Business Principles

Relationship Era

1. A small-scale consulting firm in Hawaii was struggling financially because it was unable to generate enough capital to run its business transactions. To generate capital, the firm decided to use web technologies and digital resources to build long-term associations with current customers and to reach out to new customers. In this scenario, the firm is using concepts that primarily originated in the _____ of American business history.

Non-Profit

1. Heroes Bakery chain specializes in preparing homemade baked goods. The company donates most of its earnings to rehabilitation centers for wounded war Veterans and keeps just enough to pay operating expenses. In this scenario, Heroes Bakery would most likely be classified as a _____.

It does not include actual money

1. In the context of factors of production, which of the following statements is true of capital?

Technological advances fueled rapid industrialization

1. In the context of the history of American business, which of the following was a result of the industrial revolution period in America (mid-1700s to mid-1800s)?

Industrial Revolution

1. Preston, a luthier, used to own a workshop in the 1750s where he produced handmade musical instruments of high quality. However, due to technological advances, musical instruments started being mass-produced in factories, and Preston's business began to decline. Given this information, it can be assumed that Preston lived during the _____.

Aging population

1. Ricord Books, a publication house, faced huge losses after 2008. The majority of its readers were born during the late 1950s, whose population was rapidly declining. Most modern readers preferred using e-books rather than reading from hard copies. This resulted in a decrease in the sales of Ricord Books. Identify the dimension of the social environment that this scenario exemplifies.

Banking Act

10. A wave of bank failures occurred in the United States in the early 1930s as the economy sank into the Great Depression. Congress responded by passing the _____ of 1933. fix

investors can leave their money invested only for a small period

10. In a buy-and-hold investment approach, ___________. fix

prevents your broker from selling your stock at a price you believe is to low

10. In the context of buying and selling securities, placing a sell limit order: fix

A preemptive right

10. Jeremy holds 14.5% shares of stock in an automobile company. As per the company norms, if the company issues new stock, as an existing stockholder, Jeremy can buy 14.5% of the new shares before the stock is offered to the other investors of the company. Which of the following common stockholder rights does this scenario exemplify? fix

They have a fixed number of shares

10. Which of the following statements is true of open-end mutual funds? fix

limited responsibility

11. Freldine is a company that manufactures and sells different kinds of mattresses. Since it does not have any direct retail outlets, Freldine's products are bought by customers from home furnishing stores and e-commerce websites. In the context of customer relationship management, Freldine most likely establishes _____ with its customers.

Place utility

11. Jackson runs a chain of small retail stores called Wandmin that sells bottled water, fresh juices, desserts, and some snacks. All outlets of Wandmin are either in the middle of or at the end of walking trails in Jackson's hilly hometown, where several tourists go hiking. In the context of marketing, which of following utilities does Wandmin most likely provide?

Mass customization

11. Mauve Inc. purchased a global data collection and management system that provides detailed information about each of its customers. Using this information, Mauve is able to identify the individual needs of all its customers and provide tailored products and services. This scenario illustrates the concept of:

Acquisition of new customers

11. Which of the following can be achieved by marketers by acquiring customer loyalty.

Social responsibility

11. Which of the following has incited leading-edge marketers to set higher standards in key areas such as environmentalism, abolishment of sweatshops, and involvement in the local community?

Survey Research

11. _________ is a category of marketing research that requires the researcher to interact with the research subject.

Drive higher quality at a lower cost

2. A capitalist system depends on fair competition among businesses to:

Metal coins and paper bills

2. Following a contraction in the economy, the government of Geri, a South American country, decides to increase the money supply in the country. The government wants to first tally the M1 form of money supply. In this context, the government will most likely use _____ to tally the M1 form of money supply.

Subprime mortgage loan

2. In 2007, Timothy wanted to purchase a house. As he did not have sufficient funds, he decided to take a loan. Given his low credit score, it was highly unlikely that he would beable to repay the borrowed money. However, he was finally able to secure a loan despite his reduced ability to repay the loan. Timothy most likely applied for a _____.

Federal Reserve

2. Larry is part of the Board of Governors that manages U.S. monetary policy. He has been elected by the President to serve a single 14-year term. In addition to setting the monetary policy, he is responsible for extending banking services to commercial banks. In this scenario, Larry is most likely part of the _____.

