A disadvantage of locating a small business in a shopping center is the possibility of
policy changes due to change in the center’s owners.
Common stockholders have a legally enforceable claim to dividends.
Working for another company to broaden their training and background helps justify
moving family members into the family business at a higher level.
Small businesses follow a universal set of rules for adopting and applying technology.
The economic order quantity is determined by balancing the cost of placing an order
with the costs of carrying that inventory in stock.
In an S corporation, all shareholders must be individuals, estates, or some type of
personal trust.
The franchiser exercises complete control over the franchisee’s business operations.
Venture capital firms generally require a substantial return as either equity or profit.
Employee losses from accidents and occupational diseases are paid for under state
workers’ compensation laws.
If your funds are invested in a fixed asset, they are not available for paying bills.
The possibility facing a small business that it will be unprofitable is an insurable risk.
In the context of small businesses, which of the following is true of consignment
selling?
a) Payments are made to suppliers only when the products are sold.
b) It consists of two or more companies exchanging items of roughly equal value.
c) It allows small businesses to reap tax advantages by selling stock shares to workers.
d) It is regulated by the Federal Small Business Administration.
Which of the following is true about choosing a location for a small business?
a) A business owner chooses a location such that he or she can change it frequently.
b) Employees are never adversely affected when a firm changes its location.
c) Company location is a major factor in success or failure of the business.
d) Customers tend to readily follow the business whenever it shifts locations.
Candy bars, milk, and bread are examples of _____ goods.
a) convenience
b) shopping
c) specialty
d) premium
Burger’s Inc. owns a number of fast food stores across the country. Ryan, who wants to
start his own business, decides to open a store under the Burger’s Inc. trademark. He
will have to sell and market the fast food products according to the terms of the
licensing agreement. In this scenario, Ryan is a:
a) venture capitalist.
b) franchiser.
c) franchisee.
d) manufacturing agent.
The _____ is a collection of computers and computer networks linked together to
receive and distribute information around the world.
a) Intranet
b) Internet
c) RFID
d) firewall
Which of the following budgets is planned first?
a) Production budget
b) Personnel budget
c) Revenue budget
d) Sales budget
Which of the following is true of the zero-defects approach to motivate employees?
a) It assumes that employees want to do a good job.
b) It encourages employees to learn new and related skills.
c) It gets employees involved and takes advantage of their creativity.
d) It permits employees to work at times other than the standard work week.
Jane, who wants to start her own business, considers buying an Internet caf© which is
up for sale in her neighborhood. However, Jane discovers that Internet connectivity
tends to be erratic in the store since she lives in a remote town, and decides to not buy
this business. Which of the following is most likely the reason for Jane’s refusal to buy
the business?
a) Lack of an established product line
b) Lack of an established channel of distribution
c) Problems due to old and obsolete facilities
d) Problems associated with workforce availability
_______ refer(s) to obligations to pay, resulting from purchasing goods or services.
a) Mortgage payable
b) Surplus value
c) Accounts payable
d) Owner’s equities
In which of the following areas is computer technology likely to be most useful in small
firms?
a) Repetitive, high-volume tasks
b) Unstructured activities
c) Open-ended activities
d) Tasks that require creativity and judgment
Which of the following is true of small business investment companies (SBICs)?
a) They are limited to the sale of debentures.
b) The SBA matches each dollar an SBIC puts into a loan.
c) They are prohibited from selling securities similar to preferred stock.
d) They cannot make qualified SBA loans.
An electronics store provides discount coupons to its customers when they buy a
product. Which marketing activity, other than advertising, does this situation illustrate?
a) Distribution
b) Publicity
c) Merchandising
d) Sales promotion
_____ law is administered between two or more citizens.
a) Public
b) Criminal
c) Private
d) Civil
The _____ method of setting an advertising budget is useful for specialty goods and in
situations where outside factors limit the amount of product available.
a) units of sales
b) percentage of sales or profits
c) objective
d) executive decision
The _____ is a tax on the consumption or storage of goods within a taxing jurisdiction.
a) sales tax
b) use tax
c) excise tax
d) income tax
Which of the following is a characteristic of an affirmative action program?
a) It allows punitive and compensatory damages in cases of intentional discrimination.
b) It makes it illegal to discriminate against employees or applicants because of genetic
information.
c) It provides employee selection guidelines.
d) It provides guidelines to help firms eliminate discrimination against women and
minorities.
In the context of small businesses, _____ usually involves making or processing
materials into finished goods.
a) manufacturing
b) resourcing
c) prospecting
d) merchandising
A home-based business is an attractive option for working mothers because:
a) most corporations encourage telecommuting.
b) there has been a decrease in job sharing.
c) many companies are adopting flextime.
d) daycare services are relatively inexpensive.
_____ is the fundamental redesign of a business, often resulting in reduction in size and
markets.
a) Reinvention
b) Incremental change
c) Reengineering
d) Acculturation
____ is the specific amount of profit one expects to achieve.
a) The breakeven point
b) A sales forecast
c) A profit goal
d) A benchmark