Founders of small businesses often find it very difficult to give up decision-making
authority to family members.
Universalism is an ethical model that suggests people get their ideas of right and wrong
from their family, religion, education, and community.
Lifestyle or part-time firms typically provide enough profit or salary to supplement an
income but usually not enough on which to live.
Selling your product or service in a limited area, for a limited time is known as parallel
marketing.
Compared to a corporation, a sole proprietorship is usually considered more legitimate
by customers, suppliers, and investors.
Contingency fees are a fixed amount paid for a certain task.
It is good to opt for distributors when a whole line of products need to be bought or
warehoused.
One of the ways to determine the financial situation of a business is by crafting a
business plan.
In deciding whether to make the move from part-time to full time entrepreneurship, the
key question is usually government regulations.
There are three typical locations for services: at a client’s location, at a mutually
accessible location, and at the firm’s location.
The most frequently occurring element of the BRIE model is intention.
An ethical decision should reflect a decision-maker’s real or presumed obligations to
people and institutions in his or her firm and in its task environment.
Inexpensive worldwide communication, shipping, and money transfers mean that small
businesses compete globally for business and need to be aware of global trends.
All models for the life cycle of the small business firm have multiple stages.
_____ are notes issued by credit-worthy corporations.
A. Commercial papers
B. Receivables
C. Demand deposits
D. Marketable securities
Door-to-door sales and party sales are examples of _____.
A. direct sales
B. telemarketing
C. direct response advertising
D. contract manufacturing
Juan has an accounting philosophy according to which he keeps the loans borrowed
from the business separate from the loans he takes from banks for his own purposes.
Which of the following basic accounting concepts is reflected in Juan’s accounting
philosophy?
A. The business entity idea
B. The going concern expectation
C. The accounting equation
D. The revenue and expense premise
In _____, the earnings of the business are distributed to the business owners and those
owners pay individual tax on the earnings.
A. check the box taxation
B. double taxation
C. single taxation
D. pass through taxation
Differentiation strategy is a type of generic strategy aimed at:
A. clarifying how one product is unlike another in a mass market.
B. mass markets in which a firm offers a combination of cost benefits that appeals to
the customers.
C. a portion of the market, called a segment or niche.
D. buying in bulk and selling or repackaging in smaller amounts.
The information that the account holder knows about his or her account, but the bank
does not know, includes:
A. the amount of service charges taken from the account.
B. any direct payments made to the account by the holder’s customers.
C. any deposits the holder has made after bank closing.
D. the amount of any interest received or charged.
Which of the following is true of 401(k) plans?
A. They refer to the leave policies which make no distinction between sick, vacation,
and personal days and allow employees a set number of days off each year.
B. They are compensation plans which take no more than 3 percent of the annual
personnel budget.
C. They allow the employee to have no control over the amount of their contribution
and how the money is invested.
D. They are typically easier to administer and are less expensive than traditional
pension plans.
Aaron, a businessman, has a method of keeping track of accounts receivable by sorting
them into groups of those that are 30, 60, 90, and over 90 days past due. Which of the
following actions will the collection agency which buys the delinquent account from
Aaron do?
A. Collect the entire amount owed and return it to Aaron.
B. Sell it back to Aaron after collecting the entire amount owed.
C. Collect the entire amount owed and keep all the money it obtains.
D. Take mild actions and collect a token amount.
Which of the following terms refers to small business owners’ unique selling points that
will be used to differentiate their products and/or services from those of the
competition?
A. Sales lead
B. Value proposition
C. Trendiness
D. Segmentation
In _____ executive volunteers contribute their time and energy in assisting start-up and
struggling small businesses as a public service.
A. mentoring programs
B. consultancies
C. trade associations
D. franchising outlets
Explain the different types of special-purpose plans.
Discuss the advantages and disadvantages of corporations as a business form.
What are some of the tasks an accounting system should be able to perform in order to
ensure that a business’s accounting information is accurate, reliable, and useful?
What is nondirect distribution? Describe the various distribution channels.
What are the four key decisions that entrepreneurs need to make to build the strategy
for their firms?