Ent Exam 2
What form of debt financing allows for a unique positive cash flow situation by allowing up to a 25 day delay in payment?
Credit cards
Which of the following are common forms of debt for a new business?
Credit cards, Loans, Supplier credit
____________ resources is the quantity and quality of human effort directed toward producing goods and services
Human
The effective application of _________ is one means to limit liability concerns of the new venture
Insurance
A commission ____________
Is a payment based on a percentage of sales
In recent years, the ___________ has become one of the most popular forms of incorporation for new business
LLC
Which of the following are types of corporations developed by the U.S. legal system?
LLC, Subchapter C, Subchapter S
In the long run, the cost of capital for nonequity funding is generally _______________ that of equity investment
Less than
Which type of insurance helps protect a business against lawsuit judgements?
Liability
___________ is an example of a hybrid compensation system where the employee is paid a small salary but earns a percentage of the profits at the end of the year
Profit sharing
Which of the following are elements of human resources?
Retaining employees, Hiring employees, Dealing with difficult employees
Which of the following statements are true about the Affordable Care Act?
The Act provides tax incentives for small entrepreneurial firms to encourage them to offer health insurance to their employees, One of the biggest beneficiaries of the Act are the entrepreneurs in a business that employs only themselves and their family.
The hiring process ends when ________________
The candidate returns a signed original of the offer letter
Which of the following statements about record keeping are correct?
The company should keep track of records in case someone alleges that the company discriminates in its hiring practices, The company should keep track of all advertisements that have been run whether a physical publication or on the Internet, The company should maintain a record of who responded and the job's criteria
Identify the key issues that entrepreneurial businesses should consider when trying to retain employees who add value
The compensation and benefits offered to the employees, The means of reviewing the performance of employees
Which of the following are characteristics of credit cards as a form of nonequity investment?
They typically have a set upper limit, They are generally tied to a much higher interest rate than that of a bank loan
True or false: Both a check register and a petty cash register are required by an entrepreneur to form an annual record of all expenses
True
Why is entrepreneurship important
*primary source of new jobs in the economy *driving force in the economy *outstanding source of innovation *is the essence of the "American dream" *creates wealth-- advances society
A chart of accounts is simply a listing of each type of asset within the company. Rank the categories of accounts from first to last associated with a chart of accounts
1. Income category2. Expense category3. Asset category
types of innovation
1. invention 2. extension 3. duplication 4. synthesis
5 skills important to the practice of entrepreneurship
1. play 2. empathy 3. creativity 4. experimentation 5. reflection
The government closely regulates children who work under the age of __________
16
Match the types of accounting systems used by businesses with their descriptions
A cash based accounting system - Only the smallest businesses use this systemAn accrual-based accounting system - Subchapter C corporations
An entrepreneur of a retail store looks to hire billing executives. The job requires the executives to greet and interact with a large number of customers every day. In this scenario, which of the following are perfectly acceptable to test the job candidates?
A personality test, A test on basic mathematics
Negotiations are primarily a ___________
Art
The _______________ process ends when the candidate returns a signed original offer letter
Hiring
It is perfectly acceptable for companies to test their job candidates _____________
It is perfectly acceptable for companies to test their job candidates _____________
Some major cities pay what has been called a ______________ wage that is indexed to what someone who works 40 hours per week needs to stay above the poverty line
Living
_____________ is one of the most expensive costs for any business and the most desired benefits for employees
Medical Care
Which type of business organization is characterized by the fact that the person who owns the business and the business itself are treated as the same entity?
Sole proprietorship
Which type of legal business organization is the simplest form to establish?
Sole proprietorship
Inventory should be taken at scheduled times during the year and an exact match should be completed between:
Starting inventory, Units sold, Ending inventory
Which of the following statements regarding the minimum wage requirements of the Fair Labor Standard Act are correct?
The Act covers virtually all workers, States may set a minimum wage higher than set by the FLSA, The Act does not cover workers on small farms
Where does funding typically start for most new businesses?
