BUSN205 Midterm

__________________ is buying products from another country. ______________________ is selling products to another country.

Importing, Exporting

Forms of trade protectionism include _______________________. (more than one answer may be correct)

tariffs import quotas embargos

Profit in a business is _______________________.

the amount of money left after paying expenses.

The key financial statements of a business are: (more than one answer may be correct)

-Balance Sheet -Statement of cash flows -Income Statement

Owners' equity: (more than one answer may be correct)

-For corporations, the owners' equity account records the owners' claims to funds they have invested in the firm (such as stock), as well as retained earnings. -Is called the capital account in partnerships and sole proprietorships -Includes retained earnings which are the accumulated earnings reinvested in the business and not paid out to stockholders in profit distributions or dividends Answer,

Assets are divided into these categories according to how quickly they can be turned into cash: (more than one answer may be correct)

-Intangible -Fixed -Current

The balance sheet: (more than one answer may be correct)

-Is a financial statement that reports a firm's financial condition at a specific time -Is composed of: assets, liabilities, and owners' equity -Can be used to calculate net worth or equity -Is a good measuring stick for calculating available resources

Financial ratios provide key insights into how a firm compares to other firms within its industry on: (more than one answer may be correct)

-amount of debt -profitability -overall business activity

Liabilities are: (more than one answer may be correct)

-considered long-term if not due for one year or more -recorded on the balance sheet in common accounts such as notes payable, accounts payable and bonds payable. -what a business owes to others - its debts

Not-for-profit organizations require accounting professionals to: (more than one answer may be correct)

-ensure their financial results are correct -account for every dollar contributed -show contributors how their money is being spent and that it is being spent properly -ensure that the organization is being well managed financially

Based on information in Figure 17.2, users of accounting information and the required reports are: (more than one answer may be correct)

-government taxing authorities -managers of the firm -government regulatory agencies -creditors

Cash flow analysis is needed because: (more than one answer may be correct)

-if cash flow is not properly managed, it can cause a business much concern -it is possible for a business to increase its sales and profits yet still suffer cash flow problems -cash flow problems are particularly difficult for small and seasonal businesses since they have less access to capital than larger companies -poor cash flow can constitute a major operating problem that many companies face

Auditing: (more than one answer may be correct)

-is reviewing and evaluating the information used to prepare a company's financial statements -Private accountants within an organization often perform internal audits to guarantee that the organization is carrying out proper accounting procedures and financial reporting -Public accountants conduct independent audits (an evaluation and unbiased opinion about the accuracy of a company's financial statements) of accounting information and related records. -also includes examining not only the financial health of an organization but also its efficiencies and effectiveness

The income statement for a firm: (more than one answer may be correct)

-reports financial operations over a particular period of time -shows the bottom line - that is, its profit (or loss) after costs, expenses, and taxes -reveals whether the business is actually a earning profit or losing money -includes valuable information for stockholders, lenders, potential investors, employees and the government

Referencing Figure 17.6, the income statement includes: (more than one answer may be correct)

-revenues - the value of what's received from goods sold, services rendered, and other financial sources -gross profit - revenues minus cost of goods sold; shows how much a firm earned by buying or selling merchandise -operating expenses - the cost incurred in operating a business (selling and general expenses) -cost of goods sold - the cost of merchandise sold or the cost of raw materials or parts used for producing items for resale

Computerized accounting programs are particularly helpful to small-business owners: (more than one answer may be correct)

-the partnership of technology and an accountant's specialized knowledge that helps a firm make the right financial decisions. -which means they should hire or consult with a trained accountant to identify the particular accounting needs of their firm -because software can address the needs of small businesses that are often significantly different from the needs of a major corporation -who often don't have the variety of accounting personnel within their companies that larger firms enjoy

A list of entrepreneurial attributes include: (more than one answer may be correct)

A burning desire to realize, actualize, and build your dream into reality. Most entrepreneurs are willing to work long hours in their own business because they think it is better than working long hours for someone else. Belief in your idea when no one else does and to stay enthusiastic.

Small-business owners need outside consulting advice early in the process from: (More than once answer may be correct)

A marketing consultant with small-business experience Tax and accounting advisors A competent, experienced lawyer who knows and understands small businesses A commercial loan office who can help design an acceptable business plan and give valuable financial advice as well as lend money when needed

The recording, classifying, summarizing, and interpreting of financial events and transactions in a organization to provide management and other interested parties the financial information they need to make good decisions about its operations is: (only one answer is correct)

Accounting

__________________________ is a degree of competition in which just a few sellers dominate a market, as we see in tobacco, gasoline, automobiles, aluminum and aircraft.

An oligopoly

Questions franchisors should ask before forming a global franchise are: (More than once answer may be correct)

Are you able to adapt to franchise regulations in other countries? Can you give proper support to global partners? Will your intellectual property be protected?

