Intro to business final exam practice test 2

_____ segmentation is based on what the product will do rather than on consumer characteristics.

Benefit

_____ are temporary investments of excess cash in bonds and stocks that can readily be converted into cash.

Marketable securities

_____ are distribution channel members that buy finished products from manufacturers and sell them to retailers.

Wholesalers

Which of the following is a consumer durable?

bedroom dresser

Business products are classified into two categories. Large, expensive items with long life spans are called _____ products, and; smaller, less expensive items with short life spans are called _____ products.

capital; expense

Public relations departments:

do all of the above

Assume the net profit for manufacturer of mountain bikes was $1,000,000 last year. The firm paid out $40,000 in dividends and has 200,000 shares of common stock outstanding. Its earnings per share (EPS) was:

$5

_____ ratios reflect the speed with which resources are converted to cash or sales.

Activity

_____ ratios measure the degree and effect of the firm's use of borrowed funds to finance its operations.

Debt

How do distribution channels improve product distribution?

Distribution channels reduce the number of transactions needed to get the product from the manufacturer to the consumer

Which of the following is a consumer nondurable?

breakfast cereal

Which of the following is NOT an example of a promotional goal?

delivering the product

Victorinox is the name of the company that manufacturers Swiss army knives. The _____ channel the company utilizes to get its knives to market is to wholesalers, than to retailers, and finally to consumers.

distribution

A manufacturers' representative is sometimes called a(n):

manufacturer' agent

Which of the following is NOT a type of ratio analysis used by managers to interpret the numbers in financial statements?

operating

Accountants employed within organizations are called:

private accountants

Any communication or activity designed to win goodwill or prestige for a company or person is called

public relations

Which of the following is an example of an asset that might be owned by a minor league baseball team?

reputation as a winning team

Which of the following terms equals the total profits of a company minus all dividends (distributions of profits) to stockholders?

retained earnings

_____ is the set of values, ideas, attitudes, and symbols created to shape human behavior.

Culture

_____ is the ratio of benefits to the sacrifice necessary to obtain those benefits.

Customer value

_____ are bills that have accumulated and must be paid at a specified future date within the year although no bill has been received by the firm.

Notes receivable

_____ is the act of informing, persuading, and reminding the target market about a product.

Promotion

Ennis Worth has a six-month loan for $7,500 that he used to refurbish the fishing boat he uses to earn his living. This loan is an example of:

a long-term liability

Wultec International Inc., a Canada-based manufacturer, produces end-of-line packaging equipment, such as wrapping machinery, which is used in warehouses to cover pallets and protect their contents. Wultec end-of-line packaging equipment, when purchased for warehouse use, is an example of which type of business product?

accessory

The _____ ratio is a measure of the firm's ability to pay its current liabilities once inventory is subtracted from current assets.

acid-test

Geraldine Fadsi's job in the entertainment industry is to bring together entertainers and organizations looking to hire entertainers. Fadsi is paid a commission, usually by the entertainer. Fadsi is acting as a:

agent

Which of the following is an example of an advertising medium?

all of the above

Which one of the following is a commonly used method for market segmentation?

all of the above

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

balance sheet

Which of the following is an example of a capital product that would be found in a brewery?

bottling machine

Roy Petrie is a flower wholesaler. He buys fresh flowers from countries in South America, divides the large batches into small bunches, and delivers them to independent florists. This process is called:

breaking bulk

A(n) _____ are go-betweens that bring buyers and sellers together

broker

What is the salesperson doing when, after his presentation is over, he asks, "May I call the company and place your order for 20 cases of Ecco brand golfing shoes?"

closing the sale

Radial tires installed on four-wheel drive vehicles are examples of:

component parts

Which one of the following is NOT a commonly used method for segmenting markets?

consumer

What are the two distinct markets toward which sales promotions can be targeted?

consumers and members of the marketing channel

There are two types of expenses recorded on the income statement. They are:

cost of goods sold and operating expenses

CPM in advertising terms means:

cost per thousand

Which of the following is the BEST example of a current asset for a university bookstore?

credit card charges by book buyers

The ratio of total current assets to current liabilities is called the _____ ratio.

current

Profitability ratios are used to:

determine how efficiently a company is being managed

A marketer that took the city and the climate into consideration as marketing variables would be concerned about _____ segmentation.

geographic

When Canada Dry first introduced Wink soda in the 1960s, it used the slogan, "Join the cola dropouts." The purpose of this advertising campaign was most likely to:

get customers to try the new product

The ratios that are of special interest to the firm's creditors and measure the firm's ability to pay short-term debts as they come due are called _____ ratios.

liquidity

Which of the following products would be correctly described as being in the decline stage of their product life cycle?

manual typewriters

In selling telephone service, AT&T tries to gather as much information as possible about the consumer's income, buying habits, service preferences, and occupation. AT&T is utilizing:

marketing research

The channels through which advertising is carried to prospective customers are advertising:

media

A(n) _____ is a retail store that sells at prices 25 percent or more below traditional department store prices in spartan environments.

