Bus & Finance Test 2 Flashcards

Question

One of the reasons for documenting research sources for a business communication is copyright law. There are some things, however, that copyright law does not protect. All of the following are NOT protected by copyright law EXCEPT: names familiar symbols listings of ingredients audiovisual materials

Answer 1

audiovisual materials In addition to printed materials like books and magazines, audiovisual materials are protected by copyright law. A work is considered copyrighted as soon as it is put into fixed form, even if it has not been registered.

Answer 2

A period during which majority stockholders cannot sell their stock An IPO Lock-up is a period of time after a company has initially gone public, usually between 90 to 180 days during which majority stakeholders in the company are forbidden to sell any of their shares. This is done to ensure the minority stockholders interest by not allowing too much supply of the company stock which will reduce its price.

Answer 3

Actual/Actual ICMA Actual/Actual ICMA insures that all coupon payments are always for the same amount. For irregular coupon periods, the period has to be divided into one or more quasi-coupon periods (also called notional periods) that match the normal frequency of payment dates.

Answer 4

mean The most commonly used average is the mean. It is the sum of all the items in a group divided by the number or items in the group. The mean is useful to compare one item or individual with the group.

Answer 5

revaluation Revaluation is the increase in the price of one currency relative to other currencies. A revaluation has the effect of raising the price of domestic goods to foreigners and lowering the price of all foreign goods to the domestic population.

Answer 6

General journal. Recording in the general journal is the first step in the accounting process. There are many benefits to using a general journal. It provides a chronological record, which is useful in case of an audit.

Answer 7

accounts receivable Accounts receivable is an amount that the business has to receive from its debtors. Therefore it is not classified as an intangible asset. All the other options are of intangible assets.

Answer 8

office supplies Office supplies are expenses. They are expected to be consumed in less than a year. They are not fixed assets. Fixed assets, also known as Property, Plant and Equipment, are tangible assets held by an entity for the production or supply of goods and services, for rentals to others, or for administrative purposes.

Answer 9

return on investment Return on investment or ROI is a financial ratio that expresses the income statement effect from employing an asset as a percentage of the asset's cost on the balance sheet. It is a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio.

Answer 10

buildings The short-term assets of a company like cash, cash-equivalents, accounts receivable and inventory are often referred to as working capital. The difference between its current assets and current liabilities is its net working capital.

Answer 11

commercial paper Commercial paper is a short-term unsecured promissory note issued by a corporation. The debt is issued in denominations of $100,000 or greater and usually matures in two to six months.

Answer 12

Correct answer: Update retained earnings account There are two reasons for preparing closing entries. The first is to reduce the temporary account balance to zero. The second is to update retained earnings account.

Answer 13

Income is taxed as personal income This question asks you to consider the advantages and disadvantages of the different forms of business organization. Advantages of forming a corporation over a partnership include limited liability of stockholders, unlimited life, and easily transferable ownership. Income being taxed as personal income is an advantage to a partnership.

Answer 14

cumulative preferred stock Cumulative preferred stock is preferred stock whose dividends accumulate (accrue) if not paid. Any omitted dividends have to be paid in the future before any dividends may be paid to the holders of the common stock. Most preferred stock is cumulative.

Answer 15

total liabilities/total assets The debt ratio of a company is an indication of the amount of debt the company has borrowed to buy its assets. It is equal to total liabilities by total assets.

Answer 16

Viral Marketing Viral marketing is the name given to the word-of-mouth marketing over the Internet.

Answer 17

Monopsony Monopsony is a situation where there is only one buyer and many small sellers.

Answer 18

decrease When inflation falls, interest rates usually fall too. This provides a person with a floating interest rate loan an advantage as the monthly installments may drop.

Answer 19

net present value The combination of the present value of an investment's cash inflows and the present value of the investment's cash outflows is net present value. To compute present value amounts, the future cash flows are discounted by a specified rate. The advantages of using the net present value to evaluate investments are: all of the investment's cash flows are used in the calculation, and the time value of money is considered because the future cash amounts are discounted to the present.

