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If a business is to be organized and run by more than one person, preparing the business
plan should be a team effort.
People who start a small business usually seek outside funding before using their own
funds.
A proprietorship legally ends with the owner's death, and some legal action must be
taken to restart it.
Excise tax refers to the tax levied on an individual's income.
From an investor's point of view, debt investments should have a higher financial return
than common stock investments.
A small business is one that is independently owned and operated and is dominant in its
field of operation.
_____ goods are those that customers buy often, routinely, quickly and in any store that
carries them.
a) Convenience
b) Premium
c) Specialty
d) Shopping
Which of the following is true of the members of quality circles?
a) They are usually very senior-level managers.
b) They are generally the supervisors of their respective departments.
c) They usually do not get support from top management.
d) They receive training in problem identification and communications.
Which of the following defines risk avoidance?
a) It refers to the practice of refusing to undertake an activity when the risk seems too
costly.
b) It refers to the practice of using various methods to reduce the possibility of a loss
occurring.
c) It refers to the shifting of risks to someone outside the company.
d) It refers to the strategy of setting aside funds to meet losses.
An entrepreneurial venture is characterized by:
a) innovative strategic practices and/or products.
b) independent ownership and operation and no desire for dominance in its field.
c) no scope of growing large, and the owners may not want it to.
d) normal sales, profits, and growth as opposed to rapid growth and a quick sellout.
Discuss the Americans with Disabilities Act (ADA).
Which of the following is true of a sales forecast?
a) It is the value received by a firm in return for a good or service.
b) It is an estimate of the amount a firm expects to sell during a given period in the
future.
c) It represents the difference between revenue earned and expenses incurred.
d) It is an estimate of the owners' share of the business, after liabilities are subtracted
from assets.
_____ involves fairly enforcing a system of rules and regulations to obtain order.
a) Counseling
b) Discipline
c) Arbitration
d) Employment at will
For small businesses, inputs are:
a) the products produced and the satisfactions to employees and the public.
b) all the activities from obtaining raw materials through delivering the product to the
customers.
c) a system for changing form, place, or time.
d) materials, people, money, information, machines, and other productive factors.
_____ are general statements that serve to guide managerial decision making and
supervisory activities.
a) Methods
b) Policies
c) Budgets
d) Procedures
Which of the following is true of the breakeven point?
a) It sets in advance cost targets in all aspects of product design and production.
b) It is the volume of sales where there is neither profit nor loss.
c) It is the amount of revenue expected from sales for a given period in the future.
d) It is the specific amount of profit one expects to achieve.
_____ describes the relative proportions of a firm's assets, liabilities, and owners'
equity.
a) Surplus value
b) Financial structure
c) Profit
d) Accounts receivable
A _____ is debt backed by some physical asset other than land, such as machinery,
equipment, or inventory.
a) mortgage loan
b) common equity
c) preferred equity
d) chattel mortgage loan
In an endeavor where neither party can achieve its purpose alone, a _____ becomes a
viable option.
a) joint venture
b) proprietorship
c) corporate charter
d) buy-sell agreement
Product and trademark franchising:
a) grants the franchisee the right to sell a widely recognized brand.
b) is the systematic gathering, recording, and analyzing of data related to the marketing
of goods and services.
c) is the concept that two or more people, working together in a coordinated way, can
accomplish more than the sum of their independent efforts.
d) grants a franchisee the right to market the brand and trademark and to use a complete
operating system.
_________ is the effective physical movement of a product from the production line to
the final consumer.
a) Distribution
b) Merchandising
c) Warehousing
d) Prospecting
_____ is a system used by a producer to ensure that the finished goods or services meet
the expectations of customers.
a) Standing order
b) Quality circle
c) Quality control
d) Just-in-time management
Which of the following is a characteristic of cash flow budget?
a) It allocates expenses for achieving the sales target.
b) It tells whether arrangements need to be made for borrowing or owner investments.
c) It contains a forecast of the amounts and sources of sales income and the materials
that will be needed to achieve the sales forecast.
d) It plans and controls revenue in order to obtain desired profits.
