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Flashcards in midterm practice test Deck (99)
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1

a $100 tax credit reduces your tax more than a $100 tax deduction does

  • true
  • false

true

 

2

a(n) ____ is a short, specific written declaration of the reason a business exists and what it wants to achieve

 

  • statement of intent
  • affirmation of purpose
  • mission statement
  • declaration of principle

mission statement

3

the differences between actual and budgeted performance, called ___, allows managers to spot problems before they become serious

  • profits
  • losses
  • discrepancies
  • liabilities

discrepancies

4

a current ratio of 2:1 means that the value of current assets is twice as much as the value of current liabilities

true or false

true

5

true or false

consumers are individuals and organizations that determine what products and services will be available for sale

false

consumers decide what products and services will be bought

producers decide what will be for sale

6

which of the following is not a fundamental principle that guides the effective organization of work?

  • accountability
  • responsibility
  • authority
  • moderation

moderation

7

the ____ shows how much profit is being made by each dollar of sales for the period being analyzed

  • net income ratio
  • current ratio
  • return on equity ratio
  • debt to equity ratio

net income ratio

8

a ____ represents a unit of ownership in a corporation

  • corporate bond
  • certificate of deposit
  • share of corporate stock
  • mortgage

share of corporate stock

9

true or false

an entrepreneur is an economic resource

true

10

one important advantage of forming a partnership is that this form of business organization gives each owner sole control over the business

  • true
  • false

false

they share control over the business

11

a bond represents a debt for an organization

true or false

true

12

when the company is operating at a loss, the total expenses listed ont he income statement will be ____

  • less than the total revenue
  • more than the total revenue
  • less than the total assets
  • more than the total assets

more than the total revenue

13

each of the following is one of the three economic questions that must be answered by all nations except:

  • what goods and services will be produced
  • how will the goods and services be produced
  • who will receive the profits earned when goods and services are produced
  • what needs and wants will be satisfied with the goods and services produced

who will receive the profits earned when goods and services are produced

14

without personal savings, businesses could not carry out capital projects

true or false

false

15

which of the following is not one of the six basic activities that all businesses perform?

  • raising capital
  • buying goods and services
  • conserving resources
  • generating ideas

conserving resources

16

service businesses are the fastest growing part of the US economy

  • true
  • false

true

17

unity of command means there is _____

  • a single person in charge of a business
  • an overall plan that tells each employee what to do
  • a clear reporting relationship for all staff of a business
  • a way for ideas to flow from employees to managers

a clear reporting relationship for all staff of a business

18

true or false

deflation has occurred in the US

true

19

technology has allowed people to work fewer hours

  • true
  • false

false

20

XYZ Company produces and sells five products.  People who specialize in production and marketing are assigned to each product.  XYZ company has a ____ organization structure.

  • unity of command
  • functional
  • matrix
  • corporate

matrix

21

when you purchase a corporate bond, you become one of the corporation's ___

  • owners
  • creditors
  • equity holders
  • borrowers

creditors

22

in a ____ the resources are owned and controlled by the government

  • command economy
  • traditional economy
  • market economy
  • mixed economy

command economy

23

the ____ tells you if the business will be able to pay its debts whent hey are due

  • current ratio
  • debt to equity ratio
  • return on equity ratio
  • net income ratio

current ratio

24

jamal's family has assets of $250,000, including $160,000 of value in their home.  the family has $80,000 in liabilities.  what is the family's net worth?

  • $10,000
  • $170,000
  • $330,000
  • $490,000

$170,000

250000-80000=170000

(trick question because you don't use the 160000)

25

a mortgage or rent payment is a(n) ____

  • fixed expense
  • variable expense
  • personal asset
  • deficit

fixed expense

26

the easiest form of business to start and end is a(n) ____

  • limited liability partnership
  • S corporation
  • franchise
  • proprietorship

proprietorship

27

a ____ occurs when a government spends less than it takes in

  • budget deficit
  • budget shortage
  • budget over run
  • budget surplus

budget surplus

28

which of the following is an example of a service?

  • the shingles that are used to put a new roof on your home
  • the effort of the worker you hire to put a new roof on your home
  • the hammer that is used to install the new shingles on your home
  • the increased value of your home after a new roof is installed

the effort of the worker you hire to put a new roof on your home

29

in what type of business organization is each owner personally liable for all business debts, even if the debts were created by other owners?

  • corporation
  • partnership
  • proprietorship
  • S corporation

partnership

30

when preparing a cash flow statement, include ____ under Cash Inflows

  • a gross pay before taxes and deductions
  • gross pay less taxes only
  • net income or take home pay
  • interest on mortgage

net income or take home pay