ENT FINAL EXAM 2
a program that allows employees to contribute to their retirement on a tax-free basis is ____ 401k 401T 401C 401F
401K
Which of the following questions should a new business owner examine when considering leases? All of the answers are correct. What exactly is the new business owner leasing? Is there an ability to renew the lease? Who is responsible for maintenance and improvements?
All of the answers are correct.
In the context of proper accounting practices, identify a major difference between cash-based and accrual-based accounting systems. Cash-based systems are generally used with periodic inventory counting systems, whereas accrual-based systems are used primarily with perpetual inventory counting systems. Cash-based systems are mostly used by publicly held corporations, whereas accrual-based systems are mostly used by privately held corporations Cash-based systems must be used by large businesses, whereas accrual-based systems must only be used by the smallest businesses. Cash-based systems recognize revenue as it is generated, whereas accrual-based systems record revenue only when it occurs.
Cash-based systems recognize revenue as it is generated, whereas accrual-based systems record revenue only when it occurs.
A copyright can only be claimed on creative works if they are published or made available for public consumption. TRUE OR FALSE
FALSE
In the context of legal forms of business, a general partner in a limited liability partnership ACTS AS AN INDEPENDENT EXTERNAL ADVISOR TO THE FIRM IS NOT RESPONSIBLE FOR LIABILITIES OWNED IF THE FIRM GOES BANKRUPT IS NOT ACTIVE IN THE MANAGEMENT OF THE FIRM HAS UNLIMITED LIABILITY FOR ANY DEBTS OR JUDGMENTS AGAINST THE FIRM
HAS UNLIMITED LIABILITY FOR ANY DEBTS OR JUDGMENTS AGAINST THE FIRM
Which of the following statements is true of the commission compensation system? It creates frustration when a firm either does or does not change a commission program to reflect the growth of the firm. It creates a rigid compensation system where abuse is minimal, and it removes the frustration for employees and the entrepreneur. It creates an overall healthy environment within a firm when the salespeople are very focused on their commission. It creates a uniform system in a firm where every employee is paid the same amount as commission, and it is independent of their performance.
It creates frustration when a firm either does or does not change a commission program to reflect the growth of the firm.
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 ________, SUBCHAPTER S CORPORATION LIMITED LIABILITY PARTNERSHIP SOLE PROPRETORSHIP GENERAL PARTNERSHIP
LIMITED LIABILITY PARTNERSHIP
In the context of business designs, one of the advantages of a corporation is that when it suffers losses, the founders will BE EXPECTED TO POOL THEIR PERSONAL FINANCES TO RESCUE THE BUSINESS LOSE ONLY THEIR INVESTMENT IN THE BUSINESS RATHER THAN THEIR LIFES SAVINGS SURRENDER CONTROL OF THE COMPANY TO INVESTORS BE ABSOLVED OF RESPONSIBILITY FOR THE DEBTS OF THE COMPANY
LOSE ONLY THEIR INVESTMENT IN THE BUSINESS RATHER THAN THEIR LIFES SAVINGS
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 SUBCHAPTER S CORPORATION LIMITED LIABILITY PARTNERSHIP SOLE PROPRETORSHIP GENERAL PARTNERSHIP
SOLE PROPRIETORSHIP
When forming a sole proprietorship or a partnership, the business debts are PAID BY PURCHASE ORDER THE RESPONSIBILITY OF THE FIRMS EQUITY INVESTORS THE RESPONSIBILITY OF THE OWNERS PAID THE FIRST DAY OF THE MONTH
THE RESPONSIBILITY OF THE OWNERS
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 OR FALSE
TRUE
Which of the following statements is true of a performance review in an entrepreneurial business? The formal conversation with a worker who is doing a good job and appreciating his or her work is a form of compensation. A new firm should wait for a year to give feedback, and newer generations of employees are looking for such feedback If a worker is not performing as expected, then the employer should give only positive feedback to boost the worker's morale. A complex form should be followed for all performance reviews that are given in writing to assure its validity.
The formal conversation with a worker who is doing a good job and appreciating his or her work is a form of compensation.
