Bus 190 Exam 1

What percentage of American businesses is considered small businesses?

99.7

Purchased land for $100,000 and has financed 50% of the cost using long-term debt. The effect on its balance sheet is

an increase in assets of $50,000, and an increase in liabilities of $50,000.

American growth oriented companies cannot ignore the world market since only _______ in every 22 of the world's population are US residents.

1

Approximately how many countries currently require, permit the use of, or have a policy of convergence with IFRS?

100

With set-aside programs for small businesses, up to ______ of certain government contracts are designated for small businesses.

23 percent

What percentage of small businesses survives the first five years of operations?

50 percent

Most manufacturing businesses are considered small if they employ fewer than __________ workers.

500

By the year 2030, the number of US workers ______ or older will reach 72 million - double what it is today - and many of them will be retiring from the workforce, taking their experience and expertise with them.

65

A legal organization with assets and liabilities separate from those of the owner is called:

A corporation

Which of the following is most likely to be a cooperative business operation? a. A limited liability corporation b. group of neighboring farm owners c. a mom-and-pop grocery store d. a chain of resturaunts

A group of neighboring farm owners

How does a partnership differ from a sole proprietorship?

A partnership is more difficult to dissolve than a sole proprietorship?

A partnership formed to create a competitive advantage for a business involved is an example of:

A strategic alliance

Which type of business is most likely to operate as a cooperative business

Agriculture

Which of the following of values of partnership with employees is now recognized by businesses? a. Creative thinking and problem solving b. Rewards innovation and risk taking c. Collaboration and team efforts d. All of these

All of these

Which of the following traits are needed by today's business managers a. Visionary skills b. Creativity and critical thinking c. Ability to lead change d. All of these

All of these

____ is anything of value owned or leased by a business.

An asset

The basic accounting equation is

Assets= Liabilities + Owner's Equity

___________ refers to the standards of conduct and moral values involving decisions made in the work environment.

Business Ethics

What is business?

Business consists of all profit-seeking activities that provide goods and services to an economic system.

__________ is an organization that provides temporary low-cost, shared facilities to small start-up ventures.

Business incubator

How is cash budget different from the accrual system?

Cash budgets reflect the timing of actual cash inflows and outflows; the accrual system matches expenses to the period when they occur.

According to the annual World Economic Forum's Global Risks Report, which of the following is NOT one of the top global risks that governments and businesses will need to address to maintain global competitiveness? a. Water supply crisis b. Mismanagement of population aging c. Drop in the levels of greenhouse gases d. Chronic fiscal imbalances

Chronic Fiscal Imbalances

Which form of unemployment can best be addressed by actions that lead to economic expansion?

Cyclical unemployment

The willingness and ability of buyers to purchase goods and services at different prices is called:

Demand

__________ typically slope downward, meaning that lower prices for a good or service attract larger purchases.

Demand curves

In the United States, _____ is primarily responsible for evaluating, setting, or modifying accounting guidelines.

FASB (Financial Accounting Standards Board)

Why is fair competition important in the private enterprise system?

Fair competition allows firms to compete in the marketplace, knowing that they won't be subjected to excessively aggressive practices that are designed to eliminate them.

Macroeconomics is the study of small economic units such as households and individual businesses.

False

True or False: Use of primary data in market research is much more cost effective and easier to obtain.

False

True or False: While financial ratios allow a business to make comparisons with the historical performance of that business, they do not help in attempting to compare performance with competitors.

False

Why are the four factors of production important?

Firms need to understand how to reduce the cost of production if they are going to be successful

________ consists of government spending and taxation decisions to control inflation, encourage economic growth, and balance the federal budget.

Fiscal Policy

_____ accountants focus on potential fraud in a variety of organizations

Forensic

Evelyn recently quit her marketing job as it was getting too monotonous. She is currently looking for a new job. Under which category of unemployment should Evelyn be grouped?

Frictional unemployment

Why do home-based businesses often have lower costs?

