Intro to Business Final Exam Review

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Monty Lynn

Reasons to eliminate trade restrictions include all the following except?

Protect natural security

______________ is the contractual relationship in which an established firm supplies another business with unique resources in exchange for payment and other considerations

Franchising

What is the different between outsourcing and importing?

Importing is when a firm buys foreign products that have already been produced, and outsourcing is when a firm contracts with foreign vendors to produce products

The rate of entrepreneurship differs from country to country with countries like Bolivia and Columbia having the highest rates in the world. Research conducted by the Global Entrepreneurship Monitor (GEM) theorized the rates are highest in countries in which people

Start their own business, simply because they have no other options

Entrepreneurs

Create benefits for others while seeking profit for themselves

A small mountain kingdom in the south of Africa, Lesotho is primarily an agrarian economy. If its king and political leadership made decisions that sank the kingdom into unmanageable debt through loans it could not hope to repay, to which international body would the king appeal for debt forgiveness?

IMF (International Monetary Fund)

Trading blocs are groups of countries

That have reduced or eliminated tariffs allowing for a free flow of goods among member nations

___________ refers to government efforts to influence the economy through taxation and spending decisions designed to encourage growth, boost employment, and curb inflation

Fiscal Policy

Today the economies of virtually all nations would be classified as

Mixed economies

Which of the following is NOT a significant drawback of getting into business by entering into a franchise arrangement

Franchising is generally considered to be the riskiest option for starting a business

When comparing a nation's balance of trade with its balance of payments, it is important to realize that

The balance of payments includes the balance of trade, but it also includes other financial flows such as foreign borrowing and lending

Nonprofit organizations are not in the business of

Financial gain

In the broadest sense, economics studies the choices that

People, governments, and companies make in allocating resources

Companies that attempt to monopolize a particular market are likely to violate the

Sherman Antitrust Act of 1890

The three countries participation in the North American Free Trade Agreement (NAFTA) are

Canada, Mexico, and US

A nonprofit corporation enjoys the benefit of

Earnings that are exempt from state and federal taxes

___________________ refers to actions that shape the economy by influencing interest rates and the supply of money

Monetary Policy

The purpose of a written code of ethics is to

Provide guidance to help employees make sound ethical decisions across and range of situations

A limited liability partnership (LLP) is attractive to partners because

There is no distinction between limited and general partners

The goal of _______ is to meet the needs of the current generation without harming the ability of future generations to meet their needs

Sustainable development

Which of the following is NOT an accurate statement about a sole proprietorship?

Legally, the business is considered separate and distinct from its owner

What are the three types of partnerships?

General, limited, and limited liability

A ________ occurs when two companies agree to combine operations to form a new company

Merger

Suppose the value of the US dollar strengthened considerably against the euro. Who would be the most likely to benefit from this result?

European firms exporting goods to America

In the business cycle, a transition period of rising economic growth and increasing employment is a

Recovery

Foreign _______________ involves a firm buying the rights to produce, promote, and use the domestic firm's trademark/parents in a defined geographical area as long as there is agreement on specific operating procedures

Licensing

Which of the following questions would an entrepreneur most likely ask in the aftermath of a business failure?

What can I learn from this experience that will help me be more successful in the future?

Manufacturing jobs have migrated overseas due to increased productivity and low wages of workers in other countries. This contributes to ______ unemployment for American workers in the manufacturing sector

Structural

A nation's legal system provides businesses with _____ for examining ethical standards.

A starting point

In ____________ many firms compete by selling differentiated products,

Monopolistic competition

A key difference between S Corporations and C Corporations is that

S Corporations may have no more than 100 shareholders who must all be citizens or permanent residents of the United States, while C Corporations do not have these restrictions on ownership

In the business world, social responsibility refers to

The obligation of a business organization to contribute to society

Basil Pappas sent his youth working in the restaurants of several of his close relatives. Now he wants to venture into his own business and has decided that he will open his own restaurant. Basil needs more money than he can come up with on his own, so he plans to ask his brothers to put up some money in exchange for a share of the ownership. Such an arrangement means that the company CANNOT be formed as a

Sole proprietorship

Macroeconomics focuses on

The major issues facing the national economy that may seem abstract, but directly affect an individual's day-to-day life

To evaluate inflation the government uses

consumer price index (CPI) and producer price index (PPI)

A supply curve shows that as prices rise the

Quantity of products produced rises

The _________ of the company that produces gourmet coffee includes its employer coffee bean growers who supply the company, people who drink its gourmet coffee, and the people who live in the community where the company produces the coffee

Stakeholders

A _____________ maintains limited liability but offers more flexibility in terms of tax treatment than other forms of business ownership.

