ENT Final Multiple Choice

Identify a legal question that an employer can ask during an interview.

"Do you have a Social Security number?"

The Americans with Disabilities Act regulates firms with how many employees?

15 or more employees

What is the percentage of self-employed people in the workforce?

20

In the context of legal forms of business, identify a benefit of a Subchapter S Corporation over a Subchapter C Corporation.

A Subchapter S Corporation has no limitations in the number and type of shareholders unlike a Subchapter C Corporation.

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.

Which of the following statements is true of a family business?

A family business is generally run by and for the benefit of a particular family.

Identify a true statement about gap analysis.

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

In the context of financing tools available to new businesses, identify a major disadvantage to asset leasing.

A new business might spend more money on leasing equipment over time than if it had bought the equipment outright.

Currently under the ________, firms with more than 50 employees are required to offer their employees insurance.

Affordable Care Act

A common form of debt for a small business can be classified as ________.

All of the answers are correct.

Human resource management includes ________ employees.

All of the answers are correct.

In the context of start-ups, new businesses need to be aware of which of the following issue(s)?

All of the answers are correct.

What are the advantages of leasing equipment for a new business?

All of the answers are correct.

Which of the following items does a payroll record list?

All of the answers are correct.

Which of the following questions should a new business owner examine when considering leases?

All of the answers are correct.

Which of the following represents the impact of a poor employee on the functioning of a small business?

All of the answers are correct.

All of these are potential issues for an owner in a family business except

All of these choices are correct.

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.

Identify a true statement about the process of generating new business ideas.

As a business idea evolves, an entrepreneur must be willing to develop a new set of skills to make it successful.

Which of the following personality tests is popular in universities and is composed of factors that are considered by many researchers to be the key components or types of an individual's personality?

Big Five

________ is a rational decision-making process that is constrained by our experiences, history, and culture.

Bounded rationality

________ are high-net-worth individuals who invest in businesses not as a business, but as individuals.

Business angels

________ lead(s) to a condition where a single firm making 100 percent of the product is the most efficient.

Economies of scale

Which personality test believes that a person is the result of all experiences in his or her life?

Enneagram

In the context of legal forms of business, identify an accurate statement about a general partnership.

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

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

Human resource management

In the context of legal forms of business, identify a true statement about limited liability partnership (LLP).

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?

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)?

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

Which of the following statements is true of the Fair Labor Standards Act (FLSA)?

It requires that all nonexempt 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.

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

Which of the following personality tests is based on the philosophy of Carl Jung?

Myers-Briggs

Identify a true statement about credit cards from the following.

None of the answers is correct.

What does OSHA stand for?

Occupational Safety and Health Administration

Which of the following is not a factor in a small business's success?

Other people's needs and wants are not as important as the small business owner's.

Identify a true statement about the history of entrepreneurial businesses in the United States.

The 1880s saw the initial development of the nation's large industrial base.

Which of the following laws states an employer cannot discriminate in pay to men and women who do the same job?

The Equal Pay Act

Which of the following laws established a minimum wage for workers?

The Fair Labor Standards Act

Which of the following is a defining characteristic of venture capital start-ups?

The businesses are well-funded by angel investment.

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.

Identify a defining characteristic of entrepreneurial firms.

They tend to be oriented toward the personal goals of the founder.

In the context of risks to new businesses, identify a true statement about risk tolerance.

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

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.

When a small business owner pays a commission in addition to a basic salary, it is called ________.

a hybrid compensation system

In the context of good accounting practices, the organizational fund used for expenses too small to write a check for is known as

a petty cash fund.

A small business owner must possess all of the following except

a sequential formula.

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 venture capital fund.

In the context of legal forms of business, a Subchapter S Corporation

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

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

asset leasing.

Job advertisements written for a new hire should

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

In the context of supports for new businesses, why are established businesses often hesitant to buy from a start-up business?

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

Women entrepreneurs are starting small businesses for all but which one of the following reasons?

better ideas for small businesses

In 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.

bounded rationality

In the context of business risks, how can an entrepreneur identify competitors to a new potential business?

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

All of these are threats to business success except

deficit gaps.

James and Mary own a business. When they pay themselves an advance in salary or a bonus, it is called a(n) ________.

draw

Established businesses are willing to make ________ investments in other start-up firms.

equity

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

All of the following are benefits of a Subchapter C Corporation EXCEPT

fringe benefits being treated as income.

Characteristics of an entrepreneurial firm start-up include all except

having over 100 employees.

In general, the greater the debt a business owner is willing to take on, the ________ the risk tolerance.

higher

The process of generating ideas should occur in a(n) ________ manner and not in a(n) ________ fashion.

interactive; linear

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) ________.

inventory account

Which of the following is a document that describes a job that is to be filled?

job description

In the context of managing data flows, the ________ of inventory control seeks to minimize excess capital investment in inventory.

just-in-time method

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 ________,

limited liability partnership

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

list their personal skill sets.

In the context of business designs, one of the advantages of a corporation is that when it suffers losses, the founders will

lose only their investment in the business rather than their life's savings.

Which of the following entrepreneurial firms needs to pay special attention to OSHA guidelines regardless of their size?

manufacturing firms

Threats to ________ are threats to the new business in financing its growth, including high development cost.

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

opportunity analysis.

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) ________.

payroll record

The potential entrepreneur needs to consider ________ when starting a new business.

prior experience

When should a new business owner ensure there are sufficient financial resources to operate the business?

prior to the start

A ________ statement is a financial statement that summarizes the revenue, costs, and expenses incurred during a specific period of time.

profit and loss

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

signed a contract with each other.

In the context of a harvest plan, which of the following is the deciding metric in a potential public offering of a business?

size

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

sole proprietorship.

What term is used to describe individuals or other organizations that impact the success of a business?

stakeholders

Accepting ________ ties a firm to the supplier and usually stops the firm from shopping around for a lower price.

supplier credit

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 ________.

supplier credit

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 ________. Multiple Choice

supplier credit

Which of the following can be a threat to operational financing?

swift expansion plans

In the context of evaluating entrepreneurial orientation, which of the following personality tests has a bias that adults will not change their personality over time and instead hold on to the personality they develop during childhood?

the Enneagram test

A job offer is finalized by ________.

the candidate signing the offer

Which of the following experiences can entrepreneurs evaluate when generating business ideas based on their education?

the courses they took that were particularly enjoyable

When a small business owner is advertising for a job, the company needs to attract ________ pool of applicants to choose from.

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?

the possibility of bringing in new equity partners

When forming a sole proprietorship or a partnership, the business debts are

the responsibility of the owners.

Microloans have been in existence for years; they are most commonly made directly to ________ for self-development.

women

An employee cannot sue a small business owner for injury, if the individual accepts ________.

workers' compensation