The accounting equation is: (only one answer is correct)

Assets = Liabilities + Owners' Equity

An entrepreneur has several potential sources of capital to finance a small business: (More than one answer may be correct)

Banks and financial institutions Personal savings Family and business associates Crowdfunding

In Figure 4.4, which company(ies) below have partnered with government and nonprofit organizations to create market-specific entrepreneurship programs? (More than one answer may be correct)

Coca-Cola

Based on Figure 5.3, the following should be included in a written partnership agreement: (More than once answer may be correct)

Contributions made by each partner Duties of each partner Provision for purchase of a deceased or retiring partner's share of the business Provision for sharing of profits and losses.

The social performance of a company is reflective of its responsibility for the welfare of society. That performance has several dimensions. What are they?

Corporate responsibility. Corporate philanthropy. Corporate policy.

The basic forms of business ownership in the U.S. are: (More than one answer may be correct)

Corporation Sole Proprietorship Partnership

Which of these social changes affects businesses? (More than one answer may be correct)

Diversity Older citizens Single-parent families Gen Z

___________________ is the study of how society chooses to employ resources to produce goods and services and distribute them for consumption among competing groups and individuals.

Economics

Two of the pros for ___________________ as shown in Figure 3.2 are: (1) the global market contains over 7.7 billion potential customers for goods and services; (2) productivity grows when countries produce goods and services in which they have a comparative advantage.

Free Trade

A conventional (C) corporation: (More than one answer may be correct)

Has the disadvantage of double taxation - the corporation pays taxes on its income before it can distribute any income (dividends) to stockholders and the stockholders pay income tax on dividends they receive from corporations. Is a state-chartered legal entity Has the advantage of Size because it can raise large amounts of money to work with - build modern factories, hire experts or specialists, buy other corporations, etc. Has liability separate from its owners - its stockholders are not liable for the debts or other problems of the corporation beyond the money they invest in buying ownership shares.

The service sector includes these types of businesses (as shown in Figure 1.4): ________________. (More than one answer may be correct)

Health Financial

Using Figure 5.2, what are questions to ask when choosing a business partner? (More than once answer may be correct)

How does the person respond to adversity? What contacts, resources, or special attributes will the person bring to the business? What skills does the person have? What type of decision maker is the person?

_________________________ define the organization's guiding values, create an environment that supports ethically sound behavior, and stress shared accountability.

Integrity-based ethics codes

The phrase______________________ describes how people work primarily for their own prosperity and that self-directed provides social and economic benefits for all.

Invisible Hand

Individuals and companies that develop a strong ethics code, ask themselves these questions when facing an ethical dilemma. They were written by religious leader Norman Vincent Peale. (More than one answer may be correct)

Is my proposed action legal? Is it balanced? How will it make me feel about myself?

Not all business ideas are opportunities. If your idea doesn't meet someone else's needs, the business won't succeed. Your idea is a good opportunity if: (More than one answer may be correct)

It fills customers' needs. You can get your product or service to customers before your window of opportunity closes and competitors beat you to the marketplace. You have the skills and resources to start a business.

Government leaders worldwide are being judged by stricter moral and ethical standards. Which statements below are true? (More than one answer may be correct)

Many U.S. businesses demand socially responsible behavior from their international suppliers.

The Small Business Administration (SBA) defines a small business as: (More than one answer may be correct)

Meeting certain standards of size in terms of employees or annual receipts Not dominant in its field of operation Independently owned and operated

Which of the companies shown in Figure 3.6 had a major problem with translating its slogans? (More than one answer may be correct)

PepsiCo KFC Coors Perdue

One of the four phases of long-term business cycles is _______________________________ when there are two or more consecutive quarters of decline in the GDP. Prices fall, people purchase fewer products, and businesses fail. This cycle brings high unemployment, increased business failures, and an overall drop in living standards. This cycle is usually not accompanied by deflation.

Recession

A Limited Liability Company (LLC): (More than one answer may be correct)

Represents more than half of new business registrations Does not have to distribute profits and losses in proportion to the money each person invests. Protects personal assets.

Disadvantages of franchises include: (More than one answer may be correct)

Restrictions on franchisees on the resale of their franchises. The franchisor demands either a large share of the profits in addition to the start-up fees or a percentage commission based on sales, not profit. This share is called a royalty. Fraudulent franchisors who deliver little or nothing of what they promised.

The Small Business Administration may provide small businesses the following types of financial assistance: (More than one answer may be correct)

SBA Express Loans Community Adjustment and Investment Program (CAIP) Microloans

Among sources from many different times and places - such as the Bible, Aristotle's Ethics, the Koran, and the Analects of Confucius, you'll find common statements of basic moral values: (More than once answer may be correct)

Self-sacrifice Respect for human life Honesty Integrity

A social audit is a systematic evaluation of an organization's progress toward implementing socially responsible and responsive programs. In addition to these audits, the following types of groups serve as watchdogs to monitor how well companies enforce their ethical and social responsibility policies: (More than one answer may be correct)

Socially conscious research organizations Customers

Causes of small business failure are: (More than one answer may be correct)

Starting with too little capital. Buying too much on credit. Underestimating how much time it will take to build a market. Plunging in without first testing the waters on a small scale.

