STS 2830 CH_15_16_17_18_19_20
14. A transfer method describing the first-time public sale of a stock listed on a public stock exchange is called a(n) A. IPO. B. ESOP. C. consolidation. D. termination.
A. IPO.
16. Which of these factors was least important to employees, according to Jill Kickul's research? A. Work facilitation B. Benefits C. Rewards and opportunities D. Autonomy and growth
A. Work facilitation
10. Laws, regulations, and the requirements of GAAP require that _____ value be used for financial reporting and income tax purposes. A. book B. fair market C. replacement D. disposal
A. book
4. Angel investors provide _____ financing in the _____ phase of business. A. equity; financing for start-up B. debt; financing for growth C. gift; financing for exit D. equity; financing for operations
A. equity; financing for start-up
10. The primary concern for equity investors is A. growth potential. B. protecting the principal. C. interest. D. repayment.
A. growth potential.
23. Kevin's goal appears to be one where he is able to A. harvest. B. invest. C. terminate. D. sell off.
A. harvest.
15. All of the following should be undertaken in order to ensure that an internal audit is effective EXCEPT A. meet with whomever is going to conduct the internal audit in the presence of other members of the management. B. write an engagement agreement with the auditor that clearly establishes the scope of work to be done. C. provide sufficient authority to the auditor to ensure that he or she can accomplish the goals of the audit. D. establish with the auditor that you and your board of directors have the final authority to review and approve the audit plan.
A. meet with whomever is going to conduct the internal audit in the presence of other members of the management.
11. The dissolution of a corporate form, making it back into a sole proprietorship or general partnership, if the court finds that the owner carelessly mixed up personal and business assets or finances is(are) called A. piercing the veil. B. pass through taxation. C. torts. D. exculpatory clause.
A. piercing the veil.
9. Most small businesses never go through the _____ stage. A. takeoff B. resource maturity C. emergence D. survival
A. takeoff
20. One of the first steps in developing a compensation plan is A. to determine your organization's salary philosophy. B. to develop a job description. C. to create job analysis. D. to pay an above-market salary to create loyalty.
A. to determine your organization's salary philosophy.
2. When you hire employees, typically, a probationary period lasts A. 180 days. B. 90 days. C. 30 days. D. 1 year.
B. 90 days.
7. Which of the following is a document that sets forth information about a limited company that is filed with the state to establish an LLC? A. Articles of incorporation B. Articles of organization C. Articles of partnership D. Articles of presentation
B. Articles of organization
6. Staying in touch with customers on a regular basis via visits, phone calls, e-mails, newsletters, and so on refers to which of these components from Zig Ziglar? A. Urgency B. Frequency C. Potency D. Recommendations
B. Frequency
20. If Harry adopts the practice of purchasing and accepting delivery of inventory only after it has been sold to the final customer, it would be referred to as a(n) _____ inventory system. A. point-of-sale B. JIT C. EOQ D. periodic
B. JIT
20. Which of these is NOT a CSF that can help identify those businesses more likely to survive? A. Being incorporated B. Moderate start-up capital C. Protectable intellectual property D. Brand name affiliation
B. Moderate start-up capital
2. Which of the following is true regarding a small-claims court? A. These courts will accept cases where the stakes are as large as $100,000. B. Most of these courts are designed so that ordinary citizens can bring their cases in. C. This legal option is available to entrepreneurs who can afford an attorney. D. These courts should be the first course of action for entrepreneurs in case of any problems.
B. Most of these courts are designed so that ordinary citizens can bring their cases in.
3. Which one of these government agencies is created to enforce safety in the workplace? A. EEOC B. OSHA C. SBA D. IRS
B. OSHA
7. . _____ comprises both hardware and software to integrate inventory management directly into your accounting system. A. Microinventory B. Point-of-sale system C. Periodic inventory D. Perpetual inventory
B. Point-of-sale system
19. This is not created by the government but is information known to certain people in the company that makes that company more competitive. A. Copyright B. Trade secret C. Patent D. Trademark
B. Trade secret
2. Misappropriation of business property by employees of that business refers to A. OSHA violations. B. employee theft. C. loss of key employees. D. noncompliance with ADA regulations.
