BMA Test Questions Flashcards
Which of the following is a true statement about secondary dimensions of diversity:
A. They are mental aptitudes
B. They are physical traits.
C. They are determined by a person’s subculture.
D. They can change over time.
They can change over time. Secondary dimensions of diversity are differences that may change at
various points throughout one’s lifetime and include characteristics such as language, religion, income,
geographic location, family status, work experience, communication style, and education level. Physical
traits and mental aptitudes are primary dimensions of diversity, which are inborn differences that cannot
be changed. These differences include gender, age, race/ethnicity, etc. Subculture is a secondary group
within a dominant culture. For example, suppose that a U.S. citizen has parents of Chinese decent; the
Western culture is most likely the person’s dominant culture, while his/her Chinese heritage represents a
subculture. A person’s subculture may influence some of a person’s secondary dimensions of diversity,
but it does not determine these dimensions.
Which of the following are examples of capital goods:
A. Trucks, drum scanners, and minerals
B. Bull dozers, photocopiers, and roads
C. Tractors, laborers, and cranes
D. Refineries, iron ore, and computers
B, Bull dozers, photocopiers, and roads.
Capital goods are manufactured or constructed items that are used
to produce goods and services.
Bull dozers, photocopiers, roads, trucks, drum scanners, tractors, cranes, refineries, and computers are types of capital goods.
Laborers are human resources.
Minerals and iron ore are natural resources.
Today, customer relationship management is considered an important tool in
A. commercial investing.
B. business decision-making.
C. hiring new employees.
D. establishing connections with vendors.
B, Business decision-making.
In the past, customer relationship management (CRM) was used mainly as a way to track and organize information about customers so a business could identify its most valuable
clients and tailor its marketing strategies to generate more revenue.
Today, its uses have expanded, and it
is also considered an important tool in business decision-making.
CRM is not typically considered a tool for
use in commercial investing, hiring new employees, or establishing connections with vendors. These are
not customer-focused activities. NOT CONNECTIONS WITH VENDORS
A company is facing negative returns. Which stage of production is the company in? What are the other stages of production?
A. Second
B. Third
C. Fourth
D. First
B, Third.
During the third stage of production, the company sees negative returns. Adding more variable inputs becomes counterproductive; an additional source of labor will lessen overall production.
The first stage of production produces increasing returns. In this period, each additional variable input will produce more products.
The second stage of production produces diminishing
returns. Each additional variable input will still produce additional units but at a decreasing rate.
There is no fourth stage of production.
What is a work breakdown structure?
WHAT: Work breakdown structure (WBS) is the process of dividing project tasks into meaningful components to complete the project.
Which of the following is the sequential order of a project’s work breakdown structure?
A. Subtask, task, and work assignment
B. Work assignment, task, and subtask
C. Task, subtask, and work assignment
D. Work assignment, subtask, and task
B, Work assignment, task, and subtask.
When dividing the work, the project manager first divides the entire project into work assignments. Then, each work assignment is broken down by the tasks that the assignment requires for completion. In some situations, each task has subtasks that need to be completed before moving on to
the next task.
Why do people use work breakdown structure dictionaries?
WHY? Dividing the entire project into smaller
components helps the project manager effectively schedule, assign, and monitor complex project
activities.
Phoebe is the manager of a small company. One of her employees has been showing up late and missing work frequently. What channel of communication should Phoebe use to discuss this issue with him? What should she NOT use?
A. A company-wide memo
B. An email message
C. Face-to-face conversation
D. A video conference
C, Face-to-face conversation.
When discussing sensitive issues, face-to-face communication is the best strategy because it is the richest form of communication and has the least risk of misinterpretation.
If Phoebe were to write an email, her employee may not understand her tone or meaning.
A company-wide memo is inappropriate because this is an issue that should be only between Phoebe and the employee in question.
Finally, video conferences are generally used when people are not in the same location and do
not offer any benefits that a face-to-face conversation does not provide.
One reason that businesses use a matrix organizational design is to
A. share human resources.
B. improve employee productivity.
C. segment areas of expertise.
D. standardize business task
A, Share human resources
The matrix organizational structure involves integrated departmental functions with product or project orientation.
For example, a technology specialist, a marketing researcher, a financial advisor, and a manufacturing line supervisor are members of different departments but often work together to develop a product or improve a process.
The advantage to businesses of using this organizational structure is that the business is applying its resources efficiently because a representative from each of the major departments provides a unique set of skills and knowledge to achieve the
business’s goals. Often, workers have two or more supervisors in the matrix organizational design. The matrix organizational design may improve the business’s overall efficiency, but it does not always improve an individual’s productivity.
Departmental organizational design segments employees by their areas of expertise (e.g., accounting, sales, and production).
Policies and procedures are developed to standardize various business activities and tasks in all types of organizational designs
One reason that businesses use a matrix organizational design is to
A. share human resources.
B. improve employee productivity.
C. segment areas of expertise.
D. standardize business task
A, Share human resources
The matrix organizational structure involves integrated departmental functions with product or project orientation.
For example, a technology specialist, a marketing researcher, a financial advisor, and a manufacturing line supervisor are members of different departments but often work together to develop a product or improve a process.
The advantage to businesses of using this organizational structure is that the business is applying its resources efficiently because a representative from each of the major departments provides a unique set of skills and knowledge to achieve the
business’s goals. Often, workers have two or more supervisors in the matrix organizational design. The matrix organizational design may improve the business’s overall efficiency, but it does not always improve an individual’s productivity.
Departmental organizational design segments employees by their areas of expertise (e.g., accounting, sales, and production).
Policies and procedures are developed to standardize various business activities and tasks in all types of organizational designs
Which of the following factors has the greatest effect on a consumer’s buying behavior:
A. Cultural influences
B. Situational influences
C. Individual influences
D. Social influences
A, Cultural influences.
Cultural influences have the strongest effect on a consumer’s buying behavior, even stronger than social influences, individual influences, and situational influences
A primary activity in managerial control is
A. evaluating.
B. delegating.
C. coaching.
D. forecasting.
A, Evaluating.
