ENT final

A program that allows employees to contribute to their retirement on a tax-free basis is ________.

401(k)

When conducting a gap analysis, the first column should include the ________.

Business ideas

(T/F) A lease need not specify a length of validity as it is assumed to remain in effect as long as a tenant is able to pay for it.

False

(T/F) A venture capital start-up is oriented toward the personal goals of the founder(s)

False

(T/F) Bonus systems are as well defined as profit sharing and the level of reward is independent of the discretion of an entrepreneur.

False

(T/F) Equity investment does not involve selling a percentage of the business to an outside investor.

False

(T/F) Gap analysis involves identifying an opportunity between the demand for a product or service and the availability of the product or service that you can buy from vendors to be resold to your customers.

False

(T/F) Human resource management is not important in family businesses.

False

(T/F) In the context of developing a quality business idea, the first step that an entrepreneur should take is assess their ability to fill gaps in the market.

False

(T/F) In the late 1970s and 1980s, the United States occupied the dominant economic position in the world.

False

(T/F) It is illegal for sole proprietors to run their business by deducting business expenses from their business incomes.

False

(T/F) The first step in developing a quality business idea is to analyze the market.

False

(T/F) There is one crucial person in a large organization: the chief executive officer.

False

What does OSHA stand for?

Occupational Safety and Health Administration

________ occur(s) in large companies that have excess resources such as equipment and employees.

Organizational slack

A firm sets up a low level of salary but offers to share a percentage of its profits at the end of the year. What is this called?

Profit Sharing

(T/F) A difference between copyrights and patents is that copyrights apply to creative materials generated while patents cover specific innovations that are generally industrial or process-based.

True

(T/F) A gap analysis identifies potential gaps in a market, but it does not provide individuals with the capability to fill those gaps.

True

(T/F) A rule of thumb in the founding of businesses has always been that an owner whose business is both a vocation and an avocation is difficult to beat.

True

(T/F) According to the agency theory, a manager at a large firm is more likely to exploit organizational resources for his or her own benefit than the owner of a small firm.

True

(T/F) Damage from floods and earthquakes is covered by a special form of insurance coverage. A small business owner, who chooses, may purchase it in addition to basic insurance.

True

(T/F) Debt is typically a secured investment; if the business fails, the business's assets would be sold in order to repay the debt.

True

(T/F) Every business that has been documented in the Fortune 500 list began as a new venture by a single individual or a small group of people.

True

(T/F) In the context of funding a business, crowdfunding refers to funds received by a business by soliciting a large number of very small investors, usually via the Internet.

True

(T/F) Lease contracts commonly give landlords the right to enter occupying businesses to inspect facilities.

True

(T/F) Many large and established businesses are willing to make equity investments in start-up companies.

True

(T/F) Self-employed people make up less than 20 percent of the workers in the United States.

True

(T/F) Supplier credit is typically offered on both physical assets and actual supplies of inventory purchased by a business.

True

(T/F) The Fair Labor Standards Act (FLSA) establishes a minimum wage for all workers, except workers on small farms and administrative employees.

True

(T/F) The Great Depression of the 1930s made it difficult for entrepreneurial businesses to survive in the United States. Group starts

True

(T/F) The most important person in an entrepreneurial business is the founder. Group starts

True

(T/F) The owner must be aware of his or her own tolerance of risk and establish a business that is consistent with that tolerance.

True

(T/F) The philosophy of the Enneagram test is that a person is the result of all the experiences in his or her life.

True

(T/F) The screening of résumés or applications prior to beginning an interview process for a job and the checking of references is important.

True

(T/F) The success of entrepreneurial firms pursuing new opportunities requires a number of deliberate actions by the business founder concerning human resources issues.

True

________ aid(s), counsel(s), assist(s), and protect(s) the interests of small business concerns.

US small business administration

Which of the following information should be obtained in the application/interview process? a. All of the answers are correct. b. social security number c. education and training d. work history

a. All of the answers are correct.

In the context of legal forms of business, identify an accurate statement about a general partnership. a. Established partners can bring in new equity partners by surrendering a portion of their ownership position. b. The partner with the largest equity stake makes decisions about the firm's operations. c. Owners report their shares of losses or profits independent of their interest in the firm. d. A single partner operates as the firm's manager and is directly responsible for any debts owed by the firm

a. Established partners can bring in new equity partners by surrendering a portion of their ownership position.