off-price retailer

Jay Pontiac, an auto dealer, wanted to develop a service reminder program in the form of brochures that could be sent to individual customers. On the cover of each individualized brochure was an image of the customer's vehicle, the customer's name, and vehicle model name. Inside was the vehicle's estimated current mileage at the time of the mailing. Recommended services for that vehicle based on the estimated mileage were also included. Detailed service information was provided in the service history section of the brochure. On the back of the brochure were four coupons directly related to the service recommendations. Jay Pontiac used:

one-to-one marketing

A face-to-face sales presentation of a good or service to a prospective customer is called:

personal selling

The Financial Accounting Standards Board (FASB) is currently:

pushing for major changes in GAAP

Customer satisfaction:

refers to the customer's feeling that a product has met or exceeded expectations

_____ is the action that people take in buying and using goods and services.

Buyer behavior

_____ are independent accountants who serve organizations and individuals on a fee basis.

Public accountants

American Pet Pro purchases pet grooming supplies from various manufacturers, sorts them, and resells them to retailers. American Pet Pro is a(n) _____ wholesaler.

merchant

The difference between net sales and cost of goods sold is:

gross profit

Managerial accounting provides all of the following financial information EXCEPT

income statements

The categories of heavy, moderate, and light users have to do with which type of segmentation?

volume

The sporting goods store sold $75,000 worth of merchandise in June. The retailer gave no discounts and had no returns. Which of the following statements accurately describes the information seen on the company's income statement?

Gross sales equal net sales

_____ is the collection, recording, and analysis of data important in marketing and communicating that information to management.

Marketing research

_____ involves creating a unique marketing mix for every consumer.

One-to-one marketing

Roger Wu has decided to buy a new Porsche. Since there are no Porsche dealers in his community, he must travel almost 200 miles to a find a Porsche dealer to purchase the car of his dreams. For Wu, a Porsche is a _____ product.

specialty

Assume a company has inventory valued at $50,000, its total current assets, including this inventory, total $90,000. Its total current liabilities total $20,000. Its quick ratio is:

2

Products that are bought after comparing price, suitability, quality, and style are called _____ products.

shopping

Liquidity ratios measure:

short-term financial stability

A strategy of charging a high introductory price for a new product that invites eventual competition is called price:

skimming

Abercrombie & Fitch stores are aimed at college-aged consumers. The parent company also operates retail clothing stores under the name Hollister, which are targeted to 14- to 18-year-olds and under the name Abercrombie, which sell children's wear. Abercrombie & Fitch operate:

specialty stores

In general, when a business is engaged in environmental scanning, it looks at all of the following external forces that might affect it EXCEPT:

suppliers

A product that is bought by a company for use in making another product is called a(n) _____ product.

business

Sullins Cleaning Service has purchased a new pressure washer for $18,000. Sullins Cleaning is allowed to charge a portion of the company's cost during its useful life against the profits it generates. This practice is called:

depreciation

Leon Georges works in the warehouse for a manufacturer of air-purification systems. He is responsible for the transportation of metal components, preformed plastic, etc. used to manufacture the systems as well as the efficient movement of the finished systems from the manufacturing facility to the warehouse to distribution trucks. Georges is involved in:

distribution

The chain of manufacturer, agent, wholesaler, and retailer through which items like x-ray machines, dental equipment, and safety goggles flow is called a(n) ______ channel.

distribution

Which of the following is NOT an element of the promotional mix?

distribution

Manufacturers' representatives usually:

do all of the above

Companies that use blogs in their promotions use them because they:

do all of these

International accounting standards:

do not exist

The ratio of net profit to total owners' equity is called return on:

equity

What is the final step in the selling process?

following up on sales

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

general and administrative

To ensure accuracy and consistency in the way financial information is reported, accountants follow rules known as:

generally accepted accounting principles

U.S. Carburetion Inc. makes natural gas and gasoline powered generators. Assume the company had $100,000 in net sales for the week of September 11th. Cost of goods sold was $42,000. On an income statement, the remaining $58,000 would be classified as:

gross profit

Which of the following is an example of nonstore retailing?

home shopping network

Advertising can be found:

in any of the above media

A(n) _____ is a summary of what a company has earned and spent over a given period.

income statement

The two types of distribution channels are:

industrial and consumer

A(n) _____ is an independent wholesaler who buys related product lines from many manufacturers and sells them to industrial users.

industrial distributor

Which of the following is NOT a type of retailer?

manufacturers' representative

The _____ is the belief that the firm should dedicate all of its planning, policies, operations, and efforts to the satisfaction of the customer.

