intro to business final practice test 1
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
Holiday Confections has the following balance sheet figures for the year ending December 31, 2018:Cash $1,000Marketable securities 5,000Inventory 3,000$9,000Accounts payable $2,000Notes payable 1,000$3,000Its net working capital is:
$6,000
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
_____ ratios reflect the speed with which resources are converted to cash or sales.
Activity
_____ is any paid form of nonpersonal presentation by an identified sponsor.
Advertising
_____ segmentation is based on what the product will do rather than on consumer characteristics.
Benefit
_____ is the set of values, ideas, attitudes, and symbols created to shape human behavior.
Culture
_____ is the efficient management of the acquisition of raw materials to the factory and the movement of products from the producer to industrial users and consumers.
Distribution
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
_____ is the act of informing, persuading, and reminding the target market about a product.
Promotion
_____ are independent accountants who serve organizations and individuals on a fee basis.
Public accountants
_____ are distribution channel members that buy finished products from manufacturers and sell them to retailers.
Wholesalers
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
Which of the following is an example of an intangible asset for a manufacturer of padlocks?
a patent on titanium lock mechanism
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-testRATIONALE: The quick ratio is a measure of the firm's ability to pay its current liabilities once inventory is subtracted from current assets.
Diapers is a product category in the maturity stage of its product life cycle. This means that the manufacturers of diapers:
are creating product line extensions
The _____ summarizes an organization's financial status at the end of an accounting period.
balance sheet
Which of the following is a consumer durable?
bedroom dresser
Which of the following is an example of a capital product that would be found in a brewery?
bottling machine
Which of the following is a consumer nondurable?
breakfast cereal
Radial tires installed on four-wheel drive vehicles are examples of:
component parts
What are the two distinct markets toward which sales promotions can be targeted?
consumers and members of the marketing channel
CPM in advertising terms means:
cost per thousand
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
Which of the following is NOT one of the stages in the product life cycle?
development
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 difference between net sales and cost of goods sold is:
gross profit
The maker of Centrum multivitamins introduced Centrum Silver, a vitamin designed specifically for older people. Centrum Silver is an example of a _____, a product that uses an existing brand name in an existing category but with a new formula.
line extension
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
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
After all expenses have been subtracted from revenues on an income statement, the final figure or bottom line is called the _____ when it is a positive number.
net profit
Which of the following is NOT a type of ratio analysis used by managers to interpret the numbers in financial statements?
operating
Which of the following is NOT one of the six steps in the accounting cycle?
paying accounts payable
When Nike donated $25,000 to a low-income area to provide job training, it received free and positive _____ in the news media
publicity
The Financial Accounting Standards Board (FASB) is currently:
pushing for major changes in GAAP
When Gene O'Hare went online to plan his vacation to Australia, he learned that he could buy plane tickets, rent a car, and pay for a hotel in a reduced-price tourist package, which made it very convenient for him to book his trip. The Web site O'Hare visited used _____ to make trip planning easier and more economical.
bundling
A product that is bought by a company for use in making another product is called a(n) _____ product.
business
The ratio of net profit to the number of shares of common stock outstanding is called the:
earnings per share
The ratio of net profit to total owners' equity is called return on:
equity
Which of the following is NOT a type of retailer?
manufacturers' representative
Channels of distribution make distribution easier by performing all of the following functions EXCEPT:
production
____ are temporary investments of excess cash in bonds and stocks that can readily be converted into cash.
Marketable securities
_____ 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
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.
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
A company that specializes in planning parties for children had $7,000 worth of inventory on January 1, 2018, and it had $5,000 worth of inventory on December 31, 2018. If its cost of goods sold for that period was $3,000, and its net profit was $9,000, what was its inventory to turnover ratio?
2 times
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.
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
Products that are bought after comparing price, suitability, quality, and style are called _____ products.
shopping
A strategy of charging a high introductory price for a new product that invites eventual competition is called price:
skimming
Drew Pastrin bought an AZPX brand skateboard because all of the "other guys" were buying them. Pastrin was influenced by a(n) _____ factor.
social
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
Accounting involves the _____ of the financial activities for firms.
summarizing
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
What is the primary difference between a merchant wholesaler and an agent?
whether it takes title to the product
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 rational
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
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
Which of the following is NOT an element of the promotional mix?
distribution
Public relations departments:
do all of the above
What is the final step in the selling process?
following up on sales
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
Which of the following is an example of nonstore retailing?
home shopping network
A(n) _____ is a summary of what a company has earned and spent over a given period.
income statement
When Top-Flite introduced its Strata golf balls with a new design for better flight with hit by metal clubs, it charged three times the price of golf balls currently on the market. This high introductory pricing is an example of:
price skimming
Maria Manow is planning to sell handmade quilts over the Internet. As she decides what to charge for a full-sized quilt, Manow will calculate her fixed and variable costs. At this point, Manow will be developing her _____ strategy.
pricing
Accountants employed within organizations are called:
private accountants
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
A manufacturers' representative is sometimes called a(n):
manufacturer' agent
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
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
To ensure accuracy and consistency in the way financial information is reported, accountants follow rules known as:
generally accepted accounting principles
The craft store marked skeins of embroidery thread down to a quarter apiece to attract more customers into the store. This was below the store's cost. The skeins of thread was intended to be a _____ to increase store traffic:
loss leader
Which of the following products would be correctly described as being in the decline stage of their product life cycle?
manual typewriters
The Financial Accounting Standards Board (FASB) is a:
private organization that is responsible for establishing financial accounting standards in the United States
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
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
Which of the following is an example of an industrial service?
a management consulting company
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
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
As a promotional tool, podcasting offers the advantage to listeners of:
convenience
Which of the following is NOT an example of a promotional goal?
delivering the product
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
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
On an income statement, operating expenses that cannot be linked to cost of goods sold or to sales are called _____ expenses.
general and administrative
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
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 channels through which advertising is carried to prospective customers are advertising:
media
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
Independent wholesalers that buy goods from manufacturers on their own account and then resell them to other businesses are:
merchant wholesalers
In the newspaper comics, Cathy is often seen talking to a department store clerk who is trying to persuade her that she needs to buy a new wardrobe. The clerk is engaged in:
personal selling
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
The two types of distribution channels are
industrial and consumer
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
_____ is the action that people take in buying and using goods and services.
Buyer behavior
How has the Sarbanes-Oxley Act affected accountants?
It has eliminated many nonauditing tasks they use to provide for their customers.
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
Any communication or activity designed to win goodwill or prestige for a company or person is called:
public relations
Which of the following terms equals the total profits of a company minus all dividends (distributions of profits) to stockholders?
retained earnings
Liquidity ratios measure:
short-term financial stability
A(n) _____ is a summary of the money flowing into and out of a firm.
statement of cash flows
The categories of heavy, moderate, and light users have to do with which type of segmentation?
volume
When the producers of Ocean Spray cranberry products decided to make Craisins (a dried cranberry snack food) available in convenience stores, supermarkets, and vending machines, it was involved with determining _____ strategy
distribution
_____ 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
On an income statement, expenses, such as professional salaries, utilities, office supplies, rent, and insurance, are called _____ expenses.
general and administrative
A(n) _____ is an independent wholesaler who buys related product lines from many manufacturers and sells them to industrial users.
industrial distributor
Customer satisfaction:
refers to the customer's feeling that a product has met or exceeded expectations
_____ is the ratio of benefits to the sacrifice necessary to obtain those benefits.
Customer value
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
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
The _____ is a series of marketing entities through which goods and services pass on their way from producers to end-users
distribution channel
A face-to-face sales presentation of a good or service to a prospective customer is called:
personal selling