B. employee theft.
2. When you sell part of your business, the money you receive is A. debt. B. equity capital. C. gift. D. tax credit.
B. equity capital.
16. Tax management A. focuses on generating cash to cover likely estate taxes. B. focuses on minimizing estate tax payments. C. focuses on transferring assets to heirs when the asset costs are low. D. focuses on giving the firm as a gift to someone who will keep the business a going concern.
B. focuses on minimizing estate tax payments.
22. From a growth strategy perspective, Quality Air can be described as a A. high-growth venture. B. high-performing small business. C. traditional small business. D. lifestyle firm.
B. high-performing small business.
10. Of the four generic growth strategies, most small businesses are A. traditional small businesses. B. lifestyle or part-time firms. C. high-performing small businesses. D. high-growth ventures.
B. lifestyle or part-time firms.
4. In 1964, EEOC established five protected classes. Which of these is NOT one of them? A. Race B. Color C. Age D. Religion
C. Age
20. Identify the insurance that provides funds to pay the ordinary operating expenses of your business should it be forced to close temporarily because of an insured event. A. Crime insurance B. Theft insurance C. Business interruption insurance D. Bond insurance
C. Business interruption insurance
8. Which of the following practices should be adopted to ensure that a computer is kept secure? A. Using simple passwords B. Changing passwords infrequently C. Having a PC set to lock itself up after a few minutes of inactivity D. Opening downloads from unexpected sources
C. Having a PC set to lock itself up after a few minutes of inactivity
11. Which is the number one method for fraud detection? A. Internal audit B. Internal control C. Tip D. External audit
C. Tip
5. Which of these sources of equity financing is available during all four phases of business? A. Angel investors B. Friends and family C. Venture capital D. Self generated funds
C. Venture capital
6. A legal "artificial" entity that is formed by filing specific documents with a state government is called a A. sole proprietorship. B. partnership. C. corporation. D. general partnership.
C. corporation.
1. Adding employees A. decreases the amount of work that can be done. B. reduces the legal requirements faced by an employer. C. increases the demands on the owner. D. increases the business's profitability.
C. increases the demands on the owner.
5. Just-in-Time (JIT) inventory system attempts to reduce inventory levels to the absolute minimum by all of the following EXCEPT: A. accepting inventory only as it is sold. B. assembling product in the absolute minimum time possible. C. keeping safety stock in case sales might be greater than forecast. D. shipping product to the customer immediately upon completion.
C. keeping safety stock in case sales might be greater than forecast.
13. In evaluating potential employees, a small business owner A. should hire a moderately qualified person in case filling the position is an urgent requirement. B. should ensure that only a single interviewer meets with a candidate in order to avoid conflicting evaluations. C. should design interview questions such that "yes" or "no" answers are not applicable. D. should accept the candidate's word that he or she possesses a certain skill or knowledge base.
C. should design interview questions such that "yes" or "no" answers are not applicable.
5. For start-ups, the most popular business form is the A. corporations. B. partnerships. C. sole proprietorships. D. LLCs.
C. sole proprietorships.
12. Torts are ______ wrongs. A. no-liability B. homicide C. criminal D. civil
D. civil
7. LLCs have a choice, under federal tax law, of being taxed as either a corporation or as a A. sole proprietorship. B. limited liability company. C. independent, single person business. D. partnership.
D. partnership.
19. There are two parts to a formal performance appraisal: A. the self-appraisal and the review by the supervisor. B. the internal review and the external review. C. the review of past accomplishments and the setting of future objectives. D. the performance review and the pay review.
