It is currently very common that a CPA who is hired to audit a firm’s finances will also
be hired to help design a more efficient financial information system.
A product’s features may be intangible.
Companies often use internal recruitment to build morale and keep high-quality
employees from leaving.
An investment bank is a financial institution that specializes in issuing and reselling
new securities.
A feature or image that makes a product different from existing products is called
product differentiation.
A firm’s controller is often the firm’s chief accounting officer.
The essence behind management by objectives (MBO) is that performance goals are
used to direct and motivate behavior.
Initial public offerings (IPOs) are the first sale of a company’s stock to the general
public and are a major source of funds that fuel continued growth for many firms.
A virtual organization has little or no formal structure.
Major projects, such as corporate mergers or buyouts, can adversely affect the
long-term solvency ratio of a company.
The biggest challenge of total quality management is motivating employees throughout
the company to achieve quality goals.
Today, fixed exchange rates are the norm for most major nations of the world.
The Small Business Administration is the government agency charged with owning
small businesses.
When several employees perform the same simple task, a narrow span of control is
most appropriate.
An international organization is one in which traditional boundaries and structures are
minimized or eliminated altogether.
Money deposited into a commercial bank has the potential of increasing the overall
money supply.
The behavioral approach to leadership assumes that appropriate leader behavior varies
from one situation to another.
A solution to a long-term contract based solely on COLA is called a wage reopener
clause that does not allow wage rates to be renegotiated.
In recent years, some companies have run into problems because they have not set aside
enough money to cover the retirement funds they have agreed to provide.
In a same-steps layout, equipment and people are set up to produce one type of good in
a fixed sequence of steps and are arranged according to its production requirements.
The reseller market includes farmers, manufacturers, and some retailers.
MBO involves managers and subordinates in setting goals and evaluating progress.
Municipal bonds may be issued by federal, state, or local governments.
Frequently, the informal organization effectively alters a company’s formal structure.
The divisibility characteristic of money is illustrated by a financial company’s ability to
divide its monetary assets among several investments.
The oldest and most expensive form of sales is personal selling, in which a salesperson
communicates one-on-one with potential customers to identify their needs and align
them with the product.
In a natural monopoly, prices tend to be government regulated.
Managerial ethics can be classified into three areas; behavior toward employees,
behavior toward the organization and behavior toward other economic agents.
Many new businesses are started by people who have left big corporations.
Changes in technology will result in a decrease in the amount of information that
managers will use to make decisions.
Performance appraisals are designed to show workers how well they are doing their
jobs.
Some ethical and unethical behaviors fall into gray areas, while others are widely
agreed upon.
The situational approach to leadership is concerned with the contingent outcomes and
consequences of leader behavior rather than universal outcomes and consequences.
The Russell 2000 Index focuses primarily on technology companies, small-company
stocks, and has a smaller representation of sectors such as financial, consumer products,
and industrials.
One of the daily responsibilities of the Federal Reserve System is to regulate the current
federal funds rate.
An audit examines whether a firm’s financial statement conforms to generally accepted
accounting principles.
Low start-up costs and tax benefits are advantages of sole proprietorships.
The percentage of liabilities in a company’s assets plus the percentage of owners’ equity
in its assets is always equal to 100.
Which of the following types of venue is favored by small-business retailers?
A) Superstore
B) Catalog showroom
C) Specialty shop
D) Department store
E) Studio workroom
Which of the following areas of the Certified Fraud Examiner (CFE) exam includes
theories of fraud prevention?
A) Criminology and ethics
B) Financial transactions
C) Fraud investigation
D) Fraud litigation
E) Legal elements of fraud
Assuming a company has been gathering ideas for new products, what is the next step
in the development process?
A) Test marketing
B) Prototype development
C) Business analysis
D) Concept testing
E) Screening
What is the goal of the CPA Vision Project?
A) To eradicate fraud in public companies
B) To increase the role of CPAs in providing consulting services to corporate managers
C) To better identify core competencies needed for noncertified public accountants in
the public sector
D) To better define the role of accountants in the world economy
E) To lobby for laws that better support the accounting field and eliminate fraud
When a company attempts to change its culture, what must take place to give the new
culture solid shape within the firm?
A) The firm must set up new systems for appraising and compensating employees who
enforce the new values.
B) A highly responsive strategy must be determined.
C) There must be a period devoted to conflict and resistance.
D) There must be renewed focus on the activities of the competitors and customers.
E) There must be a thorough SWOT analysis to determine if the change is necessary.
Which of the following requires managers to share information about events inside the
company and explain certain transaction?
A) Earning cycle reports
B) Revenue recognition
C) Statement of cash flow
D) Solvency ratios
E) Full disclosure
Which of the following terms refers to any economic resource that is expected to
benefit a firm or individual who owns it?
A) Asset
B) Liability
C) Equity
D) Account
E) Deposit
Who are temporary or permanent replacements for striking workers?
A) Strikebreakers
B) Union busters
C) Union breakers
D) Contingent workers
E) Labor relation teams
Which alternative to striking encourages to work at a pace that results in significantly
lower productivity for the organization?
A) Work slowdown
B) Lock out
C) Sickout
D) Picket
E) Boycott
Which of the following represents the ownership of resources used in a private
enterprise system?
A) Freedom of choice
B) Private property rights
C) Increased profits
D) Limited competition
E) Perfect competition
Which of the following is the BEST example of unrelated diversification?
A) Ford Motor Company merging with General Motors
B) Northwest Airlines merging with Procter & Gamble
C) McDonald’s merging with Burger King
D) Tootsie Roll merging with Hershey
E) Bath and Body Works merging with The Body Store
Which environment is NOT an important dimension of a business organization’s
external environment?
