Intro to Business Final

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Derek, an accountant, allocates the cost of a piece of earth-moving equipment over a specific period of time. Based on the given information, it can be concluded that Derek is implementing the process of

depreciation.

The process of spreading the costs of long-lived assets, such as buildings and equipment, over the total number of accounting periods in which they are expected to be used is called

depreciation.

In the context of the marketing concept, which is the first step that a business must take?

find out what consumers desire

For most organizations, the ultimate objective is

for the produced outputs to be worth more than the cost of inputs.

intangible and tangible products differ

from an operations standpoint- Services are intangible and without physical attributes. On the other hand, goods are tangible and can be weighed or measured based on their physical aspects.

three accounting instruments

income statement, balance sheet, statement of cash flows

Glen is a carpenter who performs home repairs and improvements for his customers. From the perspective of operations, the money he uses to purchase his tools and the electricity he uses to run his power saw are

inputs

Hannah borrowed money from a bank to start her new company. Her direct cost of borrowing this money is known as her ________ expenses.

interest

statement of cash flows

is a financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company.

income statement

is one of a company's main financial statements. The purpose of the income statement is to report a summary of a company's revenues, expenses, gains, losses, and the resulting net income that occurred during a year, quarter, or other period of time.

Benchmarking lets an organization

know where it stands competitively in its industry.

The capacity of a restaurant like Charleston's would be the

maximum number of customers who can be effectively served at any one particular time.

Mason Structures Inc. purchases cement, steel rods, and wooden panels to use in the construction of buildings, houses, and bridges. These inputs are considered as ________ inventory for a construction business.

raw materials

Materials that have been purchased to be used as inputs in making other products are included in ________ inventory.

raw materials

Accounting refers to the process of

recording, measuring, and interpreting financial information.

INPUTS

resources such as money, labor, materials and energy that are converted into outputs

role of operations

responsible for managing the process of creation of goods and services. It involves planning, organizing, coordinating, and controlling all the resources needed to produce a company's goods and services.

An accounting term that is interchangeable with revenue is

sales.

revenue

the income that a business has from its normal business activities, usually from the sale of goods and services to customers.

CAPACITY

the maximum load that an organizational unit can carry or operate.

expense

the money spent, or costs incurred, by a business in their effort to generate revenues.

QAULITY CONTROL

the process of setting standards and testing to make sure something, like a product or service, is done correctly.

In which of the following scenarios is a business least likely to survive?

when a business focuses only on customer satisfaction and not on its own objectives, such as boosting productivity

A company's assets include its liabilities.

False

In a balance sheet, assets may exceed liabilities plus owners' equity.

False

Net income is the amount on which a firm will pay taxes

False

Return on assets and return on equity are examples of ________ ratios.

profitability

Studies have found a direct relationship between social responsibility and ________ in business.

profitability

________ refers to money owed to a company by its clients or customers who have promised to pay for the products at a later date.

Accounts receivable

Balance sheet

Balance sheet accounts are used to sort and store transactions involving a company's assets, liabilities, and owner's or stockholders' equity.

Which of the following statements is true of bookkeeping?

Bookkeeping is much more mechanical than accounting.

________ are the funds used to acquire the natural and human resources needed to provide products.

Capital resources

Which of the following scenarios reflects the capital-intensive nature of a manufacturer?

Coffee at Home mass produces coffee makers with multiple settings, so customers can choose whether they want to brew a cup, two cups, or an entire pot using the same machine.

Which of the following is true of the transformation process in operations management?

It is the conversion of resources, such as labor, money, materials, and energy, into goods, services, or ideas.

net income

NI is equal to net earnings (profit) calculated as sales less cost of goods sold, selling, general and administrative expenses, operating expenses, depreciation, interest, taxes and other expenses. ... Net income also refers to an individual's income after taking taxes and deductions into account.

________ is the primary goal of business.

Profit

OUTPUTS

The goods, services and ideas that result from the conversion of inputs

An income statement is the same thing as a profit and loss statement.

True

Ian got a loan from the Small Business Administration to start his own house contracting business. For Ian, this loan is

a liability.

benchmarking

a way of measuring your performance against similar-sized businesses in your industry.

An income statement shows

an organization's profitability over a period of time.

A crafts store displays various types of paper, stickers, glue sticks, yarn, canvases, paints, and other craft supplies on shelves. These items are examples of the company's

assets

The ________ presents a snapshot of an organization's financial position at a given moment.

balance sheet

Mario Autos Inc. measures and evaluates the quality of its cars and services against the market leaders in the automobile industry. Wherever there is a gap, Mario Autos Inc. tries to cover that gap by imitating the best practices of these market leaders. This is known as

benchmarking.

difference between accounting and bookkeeping

bookkeeping is responsible for the recording of financial transactions whereas accounting is responsible for interpreting, classifying, analyzing, reporting, and summarizing the financial data.

A hospital can effectively handle a maximum number of 300 patients at any one particular time. This is referred to as its

capacity.

Nonbusiness entities typically obtain revenue through

donations

gross income

earned by an individual on a paycheck before taxes and other deductions.

Cole owns a large chain of grocery stores. A significant part of his job is determining the amount of income left after taxes and whether the company will retain this income or pay it out in dividends to its stockholders. The income in this scenario is ________ income.

net

depreciation

of allocating the cost of a tangible asset over its useful life and is used to account for declines in value. Businesses depreciate long-term assets for both tax and accounting purposes.

For manufacturers, measuring productivity is fairly straightforward because

of the tangibility of their output.

The output of service providers must be consumed immediately, and only a few services can be saved, stored, resold, or returned. Which characteristic feature of services does this best illustrate?

perishability of outputs

Quality control refers to the

processes an organization uses to maintain its established quality standards.

The outcomes of a business's efforts are

products.

The financial statement that explains how a firm's cash changed from the beginning of the accounting period to the end is called the

statement of cash flows

inventory

stock, goods, merchandise. It's those assets, those products, those things of value, that you either buy from another or make yourself, that you then sell on to someone else (at a higher price than what it cost you to buy or make the inventory).


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