Although Russia is rich in human resources and natural resources, the country ranks relatively low in terms of gross national income per person. The missing ingredient seems to be lack of entrepreneurship due to
corruption.
rising tax rates.
government actively encouraging citizens to work for large multinational companies.
decreasing population.
Question
2 of 50
Given the importance of _____ to workforce effectiveness, some business experts, such as management guru Peter Drucker, separate this factor from human resources.
capital
natural resources
entrepreneurship
knowledge
Question
3 of 50
Harry Trolle is the Chief Financial Officer of a small construction company and has just been presented information from the sales budget and various cost budgets. He uses this information to develop a forecast of the firm’s net income for the next year. Harry is reviewing the company’s
cash budget.
budgeted income statement.
cash flow budget.
budgeted balance sheet.
Question
4 of 50
New Coffee Company, LLC uses JIT (just-in-time) logistical supply methods. This means that New Coffee doesn’t really keep large stocks of coffee on hand, which is cheaper from the standpoint of operations but more risky because of the potential havoc any significant under- or over-supply of product could wreak. As New Coffee makes decisions, which ratio is of the utmost importance?
Debt-to-assets
Inventory turnover
Average collection period
Current
Question
5 of 50
When tax revenue exceeds government expenditures, the government incurs a
budget deficit.
windfall.
budget surplus.
national debt.
Question
6 of 50
_____ are companies that provide short-term financing to firms by purchasing accounts receivable at a discount.
Investment bankers
Factors
Credit agents
Commercial paper houses
Question
7 of 50
GeeGee’s is a neighborhood bakery known for its scrumptious tea cakes. GeeGee’s recipes call for expensive spices imported from Asia. Recently, the cost of these spices has risen dramatically, leading GeeGee’s to consider increasing its prices. In order to analyze how this change would affect consumer choices, GeeGee’s management could perform a
microeconomic analysis.
macroeconomic analysis.
transformational economic analysis.
structural analysis.
Question
8 of 50
_____ measures the total value of all final goods and services produced within a nation’s borders over a given period of time.
The consumer price index
Gross domestic product
Net national production
The production function
Question
9 of 50
Pop Goes the Weasel is a small toy store that competes effectively with much larger companies because it focuses exclusively on selling non-electronic toys made of wood. The company has been successful because it has
exploited a market niche.
worked to undercut larger competitors’ prices.
developed a human resource system that has attracted excellent employees.
received grants from the Small Business Administration.
Question
10 of 50
As aging baby boomers retire, companies will
face few problems finding labor because the next generation of workers is larger than the generation that is retiring.
need to compete for top talent, driving up the costs of recruitment and payroll.
rely mainly on unskilled labor in the future.
take advantage of the retirements by replacing them with workers earning lower wages and salaries, thus reducing labor costs.
Question
11 of 50
_____ is/are what the firm owes its creditors.
Retained earnings
Owners’ equity
Liabilities
Assets
Question
12 of 50
Bookkeepers perform the routine procedures involved in reporting information about the financial transactions that affect an organization, while _____ go further by analyzing and interpreting this information and communicating the results to stakeholders.
managers
employers
auditors
accountants
Question
13 of 50
All of the following statements about the impact of small businesses in the U.S. economy are true EXCEPT that
small businesses account for half of the U.S. gross domestic product.
small businesses provide greater employment stability than large firms in times of economic hardship.
small businesses have generated between 60 and 80% of the net new jobs in the United States over the past 10 years.
small businesses tend to introduce new innovations at a much higher rate than large businesses.
Question
14 of 50
Out-of-pocket costs are also referred to as
implicit costs.
explicit costs.
direct costs.
indirect costs.
Question
15 of 50
The South Korean automobile company Hyundai enjoys a 17% share of the passenger car market in India. They were able to beat the competition by changing subtle aspects of the Hyundai models sold in India, such as the roof lines to accommodate motorists wearing a turban. The company has shown that understanding a nation’s _____ can lead to business success.
political differences
economic differences
sociocultural differences
legal differences
Question
16 of 50
With a given amount of labor and other resources, producers in the nation of Alphania can produce either 100 widgets or 50 wackets. Thus, Alphania must give up two widgets to produce each wacket. Using the same amount of labor and resources, producers in Betania can produce 40 widgets or 40 wackets, so Betania must give up one widget for each wacket produced. Based on this information,
Alphania has a comparative advantage in producing both goods.
Betania has an absolute advantage in producing both goods.
Alphania has a comparative advantage in producing wackets, but Betania has an absolute advantage in producing wackets.
Betania has a comparative advantage in producing wackets.
Question
17 of 50
George’s Car Repair Shop buys parts from a local parts distributor. The distributor delivers the parts promptly under terms stated on the invoice: 3/15 net 30. George has always paid the bill in 30 days and has never really worried about these invoice terms. Your advice to George is
that he is smart to wait until the 30th day before making payment because this gives him the use of cash for the maximum possible amount of time.
that these terms mean that the payment is due in 30 days, but as long as he is not more than 15 days late, he can avoid the 3% late penalty. Thus, George could actually delay payment until the 45th day without incurring a penalty.
that, if possible, George should pay the bill within 15 days after receipt of the parts because then he will receive a 3% discount. If he does a lot of business with this firm, this will result in a sizeable savings for George by year’s end.
