Business to the Rescue Unit Review

Franc's Bread Shop is introducing a new type of sandwich bread to the community this week. Which of the following describes the business activity the bread ship is likely involved in? A. Promoting the new bread through advertising B. Collecting information on last year's new breads C. Creating a system for storing new bread recipes D. Planning for the long-term results of introducing new breads

A. Promoting the new bread through advertising Since Franc's Bread Shop is introducing a new type of sandwich bread to the community this week, the bread shop is now performing the business activity of marketing by promoting the new bread through advertising.

The operations function consists mainly of activities that are performed on a _________________ bases A. daily B. weekly C. monthly D. yearly

A. daily The operations function consists mainly of activities that are performed on a daily basis. Operations are the day-to-day activities that allow a business to keep doing what it needs to do—producing and providing goods and services for its customers.

The specific resources used in a company's production are called: A. inputs B. consumer goods C. outputs D. conversion processes

A. inputs Inputs are the specific resources used in producing goods and services. The inputs that a business needs in its production will depend upon the good or service that the firm produces.

Running out of inventory can result in A. lost sales. B. higher taxes. C. higher productivity. D. more satisfied customers.

A. lost sales. Running out of inventory can result in lost sales, lowered productivity, unhappy customers, and a decrease in profits. These are known as stockout costs, and businesses try to avoid them as much as possible.

Human resources management is demonstrated in which of the following statements: A.The business takes care of the responsibilities associated with having employees. B.The business gives its preferred customers a special discount. C.The business includes top-level managers in long-term planning. D.The business acts on new information about a competitor.

A.The business takes care of the responsibilities associated with having employees.

Why is production important to businesses? A. It prevents businesses from wasting resources. B. It creates goods and services businesses can sell. C. It enables businesses to charge high prices. D. It informs businesses about consumers' needs and wants.

B. It creates goods and services businesses can sell. Production is important to businesses because without production, businesses would have nothing to sell. All businesses must have products to sell in order to remain in business.

Accounting is distinct from finance because its main focus is on A. money management decisions. B. record-keeping activities. C. administration of assets. D. acquisition of funds.

B. record-keeping activities. Accounting is distinct from finance because its main focus is on record-keeping activities. Finance, in contrast, focuses on money management decisions.

Which of the following is a marketing activity: A. Leading B. Balancing C. Promoting D. Committing

C. Promoting Promoting is a marketing activity, along with planning, pricing, and distributing.

Annika, the purchasing specialist for Dottie's Donut Shop, just located a new, less expensive sugar supplier. Dottie does not plan to lower donut prices. If Annika buys the shop's sugar from this cheaper supplier, what is likely to happen? A. Donut sales will increase. B. Donut sales will decrease. C. The profit margin for donuts will increase. D. The profit margin for donuts will decrease.

C. The profit margin for donuts will increase. If Annika reduces the materials' cost of Dottie's donuts, the profit margin for the donuts will increase, not decrease. As long as Dottie does not lower the price of donuts, using less expensive sugar will not have an impact on donut sales.

Which of the following is a reason that the role of human-resources management is changing: A. Employees place a greater emphasis on work over personal lives. B. Business costs are going down. C. There is greater diversity in the workforce. D. The workforce is younger than ever.

C. There is greater diversity in the workforce. Greater diversity now exists in the workforce, in terms of gender, age, culture, and ability.

In an overall sense, where does marketing occur? A. Wherever trucks are B. Wherever advertisements are C. Wherever customers are D. Wherever stores are

C. Wherever customers are In an overall sense, marketing occurs wherever customers are. Advertisements, stores, and trucks are part of marketing and can be present when marketing occurs. But marketing occurs where customers live, work, study, recreate, etc.

In order for an accounting system to be useful to the business, the accounting information it contains must be A. posted by an accountant. B. approved by the chief executive officer. C. accurate and up-to-date. D. recorded using the accrual method.

C. accurate and up-to-date. Accounting records show the financial health of a business. If its accounting records are inaccurate or out of date, a business cannot be sure what its financial situation is.

Which of the following terms refers to the flow of authority within an organization: A. division of labor B. functional structure C. chain of command D. innovation

C. chain of command Chain of command, sometimes called line of command, refers to the flow of authority within an organization.

Jaron, the district technology coordinator for Abington City Schools, is responsible for purchasing new computers for the district. He recently sent out a request for price quotes to five different computer companies, and he is waiting to hear what the various suppliers' proposed prices will be. Jaron is conducting A. a make-or-buy decision. B. negotiations. C. competitive bidding. D. retail buying.