Answer 20

units of activity Of the choices the units of activity method most accurately reflects the pattern of consumption of economic benefits. This method is suitable in case of fixed assets that depreciate in proportion to units of activity rather than just the passage of time. The disadvantage of this method is that it is difficult to determine and measure a reasonable basis of activity.

Answer 21

Market makers offer to buy securities from any seller and to sell the securities to any purchaser. Market makers set a specified price at which they will buy and sell the security.

Answer 22

Correct answer: Money markets All of the answers are markets. Money markets trade debt securities that mature in under a year.

Answer 23

the firm’s undistributed earnings Retained earnings represent the accumulated earnings of the firm that have not been distributed. It represents the firm’s undistributed earnings since its inception. Since stockholders would receive these earnings if they had been distributed, retained earnings are part of the stockholders’ contribution to the financing of the firm.

Answer 24

Journal, Ledger, Trial Balance, P&L account Financial transactions are first entered into the Journal, then posted into the Ledger which is used to create a trial balance and finally the P&L account.

Answer 25

Dumping Dumping is the economically damaging practice of flooding another country which cheap products thus destroying the native industry.

Answer 26

Multi-level Marketing Multi-level Marketing is a marketing strategy that compensates promoters of direct selling companies not only for product sales they personally generate, but also for the sales of others they introduced to the company. It usually involves direct selling and advertising by word of mouth.

Answer 27

Consumer sovereignty Consumer demand and spending helps determine production in a mixed economy. This is consumer sovereignty.

Answer 28

garnishment A garnishment is a form of execution of a judgment. It is a legal proceeding whereby a creditor may collect directly from a third party who is obligated to the debtor, such as an employer. For instance, a portion of the debtor’s wages are paid to the court by the employer, and the court in turn pays the creditors.

Answer 29

crowding-out effect The essence of the crowding-out effect is that an expansionary (deficit) fiscal policy will tend to increase the interest rate and reduce investment spending. This results in weakening or canceling the stimulus of the fiscal policy

Answer 30

Trade creation Trade creation occurs when low cost producers in the free trade zone replace high cost domestic producers. While this often results in increased revenues and benefit for members of the customs union, it may also end up hurting some industries through increased specialization.

Answer 31

Portfolio investment Portfolio investments are those investments that do not involve the holder obtaining any degree of control of the company. For many people, holding stock in publicly traded companies is the most common form of portfolio investment.

Answer 32

environmental tariff A tax placed on products being imported to or exported from countries with unsatisfactory environmental pollution controls is the environmental tariff. This tariff is, in effect, a sin tax, designed to make trade with environmentally negligent countries less desirable.

Answer 33

the float The process of clearing checks that are simultaneously counted as deposits in two banks is the float. It is also called “cash items in process.”

Answer 34

leading question When an attorney asks a witness a question in such a form that the answer is obvious it is called a leading question. For example, a question like “Isn’t it true that the contract called for you to deliver the goods on December 12, 2009?” This type of question is permitted in cross-examination.

Answer 35

Employee salaries Fixed costs do not change with the output. Employee salaries would be an example of a fixed cost. The other answers are variable costs. Rent, fees, and technology are also fixed.

Answer 36

debasing Debasing is the term for reducing the value of a coin by reducing the amount of precious metal in it. It is still circulated at face value. This was frequently done by governments in order to inflate the amount of currency in circulation.

Answer 37

earnings approach Looking at GNP in terms of income derived or created from the production of the GNP is the earnings approach. It is also called the income approach or the allocations approach. Looking at GNP as the sum of all the expenditures involved in taking that total output off the market is called the output or expenditures approach.

Answer 38

marginal tax rate The marginal tax rate is the increase in taxes paid as additional income is obtained, divided by that increase in income. The average tax rate is the total tax paid divided by taxable income.

