BUSG 115 Final Exam

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

A cash receipts budget

Which of the following can be exercised only when presented with specified shipping records?

A documentary draft

Which of the following statements is true regarding a trademark?

A trademark can sometimes also function as a service mark.

Ted, a 46-year-old IT professional, recently attended a job interview at Acton Org. He was not offered the job. Ted tried to find the reasons for his disqualification and the company could not provide a satisfactory explanation. He later learned that he was refused the job due to his age as the job position was offered to a 23-year-old who had just graduated from college. Which of the following laws protect Ted from such discriminations?

ADEA

________ ratios measure how productive a particular asset is in producing sales movement.

Activity

________ occurs when the owner of real property does not enforce property rights and allows a non-owner to use the property as if it were his or her own.

Adverse possession

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's key in controlling receivables is to have them ________, by sorting them into groups.

Aged

An entity that processes checks and electronic fund transfers for banks and other financial organizations is called

Clearinghouse

Which of the following statements is true of copyrights?

________ is a type of CRM report that segments by customer or customer group on purchases or dates of purchase.

Customer vector

________ measures the extent to which a business can meet its obligations for the long haul.

Debt-to-equity ratio

Which of the following is true of customer retention?

It handles problems that crop up after a sale.

Which of the following is true of managerial accounting?

It is forward-looking in nature.

In the context of accounting functions, which of the following is true of accounts receivable?

It records provision of credit to customers.

Which statement concerning the loss of key employees is not true?

Key employees rarely become competitors.

To perform _____ analyses, only cash flows are considered.

NPV

Axion Inc. is a small business started by Robert. As the business grew, he decided to implement new company policies that would ensure that his employees are not encouraged to set up competition against Axion. Which of the following techniques should he adopt to achieve this?

Negotiate contracts with key employees that limit their freedom to go into competition

Which of the following statements is true about fixed costs?

They are unaffected by changes in output.

The "business entity" concept of accounting indicates that

a business has an existence that is separate from its owner.

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?

a manufacturer's suggested retail price

Sarah opening her own home-based business preparing tax returns. She gathers all a client's data and prepares and files their tax returns. This is an example of

a process.

Which of the following concepts assume that information flows from the income statement through the statement of retained earnings, the statement of owner's equity to the balance sheet?

articulate concept

Orion Inc. was started as a small organization with five employees. After the first year's profits were made, the owners decided to invest the profits in expanding the business. This is an example of financing the business using

bootstrapping

The ________ is a schedule of the amounts and timings of payments of cash out of a business.

cash disbursements budget

Cash that can be obtained from stocks, bonds, land, buildings, or equipment that a business has is called

cash flow from investing.

An inconsistency between experience and belief refers to

cognitive dissonance.

Checking and savings accounts are the most common forms of

demand deposits.

Which of the following is true of follow-up?

electronic approaches dramatically lower marketing costs

Which of the following is an example of debt financing?

incubators

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

2.0

To meet the high production demand, Jack Wilson—the owner of JG Sawmills—needs to invest in a frame saw. He has narrowed down to two choices: a double cut frame CZ84 saw with chipper and a HY-200 saw with double arbor bearings. The cost of CZ84 will be $91,000, whereas the cost of HY-200 will be $110,000. The salvage value of each type is $0 (zero) and both will have a useful life of 4 years. Which of the following is a benefit of leasing?

An asset can be leased at a very low down payment.

________ provides funds to pay the ordinary operating expenses of a business should it be forced to close temporarily because of an insured event.

Business interruption insurance

Which of the following statements is true of determining the value of your operating assets?

Fair market value lies somewhere between disposal value and replacement value.

He would choose HY-200 because it has a higher ROI of 0.58.

Which of the following steps would help decrease business risks?

Making specific plans for and arrangements to deal with foreseeable events

________ represent either ownership or debt of publicly held firms and government issued debt, in the form of bonds, notes, and bills.

Marketable securities

________ refers to a type of periodic inventory that conducts a count of the entire inventory being held for sale at a specific point in time.

Physical inventory

A person or other entity filing a lawsuit is known as

Plaintiff

________ ratios measure management effectiveness in creating wealth from sales and from invested funds.

Profitability

________ advertisements provide both geographic and demographic segmentation with a highly distracted audience.

Radio

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

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

Brendon wants to sue Fitness Ace, a leading provider of fitness equipment, for negligence. He approaches Arthur Bailey Group, a law firm, which has good experience in handling product liability claims for victims of exercise equipment failure. Which of the following would be true if the attorney charges Brendon in the form of flat fees?