C. competitive bidding. Jaron is conducting competitive bidding, which involves sending out a request for bids, reviewing proposed prices (bids), and selecting the best supplier for the job, based on cost and/or quality.

The overall purpose of accounting is to A. maintain accurate reports. B. compile the business's expenses. C. control the finances of the business. D. keep track of sales.

C. control the finances of the business. An accounting system provides a business with accurate financial information with which it can maintain control of its finances. Keeping track of sales, compiling expenses, and creating reports are all activities of the accounting system that help a business to control its finances.

Operations managers have two main goals in mind—efficiency (keeping costs low) and A. productivity (keeping business running fast). B. legality (keeping the business in good standing with the law). C. effectiveness (keeping customers satisfied). D. reputation (keeping up the business's good name).

C. effectiveness (keeping customers satisfied). Operations managers oversee all the processes involved with converting inputs into outputs. They complete this job with two goals in mind—efficiency (keeping costs low) and effectiveness (keeping customers satisfied). When the operations function is performed well, it adds value to the company's product.

A well-planned organizational design helps a business to better compete because: A. competitors don't have organizational structure B. it cuts down on communication C. the business is more productive D. the business has more money

C. the business is more productive A well-planned organizational design helps a business to improve communication, foster innovation, and become more productive—all actions that help the business to be more competitive.

Human resources are a company's most important resources because A. they are controlled by other company resources. B. they are the least expensive resources. C. they control all other company resources. D. they are the most expensive resources.

C. they control all other company resources. Human resources are a company's most important resource because they control all other company resources. That's why it's so vital to have appropriate human resources in place at all times.

Efficient production enables businesses to A. make an accurate forecast of sales. B. obtain advance orders for goods and services. C. turn out the most products at the least cost. D. charge higher prices than competitors.

C. turn out the most products at the least cost. Producing efficiently enables businesses to be competitive by keeping their prices at or below those of competitors. This is likely to increase sales.

According to the marketing concept, which option demonstrates customer orientation? A.Convincing a buyer to buy B.Researching a firm's competitors C.Finding out what a buyer wants D.Advertising the features of a product

C.Finding out what a buyer wants According to the marketing concept, customer orientation is finding out what a buyer wants and providing it for him/her.

TeJuan's Fishing Shack demonstrates effective information management by: A. Hiring fishing experts to explain how to use the goods offered. B. Removing wasted materials from the process of providing goods to customers. C. Promoting new fishing equipment in a popular trade magazine. D. Accessing a list of fishing equipment appropriate for a particular customer.

D. Accessing a list of fishing equipment appropriate for a particular customer. When TeJuan's Fishing Shack accesses a list of fishing equipment appropriate for a particular customer, the business is demonstrating effective information management.

A bank denies a business owner's application for credit saying, "We feel that you would be unable to make the monthly payments because of your other debts." What financial report did the bank review? A. Operating budget B. Budget C. Income statement D. Balance sheet

D. Balance sheet A balance sheet is a financial statement that captures the financial condition of the business at that particular moment. This includes the liabilities, or debts, that the business owes.

How does appropriate information management affect a business's relationship with its customers? A. Businesses make better financial decisions. B. Businesses earn higher profits. C. Businesses lose focus on customers. D. Businesses serve customers more effectively.

D. Businesses serve customers more effectively. Managing information appropriately helps businesses focus on the important task of serving customers more effectively which, in turn, may help lead to higher profits, although it is not a guarantee.

In what way might a human resources manager be involved in employee benefits? A. Choosing an employee's vacation days. B. Selecting an employee's personal plan options. C. Collecting insurance payments from employees. D. Determining eligibility and costs of benefits.

D. Determining eligibility and costs of benefits. A human resources manager might be involved in employee benefits by developing a benefits plan and determining eligibility and costs for employees.

Jeremiah purchases sterling silver necklaces and bracelets from Native American artisans and sells the items to jewelry stores and gift shops. What kind of buyer is Jeremiah? A. Business use B. Retail C. Industrial D. Wholesale

D. Wholesale Jeremiah is a wholesale buyer, because he purchases goods from manufacturers to resell to retailers.

One of the benefits of production to consumers is that production A. provides a way to be competitive. B. provides a way to earn profits. C. makes use of automation. D. creates form utility.

D. creates form utility. One of the benefits of production is that it creates form utility—usefulness created by altering or changing the form or shape of a good to make it more useful to the consumer or user. Without production, many resources would be of little use to consumers.

