Intro to Business Chapters 1-8

_____ refers to selling products in foreign nations that have been produced or grown domestically.

Exporting

Luke works in an accounting firm that offers services such as ta preparation and external auditing to corporate companies. Luke is currently providing consultation to a client that deals in automobile parts. In this scenario, Luke is most likely a:

public accountant.

Olivia is a part-time worker at a jam-producing company in her village. Her job entails plucking and cleaning grapefruits. Because grapefruits grow only in winter, Olivia is unemployed for most part of the year. The given scenario exemplifies _____.

seasonal unemployment

Which of the following statements is true of a franchisor-franchisee relationship?

A franchisor limits the franchisee's territory from expanding into other areas.

Which of the following statements is true of activity-based costing (ABC)?

It is more complex than the direct labor method.

In the context of financial statements, which of the following statements is true of large corporations?

Large corporations with publicly traded stock must provide an annual report containing financial statements to all stockholders.

Ethan is in the process of launching his new business venture that specialized in electronic waste recycling. During this period, he has been in constant touch with Lois Inc., who was seen success in this niche market. In this scenario, which of the following entrepreneurial development strategies is Ethan utilizing?

Learning from others.

Gerald wants to find out the net income of his business for the last quarter. He deducts the cost of goods sold from the revenue earned during that period and then deducts the operating expenses from the gross profit. If Gerald decides to subtract the salary of his employees from the operating expenses before deducting the operating expenses from the gross profit, which of the following expenses would he be deducting?

Selling expenses

Samuel and Dexter start a logistics company together. Both of them have an equal right to participate in the company's management and share in the company's profits. In this scenario, Samuel and Dexter most likely _____.

have a general partnership

Olivia runs a spa for women. She employs only two helpers and one receptionist. This enables her to focus most of her resources on procuring products required to provide comfort and high-quality services to customers. The opportunity of _____ is highlighted in the given scenario.

having lower overhead costs

A famous musician sells the copyright of one of his songs to a record company for 2 million. In this scenario, the sale of the copyright of the song exemplifies the sale of a(n) _____.

intangible asset

A corporation is a separate entity from its owners where the:

owners are not personally responsible for the obligations of the company.

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Lossaire, a jewelry house, needs to increase the company's declining cash inflow through its financing activities. In this context, Lossaire is most likely to:

They are accumulated earnings reinvested in a company rather than being paid to the owners.

Felix lost his job at an investment firm because of downsizing during a period of recession. To keep himself financially stable, he opened a food truck that became a huge success. Which of the following advantages of entrepreneurship initially motivated Felix to start the food truck?

Survival.

Which of the following is a disadvantage of franchising?

The franchise agreement usually requires the franchisee to follow the franchisor's procedures to the letter.

James is always keen on putting his ideas into action regardless of the outcome. He perfects his craft by trying out different possibilities. If he is dissatisfied with the result, he tries out a different method but does not give up. Which entrepreneurial characteristic is highlighted in the given scenario?

Vision.

Harold, a financial accountant at an automobile company, is asked to calculate the net income of the company for a given period. He deducts the cost of goods sold from the revenue earned during that period. Before deducting the company's operating expenses from the gross profit, he deducts the rent and the insurance premium paid by the company during that period. In the given scenario, Harold deducted the company's _____ from the company's operating expenses.

administrative expenses

Harry is one of the top managers in RPLD Corporation. He, along with seven other members, takes the major decisions of the company and oversees its operation. Although Harry is not the owner of the corporation, he holds stocks in the company and has the power to appoint a chief executive officer (CEO) for the company. In this scenario, Harry is part of the _____ of RPLD Corporation.

board of directors

Scoopjoe, an ice cream brand in Wisconsin, has ten other outlets in Illinois, Michigan, and Ohio. As part of the agreement between Scoopjoe's main outlet and the other outlets, the former not only supplies raw materials to the latter but also provides help with site selection, training of staff, and finance. The given scenario exemplifies a:

business format franchise

The basic rules governing how a corporation is organized and how it conducts its business are known as _____.

corporate bylaws

Joshua and Hubert are the co-owners of a shoe manufacturing company. They have a disagreement over company policies and business methods. Following the discord, Joshua withdraws from the company and comes under the obligation to pay a sum of $10,000- the debts of the firm that are due at the time of his withdrawal. In the given scenario, Joshua and Hubert most likely _____.

