Small Business Exam #4

permanent accounts

The accounts that are not revenue and expenses (such as cash, accounts receivable, notes payable, etc.) are called ________ and are kept in balance at all times

indirect exporting

________ uses agents, export management companies, or export trading companies as intermediaries to handle most of the exporting process.

charge back

A reduction in the bank account of a merchant by a credit card company is termed

cash budget

A(n) ________ identifies when, how, and why money is expected to come into the business, and when, how, and why it is expected to leave.

retailer

A(n) ________ is a middleman business which sells to consumers or end-users of a product, typically in single or small quantities

reconciling

After ________, the corrected bank balance and corrected book balance will be identical.

payables

Amounts owed to vendors for merchandise or services purchased on credit are called

microlender

Which of the following are SBA-approved partners who offer guaranteed loans under $50,000 to eligible small businesses?

There are disputes over when to recognize revenues

Which of the following is a difficulty that arises in understanding and interpreting the income statements?

offering discounts for prompt payment

Which of the following is a technique used by a small business to increase cash inflows?

incubators

Which of the following is an example of debt financing?

the acquisition of equipment

Which of the following is considered an investing activity

skimming

Which of the following is defined as the practice of "pocketing" money from customers and hiding the theft by not recording the sale?

short-term investments

Which of the following is more indicative of a business's financial strength?

word of mouth

Which of the following is not an example of a direct sales method?

Businesses providing a strong contrast to existing competition in the same area increase customer traffic

Which of the following is true of high customer contact businesses?

it assumes that people are inefficient processors of information

Which of the following is true of theories based on the bounded rationality models?

process layout

Which of the following layouts is most appropriate for low-volume, flexible manufacturing?

tax accounting

________ is an accounting approach based on specific accounting requirements set by governmental taxing agencies.

markup pricing

________ is probably the most widely used of the many pricing methods available.

demand deposits

________ make up most of the noncurrency cash which is available immediately.

receivables

________ refers to amounts that are owed to a business for merchandise that was sold on credit

piggybacking

________ refers to family or friends letting you add your purchases with theirs in order to get lower prices

guerilla marketing

________ uses creative and relatively inexpensive ways such as door-knob hangers, T-shirts, balloons, flyers under windshield wipers to reach customers.

payroll records

which of the following accounting functions ensures that the employment taxes are kept current?

loan covenants

Restrictions imposed by loan contracts on the operations of a business, such as requiring that a specific minimum net worth be maintained, a specific debt-to-equity ratio not be exceeded, no dividends be paid to stockholders and so on, are known as

noncore projects

Revenue-producing tasks and activities related to, but not part of, the primary strategy of a business, are called

contest

Sales promotion techniques used to introduce your brand to customers without an immediate call to purchase are ________ techniques.

mutually accessible location

Services at a ________ often have too much specialized equipment to be readily transported and a need for at least some client involvement

retained earnings

The sum of all profits and losses, less all dividends paid since the beginning of the business is called

2.0

The rule of thumb for evaluating current ratio is that the minimum acceptable ratio is

credit reporting agency

A business that collects, collates, and reports information concerning an entity's use of debt is referred to as a(n)

interest

A charge for the use of money, usually figured as a percentage of the principal is called

Collect the entire amount owed and keep all the money it obtains

Aaron, a businessman, has a method of keeping track of accounts receivable by sorting them into groups of those that are 30, 60, 90, and over 90 days past due. Aaron decides to sell long delinquent accounts to a collection agency. Which of the following actions will the collection agency which buys the delinquent accounts from Aaron do?

tax credits

Direct reductions in the amount of taxes that must be paid, dependent upon meeting some legal criteria are referred to as

liabilities

Legal obligations to give up things of value in the future are known as

a restaurant

Many businesses have either relatively few large sales events or highly seasonal sales that complicate forecasting cash inflows. Which of the following is not an example of such a company?

equity capital

Money contributed to businesses in return for part ownership of the business is called

cash

Money that is immediately available to be spent is called

variance

The difference between an actual and budgeted revenue or cost is called

sales

The first step in preparing a master budget is to prepare a ________ budget.

risk

The level of probability that an investment will not produce expected gain is called

NPV

To perform ________ analyses, only cash flows are considered.

financial risk

Uncertainty of returns in a business is referred to as

financing for growth

When a business needs cash for marketing or cash for building inventory levels, their financial management needs are

rent-free use period

A ________ is a concession which covers the time while you prepare your location prior to opening.

letter of credit

A ________ is a document issued by a bank that guarantees a buyer's payment for a specified period of time upon compliance with specified terms

corporation

A legal "artificial" entity that is formed by filing specific documents with a state government is called a

short-term debt

Any debt that must be paid in less than one year from the date of the financial statement on which it is reported is considered

balance sheet; income statement

Financial management requires that you have some method to measure and compare your financial position and financial results. Your financial position is reflected on your ________, your financial results on your ________

customers

For a business to factor receivables, the ________ must have good credit ratings.

direct response advertising

In ________, an advertisement is placed in a magazine, newspaper, radio, billboard, or television and includes an order blank with a phone number, e-mail, or snail-mail address with the intent of having customers place immediate orders

direct exporting

In ________, products are sold to foreign buyers or distributors without any intermediaries

contribution margin

In breakeven analysis, the price of one unit minus the variable cost of one unit is called the

you get an order

In microinventories, you try to buy your product or prepare your service after

liabilities + owner's equity

In the accounting equation, assets equal

bundling

Putting two or more of the same or different products or services together and selling for a price somewhat under the products' individual prices is

collateral

Something of value given or pledged as security for payment of a loan is called

grid

The ________ layout has aisles running from the front of the store to the back like the typical grocery, discount, or convenience store.

Accounts payable records help to make timely payments in order to capture prompt pay discounts and to maintain a good credit rating for the business.

Which of the following accounting functions has been accurately described?

a manufacturer's suggested retail price

Which of the following answer options describes a target price set by a manufacturer for a product or service intended to provide profit for each intermediary in the distribution channel?

the financial projections in your business plan are not useful for day-to-day management of your business

Which of the following statements is not true of preparing pro forma financial statements for your business plan?

Empowerment zones offer special support to companies locating there.

Which of the following statements is true of low customer contact businesses

A product's final price is more than the manufacturing cost if intermediaries are involved.

Which of the following statements is true of nondirect distribution?

Services at a remote location can be located anywhere in the world.

Which of the following statements is true of service locations?

the actual task of setting up an accounting system is quite easy if you understand accounting a bit

Which of the following statements is true when setting up your accounting system?

reconciling

Which of the following terms refers to the accounting process that identifies the causes of all differences between book and bank balances?

Liquidity

________ is a measure of how quickly a company can raise money through internal sources by converting assets to cash.

cash receipts budget

________ is a schedule of the amounts and timings of the cash coming into a business

financial management

________ is a set of theories and techniques used to optimize the receipt and use of capital assets