Funds that are not being used for leasing or warehouse space can be directed into the business

To provide reliable, consistent, and unbiased information to decision makers, accountants follow guidelines, or standards, known as

GAAP (generally accepted accounting principles)

Which industry listed below is NOT dominated by small businesses? a. Florists b. Hospitals c. Funeral Homes d. Hair salons

Hospitals

_____________ is described as an economic situation characterized by soaring prices

Hyperinflation

Why are more firms moving to International Financial Reporting Standards (IFRS)?

IFRS is easier to understand than GAAP

A few industries in the United States, like transportation, energy, and communications, were deregulated in the 1980's and 1990's to:

Improve customer service and reduce prices

Which of the following is true of inflation?

Inflation devalues money

In addition to creating jobs and selling products, entrepreneurship also is a great source of __________ in the economy.

Innovation

_____ ratios describe the extent to which a firm relies on debt to finance its operations.

Leverage

What characterizes a small business?

It is independently owned and operated and in not dominant in its field.

Which of the following is true of a franchiser? a. It is the small business person who purchases the franchise b. it incurs no risk in the transaction c. It guarantees profits to the purchaser d. It usually stipulates the purchase of certain ingredients or equipment, pricing, and marketing efforts.

It usually stipulates the purchase of certain ingredients or equipment, pricing, and marketing efforts.

The study of a country's overall economic issues is called:

Macroeconomics

During which era was consumer orientation developed

Marketing Era

Small-business loans often used to buy equipment or operate a business are called:

Microloans

_________ is formulated by the Federal Reserve System

Monetary policy

The market structure that is most likely to be regulated by a local, state, or federal government is:

Monopoly

Which is true about the movement of supply and demand curves?

Movement along the supply curve is opposite of movement along the demand curve

How are not=for-profit organizations different from profit-seeking businesses?

Not-for-profit organizations focus on goals other than generating profits.

The right to _______ is the most basic freedom under the private enterprise system

Private Property

Which of the following inputs would NOT be considered a factor of production?

Products

Which of the following is not one of the customary services of the Small Business Administration? a. Helping businesses apply for set-aside programs b. providing management training c. helping to write a business plan d. providing direct loans

Providing Direct Loans

In which of the following market structures there are a large numbers of buyers and sellers, each of whom has some significant control over price?

Pure competition

During which stage of the business cycle does unemployment rise and inflation fall

Recession

Which era emphasizes customer satisfaction and building long-term business relationships?

Relationship era

___________ is an admired management philosophy that believes in contributing to the community and protecting natural resources.

Social Responsibility

What is the most common form of business ownership?

Sole Proprietorship

Which of the following is a major drawback of a family owned business?

Succession

How does technology support relationship management?

Technology most often takes the form of communication to manage relationships with customers

For capitalism to operate effectively, the citizens of a private enterprise economy must have certain rights. Which of the following would NOT be considered part of the private enterprise system?

The age of industrial entrepreneurs

Which era of American business is called the "golden age" because it did so much to advance the US business system and raise the overall standard of living?

The era of industrial revolution

Identify the business era during which managers began to pay more attention to what consumers wanted and needed rather than simply to what a firm could produce.

The marketing era

Which of the following is true today regarding the business workforce? a. The workforce is adequate for business despite the aging population. b. The workforce is less mobile and less flexible. c. The workforce can expect more employer loyalty to a life-long career. d. The workforce is less independent and more collaborative in nature.

The workforce is less independent and more collaborative in nature.

What is an advantage of mergers?

They allow a company to diversity and increase their customer base

Which of the following is NOT a current global risk? a. They are all current global risks b. Rising Greenhouse Gas Emissions c. Water Supply Crisis d. Mismanagement of Population Aging

They are all current global risks

What rights do owners of common stock hold?

They have voting rights but only a residual claim on the firm's assets

Not-for-profit organizations do not face any of the challenges that profit-seeking business do.

True

There is a growing concern that as Baby Boomers retire the business workforce will fall short of actual needed workers

True

True or False: A CMA certification only requires a certain level of management experience.

True

True or False: Double-entry booking states that every accounting transaction must have an offsetting transaction.

True

True or False: Not-for-profit organizations operate in both the public and private sector.

True

True or False: Relationship marketing can enhance the ability of a business to compete with other businesses.