George should not react to these payment terms because they are a tactic used by many distributors to get customers to pay early with little or no benefit to George.
Question
18 of 50
The FASB has the responsibility of establishing the principles used to prepare financial statements. A key goal of these principles is to
create a fair distribution of corporate income among various stakeholders.
ensure that the firm’s value is fairly assessed and that its taxes are fair but not excessive.
provide external stakeholders with relevant and reliable information about a firm’s financial condition.
provide the company’s managers with access to sensitive proprietary financial information while preventing competitors and other outsiders from obtaining this information.
Question
19 of 50
Hans is considering forming a company that specializes in international consultations. He wants to serve as a liaison between U.S. and Chinese toy distributors, offering the U.S. firms access to lower cost labor and offering the Chinese firms access to one of the largest markets in the world. In addition, he will need to capitalize the operation by offering shares of common stock. Which business entity should he choose?
A corporation
An LLP
An LLC
A sole proprietorship
Question
20 of 50
Individuals who make contributions to _____ will receive tax deductions, which make it easier for these organizations to raise funds from donations.
S corporations
C corporations
general partnerships
nonprofit corporations
Question
21 of 50
During the production era, companies continued to implement new technologies to streamline production processes. Although many changes occurred, the primary focus resulted in
refinement, efficiencies, and entrepreneurship.
marketing, consumer orientation, and job specialization.
competition, marketing, and refinement.
job specialization, efficiencies, and refinement.
Question
22 of 50
All of the following are entrepreneurial characteristics EXCEPT
self-reliance.
aversion to risk.
vision.
tolerance of uncertainty.
Question
23 of 50
Which of the following industries operates under a market structure of monopolistic competition?
Clothing industry
Agricultural industry
Soft drink industry
Utility industry
Question
24 of 50
Macroeconomics focuses on
the major issues facing the national economy, but it has little or no relevance to individuals.
smaller economic units such as individual consumers, families, and individual businesses operating within the economy.
the major issues facing the national economy that may seem abstract but directly affect an individual’s day-to-day life.
the role of government, while microeconomics focuses on the private sector.
Question
25 of 50
A negative aspect of the entrepreneurship era was that
powerful businesses gained the ability to manipulate prices and exploit workers.
productivity declined in many key industries as work shifted away from mass production to more labor intensive methods.
governments began running huge deficits.
inflation spiraled out of control, resulting in a decline in the standard of living.
Question
26 of 50
Preparing a good budget is beneficial because
it fosters better communication and coordination among members of various departments with direct responsibility for producing products and services.
it provides direction through the identification of goals and plans of action.
it provides an effective way to monitor progress.
you receive all of the above benefits of budgeting.
Question
27 of 50
The primary way the Fed controls the supply of money is by
establishing the amount of currency the U.S. Treasury is allowed to print each month.
changing the reserve requirement.
buying and selling government securities on the open market.
allowing banks to borrow more money from the U.S. Treasury.
Question
28 of 50
Honda’s construction of automobile assembly plants in the United States is an example of foreign _____ for Honda Corporation.
direct investment
outsourcing
importing
licensing
Question
29 of 50
Firms that _____ may find that they can achieve their objective by developing a relationship with a firm that offers factoring services.
need to establish a source of long-term financing that avoids fees and commissions
have larger than necessary cash balances and want to find a safe way to invest the excess cash
rely heavily on credit sales and want to speed up their receipt of cash
plan to issue large sums of commercial paper in the near future
Question
30 of 50
Lisa is a marketing consultant who is trying to help a regional company design an advertising campaign that will appeal to the local population. Her report should take into account _____ factors such as the age, income, and ethnic composition of the area’s population.
psychographic
sociological warfare
natural resource management
demographic
Question
31 of 50
India and the Philippines consistently attract sizeable amounts of foreign investment for services performed in the domestic market and sold internationally. The main reason for this foreign interest is that
these countries have outstanding infrastructure, with world class transportation and power supply facilities.
these nations have large numbers of highly educated workers who are paid much less than U.S. workers.
the dollar has a higher value in the Asian market than in the American market.
the average income of consumers in these nations is among the highest in the world, so these markets have a lot of potential.
Question
32 of 50
The consumer price index (CPI) measures
change in the prices of gas and energy.
change in weighted-average price over time in a “market basket” of goods and services bought by the typical consumer.
change in prices of a set of goods representing the minimum acceptable standard of living for the nation’s consumers.
the percentage of their income consumers must use to pay for goods relative to their average incomes in the same time period.
Question
33 of 50
What distinguishes outsourcing from importing?
