Final
If you were not an employee of a design firm but were hired to prepare some CAD drawings for that company, the firm would most likely send you __________ at the beginning of the next calendar year. I. an EIN J. form W-4 K. form 1099 L. schedule C
J. form W-4
A media site where one can discuss at length professional topics to help attract clients and increase one's professional image. A. Blogging B. LinkedIn C. Facebook D. Twitter
This media site can provide business contacts, possible job openings, and a way to keep up with colleagues. A. Twitter B. Blogging C. Personal web site D. LinkedIn
Alice Michaels is looking for a loan for operational requirements. She needs $100,000 to purchase some inventory and the goods for three clients. The type of funds Alice most likely needs is _________. A. Equity capital B. A long term loan C. A line of credit D. Down payments
C. A line of credit
A style of management where all decisions about design style and execution, project management processes, and office organization are made by the owner. A. Facilitative B. Empowerment C. Autocratic D. Guidance
C. Autocratic
When a firm uses a name other than the names of the owners, a __________ generally required in order to operate? A. fictitious business name statement B. transaction sales tax license C. copyright application D. schedule 1099 information form
C. copyright application
Mary Smith has owned her design business for three years. She has no employees and works out of an office built in her garage. Although she has had some success, she has recently been offered an opportunity to work for another design company. Mary closed all of her business accounts and disconnected her business telephone number. The business formation that Mary had was a __________. A. limited partnership B. sole proprietorship C. joint venture with the new company D. corporation
B. sole proprietorship
This essential promotional tool is something no design firm can be without. A. Business stationary B. Brochure C. Press release contacts D. A networking plan
A networking plan
This person would be most helpful to you in checking the credit of potential clients. A. An accountant B. Bankers C. An attorney D. An insurance agent
A. An accountant
Ann Baxter has been in the interior design profession for five years. She has owned a business with a partner for one of those five years. Her partner suggested they write a plan for the coming year. In this case, which of the following statements is the main purpose of a business plan for Baxter and her partner? A. Define annual goals of an existing business. B. Define the idea and operation of a new business venture. C. Define marketing goals of a new business venture. D. Define pricing policies for the selling of goods.
A. Define annual goals of an existing business.
The most important aspect of sustainable (green) business practices involves A. Obtaining an in-depth knowledge about green design B. Using energy efficient electronic devices throughout the office C. Refraining from long signatures and logos on email "signature" spaces. D. None of the above.
A. Obtaining an in-depth knowledge about green design
__________ is the least important in deciding to start one's own design practice? A. Personal motivation B. Financial risk C. Design skills D. Location
A. Personal motivation
Mary Wilson's home has a market value of $250,000 with only $10,000 left on the mortgage. She needs $150,000 to lease, furnish, and purchase equipment and supplies to open a small studio. If Mary is pledging her home in order to get the loan of $150,000, Mary is seeking __________. A. a secured loan B. a line of credit C. an equity loan D. an unsecured loan
A. a secured loan
. If one of the co-owners of a __________ engages in an illegal and wrongful act, the court will find all the other owners equally as guilty. A. corporation B. S corporation C. partnership D. proprietorship
A. corporation
The greatest disadvantage of the sole proprietor form of business is the ________. A. high personal legal liability B. requirement to obtain a resale tax license C. neighbors complaining of deliveries to your home D. owner must pay self-employment tax
A. high personal legal liability
In a __________ the investors are referred to as "members." A. limited liability company B. limited partnership C. professional corporation D. privately held corporation
A. limited liability company
A __________ is required of all businesses that have employees. A. SS-4 EIN form B. 1099K C. SET 1040 D. Schedule EZ EMP
B. 1099K
Economic conditions in a market area have resulted in several independent design firms starting up. These various new owners have been in practice for a few years each, but have not been the "stars" at the firms they previously worked at. What should these new owners most likely try to do as they begin their businesses? A. Establish a strong marketing campaign. B. Hire an experienced office manager. C. Undercut the fees they charge to establish new clients. D. Enlist former clients to come over to their firm.