Taking the earnings before interest, taxes, depreciation, and amortization, reworking the figure based on analysis of the cash flow statement, and multiplying the remaining figure by a market multiple is a popular method for which valuation technique? a. Market estimation valuation b. Capitalization of earnings valuation c. Price/earnings valuation d. Asset-based valuation

a. Market estimation valuation

Which of the following statements is true of a performance review in an entrepreneurial business? a. The formal conversation with a worker who is doing a good job and appreciating his or her work is a form of compensation. b. A complex form should be followed for all performance reviews that are given in writing to assure its validity. c. A new firm should wait for a year to give feedback, and newer generations of employees are looking for such feedback. d. If a worker is not performing as expected, then the employer should give only positive feedback to boost the worker's morale.

a. The formal conversation with a worker who is doing a good job and appreciating his or her work is a form of compensation.

Identify a defining characteristic of venture capital start-ups. a. They tend to develop operations in multiple locations very shortly after the initial investment. b. They are usually self-funded or closely funded. c. They are inherently safe operations whose growth is dependent on the exploitation of knowns in the market. d. They generally have a developing organizational structure that is subject to frequent change.

a. They tend to develop operations in multiple locations very shortly after the initial investment.

Sonor Designs is a small business that makes greeting cards. Because of the small scale of the firm's operations, it cannot afford to purchase the expensive printers it needs to make greeting cards. Instead, it rents the printers from another organization. In the context of business financing, Sonor Designs renting essential business equipment from another company is an example of a. asset leasing. b. microfinancing. c. factoring. d. crowdfunding.

a. asset leasing.

In the context of business risks, how can an entrepreneur identify competitors to a new potential business? a. by observing what potential customers do to satisfy their current needs or wants b. by observing the market and identifying companies that have seen the maximum growth in the past quarter c. by conducting a brainstorming session with other entrepreneurs d. by performing a gap analysis evaluation to identify potential competitors

a. by observing what potential customers do to satisfy their current needs or wants

Established businesses are willing to make ________ investments in other start-up firms. a. equity b. nonequity c. collateral d. asset

a. equity

The process of generating ideas should occur in a(n) ________ manner and not in a(n) ________ fashion. a. interactive; linear b. linear; process c. linear; interactive d. process; interactive

a. interactive; linear

One of the accounting records maintained by Visors Inc. lists the number of regular work hours worked by its employees, the overtime hours worked by various employees, and the firm's overtime pay rate. This record also tracks salary checks issued to each employee. This record is most likely a(n) ________. a. payroll record b. expense account c. accounts payable record d. inventory account

a. payroll record

Which of the following terms means a set amount of compensation for a given time period? a. salary b. profit c. bonus d. commission

a. salary

Which kind of business is not likely to be eligible for a micro-loan program? a. telecommunication center b. washing clothes c. meals delivery d. weaving baskets

a. telecommunication center

Identify a true statement about gap analysis. a. The first column in a gap analysis includes a realistic estimation of an individual's personal resources. b. A gap analysis should be completed in a short period of time. c. One should ignore the financial requirements and the nonfinancial resources that a business needs when doing a gap analysis. d. A gap analysis requires extensive research.

b. A gap analysis should be completed in a short period of time.

Identify a true statement about the process of generating business ideas. a. Entrepreneurs should limit themselves to generating business ideas based on their education and work experience. b. After analysis, entrepreneurs may change their ideas even if they initially thought that their ideas would be successful. c. Individuals should quickly exploit opportunities they identify before competitors can identify the same gaps. d. Frequently, entrepreneurs end up finding an opportunity that matches their business concept exactly.

b. After analysis, entrepreneurs may change their ideas even if they initially thought that their ideas would be successful.

In the context of start-ups, new businesses need to be aware of which of the following issue(s)? a. funding and funding level of the firm b. All of the answers are correct. c. how information flows in the business d. the establishment of an accounting system

b. All of the answers are correct.

Which of the following questions should a new business owner examine when considering leases? a. Is there an ability to renew the lease? b. All of the answers are correct. c. Who is responsible for maintenance and improvements? d. What exactly is the new business owner leasing?

b. All of the answers are correct.

Which of the following represents the impact of a poor employee on the functioning of a small business? a. The owner's time is lost. b. All of the answers are correct. c. The problems may bleed over to other employees. d. The organization does not fully benefit from the employee.

b. All of the answers are correct.