Control is the management function that monitors the work effort. To determine if employees or processes are working effectively and efficiently, managers compare the business’s standards or goals with the actual output or desired result to evaluate performance.
Delegating is an organizing task that involves assigning authority or responsibility to another person.
Coaching is a directing activity and is an on-the-job instructional method in which a manager or supervisor is assigned a “coach” to set goals, give assistance in reaching goals, and give ongoing performance feedback.
Forecasting is a planning activity that involves making estimates or predictions about something—sales, income, expenses, etc.
Explain the concept of Gross Domestic Product
GDP is the market value of all finished goods/services produces within a country’s border in a specific time period. Functions as a scorecard of a country’s economic health. Estimates size of economy.
Determine economic utilities created by business activities. Explain each type.
FORM UTILITY: How much value a consumer receives from a product/service in a way THEY ACTUALLY NEED
TIME UTILITY: Company provides goods/services when consumers need them, timely response to customer needs
PLACE: Making goods/services available in easily accessible locations
POSSESSION: Consumers should be able to use a good/service as soon as they’re able to purchase it. Ease of ownership.
Which of the following is an example of a government regulation that affects a business’s working conditions? What are the others for?
A. Zoning laws
B. Food inspection
C. Minimum wage
D. Price supports
C, Minimum wage.
Government regulation of business includes regulating working conditions provided by businesses. One such regulation involves minimum-wage laws that specify the lowest hourly wage that businesses can pay workers.
Zoning laws are intended to protect business property.
The inspection of food is intended to protect consumers.
Government price supports maintain the price of a good or service to enable the producers to earn a profit.
Which of the following is a characteristic common to all integrated software packages? Give an example of an integrated software:
A. Performs interrelated functions
B. Calculates break-even points
C. Requires minimal training
D. Includes forecasting tools
A, Performs interrelated functions.
Integrated software applications consist of two or more related computer programs that work together to record information or perform specific business tasks or functions. For example, Microsoft Office combines a variety of programs that perform word-processing, spreadsheet, slideshow presentation, desktop publishing, and database functions. Some integrated software packages are customized to perform interrelated activities for a specific industry, such as travel and hospitality. Not all integrated software packages calculate break-even points or include forecasting tools. Because integrated software options vary, the level of training that users need also varies.
Which component of project-management software helps project managers determine the length of time that a series of interdependent tasks will take to complete under various circumstances? Explain the others.
A. Demonstration
B. Critical path
C. Presentation
D. Linear
B, Critical path.
Many project-management software packages incorporate the critical path methodology into their programs. The critical path methodology uses algorithms to determine timelines, develops schedules for complex project activities, and proposes scheduling contingency plans, which reduce
project delays.
Presentation software creates computer-generated visual aids that support oral
presentations.
Demonstration and linear are not components of project management software.
Which component of project-management software helps project managers determine the length of time that a series of interdependent tasks will take to complete under various circumstances? Explain the others.
A. Demonstration
B. Critical path
C. Presentation
D. Linear
B, Critical path.
Many project-management software packages incorporate the critical path methodology into their programs. The critical path methodology uses algorithms to determine timelines, develops schedules for complex project activities, and proposes scheduling contingency plans, which reduce
project delays.
Presentation software creates computer-generated visual aids that support oral
presentations.
Demonstration and linear are not components of project management software.
Maxton Mart is being pressured by its vendors to pay for inventory it purchased more than 30 days ago. However, Maxton Mart has not received its accounts receivable from customers. What business record has Maxton Mart failed to monitor successfully?
A. Balance sheet
B. Income statement
C. Cash flow
D. Open to buy
C, Cash flow.
By monitoring its cash flow statement, Maxton Mart knows when it is running short on cash and can take needed steps to alleviate upcoming cash shortages. If necessary, Maxton Mart should be prepared to take out a short-term loan to cover inventory costs.
The income statement provides a picture of a business’s profit or loss conditions.
The balance sheet shows a snapshot of the business’s assets, liabilities, and owner’s equity.
Open-to-buy documents indicate how much money the business has to invest in additional inventory.
- Which of the following is the sequential order of a project’s work breakdown structure? What is the purpose of a work breakdown structure?
A. Subtask, task, and work assignment
B. Work assignment, task, and subtask
C. Task, subtask, and work assignment
D. Work assignment, subtask, and task
B, Work assignment, task, and subtask.
Work breakdown structure (WBS) is the process of dividing project tasks into meaningful components to complete the project. Dividing the entire project into smaller components helps the project manager effectively schedule, assign, and monitor complex project activities.
When dividing the work, the project manager first divides the entire project into work assignments. Then, each work assignment is broken down by the tasks that the assignment requires for completion. In some situations, each task has subtasks that need to be completed before moving on to the next task.
Which of the following is an item that is subject to an excise tax? What is an excise tax?
A. Prescription medication
B. Carton of eggs
C. Ski boat
D. Business computer
C, Ski boat.
An excise tax is a special government tax on certain nonessential and luxury items (e.g., ski boat) that is included in the price that consumers pay. Eggs, medication, and business computers are not luxury items that are subject to an excise tax.
What are the three main purposes of oral presentations?
A. To inform, inspire, and entertain
B. To inform, persuade, and entertain
C. To inform, persuade, and instruct
D. To interview, debate, and entertain
B, To inform, persuade, and entertain.
The three main purposes of oral presentations are to inform, persuade, and entertain.
Interviews and debates are types of presentations, not purposes.
An entertaining or persuasive presentation might inspire, but inspiring people is not one of the main purposes of oral presentations.
An instructive presentation is an informational presentation.
Why does a business keep stock on hand for resale?
A. So it can buy raw materials
B. So it can produce manufactured goods
C. To use it in business operations
D. To sell it to end users
D, To sell it to end users.
Businesses keep different types of inventory on hand for different reasons. If the business sells the goods that it buys to end users, it is resale stock.