Communism

2. The economic system of the East Asian nation of Xinzen calls for public ownership of all businesses. The government has complete control over the market, and individuals do not have individual rights and the freedom to make choices. In this scenario, the economic system followed by Xinzen is _____.

Producer Price index

2. The government of Lenzerbia, a country in South Asia, monitors its inflation rate using an index that measures change over time in the prices that businesses pay to each other for goods and services. In this scenario, the Lenzerbian government most likely uses the _____ to evaluate inflation.

Direct Investment

3. Boson Corp., an American software development company, wants to expand its business in international markets. Therefore, it buys property in Greitch, a South Asian country, and sets up a production facility despite the high costs involved. In this scenario, Boson Corp. is most likely involved in _____.

India's subscriber base for cell phones has grown explosively over the past five years.

3. In the context of emerging economies, which of the following statements is true of the BRIC countries?

Partnership

3. In the context of foreign direct investment, a _____ is a voluntary agreement under which two or more people act as co-owners of a business for profit.

trade deficit

3. Resorto, a European country, exported sugar worth $600 million between 2015 and 2016 and imported tea worth $750 million during the same period. In this scenario, Resorto most likely had a _____ between 2015 and 2016.

A company that buys electronic goods that are domestically manufactured by other countries

3. Which of the following companies is engaged in importing?

Individual Counter trade agreements

3. _____ range from simple barter to a complex web of exchanges that end up meeting the needs of multiple parties.

Legal but unethical

4. A chocolate manufacturing company promoted a high-calorie product without providing complete information about the risks involved in its consumption. In the context of business behavior, the company's business conduct was:

Social Audit

4. Andrew, an employee in a corporate company, is asked to conduct a systematic evaluation of how well the company is meeting its ethics and corporate responsibility goals. In the given scenario, Andrew is most likely asked to do a _____.

Legal system

4. In the United States, people come from such diverse backgrounds that establishing broad agreement on specific ethical standards can be daunting. In this situation, a given country's _____ provides a solid starting point for examining ethical standards.

Carefully refrains from over processing financial rewards

4. In the context of codes of ethics, the Johnson & Johnson Credo has guided the company profitably through a number of crises. This is considered the best-known code because it:

Legal and ethical behavior

4. In the context of the legal and ethical dimensions of business conduct, rewarding integrity is an example of _____.

An ethical lapse

4. Mark and Augustine are employees of an advertising firm. Following a personal disagreement, Augustine steals Mark's idea for an advertisement and presents it as his own in a meeting. In this scenario, Augustine is guilty of _____.

Respect

4. Rudolf, a Polish manager in a company based in China, is admired by his colleagues for the way he interacts with people, his considerate nature, and his tolerance toward other cultures. In the context of universal ethical standards, Rudolf possesses the core value of _____.

Citizenship

4. Rupert is an individual who believes in contributing to the community by using eco-friendly products. In the context of universal ethical standards, Rupert most likely possesses the core value of _____

A face-to-face meeting

5. As a communication channel, __________has the highest level of channel richness and is used when the message to be communicated is personal, emotional, or high-priority.

reestablishing eye contact once you have answered the question.

5. If you encounter a hostile questioner while giving a presentation, you should avoid:

Being Concise

5. Jeffery is asked by his supervisor to prepare a presentation on company policies for the orientation program. Jeffrey covers all essential topics and removes any unnecessary information to avoid confusion. In the given scenario, Jeffery is:

Launching into another point after finishing the presentation

5. When giving a business presentation, which of the following practices is likely to alienate the audience?

Using common words

5. Which of the following practices is most likely to strike the right tone in a business message?

A manager who does not lead by example is a poor manager.

5. Which of the following statements avoids gender bias?

Our team did not hit our sales goals

5. Which of the following statements follows the recommended guidelines for picking the right words for business communication?

For most people, listening is much slower than thinking.