The founder's personal resources
The last step in the employee hiring process is _____________
The job offer
Which of the following are drawbacks to sole proprietorships?
The lack of legitimacy with suppliers and customers, the formation is limited to a single founder, the liability of the business is the responsibility of the single owner
Which of the following statements regarding negotiating the deal with a job candidate are correct?
The offer should require a fairly prompt response from a candidate, The business owner should decide the points for which he or she is willing to negotiate, The business owner should finalize the agreed offer in writing
Which of the following is NOT a common example of a license or a permit?
Trademark permit
Which of the following questions should be included on a job application?
Which of the following questions should be included on a job application?
Unemployment compensation is financial assistance for some period for people ___________________
Who lose their jobs through no fault of their own
Title VII of the Civil Rights Act applies to firms with more than __________ employees
25
Which of the following are part of the hiring process?
Writing a job description, Advertising a job description
Which of the following are considered alternative sourcing tools for funding a business?
Crowdfunding, Crowdsourcing
Banks have traditionally been a major source of funds for:
Established firms
Besides sole proprietorships, which of the following business forms requires the business debt to flow directly to the owner(s)?
General partnership
Which of the following are benefits of a Subchapter S Corporation?
Legitimacy in the market as a more established form of business, Relatively easy to form compared to Subchapter C, Limited liability for the owners, Consolidation of business and personal income for tax benefits
Which account should be used when there is an expense too small to write a check for when a check is simply inappropriate?
Petty cash register
Which of the following steps are included in a systematic employee review?
Plans for future employee growth through experience and training, Defined objectives for the next year, How employees perform related to their objectives
Which of the following typically issue grants?
Private foundations, Government
An individual who is unsure of his business idea, plans to keep his business very small, or has a minimal amount of cost and risk is more likely to select a ___________ as a business form
Sole proprietorship
Which of the following statements are true regarding liability insurance?
It helps protect against lawsuit judgements, It covers the business for accidents, It covers product negligence
Which form of insurance covers liability for workers who are injured on the job?
Workers' compensation
According to the Bureau of Labor Statistics, medical benefits cost _________ % of total compensation costs for an employee
31.4%
Which of the following are potential outcomes of a poorly managed credit card?
An increase in the interest rate, Possible bankruptcy of a firm
Employees who earn an hourly wage ___________
Are only paid for those hours they perform work
An entrepreneurial firm's package of benefits has _____________ the compensation it offers to a job candidate
As much of an impact as
Which funding tool involves the leasing of equipment from manufacturers or a third-party reseller?
Asset lease
Which of the following are considered sources of debt for starting a new business?
Banks, Suppliers, Credit cards
The critical issues of personal liability and the desire to limit exposure to the original equity investment led to the development of corporations. A corporation addresses both drawbacks by _____________.
Considering the business and the individual separate entities.
In new corporations, the shareholders and board of _____________ are often the same
Directors
Which of the following are typically the targets of grants?
Disadvantaged groups, Economic areas, Particular industries
For tax purposes, all business must have a ____________
Employer identification number
Which of the following are the benefits of factoring for a new business?
The business does not have to spend time and effort trying to collect the accounts receivable, The business gets the money from the accounts receivable immediately
Grant funding typically comes from:
The government, A nonprofit agency
Business owners should provide the interviewee with a realistic preview of the job company _______________
To set appropriate expectations for the potential employee
Which of the following is NOT a source of nonequity capital to start a business?
Venture capital
True or false: entrepreneurs typically do not have the right to fire employees
false
Business owners should ____________
Check as many of the candidates' references as possible
Which of the following are trademarked by most large companies?
Company name, company symbols, company tag lines
Banks will lend money for the establishment and maintenance of inventory by arranging a revolving line of ______________
Credit
Funding received by a business by soliciting a large number of very small investors usually via the Internet is called _______________
Crowdfunding
An ______________ investment is funds received by a business in exchange for a percentage ownership of the business
Equity
The Fair Labor Standards Act _____________________
Established a minimum wage for workers
Which of the following statements regarding changing the commission system as the company grows are correct?