have a general partnership

A severe cyclone causes substantial damage to a brick manufacturing company's production equipment. As a result, the company spends a sum of $25,000 to repair the equipment. Given this information, the sum of $25,000 that the company spends is its _____.

indirect cost

In the context of monetary policy, if the Fed decreases the reserve requirement, _____.

there will be more loans available

Priscilla is a trader of silver and diamond jewelry. Due to a recessionary trend in the industry, her business has not been making any profits for a few months. As the end of this economic trend cannot be easily ascertained, she decides to get her house mortgaged so that she can add a new line of business of trading in semi-precious stones. This financial risk appetite of Priscilla illustrates her _____ as an entrepreneur.

tolerance of uncertainty

Albert is the owner of a car service center. As a sole proprietor, any profit that he earns is:

treated as Albert's personal income.

Ronnie is the owner of a pet store and manages the store by himself. Any profit that Ronnie's store earns is:

treated as Ronnie's personal income.

A large film production company merges with a popular sound processing studio, resulting in the formation of a new company out of the two previously independent firms. This is most likely an example of a _____.

vertical merger

In the context of the history of American business, during the _____, businesses began to develop distinctive identities to help customers understand the differences among various products.

marketing era

Mercy's Apparels, a fabric company, was established post World War II with the aim of catering to the demands of consumers looking for affordable quality clothing. In the context of the history of American business, Mercy's Apparels was most likely established during the _____.

marketing era

In the context of financial statements of a company, cash flow statements commonly begin with _____.

net income

Grydon Inc. has applied for a business loan in the United Bank. To best assess the loan case, the loan officer at the bank, Cerejo, decides to look at the company's net income. Cerejo will find this information in Grydon's _____.

profit and loss statement

Anderson invested $1 million in a company called Ladmen Corp. He, therefore, has a personal interest in the company's profits and its new ventures. Given this information, Anderson is a _____ in Ladmen Corp.

stakeholder

FreshBean is an online grocery delivery service. Its employees and customers, the farmers from whom the company obtains its products, and the people who live in the community where the company operates are FreshBean's _____.

stakeholders

A cement company decided to modify its production methods to minimize the negative impact of the company's activities on the environment. The company is also invested in the purchase of upgraded machinery to implement this plan. In the given scenario, the cement company most likely embraced the idea of _____.

sustainable development

A capitalist system depends on fair competition among businesses to:

drive higher quality and lower prices.

A pharmaceutical company wanted to create a budget that was practical and that would enable its managers to make more accurate comparisons between actual costs and budgeted costs. Thus, the company created a budget that was developed over a range of possible sales levels and was designed to show the appropriate budgeted level of costs for each different level of sales. Given this information, which of the following budgets did the company create?

???

Temont Esson, a pharmaceutical company, saw a drastic increase in its sales in 2016 when compared to 2015. A survey showed that the growing percentage of the elderly was directly responsible for improving the company's sales. Identify the dimension of the social environment that this scenario exemplifies.

Aging population.

In the context of various funding options for small businesses, which of the following statements is a difference between angel investors and venture capital firms?

Angel investors are wealthy individuals, whereas venture capital firms are companies.

Which one of the following can be considered a business?

Davent, an online shopping portal that offers discounted prices on clothes.

The employees of Carrick Inc., an electronics company, are requesting the management to adopt a new performance appraisal process to allow better transparency between different levels of the company. They propose to have one-on-one feedback sessions that would help reduce various appraisal biases. Identify the dimension of the social environment that this scenario exemplifies.

Diversity.

In the context of monitoring ethics and social responsibility, which of the following is the starting point of a social audit?

Establishing goals.

Paulina, the CEO of a steel company, invites Joseph, the representative of a potential partner firm, to visit her company. She is careful not to stress on Joseph's religious background as a means to start off a conversation. Instead, she maintains a strictly professional conversation with Joseph and stays neutral to is religious background. Which of the following biases does Paulina avoid in the given scenario?

Ethnicity bias.

Samuel is struggling to run his start-up in his locality because local trade associations have establishes strict codes of conduct regarding certification, accreditation, and insurance obligation for businesses. In the context of economic freedom in a business environment, which of the following is adversely affecting Samuel's start-up?