B. Hire an experienced office manager.
Which of these documents helps the business owner know how much revenue he or she has earned each month? A. Balance sheet B. Income statement C. Chart of accounts D. Business journal
B. Income statement
Sally has researched commercial office space for her design business. The space she wishes to rent is in a small office building near several showrooms that she regularly uses. It is a new building and has no partition walls as of yet in the space she wants to take. The landlord has told her that she is entitled to an allowance to pay for basic finishes and partitions. This is called ________. A. a tenant work letter B. build-out allowance C. trade fixtures allowance D. tenant improvement work letter
B. build-out allowance
When considering starting a design practice alone or with a partner, it is important to have the business owner(s) set aside at least __________ as personal funding to pay for personal expenses. A. six months of mortgage payments B. one year of mortgage payments C. one year of living expenses D. one year of rent and health care expenses
C. one year of living expenses
This insurance protects the designer when mistakes are made on drawings. A. Personal liability insurance B. Errors and liability insurance C. Property injury insurance D. Errors and omissions insurance
D. Errors and omissions insurance
Joanne wants to purchase several pieces of ready-made framed art from a catalog supplier of posters and reproduction art pieces. The company has told Joanne that she can only have pro forma credit with them for the first two years. This means that __________. A. Joanne must pay in full in advance for all orders for those two years B. Joanne must pay 50 percent of the order at time of ordering and the balance on delivery C. the art company will not let Joanne purchase unless she obtains a pro forma loan from a bank D. Joanne must establish trade credit with the company within two years by purchasing a set amount each year
D. Joanne must establish trade credit with the company within two years by purchasing a set amount each year ...
__________ are rules and regulations that may make it difficult or even impossible to operate your design business from a home office. A. Personal property laws B. State tax laws C. Covenants and restrictions D. Tenant laws
D. Tenant laws?
Inventory that you would sell to a client includes all the following with the exception of _________. A. lamps displayed in the office B. office furniture purchased for a client yet not delivered C. office equipment like your computer D. accessories purchased for a client that did not take the items
D. accessories purchased for a client that did not take the items
A joint venture business formation is treated most similarly to a __________. A. S corporation B. limited liability company C. proprietorship D. partnership
D. partnership
If Jean Brown sells furniture, finishes, and equipment to her interior design clients, she is required to __________. E. collect sales tax on products sold through her firm F. collect sales tax on wall coverings sold by the wallpaper hanger G. pay use tax on the labor to complete custom draperies H. obtain a Tangible Property tax license
E. collect sales tax on products sold through her firm
An interior design firm is mentioned in an article about a new hospital wing. This is called public relations.
F
The primary reason for networking is to find people to help you.
F
A democratic owner will include employees in many issues that impact the operations of the business such as future planning of goals.
False
A limited partner has every right to be involved in the management of the design firm
False
Cardinal Designs was formed as a corporation. If a member of the board of directors resigns, the corporation must dissolve.
False
If your neighbors complain about traffic to your home office, you may have to relocate your business to a commercial office.
False
In Jane's design practice, her project managers are allowed to make all necessary decisions regarding the execution of the design concepts developed by Jane and her design staff. This is an example of empowerment.
False
The businesses that create a joint venture continue to exist independently at the same time the joint venture exists.
False
The income statement generally created when developing a business plan for a new business is called a pro forma income statement.
False
Mark likes to invest in small entrepreneurial businesses. His brother told him about the interior designer that designed his new medical offices. Mark contacted the designer to see if the designer would be interested in having some additional funds to expand the business into a new market in Mark's location. Mark is considered a nonaffiliated angel investor.
False - affiliated angel investor.
Any unpaid form of non-personal presentation of ideas, goods, or services is called __________. A. Publicity B. Marketing C. Advertising D. Promotion
Publicity
1. The lack of a business plan is a primary reason for the failure of a new business.
True
A business model helps to define structure and organization of a business.
True
A joint venture is a temporary business formation
True
Banks are reluctant to provide financing to small new businesses because of the lack of collateral most prospective owners have to back up the loans.
True
Due diligence means that the business owner has carefully investigated all aspects of the business operations prior to beginning the endeavor.
True
Some states will not allow licensed professionals to create a limited liability company.
True