True

True or False: The IFRS has adopted the IASB

True

True or False: The demographic method of segmenting the market is concerned with region, population, and density.

True

True or False: The not-for-profit sector is one of the fastest growing segments of accounting practice.

True

What skills are the critical skills needed by a 21st century manager?

Visionary skills, Critical thinking, Creativity

Which of the following statements is true with regards to the rights of employees in mixed market economies? a. employees are never subjected to unemployment b. the government influences career decisions for all citizens c. workers are allowed to choose labor union membership d. the government prohibits citizens from working in private enterprises

Workers are allowed to choose labor union membership

A written document that provides a statement of a company's goals, methods for achieving goals, standards for measurements is called:

a business plan

Which of the following is not a benefit to the franchiser in a franchise agreement? a. a franchiser is in control of the daily operations of a much larger business b. a franchiser employs fewer direct employees c. a franchiser can make better buying deals because of quantity purchases. d. a franchiser can handle a larger, more complex business.

a franchiser is in control of the daily operations of a much larger business

Which of the following is NOT one of the several trends challenging American businesses? a. less diverse workforce b. flexibility and mobility c. outsourcing and offshoring d. the shrinking labor pool

a less diverse workforce

Which of the following is least likely to be a small business? a. restaurant b. a construction company c. a nursing home d. an auto repair shop

a nursing home

Amtrak is an example of:

a private ownership of a for-profit corporation

Why is accounting not considered an activity of business? a. Accountants report the results of business activities performed by the three basic activities b. Accounting is not a creative function. c. Accountants are employed by outside firms, not directly by the company being audited. Accountants only look past transactions; activities are current events.

a. Accountants report the results of business activities performed by the three basic activities

Which plan below outlines its marketing strategy and includes information about the target market, sales and revenue goals, the marketing budget, and the timing for implementing the elements of the marketing mix? a. Marketing plan c. Financial plan b. Environmental plan d. Customer-oriented plan

a. Marketing plan

______ is the process of collecting and evaluating information to help marketers make effective decisions. a. Marketing research c.Cause marketing b. Distribution strategy d.Segmenting

a. Marketing research

AT&T ensured a full crowd of spectators by signing Tiger Woods to host its AT&T National golf tournament, which also honored U.S. military members. Which one of the nontraditional categories applies below? a. Organization marketing c. Person marketing b. Place marketing d. Cause marketing

a. Organization marketing

Which type of accountant is called upon to provide unbiased advice about a firm's financial condition? a. Public accountant b. Government accountant c. Certified public accountant d. Management accountant

a. Public Accountant

Why do stockholders and potential investors use accounting information? a. To make investment decisions b. To evaluate credit ratings c. To plan and control d. To evaluate tax liabilities

a. To make investment decisions

______is the power of a good or service to satisfy a want or need. a. Utility b. Exchange c. Marketing d. Barter

a. Utility

The interpersonal determinants of consumer behavior include all BUT which of the following: a. end-use influences. b. social influences. c. family influences. c. cultural influences.

a. end-use influences

Accounting plays a key role in all of the following EXCEPT: a. interpreting macro and micro analyses to report changes in the economy b. investing activities to provide valuable assets required to run a business. c. financing activities to provide necessary funds to start and expand a business d. operating activities that focus on selling goods and services, along with ensuring sound financial management

a. interpreting macro and micro analyses to report changes in the economy

The ____ is a set of activities in converting information and individual transactions into financial statements.

accounting cycle

Inventory turnover describes how efficiently a firm is managing its sales and purchases of inventory. This is an example of a(n) _____ ration.

activity

An effective business plan should include: a. the vision of the founder(s) and its mission b. description of potential customers c. a description of what makes the company unique d. all of these answers are correct

all of these answers are correct

Small businesses often fail due to: a. all of these answers are correct b. management shortcomings c. difficulty dealing with government regulations d. inadequate financing

all of these are correct

Assets include (a. cash, b. land, c. patents, d. all the above)

all the above

Entrepreneurship is:

an integral part of the private enterprise system

. ________ is part of the broader field of business intelligence, which is the task of using computer-based technology to evaluate data in a database and identify useful trends. a. Data warehousing c. Segmentation b. Data mining d. Data analysis

b. Data mining

_____ influences on consumer behavior includes individual needs and motives, perceptions, attitudes, learned experiences, and self-concept.

