Business Principles Flashcards by Robert Harkort

The following items are known as ………. on the balance sheet: cash, accounts receivable, prepaid accounts.

A. Equity.
B. Assets.
C. Liabilities.
D. Prepayments.

How well did you know this?

Not at all

Perfectly

What are the three standard financial reports?

A. Income statement. Balance Sheet. Statement of cash flows.
B. Income statement. Shareholders equity. Statement of cash flows.
C. EBITA statement. Balance sheet. Statement of cash flows.
D. Profit statement. Balance Sheet. Statement of cash flows.

How well did you know this?

Not at all

Perfectly

What is the best description of a balance sheet?

A. A summary of an organization’s profitability ratio.
B. A summary of an organization’s investing and financing.
C. A summary of an organization’s profit & loss.
D. A summary of an organization’s return on investment.

How well did you know this?

Not at all

Perfectly

Why might divisional level managers more readily accept a bottom-up budget?

A. Because they had a role in developing it.
B. Because they are personally motivated to bonus schemes attached to it.
C. Because they are used to receive orders from senior management.
D. Because they have a bigger influence on the results.

How well did you know this?

Not at all

Perfectly

What is generally the most effective approach to budget development?

A. Budget negotiation processes between management levels.
B. A combination of top-down and bottom-up processes.
C. Bottom-up processes.
D. Top-down processes.

How well did you know this?

Not at all

Perfectly

In probability sampling, each population member has a known, non-zero chance of being selected.

Which of the following is an example of probability sampling?

A. Systematic sample.
B. Convenience sample.
C. Voluntary sample.
D. Snowball sample.

How well did you know this?

Not at all

Perfectly

What is the fundamental template for direction, that defines and support the organization’s long-term goals, called?

A. Strategy.
B. Vision.
C. Objective.
D. Mission.

How well did you know this?

Not at all

Perfectly

According to Peter Drucker, what is the most crucial question in defining business purpose & mission?

A. Who is the customer?
B. Who is the shareholder?
C. What is the market orientation of the business?
D. What is the strategy of the business?

How well did you know this?

Not at all

Perfectly

Organizations can apply various strategies to boost cost-effectiveness.
Loss reduction is an example of which strategy?

A. SWOT.
B. reduction.
C. Return on investment.
D. Cost avoidance.

How well did you know this?

Not at all

Perfectly

Providing a plan and process for addressing the changes that will occur when key personnel leave, is known as:

A. Functional planning.
B. Change management.
C. Job analysis.
D. Succession planning.

How well did you know this?

Not at all

Perfectly

What is specified if an assessment applies the Myers–Briggs Type Indicator?

A. Reasoning abilities.
B. Integrity levels.
C. Intelligence quotient.
D. Mental preferences.

How well did you know this?

Not at all

Perfectly

Security officers need to be familiar with management’s philosophy and the corporate culture, meaning they must be highly socialized. Which type of training is useful to enhance the socialization aspect of the training process?

A. Mentoring.
B. Self-study.
C. Lecturing.
D. Remote training.

How well did you know this?

Not at all

Perfectly

Under this strategy, allowing an individual to reach a state of satisfaction requires changes in the work content itself, e.g., increased autonomy.

A. Maslow.
B. Argyris.
C. Herzberg.
D. Bennis.

How well did you know this?

Not at all

Perfectly

Many major ethical violations have made the news in recent years. Wells Fargo employees defrauded customers to meet sales quotas. Enron executives went to jail for accounting fraud. WorldCom executives admitted to overstating assets by $11 billion. Volkswagen manipulated vehicles so they would unjustly pass emissions tests.

What are three key reasons for unethical choices?

A. Dishonesty, disrespect, and greed.
B. Motive, opportunity, and rationalization.
C. Convenience, winning, and relativism.
D. Lack of supervision, financial pressure, and greed.

How well did you know this?

Not at all

Perfectly

An agreement with clearly stated terms to which both parties are bound at the time it is formed, is known as a(n):

A. Quasi contract.
B. Non-disclosure agreement.
C. Implied agreement.
D. Express contract.

How well did you know this?

Not at all

Perfectly

The obligation by a person to provide compensation for a particular loss or damage suffered by another person, is known as:

A. Quasi contract.
B. Loss claim.
C. Liability.
D. Indemnity.

How well did you know this?

Not at all

Perfectly

What would be the best type of budget to get commitment from divisional management?

A. Zero-based budgeting
B. Top-down
C. Bottom-up
D. Project budget

What type of businesses are most likely to encounter the most significant security lapses according to a Stanford Research Institute report (Business Property Security) discussing business vulnerability to crime losses?

A. Businesses where expansion occurs faster than controls are set up
B. Large companies with close control over branches and divisions
C. Those companies that lack proprietary guard services
D. Businesses where growth has stagnated

If your company operates at a gross margin of 25%, how much revenue should be generated to cover a loss of € 50?

