no government permission is required for the setup and maintenance of business unlike limited partnerships.

Gold Pelican, Inc. is a small e-commerce company that sells custom made briefcases to customers spread across the globe. The company is now planning to expand its operations by opening stores in many countries. Hence, the company decides to conduct a survey to understand what its existing customers think about it as a brand, its product quality, pricing, and their future expectations. Keeping in mind the budget constraints of a small business and the need to cover customers all over the world, what is the most appropriate way to conduct a survey?

Internet

What is true of theories based on the bounded rationality models?

It assumes that people are inefficient processors of information.

What is true of a direct mail approach?

It is a challenge to find the right market using this method.

What is true of managerial accounting?

It is forward-looking in nature

What is true of the accounting equation?

It is used to place records into understandable categories that are useful for managing a business.

What is feature of internet recruiting in small business?

It is vastly high in accuracy of job-search process.

What is a feature of the perpetual inventory system?

It maintains a constant record of the receipt and sale of inventory.

What term refers to the set of risks faced by firms early in their life cycles that come from a lack knowledge by the owners about the business they are in and by customers about the new business?

Liability of newness

Tammy is talented at craft but lacks the cash flow management skills required to run a business. She opens a store, Tammy's Craft Corner, with the help of her son David—a business major—who manages the budgets and expenses of the business. Within a few months, David notices problems in cash flow. Although not the primary strategy of her business, Tammy takes up craft projects for kindergarten schools in an effort to increase cash inflow. This kindergarten project is an example of a(n) _____.

Noncore project

What is true regarding the OSHA Act?

OSHA-defined "low-hazard" industries are exempt from the record keeping requirements of the regulations.

What should be included in an employee contract for a key employee?

Offer rewards for providing adequate termination notice

What is a technique used by a small business to increase cash flows?

Offering discounts for prompt payments

What accounting function ensures that the employment taxes are kept current?

Payroll records

While teaching strategy at Farell University, Jessica developed an interactive strategy-simulation game to inculcate the concept of strategy to her students. She found that they were able to grasp the concept much better from the game rather than from reading books. For two years Jessica used the game to teach students. Eventually she removed possible glitches and perfected the game. She wanted students at other universities to benefit from the simulation. The result was the launch of Simulate Strategy, Inc. Some of Jessica's students suggested that she create a Web site for Simulate Strategy, Inc. Her company is fairly new and opening a Web site immediately would expose her company to customers from around the world. In this scenario, Simulate Strategy is an example of a _____.

born international

Danielle, a graduate in fashion technology, always found it tough to find clothes for her as she belonged to the category of plus-size. Hence, she launched her clothing brand Taurus Trends that catered to the needs of plus-size and extremely tall women. In catering to the clothing needs of plus-size women, Danielle has typically adopted a(n) _____ marketing strategy.

concentrated

While the competitors of Premium Airlines cater to both the business and economy class customers along with the executive class customers, the company aims at focusing all its service efforts on customers who prefer to travel in style and comfort. Hence, the firm's airplanes only have executive seats. This is an example of a(n) _____ marketing strategy.

concentrated

During the start-up phase of a business, the emphasis is on:

conserving what little cash the business has

For a business to factor receivables, the _____ must have good credit ratings.

customers

Hugh starts his own animation company by borrowing funds from his parents. His parents tell him that he can repay them when the business is generating profits. This is an example of _____.

deferral

According to the poll conducted by the National Federation of Independent Business (NFIB), small business faced cash flow problems because of:

delayed payments from customers

Dividing the market by categories such as age, income, education level, ethnicity, or sex is termed as _____ segmentation.

demographic

Danielle, a graduate in fashion technology, always found it tough to find clothes for her as she belonged to the category of plus-size. Hence, she launched her clothing brand "Taurus Trends" that catered to the needs of plus-size and extremely tall women. Before the launch of her store, Danielle decided to observe the shopping habits of plus-size women and record how many left the stores without making a purchase because they could not find the right fit. This would typically be a(n) _____ research.

ethnographic

Formal summaries of the content of an accounting system's records of transactions are called _____.

financial statements

After determining an organization's compensation philosophy, the next step in developing a compensation plan is to:

find comparison factors for salary

Tammy is talented at craft but lacks the cash flow management skills required to run a business. She opens a store, Tammy's Craft Corner, with the help of her son David—a business major. Within a few months, the sales increase exponentially which results in a shortage of cash needed to expand their business. This crisis is termed _____.

growth trap

In the lease agreement signed by Arthur Fraser, a _____ clause exempts him from paying any restitution in case he causes accidental damage on the property. What type of contractual clause protects Arthur Fraser from paying such damages?

hold harmless

What psychological contract item would fall under the factor of an employee's autonomy and growth?

increasing responsibilities

The risk from customers primarily arises from:

injuries suffered while on business property

There are two general sources of gift financing:

institutional and personal

What is a disadvantage of providing credit to customers?

it delays the receipt of cash

The primary disadvantage of leasing is that:

it usually costs more than it would cost to purchase an asset.

The most common mandatory insurance coverage includes:

liability for damages caused by vehicle accidents.

Restrictions imposed by loan contracts on the operations of a business, such as requiring that a specific minimum net worth be maintained, a specific debt-to-equity ratio not be exceeded, no dividends be paid to stockholders and so on, are known as _____.

loan covenants

Tammy is talented at craft but lacks the cash flow management skills required to run a business. She opens a store, Tammy's Craft Corner, with the help of her son David—a business major—who would manage the budgets and expenses of the business. Tammy buys her craft materials on credit from her supplier but clears all her debts at the end of every month. The amount that Tammy owes her supplier is referred to as _____.

payables

According to the IRS, to be an independent contractor the person must:

perform a service that is not central to the operation of business

What concept is based on the perception that promises have been made in exchange for certain employee obligations such as giving of their energy, time, and technical skills?

psychological contract

Susan, who is a florist, purchases her flowers on credit. Lucy, a customer, takes eight bouquets and promises to pay Susan within two weeks. The amount that Lucy owes Susan is termed _____.

receivables

The most common form of institutional gift financing is in the form of _____.

reduced taxes

The ratio of profits to owner investment in a business is referred to as _____.

return on equity

One of the three guidelines of training is that training _____.

should be thought of as an investment

Ron is offered a sales job at an insurance company. He is informed that it is mandatory for him to be able to drive his own car to meet prospective customers and finalize insurance deals. Such a condition in the job description is referred to as a:

special requirement

The decision rule for an NPV analysis is to accept:

the largest positive NPV.

An implication of the bounded rationality models of management is that:

the more information available to be included into the decision process, the less efficient that process will be.

The most common form of employee collusion is:

theft of cash and inventory.

According to the Wells Report submitted by the Association of Certified Fraud Examiners, what is the number one method for fraud detection?

tips