Subject: Business / Management
Question
QUESTION 1
No matter the size of a business, the leader sets the ________ for how the organization operates. If the leader is chaotic, chances are the business will be too. If the leader is well organized and efficient, the business may well be too.
asset optimization
expense constraints
profit expectations
tone/style
2 points
QUESTION 2
Credit is ________.
exemplified by purchasing a product to sell, and you don't have to pay until after you have sold it
the ability to buy something without spending actual cash
both of the above
essentially using someone else's money for gain
2 points
QUESTION 3
Relying primarily on debt financing is very dangerous for a company because ________.
creditors can force a company into bankruptcy or take over company property
creditors can sabotage the business by refusing to lend it money
creditors can gain a majority share of the company and take it over
it can be very stressful for the owners, thus causing them to make mistakes
2 points
QUESTION 4
What did Ray Kroc do, when he franchised McDonald's, that set the bar for future franchise operations?
He provided training and support to franchisees to ensure that quality would be consistent in every McDonald's restaurant.
He licensed the McDonald's name to a wide variety of products such as hats and shirts.
He sold franchises in competing territories to encourage franchise owners to compete and come up with innovations for the company.
He improved the quality of hamburgers and customer service
2 points
QUESTION 5
If the amount of cash that flows in and out of your business changes significantly during certain times of the year, you should include ________ in your business plan.
a cash flow statement
a projected cash flow statement
a seasonality scenario
a flow chart
2 points
QUESTION 6
Some contracts specify that conflicts may be settled through ________ instead of court.
negotiation
coercion
arbitration
small claims
2 points
QUESTION 7
No matter what way you approach raising money for your business, you will need a ________.
written business plan
family investment
winning lottery ticket
bank loan
2 points
QUESTION 8
Which of the following is not necessary for a contract to be binding?
Signing parties must exchange something of value or agree not to do something they are legally entitled to do.
Signing parties must have their signatures notarized.
Both parties must sign the contract.
None of the above
2 points
QUESTION 9
Employees who feel used by their company ________.
may exhibit negative behaviors to customers
will not do their best
may quit the business
all of the above
2 points
QUESTION 10
A ________ is a business that markets a product or service in the exact manner prescribed by the person who developed the business.
portfolio extension
franchise
license
none of the above
2 points
QUESTION 11
Entrepreneurs use a(n) ________ to track assets and liabilities.
income statement
cash flow statement
balance sheet
profit and loss
2 points
QUESTION 12
Orders are not entered onto the cash flow statement as cash receipts because you ________.
don't get the cash until the customer actually pays for the order
might get them confused with revenue on the income statement
will have a more accurate cash flow statement if you enter them once a month
might get a cancellation
2 points
QUESTION 13
Which of the following is not a type of community development loan fund?
community development banks
public employee credit union
community development credit unions
venture capital
2 points
QUESTION 14
________ are the building blocks of business.
Letters of agreement
Contracts
Personal relationships
Customer services
2 points
QUESTION 15
Bonds are a form of ________.
debt financing
equity financing
both of the above
none of the above
2 points
QUESTION 16
Corporate, partnership, individual income tax, and __________ tax returns must be filed on time with the U.S. Internal Revenue Service.
state
local city or county
self-employment
township
2 points
QUESTION 17
The standards and rules in businesses that help someone decide right from wrong are called ________.
corporate governance
laws
ethics
morals
2 points
QUESTION 18
This is an exit strategy when an entrepreneur sells his or her company to its managers.
a merger
a management buy-out
a management takeover
an employee buy-out
2 points
QUESTION 19
The time period in which legal action may be taken is the ________.
limit of liability
statute of legal obligations
statute of limitations
none of the above
2 points
QUESTION 20
You purchase $250,000 worth of insurance to protect your restaurant with a $10,000 deductible. How much money are you entitled to receive as a payout if a fire destroys your store, which is valued at $250,000?
$240,000
$10,000
$250,000
$ $240,000 less copayment
2 points
QUESTION 21
What are the two steps in making a cash flow projection?
projecting receipts and paying bills before they are due
projecting expected cash expenses and subtracting inventory cost
projecting cash receipts and subtracting expected cash expenses
projecting receipts and capital expenditures for a quarter
2 points
QUESTION 22
Which of the following is not a role of management according to the acronym POLDSCCRIM?
planning
staffing
optimizing
innovating
2 points
QUESTION 23
The greater the potential reward, ________.
the riskier the investment is likely to be
the more the investment is likely to cost
the less risky the investment is likely to be
the longer it will take to show a return
2 points
QUESTION 24
Cash itself or items that could be quickly turned into cash or will be used within one year are called ________.
liquid assets
long-term assets
current assets
liquid cash
2 points
QUESTION 25
If a business owner wants his or her pay to be a variable operating cost, a ________ is most appropriate.
bonus
wage
salary
commission
2 points
QUESTION 26
Some federal agencies provide grants, loans, and/or loan guarantees for businesses that meet specific criteria. One of these is the United States ________.