Appropriate information management saves businesses time and money by: A. Maintaining yearly raises for employees B. increasing information overload C. increasing "paper trails" D. maintaining higher levels of productivity

D. maintaining higher levels of productivity Appropriate information management saves businesses time and money by maintaining higher levels of productivity. Employees can be more productive when good information management decreases information overload and "paper trails."

With Rosita's pizza shop, financial analysis is used to A. develop the best recipe. B. attract customers. C. oversee the baking process. D. obtain funding for supplies.

D. obtain funding for supplies.

Which of the following demonstrates the interrelationship among primary business activities: A.A business manager becomes vice president, so his/her department must adjust to the change. B.A business changes its goals, so its strategies and tactics change, too. C.A new product is introduced, so business advertisements must adjust in response. D.One business activity changes, so the others must adjust in response.

D.One business activity changes, so the others must adjust in response. Since the primary business activities are interrelated, when one business activity changes, the others must adjust in response.

Of the following, which is a durable good: a. Coffee mug b. Insect repellent c. Hamburger d. Lip balm

a. Coffee mug Of the list, the coffee mug is the only durable (lasting) good. The other options—insect repellent, hamburger, and lip balm—are each used up (consumed) rather quickly.

How does the finance function relate to company spending? A. It produces reports about spending. B. It plans and controls spending. C. It spends on investment only. D. It does not relate to spending.

a. It plans and controls spending. The finance function plans and controls spending throughout the company, making sure that it stays within the budget.

Why do top-level managers usually receive high salaries? a. Their decisions affect the entire company. b. They are required to attend a great many meetings. c. They have more experience than others in the company. d. Their responsibilities involve hands-on supervision.

a. Their decisions affect the entire company. Top-level management is composed of all managers who are responsible for the entire company. They receive higher salaries than other managers because they make important decisions that affect the whole company.

Appropriate information management helps a business build a good reputation by a. being consistent. b. charging high prices. c. eliminating all mistakes. d. offering quality products.

a. being consistent. Appropriate information management helps a business build a good reputation by being consistent. When businesses manage information correctly, they are more consistent and credible, two main ingredients of a good reputation.

Nathan is a project manager in charge of four other employees. He's divided up responsibilities and assigned them to specific team members to work on. This is known as a. delegation. b. innovation. c. unity of command. d. the scalar principle.

a. delegation. Assigning tasks to subordinates is known as delegation. It is an important part of the responsibilities involved with having authority within an organization.

Marketing is described as creating a. exchanges. b. needs. c. advertisements. d. gaps.

a. exchanges. Marketing is described as creating exchanges—or encouraging trade by providing opportunities. Regarding the other options, marketing satisfies needs, uses advertisements, and bridges the gap between producers and customers.

An example of information management is demonstrated when a business uses a working system for a. storing and retrieving information. b. researching customers' needs. c. hiring appropriate employees. d. conducting employee evaluations.

a. storing and retrieving information. Information management includes/requires an effective system for storing and retrieving information.

Operations managers must work closely with managers and employees in a. the marketing department only. b. all other parts of the business. c. competitive businesses. d. foreign markets.

b All other parts of the business. Operations managers must work closely with managers and employees in all other parts of the business. This is because operations activities affect every other business function.

Decisions about financing refer to the a. accounts receivable. b. acquisition of funds. c. administration of assets. d. accounting department.

b. acquisition of funds. Decisions about financing refer to the acquisition of funds. There are many different ways a business can obtain financing, and there are advantages and disadvantages to each method. Financial managers must decide which method or methods will be most beneficial for the company.

A risk involved with information management is being unprepared for a government a. tax break. b. audit. c. election. d. loan.

b. audit. A risk involved with information management is being unprepared for a government audit, in which the company would have to present accounting records for auditors to "look at the books."

At a hair salon, one employee washes customers' hair, another employee cuts it, and another dries and styles it. This allows the employees to make the most efficient use of their time and illustrates an organizational principle known as a. span of control. b. division of labor. c. authority. d. innovation.

b. division of labor. The hair salon example illustrates an organizational principle known as division of labor, or dividing one job into separate, smaller tasks.

A business can be described as a(n) a. disorganized method of manufacturing products. b. organized effort to produce goods and services. c. reasonable way to make a profit. d. unreasonable means for increasing revenues.

b. organized effort to produce goods and services. A business, whether for profit or nonprofit, is an organized effort to produce goods and services. It is not a disorganized method of doing anything—least of all, manufacturing products.