In the context of equity funding, identify a characteristic of venture capital funds. They seek to make small investments in numerous small-sized businesses and start-ups to improve the possibility of consistent returns. They invest in large and established businesses that have slow and steady growth rates. They tend to invest in high-growth business that can cash out by being bought out by a larger company within a set period of time. They raise capital for small businesses by sourcing small investments from multiple individuals.
They tend to invest in high-growth business that can cash out by being bought out by a larger company within a set period of time.
Carla is a high-net-worth individual who was once an entrepreneur. She now financially invests in small start-ups and businesses. Though Carla funds their initial operations and advises them on the best way to develop their operations, she rarely interferes with their day-to-day operations. In the context of the various forms of equity funding, Carla is most likely a business angel an investment banker a venture capitalist an asset lender
a business angel
which of the following statements is true of a family business? a family business is generally run and for the benefit of a particular family a family business gives no importance to human resource management managing family members is quite easy as the individuals know each other well issues of discrimination within a family business are eliminated if the firm is large
a family business is generally run and for the benefit of a particular family
when a small business owner pays a commission in addition to a basic salary, it is called _____ a benefit an hourly wage a tax a hybrid compensation system
a hybrid compensation system
in the context of legal forms of business, identify a benefit of an subchapter S corporation over a subchapter C corporation an subchapter S corporation pays for fringe benefits of the owners at its own expense unlike a subchapter C corporation an subchapter S corporation has limitations in the number and type of shareholders unlike a subchapter C corporation an subchapter S corporation can have a larger number of investors than a subchapter C corporation an subchapter S corporation has more potential for future expansion than a subchapter C corporation
an subchapter S corporation has limitations in the number and type of shareholders unlike a subchapter C corporation
in context of legal forms of business, identify of an subchapter s corporation over a subchapter c corporation an subchapter s corporation can have a larger number of investors than a subchapter C corporation an subchapter s corporation pays for fringe benefits of the owners at its own expense unlike a subchapter c corporation an subchapter s corporation has limitations in the number and type of shareholders unlike a subchapter c corporation an subchapter s corporation has more potential for future expansion than a subchapter c corporation
an subchapter s corporation has limitations in the number and type of shareholders unlike a subchapter c corporation
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 micro-financing factoring crowdfunding asset leasing
asset leasing
James and Mary own a business. When they pay themselves an advance in salary or a bonus, it is called a(n) ________. payout draw expected outlay cash out
draw
________ funds are received by a business in exchange for a percentage ownership of the company. venture capital equity asset-based tangible
equity
established businesses are willing to make ____ investments in other start-up firms asset nonequity collateral equity
equity
OSHA has attempted to shape its regulations to be more lenient in its regulations on large businesses than on small businesses. true or false
false
Patents are inexpensive and easy to obtain and maintain. true or false
false
Workers' compensation insurance rates are regulated by the federal government and are uniform across the country. true or false
false
a contract must always be in written form, and it must be signed by the parties involved true or false
false
a grant, a form of non equity funding, is expected to be repaid at a predetermined interest rate once a beneficiary firm begins to profit from its operations true or false
false
a trademark cannot be renewed once it has been issued even when the firm or the product is active true or false
false
emerging economies are based upon laws true or false
false
emerging economies are based upon laws true or false
false
human resource management is not important in family business true or false
false
in the case of business failure, debt does not need to be repaid true or false
false
which of the following statements is true of the Americans with disabilities act? it allows entrepreneurial businesses to exclude candidates who need physical adaptations to work at the firm it covers those firms with 50 or more employees it provides that each and every business must provide unfettered access to all differently-abled people it is applicable to large business firms with a turnover of more than 10 million dollars
it provides that each and every business must provide unfettered access to all differently-abled people
A company seeks to have inventory present only shortly before it is used. This method of inventory control is called balanced inventory monitoring inventory accural inventory just-in-time inventory
just-in-time inventory
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 ________. factoring supplier credit crowdfunding equity investment
supplier credit
______ can be described as a form of non equity funding where one organization finances another organizations purchasing of physical assets and supplies factoring supplier credit asset leasing angel investments
supplier credit
