Pre Assessment

Question 1

Which economic system is in use if any individual can become a sole proprietor?

Socialism
Capitalism
Communism
Traditional

Answer 1

Capitalism

Question 2

What is Current Ratio?

Answer 2

Current assets, divided by current liabilities

Question 3

What is Return on Sales?

Answer 3

Net income after taxes, divided by net sales

Question 4

What is Inventory turnover?

Answer 4

Cost of goods sold, divided by average inventory

Question 5

What are the four phases of the typical business cycle?

Answer 5

Recession
depression
recovery
prosperity

Question 6

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

Answer 6

Free-market

Question 7

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.

Answer 7

The competition within the industry will be decreased.

Question 8

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

Answer 8

Locating alternative resources for needy families

Question 9

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.

Answer 9

The organization is part of the society and cannot ignore social issues.

Question 10

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

Answer 10

A trade deficit

Question 11

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

Answer 11

It will increase

Question 12

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

Answer 12

Limited liability company

Question 13

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

Answer 13

Not for profit

Question 14

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

Answer 14

Investment by each partner

Question 15

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.

Answer 15

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.

Question 16

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

Answer 16

Unlimited liability

Question 17

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

Answer 17

Availability of capital

Question 18

Which industry attracts small businesses?

Oil drilling
Home builders
Utility companies
Automobile manufacturing

Answer 18

Home builders

Question 19

What is a characteristic of an entrepreneur?

Acceptance of luck
Preference for stability
Ability to work independently
Seeking external rewards for effort

Answer 19

Ability to work independently

Question 20

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.

Answer 20

They provide benefits to large businesses.

Question 21

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

Answer 21

The ability to adapt to change

Question 22

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.

Answer 22

It offers education on business fundamentals.

Question 23

Which of the following is a source of power within an organization?

Positional
Expansive
Functional
Relational

Answer 23

Positional

Question 24

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

Answer 24

First-line management

Question 25

Which type of skill involves dealing effectively with others outside the firm? Analytical Technical Conceptual Interpersonal

Answer 25

Interpersonal

Question 26

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

Answer 26

Participative

Question 27

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

Answer 27

Number of production processes

Question 28

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.

Answer 28

Service firms respond more quickly than manufacturing firms to changing customer needs.

Question 29

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

Answer 29

Inventory control

Question 30

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

Answer 30

Design

Question 31

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

Answer 31

Computer-integrated manufacturing

Question 32

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

Answer 32

Scientific method

Question 33

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

Answer 33

Goal-setting theory

Question 34

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

Answer 34

Increasing supervisory support

Question 35

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

Answer 35

Job enrichment

Question 36

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

Answer 36

Performing

Question 37

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

Answer 37

Cross-functional

Question 38

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

Answer 38

Selection

Question 39

Which component is a part of human resource management? Job analysis Milestone reviews Mission development Project management

Answer 39

Job analysis

Question 40

Which recruiting method in human resource management may involve going to college campuses? Lateral Internal External Peripheral

Answer 40

External

Question 41

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

Answer 41

Strategic plan

Question 42

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

Answer 42

Enact an inclusion program

Question 43

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

Answer 43

Age Discrimination in Employment Act

Question 44

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

Answer 44

Affirmative Action

Question 45

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

Answer 45

Employee Retirement Income Security Act

Question 46

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

Answer 46

Supervision by experienced workers

Question 47

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

Answer 47

Management

Question 48

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

Answer 48

Transportation | Storage

Question 49

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

Answer 49

Gathering

Question 50

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

Answer 50

Risk taking

Question 51

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

Answer 51

Producer

Question 52

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 ```

Answer 52

Reseller markets Producer markets Institutional markets

Question 53

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

Answer 53

Producer market

Question 54

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

Answer 54

Undifferentiated

Question 55

Which element is part of a marketing mix? Politics Promotion Technology Competition

Answer 55

Promotion

Question 56

Which marketing strategy is a company using when it designs differentiated marketing strategies for consumers with different needs? Sector Separated Segregated Segmentation

Answer 56

Segmentation

Question 57

Which element of the marketing mix involves decisions on storage of the product? Packaging Stockroom Distribution Warehousing

Answer 57

Distribution

Question 58

What is the role of customer relationship management as it pertains to marketing? Reward cards Inventory control Collection activities Customer-to-customer referrals

Answer 58

Reward cards

Question 59

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

Answer 59

Defining how a loyal customer is valuable

Question 60

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

Answer 60

Increased loyalty of valuable customers

Question 61

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

Answer 61

Marketing strategies

Question 62

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

Answer 62

Marketing implementation

Question 63

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

Answer 63

Strengths weaknesses opportunities threats

Question 64

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

Answer 64

Marketing implementation

Question 65

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

Answer 65

Blog

Question 66

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

Answer 66

Forum

Question 67

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

Answer 67

Social media community

Question 68

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

Answer 68

Live-stream video

Question 69

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

Answer 69

Blogs

Question 70

Describe the E business model: Business to Business

Answer 70

Facilitating sales transactions between individuals and firms

Question 71

Describe the E business model: Advertising

Answer 71

Displaying pop-ups on a firm's website in return for a fee

Question 72

Describe the E business model: Business to Busisness

Answer 72

Facilitating sales transactions between firms

Question 73

Describe the E business model: Brokerage

Answer 73

Providing an online marketplace for buyers and sellers

Question 74

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

Answer 74

Business-to-business

Question 75

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

Answer 75

Business-to-consumer

Question 76

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.

Answer 76

Company B is more effective at transforming its sales into profits than Company A.

Question 77

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

Answer 77

Cash flows from investing activities

Question 78

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

Answer 78

Reduce expenses

Question 79

Which group relies on audited financial statements to make decisions regarding investor financing? Lenders Suppliers Management Stockholders

Answer 79

Stockholders

Question 80

Which stakeholder group relies on audited financial statements for strategic planning purposes? Bankers Creditors Employees Management

Answer 80

Management

Question 81

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

Answer 81

Operating activity

Question 82

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

Answer 82

Operating activities

Question 83

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

Answer 83

Analyzing financial statements

Question 84

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

Answer 84

Comparing financial data

Question 85

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

Answer 85

Analyzing financial statements

Question 86

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

Answer 86

Justify every expense

Question 87

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.

Answer 87

Spending is planned and controlled.

Question 88

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

Answer 88

Factoring receivables as an asset

Question 89

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

Answer 89

Obtain a secured bank loan

Question 90

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

Answer 90

Short-term monthly expenses

Question 91

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

Answer 91

Long-term expansion of facilities