D. the performance review and the pay review.
22. The rule of thumb is that perks like these should take no more than _____of the annual personnel budget. A. 3 percent B. 5 percent C. 7 percent D. 10 percent
A. 3 percent
17. Which is the form of business termination that uses a legal method for closing a business and paying off creditors when debts are substantially greater than assets? A. Bankruptcy B. Sell off C. Walkaways D. Workout
A. Bankruptcy
10. This is a choice LLCs can make on their tax returns to be taxed as a corporation or a partnership. A. Check the box taxation B. Double taxation C. Pass through taxation D. Single taxation
A. Check the box taxation
12. Identify the organization authorized by the SBA to make insured loans to small businesses that are expected to increase economic activity within a specific geographic area. A. Community development organization B. Accelerator C. Small business investment companies D. Limited partnerships
A. Community development organization
1. For most small businesses, which of these represent the usual sequence of stages in the business life cycle? A. Emergence, existence, survival, success, and resource maturity B. Existence, survival, financing, success, and maturity C. Emergence, success, financing, marketing, and maturity D. Existence, growth, survival, and decline
A. Emergence, existence, survival, success, and resource maturity
3. Which among 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? A. Fair Labor Standards Act B. Immigration Reform and Control Act of 1986 C. Worker Adjustment and Retraining Notification Act D. Executive Order No. 11246
A. Fair Labor Standards Act
4. Which of the following statements is true regarding success stage of the small firm life cycle? A. Firms develop the information, skills, and the routines to grow the business's profits. B. Profits are always taken in the form of money. C. For most small business owners, this stage lasts for a very brief period. D. Firms face the liabilities of newness in this stage.
A. Firms develop the information, skills, and the routines to grow the business's profits.
6. In practice, managers of small businesses tend to use which of these when it comes to inventory? A. Heuristic B. EOQ C. Statistical analysis D. JIT analysis
A. Heuristic
9. Which among the following statements is true regarding virtual employees in small businesses? A. In the small business, virtual employees are not hired as full-time employees. B. Small business owners who work with virtual employees have to deal with taxes, unemployment insurance, sick leave, vacation pay, and benefits. C. Small business owners are required to provide additional office space for their virtual employees. D. Small business owners are responsible for the development and supervision of their virtual employees.
A. In the small business, virtual employees are not hired as full-time employees.
Scenario: A-One Garage Doors Having worked in the door installation industry for about six years, Harry has started his own company called "A-One Garage Doors". The company assembles, installs, provides services and repairs for both residential and industrial garage doors. Like any other business when it comes to residential accounts Harry's conditions are cash but for industrial accounts he thinks he should offer credit. Furthermore, he is contemplating what level of inventory he should keep to meet the demand. 17. Harry needs to know that when it comes to providing credit, this is true. A. It reduces the cost of selling. B. It forces all customers to pay. C. It usually results in lower sales revenues. D. It accelerates the receipt of cash.
A. It reduces the cost of selling.
17. _____ refers to the concept that key employees should be able to see and understand a firm's financials, that they should have a part in moving the numbers in the right direction, and that they should have a direct stake in the strategy and success of the firm. A. Open-book policy B. Autonomy C. Work facilitation D. Psychological contract
A. Open-book policy
1. Which of these represent the number one source for small business financing? A. Owners B. Angel investors C. Government programs D. Banks
A. Owners
20. Which of the following statements is true regarding trademarks? A. Some words or groups of words can be both trademarks and service marks. B. A trademark once granted lasts for 25 years. C. A trademark can continue to be renewed for another 5 years at a time. D. Trademarks are exclusive right given to the creator of a literary or artistic work.
A. Some words or groups of words can be both trademarks and service marks.
10. Which of these represents the problem with legal protection methods for intellectual property? A. There is no governmental agency that will assist small business owners in maintaining their legal rights. B. The cost of legal protection for intellectual property is so high that it is practically useless for a small business owner. C. Legal protection methods for intellectual property are primarily "reserved" for large business with huge legal staff. D. Legal protection methods can only be offered for tangible property and not intellectual property.
A. There is no governmental agency that will assist small business owners in maintaining their legal rights.
1. Fee paid by a client to an attorney for legal services that is dependent upon the outcome of a case is referred to as A. contingency fees. B. hourly fees. C. flat fees. D. retainers.
A. contingency fees.
12. When recruiting, once a job description is prepared, the next step is to A. develop questions for interviewing. B. create a job analysis. C. prepare a training module for employees. D. create a Web site.
A. develop questions for interviewing.
Scenario: Design-an-Ad Debbie is a marketing and graphic arts major at ABC University and is exploring the idea of starting her own business, "Design-an-Ad". She has several options that she is considering—going alone into business, joining with two other friends or her brother David. Where she needs help is in determining the form of business she should consider. 21. Debbie speaks with a lawyer, Mr. Hutchinson, for help with the business form paperwork. Mr. Hutchinson indicated that he will charge a fixed amount for handling the paperwork once Debbie has decided on the form. Mr. Hutchinson's method of billing is called A. flat fees. B. a retainer. C. hourly fees. D. contingency fees.
