SBM FINAL

Which of the following is an example of a current liability? A. Accounts payable B. Prepaid expenses C. Inventory D. Mortgage payable

A. Accounts payable

_____ are current assets resulting from selling a product on credit. A. Accounts receivable B. Accounts payable C. Liabilities D. Owners' equity

A. Accounts receivable

How is cash balance calculated at the end of a month? A. By deducting the total cash payments from the sum of the balance at the beginning of the month and the total cash receipts B. By deducting the balance at the beginning of the month from the sum of the total cash payments and total cash receipts C. By deducting total cash receipts from the sum of the total cash payments and the balance at the beginning of the month D. By adding the balance at the beginning of the month, the total cash receipts, and the total cash payments

A. By deducting the total cash payments from the sum of the balance at the beginning of the month and the total cash receipts

Which of the following is an effective way of minimizing white-collar crimes? A. Conducting audits of sales transaction data B. Curtailing corporate crime prosecution budgets C. Restricting disclosure D. Terminating the pension system

A. Conducting audits of sales transaction data

_____ are expected to turn over—that is, to change from one form to another—within a year. A. Current assets B. Owner's equities C. Accounts payable D. Fixed assets

A. Current assets

Which of the following employers are covered under the Executive Order 11246, as amended? A. Employers with federal contracts and subcontracts B. Employers with 15 or more employees C. Employers with 20 or more employees D. All employers who fall under the small business owners category

A. Employers with federal contracts and subcontracts

_____ helps insure against employee fraud or theft. A. Fidelity bonding B. Coinsurance C. Surety bonding D. Casualty insurance

A. Fidelity bonding

_____ are purchased for employees occupying positions that involve the handling of company funds. A. Fidelity bonds B. Revenue bonds C. Surety bonds D. Treasury bonds

A. Fidelity bonds

_____ is a list of a job's duties, responsibilities, and working conditions, as well as relationships between it and other jobs in an organization. A. Job description B. Job forecast C. Job inventory D. Job slotting

A. Job description

The _____ shows how easily a company can pay its short-term obligations. A. current ratio B. equity ratio C. debt ratio D. sales ratio

A. current ratio

Most property insurance contracts have a coinsurance provision to: A. ensure reimbursement for the full amount of covered losses. B. protect a business from losses resulting from the use of its product. C. protect a small business from suits resulting from mistakes made by someone in a professional context. D. ensure the continuation of a business following the death of its owner.

A. ensure reimbursement for the full amount of covered losses

White-collar crimes are primarily committed by _____. A. managerial employees B. factory workers C. habitual shoplifters D. laborers

A. managerial employees

Which of the following statements is an effective technique for minimizing theft? A. Reduce the number of electronic noise activators. B. Install wide-angle and one-way mirrors to observe employee or customer behavior. C. Schedule higher inventory levels on weekends. D. Institute a flatter organizational structure and replace the status quo.

B. Install wide-angle and one-way mirrors to observe employee or customer behavior

Which of the following statements is true of just-in-time (JIT) delivery? A. It results in high inventory costs for a business. B. It helps keep warehouses from overflowing. C. It ensures that the government communicates with the vendors on-line. D. It urges government agencies to buy off-the-shelf goods.

B. It helps keep warehouses from overflowing.

Which of the following statements is true about radio-frequency identification (RFID)? A. It is derived from a language called symbologies. B. It is a method of specific identification transponders that contain information. C. It can only be read from a couple of meters distance. D. It is used for checking the quality of a company's inventory.

B. It is a method of specific identification transponders that contain information

Which of the following statements is true of a sales forecast? A. It is the value received by a firm in return for a good or service. B. It is an estimate of the amount a firm expects to sell during a given period in the future. C. It represents the difference between revenue earned and expenses incurred. D. It is an estimate of the owners' share of a business, after liabilities are subtracted from assets.

B. It is an estimate of the amount a firm expects to sell during a given period in the future

Which of the following statements defines speculative risk? A. It is the uncertainty that some unpredictable event will result in a loss. B. It is the uncertainty that a voluntarily undertaken risk will result in a loss. C. It is the refusal to undertake an activity when there is a possibility of incurring heavy losses. D. It is the possibility of a loss when the possible extent of the loss is unknown.

