Pre Assessment Flashcards
To familiarize myself with the material
Which economic system is in use if any individual can become a sole proprietor?
Socialism
Capitalism
Communism
Traditional
Capitalism
What is Current Ratio?
Current assets, divided by current liabilities
What is Return on Sales?
Net income after taxes, divided by net sales
What is Inventory turnover?
Cost of goods sold, divided by average inventory
What are the four phases of the typical business cycle?
Recession
depression
recovery
prosperity
A company performs market research to determine the best design, pricing, and expected sales volume for a new product based on a patented new technology.
Which type of economy is this company operating in?
Command
State-driven
Free-market
Pure competition
Free-market
A mobile phone company headquartered in the United States has decided to pursue a horizontal integration strategy.
Which benefit will the company realize by implementing this business model?
The hierarchy structure will be flattened.
The supply of raw materials will be controlled.
The competition within the industry will be decreased.
The competition within the industry will be increased.
The competition within the industry will be decreased.
The executive director for a nonprofit organization is engaging in fraud. The resulting problems have reduced funds available for low-income families.
Which socially responsible action should the board take?
Terminating the executive director
Identifying families that are at risk of poverty
Locating alternative resources for needy families
Performing an audit to determine the extent of the problem
Locating alternative resources for needy families
Why does an organization voluntarily become more involved in social responsibility?
Social responsibility improves the organization’s research and development.
Social responsibility decreases
organizational costs in the short term.
The organization is part of the society and cannot ignore social issues.
The organization exists outside society norms and operates by a different set of rules.
The organization is part of the society and cannot ignore social issues.
Country A exports $2.1 million in goods to Country B. Country A imports $2.5 million in goods from Country B due to a rising demand for the products of Country B.
What is the result of this international business transaction for Country A?
A trade deficit
A trade surplus
An import deficit
An import surplus
A trade deficit
Mexico is the second largest international trade market of the United States. The United States exports a multitude of goods to Mexico.
What is expected concerning trade between these two countries?
It will stop.
It will increase.
It will decrease.
It will stay the same
It will increase
An entrepreneur has a small business that has been in operation for more than 15 years. The entrepreneur is the only member of the company and treats the business as a pass-through entity for tax purposes. The entrepreneur is not personally held responsible for business debts and liabilities.
Which entity classification is appropriate for this entrepreneur’s business?
Corporation
Not-for-profit
S corporation
Limited liability company
Limited liability company
An individual has decided to create a new organization that assists the elderly in the community. The organization will ask for tax-exempt donations to provide these services.
What is the entity classification for this business?
Not-for-profit
S corporation
Sole proprietorship
Limited liability company
Not for profit
What should a partnership agreement address?
Investment by each partner
Way each partner uses profits
Professional experience of each partner
Source of each partner’s financial contribution
Investment by each partner
What are two characteristics of a partner in a general partnership?
Choose 2 answers
A partner may lose only the amount of money invested in the business.
Each partner has an active role in day-to-day management of the business.
If a partner leaves, no notice must be given to anyone other than the other partner(s).
Since all partners can execute contracts for the business, suppliers can be engaged quickly.
Each partner has an active role in day-to-day management of the business.
Since all partners can execute contracts for the business, suppliers can be engaged quickly.
An owner has researched several business models for online coaching services. The owner wants to take advantage of the business model that offers ease of protection against liability of debts, raising money, and transfer of ownership.
Which business model is most appropriate?
Unlimited liability
Frozen investments
Government regulations
Management disagreements
Unlimited liability
Two friends want to start an online company selling baked goods. Since both have agreed to share responsibilities equally, the friends decide a partnership business model will work best because this will allow the two to act as co-owners of the business and split the profits.
What is an advantage in choosing this business structure?
Perpetual life
Limited liability
Ability to sell stock
Availability of capital
Availability of capital
Which industry attracts small businesses?
Oil drilling
Home builders
Utility companies
Automobile manufacturing
Home builders
What is a characteristic of an entrepreneur?
Acceptance of luck
Preference for stability
Ability to work independently
Seeking external rewards for effort
Ability to work independently
What is a contribution of small businesses to the U.S. economy?