Answer 39

cross elasticity of demand Cross elasticity of demand occurs when an economic concept that measures the responsiveness in the quantity demand of one good when a change in price takes place in another good. The measure is calculated by taking the percentage change in the quantity demanded of one good, divided by the percentage change in price of the substitute good.

Answer 40

remand Remand is the term for the return of a case by an appellate court for further action by a lower court. A remedy is an action that enforces a right. Replevin is an action for the recovery of goods wrongfully taken or kept. Rescission is the cancellation of a contract.

Answer 41

derived demand Derived demand is the demand for resources derived from the finished goods and services which resources help produce. When more steel is demanded the demand for labor is a derived demand.

Answer 42

Sweden. The European Free Trade Association consists of Lichtenstein, Norway, Iceland, and Switzerland. The Association establishes free trade among the member countries.

Answer 43

Alternative cost. Opportunity cost refers to a benefit that a person could have received, but gave up, to take another course of action. It is an alternative given up when a decision is made. Opportunity cost is equal to the return of the most lucrative option minus the return of the chosen option.

Answer 44

protective tariff Tariffs are usually associated with protectionism, a government's economic policy of controlling trade between nations for the better of its own. For political reasons, tariffs are usually imposed on imported goods. A protective tariff is designed to protect domestic industries from foreign competition, especially from competitors whose host nations allow them to operate under conditions that are illegal in the protect nation, or who subsidize their exports.

Answer 45

price The three things necessary for a commodity to have value-in-exchange are: utility, scarcity, and transferability. In economics value means the power that goods have to exchange other goods and services. This is the value-in-exchange.

Answer 46

time utility The farmer has created time utility. By waiting to sell he has added value to his wheat. There are several types of economic utility which include: form, place, time, service, possession, knowledge, and natural utility.

Answer 47

allocative efficiency The supply factors in economic growth are: the quantity and quality of a nation’s natural resources; the quantity and quality of its human resources; its stock of capital facilities; and its technology. Two other factors which are not considered supply factors are: a sufficient level of aggregate expenditures and allocative efficiency.

Answer 48

Trough All of the answers are the four phases of the business cycle. The lowest phase of the GDP is the trough. The trough follows the recession.

Answer 49

procedural law Procedural law sets forth how rights and responsibilities can be legally exercised and enforced through legal system. Substantive law defines legal rights and duties. It is concerned with all rules of conduct except those involved in enforcement.

Answer 50

compensatory damages Compensatory damages are awarded to make the victim of the breach “whole” in the economic sense. Liquidated damages can also do this but there must be a provision in the contract that sets forth the amount of damages to be awarded in the event of a breach of the contract.

Answer 51

horizontal privity Horizontal privity determines who benefits from warranty and who brings cause of action. This can be a household, people expected to use the product, or any person.

Answer 52

automatic stabilizers Automatic stabilizers are so called because they act to stabilize economic cycles and are automatically triggered without explicit government intervention. They are designed to offset fluctuations in a nation's economic activity without intervention by the government or policymakers. Unemployment is an example of an automatic stabilizer.

Answer 53

The company was not a good fit for my skills and… The key to appropriately answering questions at an interview is to do so in a manner that is honest and diplomatic. Answering questions in a way that is unprofessional may make you appear undesirable to the interviewer.

Answer 54

quorum A quorum is the minimum number of members that must be present to conduct business at a meeting. This is recorded in the minutes of the meeting.

Answer 55

Corporation. There are many benefits of corporations. Higher taxes are a disadvantage. Other disadvantages include organizational expense and agency problems.

Answer 56

Entrepreneurs create something new or something different that changes or transmutes values. This is the only true statement. Not all small businesses are entrepreneurships. The enterprise must have something special. In fact, entrepreneurs are the minority among new businesses.

Answer 57

Always ask for a job. This would be the least useful. Do not ask for a job, unless the person has one to offer.