Ways in which governments can encourage entrepreneurship: (More than one answer may be correct)

The Kauffman Foundation and the federal government partnered to start an initiative called Startup America to "celebrate, inspire, and accelerate high-growth entrepreneurship throughout the nation." Offer to defer taxes or reduced taxes to investors willing to invest in companies or projects in nearly 9,000 high-poverty areas across the country. Create incubators and technology centers to reduce start-up capital needs. Designate specific geographic areas called enterprise zones to attract businesses by offering lower taxes and other support.

Socialism is an economic system based on the premise that some, if not most, basic businesses (eg., steel, coal mines, and utilities) should be owned by the government so that profits can be more evenly distributed among the people. Which statement(s) below are true?

The government takes income from wealthy people and redistributes it to poorer people through various government programs. Workers in a socialist society usually get longer vacations, work fewer hours per week and have more employee benefits (including healthcare).

Reasons why people are will to take the entrepreneurial risk: (More than once answer may be correct)

They want to be free to roam, create, work, and delegate. They seek achievement more than power. For an increasing number of Millenials, women, minorities, older people, and people with disabilities, starting their own businesses offers them more opportunities than working for others.

A business should be managed ethically for many reasons. How many of the answers below are good reasons?

To avoid government intervention in the form of new laws and regulations. Maintain a good reputation. To keep existing customers and attract new ones.

Which of these steps do many people believe can improve U.S. business ethics?

Top management must adopt and unconditionally support an explicit corporate code of conduct. The ethics code must be enforced with timely action if any rules are broken. An ethics office must be set up with which employees can communicate anonymously about illegal and unethical behavior.

The following questions should be on a checklist for evaluating a franchise: (More than one answer may be correct)

Will the franchisor assist you with management training and employee training programs? Does the franchise give you an exclusive territory for the length of the franchise? What competition already exists in your territory for the product or service you contemplate selling?

The ____________________ is the total value of a nation's exports compared to its imports measured over a particular period.

balance of trade

A _____________ is any activity that seeks to provide goods and services to others at a _____________ .

business, profit

Market prices are determined by____________________________.

by both supply and demand reach an equilibrium point and toward which markets will trend

Compared to large businesses in international trade, small businesses: (More than once answer may be correct)

can usually begin shipping much faster can offer a wider variety of suppliers can give customers personal service and undivided attention because each overseas account is a major source of business

Under__________________ most of the factors of production and distribution (land, factories, railroads, and stores) are owned by individuals and operated for profit.

capitalism

Businesses often use outsourcing in order to_______________________. (More than one answer may be correct).

do functions like production or accounting. stay competitive

When looking at the concept of social responsibility through the eyes of the stakeholders, business are responsible to: (More than one answer may be correct)

employees. investors the environment. customers.

__________________________ is the value of one nation's currency relative to the currencies of other countries.

exchange Rate

An arrangement whereby someone with a good idea (the franchisor) for a business sells the right to use the business name and sell a product (the franchise) to others (the franchisees) in a given territory. According to the International Franchise Association: (More than one answer may be correct)

gas stations with convenience stores are among the most popular businesses for franchising in the U.S. franchised businesses produce a direct and indirect impact on the U.S. economy of $674 billion franchised businesses in the U.S. create approximately 7.6 million jobs McDonald's is often considered the gold standard of franchising

Key economic indicators are________________________________. (More than one answer may be correct).

gross domestic product the unemployment rate inflation

Influences on the Global Environment of business are ____________________________. (More than one answer may be correct).

growth of global competition. the negotiation of trade agreements among nations. war and terrorism. climate change.

Franchising _________________________________. (More than one answer may be correct)

is a contractual agreement whereby someone with a good idea sells others the rights to use the name and to sell products/services in a specified region. successes have recognized regional tastes and choices in each country.

The risk an entrepreneur takes when starting a business ___________________. (More than one answer may be correct)

is losing time is losing money

E-commerce _________________________________. (More than one answer may be correct).

is the buying and selling of goods online

The factors of production include__________________________.(More than one answer may be correct)

land labor capital entrepreneurship

The Federal Reserve Bank (the Fed) raises and lowers interest rates to help control the rapid ups and downs of the economy. This management is called______________.

monetary policy

Stakeholders __________________________. (More than one answer may be correct)

often have needs which conflict. are all of the people who stand to gain or lose by the policies and activities of a business.

Sociocultural forces present hurdles complications in global markets and include ________________________. (More than one answer may be correct)

religion customs language

The advantages of a joint venture are_________________________. (More than one answer may be correct)

shared technology and risk. shared marketing and management expertise.

Under free-market capitalism, people have basic rights. They are______________________. (More than one answer may be correct.)

the right to own property the right to own a business and keep all that business's profits the right to freedom of competition the right to freedom of choice

A business plan is a detailed written statement that describes: (More than one answer may be correct)

the target market the nature of the business the advantages the business will have over competition the resources and qualifications of the owner(s)

Trade protectionism is ________________________________. (More than one answer may be correct).

used when countries are wary of foreign competition in general. the use of government regulations to limit the import of goods and services. implemented when advocates believe it allows domestic producers to survive and grow, producing more jobs.