Excessive regulation.

_____ is the authority granted by a domestic firm to an overseas firm for the rights to produce and market its product or to use its trademark/patent rights in a defined geographical area.

Foreign licensing

Which of the following statements is true of effective business communication?

It should seek and understand feedback from the speaker's audience.

_____ is a form of communication that does not involve the use of words.

Nonverbal communication

In the context of the strategies for reaching global markets, which of the following is a disadvantage of foreign outsourcing?

The adherence to ethical standards by foreign producers is at risk.

Marina, a garments manufacturing company, signed a contract with Tertch Tex, a textile company, to receive 2 million pounds of yarn at a rate of $2 per pound. However, Tertch Tex hikes up the price to $5 per pound just before the day of delivery. Marina files a lawsuit against Tertch Tex for breaking an enforceable contract and receives $100 million in compensation. In this context, which dimension of the business environment is affected the most?

The economic environment.

In the context of the history of American business, which of the following statements is true of the industrial revolution?

There was a loss of personal pride in the production process.

Which of the following is a similarity between socialism and communism?

They are both strongly involved with the government.

Brian had started a new business venture using a majority of his savings. However, his divorce affected him monetarily because of which he had to shut down his business. Which of the following threats is highlighted in the given scenario?

Too little money.

In the context of monetary policy, which of the following statements is true of the discount rate?

When the cost of acquiring funds from the Fed is low, interest rates on bank loans tend to fall.

The _____ is an international cooperative of 118 member countries, working together to reduce poverty in the developing world.

World Bank

The gross domestic product (GDP) of Trelinberg, a South American nation, has been decreasing for the past eight years. The long period of consecutive decreases in the GDP has led to high unemployment rates in Trelinberg. In the given scenario, the economy of Trelinberg is most likely in _____.

a depression

Dylan is a supervisory manager in the production department of a tea manufacturing company. Each year, he actively participates in the budgeting process of the company. His input is valued by the top management as he is able to identify the issues in his department. In this scenario, it can be said that Dylan's company follows the _____ to budgeting.

bottom-up approach

The overstating of needs or setting low budget goals by managers in a budgeting process can result in _____.

budgetary slack

The economic system of the United States is called _____.

capitalism

In the context of open market operations, when inflation is a concern, the Fed sells securities to buyers who write checks to the Fed to pay for securities they bought, and the Fed withdraws these funds from banks. With fewer funds, _____.

credit becomes tighter

CuberTech, an American electronics company, set up its production facilities in Chuaga, an Asian country, because the workers in Chuaga work for about one-third the pay of American workers. This substantially lowered CuberTech's cost of production. This scenario is an example of _____.

direct investment

Susan, the Human Resources Director at Trangend Cosmetics, is responsible for recruiting, hiring, and training employees. In the context of the given scenario, Susan is a _____.

factor of production

In the context of universal ethical standards, being open minded and not taking advantage of others exemplifies the core value of _____.

fairness

When Congress agreed to raise the debt ceiling during the economic meltdown in the United States in 2011, it temporarily averted a shutdown crisis, but the deal they reached to do so created the _____.

fiscal cliff

Harold, a financial accountant in a company, is asked to identify the changes in the company's account values between 2014 and 2016. To get the required information, he uses comparative financial statements, which state the figures for the two years side by side. These comparative financial statements make it easier for Harold to identify the changes that may have taken place during that period. In this scenario, Harold is most likely using _____ to get the required information.

horizontal analysis

Flickczar, a film production company in the United States, sells the distribution rights of a film to its distributors in underserved areas at rock-bottom prices, while it sells the rights of the same film to distributors in other areas at normal prices. In the context of business behavior, Flickczar's business practice is _____.

illegal and ethical

Providing rock-bottom prices only to distributors in underserved areas is _____.

illegal but ethical

A chocolate manufacturing company promoted a high-calorie product without providing complete information about the risks involved in its consumption. In the context of business, the company's business conduct was:

legal and unethical.