5. Which of the following statements is true about listening?

Dynamic delivery

5. _______ is a vibrant, compelling presentation style that grabs and holds the attention of the audience.

conglomerate merger

6. A(n)_________ is a combination of two firms that are in unrelated industries.

spin-off

6. A(n)__________, a type of divestiture, occurs when a company issues stock in one of its own divisions or operating units and sets it up as a separate company--- complete with its own board of directors and corporate officers.

stockholder

6. An owner of a C corporation is called a _____.

retained earnings

6. In the case of C corporations, shareholders don't pay income taxes on __________.

A spin-off

6. Sarcosine Chemicals Corp. issues stock in one of its operating units and sets it up as a separate company called Prussic Corp., with its own board of directors and corporate officers. Sarcosine Chemicals Corp. then distributes the stock in Prussic Corp. to its existing stockholders. Which of the following forms of divestitures does this scenario exemplify?

is considered to be a legal entity that is separate and distinct from its owners

6. Unlike a sole proprietorship, a corporation:

is considered to be a legal entity that is separate and distinct from its owners.

6. Unlike a sole proprietorship, a corporation:

LLCs are subject to fewer reporting requirements than corporations

6. Which of the following is a difference between limited liability companies (LLCs) and corporations?

growth hacking

7. In the context of protecting your start-up, _____ means using metrics, creative strategies, and state-of-the-art technology to accelerate the advancement of your brand, service, or product far beyond the norm.

They tend to be quite attractive to small firms.

7. In the context of small business opportunities, which of the following statements is true of market niches?

Energy

7. Lester owns a small law firm and has a 10-hour workday. Despite keeping long hours, he is open to working on weekends and holidays if required. He also responds to late-night calls from clients. Which of the following entrepreneurial characteristics is highlighted in the given scenario?

Buying a cake shop franchise

7. Natalie is a professional baker who dreams of owning her own cake business. She does not have any ideas or concepts for starting a cake shop, but her wealthy uncle is ready to fund her initial capital. Natalie's risk appetite is low and she wants to run a business that has less than 10 percent chances of first-year failure. Which of the following could be the best solution for Natalie to pursue her dream of owning a cake shop?

Challenge

7. Paul worked as an artisan at a furniture company where a set of artisans were required to produce a specific part of a product, and the product was later assembled. Paul quit his job and started a small furniture business where he crafts unique products based on the demands of his customers. He feels that the constant need to adapt and outperform himself keeps him focused and motivated to improve his craft. Which advantage of entrepreneurship is highlighted in the given scenario?

Providing personal customer service

7. Rudy, a food truck owner, has sizable followers on his website where he personally interacts with them and thanks them for their support. He also lets his followers know his location and the menu for a day in advance. The opportunity of _____ is highlighted in the given scenario.

Industry-specific statistics

7. Which of the following pieces of information is found in the U.S. Small business administration resources?

Vision

7. Xavi develops a cell phone battery that can be charged by a solar panel and can run efficiently for up to three hours. His friends point out that it would be difficult to get cell phone manufacturers to adopt this new technology and that it could take a long time for people to start relying on it. However, Xavi is convinced that he can make his idea popular and successful. He plans to start a new company called EnerMob Inc. that would promote and sell the cell phone battery to the public. In this scenario, which of the following entrepreneurial characteristics is Xavi demonstrating?

They invest in promising start-up companies because they want to make money themselves.

7. identify a true statement about angel investors

flexible budget

8. A ______ is one that is not based on a single assumed level of sales and enables managers to make meaning comparisons between actual costs

flexible budget

8. A____ is one that is not based on a single assumed level of sales and enables managers to make meaningful comparisons between the actual cost and budgeted costs.

Qualified Opinion

8. Andrew is performing an audit of the financial statements of a cosmetics company. While analyzing the financial statements, he identifies some minor concerns. However, he believes that on balance the company's statements are accurate and its accounting methods are consistent with the generally accepted accounting principles. In this scenario, the independent auditor's report will most likely offer a(n) _____

The budgeted income statement, the capital expenditure budget and the cash budget.

8. Ashley, a manager at a toy manufacturing company, needs to create a financial document for the company that would show how the company's operating, ...... investing, and financial..... asset, liability, and owners equity accounts. To prepare this document Ashley needs to collect data from:

Internal auditor

8. Betty's job entails detecting problems such as embezzlement, waste, mismanagement, and employee theft at her organization. In this case, Betty is a(n)__________

variable costs

8. Clasued Inc. a furniture manufacturing company, receives a bulk order from a multinationals company for 150 office chairs. To complete the order on time, Clasued Inc. speeds up its production process by hiring additional labor and purchasing more supplies. In this scenario , the costs incurred by Clasued Inc. for hiring more labor and buying more supplies exemplify its _________.