A. € 1.000
B. € 500
C. € 200
D. € 50

What is the underlying equation of the balance sheet?

A. Ownership (equity) = Assets + Liabilities
B. Liabilities = Assets + Ownership (equity)
C. Assets = Ownership (equity) + Liabilities
D. Net profit = Income – operating expenses

This account is maintained for all things of value owned by an enterprise. This type of account generally lists cash, accounts receivable, property and inventory:

A. Liability Account
B. Asset Account
C. Income Account
D. Control Account

In a business, three types of activities create and use cash: operations, investments and financing. Which financial statement focuses on these activities?

A. Balance sheet
B. Income statement
C. Profit and loss statement
D. Cash flow statement

If your organization has two options:
- Option 1: A € 1,500,000 investment in R&D typically returns € 600,000 in revenue within five years.
- Option 2: Reduce debt instead by making a € 2,000,000 investment in debt reduction that would save the company € 750,000 in interest payments over five years.

Notwithstanding other issues, what is the best option based on ROI?

A. Option 1
B. Option 2
C. Either option 1 or 2 (i.e., no difference)
D. Neither option 1 nor 2

Following several recent burglaries at one of your company’s smaller locations, you have prepared a business case for the acquisition of 2 new security cameras. It is expected to reduce losses by €1.000 per annum. The cameras cost €2.000 each. Furthermore, installation costs are estimated at €1.000.

Not taking into account other measures, what is your ROI (ROSI) on this investment?

A. 10%
B. 20%
C. 25%
D. 30%

Which statement regarding benchmarking is true? A. Benchmarking only focusses on factors within the organization's control B. Benchmarking is the backbone of the process of identifying, studying, and implementing best practices C. Benchmarking is the process of imitating the profitable activities of other organizations D. Benchmarking requires repeating a process until it becomes excellent

Which of the following is NOT one of the reasons companies develop policies? A. To help with achieving objectives B. To comply with the legal and social environment in which they operate C. To avoid claims from customers D. To protect employees

What would be the first step in procedure development? A. Gathering information B. Identifying the need C. Management approval D. Copying best practices

In many organizations, especially large multinationals, it is quite common for people from different operational areas to join forces to solve problems or implement process improvements. What is this form of co-operation called? A. Cross-functional collaboration B. Divisional teamwork C. Hierarchical structure D. Process approach

A small-scale, short-term experiment that helps an organization learn how a large-scale project might work in practice, is known as: A. Beta testing B. Alpha testing C. Acceptance testing D. Pilot testing

The lecture, a common method of security training, particularly for large groups with little or no knowledge of the subject is: A. The best training method in terms of cost and benefit B. A method which should not be complimented by other learning methods C. Is the best method for presenting concepts and policies D. An ill effective means of motivating learners

Who developed the Immaturity-Maturity Theory? A. Herzberg B. Argyris C. Maslow D. McGregor

Mc Gregor theorized that the motivation employees use to reach self-actualization allows them to reach their full potential. This led companies to focus on how their employees were motivated, managed and led; creating a management style which focuses on the drive for individual self-fulfillment. This leads to the creation of which management style? A. Authoritative management style B. Theory X management style C. Theory Y management style D. Affiliative management style

Some managers believe they have the knowledge, skill, ability, and time to write every lesson plan and deliver every class. According to Hertig, this belief can evolve into the …. A. Overtraining syndrome B. Teacher syndrome C. Frog syndrome D. Floating theory

Most organizations today are redesigning work and jobs so as to let workers make many of the job-related decisions that previously were made exclusively by managers. This is commonly referred to as: A. Transition Decision Making B. Empowerment C. Equity and inclusion D. The Princeton Principle

Two of the most important skill elements for effective oral communication is the ability to …… and the ability to provide feedback. A. Speak clearly B. Listen actively C. Make eye contact D. Avoid distractions

What is the purpose of a job analysis? A. To create a valid job description B. To grade an employee's performance C. To aid in employee development D. To increase efficiency

There are a number of reasons that lead businesspeople to make unethical choices. Which of the following is not one of those? A. Relativism B. Convenience C. Winning D. Opportunity

Several recent high-profile cases have brought more attention to business ethics. The reason may be that the unethical behavior has caused widespread harm. One ill effect is the liability employers bear for the negligent action of employees. What is the imputation of an employee’s negligence to the employer called? A. Gross liability B. Agency liability C. Vicarious liability D. Employer's liability

In business and law, having a “fiduciary responsibility” to someone is known as having a …. A. duty of loyalty B. duty of care C. debt outstanding D. professional indemnity

When an insurance company, as part of an individual's insurance policy, agrees to compensate the insured person for losses that the insured person incurred as the result of accident or property damage, this is known as: A. risk transfer B. indemnity C. due diligence D. promise