Small Business Management Exam 2

Considering the personal selling formula for generating interest in your product or service, cognitive dissonance occurs during the close of the sale.

False

Guerilla marketing is a form of communication that encourages the customer to act immediately, such as coupons, sales, or contests.

False

Perks is a great way to provide long-term boosts in motivation.

False

Statement of cash flows is also referred to as the statement of financial position.

False

The accounting equation is simply stated as Assets = Liabilities - Owner's Equity.

False

The more debt that is included in the capital mix, the higher is the weighted average cost.

False

When conducting employee performance reviews, an appraisal form should be filled out by the employee and returned to you after the scheduled performance review.

False

Which of the following statements best describes the process of idea screening in new product development?

Idea screening is the process of selecting the most promising ideas to be further evaluated.

The term for measures or metrics that identify the outcomes that are most important to the success of a business are known as

KPIs.

Which of the following statements is not true of managing and fostering productivity among virtual employees?

Micromanagement is important as they are remote staff.

_________ is the most used item on the income statement.

Operating income

________ is setting a price at the highest level the market will bear, usually because there is no competition at the time.

Skimming

During the start-up phase of a small business the emphasis is on conserving what little cash the new business has

True

If you have started a business, or are doing a business where you do not expect to prepare a full business plan, a stand-alone marketing plan might be useful.

True

If your company holds a patent on a product, you will initially set the price so high that only a few can afford it.

True

Investing in multiple businesses increases the chances of offsetting possible losses incurred from one business.

True

The two key factors in traditional leadership theories are task and person.

True

The usefulness of the income statement for managing a small business is related to the amount of detail available in the statement.

True

Entrepreneurial leadership has three key components over and above task and person. Which of the following answer options is not one of those three key components?

Truthfulness

"Which credit card would you like to use to pay for that?" is an example of

a trial close.

As a business owner, if you have a group of people you assemble because you trust their judgment and goodwill toward you and your firm who may meet with you as a group, or individually for impromptu meetings are considered your

board of advisers.

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

collateral.

Tammy has just opened a donut shop called The Rabbit Hole. Given that The Rabbit Hole is in its start-up phase, which of these would be Tammy's immediate financial management need?

conserving what little money the business has

Financial statements are defined as

formal summaries of the content of an accounting system's records of transactions.

When debt increases as a percentage of total investment, returns on equity

increase at a decreasing rate.

In the accounting equation, assets equal

liabilities plus owners equity.

The job rotation technique is an example of

on-the-job training.

The difference between assets and liabilities of a business is called its

owner's equity.

_______ refers to the trial period in which an employee has temporary status before a formal offer to work full time is presented.

probationary period

Which of the following is the first step in crafting a job description?

provide a job title

When segmenting your market, ________ segmentation looks at what drives the person, for example hobbies, cultural interests, or health concerns.

psychographic

Employee referral

rewards employees for recommending potential candidates that would be a great fit.

People who receive a promotional impression and who give some thought to buying the product are considered

sales leads.

Which of the following is not one of the four key factors considered when determining an optimum price?

supply chain costs

________ is often used to support the corporate identity and value propositions that are established through public relations efforts.

Advertising

Which of the following federal employment laws requires the payment of same wages to males and females for work requiring equal skill, effort, and responsibility in similar working conditions?

Fair labor standards act

An established company can come up with sales forecasts by looking at their sales for the past week, month, or quarter - called organic traffic - and project forward.

False

Which of the following is a drawback to financing with debt?

Payment is expected even if you have no money to make the payment.

Which of the following statements is always true of sales promotions?

Sales promotion is one of the major forms for marketing.

A small company selling handmade items online and having only five total employees, including the owner, would not be subject to which of the following laws?

The Americans with Disabilities Act

A job description defines and discusses all the essential knowledge, skills, and abilities that are needed to fill a position.

True

A marketing plan includes a table of contents, executive summary, and appendixes similar to fully developed business plan.

True

Accounting is important for small businesses because investors will not even consider funding your concept unless you provide specific accounting information in an accepted format.

True

Adding employees in a firm increases both the amount of work that can be done and the demands on the owner.

True

Leasing, rather than building or buying, is an option with a considerably lower initial cash outlay and is often the only feasible choice for new businesses.

True

Liquidity is a measure of the ability of a business to meet both short-term and long-term obligations.

True

Money borrowed for the purpose of investment in a business is called debt capital.

True

Sales leads who actually make some sort of effort to learn more about the product, service, or business in anticipation of a possible purchase are known as prospects.

True

The concept of total products includes how customers think about your product.

True

A(n) _________ typically means the core product plus features that tend to differentiate the product from competition.

augmented product

A _________ defines and discusses all the essential knowledge, skills, and abilities that are needed to fill a position.

job description

The term _______ is associated with objectively evaluating how well someone is doing their job

job metrics

Which of the following would implicate employee empowerment?

letting employees make on-the-spot decisions for the companies' best interest

Of the following answer options, which is the most available funding source of new businesses?

owners' equity investments

Tony is a whiz in the kitchen. Not only does he make great food but he has invented about a dozen time-saving kitchen gadgets along the way. These are all home-made inventions made either by using new materials or by modifying existing gadgets to work in new, better ways. He has made duplicate gadgets for friends and some say they use the gadget every day. Tony quit his construction job to concentrate on his kitchen gadgets—he started his own company, Kitchen Helpers. An approach to researching based on the used of existing information, often from government, commercial or academic databases and research efforts is

secondary research.

Which among the following is an example of a variable cost?

shipping

In evaluating potential employees, a small business owner

should design interview questions such that "yes" or "no" answers are not applicable.

Fostering a sense of ______ allows people to interact with one another on a professional level.

teamwork

Independent contractors who provide specialized business services or support from a distance, through different methods of communication are known as

virtual employees.

Which of the following describes angel investors?

wealthy individuals who invest in companies in relatively early stages of development