Existing salespeople do not like changes to compensation systems that decrease commissions, Business owners need to think about the sales commission long term when creating it, New hires do not think it is fair to be paid a lower commission than older sales staff
True or false: Credit cards a form of equity investment
False
True or false: a Subchapter C Corporation treats fringe benefits that paid out as income for employees
False
Besides banks, finance companies, and the founders, another source of nonequity loans comes from:
Friends and family
A _______________ involves a contractual agreement whereby the business receives some amount of money that must be repaid over a specified period of time at a specified interest rate
Loan
An example of a fatal flaw of a business concept would be No real need exists for the concept
No real need exists for the concept
Because it is expensive to obtain and maintain, a patent should only be obtained if it contributes to the sustainable competitive advantage of the organization
Patent
A ____________ is a set amount of compensation for a given time period
Salary
Which of the following forms of incorporation is required to pay income tax, which results in double taxation?
Subchapter C Corporations
What areas would be explored under the "T" phase of TRIM?
who needs to be on the start team
Many regulations enacted by the federal government do not apply to businesses with fewer than _____________ employees
50
What type of lending involves the bank estimating the residual value of the equipment if the bank had to repossess the equivalent and then lend the business a percentage of the difference between that number and the sale price?
Asset-based lending
What type of insurance can be purchased to cover losses from employee embezzlement?
Bonding
The __________ Act requires businesses to provide unfettered access to all disabled people
Americans With Disabilities
Which class of partner in a limited partnership is considered the manager of the firm and has unlimited liability for any debts or judgements against the firm?
General
Which of the following describe the roles that human resources management plays in business?
Hiring new employees, Inspiring employees, Managing employees
Which of the following are disadvantages associated with subchapter S corporations?
May require a lawyer to process paperwork, expensive and complex formation compared with sole proprietorships, limitation on the number of shareholders
Which of the following large firms have been a leading source of venture capital in the United States?
Microsoft, Intel, Cisco
Which of the following statements about the FLSA requirements regarding nonexempt employees are correct?
Nonexempt employees who work over 40 hours per week must be paid time and a half, Firms that pay employees on a weekly basis cannot use compensatory time, Compensatory time is not typically allowed from one pay period to the next
Which of the following should an advertisement ask an applicant to submit?
Resume, List of references
Identify the issues a new business uses to determine the quality of accounts receivable
The debtor's credit rating, The size of the transaction
Which of the following statements regarding unemployment compensation are correct?
The tax is paid by the employer based in part on the company's history of unemployment, People are expected to look for employment while they are receiving unemployment compensation, It pays a set amount of money directly to the former employee
Which of the following actions are considered to be acts of discrimination?
Which of the following actions are considered to be acts of discrimination?
Which of the following questions should be considered by a new business owner before entering into a lease contract?
Who is responsible for maintenance and other facilities issues?, Who would be responsible for making improvements to the facility?, Who has to carry the liability insurance and at what level? Can the business owner renew the lease after the term expires?
Which of the following statements regarding the Occupational Safety and Health Administration are correct?
Fines are lower for businesses that have fewer than 25 employees, Small firms with less than 10 employees do not have the record-keeping regulations that larger firms have, It has tried to be more lenient toward small businesses.
Which of the following are examples of licenses and permits?
OSHA food-handling permits, Occupancy limits, Business licenses
Which form of incorporation is required to pay an income tax?
Subchapter C
Which of the following are types of patents?
Utility, Plant, Design
An employee who earns a salary is paid ____________
A set amount of money that is paid without regard to how many hours worked within a given period
Which of the following is the next step in the hiring process after the job description has been created?
Advertising the position
Which of the following are examples of questions that employers may not ask?
Age, Religion, Gender
Unlike a Subchapter C Corporation, a limited liability corporation (LLC)
Allows for the flexible treatment of profits from the organization
Entrepreneurs should remember to ______________ when writing an advertisement for a new hire
Be concise and oriented toward the basic information needed
Which form of equity investors refers to high-net-worth individuals that invest widely in business?