Steve manages employees who are highly skilled and need little supervision. Therefore, he can supervise quite a few employees at once. Steve's span of control is a. open. b. wide. c. narrow. d. tight.

b. wide. Steve has a wide span of control, meaning he can supervise a higher number of employees at once. A narrow span of control refers to supervising fewer employees at once.

Which of the following is a marketing activity: a. Balancing customer needs with wants b. Leading a project team c. Communicating with customers d. Committing to lower operational expenses

c. Communicating with customers. Communicating with customers is a marketing activity, along with planning how to carry out the marketing process, finding out about customers, offering the products customers want, determining how much to charge for the products, and putting products where they need to be.

Which of the following is an example of one of a business's inputs: a. Services b. Products c. Employees d. Goods

c. Employees. Every business takes inputs (resources) and uses them to make outputs (products). Inputs are things such as employees, raw materials, equipment, capital, etc. Outputs are goods and services, also known as products.

Which of the following is an on-boarding activity: a. Compliance b. Grievances c. Orientation d. Exit interviews

c. Orientation Orientation is an on-boarding activity, an HR management activity that gets new employees started on the job.

Strategic management is demonstrated in which of the following phrases: a. Recruiting appropriate employees b. Obtaining funds for business projects c. Planning and organizing for the future d. Regularly updating business processes

c. Planning and organizing for the future Strategic management involves planning and organizing for the future.

Operations is demonstrated in which of the following phrases: a. Keeping accurate financial records b. Planning for future success c. Producing goods and services d. Hiring qualified employees

c. Producing goods and services Producing goods and services is a primary aim of operations.

Managing information for business continuity is important in case of a. high employee turnover. b. low sales volume. c. a disaster. d. a drop in stock price.

c. a disaster. Managing information for business continuity is important in case of a disaster. A disaster might be manmade, such as a building fire, or it might be an act of nature, such as a tornado or a flood. No matter what, though, companies must ensure that business can still run smoothly and that employees can still access the information they need.

The administration of assets refers to decisions about a. accounting. b. spending. c. investments. d. financing.

c. investments. The administration of assets refers to decisions about investments. Each company has assets—things it owns that are of value. Financial managers are responsible for determining what types of assets the company should own, as well as the proper mix of those assets.

Checks, receipts, invoices, and purchase orders are examples of a. financial statements. b. department ledgers. c. source documents. d. accounting standards.

c. source documents. Checks, receipts, invoices, and purchase orders are examples of transaction source documents that represent a business's financial transactions. Source documents usually contain the transaction amount, the payer, the payee, the good or service being purchased or sold, etc.

What type of accounting method would most likely be used by a large business that has a large number of outstanding loans and customer charge accounts? a. Check method b. Cash method c. COD method d. Accrual method

d. Accrual method The accrual method records transactions at the time they occur even if no money changes hands at that time. A large business would be likely to use the accrual method to have an accurate report of the amount of sales.

What kind of conversion process is being used in an assembly line that produces soft drinks? a. Batch b. Labor-intensive c. Unit d. Capital-intensive

d. Capital-intensive Capital-intensive conversion processes depend upon the use of equipment. The mass production of soft drinks depends on the use of equipment. Labor-intensive conversion processes rely on the skills of workers.

What type of accounting method would most likely be used by a small business owner who does not offer credit? a. Check method b. Accrual method c. COD method d. Cash method

d. Cash method Many small businesses that do not offer credit use the cash method because it tracks the actual amount of cash that the business has on hand. With the cash accounting method, income and expenditures are recorded at the time the money changes hands.

Because of a business's organizational design, its employees are able to work together to come up with a brand-new product. This process is called a. Division of labor b. Competition c. Authority d. Innovation

d. Innovation Innovation refers to creating something new, such as a product, a process, or a strategy. A well-planned organizational design encourages innovation within the business.

What management function is being described in the following situation: David Thomas, a top-level manager, identifies jobs to be performed, assigns responsibility for them, establishes departments to handle the jobs, and determines how many and which employees mid-level managers will supervise. a. Directing b. Controlling c. Planning d. Organizing

d. Organizing Organizing is the management function of setting up the way the business's work will be done.

Which operations activity is also referred to as procurement? a. Logistics b. Inventory control c. Quality control d. Purchasing

d. Purchasing. Purchasing, or procuring, is the buying of goods and services for a business. Businesses procure needed materials to make products, products for resale, and day-to-day supplies and equipment.

A manager evaluates the production output of a department by checking it against the production goals for that time period. This is an example of the ____________ function of management. a. planning b. directing c. organizing d. controlling

d. controlling Controlling is the management function that monitors the work effort.