Which of the following laws established a minimum wage for workers? the civil rights act the fair labor standards act the Shermans antitrust act the Americans with disabilities act
the fair labor standards act
A chart of accounts is a listing of each type of activity (such as expense items) and each type of asset within the company. true or false
true
An owner must develop a paper trail regarding an employee's bad performance. true or false
true
Debt is a generic term that describes any type of nonequity funding tied to a business. true or false
true
Extra expenses, not counted on in the planning stage of a new business, can quickly eat up cash intended to grow the business. true or false
true
identify a legal question that an employee can ask during an interview "are you married" "are you heterosexual or homosexual" "are you a republican or democrat" "do you have a social security number"
"do you have a social security number"
what percentage of states has an unemployment compensation law? 25 100 50 75
100
The Americans with Disabilities Act regulates firms with how many employees? less than 10 employees 20 or more employees less than 15 employees 15 or more employees
15 or more employees
The government regulates the employment of children under the age of ________. 20 18 16 21
16
What is the major difference between a board of directors and a board of advisors? A board of directors has fiduciary responsibility, whereas a board of advisors advises the firm. A board of directors always directs large companies, whereas a board of advisors is usually found in small firms. A board of directors is individuals from outside the firm, whereas a board of advisors is individuals from inside the firm. There is no difference
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? It is limited to partial wage replacement and medical bills acquired while treating the injury caused at the workplace. All of the answers are correct. It is given to an employee who qualifies for the compensation, regardless of the fault of the owner. Once an employee accepts workers' compensation, he or she cannot sue the entrepreneur for the injury caused due to unsafe working conditions.
All of the answers are correct.
A business that chooses to form a corporation must have a board of directors. In new small corporations, the board of directors and shareholders must be different individuals. TRUE OR FALSE
FALSE
In a sole proprietorship, all the income and losses are reported on schedule D of the 1040 tax form. TRUE OR FALSE
FALSE
Patents are inexpensive and easy to obtain and maintain. TRUE OR FALSE
FALSE
All of the following are benefits of a Subchapter C Corporation EXCEPT NO LIMIT TO THE NUMBER OF SHAREHOLDERS HEALTH BENEFITS PAID BY THE CORPORATION OWNERS BEING TREATED AS EMPLOYEES OF THE COMPANY FRINGE BENEFITS BEING TREATED AS INCOME
FRINGE BENEFITS BEING TREATED AS INCOME
Which of the following statements is true of the Civil Rights Act? It allows for the promotion of the differently-abled employees irrespective of their performance. It provides that each and every business must provide unfettered access to all disabled people. It ensures that all individuals are judged according to the discretion of an entrepreneur. It currently applies to all firms with more than 25 employees
It currently applies to all firms with more than 25 employees
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 None of the answers is correct. a venture capital fund. an asset lease arrangement. supplier credit.
a venture capital fund.
Currently under the ________, firms with more than 50 employees are required to offer their employees insurance. Americans with disabilities act affordable care act equal pay act fair labor standards act
affordable care act
An example of a benefit a company can offer is 401k all of the answers are correct sick leave retirement plans
all of the answers are correct
Human resource management includes ________ employees. all of the answers are correct hiring managing inspiring
all of the answers are correct
Investors can be a minority active all of the answers are correct passive
all of the answers are correct
a common form of debt for a small business can be classified as ____ supplier credit all of the answers are correct credit cards loans
all of the answers are correct
what are the advantages of leasing equipment for a new business? all of the answers are correct no hassles of an aging asset beginning operations with a minimum cash outlay ability of the business to trade up as newer; higher quality machines become available
all of the answers are correct
which of the following information should be obtained in the application/interview process? work history all of the answers are correct education anf training social security number
all of the answers are correct
which of the following items does a payroll record list all of the answers are correct base pay taxes gross pay
all of the answers are correct
which of the following represents the impact of a poor employee on the functioning of a small business the problems may bleed over to other employees all of the answers are correct the organization does not fully benefit from the employee the owners time is lost
all of the answers are correct
In the context of legal forms of business, a Subchapter S Corporation gives the owners of the firm virtually unlimited liability for its debts and liabilities. allows the owners to treat the income of the firm as part of their personal incomes. treats the owners of the firm and the firm itself as the same entity. treats the owners of the firm as advisory members with little say in the operations of the firm.
