Compend Test Flashcards
A business that makes finished goods from raw materials by hand or machinery is referred to as a
Manufacturing business
A business that purchases finished goods for resale is referred to as a
Merchandising Business
A particular business that provides a service as opposed to a product is referred to as a
Service Business
An individual that assumes the risks associated with a new venture start up can be referred to as an
Entrepreneur
A group of potential customers that are recognized as possessing purchasing power and unsatisfied needs defines
Market
The main objective in a market survey is
To determine where the potential customers are
Any capital that is invested in a business by the owner can be called
Equity capital
Any credit that is extended from one business to another in order to help finance the distribution of goods from the producer is called
Trade Credit
Long-term capital that is invested in a business is referred to as
Fixed Capital
In a business, the number of times the average inventory is sold or used up can be referred to as
Inventory turnover
A point in business operations whereby total sales revenue equals total costs
Break-Even Point
If a prospective business owner attempts to statistically study such factors as human population size, density, and wealth, we would refer to this as
Demographics
The art of making the public aware of one’s products and/or services that are for sale can be referred to as
Advertising
Any effort undertaken to retain and preserve the assets and earning power of a business is called
Risk Management
Factors associated with evaluating a credit risk would involve all of the following except
Inventory control considerations
In business, a reduction of selling price below original selling price is referred to as
Markdown
In a business, the name, goodwill, copyrights, and patents are referred to as
Intangible Assets
In organizing a business, a legal form of organization that is authorized by a state to operate a business under a stat charter is referred to as a
Corporation
A written description of a new idea that projects marketing, operational, and financial aspects of a proposed business is known as a
New Venture Plan and Business Plan
A management function which compares organization and individual performance with predetermined standards or expected results is known as
Evaluating and Controlling
A line of credit that may be used over and over again up to a certain borrowing limit is called
Revolving or Open end Credit
Capital that is invested in the business by the owner is known as
Equity Capital or Personal Capital
The difference between current assets and current liabilities is
Working or Circulating Capital
Which of the following are functions of management
Controlling and Actuating
Which of the following is an external problem and risk of business ownership
Tax Burdens and Human Resource Planning
Which of the following is an intangible asset?
Name of the business and Goodwill
Which of the following are advantages of a sole proprietorship?
Efficiency of labor and Ease of starting
Which of the following are disadvantages of a sole proprietorship?
Unlimited Liability and Limited Management Ability
Which of the following are advantages of a partnership?
Combined management, talent, and capital, and Continuity in existence
Which of the following are disadvantages of a partnership
Death or incapacity of one of the partners may end the partnership and Double Taxation
Which of the following are advantages of a corporation
Large financial capability and limited liability of each owner
Which of the following are disadvantages of a corporation
Legal restrictions on activities and Lack or personal interest
Which of the following are examples of debt capital
Commercial loans and Venture Capitalists
Which of the following are advantages of extending credit
Sales are increase and Goodwill is built-up and easily maintained
Legislation guarantees disabled people equal access to employment, as well as access to public places, is known as
ADA
A governmental agency with the responsibility for regulatory and enforcement of safety and health matters for most US employees is known as
OSHA
A type of credit granted by retailers that is used by individuals or families for the satisfaction of their own wants is known as
Consumer Credit
A form of legal organization in which a business association made up of two or more persons is formed for the purpose of carrying on as co-owners is known as a
Partnership
One who organizes, manages, and assumes the risk of a business firm or venture is known as
An Entreprenuer
The current asset items consisting of cash, inventories, and accounts receivables is known as
Circulating Capital
The number of times the average inventory has been sold or used up during a period is known as
Inventory Turnover
Which of the following is NOT a consumer buying motive
Indemnity
A document that lists the major responsibilities and tasks of the job is known as a job
Description
The form of legal organization that is owned and operated by one person is the
Proprietorship
A legal form of organization whereby a legal entity is authorized by a state to operate a business under the entity’s charter or articles of incorporation is known as a
Corporation
The combination of two or more individual’s talents and capital serves as an advantage of the legal form of ownership known as a
Partnership
A common business credit/sales term is
2/10, n30
Rent is an example of a
Fixed expense
Which of the following is NOT a characteristic of a small business
