Chapter 9-10

Question 1

Balance Sheet

Answer 1

a statement of the assets, liabilities, and capital of a business or other organization at a particular point in time, detailing the balance of income and expenditure over the preceding period.

Question 2

Breakeven point

Answer 2

The break even point is the production level where total revenues equals total expenses. In other words, the break-even point is where a company produces the same amount of revenues as expenses either during a manufacturing process or an accounting period.

Question 3

Budgeting

Answer 3

allow or provide a particular amount of money in a budget.

Question 4

Business plan

Answer 4

A business plan is a formal statement of business goals, reasons they are attainable, and plans for reaching them. It may also contain background information about the organization or team attempting to reach those goals.

Question 5

Cash flow

Answer 5

the total amount of money being transferred into and out of a business, especially as affecting liquidity.

Question 6

Chief executive officer

Answer 6

is a top-ranking corporate position, responsible for overseeing operations. Often the company’s president, the CEO reports to the chairman of the board and board members.

Question 7

Debt funds

Answer 7

Debt funds are mutual funds that invest in fixed income securities like bonds and treasury bills.

Question 8

Degree of centralization

Answer 8

a process where the concentration of decision making is in a few hands. All the important decision and actions at the lower level, all subjects and actions at the lower level are subject to the approval of top management.

Question 9

Entrepreneur

Answer 9

a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so.

Question 10

Equity funds

Answer 10

An equity fund is a mutual fund that invests principally in stocks. It can be actively or passively (index fund) managed.

Question 11

Fixed costs

Answer 11

business costs, such as rent, that are constant whatever the quantity of goods or services produced.

Question 12

Free-reign managers

Answer 12

Leadership style where subordinates are not directly supervised and instead must function on own and prove their worth through accomplishments. No specific supervisory criteria must be met.

Question 13

Front-line managers

Answer 13

Frontline managers are managers who are responsible for a work group to a higher level of management. They are normally in the lower layers of the management hierarchy, and the employees who report to them do not themselves have any managerial or supervisory responsibility

Question 14

Gross profit

Answer 14

Gross profit is the profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services. Gross profit will appear on a company’s income statement or can be calculated with this formula: Gross profit = revenue - cost of goods sold.

Question 15

Income statement

Answer 15

An income statement is a financial statement that measures a company’s financial performance over a specific accounting period. Financial performance is assessed by giving a summary of how the business incurs its revenues and expenses through both operating and non-operating activities.

Question 16

Line of authority

Answer 16

The most fundamental authority within an organization, reflects existing superior-subordinate relationships. It consists of the right to make decisions and to give order concerning the production,sales or finance related behaviour of subordinates

Question 17

Managers

Answer 17

a person responsible for controlling or administering all or part of a company or similar organization.

Question 18

Marketing

Answer 18

the action or business of promoting and selling products or services, including market research and advertising.

Question 19

Marketing plan

Answer 19

A marketing plan is a business document outlining your marketing strategy and tactics. It’s often focused on a specific period of time (i.e. over the next year) and includes a variety of marketing factors including costs, goals, and action steps.

Question 20

Middle managers

Answer 20

Middle management is the intermediate management of a hierarchical organization that is subordinate to the executive management and responsible for at least two lower levels of junior staff

Question 21

Organizational chart

Answer 21

a graphic representation of the structure of an organization, showing the relationships of the positions or jobs within it.

Question 22

Participative managers

Answer 22

Participative management is defined as a management style in which leaders place emphasis on employees’ involvement in the management process.

Question 23

Senior managers

Answer 23

Senior management, executive management, or management team is generally a team of individuals at the highest level of organizational management who have the day-to-day responsibilities of managing a company or corporation.

Question 24

Small business

Answer 24

An independently owned and operated company that is limited in size and in revenue depending on the industry. A local bakery that employs 10 people is an example of a small business. A manufacturing facility that employees less than 500 people is an example of a small business.

Question 25

Span of control

Answer 25

the area of activity or number of functions, people, or things for which an individual or organization is responsible.

Question 26

Telecommuting

Answer 26

work from home, making use of the Internet, e-mail, and the telephone.

Question 27

Variable costs

Answer 27

a cost that varies with the level of output.

Question 28

Autocratic managers

Answer 28

An autocratic person or organization has complete power and makes decisions without asking anyone else’s advice.