Viorien, a company based in the country of Dannistel, has permitted a foreign company the rights to product its products and to use the Vieorien trademark. However, Viorien does not have the authority or the rights to dictate the business operations of the foreign country. In this scenario, the foreign company that Vieorien deals with is the _____.

licensee

A(n) _____ is a form of business ownership that offers both restricted responsibility to its owners and flexible tax treatment.

limited liability company

Sebastian is an employee at Plowell Inc. His duties include preparing reports and analyzing company data. He also appraises financial performances and verifies the accuracy and validity of the company's internal records. In this scenario, Sebastian's role is that of a _____ in the organization.

management accountant

In the context of ethical choices, research results from the Ethics Resource Center (ERC) illustrate that:

misconduct by employees rose when they felt that the Great Recession negatively impacted the ethical culture of their company.

Sidney is a member of the Financial Accounting Standards Board (FASB) and is entrusted with the responsibility of establishing accounting principles in the United States. As a member of the board, Sidney:

must sever all ties with any firms of institutions that she served prior to joining the board.

Michael is a middle-aged professional who lost his job five months ago when his former employer downsized. He has actively been looking for work ever since but has not been able to find a job that utilizes his abilities or offers an income similar to his previous position. He is beginning to realize that the only way for him to survive his current situation is to start his own business. In this scenario, Michael will most likely become a(n) _____.

necessity entrepreneur

A small-scale consulting firm in Hawaii was struggling financially because it was unable to generate enough capital to run its business transactions. To generate capital, the firm decided to use web technologies and digital resources to build long-term associations with current customers and to reach out to new customers. In this scenario, the firm is using concepts that primarily originated in the _____ of American business history.

relationship era

Universal ethical standards can solve the problem of too many people viewing ethics as _____.

relative

Brontsky & Co., a member bank of the Fed, receives a notice from the Fed that notifies that it must hold funds equal to 15% of the deposits held by its customers. In this scenario, the 15% is the _____.

reserve requirement

In the context of the income statement of an organization, accountants use accrual-basis accounting when recognizing _____.

revenues

To preserve independence and impartiality, the Financial Accounting Standards Board (FASB) members are required to:

sever all ties with any firms or institutions they served prior to joining the board.

Robert starts his presentation on business ethics by comparing the ethical policies of a business to an airplane ride without any turbulence. Just like the absence of turbulence makes the journey more enjoyable, ethical policies help ensure smooth functioning of the business. In this given, scenario, Robert most likely uses a(n) _____ to open his presentation.

simile

Gregory is a typist at a corporate firm. When the company adopted a special voice recognition software for the purpose of documentation, Gregory's job became inessential. Therefore, he was laid off. The increased use of technology in most companies makes Gregory's skills inessential, and he remains unemployed for a long time. In the given scenario, Gregory is facing _____.

structural unemployment

The controversial $700 billion economic bailout plan passed by Congress in early October 2008 was called the _____.

Troubled Assets Relief Program

Jordan, a senior executive at a marketing firm, used to regularly meet international clients to discuss future projects. After one of his recent meetings went wrong, Jordan, in a fit of rage, threw a paper weight at his junior associate. The firm's management immediately terminated Jordan for this act. In the context of business ethics, Jordan was guilty of _____ in this scenario.

an ethical lapse

Before starting his presentation on the benefits of taxi services, Mark engages the spectators by asking them to imagine themselves driving in a drunken state. He goes on to ask them the possible outcomes that they can imagine. This exercise ensures that Mark gets the spectators' complete attention. In the given scenario, Mark uses _____ to open his presentation.

audience involvement

Tanya is planning a presentation on the best practices in communication. After much thought, she decides to restrict herself to just three key points. The reason behind Tanya sticking to just a few key points in her presentation is because:

audiences can only absorb about two to four main points.

In the contest of the social environment dimension of a business, _____ is the measurable characteristics of a population.

demographics

In the context of challenges to effective communication, the term _____ refers to any interference that causes the message you send to be different from the message your audience understands.

noise

Julian wants to open a bakery. He uses his savings and borrows some funds from his family to start his business. In the given scenario, Julian uses _____ to fund his business.

personal resources

Giovani, a baker, makes exactly 20 loaves of brown bread each day. These loaves of bread are delivered to the 20 individuals who have placed an order with him. The quantity associated with such a demand and supply pattern is called _____.

the equilibrium quantity

Which of the following communication channels should ideally be used when you must communicate lengthy or detailed uncontroversial information?

Memos.