allows the owners to treat the income of the firm as part of their personal incomes.
identify an accurate statement about the hybrid compensation system. an entrepreneur should provide bonuses in a timely manner that is relevant to the individuals in the firm and within the realities and constraints of the business an entrepreneur needs to visualize a quarter as a relevant time frame, whereas workers need to visualize weekly feedback on their performance through a bonus an entrepreneur need not consider the industry standards in developing a compensation system an entrepreneur should not differentiate the level of rewards among his employees and should maintain a well-defined structure
an entrepreneur should provide bonuses in a timely manner that is relevant to the individuals in the firm and within the realities and constraints of the business
Job advertisements written for a new hire should give maximum information needed for a potential applicant. be similar to the generic advertisements placed every week. contain the current challenges faced by the industry. be kept concise and should communicate the culture of the firm.
be kept concise and should communicate the culture of the firm.
an ______ is a listing of each type of activity (expense) and each asset within a company chart of accounts inventory accrual account systems account
chart of accounts
in the context of non equity funding, identify a true statement about loans banks take a controlling percentage of ownership of any small business they give a loan to debt holders have a right to a firms assets if the firm fails to pay off their loans banks have traditionally been eager to fund entrepreneurial firms equity investors receive proceeds from a filed firm before all other loans are paid off
debt holders have a right to a firms assets if the firm fails to pay off their loans
Covore Inc., a start-up firm, receives the majority of the funds it requires to begin its operations from five individuals. In exchange for these funds, each individual receives a share of ownership in the firm. The funds provided to Covore Inc. by the individuals are an example of ________. equity investment debt asset-based lending crowdfunding
equity investment
credit cards have all the following except high interest rate not being tied to a particular asset equity investment no set repayment schedule
equity investment
in the context of legal forms of business, identify an accurate statement about a general partnership a single partner operates as the firms manager and its directly responsible for any debts owned by the firm the partner with the largest equity stake makes decisions about the firms operations established partners can bring in new equity partners by surrendering a portion of their ownership position owners report their shares of losses or profits independent of their interest in the firm
established partners can bring in new equity partners by surrendering a portion of their ownership position
In the context of financial tools, a business can quickly generate cash in the short run by selling accounts receivable at a discount to another company. This is a technique known as ________. leasing asset leasing crowdfunding factoring
factoring
A lease need not specify a length of validity as it is assumed to remain in effect as long as a tenant is able pay for it true or false
false
Founders cannot lend money to their own firm. true or false
false
Human Resources as defined in economics, is the processing of employees in monetary terms true or false
false
If a job is more central to an organization and has higher required skill levels than other positions, then the importance of employee references decreases. true or false
false
John reviews Michael's performance on the goals and outcomes that were set 12 months ago. This is called a goal review. true or false
false
Funding for any new business starts with the resources of the ________. equity fund bank investment banker founders
founders
________ are special funds that are neither equity nor debt, that do not require repayment, and are designed to aid businesses in specific areas. incubator equity grants small business loans no pay loans
grants
in the context of legal forms of business, identify a true statement about limited liability LLP all partners in a limited liability partnership are jointly responsible for any debts or judgements against the firm in a limited liability partnership, limited partners can work at the firm but not be active in its management limited partners in a limited liability partnership must be external advisors who do not have a stake in the ownership of the firm general partners in a limited liability partnership are indirectly responsible for federal taxes owned by the firm
in a limited liability partnership, limited partners can work at the firm but not be active in its management
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 an payroll record expense account inventory account check register
inventory account
which of the following statements is true of the fair labor standard act it allows an entrepreneur to employee children under the age of 15 years if he or she can establish the safety of the working environment it requires that all non exempt employees who work over 40 hours a week should be paid at the rate of time and a half it provides that each and every business must provide unfettered access to all disabled people it sets a minimum wage for all workers, including workers on small farms and administrative employees
it requires that all non exempt employees who work over 40 hours a week should be paid at the rate of time and a half
