Intro to Business Final Exam

A company that has a global vision:

-recognizing and reacting to international marketing opportunities-using effective global marketing strategies-being aware of threats from foreign competitors

Suppliers are internal stakeholders.

False, Internal stakeholders are employees, managers, owners

Which of the following calculations is a formal expression of the accounting equation?

assets - liabilities = owners' or shareholders' equity

A(n) _____ is the financial statement that is used to assess the sources and uses of cash flow during the year.

statement of cash flows

Accounting involves the _____ of the financial activities for firms.

summarizing

_____ is the system used to record a firm's financial transactions in a routine and clerical process.

Bookkeeping

After graduating from college, Joseph Tantillo decided to start a retail Web site that specializes in personalized Greek apparel. To fund his Web site, he borrowed money from his parents (who expect to be repaid with interest). In other words, he used _____ financing.

debt

_____ financing is a form of business financing consisting of borrowed funds that must be repaid with interest over a stated time period.

debt

The two forms of business financing are _____ (borrowed funds) and _____ (ownership funds).

debt; equity

Internal stakeholders are groups outside a business or people who don't work inside the business but are affected in some way by the decisions and actions of the business.

false, suppliers, customers, government, society, shareholders, creditors etc are external stakeholders

On a statement of cash flows for a manufacturer of digital thermometers, the cash flows from operating activities would include:

the sale of land adjacent to the manufacturer's administrative office building.

_____ is financing obtained from investment firms that specialize in financing small, high-growth companies and receive an ownership interest and a voice in management in return for their money.

venture capital

In a mixed economy, the government is involved in the economic system through:

But the government is extensively involved in the economic system through taxing, spending, and welfare activities. The U.S. economy leans toward pure capitalism, but it uses government policies to promote economic stability and growth.

_____ deals with reporting to outsiders. _____ accounting deals with the internal operations of the firm.

Financial accounting; Managerial accounting

_____ is the process of hiring, developing, motivating, and evaluating people in order to achieve organizational goals.

Human Resource Management

According to the _____, a firm should first identify consumer needs and then produce the goods and services that will satisfy them.

Marketing concept

The key element in socialism is:

Socialism is an economic system in which the basic industries are owned by the government or by the private sector under strong government control.

Which of the following is NOT one of the main activities for a human resource manager?

Staffing, training & professional development, compensation, safety and health, employee and labor relations

On an income statement, expenses, such as professional salaries, utilities, office supplies, rent, and insurance, are called _____ expenses.

general and administrative expenses

Customer satisfaction:

role of marketing is to identify, satisfy, and retain customers. Key to customer satisfaction is making sure everyone feels they benefit from the exchange. Your customer is happy with the value they get for what they pay. You are happy with the payment you receive in exchange for what you provide.

_____ refers to sending work functions to another country resulting in domestic workers losing their jobs.

Outsourcing

The _____ summarizes an organization's financial status at the end of an accounting period.

balance sheet

What type of business organization generates the most total sales?

corporation

The most common form of business organization is the:

sole proprietorship

CoolBrands International has entered an agreement with Binney & Smith to create a line of frozen novelties based on the Crayola brand, including pops, bars, sandwiches, cups, cones, sundaes and shakes. CoolBrands will pay Binney & Smith a royalty for the right to use the Crayola trademark. This is an example of:

A Licensing Agreement

A business is an organization that strives for a profit by providing goods and services desired by its customers.

A business is any activity that provides goods or services to consumers for the purpose of making a profit.

In a _____, the factors of production are owned collectively rather than individually, and no incentives to work harder or to produce quality products are provided.

Communist Economic System

When Grand Metropolitan, a British company, purchased U.S.-based Pillsbury Co. in order to expand its product line and the market for its existing consumer products, it was an example of a(n):

Direct Foreign Investment

The least costly and least risky method for selling a product on the global market is:

Exporting

The U.S. money supply is composed of:

M1 money supply includes those monies that are very liquid such as cash, checkable (demand) deposits, and traveler's checks. M2 money supply is less liquid in nature and includes M1 monies plus savings and time deposits, certificates of deposits, and money market funds.

Management is the process of guiding the development, maintenance, and allocation of objectives.

Management activities include Planning, Organizing Controlling, Leading.

_____ is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.

Marketing

Manila Water, the provider of the water and sewerage services in the capital of the Philippines has purchased the government owned water and sewerage system for the entire country. It promises to make the nation's water and sewerage system run as efficiently and profitably as the one it operates in Manila. The development, maintenance, and allocation of resources to achieve its goal will require:

Planning

_____ is the amount of money remaining from a firm's sales revenue after it deducts production costs, interest costs, and taxes.

Profit

With a communist economy system:

The complete opposite of capitalism is communism. In a communist economic system, the government owns virtually all resources and controls all markets. Economic decision-making is centralized: the government, rather than the competitive forces in the marketplace, decides what will be produced, where it will be produced, how much will be produced, where the raw materials and supplies will come from, who will get the output, and what the prices will be. This form of centralized economic system offers little if any choice to a country's citizens.