A) The political-legal environment
B) The sociocultural environment
C) The technological environment
D) The corporate cultural environment
E) The global business environment
What type of business has two or more owners who share in the operation of the firm
and are financially responsible for its debts?
A) Corporation
B) Partnership
C) Cooperative
D) Conglomerate
E) Nonprofit
When is a company susceptible to a hostile takeover?
A) When a bull market is in effect
B) When stock prices are high, but assets are decreasing
C) When stocks are low priced, but assets have high value
D) When the international market is in recession
E) When angel investors demand repayment of their venture capital
Where can a firm find statistical information on the strength and performance of an
economy?
A) Aggregate output
B) Business cycle reports
C) Economic indicators
D) Standard of living indexes
E) Gross domestic product
What feature does a firewall provide?
A) Internet access
B) Protection from electrical surges
C) Connectivity between stations in a LAN
D) Privacy protection
E) Links to computers in a WAN
What should a firm use to evaluate the work activities, materials flow and paperwork in
an effort to determine how those activities provide benefit for the customers?
A) Value-added analysis
B) Benchmarking
C) Getting closer to the customer
D) Supply chain management
E) Follow-up
Which of the following BEST describes the effects of leadership neutralizers in an
organization?
A) They tend to make leader behavior ineffective.
B) They tend to make leaders more charismatic.
C) They tend to outweigh the need for leader behavior.
D) They tend to make managers become effective leaders.
E) They tend to make leaders more neutral toward employees.
Which of the following is crucial for high-priced consumer products such as homes and
cars?
A) Creative selling
B) Interactive marketing
C) Missionary selling
D) Order processing
E) Trade shows
The idea that individuals would contribute according to their abilities and receive
benefits according to their needs supports which type of economy?
A) Market economy
B) Socialist based economy
C) Mixed market economy
D) Capitalist market economy
E) Communist based economy
What occurs when the quantity demanded exceeds the quantity supplied?
A) Demand deficit
B) Surplus
C) Equilibrium point
D) Shortage
E) Supply schedule
Which of the following refers to a set of methods and technologies used to produce a
good or service?
A) Quality ownership
B) Production
C) Utility
D) Value added analysis
E) Operations process
Which of the following takes place when a manufacturer grants the right to sell a
product to a very limited number of retailers or wholesalers?
A) Intensive distribution
B) Direct channel distribution
C) Sales agent distribution
D) Exclusive distribution
E) Selective distribution
A company that buys products to use to produce or create other goods or services is a(n)
A) convenience buyer.
B) consumer.
C) industrial buyer.
D) capital buyer.
E) rebrander.
How can a company establish market leadership for a product?
A) Introduce the product with a lower price than competitors.
B) Do not introduce the product until success is certain.
C) Be sure the product supports the overall goals and strategies of the organization.
D) Introduce the product before competitors.
E) Introduce a product that supports the rest of the product line.
Which of the following measures indicates the prices of typical products purchased by
American consumers living in urban areas?
A) GDP per capita
B) Standard of living
C) Consumer price index
D) Purchasing power parity
E) Economic indicators
What is the result of a borrower who fails to make payments to the lender when due?
A) Bankruptcy
B) Default
C) Risk ratings
D) Bondholder’s claim
E) Bond indenture
What skills can a manager utilize to work well with people and make them feel excited
about their work?
A) Human relations skills
B) Technical skills
C) Accounting skills
D) Conceptual skills
E) Marketing skills
What are low grade bonds usually called?
A) Bankruptcy
B) Default bonds
C) Junk bonds
D) Corporate bonds
E) Grade B bonds
Which of the following will force a sole proprietorship to be legally dissolved?
A) Sales exceed $1 million.
B) The partners reorganize the firm’s structure.
C) Earnings are less than $500,000.
D) The owner donates profits.
E) The owner dies.
What is the electronic collection, storage, and retrieval of data referred to as?
A) Management information systems
B) Data warehousing
C) Data mining
D) Information linkage
E) Knowledge information systems
Which of the following represents a feature or image that makes one product different
from its competitors?
A) Marketing strategy
B) Product differentiation
C) Place distribution
D) Personal selling
E) Product positioning
Which type of corporation spans national boundaries and is subject to regulation in
multiple countries?
A) Publicly held
B) Limited liability
C) Subchapter S
D) Professional
E) Multinational
If a manufacturer divides the organization according to the way goods are created, what
type of departmentalization is being utilized?
A) Functional departmentalization
B) Process departmentalization
C) Customer departmentalization
D) Geographic departmentalization
E) Brand departmentalization
When a business owner forms a master limited partnership, what responsibilities does
the master partner have toward the minority partner(s)?
A) The master partner must provide detailed operating and financial reports.
B) The master partner must allow the partners a vote on all major business changes and
transactions.
C) The master partner must make all liabilities clear before the partnership is formed.
D) The master partner must give up majority ownership.
E) The master partner must allow the partners to take an active role in the business.
How do consumer choice and demand affect a capitalistic system?
What is involved in service process design?
Discuss earnings per share and how they are used.
Discuss the art of management and how it is supported by the science of management.
Describe the ways in which businesses protect themselves from the threats and risks
information technology poses.
What are the four components of national competitive advantage?
Describe the services provided by merchant wholesalers.
What happens to demand and price during times of inflation?
Explain the difference between an electronic storefront and a cybermall.
How will leadership styles change in a collective culture when compared to an
individualistic culture?
How can diversity create competitive advantage?
Discuss the fair value discloser standard that is being jointly developed by the FASB
and the IASB.
Explain the role of a corporation’s board of directors.
What role has e-mail played in business ethics and company practices?
How does Maslow’s hierarchy of needs model explain employee motivation?