The United States goes through a period of recession because of the continuous decrease in the nation's gross domestic product. The Fed intervenes and improves the situation by reducing the discount rate. This move by the Fed will result in:

banks obtaining funds at a lower cost.

Prenora Inc., a newly established company, is set to prepare its first budget. The top management of the company decides to use a budgeting approach that will seek active participation from the middle and supervisory managers of the company. In the given scenario, Prenora Inc. will most likely use the _____ to budgeting.

bottom-up approach

In the context of managerial accounting, _____ are costs that are incurred as the result of some specific cost object.

direct costs

Troboli is a North American country. The total value of all final goods and services produced in Troboli in the last fiscal year was 3.3% more than the year before that. This growth placed Troboli in a better position compared with most of its allies. In this scenario, the total value of all final goods and services through which the economic condition of Troboli was assessed is known as _____.

gross domestic product

Green Haven is an organization whose earnings are exempt from federal and state income taxes. Individuals who contribute money to the organization can avail the benefit of tax deduction. However, the organization is barred from distributing dividends to its members. Given this information, Green Haven is most likely a(n):

not-for-profit corporation.

Gimm Sphere, a content development firm, rents a small building and moves its marketing team there to make room for new content developers. The new building is smaller than Gimm Sphere's main office, with smaller cubicles and a poor heating system. The marketing team members are unhappy with the new environment, which directly affects their productivity. In the given scenario, the marketing team is most likely facing _____ to communication.

physical barriers

Uniesia, an Asian company, wants to set up a production facility in Naurinia, an African country, because of the low labor costs in the country. However, Uniesia is unable to do so because of the situation of constant sivil unrest in Maurinia. In the given scenario, Uniesia is most likely facing the barrier of _____.

political differences

In the context of international trade restrictions, _____ are limitations on the amount of specific products that may be imported from certain countries during a given time period.

quotas

Harvey, a shareholder in Braxwell Technologies, reinvests 10% of the dividends received from the company back into it, partly to evade taxes, and partly to support the company. This scenario reflects the concept of _____.

retained earnings

Heleus Oil & Gas Company routinely performs emission tests to keep a check on the emissions produced by its corporate operations and find new ways to reduce them significantly. In this scenario, Heleus Oil & Gas Company is tracking its:

scope 1 emissions.

Romernia, an Asian country, imported goods and services worth $700 million in the last fiscal year. It exported goods worth $400 million in the same year. The difference in the value of Romernia's imports and exports is known as _____.

the balance of trade

To strike the right tone while writing a business message, it is suggested that an individual:

uses the active voice to facilitate concise communication.

When George, an American, went to represent his company in a global conference that was being held in Germany, he was unaware of the social practices of the host country. While talking to a German representative, he used the "ok" gesture, which created tension and uneasiness between him and the German representative. Which of the following communication barriers did George most likely face in the given scenario?

A cultural barrier.

In the context of the history of American business, which of the following occurred during the entrepreneurship era?

Industrial titans crated enormous wealth that raised the overall standard of living across the country.

In the context of balance sheets, which of the following is a difference between liabilities and owners' equity?

Liabilities indicate the claims outsiders have against the firm's assets, whereas owners' equity refers to the claims the owners have against their firm's assets.

The management of Minstrel Magik, an event management company, ensures to use gender-neutral language in its emails to both customers and employees. In the given scenario, it can be inferred that the management follows the business communication guideline of _____.

avoiding bias

Melvin and Neil run a pawnshop in their neighborhood. They offer loans to individuals in exchange for personal items of higher or equal value, which are used as collateral. If an individual is unable to repay the loan, Melvin and Neil then sell these items at higher rates. In this scenario, Melvin and Neil's pawnshop is an example of a _____.

business

Boson Corp., an American software development company, wants to expand its business in international markets. Therefore, it buys property in Greitch, a South Asian country, and sets up a production facility despite the high costs involved. In this scenario, Boson Corp. is most likely involved in _____.

direct investment

Mora, an Amerian jewelry manufacturing company, wants to import diamonds from Renoria, an Asian country. However, the officials in charge of the trade in Renoria agree to formalize the transaction only if they are paid a certain amount of money for their personal benefit. Since American businesses are prohibited from offering bribes to any foreign nation, Mora has to look to another exporter of diamonds. In the given scenario, Mora is most likely facing the barrier of _____.