The attorney would charge separately for consultation and paperwork.

Which of the following is true of payment procedures when exporting?

Up-front cash payment is a risk to the customers.

Which of the following statements concerning compliance with government regulations is true?

Violation of some of the regulations is probably inevitable.

Which of the following examples is an instance of co-marketing?

a summer promotion with Heinz catsup and Ballpark franks

Which of the following business location options requires you giving them a stake in your company?

accelerator

Which of the following examples is not a form of earned media?

an advertorial

Which of the following is an example of a cash equivalent?

commercial paper

The number of prospects or leads you need to approach in order to make one sale if your

conversion rate.

The direct cost incurred in using an asset for the purpose for which it was intended is termed as

cost of operating.

Which of the following is the cost incurred in financing, insuring, taxing, or tracking an asset?

cost of owning

Ted's business, situated near the Missouri River, was partially destroyed when the river overflowed after a deluge. Which of the following measures would've helped Ted minimize the effect of the flood from interrupting the operations of his business?

creating provisions for subcontracting work to minimize business interruption to

A(n) ________ refers to a part of a contract in which a party to the contract states that he or she will not be responsible for certain actions.

exculpatory clause

________ is an indicator of the business's ability to manage cash flows so that the company has the fiscal ability to respond appropriately if an unexpected opportunity or problem arises.

financial flexibility

Giveaways, samples, and tastings are examples of ________ techniques used in sales promotion.

introductory

it allows easy comparisons of alternatives.

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

owners' equity investments

The practice of acquiring inventory only in response to a completed sale is called a(n)

pull-through system.

Which of the following answer options is one of the four steps in the "Get Customers" portion of the customer development funnel for physical products?

purchase

A computer program that encrypts all the data on your computer with an unknown key is called ________. If the business does not pay a specified amount, all the computer contents will be erased.

ransomware

The first task to be completed before a comprehensive insurance program for a business can be developed is

to identify risks.

The name under which a business is operated is known as its

trade name.

Which of these is an advantage of sole proprietorship?

unique tax advantages

Which of the following is not a form of owned media?

viral marketing

A(n) ________ is a middleman business that buys and sells to businesses rather than consumers.

wholesaler

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

word of mouth

Juan's Auto Repair is preparing its income statement. The report shows sales revenue of $80,000, cost of goods sold at $30,000, and sales, general, and administrative expenses of $25,000. Since Juan uses the single-step format for his income statement, what is Juan's net income?

$25,000

________ are a location option for businesses with low customer contact.

Empowerment zones

Feedback

________ refers to the contacts business owners periodically make with customers in order to remind them of their business, and their interest in customers' business.

Follow-up

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

Noncore projects

One fear some people have when negotiating is being dealt a dirty trick by the other side. Which of the following statements is true of such dirty tricks?

One-time deals are more prone to dirty tricks.

________ is money from selling part of a business to people who are not and will not be involved in the management of the business.

Outside equity

Which of the following is a disadvantage of leasing?

Renovation options are limited in a leased property.

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

Rent-free use period

________ is the cost incurred to substitute one asset with an identical asset.

Replacement value

Which of the following statements is true of sharing business risk with the government?

Risk for a government is very different from risk for private business.

________ are programs designed to report on a user's keystrokes or data, or give remote control of a PC to others.

Spyware

Which of the following statements concerning small business and law is not true?

State laws applicable to small business are standard in all fifty states.

Crux Inc. and Synapse Inc. are two competing businesses in the same city. They use the services of the same insurance company and have taken the same policy. Crux has a higher deductible than Synapse for the policy. Which of the following statements would be true in this case?

Synapse pays a higher premium than Crux.

Larry owns a successful business called Super Car-Hire. He plans to sell it to Bob. Bob assumes that he can keep up the high revenues if he can plan and execute the mission of the business well. Which of the following basic accounting concepts is reflected in Bob's assumption?

The going concern expectation

The total cost of obtaining an asset, including such costs as purchase price, transportation, installation, testing, and calibrating in order to ready it for its first productive use is termed as

acquisition cost

Properly prepared financial statements agree such that the cash flow statement provides the ending cash balance for the

balance sheet.

The sum of money that has actually been received and paid out of a depositor's account is termed

bank available balance.

