Reengineering is the fundamental redesign of a business, often resulting in reduction in
size and markets.
All U.S. laws affecting businesses are based on the federal or a state constitution.
Lack of an established product line does not typically stop a person from starting a new
business.
The responsibility for purchasing should be assigned to several people in the company
to get the best quality items.
Competition becomes more aggressive during the decline stage of a product’s life cycle,
with
declining prices and profits.
Managers of family-owned businesses must agree to hire any family member who
wants to join the business.
Most small businesses are successful in purchasing when they use a single source of
supply.
Owners of small businesses do not have to pay personal taxes on their salaries and other
ownership-related income they withdraw from the business.
_____ is a group of volunteer members who specialize in helping people develop their
business ideas.
a) Small Business Development Center
b) Service Corps of Retired Executives
c) Production Credit Association
d) Officers’ Welfare Association
The continuous fee paid by the franchisee to the franchiser based on a percentage of the
franchisee’s gross revenue is known as:
a) royalty fee.
b) start-up fee.
c) license fee.
d) franchise fee.
_____ refer to the acceptable levels to which employee achievement should conform.
a) Operating standards
b) Ethical standards
c) Performance standards
d) Employee standards
Which of the following is an example of products sold in seasonal stores?
a) Expensive video
b) Precious jewelry
c) Skiing equipment
d) Cigarette
Expenses that do not change in value as sales volume rise or fall are called _____.
a) variable expenses
b) fixed expenses
c) operating expenses
d) miscellaneous expenses
Advertising costs have a consistent relationship to the firm’s sales volume in the _____
method of setting an advertising budget.
a) units of sales
b) percentage of sales or profits
c) objective
d) executive decision
Operating systems:
a) are needed only for businesses that produce goods.
b) must be different for different types of businesses.
c) consist of the inputs, processes, and outputs of a business.
d) focus on the systematic gathering, recording, and analysing of data relating to the
marketing of goods and services.
_____ is the extra compensation paid for all production over a specified standard
amount.
a) Merit increase
b) Profit sharing
c) Incentive wage
d) Stock ownership
Businesses use self-insurance primarily for _____.
a) risk avoidance
b) risk prevention
c) risk transfer
d) risk assumption
Which of the following is a disadvantage of RFID tags over barcodes?
a) RFID tags cannot be scanned easily.
b) RFID tags have a shorter range of readability.
c) RFID tags are subject to viruses.
d) RFID tags are not affordable.
_____ are reductions from a product’s normal list price and are given to customers as an
inducement to buy more of the same product.
a) Discounts
b) Allowances
c) Subsidies
d) Trade-ins
A characteristic of family-owned businesses in the U.S. is that they:
a) have less potential financial risks.
b) can be a source of unresolved family conflicts.
c) have little disagreement among members on how to meet business goals.
d) rarely have family members with differing value systems.
Which of the following is a method of computing inventory that small firms tend to use
to save taxes when prices rise?
a) First-in, first-out method
b) Last-in, first-out method
c) Average-cost method
d) Direct tax method
Which of the following is an advantage of hiring professional managers to run
family-owned businesses?
a) More employment opportunities for family members
b) Retained “personal touch”
c) Fair treatment of employees
d) Concentration of power in small cliques
_____ is the promotional effort made for a product or service, especially at the point of
purchase.
a) Trading
b) Sponsoring
c) Merchandising
d) Brokering
Which of the following is considered a downside to personal data assistants?
a) They cannot be used for scheduling and contacts.
b) They are largely unaffordable.
c) They have tiny keyboards for input.
d) They cannot exchange data with laptops.
Which of the following refers to a group of retired managers from all walks of life who
help people develop their business ideas?
a) Service Corps of Retired Executives
b) Federal Small Business Administration
c) State Economic Development Agency
d) Small Business Development Center
_____ control is the careful planning and control of all financial activities of a firm.
a) Budgetary
b) Auditing
c) Production
d) Operating
What is the Uniform Commercial Code?
Why do small business owners prefer proprietorship? What are the disadvantages of
proprietorship?
How can a small business decrease planned expenses to improve profits?
What is the marketing concept?
Mention the causes or reasons of discontinuance or failure.
How do small companies plan for human resource needs?