You should not use a cookie-cutter business plan program because a. potential investors are often family members, which makes it critical that the entrepreneur seeks to ensure the chances of success by doing thorough planning and thinking. b. All of these choices are correct c. each business plan should have its own voice, feel, and presentation. d. a good plan is best developed by the individual contemplating the business, not by a paid consultant.

b. All of these choices are correct

Which of the following personality tests is based on the philosophy of Carl Jung? a. Big Five b. Myers-Briggs c. Insights d. Enneagram

b. Myers-Briggs

Which personality test indicates the different ways individuals deal with other people and their environments? a. Insights b. Myers-Briggs c. Big Five d. Enneagram

b. Myers-Briggs

Several successful businesspeople establish a partnership with each other. They combine their financial resources and use the resultant pool of resources to make equity investments in various high-growth new undertakings. In the context of equity funding, the partnership and the pooled resources of the businesspeople are best described as a. an asset lease arrangement. b. a venture capital fund. c. supplier credit. d. None of the answers is correct.

b. a venture capital fund.

Job advertisements written for a new hire should a. give maximum information needed for a potential applicant. b. be kept concise and should communicate the culture of the firm. c. contain the current challenges faced by the industry. d. be similar to the generic advertisements placed every week.

b. be kept concise and should communicate the culture of the firm.

Women entrepreneurs are starting small businesses for all but which one of the following reasons? a. greater control of their lives b. better ideas for small businesses c. manage family needs d. hit the glass ceiling

b. better ideas for small businesses

What term is used to describe Walmart's ability to purchase more advertising space at a lower cost per ad? a.volume excess b. economies of scale c. buying bonus d. advertising bonus

b. economies of scale

In the context of a harvest plan, which of the following is the deciding metric in a potential public offering of a business? a. capital b. size c. location d.nature

b. size

Borealis Computing is a small start-up firm that needs to purchase essential equipment and supplies to begin operations. Gencent LLC, a larger firm, offers to finance Borealis Computing's purchases. Under their agreement, Borealis Computing will repay Gencent LLC overtime at a specified interest rate. In the context of nonequity funding, Gencent LLC's financing of Borealis Computing's purchases is an example of ________. a. crowdfunding b. supplier credit c. factoring d. equity investment

b. supplier credit

Investors can be a. active. b. a minority. c. All of the answers are correct. d. passive.

c. All of the answers are correct.

In the context of legal forms of business, identify a benefit of an Subchapter S Corporation over a Subchapter C Corporation. a. An Subchapter S Corporation pays for fringe benefits of the owners at its own expense unlike a Subchapter C Corporation. b. An Subchapter S Corporation can have a larger number of investors than a Subchapter C Corporation. c. An Subchapter S Corporation has limitations in the number and type of shareholders unlike a Subchapter C Corporation. d. An Subchapter S Corporation has more potential for future expansion than a Subchapter C Corporation.

c. An Subchapter S Corporation has limitations in the number and type of shareholders unlike a Subchapter C Corporation.

In the context of nonequity funding, identify a true statement about loans. a. Banks take a controlling percentage of ownership of any small business they give a loan to. b. Banks have traditionally been eager to fund entrepreneurial firms. c. Debt holders have a right to a firm's assets if the firm fails to pay off their loans. d. Equity investors receive proceeds from a filed firm before all other loans are paid off.

c. Debt holders have a right to a firm's assets if the firm fails to pay off their loans.

In the context of legal forms of business, identify a true statement about limited liability partnership (LLP). a. General partners in a limited liability partnership are indirectly responsible for federal taxes owed by the firm. b. All partners in a limited liability partnership are jointly responsible for any debts or judgments against the firm. c. In a limited liability partnership, limited partners can work at the firm but not be active in its management. d. Limited partners in a limited liability partnership must be external advisors who do not have a stake in the ownership of the firm.

c. In a limited liability partnership, limited partners can work at the firm but not be active in its management.

Which of the following is an advantage that family businesses enjoy over nonfamily-owned businesses? a. Family businesses are able to respond quickly to change around them, whereas nonfamily-owned businesses are often slow to react to changes. b. Family businesses have the ability to cheaply produce large numbers of a product, whereas nonfamily-owned businesses can only produce small volumes of a product. c. Individuals in family businesses are often willing to work at times and in conditions that employees in nonfamily-owned businesses would not accept. d. Family businesses can afford to fill niches within markets that nonfamily-owned businesses cannot afford to fill.

c. Individuals in family businesses are often willing to work at times and in conditions that employees in nonfamily-owned businesses would not accept.