Identifies a firm's planned investments in major fixed assets and long-term projects.

8. In the context of a finical budgets, the capital expenditure budget:

financial budget and the operating budget

8. In the context of budget preparation, the master budget of a firm organizes the ________ into a unified whole.

is designed to show the appropriate budgeted level of costs for each level of sales.

8. In the context of budgeting, a flexible budget:

are seldom interested in analyzing detailed accounting information about the individual department within the firm.

8. In the context of financial accounting, the external stakeholders of a firm:

direct costs

8. In the context of managerial accounting, _________ are costs that are incurred as the result of some specific cost object.

issue additional shares of its own stock.

8. Lossaire, a jewelry house, needs to increase the company's declining cash inflow through its financing activities. In this context, Lossaire is most likely to:

public accountant

8. Luke works in an accounting firm that offers services such as tax preparation and external auditing to corporate companies. Luke is currently providing consultation to a client that deals in automobile parts. In this scenario, Luke is most likely a:

current assets

8. Pastello, a bakery in New Jersey, needs to sell all the goods in its inventory before they perish. The bakery owners, Mark and Julia, plan to use the cash received from selling the goods to open a new outlet of Pastello in a different locality. In this scenario, the goods stored in Pastello's inventory represent its _____

Statement of retained earnings

8. The ____ of a company is a simple statement that shows how the accumulated revenues that have been reinvested in the company have changed from one accounting period to the next.

Static Budget

8. The management of an electronics company created the annual budget on a single assumed level of sales. This level of sales is to remain constant for the whole year. Later, the measure the financial process of the firms as the values in the estimated budget very significantly from the actual sales. In this given scenario the management must:

balance sheet, income statement, and statement of cash flows.

8. The three kinds of basic financial statements that are prepared in financial accounting are:

It is more complex then the direct labor method

8. Which of the following statements is true of activity-based costing (ABC)?

Current assets

9. A firm's _____ include cash and other assets expected to be converted into cash in the following year.

rejected since the expected future cash flows from the project are less than the cost of the investment.

9. A project with a negative net present value should be:

cash budget

9. Garry, a financial manager at AtoZ technologies, wants to know when his firm will need to arrange for short-term financing and when the firm is likely to have surplus cash available to pay off loans or to invest in short-term liquid assets. These concerns suggest that Garry would want to develop a _____

Leverage ratios

9. Hevron Hrist, a multinational company, finances itself each year by procuring 25 percent of its yearly budget through loans from banks. The remaining budget is covered by the company itself. The given scenario suggests that the firm most likely relies on measuring _____ to decide its capital structure.

imposes no required payments

9. Unlike the debt in a firm's capital structure, the equity in a firm's capital structure:

Feedback

In the context of the factors of job enrichment, _____ means that workers receive clear, frequent information about their performance.

Roth IRA

Personal Finance. Delores had invested in an individual retirement account (IRA) over the 25 years of her service and then invested the money from the IRA in government securities. The contributions that Delores had made to the account were not tax deductible at the time they were made, but she did not have to pay taxes on the distribution she received from the IRA on retirement. In this scenario, Delores had invested in a _____.

Anyone under the age of 21 must have an adult cosign the credit card application

Personal Finance. In the context of credit card practices, a mandate of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 is that:

The higher the APR, the greater the interest expense on unpaid balances.

Personal Finance. In the context of credit cards, which of the following statements is true of the annual percentage rate (APR)?

allows you to gain first-hand experience that supplements what you learn in the classroom.

Personal Finance. In the context of investing in your career, securing an internship during your college years:

Credit

Personal Finance. _____ refers to your ability to obtain goods or resources without having to make immediate payment.

A written code is worthless if it does not reflect living principles.

Which of the following statements is true of an ethics code?

Implementation of strategies should happen largely through operational planning.

Which of the following statements is true of strategic planning?