For example, an appliance-store chain (retailer) buys stoves, refrigerators, and dishwashers from manufacturers, and sells the items to consumers. Items such as parts (e.g., nails) and raw materials (e.g., wood) are used to produce
manufactured goods. Businesses also maintain an inventory of supplies (office, cleaning) for employees to use to complete their work.
What can a business do if it is exposed to risks that commercial insurance companies do not cover?
A. Establish a risk-management committee
B. Acquire a professional association
C. Create a trade union
D. Form a captive insurance company
D, Form a captive insurance company.
Organizations (i.e., corporations, industry/professional/trade associations) often form their own insurance companies—called captive insurance companies-when they carry risks that commercial insurance companies will not cover. The organizations that form the captive insurance companies control insurance activities including the underwriting processes, premium rates, and claims-processing policies.
Acquiring a professional association, establishing a risk management committee, and creating a trade union are not ways in which a business TRANSFERS risk.
Which of the following is an example of employee pilferage:
A. Hacking into a competitor’s computer network to obtain trade secrets
B. Changing the amount specified on a check you prepare for the company with authorization
C. Installing personally owned software on your workplace computer
D. Padding an expense account
D, Padding an expense account.
Employee pilferage involves the taking of small amounts or small articles without the consent of the company. That is what occurs when an employee pads his/her expense account.
Having authorization to change the amount specified on a check is not pilferage.
Installing personally owned software on your computer may violate company policies; however, it does not represent employee pilferage.
Hacking into a competitor’s computer network to obtain trade secrets is a computer crime, rather than pilferage.
What source of credit offers its members small loans, installment credit, and low interest rates? Explain the other organizations.
A. Commercial banks
B. Sales finance companies
C. Credit unions
D. Savings and loan associations
C, Credit unions.
A credit union is a financial cooperative set up to provide savings and credit services to its members. These services include small loans, installment credit, and low interest rates.
Commercial banks offer many financial services including checking and savings accounts, secured and unsecured loans, installment credit, and bank credit cards. They offer small and large loans, and their interest rates vary.
A sales finance company is a business that purchases borrowers’ contracts from sellers. Their interest rates are higher than the rates offered by credit unions.
A savings and loan association is a financial institution that offers savings accounts and makes loans to borrowers. Most of their loans are for large-ticket items such as real estate. FOCUSED ON MORTGAGES
Alexis and her team are working on a new project proposal to show their boss. She knows that doing the project their way will be costly and time-consuming, but she also knows that the results will be great. She and her team decide to first present the benefits of the project and then draw the conclusion that investing company time and money would be a good idea. Alexis hopes to convince her boss using what?
A. inductive organization.
B. deductive organization.
C. chronological order.
D. geographical order.
A, Inductive organization.
Inductive organization starts with examples, facts, or reasons and saves conclusions for last. When you need to persuade someone of something, inductive organization can be especially helpful. This is the case for Alexis and her team. She knows that her boss won’t necessarily want to spend a lot of time and money on the project, so she starts by listing the benefits. If she started out with the costs, her boss would likely be scared off before she even had the chance to convince him.
FACTS –> CONCLUSION
Deductive organization is the opposite of inductive organization. It starts with the conclusion, and then moves to examples, facts, and reasons. This method of organization is best when delivering routine information or business writing.
CONCLUSION –> FACTS
Chronological order presents information in time sequence. This is useful when describing history or sales figures.
Geographical order involves organizing your information around location. This method of organization isn’t used that often, since there aren’t many topics that are easily organized by location.
Determining a project’s feasibility, developing a statement of work (SoW), creating SMART objectives, and developing a project charter occur during the __________ stage of project management. Describe all the stages of project management.
A. initiation
B. planning
C. execution
D. closure
A, Initiation.
The project life cycle consists of four stages: initiation, planning, execution, and closure. The initiation stage involves determining a project’s feasibility, developing a statement of work (SoW), creating SMART objectives, and developing a project charter.
The planning stage involves in-depth project planning to ensure that the project’s scope is clearly defined. This entails developing a Work Breakdown Structure, identifying needed human and nonhuman resources, developing a project schedule, and preparing a project plan.
The execution, or implementation, stage requires the project manager to monitor and control project activities by maintaining ongoing communication with all project participants, updating and modifying the project plan, monitoring risks, controlling project quality, gaining change approvals, and maintaining project records.
The closure stage entails writing final project reports and preparing a lessons learned document.
The Colbert Company ships 19 cases of model number 328 bolts to SOA Manufacturing Company every other week. This is an example of a(n) __________ purchase order. Describe all the other order types.`
A. seasonal
B. advance
C. standing
D. open
C, Standing.
Standing orders involve sending products at set intervals. This type of purchase order is ideal for businesses that need the same amount of an item on a regular basis. In the example, SOA Manufacturing may need the bolts to produce its products. Because SOA knows that it generates a set amount of outputs in a certain amount of time, it advises its vendor (Colbert Company) to ship a certain
amount of bolts at intervals—every other week. WEEKLY/MONTHLY ETC STAPLES
An advance order is a regular order that is placed now with delivery requested at a future time (e.g., weeks, months). IN ADVANCE
A seasonal order is an order that is placed for seasonal merchandise, such as snow shovels or beach umbrellas. SEASONAL
An open order is an order for staple goods that is placed with one of several available vendors who can meet the business’s immediate requirements (e.g., time, price, quantity). An open order is a type of purchase order in which buyers place the order with the supplier that can best meet the needs or criteria (e.g., price) for a particular item. BEST MATCH FOR STAPLE GOODS
The laddering technique is used to capture and change categories of
A. horizontal communication.
B. hierarchical information.
C. meaningless data.
D. redundant knowledge.
B, Hierarchical information.
A hierarchy arrangement sets information in a certain order, rank, or level. The laddering technique is a tool that helps an organization to capture information and categorize it into a meaningful and useful order. The business can obtain information by collecting tacit knowledge from internal and external sources. The laddering technique, which can be implemented manually or with a computer program, can help a business organize the steps necessary to complete a certain activity or process. By doing so, the business might discover ways in which it can change the ordering system to increase efficiency, such as eliminating an unnecessary task or a task that is being performed twice. KEEPS ASKING WHY WHY WHY FOR WHY COMS MAKES PURCHASE (USUALLY) EXCEPT IN THIS TEST? IDEK LMAO)
Horizontal communication occurs among individuals at the same level, such as coworkers
If the cash from operating activities is consistently greater than the company’s net income, the company’s net earnings are of a(n) __________ quality.