Which of the following statements is true of the Americans with Disabilities Act (ADA)? a. It allows entrepreneurial businesses to exclude candidates who need physical adaptations to work at the firm. b/ It covers those firms with 50 or more employees. c. It provides that each and every business must provide unfettered access to all differently-abled people. d. It is applicable to large business firms with a turnover of more than 10 million dollars.

c. It provides that each and every business must provide unfettered access to all differently-abled people.

In the context of legal forms of business, identify a true statement about sole proprietorship firms. a. Many communities discourage the formation of these firms because their operations are difficult to regulate. b. These firms can have multiple founders with equal stakes so long as a single individual is considered to be the owner. c. Laws governing business practices do not recognize other equity investors, which limits the growth potential of such firms. d. Because of the limited nature of the growth potential of such firms, any profits they make are exempt from federal taxation.

c. Laws governing business practices do not recognize other equity investors, which limits the growth potential of such firms.

Identify a true statement about entrepreneurial firms. a. The organizational structure in such businesses is often well-developed. b. Such businesses tend to develop operations in multiple locations very shortly after the initial investment. c. The number of employees in such businesses is not expected to grow to more than 50 to 100. d. Such businesses generally hire an experienced president to grow the company.

c. The number of employees in such businesses is not expected to grow to more than 50 to 100.

Which of the following is true of robber barons in the context of the history of entrepreneurial businesses in the United States? a. They dominated those industrial sectors that were already well-established. b. They were responsible for the failure of several small businesses. c. They indulged in great abuses in order to succeed in their business. d. They failed to take advantage of the economies of scale.

c. They indulged in great abuses in order to succeed in their business.

In the context of identifying new business opportunities, which of the following is the definition of brainstorming? a. a rational process by which a group of an entrepreneur's peers evaluates his or her business ideas based on several parameters, such as financial risk and capability gaps b. a creative process whereby an individual is asked to develop ideas based on gaps in a market identified by venture capitalists c. a creative process whereby a group of individuals are brought together and asked to generate numerous ideas, with little or no effort made to evaluate the potential for each idea d. a simple process of systematically examining the difference between what is expected in a business and what actually occurs during its operation

c. a creative process whereby a group of individuals are brought together and asked to generate numerous ideas, with little or no effort made to evaluate the potential for each idea

In the context of legal forms of business, a Subchapter S Corporation a. treats the owners of the firm as advisory members with little say in the operations of the firm. b. treats the owners of the firm and the firm itself as the same entity. c. allows the owners to treat the income of the firm as part of their personal incomes. d. gives the owners of the firm virtually unlimited liability for its debts and liabilities.

c. allows the owners to treat the income of the firm as part of their personal incomes.

In the context of good accounting practices, ________ allow entrepreneurs to perform a monthly tracking of how much they spend and ultimately form an annual record of all business-related costs. a. accounts payable b. inventory accounts c. expense accounts d. petty cash registers

c. expense accounts

Threats to ________ are threats to the new business in financing its growth, including high development cost. a. deficit gaps b. sales generation schemes c. operational financing d. profit margins

c. operational financing

A type of gap analysis that compares the possibilities in the marketplace with an individual's competence to address those gaps is called a. descriptive analysis. b. market analysis. c. opportunity analysis. d. predictive analysis.

c. opportunity analysis.

Trilane Systems is a small business. Its owner, Myra, is also its only employee. She handles the business's operations herself and is responsible for all of the business's income and losses. In the context of the legal forms of business, Trilane Systems is a a. general partnership b. Subchapter C Corporation c. sole proprietorship d. limited liability partnership

c. sole proprietorship

Which of the following personality tests was developed by two independent research teams who analyzed data collected from thousands of people? a. the Myers-Briggs test b. the DISC assessment c. the Big Five test d. the Enneagram test

c. the Big Five test

In a lease, a landowner can enter a business premises for all the following reasons EXCEPT a. when checking to see if anything is illegal. b. when the landowner wants to manage the rental property. c. whenever the landowner wants to. d. when the landowner wants to inspect it.

c. whenever the landowner wants to.

Microloans have been in existence for years; they are most commonly made directly to ________ for self-development. a.young adults b. men c. women d. Hispanics

c. women

What is the major difference between a board of directors and a board of advisors? a. There is no difference between the two. b. A board of directors always directs large companies, whereas a board of advisors is usually found in small firms. c. A board of directors is individuals from outside the firm, whereas a board of advisors is individuals from inside the firm. d. A board of directors has fiduciary responsibility, whereas a board of advisors advises the firm.

d. A board of directors has fiduciary responsibility, whereas a board of advisors advises the firm.