Answer 58

financial bootstrapping financial bootstrapping can be defined as “a collection of methods used to minimize the amount of outside debt and equity financing needed from banks and investors.” There are many different types of bootstrapping such as owner financing, sweat equity, and minimization of accounts receivable.

Answer 59

downline The downline in a multi-level marketing business, the people signed up under an individual on which the individual receives payment on their sales. A multi-level marketing business is any business in which a person receives proceeds not only from their own sales, but from the sales made by people they have signed up, and potentially people those people have signed up, and so on.

Answer 60

organizing McClelland’s three secondary needs include: power, affiliation and achievement, not organizing. Power is used to influence others and seek positions of influence. Affiliation includes getting along with others and enjoying the company of others. Achievement includes setting challenging goals for oneself, trying hard to reach these goals and using feedback on performance to achieve goals.

Answer 61

Capitalist. There are different characteristics of managers, capitalists, and entrepreneurs. Capitalists typically avoid risks. Entrepreneurship, however, requires risk.

Answer 62

Operating cash flow Cash flow that comes from producing or selling a product/service is an operating cash flow. This falls under the harvest concept.

Answer 63

distributive education Distributive education is a program of vocational education at the high-school level in which a student is employed part-time and also attending classes. The student receives on-the-job training at the same time he or she takes classes directly pertaining to the student’s vocational field.

Answer 64

group dynamics Group dynamics refers to how people interact and communicate. Group dynamics can play an important part in reaching group decisions. Group dynamics includes interactions, exchange of information, and relationships.

Answer 65

mission statement The mission statement is a one or two-sentence statement that describes why your company exists, who it serves, your company’s goals and your company’s philosophy. Essentially, the mission statement briefly describes what your company has set out to achieve. It should be kept simple and be grounded in reality.

Answer 66

Formative Assessment Formative assessment, also referred to as "educative assessment," is used to aid learning. A common form of formative assessment is diagnostic assessment. Diagnostic assessment measures a student's current knowledge and skills for the purpose of identifying a suitable program of learning.

Answer 67

An interview for which a prior appointment is not needed and anyone can attend without getting their application shortlisted earlier Normally while applying for job one has to submit the application and if the company finds the qualifications good the candidate is invited for an interview. In a walk-in interview any candidate can take the interview without the first cutoff.

Answer 68

Situational Situational techniques are also called Incident interview questions. These focus on stories and ask candidates how they would react. They are also useful for explaining expectations.

Answer 69

inside address The inside address identifies the recipient of the letter. It is typed one or more lines below the date, depending on how long the letter is.

Answer 70

Objectives should direct instruction Competency based programs are based on student achievement of specific objectives outlined in the course. These objectives direct the scope and method of instruction. These programs are used in business skill building areas of instruction.

Answer 71

Affective The Affective domain includes the manner in which we deal with things emotionally, such as values, appreciation, motivations, and attitudes. The skills here would allow the students to understand why businesses should maintain accountability and conduct their operations in an honest manner.

Answer 72

$12, 80 cents The cost of milk produced should be greater than the cost of the fodder fed if keeping the cow is financially feasible. At $12 per liter, the cow would produce $1200 while using 1200 kg of fodder at $0.80 per kg which cost $960. This is the only case in which keeping the cow would be viable. In all other answer options, the cost for the fodder would be greater than the income from the milk production.

Answer 73

The shortcomings of the previous employer Usually in an interview the shortcomings of the previous employer are not a topic for discussion. If candidates are asked this question they should not start listing out all that they found lacking but instead deviate the question to why they are joining the new organization. Critiquing a previous employer in front of a new one creates a negative impact.

Answer 74

Use capital letters to emphasize salient points. This would not be a good suggestion. The writer should use standard spelling, punctuation, and capitalization. There is nothing worse than an email that “screams” a message in capital letters.

Answer 75

Saving comes down As the rate of interest of loans comes down, banks offer lower rates of interest on deposits which reduces saving. Banks cannot force people to save more, it depends only on how much the people are being given in terms of interest for their savings.