They raise capital easily.
They involve a low risk of failure.
They provide benefits to large businesses.
They create close employee relationships.
They provide benefits to large businesses.
What is an advantage of operating a small business?
The low risk of failure
The unlimited potential
The ability to adapt to change
The diversity of management
The ability to adapt to change
How does the Small Business Administration provide assistance?
It offers direct loans to entrepreneurs.
It offers education on business fundamentals.
It makes equity investments in upstart businesses.
It assigns members to a firm’s board of directors.
It offers education on business fundamentals.
Which of the following is a source of power within an organization?
Positional
Expansive
Functional
Relational
Positional
A healthcare organization received a number of complaints regarding the front office staff. After reviewing the customer satisfaction surveys, it was determined that the complaints are due to overbooking patients on the schedule.
Which management level should address this issue?
Top management
Middle management
Financial management
First-line management
First-line management
Which type of skill involves dealing effectively with others outside the firm?
Analytical
Technical
Conceptual
Interpersonal
Interpersonal
A manager encourages employees to own stock and make important business decisions in the hope that this will create a high-involvement ownership culture within the organization.
Which type of leadership style has this manager displayed?
Autocratic
Democratic
Participative
Entrepreneurial
Participative
A company manufactures a product that moves through several stages including assembly, painting, and finishing.
Which step in the conversion process is reflected?
Focus of availability
Magnitude of change
Capacity of product distribution
Number of production processes
Number of production processes
How does the service industry differ from the manufacturing industry?
Manufacturing firms listen to their customers more than service firms.
Service firms find it easier than manufacturing firms to evaluate customer satisfaction.
Service firms respond more quickly than manufacturing firms to changing customer needs.
Manufacturing firms seek more customer opinion than service firms before making their product.
Service firms respond more quickly than manufacturing firms to changing customer needs.
A materials manager ensures that the proper amount of materials is available when needed for production.
Which step in the planning process is occurring?
Scheduling
Purchasing
Inventory control
Operational planning
Inventory control
An automobile manufacturer identifies a small number of consumer complaints associated with the air bag systems that have been exploding and injuring the car’s passengers. Exploded air bags are recovered from a number of the cars associated with the complaint, and it is determined that the air bags provided by the air bag supplier were manufactured to the automobile manufacturer’s specification but clearly did not function properly.
Where in the production process did this problem occur?
Design
Purchasing
Quality control
Operational planning
Design
Which type of technology in the United States uses a computer system that not only helps design products but also controls the machinery needed to produce the finished product?
Computer-aided design
Computer-aided manufacturing
Computer-integrated manufacturing
Computer-assisted drafting process
Computer-integrated manufacturing
A chief executive officer wants to motivate workers by using the piece rate system.
Which major historical perspective on motivation is represented?
Scientific method
Hawthorne studies
Maslow’s hierarchy of needs
Herzberg’s motivation hygiene theory
Scientific method
A manager is deciding on next year’s target for expected dollar sales per employee with the staff of the sales department. The manager and employees established the target to be three times last year’s target.
Which motivation theory does this describe?
Equity theory
Expectancy theory
Goal-setting theory
Job enrichment theory
Goal-setting theory
What is a technique of increasing employee motivation using management by objectives?
Increasing supervisory support
Reducing the amount of paperwork
Promoting employees’ sense of importance
Implementing higher quality control standards
Increasing supervisory support
A plant manager has experienced excessive turnover in the assembly department and presented the issue in a department-wide meeting. One employee indicated the jobs in the department were so repetitive that people got bored and quit. The other employees agreed. The plant manager suggested the process could be changed so that tasks were grouped and teams of employees could work together to complete the job.
Which motivational technique is the plant manager using to address the employees’ concerns?
Equity theory
Job enrichment
Employee empowerment
Management by objective
Job enrichment
A newly formed team is in the process of launching a new project, and they have come to accept and understand one another over the past few weeks.
Which stage of team development occurs next?
Norming
Storming
Adjourning
Performing
Performing
A purchasing agent decides to create a team to gain insight into useful purchases for the company. There will be several team members with a complimentary skill set from different departments in the same office building. It will be an ongoing team and will be managed by a project manager.