Limited liability company

Entrepreneurs tend to have an internal locus of control. This means they

Have a sense that they are personally responsible for what happens in their lives

Types of corporations include

General, S, statutory close, and nonprofit

Miguel Santos became very wealthy when his 10-year-old company made it big and he sold it for several million. Now, he is a ________ who invests in other promising start-up companies. His goal is to make a sizeable return on his investments when these new companies grow to the point where they, too, are sold to a larger firm, or when they go public.

Angel investor

A ___________ merger is the combination of two or more firms at different stages of production of a given product or service so the firms have a buyer-seller relationship.

Vertical

Research suggests that many entrepreneurs fund their new business with

Personal resources of the founder

A trade _____________ occurs when a country imports more goods and services than it exports

Deficit

A ___________ is any activity that provides goods and services in an effort to earn a profit

Business

The four major categories of factors of production are

Natural resources, capital, human resources, and entrepreneurship

A well-written partnership agreement for a general partnership can help the partners deal with all of the following issues EXCEPT how to

Avoid unlimited liability

A possible drawback when buying an existing business is that

You may inherit the mistakes made by the previous owner

Demand is defined as

The quantity of products that consumers are willing to buy at different prices

_____________ are companies that invest in start-up businesses with high growth potential in exchange for an ownership stake

Venture capital firms

Ben & Jerry's is recognized for being a socially conscious trendsetter. As a socially responsible company this maker of high-quality ice cram is likely to focus on

Finding the proper balance between earnings and profits and meeting responsibilities to other stakeholders

The general partnership avoids the problem of double taxation experienced by __________ because earnings of partnerships are taxed only as income of the ___________ with no separate tax on the income of the ___________.

C Corporations, business, partners

Itunes...Expedia... and Charles Schawb are all examples of ______companies participating in e-commerce.

B2C

Financial managers who have a good understanding of the risk-return tradeoff know that..

higher rates of return are riskier than lower rates of return

Lou French works for the Oakland County Police Department. He is charged with sorting through massive amounts of data with statistical and mathematical programs in an effort to detect fraud and crime. Lou Freeh is using...

data mining

eCommerce is different from bricks and mortar business because

all the above (its nearly irrelevant where the seller is located, there are low barriers to entry for merchants starting a new business, no travel is required to purchase goods)

Investors who employ the "buy and hold" investment approach...

hold a diversified portfolio of securities and are willing to ride out the short-term downturns in the market.

Stockholders would most likely use accounting information provided by their firm to...

gauge whether the firm is generating a satisfactory return on their investment

Financial planning asks all of the following questions Except:

when will the firm need to acquire external financing?

What is the accounting equation?

assets=liabilities + owner's equity

When a company utilizes______ it arranges for other organizations in the value chain to perform functions that were previously performed internally...

outsourcing

_____ addresses the needs of the external stakeholders including stockholders...creditors...and government regulators.

Financial accounting

The three basic types of securities corporations issue to raise long-term financial capital are..

common stock, preferred stock, and bonds

As a part of the financial planning process, planners would create projected financial statements also known as _____ statements.

pro forma

The_____ summarize a firm's financial position at a specific point in time(a specific quarter or year).

Balance sheet

Capital _____ is the process a firm uses to evaluate long-term investment proposals.

mapping

According to the _____ method of accounting revenues are recognized when they are earned and payment is reasonably assured.

accrual-basis

All of the following are assets Except

salaries payable (cash, inventory, building)

Candidates wishing to become certified public accountants must complete all of the following to reach certification Except

must complete an accounting-related internship while in college (must complete 150-semester hours (5years) of college education with heavy emphasis on accounting and business-related courses, must pass a rigorous exam, must complete one year direct work experience in the field of accounting)

Choose the best example of viral marketing.

word-of-mouth promotion

Some have said with good sense that "the secret to having money is not__________ but________.

making more; spending less

Intellectual property refers to..

marketable products and services that result from someone's creative and intellectual efforts

To facilitate trade several European nations have adopted a single currency—the ______________:

Euro

For the past several decades the _________ and ___________ were the two largest securities exchanges in the United States.