Business angels
Which of the following aspects listed below are part of retaining employees?
Compensation and benefit systems, wages and hours requirements, performance reviews
Any form of capital infusion that must be paid back with interest is called ____________
Debt
In the event of a business failure, which of the following sources of funding must be paid back first?
Debt
Which of the following are potential business angels?
Entrepreneurs who have cashed out, Individuals with significant inheritances, Professionals such as doctors or lawyers, High-income executives of large organizations
The __________ requires that employers not discriminate in pay to man and women who do the same job
Equal Pay Act
Which form of intellectual property protection is the most complex and expensive and covers a specific innovation?
Patent
An important feature of a Subchapter C corporation is that there are no limits to ____________
The number of shareholders that an organization can obtain
Which of the following is a characteristic of general partnerships that is similar to that of sole proprietorships?
The owners report their shares of losses or profits on their own personal income tax returns in proportion to their interest in the firm.
A __________ is a legal protection of the intellectual property that is associated with a specific business?
Trademark
Promoting a drug-free workplace may be made more difficult in states like Colorado or Washington State where ____________
marijuana laws and drug-free workplace programs may conflict
One of the most important issues between a typical entrepreneurial start up and a family business are issues related to _____________
Human resources due to some of the employees being family members
Why should business owners retain employees who add value?
It takes time to bring each new employee to an acceptable level of performance, The hiring process consumes a lot of time and money.
Which of the following statements are true regarding supplier credit?
It ties firms to a specific supplier, It limits the firm's ability to shop around, The rates are more competitive than bank sources, The terms can be quite generous
The ___________ is charged with protecting the health of workers
Occupational Safety and Health Administration
A company's compensation system is
of the highest importance for employees
Which of the following elements is NOT required when forming a Subchapter C or Subchapter S Corporation
Details of the social responsibility policy
The accounting system and the data flow management provide information on how the ______________ will be used by the business
Funding
Which of the following activities may be included when a candidate spends a full day at the company?
Having the applicant work with other employees, Allowing the applicant to see the day-to-day company environment, Allowing the applicant to have lunch with other workers
What method of inventory control seeks to minimize excess capital investment in inventory by having it present only shortly before it is used?
Just-in-time-inventory
A loan provided for the purchase of a necessary asset for the business is called _____________ lending
asset-based lending
Which of the following is a human resources issue for family firms?
Placement of family members can create an environment of discrimination, It is more difficult to fire or discipline a family member, One family member may make another mad, since they know that member's "hot buttons"
Which of the following are true regarding the accounts payable?
The record should include date paid, amount paid, and check number or tracking number, All invoices received should be recorded, A record of payment toward each invoice should be included
Identify the true statements about workers' compensation laws in the United States.
They aim to provide some type of wages to employees who are disabled or injured while on the job, They provide workers' compensation insurance that is regulated by each state
Which of the following statements regarding bonus systems are correct?
They are similar to profit sharing, They are not as well defined as profit sharing, They are based on the employee's performance
Which of the following are the characteristics of limited partners in a limited liability partnership?
They are typically allowed to work for the firm, They are considered passive investors, Their liability is limited to their investment in the business
True or false: Funding for almost any new business begins with the founder and his or her personal resources
True
The Americans with Disabilities Act (ADA) applies fully to any business with more than _________ employees and in some communities has been applied to all businesses
15
A __________ is where a sales commission is paid in addition to a basic salary
Hybrid compensation system
General and limited are two broad categories of
Partnership
Which of the following is a typical disadvantage of having suppliers invest in a new business?
The suppliers' deal involves an exclusivity agreement
What is a generic term used to describe any type of nonequity funding tied to the business?
Debt
True or false: Issues surrounding succession are never a problem in a family run business
False
Subchapter S and subchapter C Corporations take their names from subchapters in the ___________ code
Internal Revenue
It is important to record and balance the company account on at least a ___________ basis
Monthly
What is the initial value at which the firm's shares are offered?