A. flat fees.
19. As a general rule, the _____ the deductible, the _____ the policy premium payments will be. A. higher; lower B. higher; higher C. lower; higher D. lower; lower
A. higher; lower
8. In general, all the forms of business organizations can be categorized along two dimensions: (1) how much responsibility owners have for the organization's liabilities, and (2) A. how the business is taxed. B. how the business is financed. C. who the target market is. D. whether it is a manufacturing or service organization.
A. how the business is taxed.
9. A charge for the use of money, usually figured as a percentage of the principal is called A. interest. B. dividend. C. tax. D. risk.
A. interest.
24. 91. To really understand what he wants the person hired to do, Uncle Bob needs to develop a _____ which defines and discusses all the essential knowledge, skills, and abilities that are needed to fill the position. A. job description B. job analysis C. job prospect D. job training
A. job description
5. The magnitude of losses resulting from _____ claims has increased greatly in recent years with an increase in class action lawsuits. A. product liability B. professional liability C. premises liability D. personal liability
A. product liability
16. The amount that revenues exceed expenses is known as A. profit. B. cash flow. C. operating margin. D. goodwill.
A. profit.
19. People who open multiple businesses throughout their career are called A. serial entrepreneurs. B. unsatisfied business owners. C. terminal venturers. D. workout specialists.
A. serial entrepreneurs.
12. The greatest threat of loss from employee dishonesty occurs when A. two or more employees collude. B. employees lose their jobs. C. employees are paid above market wages. D. the owner establishes the culture of trust.
A. two or more employees collude.
24. Desired coverage beyond mandatory insurance that Kirk may want to consider includes all of these EXCEPT A. unemployment insurance. B. catastrophe. C. product liability. D. general liability.
A. unemployment insurance.
1. _____ is money that is owed to your business by your customers. A. Inventory B. Accounts receivable C. Factor receivables D. Accounts payable
B. Accounts receivable
21. This ratio is the measure of how much money can be made available very quickly to pay obligations within the fiscal year. A. Current ratios B. Acid test ratios C. Activity ratios D. Leverage ratios
B. Acid test ratios
25. If Debbie decides to enter into a partnership with her friends, she should know that this is one of its disadvantages. A. Difficulty in obtaining credit B. An impasse may develop if the partners become incompatible C. Lack of specialized skills D. Relative permanence
B. An impasse may develop if the partners become incompatible
16. Which of these refers to a dispute resolution process held instead of court cases in which both sides present their case to a legal professional? A. Litigation B. Arbitration C. Mediation D. Piercing the veil
B. Arbitration
3. Which of these techniques can help an individual move from entrepreneurial thought to actions? A. High-growth venture B. BRIE C. Walkaway and workouts D. CSFs
B. BRIE
20. _____ refers to the percentage cost of obtaining future funds. A. Risk B. Cost of capital C. Financial leverage D. Optimum capital structure
B. Cost of capital
15. A(n) _____ is a formalized legal method to transfer some or all of the ownership of a business to its employees. A. IPO B. ESOP C. consolidation D. termination
B. ESOP
7. _____ is an underused, low-cost method which rewards your employees for recommending potential candidates that would be a great fit. A. Networking B. Employee referral C. Internet recruiting D. Outsourcing
B. Employee referral
17. Which of the following is an example of a special type of liability insurance that covers losses from harm caused during the performance of your profession? A. Unemployment insurance B. Errors and omissions insurance C. Liability insurance D. Worker's compensation insurance
B. Errors and omissions insurance
Scenario: Johnny's "Joyride Graphics" "Joyride Graphics", a graphic design company, is a dream of Johnny Jackson, a native of Jacksonville. Being in a rural University town, Johnny knows quite a few people. This situation has put Johnny in a dilemma with his business start-up phase financing. He is really confused about where else he can get money other than his own pocket for his "Joyride Graphics". 23. Given that the Joyride Graphics is in a start-up phase, which of these would represent its financial management need? A. Building owner's wealth B. Profits being secondary to cash flow C. Investing to build equity and firm value D. Cash for building inventory levels
B. Profits being secondary to cash flow
14. Which of the following should be undertaken in order to reduce a business's exposure to the risk of violating tax regulations? A. Understate revenues and overstate deductible expenses B. Reconcile the cash register tape to the cash register contents every day C. Take cash from the businesses before it is recorded as revenue D. Borrow from tax money in order to make payments to creditors
B. Reconcile the cash register tape to the cash register contents every day
18. _____ is the popular name for a_____ bankruptcy in which a bankrupt firm's assets are sold by the bankruptcy trustee and the proceeds used to pay the firm's debts. A. Liquidation; Chapter 11 B. Reorganization; Chapter 13 C. Liquidation; Chapter 7 D. Reorganization; Chapter 11
B. Reorganization; Chapter 13
14. Identify this federal law that describes the steps publicly traded businesses must take to protect and provide their key financial information. A. The Service Contract Act B. Sarbanes-Oxley Act C. Walsh-Healy Public Contracts Act D. Davis-Bacon Act
B. Sarbanes-Oxley Act
13. When one firm absorbs another through purchase, it is called a(n) A. merger. B. acquisition. C. transfer. D. termination.