Which type of team will work well?
Virtual
Self-managed
Problem-solving
Cross-functional
Cross-functional
Which component involves a screening process that consists of conducting web-based research on qualified applicants to determine if the applicants are a good fit for the company?
Planning
Selection
Recruiting
Job analysis
Selection
Which component is a part of human resource management?
Job analysis
Milestone reviews
Mission development
Project management
Job analysis
Which recruiting method in human resource management may involve going to college campuses?
Lateral
Internal
External
Peripheral
External
Administration has begun to partner with the human resources department to identify ways to increase diversity.
What should be aligned with the diversity program to help these groups achieve this goal?
Sales goals
Fiscal budget
Strategic plan
Auditing policies
Strategic plan
42.
An organization located in a predominantly Caucasian area wants to ensure that, despite its location, it is encouraging a multicultural workforce through its hiring process.
What should this organization do to support this goal?
Enact an inclusion program
Become the employer of choice
Ensure retention of diverse employees
Understand demographic changes in the workforce
Enact an inclusion program
A 60-year-old candidate is applying for a job for an upper-management position at a large company. The candidate has relevant experience that includes a military background. The hiring manager wants to hire the candidate and makes an offer that is contingent on the candidate being required to retire at age 65.
Which federal law is violated with this job offer?
Title VII of the Civil Rights Act
Age Discrimination in Employment Act
Employee Retirement Income Security Act
Uniformed Services Employment and Reemployment Rights Act
Age Discrimination in Employment Act
A large firm holding $500,000 in government contracts operates in a city with a diverse population. Almost all of the employees in this firm are white, and recruiters do not actively seek or hire candidates from the area’s minority population.
Which series of executive orders is the firm violating in its recruitment efforts?
Four-Fifths Rule
Affirmative Action
Equal Rights Amendment
Race Discrimination Ordinance
Affirmative Action
During a job interview, a candidate asks the hiring manager about the company’s employee savings program. The hiring manager says that the company provides each employee with a pension plan because the company believes in a well-rounded benefits program. The manager says, however, that the pension plan will not be federally insured.
Which act makes this pension design unlawful?
Consumer Credit Protection Act
Fraud Enforcement and Recovery Act
American Recovery and Reinvestment Act
Employee Retirement Income Security Act
Employee Retirement Income Security Act
What is a characteristic of the on-the-job method of employee training and development?
Attendance at formal classes
Certification through role playing
Supervision by experienced workers
Participation in designated seminars
Supervision by experienced workers
Which type of development is defined as the process of preparing leaders and other professionals to assume increased responsibility in both present and future positions?
Personal
Employee
Technical
Management
Management
A wholesaler purchases products from a pharmaceutical company for re-sale to independent drug stores.
Which two marketing physical distribution sub-functions will this wholesaler perform?
Choose 2 answers
Storage
Gathering
Transportation
Standardization
Transportation
Storage
A marketing manager needs to understand competitors’ actions in order to increase the company market share. The manager uses consumer surveys to obtain the needed information.
Which sub-function of marketing facilitation is represented by this action?
Selling
Buying
Storing
Gathering
Gathering
An entrepreneur expresses dismay with the experience of marketing a new software application. It included losses due to bad debt expenses, obsolete products, theft by employees, and product liability lawsuits.
Which aspect of the facilitating function of marketing is the entrepreneur reacting to?
Financing
Risk taking
Standardizing
Data gathering
Risk taking
A baker buys flour and other ingredients to make cupcakes to sell at a local grocery store.
Which type of market does this demonstrate?
Reseller
Producer
Consumer
Institutional
Producer
The business-to-business market type includes businesses, both for-profit and non-profit, that provide products and services to the end consumer. Companies in the business-to-business market type include wholesalers, hospitals, township agencies, farmers, and family-owned businesses.
Which three market types are included in this overall market?
Choose 3 answers
Seller's markets Foreign markets Reseller markets Producer markets Household markets Institutional markets
Reseller markets
Producer markets
Institutional markets
A large manufacturing firm supplies parts to a smaller firm. These parts are then assembled to create a larger machine.