The local community is an external stakeholder.

True

The _____ is an agreement that dramatically lowered trade barriers worldwide and created the new World Trade Organization (WTO).

Uruguay Round

Jeff Arnold and Reggie Bradford created WebMD, an Internet provider of health care information. Early in the development of this high-growth company, Arnold and Bradford attracted a group of investors who provided them with money needed to acquire other Internet companies with similar missions. The investment group is called:

angel investors

Which of the following statements about incorporation is true?

Articles of incorporation may vary slightly from state to state.

U.S. plane manufacturer McDonnell-Douglas has authorized Mitsubishi Heavy Industries, a Japanese company, to use its trademarks, patents, and other proprietary knowledge to manufacture F-15 fighter planes. Mitsubishi Heavy Industries pays McDonnell-Douglas. This is an example of:

Contract Manufacturing

Pete Yankin and Ken Lowery consider themselves to be experts on hunting in the mountains in North Carolina. As a result, the two men established a company that markets hunting expeditions. Yankin and Lowery share responsibilities for booking the trips, gathering supplies, and guiding groups of five to seven hunters into locations where they can hunt for deer and bear. Since the two will share any profit equally, this would be an example of a(n):

business partnership

The World Trade Organization (WTO):

has emerged as the world's most powerful institution for reducing trade barriers and opening markets. Oversees the implementation and administration of the agreements between nations that fall under the WTO's scope of authority Provides a forum for negotiations and settling disputes among nations. Overall, the WTO's mission is to improve the stability and predictability of global trade. As a result, it tends to support free-trade, as opposed to protectionist, policies, and strongly discourages the use of quotas and other such restrictions on imports.

Andy Yocom was looking to start a small business so he could be his own boss. While golfing one day, he saw prime advertising space on the flags on the course. He has decided to call his new venture Invision Golf Group Inc. What should he include in his business plan?

All of the above (the elements of the company that make it uniquea management plana financial planan analysis of the market in which the company will operate)

An economic system based on competition in the marketplace and private ownership of the factors of production is known as:

Capitalism, also known as the private enterprise system, is based on competition in the market place and private ownership of the factors of production (resources). In a competitive economic system, a large number of people and businesses buy and sell products freely in the marketplace. In pure capitalism, all the factors of production are owned privately, and the government does not try to set prices or coordinate economic activity.A capitalist system guarantees certain economic rights: the right to own property, the right to make a profit,the right to make free choices, and the right to compete. The right to own property is central to capitalism. The main incentive in this system is profit, which encourages entrepreneurship. Profit is also necessary for producing goods and services, building manufacturing plants, paying dividends and taxes, and creating jobs.The freedom to choose whether to become an entrepreneur or to work for someone else means that people have the right to decide what they want to do on the basis of their own drive, interest, and training. The government does not create job quotas for each industry or give people tests to determine what they will do.Competition is good for both businesses and consumers in a capitalist system. It leads to better and more diverse products, keeps prices stable, and increases the efficiency of producers. Companies try to produce their goods and services at the lowest possible cost and sell them at the highest possible price. But when profits are high, more businesses enter the market to seek a share of those profits.

One of the three basic functions performed by the Equal Employment Opportunity Commission is:

Equal employment opportunity isn't just the right thing to do, it's the law. Specifically, it's a series of federal laws and amendments designed to eliminate employment discrimination. Employment discrimination laws and regulations are enforced by the Equal Employment Opportunity Commission (EEOC), an agency established by the Civil Rights Act of 1964 (Title VII). The agency's mission is to stop and remedy unlawful employment discrimination. Specifically, the EEOC is charged with "enforcing federal laws that make it illegal to discriminate against a job applicant or an employee because of the person's race, color, religion, sex (including pregnancy, gender identity, and sexual orientation), national origin, age (40 or older), disability or genetic information."[6] Since its creation in 1964, Congress has gradually expanded EEOC powers to include the authority to investigate claims, negotiate settlements and file lawsuits. The agency also conducts outreach and educational programs in an effort to prevent discrimination. Finally, the EEOC provides equal employment opportunity advisory services and technical support to federal agencies.

What is the primary difference between a good and a service?

Examples of goods provided by a business are tangible items such as cars, televisions, or soda. A service is an action or work performed for monetary compensation. Services include things such as haircuts, hotel stays, or roller-coaster rides.

Which of the following is the BEST example of a not-for-profit business?

For-Profit: Incurs expenses for operations Provides goods and services to customers Generates revenues from sales Owned by individuals, partners, or shareholders Profit is used to pay owners, partners, or shareholders Pays salaries to employees and managers Profits are subject to taxation by local, state, and federal authorities Not-for-Profit/Nonprofit: Incurs expenses for operations Provides goods and services to customers Generates revenues from sales and/or contributions Operated by board of directors, trustees, or managers Profit is used to further the mission of the organization Pays salaries to employees and managers Profits are NOT subject to taxation by local, state, and federal authorities

Which of the following is NOT one of the four functions of management?

