Small companies can no longer consider themselves to be strictly domestic businesses
in this hotly competitive global environment.
Impulse shoplifters steal on the spur of the moment when they succumb to temptation.
Perhaps the most important feature of a partnership agreement is its ability to resolve
potential sources of conflict among partners.
Left-brain people tend to be prolific thinkers.
The purpose of a vendor certification program is to create a list of acceptable vendors
that the small business owner can spread his/her orders among to avoid stocking out
due to delays in shipments.
Installment loans are made to big firms for purchasing other businesses.
Market research frequently only confirms the intuition of the small business owner.
Installing a sprinkler system to minimize the threat of fire would be a risk reduction
strategy.
Generally speaking, current employees will prove flexible and able to meet whatever
changes the new owner desires to make once the business is acquired.
A small business exporting to Hungary would likely have to engage in barter or
countertrade since Hungarian currency is not convertible into any other currency.
A new owner of an existing business can generally introduce change and innovation
almost as easily as if the company was a new business start-up.
Patents are a grant from the federal government for the life of the inventor plus fifty
years and cannot be renewed.
One of the most important words on the Internet is “free.”
Congress has created a number of laws to establish standards pertaining to product
labeling for consumer protection.
The common short-term loan is for one year, often repaid sooner, and repaid in one
lump sum.
Total inventory cost is maximized when carrying cost and ordering costs are balanced.
Even though it is an intangible factor, the entrepreneur’s “character”and the quality of
the presentationare important factors in evaluating a loan proposal.
It is not necessary for the industry analysis to address the profitability of the businesses
in the targeted market segment.
Bartering refers to buying much needed materials, equipment, and supplies in exchange
of other products or services and cash.
Despite their popularity, family-owned businesses are actually a small portion of the
economy and contribute less than 25% of the GNP to the economy of the United States.
At the end of a capital lease, a business has no option left to purchase the equipment.
Small companies often find that competing in foreign markets and selling to foreign
customers makes them tougher competitors at home.
Small Business Investment Companies (SBICs) provide both debt and equity financing
to small businesses.
The market approach to valuing a company relies primarily on the price/earnings ratio
of the company in comparison to the average P/E of similar companies.
Companies should be flexible and willing to make adjustments to their products and
services, promotional campaigns, packaging, and sales techniques when selling abroad.
Goals and objectives provide the direction for the small firm and are essential to the
strategic planning process.
The best way for Specialty Building Supplies to move into international markets, given
their expertise and their Autovent product, would be direct exporting.
Often, ideas require a gestation period.
Another process central to the successful implementation of TQM is identifying the
individual(s) responsible for any mistakes as part of fixing the immediate quality
problems.
Highly successful entrepreneurs are able to communicate their vision and their
enthusiasm about that vision to those around them.
A firm commitment underwriting agreement essentially guarantees that the small
company making the initial public offering will receive the funds it needs.
Under uniform delivered pricing, a company charges all of its customers the same price,
even though the cost of selling or transporting the merchandise varies.
A company must establish its right to a trademark by actually using it.
Cash flow cycle refers to the time lag between paying suppliers for merchandise and
receiving payment from customers.
Knowing that employees are “connected” through the grapevine allow business owners
to send out ideas to obtain reaction making a formal announcement.
In an installment loan for equipment, the loan’s amortization schedule would coincide
with the equipment’s useful life.
Successful Total Quality Management (TQM) requires:
A) training employees in the use of the tools of statistical quality control.
B) directive management, providing clear quality direction.
C) thorough and complete quality inspections.
D) holding middle management responsible for the results.
________ is the personal contact between salespeople and potential customers that
comes from sales efforts.
A) Publicity
B) Personal selling
C) Specialty advertising
D) Advertising
Drawbacks of owning a small business include all but:
A) unbalanced family life.
B) no guarantee that the business would make profits.
C) too many financial statements.
D) Both A and B
There are a number of “tests” of ethical behavior in business. The one that prioritizes
choosing the option that results in the greatest good for the greatest number of people is
known as:
A) the utilitarian principle.
B) the professional ethic.
C) the Golden Rule.
D) Kant’s categorical imperative.
In a business sale, the buyer seeks to:
A) get the business at the lowest price possible.
B) negotiate favorable payment terms, preferably over time.
C) minimize the amount of cash paid up front.
D) All of the above
One important intangible yet highly important advantage an investment from a large
corporate partner gives a start-up is:
A) credibility.
B) success.
C) power.
D) None of the above
Which of the following would be a sign that a company is overextended in its debt?
A) A low debt ratio compared to the industry average
B) A debt-to-net worth ratio of 0.12 to 1
C) A times-interest-earned ratio that is far below the industry average
D) A high inventory turnover ratio
If a small business owner receives a “Notice of Filing” from a customer, he should:
A) send a second notice.
B) ask that customer for a portion of the purchase price up front.
C) arrange for a lockbox for future payments from that customer.
D) immediately file a proof-of-claim.
An important source of credit information that collects information on small businesses
that other reporting services ignore is:
A) National Association of Credit Management.
B) TRW.
C) Dun & Bradstreet.
D) National Association of Small Business Owners.
In a(n) ________, a domestic small business forms an alliance with a company in the
target nation for the purpose of exporting to that market.