b. Personal

The most common form of market segmentation is: a. geographic. b. demographic. c. product-related. d. psychographic.

b. demographic

The use of regional warehouses by big box retailers is a part of their _____ strategy. a. quantity b. distribution c. pricing d. promotional

b. distribution

When two parties benefit from trading things of value, they have entered into a(n) _____ process. a. conversion c. critical b. exchange d. production

b. exchange

Tom Colicchio, a successful restaurateur and judge on the reality series Top Chef, discovered that service preferences are different in California and New York. His product should be segmented based on: a. demographics. b. geography. c. product use. d. psychographics.

b. geography

The exchange process is an activity in which two or more parties give something of value to each other to: a. make the best deal. b. satisfy perceived needs. c. maintain client relationship. d. market products.

b. satisfy perceived needs

The financial document that shows how the company's finances are doing at a particular point in time is called a(n)

balance sheet

A __________ occurs when government spends more than it raises through taxes and fees.

budget deficit

Which of the following is not part of the marketing mix? a. Production b. Price c. Distribution d. Promotion

c. Distribution

The best marketers not only give consumers what they want but also: a. offer the lowest prices. b. create form utility. c. anticipate needs before those needs surface. d. sell items that are not needed.

c. anticipate needs before those needs surface

Marketing the Special Olympics is a form of: a. person marketing. b. place marketing. c. cause marketing. d. organization marketing.

c. cause marketing

A(n)_____ consists of two or more firms combined to form one company. a. sole proprietorship c. merger b. acquisition d. joint venture

c. merger

Which of the following nontraditional marketing forms would focus on a political candidate's campaign? a. Event marketing b. Cause marketing c. Person marketing d. Organization marketing

c. person marketing

Which strategy below includes decisions about package design, brand names, trademarks, warranties, product image, new-product development, and customer service? a. Distribution strategy c. Product strategy b. Promotional strategy d. Pricing strategy

c. product strategy

Accounting is the process of: a. developing a marketing plan. b. obtaining funds for the firm's operations. c. recording, measuring, and interpreting financial data. d. producing goods and services.

c. recording, measuring, and interpreting financial data.

The era in marketing history that believed creative advertising and selling would overcome consumers' resistance is _____. a. production b. marketing c. sales d. relationship

c. sales

The marketing mix consists of all the following EXCEPT: a. product. c. target. b. price. d. place.

c. target

The _____ budget tracks the firm's cash inflows and outflows

cash

The ultimate goal of relationship marketing is:

customer satisfaction

Which of the following is an example of ownership utility? a. A convenience store stays open 24 hours a day, seven days a week. b. A bank is located across the street from the largest employer in town. c. A restaurant allows customers to create their own menu combinations. d. A furniture store offers 90-days-same-as-cash financing to qualified buyers.

d. A furniture store offers 90-days-same-as-cash financing to qualified buyers

Which of these is NOT one of three basic activities of an organization? a. Operating b. Financing c. Investing d. Accounting

d. Accounting

Which of the following is NOT a part of the marketing mix? a. Price b. Promotion c. Product d. Practice

d. Practice

Which of the following is NOT a typical method of segmenting B2B markets? a. Geographic b. Demographic c. End-use d. Psychographic

d. Psychographic

Daron's washing machine has stopped working. He has looked at Consumer Reports, talked to friends and family, and gone to several retailers to look at new machines. This weekend he will sort through the information that he has already gathered. Daron is at what stage of the consumer buying process? a. Search b. Evaluation of alternatives c. Problem recognition d. Purchase decision

d. Purchase decision

Interpersonal and personal factors affect the consumer behavior process: a. during the problem recognition stage. b. when the customer is looking for information. c. immediately before the purchase act. d. at every step along the way.