Which type of market is being used by the large manufacturing firm?
Producer market
Consumer market
Institutional market
Government market
Producer market
Which type of target market approach is a company using when it designs a single marketing mix and directs it at the entire market for a particular product?
Concentrated
Homogeneous
Undifferentiated
Undistinguishable
Undifferentiated
Which element is part of a marketing mix?
Politics
Promotion
Technology
Competition
Promotion
Which marketing strategy is a company using when it designs differentiated marketing strategies for consumers with different needs?
Sector
Separated
Segregated
Segmentation
Segmentation
Which element of the marketing mix involves decisions on storage of the product?
Packaging
Stockroom
Distribution
Warehousing
Distribution
What is the role of customer relationship management as it pertains to marketing?
Reward cards
Inventory control
Collection activities
Customer-to-customer referrals
Reward cards
Which role does the customer’s lifetime value play in an effective business customer relationship management program?
Defining how a loyal customer is valuable
Proving that a new customer holds the most value
Showing that customers who require constant marketing are valuable
Documenting that short-term customers provide value to the business
Defining how a loyal customer is valuable
What is a benefit of a successful customer relationship management program?
Addition of new markets
Decreased promotion costs
Increased loyalty of valuable customers
Elimination of non-performing customers
Increased loyalty of valuable customers
A marketing team has just developed and defined the marketing elements for successfully positioning the firm’s marketing offer.
Which component of the marketing plan is being described?
Marketing control
Marketing objective
Marketing strategies
Marketing implementation
Marketing strategies
After meeting with a project manager, each team member is assigned activities and responsibilities within the marketing plan.
Which component of the marketing plan is being described?
Marketing strategies
Marketing objectives
Marketing implementation
Marketing evaluation and control
Marketing implementation
The director of marketing is attempting to create positive buzz about the company and decides to use a SWOT analysis as part of the process.
What is identified by this form of analysis?
Situation, warnings, obligations, threats
Strengths, warnings, opportunities, tasks
Situation, weaknesses, obligations, tasks
Strengths, weaknesses, opportunities, threats
Strengths
weaknesses
opportunities
threats
The chief executive officer (CEO) asks the marketing department to outline the different components of the marketing plan. The CEO is especially interested in seeing the outline of the actions that will be used to carry out the plan.
Which component of the plan is being requested?
Marketing analysis
Marketing strategies
Marketing objectives
Marketing implementation
Marketing implementation
A retail clothing company plans to use a website to share information, increase customers’ knowledge about its products, and build trust.
Which type of social media tool can be used to meet these objectives?
Wiki
Blog
Forum
Podcast
Blog
A software company creates a web-based electronic bulletin board for customers to share tips on using the software and to answer other customers’ questions.
Which type of social media tool can be used to meet this objective?
Blog
Wiki
Forum
Podcast
Forum
A pizza restaurant chain is developing a new online presence to obtain customer feedback about a new product.
Which tool can be used to meet this objective?
Podcast
Streaming radio
Social media game
Social media community
Social media community
A mobile phone retailer decides to host an online launch party in real-time for its newest phones in order to promote name recognition of its brand.
Which social media tool can the retailer use to achieve this objective?
Blogging system
Live-stream video
Idea-sharing page
Text-based social network
Live-stream video
A discount pharmacy chain plans to use inbound marketing to gain attention from a broader base of customers.
Which social media tool is used to achieve this objective?
Blogs
Surveys
Radio advertisements
Television commercials
Blogs
Describe the E business model:
Business to Business
Facilitating sales transactions between individuals and firms
Describe the E business model:
Advertising
Displaying pop-ups on a firm’s website in return for a fee
Describe the E business model:
Business to Busisness
Facilitating sales transactions between firms
Describe the E business model:
Brokerage
Providing an online marketplace for buyers and sellers
Which e-business model is being used when a manufacturer of plastic sells to another party who will use it to make children’s toys for sale?
Business-to-business
Business-to-consumer
Consumer-to-business
Consumer-to-consumer
Business-to-business
Which e-business model is being used when an online hardware store sells to individual buyers?