A. high
B. low
C. moderate
D. excessive
A, High.
The cash from operating activities is compared to the company’s net income. If the cash from operating activities is consistently greater than the net income, the company’s net income or earnings are said to be of a high quality
Which of the following are elements that appear in the heading of a memorandum:
A. To, title, from, and date
B. To, from, date, and subject
C. Date, title, to, and company
D. Company, to, subject, and date
B, To, from, date, and subject.
When writing a memorandum, businesspeople place a heading at the top of
the page to indicate who the letter is to, who the letter is from, what the message is about, and the date the message was written.
The company’s name and the employee’s title do not always appear in the heading.
The capability of combining graphics, text, animation, and sound is a unique characteristic of __________ software programs. What are the other types?
A. communication
B. presentation
C. numeric
D. electronic
B, Presentation.
Presentation software programs give the user the capability of presenting information by combining graphics, text, animation, photographs, and sound. Presentation software can be used to create slide programs, overhead transparencies, multimedia presentations, etc. This software enables users to develop visual presentations that are lively, colorful, and appealing to viewers.
Communication software programs establish connections between computers.
Numeric and electronic are not types of software programs, although some programs analyze numerical data.
Jamal wants to purchase software for his small business that allows him to create text documents,, prepare presentations, maintain a customer database, and develop numerical charts. What type of software would best meet Jamal’s needs? Explain the others
A. Word processing
B. Integrated
C. Spreadsheet
D. Trajectory
B, Integrated.
Integrated software applications consist of two or more related computer programs that work together to record information or perform specific business tasks or functions. An example of integrated software is Microsoft Office—it consists of several related programs, such as word processing (Word), spreadsheet (Excel), presentation (PowerPoint), and database (Access).
Trajectory software is used to measure velocity, wind drift, momentum, etc.
Company executives decided to add a new product line to the company’s mix. The company would benefit from
A. adjusting its budget.
B. hiring new employees.
C. change management.
D. ethics training.
C, Change management.
Change management is a structured process used to ensure that changes are successfully made and have lasting impact. Change management would be beneficial to a company that is adding a new product line.
There is no indication that the company needs to hire new employees, adjust its budget, or undergo ethics training
- Social media policies are especially important in today’s modern world because
A. the Internet can only harm a company’s reputation.
B. employees can’t be trusted with technology.
C. negative comments can spread quickly online.
D. companies rely on social media to communicate.
C, Negative comments can spread quickly online.
Social media policies are especially important in today’s ultra-connected world. One negative comment about a company on social media can spread like
wildfire—harming the reputation of both the person who posted it and the company.
It is not true that employees can’t be trusted with technology—many companies rely on employees’ use of technology to complete their work effectively and efficiently.
While it is true that the Internet can potentially harm a company’s reputation, it can also be a useful tool for improving a company’s reputation and for spreading awareness of the company’s products or services.
Companies do not generally rely solely on social media to communicate.
Your boss tells employees not to use their phones in front of customers, but s/he is constantly texting and checking social media. Your boss is ineffective at modeling ethical behavior because s/he isn’t
A. providing feedback.
B. being consistent.
C. making ethics relevant to employees.
D. communicating clearly and openly.
B, Being consistent.
Inconsistency is one of the biggest reasons that people struggle to effectively model ethical behavior. It is important to make sure that your actions and words are consistent and align with your moral principles. If your boss has a rule, yet s/he doesn’t follow it, you won’t be likely to look to him/her as an ethical role model.
There is no indication that your boss is not providing feedback, making
ethics relevant to employees, or communicating clearly and openly.
An organization-wide system that businesses use to ensure that products meet quality standards is known as quality _____. What are the other aspects of quality management?
A. management.
B. control.
C. assurance.
D. improvement.
C, Assurance.
Quality management is the ongoing process of planning, implementing, and integrating quality into every aspect of an organization.
There are three main aspects of quality management—quality control, quality assurance, and quality improvement.
Quality control is a process that measures products against predetermined standards after the products have already been created. CONTROL THE WRONG PRODCUTS CREATED
Quality improvement involves an organization’s willingness to change and adapt for the purpose of maintaining quality.
Finally, quality assurance is an organization-wide system that businesses use to ensure that products meet quality standards. ASSURANCE IN EVERY ASPECT OF THE COMPANY
If a business wants to send a mailing to customers in specific geographic regions, it should set the database query to sort its customer information by
A. name.
B. sales volume.
C. state.
D. street number
C, State.
A database software program allows a business to sort customer information by various criteria— customer name, sales volume, customer type, zip code, etc. Queries are database fields that the business uses to sort the data. The type of data that the business wants to retrieve or analyze determines the database query (sorting mechanism) that the business uses.
To obtain a list of customers in specific geographic regions, the business should sort by state. Depending on the business’s needs, it may also use zip code, city name, or country to sort by geographic location.
Sales volume, customer name, and street numbers are not queries that will sort customer information by geographic location. BC what will 22344 do without rest???
- Which of the following steps in the civil litigation process typically comes first? What is the civil litigation process?
A. Pleadings
B. Discovery
C. Trial
D. Appeal
A, Pleadings.
Civil lawsuits occur because of disputes among people, businesses, or other entities. The first step of the litigation process is called pleadings. During this phase, each party in a lawsuit submits an official document detailing its side of the dispute.
After pleadings, the discovery process takes place. During the discovery process, each side gathers relevant information about the case to help bolster its argument.
After discovery, a trial occurs in which each party presents evidence in support of its claims to a judge and/or jury.
An appeal may be filed after a trial is completed. An appeal is a request for a higher court to review the case in hopes of achieving an alternative outcome. APPEAL TO A HIGHER COURT
What type of money is recorded in the cash receipts column of a cash flow statement?
