Corporations must obtain a federal charter before they can conduct any business.
In a partnership, profits (and losses) must be shared according to the ratio of capital
originally invested in the partnership.
A job analysis describes the process by which a firm determines the duties and nature of
the jobs to be filled and the skills and experience required of the people who are to fill
them.
Direct (variable) costing includes in the unit cost of a product only those costs that vary
with the quantity of units produced.
As the trend toward increased globalization continues, successful companies must
consider themselves businesses without borders.
An effective job interview contains three phases: breaking the ice, asking questions, and
selling the candidate on the company.
It is much wiser to carry too little inventory rather than too much because there are no
costs associated with carrying too little inventory.
Social responsibility is important only for large corporations.
Ratio analysis allows a business owner to identify potential problem areas in her/his
business before they become business-threatening crises.
A job analysis describes what the job is, what its duties and responsibilities are, and
what work conditions are involved.
Slow accounts receivable are a real danger to a small business because they often lead
to cash crises.
The franchise contract defines the rights and the obligations of both parties and sets the
guidelines that govern the franchise relationship.
The only cultural barrier an American small business manager must overcome when
conducting business internationally is the language gap.
Many franchises have discovered that small outlets in high-traffic, nontraditional
locations generate nearly the same sales volume as full-size outlets at a fraction of the
cost.
Because they have college degrees, a working knowledge of business, and years of
management experience, both corporate castoffs and corporate dropouts who become
entrepreneurs will most likely increase the small business survival rate.
The ________ serves a large trading area (10 to 15 miles or more), contains from 50 to
100 stores, and draws customers from a population that lives within a 20- to 40-minute
driving time.
A) neighborhood shopping center
B) community shopping center
C) regional shopping mall
D) central business district
Many joint ventures fail because the parties involved neglected to ________.
A) select a partner who shares their company’s values
B) spell out in writing exactly how the venture will work and who has decision-making
authority
C) select a partner whose skills are different from, but compatible with, their own
D) All of the above
________ is an emerging international market for U.S. franchisors that is expected to
realize the highest future growth rate.
A) Europe
B) Canada
C) Japan
D) China
The key ingredient in the superior customer service equation is ________.
A) state-of-the-art equipment
B) standards and measurements of customer service
C) the support of managers
D) friendly, courteous, well-trained people delivering customer service
Which of the following is a benefit of entrepreneurship?
A) The opportunity to gain control over your own destiny.
B) The opportunity to reach your full potential.
C) The opportunity to do what you enjoy.
D) All of the above
Which of the following associations is correct?
A) Balance sheet – cost of goods sold
B) Income statement – owner’s equity
C) Current assets – inventory
D) Long-term liabilities – accounts payable
The philosophy of producing a high-quality product or service and achieving quality in
every aspect of the business and its relationship with the customer, with a focus on
continuous improvement in the quality delivered to customers is ________.
A) total quality management, or TQM
B) time compression management, or TCM
C) bootstrap marketing
D) customer experience management, or CEM
Solid cash management enables a business owner to ________.
A) adequately meet the cash demands of the business
B) avoid retaining unnecessarily large cash balances
C) stretch the profit-generating power of each dollar the business owns
D) All of the above
________ entrepreneurs are business builders who seek innovative solutions to some of
society’s most vexing problems.
A) Social
B) Opportunistic
C) Serial
D) Necessity
Before a Web site can become the foundation for a successful e-business ________.
A) the technology must be right
B) it should be previewed by a Web designer
C) it must be created with the target audience in mind
D) the physical storefront must be established
________ is a statement that defines the values underlying the entire company and its
ethical responsibilities to its stakeholders.
A) Company credo
B) Company annual report
C) Company vision
D) Company strategic plan
The purpose of zoning regulations is to ________.
A) restrict the growth of businesses
B) contain similar types of activities in suitable locations
C) help new businesses “incubate” in their startup period
D) build the traffic volume for retail and service businesses
Which hemisphere of the brain processes information in a step-by-step fashion?
A) Right hemisphere
B) Left hemisphere
C) Lateral hemisphere
D) Intuitive hemisphere
Switching costs, the number of buyers, and if the items represent a relatively small
portion of the cost of finished products are key considerations regarding the ________.
A) threat of new entrants to the industry
B) rivalry among companies competing in the industry
C) bargaining power of suppliers
D) bargaining power of buyers
Malcolm won a contract to provide nuts, bolts, and washers to a small African country’s
military. Unfortunately, neither his bankers nor venture capitalists would provide the
loans needed to buy the material to produce the order. The bank did not do international
loans. Which barrier to international trade is Malcolm experiencing?
A) Financing
B) Information
C) Cultural
D) Attitude
A special type of partnership in which all partners, who in many states must be
professionals, are limited partners is called ________.
A) general partnership
B) limited partnership
C) silent partnership
D) limited liability partnership
The technique of ________ uses three columns that allow the entrepreneur to weigh
both the advantages and the disadvantages of a particular decision and work to
maximize the variables that support it while minimizing those that work against it.
A) force-field analysis
B) TRIZ
C) brainstorming
D) mind mapping
When evaluating the assets of an existing business, the inventory ________.
A) is always current and salable
B) usually appreciates over time, making the business a bargain
C) should be judged on the basis of its market value, not its book value
D) is usually stated honestly and does not need an independent audit
According to the American Collectors Association, if a business is writing off more than
________ percent of its sales as bad debts, it needs to tighten its credit and collection
policies.
A) 3
B) 5
C) 10
D) 25