B. acquisition.
17. The _____ of the business is the most important single factor for being able to borrow significant amounts of money. A. character B. capacity C. condition D. collateral
B. capacity
24. If Kevin wants to explore transfer, he should consider a A. liquidation. B. sell off. C. walkaway. D. workout.
B. sell off.
22. For start-ups like Design-an-Ad, the most popular business form is the A. LLC. B. sole proprietorship. C. corporation. D. partnership.
B. sole proprietorship.
3. All business forms are types of separate, legal entities EXCEPT A. partnerships. B. sole proprietorships. C. LLCs. D. corporations.
B. sole proprietorships.
18. Sharing ideas, working toward a common goal, analyzing one another's work, and communicating cross functionally are related to A. training. B. teamwork. C. recognition. D. work facilitation.
B. teamwork.
11. Using outside equity in your business A. will increase your own exposure to financial loss. B. will protect it from increased costs in the form of interest. C. is inexpensive. D. solves problems of control and decision-making.
B. will protect it from increased costs in the form of interest.
12. _____ refers to the process of deciding among various investment opportunities to create a specific spending plan. A. ROI B. Payback period C. Capital budgeting D. Return on asset
C. Capital budgeting
15. _____ is judged largely by the owner's personal credit rating and by that of the business. A. Capacity B. Collateral C. Character D. Condition
C. Character
14. Which among the following is an on-the-job training method? A. Lectures B. Case studies C. Coaching D. Role playing
C. Coaching
9. Which form of business faces double taxation? A. Sole proprietorship B. Partnership C. Corporation D. LLC
C. Corporation
19. Which of these is a government organization that works to increase economic activity in the form of job opportunities within a specific geographic area? A. Small Business Administration B. Center for regional progress C. Economic development agency D. Rural economic enterprise agency
C. Economic development agency
3. "Profits are secondary to cash flow" is a financial management need in which phase of business? A. Financing for growth B. Financing for exit C. Financing for start-up D. Financing for operations
C. Financing for start-up
18. _____ exist to pay losses that are not covered by other liability insurance. A. Malpractice insurance B. Errors and omissions insurance C. General liability insurance D. Product liability insurance
C. General liability insurance
6. Which among the following is a method that has traditionally been used by businesses to hire employees? A. Employee referral B. Internet recruitment C. Help wanted ads D. Career service offices
C. Help wanted ads
8. _____ are jobs in businesses offered to students, arranged through universities. A. Assignments B. Careers C. Internships D. Referrals
C. Internships
11. Which of these is the first step in crafting a job description? A. Job overview B. Duties and responsibilities C. Job title D. Credentials and experience
C. Job title
15. Which among the following dispute resolution methods is generally much faster to complete and the least expensive? A. Litigation B. Arbitration C. Mediation D. Piercing the veil
C. Mediation
Scenario: Klassic Karate Being a black belt in two different martial arts, Kirk Karwan has opened his martial arts school, "Klassic Karate" to teach karate to young children and adults. Kirk has hired six other black belts to help him teach the 300 plus children and adults who have signed up at the school. When asked by some parents about the type of insurance the school carries and how he manages the different risks, Kirk was stunned. Not only had he not bought the insurance but he had not even thought about it or any other types of risks. 22. When it comes to the other black belts hired by Kirk, which of these represent a business risk that Kirk needs to manage? A. Klassic Karate's location B. Klassic Karate's marketing C. Violation of government regulations D. Karate being inappropriate for children
C. Violation of government regulations
25. If Johnny wants limited liability with Joyride Graphics, he can consider any of these legal forms EXCEPT A. a corporation. B. a limited partnership. C. a sole proprietorship. D. an LLC.