A. Credit
B. Cost of goods
C. Collected
D. Expenses
C, Collected.
Only collected money is recorded under cash receipts (SOUNDS LIKE RECIEVES). For example, if a business expects to make $5,000 from cash sales and $2,000 from credit sales, it records only the $5,000 in the cash receipts column. The $2,000 in credit sales is referred to as accounts receivable and should not be recorded until it is actually collected, otherwise the business will appear to have more money on hand than it actually does.
Cost of goods is the amount of money a business pays for the products it will sell and often is a sizeable expense.
Expenses are listed in the cash payments column rather than in the
cash receipts column
- The main reason why people lose their jobs is that they
A. take too many days off work.
B. complain about the unsatisfactory pay.
C. do not get along with their coworkers.
D. are not able to perform all job tasks.
C, Do not get along with their coworkers.
Although employees lose their jobs for a variety of reasons, studies indicate that the primary reason is failure to get along with coworkers. A worker who does not get along with others usually is not very happy or productive and may cause problems in the workplace.
Complaining about unsatisfactory pay is not a reason to be fired. Taking too many days off work and not being able to do all job tasks are problems that can be corrected.
- Which of the following would be the most likely cause of customer complaints:
A. Product quality
B. Institutional ads
C. Extended hours
D. Price reductions
A, Product quality.
Poor-quality products that do not perform properly or break are a common CAUSE for complaint.
Other causes include the business itself, its policies, and its personnel. Price reductions are usually pleasing to customers.
Extended hours give customers more time to shop.
Institutional ads promote the image of the business and are not likely to be the subject of complaints.
- What is one of the main reasons that employees behave unethically?
A. To become managers
B. To create positive customer relations
C. To do what everyone else does
D. To obtain publicity
C, To do what everyone else does.
Employees who behave unethically often justify their actions by believing that everyone else does it. Some employees may see their coworkers use company equipment for personal projects, and then do the same themselves. Most employees realize that such behavior is unethical and use “everyone else does it” as an excuse.
Unethical behavior would not result in long-term positive customer relations.
Most people would not want their unethical behavior to be publicized.
Although some people may behave unethically to become managers, it is not a main reason for unethical behavior
- Businesses often monitor internal inventory records to obtain the information needed to
A. organize new displays.
B. plan special sales.
C. evaluate vendors.
D. create safety rules.
B, Plan special sales.
Businesses monitor internal inventory records to keep track of the type and quantity of products that are in stock. By monitoring this information, businesses can identify an oversupply of certain products, or products that are slow sellers. The inventory records help businesses decide when it would be appropriate to plan a special sale to get rid of excess inventory or slow-selling items.
Keeping these items in stock ties up money that the business could use to buy new products that customers want to buy.
Businesses do not monitor internal inventory records to obtain the information needed to organize new displays, evaluate vendors, or create safety rules.
- Macon Industries writes a purchase order for bolts, washers, and nails and sends the order to the Stanton Company to process. In this situation, the purchase order is a(n)
A. letter of intent.
B. open order.
C. accounts-receivable document.
D. sales contract.
D, Sales contract.
A purchase order is a form that a business fills out to order goods. Because the order indicates that the business is willing to do something (pay for the items it orders) in exchange for something else (take possession of the goods), the purchase order serves as a sales contract.
An open order is a type of purchase order in which buyers place the order with the supplier that can best meet the needs or criteria (e.g., price) for a particular item.
Because accounts receivable is an accounting activity that involves collecting payment for the goods and services that the business offers, a purchase order is
not an accounts-receivable document.
A letter of intent is a letter that declares the writer’s intention to do something.
A purchase order is a form rather than a letter.
To use oral communication effectively, you need to
A. pronounce your words correctly.
B. impress your listeners.
C. know your listeners.
D. distract your listeners’ attention.
A, Pronounce your words correctly.
The correct use and pronunciation of words is essential to effective oral
communication. Mispronunciation creates an unfavorable impression; it can embarrass the speaker; and it may also fail to communicate the intended message.
Trying to impress listeners may create a barrier to good communication.
It is not necessary to know your listeners to communicate effectively.
You need to attract and hold your listeners’ attention, not distract them.
TRY THINKING OPPOSITES`
The Prater Corporation wants to expand its market share by 6% next year. What type of goal has the company set?
A. Financial
B. Ideological
C. Organizational
D. Input
C, Organizational. Organizational goals affect the overall organization.
Organizational goals may involve things such as increasing efficiency levels, growing the business, or expanding market share.
Ideological goals involve the vision and general purpose of the company’s existence.
Financial goals address the company’s income and expenses.
Inputs are resources that are used to produce outputs.
The owner of the Vidal Boutique verbally offers to sell Biele’s original hat designs in the shop and to give her a 50% commission on the sale of the hats. Briele verbally agrees to deliver two new hats for the shop to sell each week. Briele and the boutique owner’s agreement is an example of a(n) ________.
A) implied
B) express
C) voidable
D) executed
B, Express
Express Contract - Each parties verbally EXPRESSES what they will do
Implied Contract - There’s an understanding that developes after conducting business with another paty
Voidable Contract - One party committed fraud/misrepresentation
Executed Contract - After contract is EXECUTED
Outerway Airlines purchases many smaller airlines to grow its business. Which method is Outerway Airlines using?
A) Expansion
B) Merger
C) Consolidation
D) Hybrid Structure
C, Consolidation
Ourway Airlines is acquiring many smaller companies, which is known as consolidation.
MERGER - Two businesses combine to form one company - they MERGE into one
EXPANSION - Company raises money (selling stocks, bank loan, profits, etc.) to expand business
HYBRID STRUCTURE - A type of ownership that allows owners to enjoy the advantages of corporations and sole proprietorships/partnerships
During a job interview, Christian did not maintain constant eye contact with his interviewer. Instead, he looked down at his papers a few times. The interviewer most likely assumed that Christian
A) Was not really interested in the position
B) Was lying about his job qualifications
C) Lacked confidence in his own abilities
D) Was nervous or trying to recall information
D, Was nervous or trying to recall information
Interviewers interview many people - they can understand that when you’re looking away and not maintaining eye contact, you may be nervous or trying to recall information. However, if you’re doing it for longer periods of time they may assume A, B and C.