B. It is the uncertainty that a voluntarily undertaken risk will result in a loss

Which of the following statements is a characteristic of a cash flow budget? A. It allocates expenses for achieving the sales target. B. It tells whether arrangements need to be made for external sources of cash, such as borrowing or owner investments. C. It contains a forecast of the amounts and sources of sales income and the materials that will be needed to achieve the sales forecast. D. It plans and controls revenue to obtain desired profits.

B. It tells whether arrangements need to be made for external sources of cash, such as borrowing or owner investments

_____ is the management function of getting employees to do the things one wants them to do, by means of communicating with, motivating, and disciplining them. A. Recruiting B. Leading C. Selecting D. Rightsizing

B. Leading

_____ provides protection for an employee's estate when he or she dies while still in the income-producing years. A. Critical illness insurance B. Life insurance C. Health insurance D. Business insurance

B. Life insurance

_____ refers to the process of using various methods to reduce the possibility of a loss occurring. A. Loss avoidance B. Loss control C. Risk transfer D. Risk assumption

B. Loss control

_____ is the process of establishing and maintaining contacts with key persons in one's own or another organization as informal development or promotion systems. A. Reengineering B. Networking C. Rightsizing D. Leasing

B. Networking

_____ is a series of prescribed steps to be taken by a small business owner to ensure that a profit will be made. A. Budgeting B. Profit planning C. Forecasting D. Profit sharing

B. Profit planning

The land, cash, accounts receivable, inventory, equipment, building and other things of value that a company owns are considered its _____. A. profits B. assets C. revenues D. expenses

B. assets

A(n) _____ provision requires policyholders to buy insurance in an amount equal to a specified percentage of property value. A. indemnity insurance B. coinsurance C. self-insurance D. inventory insurance

B. coinsurance

_____ are obligations to pay for goods and services purchased and are usually due within 30 or 60 days, depending on the credit terms. A. Purchase returns B. Sales returns C. Accounts payable D. Owner's equities

C. Accounts payable

The _____, established in 2010, is a comprehensive health care reform act that requires every American to be covered under a health insurance plan, in essence improving access, affordability, and quality. A. Health Care Reconciliation Act B. United States National Health Care Act C. Affordable Care Act D. Economic Health Care Act

C. Affordable Care Act

Which of the following disabilities is covered under the Americans with Disabilities Act? A. Kleptomania B. Sexual behavior disorders C. Chemical dependency D. Gambling

C. Chemical dependency

Which of the following is covered by business insurance? A. Economic loss incurred by a business when sponsoring athletic teams B. Loss from the use of a business's product C. Economic loss to a business when a key employee dies D. Loss to a business due to bankruptcy

C. Economic loss to a business when a key employee dies

Which of the following is a legally required fringe benefit that must be provided by employers with 50 or more employees within a radius of 75 miles of their home office? A. Alcohol and drug rehabilitation B. Auto insurance C. Family and medical leave D. Severance pay

C. Family and medical leave

Which of the following is an example of a current asset? A. Motor vehicles B. Furniture C. Inventory D. Office equipment

C. Inventory

Which of the following statements is a characteristic of risk? A. It cannot be analyzed statistically. B. It is typically uninsurable. C. It exists when the possibility of a loss is present but the possible extent of the loss is unknown. D. It refers to the uncertainty as to whether a voluntarily undertaken activity will result in a gain or a loss.

C. It exists when the possibility of a loss is present but the possible extent of the loss is unknown

_____ is referred to as the proprietors' share of (or net worth in) a business, after the liabilities are subtracted from the assets. A. A breakeven expense B. An operating expense C. Owners' equity D. Private equity

C. Owners' equity

In businesses, the method of risk assumption usually takes the form of _____. A. inventory control B. self-auditing C. budgetary control D. self-insurance

D. self-insurance

Retailers sometimes refer to losses from both theft by outsiders and theft by employees as _____. A. downsizing B. restitution C. pillage D. shrinkage

D. shrinkage

The _____ is an integrated-coordinated system of activities to transform raw materials into finished products delivered to the end consumer. A. inventory code B. economic order C. quality circle D. supply chain

D. supply chain

Working capital indicates the ability a company has: A. to fund innovations. B. to multiply its profits within a short time. C. to lower its variable costs of production. D. to pay its current liabilities

D. to pay its current liabilities

Which of the following statements is true of benchmarking? A. It involves setting up standards and then measuring performance against them. B. It is a series of prescribed steps to be taken to ensure that a profit will be made. C. It sets cost targets for all phases of design, development, and production of a product for each accounting period. D. It describes the relative proportions of a firm's assets, liabilities, and owners' equity.