marketing concept

The Art Institute, a school for training artists to be financially self-sufficient, has a debt-to-equity ratio of 120 percent. This means the school has:

more debt than equity

Gross sales for Nevada Silver, a retailer of silver jewelry was $120,000 for the month of May. Sales discounts amounted to $18,000. There were no returns. The difference, $102,000, is Nevada Silver's:

net sales

Vegetarians have the upper hand in Mumbai, India, where not eating meat is a centuries-old tradition. In a booming Indian economy, the vegetarians are outnumbering the meat-eaters in many metropolitan areas. In response to this growing vegetarianism (especially among the middle class), franchises like Pizza Hut have created 100 percent vegetarian menus. By eliminating all meat from pizzas, the Indian Pizza Huts have engaged in a _____ strategy.

product

The _____ is the person who develops and implements a complete strategy and marketing program for a specific product or brand.

product manager

The brand name Cover Girl appeared in a young adult novel called Cathy's Book: If Found Call (650) 266-8233. One sentence in the book reads: "a killer coat of Lipslicks, a line of Cover Girl lip glosses. Procter &Gamble promoted the novel at beinggirl.com Web site in exchange for the mention. This is an example of"

product placement

In August 2006, the manufacturer of Cross pens introduced the golden toned Verve pen as featured in the Stormbreaker film. In James Bond fashion, the Cross pen serves as one of the key gadgets in the film. The use of the Cross pen is an example of:

product placement. RATIONALE: Product placement is paid inclusion of brands in mass media programming.

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

Financial accounting; Managerial accounting

_____ 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

Katherine Cozzine is a talented violinist. She is also pragmatic. When she graduated from high school, she chose a college that would provide her a strong business foundation even though she would have preferred to major in music. Cozzine did not know that there are over 200 music-business programs in the U.S., which would have allowed her to continue her music and prepare for a career in the industry. To Cozzine the music-business programs were ______ products.

unsought

The _____ is a specific group of consumers toward which a firm directs its marketing efforts.

target market

On a statement of cash flows for a provider of tutoring services, the cash flows from financing activities would include:

the money borrowed to purchase the furniture in the tutorial area and the interest owed on that debt

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

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

What is the primary difference between a merchant wholesaler and an agent?

whether it takes title to the product

Which of the following statements describes an advantage that personal selling has over other forms of promotion?

Personal selling costs can be adjusted by controlling the size of the sales force.

Which of the following assets is NOT an example of a fixed asset for a manufacturer of road building equipment?

cans of yellow paint for refurbishing equipment

Compressor pumps installed in General Electric refrigerators would be considered:

component parts

Haley Optics manufactures lens used in cameras, binoculars, and scientific equipment. It had sales of $300,000 during the last quarter. Its gross profit sold was $120,000. On an income statement, an accountant would classify the remaining $180,000 as:

cost of goods sold

The Library is a new bar in town. Unlike the other bars in town, it charges no cover charge. The new bar has also priced its beer at $3 less per pitcher than its competition. Given what you know about pricing strategies, which pricing strategy is the owner of the new bar using?

penetration pricing

Which of the following is an example of an individual factor that influences the consumer decision-making process?

personality

There are a lot of talented people. Many singers who have not been discovered are as talented or more so than some of the best-known musical artists. For instance, pricing a musical act at $20,000 when a small community arts center can get just as great an entertainment experience for its audience for $5,000 is an example of:

prestige pricing

Compassion International is a nonprofit organization dedicated to releasing poor children from spiritual, economic, social and physical poverty. What would be the most likely goal for an advertising campaign for this international organization?

provide information

Pricing a product at $399.99 instead of $400 to make the customer view the price as in the $300 range instead of the $400 range is an example of:

psychological pricing

In 2006, consumers held on to a 2007 Chevrolet Monte Carlo at the State Fair of Texas in an endurance competition that tested consumers to see who can hold on to the car the longest to win it. An article in USA Today about the winner of the competition is an example of which promotional activity?

public relations

The manufacturer Mike and Ike, the fruit-flavored chewy candies, has changed its packaging and developed contests all geared to 12- to 17-year-olds. What type of market segmentation identifies its market?

demographic

A kennel designed for boarding small dogs has current assets of $8,000, current liabilities of $2,000, and fixed assets of $25,000. The small company has a current ratio of:

4

As a promotional tool, podcasting offers the advantage to listeners of:

convenience

Which of the following is a type of sales promotion that can be used if the organization's goal is to increase brand loyalty?

frequent-buyer programs

On an income statement, operating expenses that cannot be linked to cost of goods sold or to sales are called _____ expenses.

general and administrative

Shenshen Zhongxing Telecom (ZTE) is a Chinese company that is the only telecommunications company in China that produces and markets an inexpensive camera phone to sell to middle class Chinese living in urban areas. Because ZTE targets a single segment within a limited geographical area, it can be said to have a(n):

niche competitive advantage

_____ pricing is the strategy of increasing the price of a product so that consumers will perceive it being of higher value.

Prestige