Entrepreneurship Chapter 10 Test Review
The stock ______ rate is the rate at which the inventory of a product is sold and replaced with new inventory
stock turnover rate
An organizational ______ is a plan that shows how the various jobs in a company relate to one another
structure
MATH: a business reported the following, net sales $300,000, cost of goods sold $210,000, operation expenses$40,000, taxes $35,000. Find gross profit *net sales - goods sold*
$90,000
MATH: A business reported the following, net income after taxes $25,000, and then the net sales was $200,000. Find the net profit on sales ratio. *net income/net sales (percent)*
12.5%
MATH: Appliance store had total sales of $194,000 last month, of that amount $36,860 came from the sale of refrigerators. Divide
19%
MATH: Michelle Conner owns a retail store, in her industry she needs to keep 3 months worth of inventory in stock at all times what is the stock turnover rate?
4
MATH: Time has a beginning inventory worth $500,000 on his computer software store and expects to sell $900,000 over a period of 6 months, he wants to have a $400,000 of inventory at the end on the 6 months
800,000 purchases
Management style in which employees are involved indecision making and the manager provides less direction is called:
A. democratic
Beginning inventory plus _______ minus sales equals ending inventory
purchases
Outlines for appropriate employee behavior and actions are called:
rules
Which of the following is a strategy that a business can use to encourage a faster payment:
B. offer discounts
all of following are concerns that the managers must address except:
B. reducing
the person in a business who is responsible for planning, organizing, etc. is a
C. manager
This type of budget shows the projections of your cash going in and going out:
Cash budget
which of the following is not generally thought of as part of the organizing function?
D. strategic planning
As a business owner it is important for you to never make exceptions to rules, policies, and procedures once they are established because if you do customers and employees will become confused.
False
Increasing payroll can improve a businesses cash flow
False
Rules are more specific than procedures
False
The 3 most important elements of a companies financial strength are its revenues, profits, and human resources
False
The cost of insurance tends to decrease as the value of inventory ensured increases
False
The perpetual inventory method keeps track of the inventory levels on a weekly basis
False
Two businesses with the same level of sales and expenses will have the same cash flow
False
Under no circumstances should the authoritative management style be used in modern day
False
The dollar amount of all sales with any returns subtracted from it is called:
Net sales
______ includes all of the activities involved in obtaining, training employees of a business
Staffing
A ______ is a paper inventory record for a single item
Stock card
Even if your business uses the perpetual inventory method you will need to take a physical inventory once or twice annually
True
Inspecting products and services to ensure they meet quality standards is an example of the controlling function of management
True
Organizing involves identifying and arranging the work and resources needed to achieve business goals
True
Successful inventory management involves balancing the cost of inventory with the benefits of having inventory in stock
True
The min amount of merchandise a business wants to keep in inventory is often referred to as the reorder point
True
offering discounts on bills paid right away is a good way to improve your businesses cash receipts
True
The cost of holding inventory are known as ______ costs
Varying cost
The _______ point is the volume of sales that must be made to cover all of the expenses in a business
break-even point
The level of inventory a business keeps in stock depends on 3 factors:
carrying cost, the cost of not having an item, and stock turnover rate
The process of setting standards for the operation of a business and ensuring those operations are met is called:
controlling
rules, policies, procedures, and budgets are important components of strategic planning
false
______ sales is the dollar amount of all sales
gross sales
Combining authoritative and democratic management styles is called _______ management
mixed
A _________ contains all of the rules, policies, and procedures a business should follow in order to function
operations manual
this inventory method keeps track of inventory levels on a daily bases
perpetual
What are 2 ways you can track inventory? Give brief description of each.
perpetual (daily) and periodic (weekly, monthly, yearly)
what is planning? name and describe the 3 types of planning commonly used in business
planning is all of the things that go into making the business move forward. strategic, intermediate range planning, and short term planning