C. a sole proprietorship.
7. Different risks in the business can be managed by doing all of these EXCEPT A. making specific plans for and arrangements to deal with foreseeable events. B. creating and enforcing an appropriate code of conduct for yourself and all employees. C. actively working to create physical hazards in your workplace as a test. D. ensuring that valuable assets are physically secure.
C. actively working to create physical hazards in your workplace as a test.
15. All of the following are the disadvantages to rental EXCEPT: A. it requires that you make regular payments. B. the number of dollars paid in rent usually exceeds the number of dollars you would spend to own the asset. C. by renting capital equipment you incur ongoing costs if business conditions change. D. you do not have an ownership position.
C. by renting capital equipment you incur ongoing costs if business conditions change.
8. Assets that are expected to provide economic benefits for periods of time greater than one year are called: A. accounts receivable. B. short-term investments. C. capital assets. D. cash and cash equivalent assets.
C. capital assets.
8. The set of risks faced by firms early in their life cycles that come from a lack of knowledge by the owners about the business they are in and by customers about the new business is called the A. slack resource. B. walkaway and workout. C. liability of newness. D. CSF.
C. liability of newness.
24. Based on what you have learned in this chapter, unless otherwise advised by Mr. Hutchinson, the best choice for Design-an-Ad is A. sole proprietorship. B. partnership. C. limited liability company. D. C corporation.
C. limited liability company.
16. The _____ likely an event is to occur, and the _____ the potential amount that the insurance company must pay, the _____ the price that you must pay for coverage. A. more; lesser; lower B. less; greater; higher C. more; greater; higher D. less; lesser; higher
C. more; greater; higher
13. Employee contracts should include all of the following provisions EXCEPT A. limit the employee's freedom to go into competition. B. contain the employee's specific promise not to disclose sensitive or secret information. C. offer punishments for providing inadequate termination notice. D. cross training among employees.
C. offer punishments for providing inadequate termination notice.
3. Pledging receivables will get you about _____ of the amount that can be collected, where as, factoring can get you _____ percent of the amount due. A. one-fourth; 90-95 B. one-fifth; 40-45 C. one-half; 75-80 D. three-fourth; 20-25
C. one-half; 75-80
19. If Harry were to use EOQ, it would help him in terms of: A. borrowing cost and buying cost. B. lost sales cost and shelf-life cost. C. ordering cost and carrying cost. D. buying and selling.
C. ordering cost and carrying cost.
1. Inventory can be stolen, spoiled, or become obsolete. Production machinery can break down. Furniture, office equipment, vehicles, and buildings can be damaged or destroyed by vandalism, accidents, fire, flood, or wind. All of these represent risks related to the A. personnel of the business. B. customers of the business. C. property of the business. D. goods of the business.
C. property of the business.
11. Potential buyers and investors are most interested in _____ value of your assets. A. book B. fair market C. replacement D. disposal
C. replacement
18. Direct reductions in the amount of taxes that must be paid, dependent upon meeting some legal criteria are called as A. tax abatements. B. grants. C. tax credits. D. debts.
C. tax credits.
18. Distinctive words, slogans, or images, that identify a product and its origin is called a A. trade secret. B. copyright. C. trademark. D. patent.
C. trademark.
10. Consider these alternative methods to hire an employee at no cost if your budget does not allow for a paid employee EXCEPT A. volunteers. B. barter. C. virtual employees. D. internships.