A. It involves setting up standards and then measuring performance against them.

_____ is the ability of one person to influence others to attain objectives. A. Leadership B. Reengineering C. Staffing D. Planning

A. Leadership

Which of the following measures can be used to enhance document security? A. Maintaining backups of records B. Allowing only senior executives to take home confidential business records C. Instituting flexible security policies D. Discouraging employees to work from remote destinations

A. Maintaining backups of records

_____ protects a business from losses due to suits resulting from mistakes made—or bad advice given—by someone in an official context. A. Professional liability insurance B. Workers' compensation policy C. Business interruption coverage D. Corporate surety bond

A. Professional liability insurance

_____ is the difference between revenue earned and expenses incurred. A. Profit B. Liability C. Gap ratio D. Depreciation

A. Profit

_____ is the trademark for a type of machine-readable optical label containing information about the item to which it is attached. A. QR code B. Radio-frequency identification code C. Quality circle D. Six Sigma certification

A. QR code

_____ is the amount of current assets less current liabilities. A. Return on investment B. Working capital C. Quick ratio D. Return on net assets

B. Working capital

The assets, liabilities, and equity accounts of a business, which are interrelated and interact with each other, represent: A. the benchmarks of the business. B. the surplus value of the business. C. the financial structure of the business. D. the profit realization rate of the business.

C. the financial structure of the business.

Cost of goods sold is: A. the targeted cost for all phases of design, development, and production of a product for each accounting period. B. the sum of net income and accounts receivable. C. the total cost in terms of raw materials, labor, and overhead of a business that can be allocated to production. D. the difference between revenue earned and expenses incurred.

C. the total cost in terms of raw materials, labor, and overhead of a business that can be allocated to production

The _____ retirement plan permits workers to place a certain amount of their wages in a tax-deferred retirement savings plan. A. flexcomp B. defined-contribution C. defined-benefit D. 401(k)

D. 401(k)

Which of the following training methods do small companies use to make their employees more versatile during shortage of skilled job applicants? A. Apprenticeship training B. Internship training C. Co-op program D. Cross-training

D. Cross-training

Which of the following constitutes taxable income? A. Total revenues plus deductible expenses B. Total revenues minus dividends paid C. Total revenues plus dividends paid D. Total revenues minus deductible expenses

D. Total revenues minus deductible expenses

Which of the following can the owners of small businesses do to cope with variations in demand? A. Hire permanent workers during peak periods B. Avoid subcontracting production C. Avoid carrying complementary products, such as winter and summer items D. Use inventory buildups to smooth out operations

D. Use inventory buildups to smooth out operations

Which of the following statements is true of a Corporate Owned Life Insurance (COLI) policy? A. It is the policy that a company purchases for its vital employees. B. It is the policy that employees purchase because it is mandated by the government. C. It provides protection against the risk of medical expenses incurred due to an accident. D. It provides protection against the risk involved in sponsoring athletic teams.

A. It is the policy that a company purchases for its vital employees

Which of the following statements defines risk avoidance? A. It refers to the practice of refusing to undertake an activity when the risk seems too costly. B. It refers to the practice of using various methods to reduce the possibility of a loss occurring. C. It refers to the process where a company shifts the consequences of a risk to someone outside the company. D. It refers to the strategy used by insurance companies to set aside funds to meet their possible losses

A. It refers to the practice of refusing to undertake an activity when the risk seems too costly

Which of the following scenarios constitutes shoplifting? A. Sally, a young woman, stole an expensive brooch from a departmental store and hid it in her handbag. B. Robert, a habitual offender, set fire to a shop owned by his rival's family. C. Gina, an accountant, embezzled funds from her company's account. D. Mark, a teenager, stole money from his mother's purse for buying cigarettes.