Actively managed by stockholders
The simplest and most common legal form of business ownership is
Sole Proprietorship
The statistical study of human populations with respect to their size, density, distribution composition, and income is known as
Demographics
Capital that is invested in the business by the owner is known as
Equity Capital
A source of debt capital would include
Commercial loans
A plan which provides inducements to potential purchasers of products and/or services is called
Sales Promotions
A cost which is uniform per unit, but fluctuates in total, in direct proportion to change in the related total activity or volume is known as
Variable Expense
An interview whereby the applicant is asked a predetermined set of questions is known as
A structured interview
Which of the following is an internal problem that can lead to business failure
Lack of Expertise
An external problem that can lead to small business failure is
Consumerism
A factor to be considered with the evaluation of a credit risk would be the
Credit Application
Which of the following would not be an insurance risk to consider
Terms of the sale
Which of the following is not a way to reduce the risks
Take on more risks
Which of the following is a requirement for a building layout
Accessibility
A BFQQ is
A qualification that is absolutely necessary
Which of the following is not a type of consumer credit
Personal Checks
The type of consumer credit where the balance is paid in small monthly (fractional) payments over a period of time is
Installment Credit
When selecting employees, the applicant’s appearance, poise, speech, and other characteristics may best be determined by
The employment interview
The difference between merchandise cost and the selling price is known as the
Mark-up
Which of the following is not included in the employment application
Applicant’s sex
Which of the following is an example of a variable expense
Repairs
The difference between current assets and current liabilities is
Working capital
Long term capital invested in the business is
Fixed Capital
Which of the following is not an advantage of a corporation
Legal restrictions of activities
Which of the following is recognized as a disadvantage of extending credit
Some losses from bad debts and customers with fraudulent intentions are bound to occur
Which of the following has the disadvantage of no limit being placed on the owner’s personal liability
Proprietorship
Which of the following is not used to measure the success of advertising
Income trends in the community
Which of the following statements is true concerning consumer credit
Credit customers are more interested in quality and service than price
A strategy available to absorb risks would be
To remove the cause
A strategy to minimize risk would be to
Purchase outside insurance
Whenever a business must pay for the merchandise before its delivery, which of the sales terms apply
CBD
Which of the following federal laws affecting employment concerns prohibits wage discrimination based on the sex of the worker
Equal Pay Act of 1963
The wealth produced in or near a community that provides employment and income to the local population is known as the
Economic Base
The practice of trying to get something that is being sought by others under similar circumstances at the same time is known as
Competition
Which of the following is an internal problem that can contribute to the failure of a business
Financial Shortages
On a chart which plots sales, fixed and variable costs for a given period of time, the point where the sales and the total cost lines intersect is called the
Break Even Point
2/10, n30 means
A 2% discount if invoice is paid within 10 days, net due in 30 days
Which of the following is not a consideration concerning the selection of suppliers
Whether or not they have an acceptable accounts receivable ratio
All of the following are factors which can affect the recruitment and selection of employees except
The religion of the applicant
The principal government agency concerned with the financing, operation, and management of small businesses is the
Small Business Administration
A written description of a new idea that projects marketing, operational, and financial aspects of a proposed business is known as
A business plan
Which of the following is normally not a source of published market data
Census of banking
Which of the following laws prohibits discrimination against any qualified individual with a disibility
Americans with Disability ACt
Which of the following acts outlaws discrimination in employment based on race, color, religion, sex, pregnancy, or natural origin?
Civil Rights Act
The quantity to be purchased which minimized total cost is referred to as the
Economic Order Quantity
Business interruption insurance covers
Lost income
Life insurance that protects a firm against losses due to the death of a key employee is known as
Key Person insurance
The association of business firms that promotes ethical conduct by all business firms in a community is known as the
Better Business Bureau
An association of business people who attempt to protect and promote the commercial interests in a community is known as the
Chamber of Commerce
A management function which compares organizational and individual performance with predetermined standards or expected results is
Controlling
Which of the following refers to those activities which encourage subordinates to work toward the achievement of the company’s goals
Directing
Selling a business’s accounts receivable for cash to a third party is referred to as
Factoring