What is a sole proprietorship?
- Complete business control
- Not a separate business entity - your business assets and liabilities ARE NOT HELP SEPARATE FROM YOUR PERSONAL ASSETS/LIABILITIES
- Can’t sell stock
- Banks are hesitant to lend loans
- Can get trade name
- Low-risk businesses
What are limited (liability) partnerships?
- One general partner with unlimited liability (LP)
- All other partners have limited liability and limited control
- (Everyone has limited liability - no one is responsible for the actions of the other partners) (LLP)
What are limited liability companies (LLCs)?
- Benefits of both companies and partnership business structures
- Protects you from personal liability - your personal assets like vehicles - won’t be at risk
- Members of an LLC are considered self employed
- Medium/high risk businesses
What is a corporation?
A corporation (or C-corporation) is a business that’s completely legally separate from its owner—in fact, it has a lot of the same rights that a person has. It can borrow money, start a lawsuit, own property, and enter a contract—as itself.
Less liability risk. The huge advantage of starting a corporation is the legal separation. Unlike a partnership or sole proprietorship, a corporation is legally responsible for itself. So if your corporation ever faces a major lawsuit, you won’t necessarily be personally liable for the financial settlement.
It’s more difficult and expensive to start a corporation, and you’ll need to keep up with a bunch of paperwork and extra operating obligations.
Double taxation on assets and dividends
What is an S-Corporation?
It’s a special kind of corporation that can help you avoid the double taxation problem. (FYI, the name is often shortened to “S-corp.”)
Liability protection. Like a C-corporation, an S-Corporation is responsible for its own liability—so there’s much less chance of you being personally liable for your business’s obligations.
Expensive to start and maintain. All that paperwork requires lots of time and resources—you’ll probably need to pay someone to help you get everything started (and then stay on top of all the ongoing paperwork).
Limited eligibility. Not every corporation can be an S-corporation—you’ll have to meet a set of strict requirements to qualify.
What is a general partnership?
A general partnership is pretty close to a sole proprietorship—except for the fact that you will share ownership of the business with at least one other person.
ADVANTAGES
Easy to get going. Your partnership agreement could even start with a handshake because no formal paperwork is required.
DISADVANTAGES
Lack of control. Because you’re forming a company with other people, you won’t have as much say over what happens as you would if you were on your own—and a major disagreement with your partners could sink the whole business.
Your liability risk. Since a general partnership works a lot like a sole proprietorship, you and your partners will be personally responsible for the company’s debts and liabilities. That means you could end up paying for something unwise or negligent your partner did (so make sure you have liability coverage!).
What are the steps in the litigation process?
- Pleadings
- Discovery
3 Trial - Appeal
What happens in the pleadings of the CLP?
- Complaint - plaintiff files a complaint with the court and sends it to the defendant describing what the defendant did or failed to do that caused the plaintiff harm
- The defendant has to file an answer with the court in a specific amount of time with the defendant’s side in the dispute with MAYBE counterclaims
What happens during discovery in the CLP?
- Longest part of the case
- Parties ask each other and third parties for case information (testimonies/depositions)
- They can also ask expert witnesses for technical information to testify connections in the case
- Motions to ask the court to rule/act - ex: motion for summary judgement to dismiss part of a party’s issues, motion to exclude some evidence from trial, motion to ask court to order other parties to produce docs
What happens during the trial in the CLP?
- Each party provides the judge a brief before the trial
- Opening statement
- Evidence - witnesses/documents/exhibits
- Cross examine witnesses
(Plaintiff first, defendant next) - Sometimes plaintiff rebuttal evidence
- Jury deliberates and reaches a verdict
- Post-verdict parties may challenge a jury’s verdict - motion for judgement notwithstanding or set aside jury’s verdict
What happens during the appeal during the CLP?
- Can extend the litigation process by a year or more
- Appellate court
Which of the following best describes how a formal business correspondence should be organized?
A) It should be sent as an email
B) It should state the message briefly because people don’t have time to read lengthy letters
C) It should have a friendly and conversational tone to maintain good relationships
D) It should end with a conclusion summarizing the message and stating what action to take
D, because it is important to do that. Brief messages may appear too informal and don’t organize the information
What does CRM stand for?
Customer relationship management
What is a traditional economy?
People produce whatever and however his ancestors produced - agricultural revolution, etc.
Certain industries are more sensitive to specific environments changes than others. Which of the following organizations are most likely to be significantly affected by an increase in fuel prices?
A) Car dealership
B) A school
C) A hospital
D) An airline
D, an airline
It’s business model is highly dependent on an increase in fuel prices because its business model is highly dependent on fuel to transport passengers,
What is nominal GDP?
GDP unadjusted to deal with inflation - real GDP is adjusted.
What should economists do to account for the effects of inflation on GDP?
A) Use a price deflator
B) Avoid double counting
C) Use the balance of trade
D) Use only nominal GDP
A, because inflation can distort GDP by making it higher
Price deflators convert prices to a base dollar value. Nominal GDP is unadjusted for inflation
What is a promissory note?
A written promise to repay loans
Isaiah is a new employee at a company where employees are expected to state in entry-level positions to learn the company from the ground up and work to be promoted. Isaiah has much more experience than his coworkers and can see many process that need to be improved. How can Isaiah best adapt to his new working environment?
A) Expect to work a long time before he will be considered for a position
B) Make suggestions to his supervisors to import the company’s process
C) Write a proposal on how the company could make changes and increase profits
D) Work hard so managers will recognize his effort and commitment to the company
D, because he can use that to show he’s capable and accepting of the company culture. The other options don’t show that he’s willing to learn an entry level position first.
Which of the following is subtracted from operating cask flow to find cash flow?