Which of the following statements is true of worker's compensation? a. It is limited to partial wage replacement and medical bills acquired while treating the injury caused at the workplace. b. It is given to an employee who qualifies for the compensation, regardless of the fault of the owner. c. Once an employee accepts workers' compensation, he or she cannot sue the entrepreneur for the injury caused due to unsafe working conditions. d. All of the answers are correct.

d. All of the answers are correct.

Which valuation method accounts for all the hard assets and then adds an acquisition or goodwill value? a. Market estimation valuation b. Capitalization of earnings valuation c. Price/earnings valuation d. Asset-based valuation

d. Asset-based valuation

Which valuation method is typically the lowest business valuation number calculated unless you are an asset-intensive business? a. Market estimation valuation b. Capitalization of earnings valuation c. Price/earnings valuation d. Asset-based valuation

d. Asset-based valuation

Which personality test believes that a person is the result of all experiences in his or her life? a. Insights b. Myers-Briggs c. Big Five d. Enneagram

d. Enneagram

In the context of risks to new businesses, identify a true statement about risk tolerance. a. In new markets, entrepreneurs must be willing to put up with risks that outweigh their personal risk tolerance. b. Entrepreneurs can avoid a majority of the risks associated with new start-ups by allowing competitors to invest in their new businesses. c. Risks must be determined by entrepreneurs based on the findings of focus groups with other entrepreneurs in the same industry. d. What constitutes a risk is determined by an entrepreneur by observing his or her own tolerances.

d. What constitutes a risk is determined by an entrepreneur by observing his or her own tolerances.

When a small business owner pays a commission in addition to a basic salary, it is called ________. a. a benefit b. an hourly wage c. a tax d. a hybrid compensation system

d. a hybrid compensation system

In the context of supports for new businesses, why are established businesses often hesitant to buy from a start-up business? a. because it is more profitable for established businesses to fulfill any requirements through resources already present within their organizational structures b. because the supply structures of established businesses are resistant to incorporating new supply sources c. because small businesses are typically family-run establishments, making them unreliable in the long run d. because it is not clear if the new business will be able to fulfill an order or service a product in the future

d. because it is not clear if the new business will be able to fulfill an order or service a product in the future

n the context of entrepreneurial orientation, the presence of ________ often leads young people to be pioneers in an area, as they are not limited by the restrictions of the past. a.organizational slack b. introversion c. family support d. bounded rationality

d. bounded rationality

In the context of legal forms of business, a general partner in a limited liability partnership a. acts as an independent external advisor to the firm. b. is not active in the management of the firm. c. is not responsible for liabilities owed if the firm goes bankrupt. d. has unlimited liability for any debts or judgments against the firm.

d. has unlimited liability for any debts or judgments against the firm.

The catalog of items maintained by a business, which lists the description, quantity, item number, unit cost, and total cost of each item the business carries, is known as a(n) ________. a. expense account b. check register c. payroll record d. inventory account

d. inventory account

Carla and John enter into a partnership and form a business. Under the partnership agreement, Carla is directly responsible for the management of the firm and its liabilities. John has a minor financial stake in the firm and works there, but he is not held responsible for the taxes and debts owed by the firm. In the context of the legal forms of business, Carla and John have formed a ________, a. general partnership b. Subchapter C Corporation c. sole proprietorship d. limited liability partnership

d. limited liability partnership

Which of the following types of firms do business incubators work best with? a. tobacco products b. restaurants c. retail stores d. scientific firms

d. scientific firms

Which of the following is an advantage that small firms have over large businesses? a. the ability to produce services and products quickly and cheaply b. critical knowledge spread across the firms' human resources pool c. significant financial resources slack d. the ability to respond quickly to changes

d. the ability to respond quickly to changes

What term is used to describe the process of systematically examining the difference between what is expected and what occurs?

gap analysis

________ is the quantity and quality of human effort directed toward producing goods and services.

human resource management

Brainstorming works well in ________ groups.

informal

A company seeks to have inventory present only shortly before it is used. This method of inventory control is called

just-in-time inventory

Before establishing a new business, the first thing founders should do is

list their personal skill sets

________ can be described as a form of nonequity funding where one organization finances another organization's purchasing of physical assets and supplies.

supplier credit

The largest group of new business owners is ________.

women