________ is the practice of trading goods and services without the use of money.

barter

General partnerships are similar to limited partnerships in that

both dissolve when their respective partnership mix changes.

Tim grew up in a rough neighborhood of Chicago and received support from The Boys and Girls Club when he was in school. Tim went on to become a successful local businessman who now talks up the benefits of The Boys and Girls Club to everyone he knows and does everything he can to raise public awareness of the program. Tim is a(n) ________ for The Boys and Girls Club.

brand ambassador

Liability insurance protects a business against

claims from harm caused by inadvertent consequences of actions of the business or its employees.

An organization authorized by the SBA to make insured loans to small businesses that are expected to increase economic activity within a specific geographic area is referred to as a(n)

community development organization.

During the start-up phase of a business, the emphasis is on

conserving what little cash the business has.

________ refers to the practice of accepting goods for resale, without taking ownership of them and without being responsible to pay prior to their being sold.

consignment

Joshua suffered a serious knee injury at work after a machine he was using malfunctioned. Joshua plans to sue for compensation from Milch Enterprises, the company that built that machine. Joshua's attorney wants a percentage of the compensation if it is proven that Milch Enterprises' negligence caused the accident. Which of the following types of legal fee would Joshua be paying to his attorney?

contingency fees

Which of the following ratios is determined by dividing total liabilities by total assets?

debt to assets ratio

A(n) ________ is an amount of loss that is specifically excluded by the insurance contract.

deductible

Hugh starts his own animation company by borrowing funds from his parents. His parents tell him that he can repay them when the business is generating profits. This is an example of

deferral

Coupons, rebates, buy-one-get-one promotions, and sales are all forms of ________ techniques used in sales promotion.

discounting

Which of the following is an example of a special type of liability insurance that covers losses from harm caused during the performance of a profession?

errors and omissions insurance

When the financial management needs of a business are to reinvest for maintenance or to build owner wealth, the business needs

financing for operations.

Anderson and Anderson is a law firm that has been handed a job to take care of patent issues for Gantar Labs. Anderson and Anderson charges a fixed amount for patent-related cases. Which of the following types of fees will Gantar be paying Anderson and Anderson?

flat fees

In a ________ layout, the store is laid out in sections with aisles that angle or meander through the store.

free-form

Josh, the owner of a software company, is facing cash flow problems. To control the cash outflow, he avoids paying the bills to his vendors. After much delay, he sends a check in payment but intentionally forgets to sign the check. To prevent the cash from going out of his business, Josh is applying the strategy of

gaming the payment process.

________ refers to the value of a business that exceeds the sum of the value of all individual assets but that cannot be sold separately from the business.

goodwill

Which of the following answer options is not one of the most commonly identified sources of U.S. business risk small businesses face?

government instability

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

guerilla marketing

In the lease agreement signed by Arthur Fraser, a(n) ________ clause exempts him from paying any restitution in case he causes accidental damage on the property. Which of the following types of contractual clauses protects Arthur Fraser from paying for such damages?

hold harmless

Which of the following statements lists revenues and expenses and shows the amount of profit a business makes for a specified period of time?

income statement

Which of these arguments would be helpful in deflecting vicarious liability?

independent contractor argument

We use many electronic forms of money: debit cards, online bill payments, electronic bank drafts, wire transfers, even Bitcoin. These forms of money make an important point - the essence of money is that it is a form of

information

Someone who uses intellectual property without the permission of the owner is referred to as a(n)

infringer

A(n) ________ is a valuable process that can greatly help an employer with the issues of keeping risks at acceptable levels. It is strictly a management tool that is not provided to outsiders; it can be structured and conducted in any systematic manner the owner finds acceptable.

internal audit

When preparing pro forma statements for your business plan, once sales have been projected, the next step is to plan for

inventory purchases.

it relies on accounting information with which investors are comfortable

it requires the business to make regular, timely payments

Which of the following is true of financial management for a business exit?

its main emphasis is on maximizing the value of the business for successors

Contests are a specific form of the key Media Integration techniques of ________ which involves paying for mailing lists of potential customers, or selecting target markets or buying subscriber lists on social media sites to whom advertisements will be shown.

lead generation

Which of the following is not an advantage for providing credit to customers?

lenders are more likely to provide financing

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.

letter of credit

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

loan covenants

An accounting method that is specifically intended to be used for planning, directing, and controlling a business is called

managerial accounting

In the PESO model, the overlap of the circles Shared and Earned is where your ________ reside.

media partnerships

The most highly desired form of insurance for most employees is

medical insurance.