A) Capital expenditures
B) Dividends
C) Acquisitions
D) Earnings
A, Capital Expenditures
Free cash flow is the measure of a company’s performance. It is calculated by subtracting capital expenditures from operating cash flow. Capital expenditures include equipment, buildings, and other property.
Becoming more socially-minded in marketing can bring a business
A) Higher profits
B) Lower costs
C) A competitive advantage
D) More products
C, Competitive Advantage
Since many consumers are interested in socially responsible products, being socially-minded can give a business a competitive advantage over companies who are not practicing socially responsible marketing.
Socially-minded marketing does not necessarily lead to lower costs, higher profits, or more products.
Nate’s father has worked at the same company for 30 years, but Nate expects to work for at least 4 different companies by the time he is 30 years old. This trend explains how
A) Non-compete agreements have become obsolete
B) Intellectual property can be passed down through generations
C) Inevitable disclosure does not work in every situation
D) Mobility increases the need for protection of trade secrets
D, Mobility increased the need for protection of trade secrets
Before knowledge can be reused or shared, it must be
A) Manipulated
B) Embedded
C) Analyzed
D) Recognized
D, as the first phase of knowledge management process is discovery and detection, during which knowledge is recognized and categorized.
The Demarco Hotel employed data mining techniques to analyze its clients’ online search activity. It discovered that customers that visit antique shops also commonly tour art and history museums. What type of data mining tools did the hotel use?
Association learning. Cluster detection analyzes data defines distinct clusters or sub-categories within a category.
Which of the following is a true statement about personal use of company equipment?
A) Employees are often less careful with company property than with their own belongings
B) Employees must sign contracts to use company equipment for personal reasons
C) Only electronic equipment should be available for employees’ personal use
D) Personal use of company equipment is prohibited by law
A, so employees should not do that
Which of the following accurately describes an employee’s responsibility when a workplace injury occurs?
A) The employer must allow the injured employee to return to work six months after an injury has occurred
B) The employer must arrange for a medical exam to determine the severity of the employee’s injury
C) The employer is responsible for filing an injury incident report with its workers’ compensation board
D) If contacted by an injured employee’s attorney, the employer must provide any requested information
C, so that it does not violate the legal rights of the employees.
Employers must allow injured employees to return to their job whenever s/he has recovered from the injury - no time limits exist.
CC knows it wants to work with Larry’s Lumber for next project, but not certain of products needed. Best purchase order is:
A) contract
B) Blanket
C) Planned
D) Standard
A, Contract
Contract PO: Details, payment, delivery terms w/out products - agreement for future orders
Blanket PO: Specific goods, not quantities
Planned PO: Full details w/ tentative dates
Standard PO: Irregular/one-time w/ all specifications
A company needs to negotiate with a powerful supplier without much risk. Which strategy is the best?
A) Cancel orders
B) Become own supplier
C) Introduce supplier to new markets
D) Consider litigation
C, Introduce supplier to new markets
Risk-averse: Bring suppliers new values
Can become own supplier, but expensive and difficult and risky
Canceling/withholding orders + litigation: highly risky
What is a direct benfit of supply chain collaboration?
Lower cost due to reduced inventory, as each company needs to carry less doesn’t have to pay for the logistics
What is business process thinking?
Emphasizes the importance of processes in business
How can being a part of a trade association contribute to an employee’s career developement?
S/he can learn techniques to improve their job performance. Opportunities to make new contacts are small compared to this.
What document is needed to request approval for project from senior management?
A. A project management plan
B. A business case
C. A project charter
D. A statement of work
C, Project Charter: A document that formally authorizes the project and fives the PM the authority to apply resources to the project. The doc is often presented to senior management as a way to gain the necessary permission and commitment for the project.
A project management plan is a comprehensive plan that includes all of the other plans necessary for the project. It is developed after the Project Charter
A business case is a document that provides the nessacary info to understand whether the project is worthwhile.
A statement of work is a narrative description of products, services, or results to be delivered by a project. It is needed to develop a project charters
When do you analyze and measure project performance? (process group)
A, Monitoring and controlling NOT closing
What is the relationship between innovation, learning, and internal external changes?
Internal/exteneral changes lead to new learning which leads to innovation.
Tessa and her friends were caught drinking alcohol underage. This is an example of breaking
A. administrative law. C. criminal law.
B. civil law. D. international law.
C, Criminal law.
Criminal law deals with crime, which can cause damage to an individual as well as society
as a whole and the legal punishment of criminal offenses. Underage drinking is a criminal offense. It is not an example of breaking civil law, administrative law, or international law.
Criminal law deals with crime (behaviors that have been defined as illegal/antisocial, such as manslaughter & underage drinking)
Civil law: Resolution of disputes between individuals, medical malpractice is a civil law case, as are business disputes, land deals, libel & slander, & other commercial interests
Which of the following is a type of credit card that can be used to make purchases from a variety of
participating businesses:
A. Retail store C. Hotel
B. Bank D. Petroleum
B, Bank.
Bank credit cards can be used at any business that is affiliated with the system. This gives cardholders a wide range of businesses from which to choose. Retail store, hotel, and petroleum cards are issued by individual companies and may be used only at their facilities.
SOURCE: FI:002 Explain the purposes and importance of credit
Chandra wants to develop a personal budget. What is the first step she should take?
A. Establishing her goals C. Determining regular expenditures
B. Estimating her income D. Allocating income
A, Establishing her goals.
NOTE: Not estimating income
Before Chandra figures out the details of her budget, she needs to establish her goals. She can’t create an effective or realistic budget unless she knows what goals she’s focusing on. Estimating income, determining regular expenditures, and allocating income occur later in the budget development process.
SOURCE: FI:066 Develop personal budge
Checks, receipts, invoices, and purchase orders are examples of
A. financial statements. C. source documents.
B. department ledgers. D. accounting standards.
C, Source documents.
NOTE: Not financial statements
Checks, receipts, invoices, and purchase orders are examples of transaction source documents that represent a business’s financial transactions. Source documents usually contain the transaction amount, the payer, the payee, the good or service being purchased or sold, etc.