New York Stock Exchange(NYSE); NASDAQ

____ provide reports...information...and analysis to managers to assist them with making better informed decisions.

Managerial accountants

With debt capital...companies___; with equity capital...companies___.

repay borrowed money with interest; exchange ownership for money

____ accountants provide services such as tax preparation...external auditing...or management consulting to clients on a fee basis.

Public

A(n)_____ is a network confined to sites on internal web servers and only available to individuals within an organization.

intranet

Currency simplifies trade when it is.

all the above (portable, divisible, durable)

In operations management quality is defined in terms of:

how well a product satisfies the preferences of customers.

Greg is a recent graduate with this accounting degree. He has also sat for and passed the CPA exam. At his new accounting position at Get With It.com he notices that depreciation expense is not calculated in what he understands to be an acceptable accounting method. Greg has decided to approach his supervisor and clarify what he believes to be a discrepancy in standard practices. To make his case he should refer to...

GAAP

In some economies...prices escalate...causing currencies to not be stable. Zimbabwe is a recent example of this rapid price escalation which we call:

hyperinflation

_____is the functional area of business that is responsible for finding... among man alternatives... the best sources for funds and the best way to use them.

Finance

An organization's activities and processes that involve the physical flow of goods from the raw material state to the final consumer is known as_____

supply chain

Equity financing is provided by____ while debt financing is provided by____.

owners, creditors

Which item would be listed first on the income statement?

revenue

A____ allows investors to track general market conditions.

stock index

For financial managers to be socially responsible... it requires them..

to make a long-term commitment to the needs of many stakeholders.

Which statement about Enterprise Resource Planning (ERP) is false?

A key advantage of ERP systems is that compared to older systems, they are relatively inexpensive to implement and easy to establish.

Profit is the difference between..

revenue and expenses

One advantage of many mutual funds is that they..

offer investors professional management and liquidity

A firm's current liabilities..

are due to lenders in less than a year

The___ shows the cash flowing in and out of a firm through its operating...investing...and financing activities.

statement of cash flows

If every piece if inventory in a company's supply chain can be tracked precisely with RFID technology what is that firm using?

ERP

The process of developing the operating budget begins with the..

sales budget

Financial management includes all of the following functions EXCEPT

making decisions about the appropriate way to promote products.

Which of the following would be listed in the liabilities section of the balance sheet?

wages payable

Given the nature of their products many service firms base their facility location decisions primarily on:

proximity to their customers

Moor's Law suggest that information technology..

advances at a rapid pace

A commonly-used hierarchy depicts data being transformed from lower to higher levels of meaning specifically from data to:

information>knowledge>wisdom

The___ is an index based on the adjusted average price of stocks of 30 major corporations picked by editors of The Wall Street Journal..

Dow Jones Industrial Average

While TQM has several goals... Six Sigma is about_____

reducing defects

An initial____ is the first time a corporation issues stock that may be purchased by the general public.

public offering

The___ is a broad stock index that includes many of the largest and best known United States corporations.

Standard & Poor's 500

The two primary sources of equity financing are _____ and ____.

owner contributions; retained earnings

For the followers of Jesus... scripture says a great deal about money...such as

all of the above

Preferred stockholders enjoy a preference over common stockholders with respect to...

dividends

A business has two sources of funds: the owners and the non-owners. The financing provided by owners is represented on the balance sheet as____ and the financing provided by non-owners is represented on the balance sheet as____.

owner's equity; liabilities

Which of the following is NOT one of the big four international accounting firms?

Boyd and Walker

The current chairman of the Board of Governors of the Federal Reserve Bank of the United States is..

Ben Benanke

As ____ you work within an organization preparing reports and analyzing financial information such as budgets and cost management.

Management accountant

Angel investors are...

wealthy persons who invest in young business

A stock ____ is a short combinations of letters used to identify the stock of a particular company.

symbol

The___ is a project management tool illustrating relationships among all activities involved in completing a project thus enabling mangers to identify activities that are most likely to delay the project's completion.

Critical path method

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