in the context of legal forms of business, identify a true statement about sole proprietorship firms because of the limited nature of the growth potential of such firms, any profits they make are exempt from federal taxation laws governing business practices do not recognize other equity investors, which limits the growth potential of such firms many communities discourage the formation of these firms because their operations are difficult to regulate these firms can have multiple founders with equal stakes so long as a single individual is considered to be the owner
laws governing business practices do not recognize other equity investors, which limits the growth potential of such firms
an _____ is an index wage that requires the minimum wage to be at least what someone who works 40 hours a week needs to stay out of poverty efficiency wage wage ceiling wage ratio living wage
living wage
which of the following entrepreneurial firms needs to pay special attention to OSHA guidelines regardless of their size? small retail firms manufacturing firms none of these answers are correct family wholesale firms
manufacturing firms
Which of the following terms means a set amount of compensation for a given time period? salary commission profit bonus
salary
Sea Waves Tours and Avis Travels enter into a formal agreement with each other. Under this agreement, over the next year, Sea Waves Tours will recommend Avis Travels to all its customers. Avis Travels will pay a small commission for every new customer they gain as a result of this recommendation. In this scenario, Sea Waves Tours and Avis Travels have created a subchapter C corporation formed a limited liability partnership signed a contact with each other entered into a general partnership
signed a contact with each other
Marsciva Technologies is an emerging business. The firm considers the owners to be employees of the firm and therefore pays them salaries and bonuses. To reduce corporate tax, the owners of Marsciva Technologies pay themselves nearly all the profits generated so that very little actual profits are reported by the firm. Based on these characteristics, Marsciva Technologies is most likely a subchapter C corporation sole proprietorship limited partnership subchapter S corporation
subchapter C corporation
Accepting ________ ties a firm to the supplier and usually stops the firm from shopping around for a lower price. supplier credit funding grants non equity credit equity funding
supplier credit
when a small business owner is advertising for a job, the company needs to attract _____ pool of applicants to choose from the largest the smallest the most educated the rarest
the largest
In the context of legal forms of business, which of the following is an area in which sole proprietorships differ from general partnerships? how much responsibility the owner or owners have for making business decisions where the liability for the firm's debts and finances rests the possibility of bringing in new equity partners how the firm's income and losses are reported on tax forms
the possibility of bringing in new equity partners
A petty cash fund operates like a bank savings account. true or false
true
ADA stands for the Americans with Disabilities Act. true or false
true
Debt, a source of nonequity funding, allows a new business to handle the disparity between when goods must be purchased and when money will be received from a customer to pay for those goods. true or false
true
Human Resources has been defined in economics as the quantity and quality of human effort directed toward producing goods and services true or false
true
If a new business deals with toxic waste such as asbestos, it can expect to be subject to significant regulation, regardless of the size of the firm. true or false
true
John takes out a loan for a necessary machine in his business. This type of loan would be called asset-based lending. true or false
true
One action a small business owner might take to establish that the firm is not discriminatory would be to advertise the job widely in several publications. true or false
true
Shrinkage of a firm's inventory can result from either employee or customer theft. true or false
true
The screening of résumés or applications prior to beginning an interview process for a job and the checking of references is important. true or false
true
The time period for which profit sharing or bonuses are given should be relevant to the individuals in a firm and within the realities and constraints of the business. true or false
true
a cash-based accounting system recognizes expenses as they are paid and recognizes revenue when it is generated true or false
true
a frustration of the commission system comes when the firm does not change the rate of the commission even when the company is doing well true or false
true
a sole proprietorship is where the owner, for legal, is treated the same as a business true or false
true
a trademark is legal protection of intellectual property that is associated with a specific business true or false
true
in the context of funding a business, crowdfunding refers to funds received by a business by soliciting a large number of every small investors, usually via the internet true or false
true
the rates of workers compensation insurance for individual firms within a particular state are fairly standard and are generally based on the industry and size of the firm true or false
true
______ is a fund that is organized as a limited partnership asset capital business angel venture capital equity
venture capital
In a lease, a landowner can enter a business premises for all the following reasons EXCEPT whenever the landowner wants to. when the landowner wants to inspect it. when the landowner wants to manage the rental property. when checking to see if anything is illegal.
whenever the landowner wants to.