Financial statements are summaries of accounting information. Source documents are the inputs to the accounting cycle, while financial statements are the outputs. Department ledgers are accounting records for specific departments or areas of the business. Accounting standards are rules that accountants must follow when preparing financial statements.
SOURCE: FI:085 Explain the concept of accounting
Jillian is working on a knowledge management project. Her company wants to capture and understand how and why its managers use a certain collaboration software at work. To help her retrieve this information, Jillian carefully observes managers going about their daily routines using the software in question. She also asks the managers various questions about the software, such as “How does this tool make your life easier?” Jillian is attempting to retrieve __________ knowledge.
A. embedded C. explicit
B. tacit D. understood
A, Embedded.
NOTE: NOT TACIT
Embedded knowledge is information that is “trapped” within organizational routines,
processes, and protocols. This type of knowledge is not clearly communicated; rather, it is hidden within employees’ daily work routines.
Tacit knowledge is knowledge that is intuitive—it is often hard to define and experience-based. Tacit knowledge is deeply personal and is often the hardest type of knowledge to capture.
Explicit knowledge is widely available information that is easy to access and understand. An
example of a source of explicit knowledge would be a company training manual.
“Understood knowledge” is not generally a term used to describe one of the three main types of knowledge.
SOURCE: KM:018 Apply knowledge management processes
Determine if the following statement is true or false: The primary purpose of quality-control measures is
to evaluate employee efficiency levels.
A. False; businesses also use quality-control measures to evaluate products, processes, and other
business functions.
B. False; the primary purpose of quality-control measures is to evaluate the degree of excellence of
goods and services.
C. True; businesses must evaluate their employees’ performance to ensure that they are producing
high-quality goods and services.
D. True; employees perform the work, so they are responsible for developing and implementing
product-quality measures.
A, False; businesses also use quality-control measures to evaluate products, processes, and other business functions.
Quality control is ensuring the degree of excellence of a good, service, process, or activity. Efficiency levels are one measure that evaluates a variety of business processes and activities, including employee efficiency levels. If employees are not performing as efficiently as they could, there could be a problem with equipment, a process, or a procedure. Governments, industries, and management develop product-quality standards.
SOURCE: OP:163 Identify quality-control measures
One of the benefits of setting goals that will help you in your relationships with others is that setting goals
A. gives you a way to measure your progress.
B. helps you understand yourself.
C. helps you stay on task.
D. raises your level of self-esteem.
B, Helps you understand yourself.
Goal setting helps you understand yourself, and understanding yourself helps you understand other people.
Goal setting helps you stay on task, raises your level of self-esteem, and gives you a way to measure your progress, but these benefits do not necessarily help you in your relationships.
SOURCE: PD:018 Set personal goals
The part of a business letter that follows the inside address is the
A. body.
B. signature line.
С. dateline.
D. salutation.
D. Salutation
Structure:
Dateline
Inside Address
Salutation
Body
Signature Line
A message from the company president to all employees concerning a change in insurance coverage is
communication of the form:
A. upward
B. informal
C. staff
D. lateral
C, Staff
As the letter was sent to all start members, it is a form of staff communication. This is a form of downward communication.
Upward communication is one where employees speak to managers, etc.
What role does utility play in the implementation of the marketing concept
A. A payment method
B. A satisfaction gauge
C. A cost-saving tool
D. A delivery process
B, A satisfaction gauge.
Both utility and the marketing concept consider the consumer’s point of view about a product. In the implementation of the marketing concept, utility functions as a gauge of the consumer’s satisfaction.
Utility is used as a measurement tool not as a payment method, a cost-saving tool, or a delivery process.
SOURCE: EC:004
Which of the following actions describes proactive management:
A. Encouraging individualism
B. Making only long-term plans
C. Planning in advance for change
D. Avoiding risk
C, Planning in advance for change.
Proactive management is characterized by anticipating and planning in advance for change. Proactive managers make both short and long-term plans. They encourage teamwork over individualism. They take calculated risks.
SOURCE: EC:107
Which of the following is not one of the four main idealized market structures used in trade theory:
A. Monopolistic competition
B. Perfect competition
C. Monopoly
D. Perfect monopoly
D, Perfect monopoly.
Perfect monopoly is not a term used to refer to market structure. The four main idealized market structures used in trade theory are perfect competition, monopoly, oligopoly, and monopolistic competition.
Perfect competition is an idealized market structure that includes large numbers of buyers and sellers.
A monopoly is a market structure in which there is only one seller.
An oligopoly is a market structure in which there are a number of small sellers.
A monopolistic competition is a market structure in which there are many sellers producing differentiated products.
SOURCE: EC:012
An individual with a higher income who pays a larger percentage of his/her income as taxes than an individual with a lower income is in a
tax system.
A. flat
B. regressive
C. proportional
D. progressive
D, Progressive.
In a progressive income tax system, those who have a higher income pay a larger percentage of their income to the government.
In a regressive tax system, those who have a higher income pay a comparatively smaller percentage of their income as tax than those who have a smaller income.
In a proportional tax system, all individuals of all incomes pay the same proportion of their incomes to the government.
In a flat tax system, all individuals pay the same amount to the government regardless of their income.
SOURCE: EC:072
Limited commodities can cause
A. price stability.
B. cost-push inflation.
C. demand-pull inflation.
D. hyperinflation.
B, Cost-push inflation.
Cost-push inflation occurs when limited commodities drive up the costs of creating products and, in turn, their prices.
Price stability is a state in which prices don’t change rapidly and the value of money is stable; it is not caused by limited commodities.
Demand-pull inflation happens when the money supply grows faster than the economy does.
Inflation targeting is an effort by a government t hit a set inflation rate.
SOURCE: EC:083
C
Estimates. While most figures used in GDP computations are reliable, there are some that have to be estimated. It is impossible to maintain 100% accuracy when dealing with the vast amounts of informatio relating to an economy. Government bases its economic forecasts, or predictions, on the GDP figures.
Transfer payments are payments made by the government for which no goods or services are received in exchange, and they are not counted in GDP.
SOURCE: EC:017