Par value
True or false: recruiting companies do an extremely good job recruiting and placing people with companies that have unique skill requirements
True
A _________________ is like a master system for tracking the activity of a business
Chart of accounts
Which of the following statements regarding equity theory are correct?
Employees will accept that someone who has been with the company longer may earn more, Employees need a clear understanding of how their compensation compares to peers', Employees judge the fairness of their compensation based on others in a similar situation
True or false: The founder should avoid personally lending money to the new business because it is an unsecured investment
False
True or false: The greater the insurance coverage obtained by a new business , the lower the cost
False
Marc and James were hired at the same time. They graduated from the same school with the same grade point average. They both work in the same department doing similar jobs. During their last review, bot received similar performance ratings. James is paid $500 more than Marc. According to equity theory, how would Marc feel if he found out?
He would feel that he is unfairly compensated compared to James
True or false: When considering funding, a firm needs to evaluate not only the amount provided but also the sources of that funding
True
True or false: a partnership will be governed by either the Uniform Partnership Act or the Revised Uniform Partnership Act if the partnership agreement is not developed and signed.
True
The 4 pillars of an entrepreneurial opportunity are
large and growing market strong team excellent financial returns competitive advantage
Identify the true statements about a Subchapter C Corporation.
It considers the owners as employees and pays them salaries and bonuses, profits that are not paid out for such items as salaries are retained for future expansion *
Hiring a family member ___________ discrimination issues for larger family businesses
does not eliminate
A business owner hires a mechanic to work on cars owned by the customers. The mechanic makes a mistake that leads to significant and costly damage to a customer's car. Which type of insurance can be purchased to cover the damages?
Bonding
Identify the characteristics of loans as a source of funding for a new business
They are secured by assets or a personal guarantee, They are often repaid monthly from cash flow
Which of the following are likely to affect a small business when an employee becomes a problem?
The problem may cause other employees to have problems, The organization does not fully benefit from the unhappy employee, The owner loses time dealing with the situation
True or false: An entrepreneur should keep continuous records of all advertisements that have been run wither a physical publication or on internet, who responded, and the criteria of the job
True
Which of the following need to be avoided by a business owner, or an interviewer, to provide a job candidate with a realistic preview of the job and company?
Underselling the job expectations, Overpromising what the job will be
Which of the following is NOT a common form of debt for a new business?
Venture capital
Business owners should ___________
Write a job ad that sells the job and business honestly
What makes a country entrepreneurial
financial resources support from government entrepreneurship education research and development transfer commercial and legal infrastructure entry regulation physical infrastructure cultural and social norms
when determining your revenue stream, what question should you ask yourself?
how much are my customers willing to pay?
Equity theory states that employees judge
how well they are treated in the context of how well others are being treated
Which law requires that there be no discrimination in the hiring, management, or dismissal of employees with disabilities?
Americans with Disabilities Act
Which of the following are the results of violating a trademark?
Be required to change the name, Be required to pay monetary damages
Two related entities that can help the business owner foresee the potential legal liabilities are:
Board of advisors, board of directors
A ____________ is an agreement between two parties to perform certain activities for some consideration
Contract
What form of debt financing allows for a unique positive cash flow situation by allowing up to a 25-day delay in payment?
Credit cards
Which form of debt is almost always tied personally to the founders, thus exposing them to personal bankruptcy?
Credit cards
Which of the following is NOT true with regard to managing the flow of data?
Data management methods must be complex
Which option traditionally involves selling a percentage of the business to an outside party?
Equity investment
If a firm needs to generate cash in the short run, accounts receivable can be sold at a discount via a technique known as
Factoring
The ____________ established a minimum wage for workers
Fair Labor Standards Act
True or false: To calculate the maximum amount to obtain in outside financing, it is advisable for an entrepreneur to calculate the entire cash flow projection by adding in all equity investments
False
Which of the following statements are true regarding equity investment
In the case of dissolution, each investor is entitled to a percentage of the break-up value equal to their investment percentage, The founder must clearly outline what rights and expectations each investor has as the business grows, Equity investment involves selling a percentage of the business to an outside party
Which of the following are the characteristics of a Subchapter C corporation?