Four functions are: Operations(production supply chain), Finance(Accounting Procurement HR), Marketing Sales(Customer Service), Research & Development(IT).

Which of the following statements about the Federal Deposit Insurance Corporation (FDIC) is true?

In addition, the Federal Deposit Insurance Corporation (FDIC) protects the savings of the average person. Every bank is required by law to pay a fee to the FDIC, based on the size of its deposits. Then, if a bank should go bankrupt and not be able to repay depositors, the FDIC guarantees that all customers will receive their deposits back up to $250,000. In the United States, the Federal Deposit Insurance Corporation (FDIC) is responsible for deposit insurance. Banks pay an insurance premium to the FDIC. The insurance premium is based on the bank's level of deposits, and then adjusted according to the riskiness of a bank's financial situation.Bank supervision involves inspecting the balance sheets of banks to make sure that they have positive net worth and that their assets are not too risky. In the United States, the Office of the Comptroller of the Currency (OCC) is responsible for supervising banks and inspecting savings and loans and the National Credit Union Administration (NCUA) is responsible for inspecting credit unions. The FDIC and the Federal Reserve also play a role in bank supervision.

Managerial accounting provides information that would probably be most beneficial to:

Managerial accounting information is for internal use and provides special information for the managers of a company. The information managers use may range from broad, long-range planning data to detailed explanations of why actual costs varied from cost estimates. The employees of a firm who perform these managerial accounting functions are often referred to as Cost Accountants. Managerial accounting is more concerned with forward looking projections and making decisions that will affect the future of the organization, than in the historical recording and compliance aspects of the financial accountants. There are no reporting guidelines such as GAAP; therefore, managerial accounting reports will vary widely in both scope and content. Also, much of the information generated by managerial accountants is confidential and not intended to be shared outside of the organization. Managerial accounting focus on range of topics from production planning to budgets for raw materials. When a company makes a decision to purchase a component part instead of manufacture it in house, that decision is based primarily on managerial accounting information. For this reason, many managerial accountants consider themselves to be provide "accounting information for decision making."

A "mixed economy" is an economic system that:

Pure capitalism and communism are extremes; real-world economies fall somewhere between the two. The U.S. economy leans toward pure capitalism, but it uses government policies to promote economic stability and growth. Also, through policies and laws, the government transfers money to the poor, the unemployed, and the elderly or disabled. American capitalism has produced some very powerful organizations in the form of large corporations, such as General Motors and Microsoft. To protect smaller firms and entrepreneurs, the government has passed legislation that requires that the giants compete fairly against weaker competitors.Canada, Sweden, and the UK, among others, are also called mixed economies; that is, they use more than one economic system. Sometimes, the government is basically socialist and owns basic industries.

Which of the following factors affects an employee's compensation?

Salary and benefits are also within the scope of human resource management. This includes identifying appropriate compensation based on role, performance, and legal requirements. Compensation activities include: Setting compensation levels to be competitive and appropriate within the market, using benchmarks such as industry standards for a given job function Negotiating group health insurance rates, retirement plans, and other benefits with third-party providers Discussing raises and other compensation increases and/or decreases with employees in the organization Ensuring compliance with legal and cultural expectations when it comes to employee compensation

Which of the following statements about a socialist economic system is true?

Socialism is an economic system in which the basic industries are owned by the government or by the private sector under strong government control. A socialist state controls critical, large-scale industries such as transportation, communications, and utilities. Smaller businesses and those considered less critical, such as retail, may be privately owned. To varying degrees, the state also determines the goals of businesses, the prices and selection of goods, and the rights of workers. Socialist countries typically provide their citizens with a higher level of services, such as health care and unemployment benefits, than do most capitalist countries.As a result, taxes and unemployment may also be higher in socialist countries.

International accounting standards:

The International Accounting Standards Board (IASB) is the independent, accounting standard-setting body of the IFRS Foundation.[1]The IASB was founded on April 1, 2001 as the successor to the International Accounting Standards Committee (IASC). It is responsible for developing International Financial Reporting Standards (the new name for International Accounting Standards issued after 2001), and promoting the use and application of these standards.

A stakeholder is an individual or group that has a legitimate interest in a company, organization, or business.

True

Credit cards:

When you make a purchase with a credit card, the credit card company immediately transfers money from its checking account to the seller, and at the end of the month, the credit card company sends you a bill for what you have charged that month. Until you pay the credit card bill, you have effectively borrowed money from the credit card company. With a smart card, you can store a certain value of money on the card and then use the card to make purchases. Some "smart cards" used for specific purposes, like long-distance phone calls or making purchases at a campus bookstore and cafeteria, are not really all that smart, because they can only be used for certain purchases or in certain places. In short, credit cards, debit cards, and smart cards are different ways to move money when a purchase is made. But having more credit cards or debit cards does not change the quantity of money in the economy, any more than having more checks printed increases the amount of money in your checking account.