Interstate Commerce Commission (ICC)
Small Business Administration (SBA)
Federal Land Bank (FLB)
Agricultural Extension Agency (AEA)
2 points
QUESTION 27
A ________ is the amount of loss or damage that you agree to cover before any insurance coverage takes over.
deductible
carrying cost
premium
co-insurance
2 points
QUESTION 28
________, an American economist, argued that business should focus on making quality products instead of maximizing profits and that profit would follow.
Conrad Hilton
W. Edwards Deming
Paul Samuelson
Adam Smith
2 points
QUESTION 29
If you want to buy a business that is growing rapidly, what is the best valuation method to use to determine a fair price for it?
book value method
market-based approach
future earnings method
pay-back method
QUESTION 30
A(n) ________ rate of return means that interest is earned on the base amount plus any interest previously earned.
compound
accrued
annual
fixed
QUESTION 31
Which of the three financial statements that an entrepreneur prepares is used to guide the day-to-day operations of the business?
the cash flow statement
the income statement
the balance sheet
tax returns
QUESTION 32
_______ = Cash on Hand + Cash Receipts–Cash Disbursement.
Profit
Revenue
Cash flow
Gross profit
QUESTION 33
Research indicates that ________ is the most important characteristic required for successful leadership.
self-esteem
business knowledge
drive
intelligence
QUESTION 34
Lost sales and goodwill are potentially significant costs that may arise from ________.
too little inventory
too much inventory
either too little or too much inventory
poor customer service with inventory
QUESTION 35
The number of stockholders in a Subchapter S Corporation is limited to ________.
75
50
12
250
QUESTION 36
The inventory method in which you look at the inventory on hand, and when the stock level of an item appears to be low, you reorder is called ________.
basic control
proximal management
estimation
visual control
QUESTION 37
Businesses typically sell for several times their income because the future stream of income is being sold. The price of the business is its ________.
five times earnings
future value
present value
tangible and intangible value
QUESTION 38
The statistical methods, within Six Sigma, are designed to eliminate defects to a failure rate of ________ defects per one million opportunities, or a 99.9997% success rate.
3.4
34
0.34
.344
QUESTION 39
Madam C. J. Walker was an entrepreneur who became ________.
the first female pharmacist in America
the first African-American businessperson to become a millionaire
the first entrepreneur to franchise a business
the first self-made female millionaire
QUESTION 40
Licensing is ________.
the right to sell knockoffs of a product
the right to start a business and run it exactly as the licensor wants it to be run
the right to operate a business
renting your brand or other intellectual property to increase sales
QUESTION 41
Which statement best describes how the cash flow statement differs from the income statement?
The income statement records sales and expenses when they happen, not when cash is actually exchanged. The cash flow statement records cash inflows and outflows when they actually occur.
The income statement records income, as it comes in, while the cash flow statement records cash from sales.
The income statement keeps track of cash when sales are made; the cash flow statement keeps track of cash after sales are made.
The cash flow statement also includes the current market value of assets.
QUESTION 42
If you extend credit, it is critical to minimize which number to keep cash flowing?
receivable turnover ratio
inventory turnover ratio
collection-period ratio
debt-to-equity ratio
QUESTION 43
An income statement shows whether the difference between revenues (sales) and expenses (costs) is a profit or a ________.
loss
net profit
breakeven
semi-loss
QUESTION 44
The act of Congress that requires employers to pay men and women the same amount for the same work is called ________.
The Equal Opportunity Act
The Equal Pay Act
The Work Compensation Act
Anti-discrimination Act
QUESTION 45
The three factors included in the calculation of the Reorder Point are ________.
demand, lead time, and safety stock
supply, price, and safety stock
demand, inventory, and price
supply, demand, and holding costs
QUESTION 46
Ways to value a business include comparison to other firms, benchmarking, or looking at a multiple of net earnings. Any of these methods is an attempt to arrive at a ________.
future value
net present value
fair market value
profit maximizing price
QUESTION 47
A brand is a combination of name, logo, and design that ________.
identifies the owner of a company
expresses the philanthropic intentions of a company to consumers
puts people in the mood to buy the product or service
becomes associated in the minds of consumers with the products or services of a company
QUESTION 48
What is the difference between strategic planning and operational planning?
Strategic plans are for one year or less and have very specific objectives, while operational plans are more vague and long-term.
Strategic planning covers the short-term day-to-day workings of a business, while operational planning sets out long-term goals.
Strategic planning sets out strategies for the business to achieve long-term growth and other goals, while operational planning covers the day-to-day operations of the business.
Strategic planning is reserved for middle management in large companies.
QUESTION 49
William Petty's article on harvesting quotes Steven Covey, who says ________.
the key to being effective in life is "beginning with the end in mind"
"your chance to sell or to merge typically occurs within the first two years of the life of the business"
"you may have only one chance to harvest your business"
None of the above
QUESTION 50
Which of the following is not a potential penalty for breaking a contract?
You may lose a share of the ownership of your business to the other party who signed the contract.
You may be sued in a court of law by the other party who signed the contract.
A court may order you to pay damages to the other party who signed the contract.
It can be costly.