Outsourcing occurs when a firm buys foreign products that have already been produced, and importing occurs when a firm contracts with foreign vendors to produce products.
Importing occurs when a firm licenses its product to a foreign firm for production, and outsourcing occurs when a firm buys foreign property for the expressed purpose of producing the product.
Importing occurs when a firm buys foreign products that have already been produced, and outsourcing occurs when a firm contracts with foreign vendors to produce products.
Outsourcing occurs when a firm licenses its product to a foreign firm for production, and importing occurs when a firm buys foreign property for the expressed purpose of producing the product.
Question
34 of 50
A firm’s cost of goods sold is subtracted from the _____ on the _____ in order to compute the firm’s _____.
total assets; balance sheet; net worth
revenue; statement of cash flows; cash balance
revenue; income statement; gross profit
liabilities; balance sheet; total profit
Question
35 of 50
For the franchisee, the advantages of a franchise arrangement often include
less risk and easier access to funding.
unlimited and unrestricted opportunities for growth.
low cost of formation.
freedom and flexibility in management.
Question
36 of 50
Most business enterprises in the United States are privately owned, but the federal government owns a number of major enterprises, such as the U.S. Postal Service. This suggests that the U.S. economy is best classified as a
pure market economy.
mixed economy.
true command economy.
pure planned economy.
Question
37 of 50
McDonald’s uses foreign _____ to build its corporate presence worldwide.
licensing
direct investment
outsourcing
franchising
Question
38 of 50
During the marketing era, businesses concentrated on
hard selling designed to convince people to buy products.
building long-term customer relationships.
developing brands to differentiate their products from those of competitors.
none of the above.
Question
39 of 50
The most common type of franchise agreement is the
business format franchise agreement.
general partnership agreement.
limited liability corporate agreement.
operation agreement.
Question
40 of 50
The external audit process includes all of the following EXCEPT:
making sure accounting and booking staff have a clear understanding of GAAP.
reviewing sales receipts and invoices.
checking the accuracy of every transaction.
counting the supplies in inventory.
Question
41 of 50
One drawback of offering credit customers more time to pay is that it can
cause incorrect measurement of sales revenue under the accrual method.
increase the cost of credit to customers.
delay the receipt of cash the firm needs to pay its obligations.
increase the firm’s taxable income.
Question
42 of 50
_____ is the most basic level of international market development and involves shipping domestically produced products overseas.
Importing
Exporting
Franchising
Licensing
Question
43 of 50
The _____ budget brings together all of the firm’s budgeting documents to provide a unified plan for a specific budget period.
operating
master
fiscal
A-level
Question
44 of 50
The mix of equity and debt financing a firm uses to meet long-term financing needs is known as the firm’s capital
ratio.
forecasted spectrum.
forecasted budget.
structure.
Question
45 of 50
Barry and Inga recently founded a hot new company that is growing rapidly. In need of a large amount of capital to finance their company’s growth, they are in talks with a venture capital firm. Barry and Inga should realize that the venture capital firm will only provide financing
if Barry and Inga agree to avoid any risky investments.
after Barry and Inga have paid off all of the personal debt they incurred to start their company.
in exchange for a significant stake in Barry and Inga’s firm’s ownership.
if Barry and Inga agree to pledge specific company assets as collateral to back the loan.
Question
46 of 50
Which of the following is a key feature of an organization that adopts the marketing concept?
Departments throughout the organization adopt a customer orientation.
Executive management and the board of directors focus mainly of the financial aspects of the company’s operations.
The marketing department is seen as the only department capable of creating lasting value.
The goal of the organization is to maximize market share by keeping prices as low as possible.
Question
47 of 50
Which of the following is true about the SBA?
They offer microloans through community nonprofits.
They underwrite government grants.
The SBA oversees all small businesses in the U.S., much like the SEC oversees public companies.
The SBA uses federal funds to provide up to 100% of the capital for small businesses.
Question
48 of 50
Financial management includes all of the following functions EXCEPT
making decisions about the appropriate way to promote products.
managing the firm’s working capital.
evaluating a firm’s long-term investment opportunities.
evaluating a firm’s recent financial performance.
Question
49 of 50
Jasmine started a small business two years ago. The business is just now seeing some success, and Jasmine notes that she has a few thousand dollars more in her bank account than she currently needs to pay her bills. However, because of the uncertainty of cash flows in her new business, she is concerned that she may need access to these funds on fairly short notice in the future. Given this situation, Jasmine should
invest the funds in common stocks.
keep all of these funds in her checking account.
put some of her excess cash into money market mutual funds.
use her excess cash to buy intangible assets.
Question
50 of 50
Ross has two different projects he would like to work on this weekend. He wants to paint the spare bedroom, and he wants to perform some minor repairs on his old ’83 Chevy. Unfortunately, he doesn’t have time to do both this weekend. The fact that Ross must give up one thing in order to do something else illustrates the concept of
diminishing returns.
opportunity cost.
comparative advantage.
the hierarchy of needs.