It does not provide any protection for the owners beyond their equity investment, It does not have any limits on shareholder participation
A __________ description describes the skills and capabilities that a candidate should have.
Job
___________ are the least expensive corporation types to form
Limited liability corporations
Identify a characteristic of a general partnership that is different from that of a sole proprietorship
Partners are generally held to be jointly liable for all debts incurred by the partnership
A more complex business form that has two or more people sharing unlimited liability in a new business venture is called a general _________________
Partnership
Which of the following are the three basic types of legal business organization?
Partnership, corporation, sole proprietorship
Business owners who offer profit sharing ________________
Pay employees a small salary but offer a percentage of the profits that the company earns
A seperate accounts __________________ record should be maintained for each creditor
Payable
Which accounting record tracks time for hourly workers and attendance for salaried employees?
Payroll
A ___________ examines employee's goals and the outcome of those goals over a particular given time period
Performance review
An advantage of the Subchapter __________ Corporation is that it allows the owners to report their income or losses on their personal income tax returns, thus avoiding double taxation.
S
Which of the following are compensation options that a small business owner may employ to pay employees?
Salary, Commission, Hourly wage
___________________ credit is a form of nonequity funding for physical assets as well as the actual supplies purchased
Supplier
Which of the following are advantages of asset leasing for a new business?
The business is able to acquire the assets that it needs to begin operations with a minimal cash outlay, The company is not stuck with an aging asset as the entrepreneur is able to trade up.
Which of the following are sources of nonequity capital to start a business?
Debt, Grants
Which of the following are characteristics of good employment advertisement?
Make the advertisement stand apart to draw potential applicants' attention, Express excitement about the firm, Communicate the firm's culture
True or false: If a corporation suffers substantial losses, the founders will lose only his or her investment in the business
True
Entrepreneurs should ask applicants to submit their _____________ and list of references by the deadline
resume
Which of the following are key reports a business should generate?
Petty cash, Expense account, Accounts payable, Payroll
Employers may ask job candidates about their ___________, but not their ____________
Prior convictions; Arrest record
Accepting _____________ __________________ can limit a firm's ability to shop around for a cheaper source
Supplier credit
Which of the following statements about human resources is NOT true?
The most important role of human resources is to meet basic legal requirements
Identify a disadvantage of asset leasing for a new business
The new business may spend more money for the equipment over time than if if it had bought the new unit outright
___________ insures businesses from damages caused by workers in the performance of their jobs.
Bonding
Which of the following are excellent sources of information regarding regulatory requirements?
Chamber of commerce, Small business assistance centers, Local department of economic development, Small business administration
Which of the following key reports is the master system for tracking the activity of the business?
Chart of accounts
A key aspect of how the funding will be used is found in the information provided by the business, and that comes from:
Data flow management, The accounting system
___________ is a major source of nonequity financing and can come from banks, credit cards, or suppliers
Debt
Which of the following are typically recommended before seeking outside funding?
Determine the percentage of ownership reserved for investors, Determine the percentage of ownership for each founder, Determine a fair and valid estimation of the value of the firm
True or false: there is no need to treat a loan from family as a contractual agreement
False
Why do companies invest in a new venture with the idea of ultimately purchasing the venture?
It helps the companies maintain access to the latest thinking in the field, It is one of the least expensive means for the companies to try out new ideas
Which of the following statements are true about a venture capital fund?
It includes limited partners seeking high returns, It has a general partner who investigates and invests in each new business
Identify the typical requirements for a new business to obtain a city or county business license
It should agree to report basic information about its performance on a set schedule, It should pay a set fee, which is usually less than $100.