Business-to-business
Business-to-consumer
Consumer-to-business
Consumer-to-consumer
Business-to-consumer
An investor is examining two years of return on sales data for two companies: Company A and Company B.
Year 1 Year 2
Company A 3.2 3.7
Company B 5.2 4.6
Industry Average 4.0 4.1
How can this accounting information assist the investor in assessing risk?
Company B is performing below the industry average.
Company A is performing above the industry average.
Company A is more effective at transforming its sales into profits than Company B.
Company B is more effective at transforming its sales into profits than Company A.
Company B is more effective at transforming its sales into profits than Company A.
Which section of the statement of cash flows reflects the sale of land and equipment?
Cash flows from selling activities
Cash flows from investing activities
Cash flows from financing activities
Cash flows from operating activities
Cash flows from investing activities
An investor has calculated a company’s return on sales ratio as being 0.044, or 4.4%. The industry average is 6.5%, which makes this company a riskier investment than the average.
Which action should be taken to improve the company’s ratio and lower investor risk?
Reduce sales
Increase sales
Reduce expenses
Increase expenses
Reduce expenses
Which group relies on audited financial statements to make decisions regarding investor financing?
Lenders
Suppliers
Management
Stockholders
Stockholders
Which stakeholder group relies on audited financial statements for strategic planning purposes?
Bankers
Creditors
Employees
Management
Management
A manager wants to evaluate the company’s increase in overall long-term liabilities to determine the change in debt.
Which category of cash flow activity would this review be evaluating?
Investing activity
Financing activity
Operating activity
Liquidating activity
Operating activity
A manager needs to demonstrate actual cash flow information that addresses the company’s revenue amount.
Which section of the cash flow statement should the manager use in the evaluation?
Investing activities
Financing activities
Operating activities
Liquidating activities
Operating activities
Which financial method allows external users to determine the net worth of a business?
Measuring cost of capital
Comparing financial data
Calculating financial ratios
Analyzing financial statements
Analyzing financial statements
Which financial method will provide managers with information about industry metrics?
Comparing financial data
Calculating financial ratios
Measuring the cost of capital
Analyzing financial statements
Comparing financial data
Which financial method will be useful in summarizing an individual firm’s operating, investing, and financing activities?
Comparing financial data
Measuring cost of capital
Calculating financial ratios
Analyzing financial statements
Analyzing financial statements
What is the intent derived from using zero-based budgeting in terms of spending?
Justify every expense
Manipulate the budget
Include discretionary items
Promote additional spending
Justify every expense
What is a benefit of having quality financial management as a business operations predictor?
Suppliers provide quality material.
Financial statements are accurate.
Government reports are filed on time.
Spending is planned and controlled.
Spending is planned and controlled.
In reviewing the latest set of financial statements, the owner of a local retail store sees the business is struggling. The firm has sold a great deal of its products on credit. Consequently, the owner needs to take action in order to increase cash flow and improve the company’s financial standing. The owner would like to accomplish this goal without changing the capital structure.
Which form of equity-based financing should be used?
Merging with another local firm
Factoring receivables as an asset
Seeking outside business partners
Selling shares of stock to the public
Factoring receivables as an asset
An aspiring entrepreneur is evaluating financing options for a new business and wants to make sure there is no loss of control for the owners.
Which form of financing should be used?
Obtain a secured bank loan
Conduct an initial public offering
Take on additional business partners
Issue private shares of company stock
Obtain a secured bank loan
A company is awaiting payments from accounts receivable in two weeks but needs to pay rent for the current month. Since the company does not have the cash to make the payment, it decides to secure funding from the bank.
Which type of financial need is described?
Long-term monthly expenses
Short-term monthly expenses
Long-term unexpected emergencies
Short-term unexpected emergencies
Short-term monthly expenses
A company is growing and producing at full capacity. In order to increase production, the owner decides to build an additional plant. The company did not have enough cash to pay for the building of the new plant and took out a loan.
Which type of financial need is described?
Long-term acquisitions
Short-term acquisitions
Long-term expansion of facilities
Short-term expansion of facilities
Long-term expansion of facilities