A. Sally, a young woman, stole an expensive brooch from a departmental store and hid it in her handbag.

_____ is a payment system through which one can accept charge sales from startup with an attachment to one's android, to customer POS. A. Square Point of Sale B. Online Banking ePayment C. PayPal Point of Sale D. Electronic Payment Service

A. Square Point of Sale

_____ are sales lost because an item is not available in a store when customers want it. _____ are sales lost because an item is not available in a store when customers want it. A. Stockouts B. Inflations C. Inventory losses D. Standing orders

A. Stockouts

What should a manager do to handle employee complaints? A. The manager must assure employees that their complaints will not jeopardize their employment. B. The manager must dismiss an employee's complaint if it seems to be without foundation. C. The manager must avoid making written records of incidents. D. The manager must provide employees with an extensive procedure to present their complaints.

A. The manager must assure employees that their complaints will not jeopardize their employment.

Which of the following is true of S corporation shareholders? A. They are taxed at individual rates. B. They are taxed at corporate rates. C. They do not enjoy legal protection that comes with corporate status. D. They do not have any restrictions on benefit plans.

A. They are taxed at individual rates

A _____ is a statement of a firm's assets, liabilities, and owners' equity at a given time. A. balance sheet B. purchase order C. profit goal D. sales forecast

A. balance sheet

_____ is the best-known form of risk transfer. A. Budgeting B. Auditing C. Insurance D. Warranty

C. Insurance

Which of the following statements is true about choosing a location for a small business? A. A small business owner must choose a location that is not permanent to include the option of moving to another location. B. It is a factor that does not adversely affect the employees of a small business. C. It is a factor that can make the difference between success and failure for a small business. D. A small business owner must choose a location that is inexpensive irrespective of the accessibility to consumers.

C. It is a factor that can make the difference between success and failure for a small business.

Which of the following statements is true of profit planning? A. Profit planning completely eliminates the risk of failure in a small business. B. Typically, determining the volume of sales revenue is not required for profit planning. C. Profit planning must precede other planning activities because it establishes targets. D. One's profit goal need not be a specific target value.

C. Profit planning must precede other planning activities because it establishes targets.

_____ is a system used by a producer to ensure that the finished goods or services meet the expectations of customers. A. Standing order B. Quality circle C. Quality control D. Just-in-time management

C. Quality control

_____ means shifting the consequences of a risk of a business to persons or organizations outside that business. A. Risk avoidance B. Risk forecasting C. Risk transfer D. Risk assumption

C. Risk transfer

_____ provide(s) protection against the failure of a contractor to fulfill contractual obligations. A. Fidelity bonds B. Key person insurance C. Surety bonds D. Business insurance

C. Surety bonds

Which of the following laws prohibits employment decisions based on race, color, religion, sex, or national origin? A. Civil Rights Act of 1991 B. Vocational Rehabilitation Act of 1973 C. Title VII of Civil Rights Act of 1964, as amended D. Executive Order 11246, as amended

C. Title VII of Civil Rights Act of 1964, as amended

Sale of proprietary information is an example of _____. A. a blue-collar crime B. risk transfer C. a white-collar crime D. risk avoidance

C. a white-collar crime

The _____ is the ratio of current assets, less inventory, to current liabilities. A. current ratio B. debt ratio C. acid test ratio D. cash ratio

C. acid test ratio

A well-managed small business is most likely to: A. place low importance on the balance sheet. B. emphasize rapid growth instead of stability. C. emphasize long-range planning. D. be less liquid than a badly managed company.

C. emphasize long-range planning

A(n) _____ periodically shows revenues, expenses, and profits from a firm's operations. A. balance sheet B. statement of retained earnings C. income statement D. inventory statement

C. income statement

Which of the following budgets is planned first when preparing the operating budget? A. The production budget B. The personnel budget C. The revenue budget D. The sales budget

D. The sales budget

_____ allows retailers to demand payment of shoplifters or their parents for the items taken. A. Social justice B. Civil restitution C. Redistributive taxation D. Organizational justice

B. Civil restitution

Which of the following statements is true of specialty goods? A. Customers do not just buy a specialty good because of the name on the item. B. Customers do not comparison shop for specialty goods. C. Customers spend much time looking for specialty goods. D. Customers enquire about each and every detail of a specialty good with the sales personnel.