A) foreign joint venture
B) trade intermediary
C) domestic joint venture
D) export management company
Clementine, DataScope Pro, GoldMine, and MineSet are what type of software
packages?
A) Customer relationship management
B) Data mining
C) Data discovery
D) Word processing
A small retail boat shop is most likely to rely on ________ to finance its inventory.
A) discounted installment contracts
B) floor planning
C) installment loans
D) trade credit
Foreign trade zones were created in:
A) 2001.
B) 1992.
C) 1902.
D) 1934.
The U.S. Department of Agriculture provides financial assistance to certain small
businesses through the Rural Business-Cooperative Service (RBS). The RBS program
is open to:
A) just farms.
B) urban businesses.
C) rural businesses.
D) all types of businesses.
Joan was hired as a sales representative. One of her responsibilities was to make outside
sales calls. Over the years, she got friendly with her customers. One of the customers
has been asking her for a date for a while and finally told her that she will not be getting
any orders unless she goes out with him.
A) This is in violation of sexual harassment and Joan can sue the customer.
B) This is in violation of sexual harassment and Joan can sue her employer.
C) This is not in violation of sexual harassment because the employer was not
negligent.
D) This is not in violation of sexual harassment because Joan liked the customer very
much.
Absorption costing:
A) is complete pricing in that it takes into consideration all manufacturing and overhead
costs.
B) guarantees the manufacturer a desired profit margin.
C) does not encourage a manufacturer to operate efficiently.
D) clouds the true relationship of price, volume, and costs.
A process layout would be best fitted to:
A) an automobile assembly plant.
B) an oil refinery.
C) a manufacturer of handmade metal gifts.
D) a textbook publishing plant.
One advantage of personal selling is:
A) success is not measured just by sales volume but also by customer satisfaction.
B) top sales people use an indirect approach to close the deal.
C) the sales person knows what the company wants and works for company’s
perspective.
D) All of the above
The ________ forbids contracts that restrain trade or create monopolies.
A) Clayton Act
B) Sherman Anti-Trust Act
C) Robinson-Patman Act
D) Miller-Tydings Act
The most common reason cited by banks for rejecting small business loans is:
A) poor credit history.
B) undercapitalization or too much debt.
C) lack of collateral.
D) insufficient cash flow or poor profitability.
The ________ is built on the basic accounting equation: Assets = Liabilities + Owner’s
Equity.
A) income statement
B) sources and uses of funds statement
C) balance sheet
D) cash budget
Typical short term loans are for:
A) purchase of more inventory.
B) purchase of computers.
C) positive cash to pay other debts.
D) All of the above
The concept of social responsibility has evolved from that of a nebulous “do-gooder” to
one of:
A) “law follower.”
B) “social steward.”
C) “moral steward.”
D) “law abider.”
The annual losses in bad debts for small businesses is:
A) $856 million.
B) $12 billion.
C) $42 billion.
D) $312 million.
When buying a franchise, the potential franchisee should first:
A) search for start-up capital for local banks.
B) evaluate him/herself as to the fit with the franchise.
C) work in a similar business or industry for a year.
D) contact the local chamber of commerce for information on the local economy.
Which of the following statements is correct?
A) Supply-chain management includes hiring the qualified HR Director.
B) Supply-chain management includes all the activities that produce goods and services
and delivers them to the customer.
C) Supply-chain management includes providing quality service.
D) All of the above
Toni wants to buy software from Bill that she can modify in order to hack into her
boyfriend’s e-mail account to see if he’s writing to another woman. When Bill discovers
why Toni wants the software, he refuses to sell it to her. Toni sues Bill in small claims
court. Is the contract valid?
A) Yes, because a verbal contract is binding.
B) No, because of the principle of legality.
C) Yes, because of promissory estoppel.
D) No, because Toni is clearly crazy.
Which of the following generally is not required by a Certificate of Incorporation?
A) The names and the addresses of the incorporators
B) A statement of the corporation’s purpose
C) A statement of how stock proceeds will be used
D) The corporation’s bylaws
Effective leaders are noted for their:
A) ability to get their followers to do what they themselves can’t or won’t do.
B) ability to provide guidance based on values for making decisions.
C) willingness to assign responsibility while retaining authority so they can monitor
employee success.
D) focused seriousness in achieving goals, working hard and then harder.
The ________ acquaints lenders and investors with the nature of the business and the
general goals and objectives of the company.
A) executive summary
B) company history
C) business and industry profile
D) marketing strategy
Judith started her business in 1995. During the years, she sold different products she
purchased from distributors and manufacturers. One day, she came up with a new
product. She patented the product and got started to sell the product. What should be the
objectives of her pricing strategies?
A) Get the product accepted
B) Maintain market share as competition grows
C) Earn a profit
D) All of the above
The first rule governing transfer of title and risk of loss states that:
A) title transfers to the buyer as soon as the goods are delivered.
B) the buyer has both title and risk of loss as soon as the goods are paid for, regardless
of their physical location.
C) the supplier and small business may agree to a shift of the risk of loss at any time
during the transaction between them.
D) title transfers to the buyer as soon as the goods are in the hands of the carrier.
________ is when a company raises capital by selling shares of its stock to the general
public for the first time.
A) Preferred stock selling
B) Rule 157 Offerings
C) IPO
D) All of the above