d. at every step along the way

Long-term customers buy more, require less service, and provide valuable feedback to a marketer. These elements contribute to a high: a. propensity to consume. b. relationship c. brand loyalty. d. lifetime value of a customer

d. lifetime value of a customer

Marketing creates all of the following types of utility EXCEPT: a. form. b. time. c. place. d. ownership.

d. ownership

The marketing concept: a. works best during a seller's market. b. is ineffective in the age of Internet transactions. c. focuses on producing products at a reasonable cost in large batches. d. refers to a companywide customer orientation to promote long-run success.

d. refers to a companywide customer orientation to promote long-run success

The Census Bureau is a major source of ______ data for marketers. a. primary b. internal c. proprietary d. secondary

d. secondary

A merger between two companies in different levels of the production and marketing of a product is called a(n) _____ merger. a. joint b. industry-dominate c. horizontal d. vertical

d. vertical

If labor hours increase, the amount of natural resources used remains the same, and output remains constant, productivity is said to have:

decreased

Cooperatives allow members to: a. share equipment b. benefit from group purchasing discounts c. share of other efforts such as marketing d. do all of these

do all of these

What does a corporation have to incur that a partnership and sole proprietorship do not?

double taxation on corporate earnings

Core inflation rate is the inflation rate of an economy after _______ and ______ prices are removed

energy; food

An ___________ is a risk taker in the private enterprise system

entrepreneur

How many shareholders does a S corporation have?

fewer than 100

Natural resources include all of the following EXCEPT: a. building sites b. land c. mineral deposits d. financial capabilities

financial capabilities

A corporation that is doing business in states other than the state in which it has filed incorporation papers is called a:

foreign corporation

Donna is a forensic accountant who has been hired by the local district attorney to investigate a possible case of embezzlement. She found boxes of records that suggest several thousands of dollars of vendor payments might have been falsified. The effect of those false transactions would probably show up as

higher expenses on the income statement

A _____ combines firms of the same industry that wish to diversify, increase their customer base, cut costs, or offer expanded product lines

horizontal merger

Many former owners of failed firms blame ______ for their company's failure.

inaccurate budgeting

A firm's ability to meet its short-term obligations is measured by

liquidity ratios

Which of the following risks does the franchiser take on in a franchise agreement? a. loss of money for several years. b. loss of control over every aspect of the business c. loss of absolute control of operations d. all of these answers are right

loss of absolute control of operations

Capital Includes:

money that a firm raises for expansion

A cash budget is usually prepared once a _____

month

To cover the budget deficit, the government of a country borrows money by selling Treasury bills, Treasury notes, Treasury bonds to investors. All of this borrowing is referred to as the _______.

national debt

The US Postal Service and the American Heart Association are called __________

not-for-profit organizations

New competitors are discouraged in an oligopoly primarily because:

of the high start-up costs that form barriers to entry

Small businesses account for nearly ________ of US exports to the World Market

one third

The internet has made possible another business tool for staffing flexibility: __________, or using outside vendors to produce goods to fulfill services and functions that were previously handled in-house or in-country.

outsourcing

What does managing customer relationships instead of focusing on transactions do?

requires added personnel and reduces organizational flexibility

A ___________ reduces the money supply to curb rising prices, over-expansion, and concerns about overly rapid economic growth.

restrictive monetary policy

Which of the following does not grant direct loans to small businesses? a. commercial banks b. small business investment companies c. small business administration c. private lenders

small business administration

A(n) _____ shows the change in net worth from the end of last fiscal year to the end of the current one

statement of owner's equity

A __________ is a partnership formed to create competitive advantages for the businesses involved

strategic alliance

The procedure by which accountants convert data about individual transactions to financial statements is called

the accounting cycle

Economics is the study of:

the choices people and governments make when allocating scarce resources.

The financial statement that describes a firm's financial performance over a specified period of time is

the income statement

Who owns the corporation?

the shareholders

Small businesses are more likely than large ones to hire:

the youngest workers

The primary purpose for developing a business plan is:

to obtain financing for the business

_______ out of every three new jobs are created by small business.

two

Because of the boom in worldwide trade, there is a need for comparability and ______ in international accounting rules.

uniformity