B. Customers do not comparison shop for specialty goods.

Which of the following refers to a profit planning step of a small business? A. Listing strategies for rapid growth B. Determining the volume of sales revenue needed to reach profit goals C. Listing strategies and possible alternatives to reduce production costs D. Analyzing the diversification strategies of competitors

B. Determining the volume of sales revenue needed to reach profit goals

Which of the following statements is true of the 80-20 rule? A. Eighty percent of a company's supplies comes from one supplier, and the remaining 20 percent from other suppliers. B. Eighty percent of a company's income comes from 20 percent of its products. C. The cost of raw materials should be about 80 percent of the cost of the finished product, and the cost of manufacturing should be about 20 percent of the cost of the finished product. D. A company should carry out 80 percent of its production using 20 percent of the items in its inventory.

B. Eighty percent of a company's income comes from 20 percent of its products.

Which of the following statements is true of the breakeven point? A. It sets in advance cost targets in all aspects of product design and production. B. It is the volume of sales where there is neither profit nor loss. C. It is the amount of revenue expected from sales for a given period in the future. D. It is the specific amount of profit one expects to achieve.

B. It is the volume of sales where there is neither profit nor loss

Which of the following is an advantage of an effective product layout? A. It requires movement of material or people. B. It requires minimal space for aisles and storage. C. It provides flexibility to take care of change and variety. D. It uses the same general-purpose machines and equipment for several steps in an operation.

B. It requires minimal space for aisles and storage.

Which of the following statements is true of taxes on amounts withdrawn from a business? A. Salaries and bonuses received from the business corporation are not considered as expenses to the business. B. When one withdraws cash from a proprietorship or partnership, these sums are also taxable to that person as an individual. C. When owners receive a dividend from a corporation, it is taxed only once. D. The payment of pension plans is not deductible by the business.

B. When one withdraws cash from a proprietorship or partnership, these sums are also taxable to that person as an individual

A(n) _____ is a formal list of all the property of a business, or the property so listed. A. purchase order B. inventory C. stockout D. operating system

B. inventory

Employee losses from accidents and occupational diseases are paid for under state _____ laws. A. medical leave B. workers' compensation C. social security D. accident insurance

B. workers' compensation

_____ means employers may hire or fire employees with or without cause at any time they choose. A. Positive discipline B. Judicial due process C. Employer stock ownership D. Employment at will

D. Employment at will

Which of the following constitutes a white-collar crime? A. Kidnapping B. Shoplifting C. Physically assaulting one's neighbor D. Falsifying accounts

D. Falsifying accounts

What is the advantage of using multiple sources of supply? A. During shortages, better services can be received. B. Discounts can be obtained with low-volume buying. C. The cost of ordering is low. D. Greater variety of goods can be obtained.

D. Greater variety of goods can be obtained.

Which of the following statements is true of casualty insurance? A. It does not provide protection against burglary, theft, and robbery. B. It excludes health and accident insurance. C. It refers to setting aside funds to meet losses that are uncertain in size and frequency. D. It consists of automobile insurance, both collision and public liability

D. It consists of automobile insurance, both collision and public liability

Which of the following is an advantage of cross-training? A. It helps employees specialize in their area of work. B. It is the most effective way to increase employee attrition. C. It is most effective for young people who cannot finish a high school program. D. It is an effective way to keep workers more interested in their jobs.

D. It is an effective way to keep workers more interested in their jobs.

Which of the following statements is a characteristic of an affirmative action program? A. It allows punitive and compensatory damages in cases of intentional discrimination. B. It makes it illegal to discriminate against employees or applicants because of genetic information. C. It provides employee selection guidelines. D. It provides guidelines to help firms eliminate discrimination against women and minorities.

D. It provides guidelines to help firms eliminate discrimination against women and minorities.

_____ is a statement of the mental, physical, and other qualifications required of a person to do a particular job. A. Job forecast B. Job evaluation C. Job method D. Job specification

D. Job specification

_____ are the financial obligations of a business created by borrowing. A. Current assets B. Fixed assets C. Equities D. Liabilities

D. Liabilities

Which of the following is an example of a long-term liability? A. Accounts payable B. Accounts receivable C. Accrued payable D. Mortgage payable

D. Mortgage payable

_____ refers to the process of setting aside funds to meet losses that are uncertain in size and frequency. A. Risk avoidance B. Risk prevention C. Risk transfer D. Risk assumption

D. Risk assumption