Answer 76

Chronological Resumes are usually classified as chronological and functional based on their order and things highlighted. The chronological focuses on time frames and where work was done and is the one appropriate for beginners, entry level jobs.

Answer 77

Informal survey Papers and reports need to be carefully researched. This can include formal and informal research. An informal survey is informal research. The other answers are sources for formal research.

Answer 78

4% The nominal rate of interest is the amount that the bank gives in terms of an extra percentage for deposits. Here for $200 the bank gives $8, so the nominal percentage rate is 8/200=4%.

Answer 79

Do not include any details. To be sure that the receiver of the message is not left with confusion or doubt, details are necessary. The middle section of the communication should contain the details.

Answer 80

Plain Words in reports should be plain and familiar. Long, unfamiliar words will create confusion and lose interest. Terminology is appropriate if used in the correct context.

Answer 81

demand for specific action on the request The process of writing a letter of request should include: a direct statement of the request; justification, explanation and details of the request; but not a demand for action. The closing should be courteous with request for the specific action you desire.

Answer 82

He worked all night; therefore, he was able to finish the report in time. A has no punctuation between night and therefore. They are two separate ideas and need to be kept apart. Option D has an unnecessary comma after report. Semicolons can sometimes occupy the same space as periods, as long as (1) the ideas they separate are closely related and (2) the joined ideas sound good when read together as a single sentence.

Answer 83

Cover all topics to be discussed in one email. C A person should cover only one topic per e-mail. Other guidelines include editing and spell-checking the email, and adding the address as the last step before sending to reduce the chance of sending an unfinished email.

Answer 84

Functional Functional resumes focus on the skills that individuals develop. These are the most useful types of resumes for applicants attempting to choose jobs in a new industry.

Answer 85

Creating the budget of the organization A secretary is appointed to assist a person who is short of time and would like to delegate the tasks of lesser importance. A secretary would not be required to do a task as important as creating a budget of an organization.

Answer 86

mind mapping This technique is called the Mind Map. As you make notes each branch has sub-branches. Different branches may link to one another. It is a visual method that makes the meeting notes easier to recall.

Answer 87

The instructor is comfortable using the new supplies As curriculum changes it becomes important to buy new supplies and use them to train students. The supplies should be safe and not pose any accidental injury. As far as the instructors are concerned, they have to learn to use the new supplies too as it is in the benefit of the students.

Answer 88

coaching style In the coaching style of management top executives provide direction and tell lower-level employees what to do. However, management assumes that employees are members of the team, willing to do their share to accomplish the organization’s goals. Management explains the rationale for decisions and listens to ideas and suggestions from below.

Answer 89

Fair Credit and Charge Card Disclosure Act The Fair Credit and Charge Card Disclosure Act requires new disclosures on credit and charge cards, whether issued by financial institutions, retail stores or private companies. Information such as APRs, annual fees and grace periods must be provided in tabular form along with applications and pre-approved solicitations for cards.

Answer 90

Connecticut The United States Postal Service has a two letter code for all the U.S. states. Connecticut has the code of CT.

Answer 91

in direct order When the reader is likely to agree with the content of the report, the material is presented in direct order, starting with the main idea. If the reader may have reservations about the report, the material is presented in indirect order, starting with the details and leading up to the main idea.

Answer 92

Behavioral Behavioral interviews incorporate past performance in questions. It also helps explore job expectations.

Answer 93

deductive sequence Deductive sequencing starts with the main idea followed by supporting details. Inductive sequencing starts with the details and ends up with the main idea.

Answer 94

Say that it is not something that should be discussed here A polite way to refuse to answer the question would be to say that it is not something that should be discussed and does not make any effect on the performance of the person. Then tell the interviewer to move ahead.

Answer 95

proportionate tax A proportionate tax is a tax in which the rate remains unchanged as the tax base increases. An example of a proportional tax is property tax.

Bus & Finance Test 2 Flashcards

(119 cards)