C. virtual employees.
25. If Kevin decides to terminate his business, a possible methods is a(n) A. sell off. B. pass off. C. workout. D. IPO.
C. workout.
5. The Family and Medical Leave Act requires employers to give employees up to _____weeks leave, paid or unpaid, without loss of position, seniority, or benefits, for a qualifying condition or event. A. 4 B. 6 C. 8 D. 12
D. 12
Scenario: Handy Hardware Uncle Bob has been running the Handy Hardware Store for a few years now. As the business grew, he had been thinking about getting help. So far he had run the business by himself but now he feels that it might be time to bring other people onboard to help. 23. Uncle Bob can hire an individual with a probationary period. This probationary period typically lasts A. 30 days. B. one year. C. six weeks. D. 90 days.
D. 90 days.
24. As Joyride Graphics moves into the growth phase, which of these would more likely become its dominant financial management need? A. Cash flow "smoothing" B. Investing to build equity and firm value C. Productivity D. Cash for marketing
D. Cash for marketing
8. Which among the following is a disadvantage of partnerships? A. Lack of division of labor B. Difficulty in raising capital C. Complex procedures involved in set up D. Death of any one of the partners terminates the partnership
D. Death of any one of the partners terminates the partnership
23. If Debbie decides to go with sole proprietorship, she should know that this is one of its disadvantages. A. Secrecy. B. Owner doesn't have to share profits. C. Absence of tax advantages. D. Difficulty in obtaining credit.
D. Difficulty in obtaining credit.
2. Entrepreneurial role is most needed or focused upon during which stage of the small firm life cycle? A. Success B. Resource maturity C. Takeoff D. Emergence
D. Emergence
21. Which of these are also called dishonesty bonds? A. Credit bonds B. Rescue bonds C. Surety bonds D. Fidelity bonds
D. Fidelity bonds
4. The_____ requires employers to complete I-9 forms for each employee. A. Fair Labor Standards Act B. Title VII of the Civil Rights Act of 1964 C. Worker Adjustment and Retraining Notification Act D. Immigration Reform and Control Act of 1986
D. Immigration Reform and Control Act of 1986
6. Which among the following is a disadvantage of sole proprietorships? A. No specific tax advantages B. Difficult to organize, operate, and dissolve C. Owner has to share profits D. Inadequate management and employee skills
D. Inadequate management and employee skills
14. Which of the following statements is true regarding the Fair Credit Reporting Act? A. It requires that consumers investigate and report any inaccuracies to all nationwide CRAs. B. It provides CRAs with 60 days to investigate cases of inaccurate information. C. It requires that CRAs independently confirm information. D. It requires that all information reported by CRAs be accurate.
D. It requires that all information reported by CRAs be accurate.
25. Which of these is the first step Uncle Bob needs to start with, in crafting a job description? A. Duties and responsibilities B. Job training C. Job overview D. Job title
D. Job title
16. Which of the following is not a benefit of leasing? A. You can usually obtain a very low down payment. B. The process of negotiating and closing a lease is usually less complicated and expensive than making a purchase and obtaining borrowed funds. C. It is usually much easier for you to replace leased assets than it is to replace assets you own. D. Leased assets have less number of restrictions on how they may be used, maintained, and disposed of.
D. Leased assets have less number of restrictions on how they may be used, maintained, and disposed of.
4. Which of the following is an advantage of corporations? A. Personal in nature B. Low incorporation fees and taxes C. Ease of conducting business in another state D. Relatively permanent
D. Relatively permanent
Scenario: Quality Air Kevin has been running "Quality Air, Inc.", a heating and air conditioning business for about 20 years. The business has been growing about 15 percent a year with sales of $250,000 per year and is profitable generating slack resources. Now approaching his 50s, Kevin is seriously considering recovering the value from his business investment. 21. Identify the small firm life cycle stage that Quality Air Inc. is at. A. Existence B. Emergence C. Survival D. Success
D. Success
15. Which of these is a suggested guideline for training? A. It should be provided only at the initial stage of employment. B. Employees should practice what they have learned on their own time. C. Have employees sign long-term contracts so they do not leave after receiving training. D. Think of it as an investment.
D. Think of it as an investment.
21. 85. If Harry adopts a perpetual inventory system, _____ is one method that can be used to reduce the cost. A. periodic inventory B. JIT C. microinventory D. bar coding
D. bar coding
5. The main challenge of the resource maturity stage is to avoid A. overspending. B. legal problems. C. cost fluctuations. D. customer complacency.