The purchase of inventory—typical with Internet-based businesses—only after a sale is made is called a

micro inventory.

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

microlender

Which of the following is a form of advertising that is inserted into the regular flow of noncommercial webpages, the FTC requires them to carry an identifier such as "Sponsored" to show it is an ad.

native advertising

Training and flexible hours are a part of the _____ strategy used to control money that is expected to leave the firm.

noncash incentive

At the _____ stage of a business, the emphasis of financial management is to build owner wealth, to conserve assets, to match cash inflows to outflows, and to maximize the return on capital assets by making optimal investing decisions.

operations

Economic order quantity (EOQ) helps a business to think in terms of

ordering costs and carrying costs.

A negative balance in a depositor's bank account is referred as a(n)

overdraft

Which among the following is a disadvantage of sole proprietorships?

owner has unlimited liability for the firm's debt

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

payables

According to the IRS, to be an independent contractor the person must

perform a service that is not central to the operation of the business.

A system of recording the receipt and sale of each item as it is soldis called a

perpetual inventory.

In the "Grow Customers" portion of the customer development funnel, additional sales can take four forms in the physical world. Which of the following is not one of those forms of additional sales?

personal selling

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

receivables

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

reconciling

Maintaining an inventory helps a business to have an optimal level of cash flow by

reducing the cost of processing orders.

Which of the following is true of the presentation phase of personal selling?

rehearse presentations and memorize facts

Identify the type of service location in which face-to-face meetings with clients are infrequent.

remote location

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

retailer

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

retained earnings

This ratio is determined by dividing net income by average investment.

return on investments

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

sales leads.

Ty ran a shop that sold and traded sports cards and sports memorabilia. He bought space on a billboard overlooking one of the main highways into the city and included the shop's phone number (555-CARDS). The shop soon received a flood of phone calls inquiring about his location, stock, and business hours. The number of customers entering the store increased by tenfold and his sales doubled. Every person who called the shop because they saw the billboard are

sales leads.

Which of the following provides potential customers an education in a firm's product or service, including stories of customers' whose problems were solved, an FAQ list, as well as a page on the products or services, and a page on the business owner and his or her firm?

sales packets

Tara's friend Robbie worked at the local coffee shop. Tara always stopped to get her morning coffee from the shop because Robbie would fix her a deluxe coffee but only charge her for a standard cup of coffee. This is an example of

skimming

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

skimming

Private businesses that are authorized to make SBA insured loans to start-ups and small businesses are called

small business investment companies.

Which of the following forms of business requires no government permission to set up?

sole proprietorship

Except for ________, business forms are types of separate, legal entities.

sole proprietorships

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

supply chain costs

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

tax credits.

The amount an insurance company must pay out in claims is a function of all but one of the following answer options. Which option is not one of those functions?

the annual amount the business owners pays for the insurance

Which financial report provides the value of the things the business owns and who has a claim on that value?

the balance sheet

The output level necessary to attain any specific profit goal is calculated by adding the desired profit to the fixed cost then dividing the sum by

the contribution margin of one unit.

An implication of the bounded rationality models of management is that

the more information available to be included into the decision process, the less efficient that process will be.

Miguel owns a car wash that has a larger bay for washing trucks and boats. The spray level of the power washer combined with the detergent can remove paint from some models of boats so Miguel is very careful about which boats are allowed into the larger bay. The bay is kept closed and customers are instructed to check with a manager or authorized employee in the office before using the bay to wash a boat. Miguel has instructed all employees that only managers and a few select employees have the authority to permit a boat to use the system in the larger bay. Employees are told they may face personal liability by allowing boats access without confirming with a manager. Managers and the select few employees allowed to permit access are trained in how to test the paint for ability to withstand the spray and detergent. An unauthorized employee allows a person to wash their boat in the larger bay without testing the paint or informing an authorized employee of their decision and the boat sustains major paint damage. The boat owner threatens to sue Miguel for the damage but Miguel insists the employee is responsible for the damage. Miguel is using which argument to deflect the liability of the ruined paint?

the scope of authority argument

Which of the following is not true of personal selling?

there is no formula for personal selling

When documenting the operations of your business, which of the following answer options contains the most detail?

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