Which form of business has at least two individuals who are partners in a venture but only one person declares a full pass through of all income on his or her federal taxes and assumes unlimited liability?
Limited liability partnership
Which of the following elements are required when forming a Subchapter C or S Corporation?
Location of the corporate headquarters, General nature of the business, Names, addresses, and titles of all founders
Which of the following statements regarding a company's compensation system are correct?
Salary and benefits play an important role in maintaining employee morale, It needs to be fair and equitable for all employees, Employees often compare their salary with others at their company
Which of the following statements regarding drug testing employees are correct?
Some states offer discounts on workers' compensation insurance for businesses that have a drug-free workplace program, The employees' privacy rights can come into conflict with a drug-free workplace policy, Business owners have a right to insist on drug testing
Identify the important pieces of information that need to be considered by an entrepreneur who seeks to place an advertisement on a job-placement website
Statistics on reply rates, Readership and viewership of the website, Rates charged for placing the advertisement
Which of the following is true regarding a board of advisors?
The group is formed at the discretion of the founder, The group is composed of individuals outside the business, The group advises the founder on key issues
______________ involves entrepreneurs making a pitch on an Internet site and letting potential investors know what they will receive for their funding , which might be equity but is often a product, service, or gift
Crowdfunding
Which of the following are true with regard to managing the flow of data?
Data are tied to the strategic needs of the business, Data are obtained in a timely manner
What are the key financial issues involved with starting a business?
The funding and the funding level of the firm, The establishment of an accounting system, The flow of information in the new business
Ways that entrepreneurs can ensure that they avoid discrimination or the appearance of discrimination are to do which of the following?
Write job descriptions so they do not include terms such as "handyman," "salesman," "young," or "counter girl", Give everyone an equal opportunity to be considered, Advertise jobs widely to include many potential groups
Which of the following is the first step in the hiring process?
Writing a job description
What is the best description of a pitch deck?
a brief presentation usually 10-12 slides that provide a quick overview of idea
A copyright can be claimed on creative materials generated, such as:
books, unpublished music, advertising copy, artwork
Which of the following is NOT one of the three basic types of legal business organization?
Franchise
Which form of business involves two or more individuals sharing unlimited liability in a business venture?
General partnership
In which of the following business forms do the business debts flow directly to the owner?
General partnership, Sole proprietorship
What are special funds that are neither equity or debt funds that are designed to aid businesses in specific areas?
Grants
A sole proprietorship is very popular among individuals who:
Have a business where the costs and risks are very low, Have a very small business, Are unsure about their business idea.
The _____________ system of a firm is a powerful asset that should be used as a fine-grained tool to provide data about when and how inventory is needed
Accounting
Which of the following is not considered a benefit but is mandated by the law?
Unemployment insurance
Under which of the following conditions are examples of when a business owner should conduct a more comprehensive reference check?
When the employee might be in a position to put the business or its customers at risk, When the employee will be driving a company or personal car for business reasons, When the position requires the employee to visit customers' homes
Besides banks, finance companies, and friends and family, another source of nonequity loans comes from:
The founders
The business owner should do which of the following to determine which candidates to interview?
Directly compare the applications with the job description, Focus first on those candidates who closely match the job description, Immediately reject those candidates who do not have the minimum position requirements
A corporation pays a tax on its profits; then those after tax profits are paid as dividends to the owners, who then have to pay personal income taxes on the dividend income. This situation is referred to as ___________
Double taxation
Which of the following statements regarding commission compensation systems are correct?
Employees may make sales to customers who are financially weak and do not pay their bill, They sometimes cause employees to focus on commission instead of the overall good for the firm, Sometimes, employees figure out how to abuse the system
Which of the following statements about recruiting companies are correct?
Fees can be a significant portion of the employee's first year salary, They generally provide employers with highly qualified employees, They typically charge a company fee
Which of the following must be formally addressed by both Subchapter C and Subchapter S Corporations?
Holding annual board meetings, reporting standards to local, state, and federal authorities, authorization of more shares of stock