D. customer complacency.
21. All of the following are examples of long term incentives to employees that help retain valuable team members EXCEPT A. profit-sharing plans. B. stock options. C. stock grants. D. employee bonuses.
D. employee bonuses.
22. During the start-up phase of a small business the "3-F investors" are all of these EXCEPT A. friends. B. family. C. fools. D. foundations.
D. foundations.
13. Accelerators are also called as A. LLCs. B. corporations. C. partnerships. D. incubators.
D. incubators.
11. The most straightforward way to achieve sales growth A. is to count on established customers to help improve sales through word-of-mouth. B. is to expand into areas where you may have a small customer base. C. is to convert occasional customers into steady customers. D. is by increasing sales to existing steady customers.
D. is by increasing sales to existing steady customers.
12. The most straightforward way to achieve sales growth A. is to count on established customers to help improve sales through word-of-mouth. B. is to expand into areas where you may have a small customer base. C. is to convert occasional customers into steady customers. D. is by increasing sales to existing steady customers.
D. is by increasing sales to existing steady customers.
18. Harry should be made aware that all of these are negative effects of extending credit to his customers EXCEPT: A. he may end up borrowing money to fill the gap. B. sometimes customers who use credit will not pay. C. it delays the receipt of cash. D. it increases the cost of selling.
D. it increases the cost of selling.
2. All of these are negative effects of extending credit to customers EXCEPT: A. it delays the receipt of cash. B. it creates a borrowing situation for the owners of the business providing credit. C. some customers with credit will not pay. D. it increases the cost of selling.
D. it increases the cost of selling.
14. Renting capital assets provides all of these advantages EXCEPT: A. it requires little or no cash investment. B. it does not require extensive paperwork. C. it protects you from unexpected repairs. D. it usually results in higher sales revenues due to repeat business.
D. it usually results in higher sales revenues due to repeat business.
4. The _____ is the amount of inventory that results in the minimum cost, considering the cost of lost sales resulting from running out of stock, the number of units sold per day, and the number of days required to receive inventory. A. microinventory B. periodic inventory C. EOQ D. optimum stocking level
D. optimum stocking level
17. A grant by the U.S. government to an inventor for an idea that is new, useful, and nonobvious, giving the inventor the exclusive right to make, use, or sell his or her idea is called a A. trade secret. B. copyright. C. trademark. D. patent.
D. patent.
13. The two most commonly used financial ratios for comparing investment alternatives are: A. current and quick ratios. B. return on sales and return on investment. C. operating profit margin and net profit margin. D. payback period and ROI.
D. payback period and ROI.
7. According to the components from Zig Ziglar, a message that is remembered and remembered for the right reasons is said to be A. relevant. B. recent. C. frequent. D. potent.
D. potent.
9. Depreciation is based on all of the following assumptions EXCEPT A. that the asset has a fixed, determinable period of utility. B. that the asset has a fixed, determinable value that will exist when the depreciation process is complete. C. that the value of the asset will decline in a continuous and predictable manner over the period of utility. D. that it is the cost incurred to replace one asset with an identical asset.
D. that it is the cost incurred to replace one asset with an identical asset.
6. Restaurants, clothing retailers, barbers, and beauticians face relatively low risks of loss from nonpayment because A. most customers prefer making upfront payments for such products and services. B. few people have credit cards that have charge limits big enough to buy such things. C. giving credit to customers increases sales. D. the amount that any one customer charges is unlikely to be big enough to threaten the business if it is not paid.
D. the amount that any one customer charges is unlikely to be big enough to threaten the business if it is not paid.
13. According to the IRS, to be an independent contractor A. the person must decide how the work must be done in consultation with the employer. B. the person's expenses must be paid by the employer. C. the person must perform a service that is central to the operation of the business. D. the person must be employed for a distinct term.
D. the person must be employed for a distinct term.
23. The first task that Kirk needs to complete before a comprehensive insurance program can be developed for Klassic Karate is A. to provide a business succession plan for Klassic Karate. B. to raise the number of participants for Klassic Karate. C. to develop a financial plan for Klassic Karate. D. to identify risks faced by Klassic Karate.
D. to identify risks faced by Klassic Karate.