legal differences

The government of Lenzerbia, a country in South Asia, monitors its inflation rate using an index that measures change over time in the prices that businesses pay to each other for goods and services. In this scenario, the Lenzerbian government most likely uses the _____ to evaluate inflation.4

producer price index

To find the right words for a business presentation, the audience needs to be analyzed. One of the factors that should be considered to identify the audiences' needs is the _____ of the audience.

profession

Luis runs a bakery that offers only takeaway service. His customers visit his residence and watch him prepare their order. They also get an opportunity to bring their cake designs and help Luis prepare the desired cake. As a result, he knows most of his customers well. The opportunity of _____ is highlighted in the given scenario.

providing personal customer service

The economic situation in Lanceberg, an African country, slowly picks up after a severe financial downturn. Over a period of 12 months, businesses begin to expand and employment levels begin to rise. The markets in the country are also vitalized as consumers begin to engage in normal buying behavior. In this scenario, the economy of Lanceberg is currently in the _____.

recovery phase

Resorto, a European country, exported sugar worth $600 million between 2015 and 2016 and imported tea worth $750 million during the same period. In this scenario, Resorto most likely had a _____ between 2015 and 2016.

???

Richard is a wealthy and successful businessman who s well known for financing many successful start-ups. He has earned a sizeable amount of profit by providing capital to start-ups in return for a share of their profits. In the given scenario, which of the following statements is true of Richard?

He is an angel investor.

Howard is a young entrepreneur who is invested in creating a new form of social media. He is sure of his idea and believes that it will be successful in the long run. However, he is careful not to be overoptimistic about it and works on other ideas at well. In the given scenario, which of the following statements is true of Howard?

He is confident but not overconfident regarding his abilities.

The finance and marketing departments of a company are required to collaborate on a project. However, the two teams face significant challenges while trying to communicate with each other because of the use of jargon specific to each department. In the given scenario, which of the following communication barriers do the teams face?

Language barriers.

Who among the following is most likely to benefit when the dollar is strong and the euro is weak?

Ron, an American who is touring Europe.

Quezi, an East Asian country, borrows $300 million from Muranico, a North American country, to fund its infrastructure projects, Quezi exports petroleum worth $700 million to Muranico and other countries. Besides this, Quezi provides foreign aid worth $40 million. In this scenario, this flow of money into and out of Quezi can be measured by _____.

balance of payments

In the fiscal year 2015-2016, Nescarto, an African country, imported goods worth $18 million and exported goods worth $20 million. It also borrowed $40 million from other countries. In this scenario, Nescarto had a _____ during 2015-2016.

balance of payments surplus

To give the company's stockholders, creditors, and other external stakeholders an accurate idea of the company's overall performance, Rowensport Corporation, a multinational company, releases statements that contain details of the company's profits and losses over the past five years. In this scenario, the company is most likely involved in _____.

financial accounting

Andrew wants to give some constructive feedback to his superiors about improving the work environment. However, he is reluctant to do so because his supervisors are nonresponsive to team members' queries and suggestions. In the given scenario, Andrew faces a(n) _____.

organizational barrier

After being stagnant for a few years, a clothing company started making profits consistently. Following this, the CEO of the company decided to contribute to the growth of the community by starting an apprenticeship program in tailoring. The program involved providing training to a batch of ten uneducated, underprivileged people free of cost every year. In this scenario, the company's gesture exemplifies _____.

social responsibility

Ashley, a manager at a toy manufacturing company, needs to create a financial document for the company that would show how the company's operating, investing, and financing activities are expected to affect the asset, liability, and owners' equity accounts. To prepare this document, Ashley needs to collect data from:

the budgeted income statement, the capital expenditure budget, and the cash budget.

Keltica, a country in Asia, enjoyed a period of great economic boom in the 1980's. The country had robust economic growth, high employment, and abundant business investments during this period. In the context of the business cycle, the economy of Keltica was in _____ during the 1980's.

the expansion phase

The central banking system in the country of Darmos issues a notice to all its commercial banks stating that they must possess funds that are equal to 48% of the deposits held by their customers. In the given scenario, the central banking system's notice exemplifies _____.

the reserve requirement