Kleptomaniacs have a compulsive need to steal even though they have little, if any,
need for the items they shoplift.
The most common method of controlling inventory in a small business is the perpetual
system.
The key to successful time compression management is speeding up the manufacturing
process, since manufacturing consumes 90% of the time it takes to get the order into the
customer’s hand.
One of the advantages of a partnership over a proprietorship is the increased sources of
capital and credit it offers.
Every seller who offers goods for sale implies a warranty to title for those goods.
The less specialized the firm, the greater the importance of proximity in the location
decision.
In a best efforts agreement, the underwriter agrees to purchase all of the shares in the
offering.
Lack of export financing remains a significant barrier to small businesses selling in
foreign markets.
Computerized point-of-sale systems have given small business owners the ability to use
perpetual inventory control systems across a larger portion of their inventories.
Bankruptcy proceedings can be filed by the owner or his/her creditors.
Too often, business plans describe in great detail what the entrepreneur intends to
accomplish but pay too little attention to how he plans to accomplish it.
Setting up an e-commerce site takes most companies at least six months to complete.
Bonds are corporate “IOUs.”
When customers shop for “value,” they also consider the company’s stance on social
responsibility.
In a partnership, the general partner(s) share their unlimited liability for the business
debts with both silent and dormant partners.
In an ABC system, “A” items are those that account for a low dollar usage volume.
While franchise outlets are throughout the world, Africa is the primary market for U.S.
franchisers.
A “limited liability company” is legally treated just like a limited partnership.
Closely held corporationshave shares that are controlled by a relatively small number of
people, often family members, relatives, or friends.
It is important to be cost efficient when developing a Web site. As such, it is not
necessary to include an option of calling the company to resolve problems.
As part of designing a killer Web site, establishing hyperlinks with other businesses,
preferably those selling products or services that complement yours, is recommended.
Entrepreneurs’ resource limitations often require them to be highly innovative.
Secure fire layer (SFL) technology is being used to encrypt customers’ transaction
information as it travels across the Internet.
The first step on how to establish an exporting program is to analyze the product or
service.
A popular form of in-store advertising which reaches the customer at a crucial point is
specialty advertising.
Immigrant entrepreneurs tend to arrive in the United States with less education and
experience but more drive and access to capital through their “ethnic” connections.
The higher the current ratio, the stronger the small firm’s financial position.
Insurance companies specialize in long-term loans.
The left brain takes care of the body’s emotional, intuitive, and spatial functions.
When denied bank loans, small business owners often look to commercial finance
companies for the same types of loan.
Paid listings also are called:
A) pay for placement.
B) pay per click.
C) pay for performance ads.
D) All of the above
Purchasing rival companies’ products, taking them apart, and analyzing them is:
A) industrial espionage.
B) illegal due to federal regulation.
C) benchmarking.
D) cataloguing.
According to Ted Levitt, creativity is ________ new things.
A) thinking
B) doing
C) corroborating
D) emulating
________ are short-term, specific targets which are attainable, measurable, and
controllable.
A) Objectives
B) Policies
C) Goals
D) Standard operating procedures
When forecasting cash disbursements in the cash budget:
A) they count as a cash receipt until they are paid.
B) they should be recorded in the month they will be paid.
C) the disbursement should be recorded in the month the obligation was incurred.
D) the money can be used for other purposes until it is due for disbursement.
________ thinking is the ability to see the differences among various data and events.
A) Divergent
B) Parallel
C) Investigative
D) Convergent
A mission statement should answer which of the following questions?
A) What are the needs and wants of the target customers?
B) How will we finance our growth and expansion?
C) Who are our competitors?
D) How much money will we make?
Perhaps the most significant actions on-line companies can take to bolster their
customer service efforts are:
A) providing a quick online checkout process.
B) creating a well-staffed and well-trained customer response team.
C) offering a simple return process.
D) All of the above
Ways to cut overhead cost are:
A) when possible buy instead of lease.
B) avoid non-essential outlays.
C) hire consultants and full time employees.
D) None of the above
A(n) ________ is a company-provided benefit designed to help reduce workplace
problems such as alcoholism, drug addiction, a gambling habit, and other conflicts and
to deal with them when they arise.
A) employee assistance program (EAP)
B) substance abuse policy
C) drug testing program
D) employee education program
Some of the most valuable interview questions attempt:
A) to gain insight into the candidate’s ability to reason and be logical.
B) to be creative.
C) Both A and B
D) to be similar to the job description.
Which of the following is correct?
A) Sales ” variable costs ” fixed costs = contribution margin
B) Total revenue ” variable costs = contribution margin
C) Total revenue ” fixed costs = contribution margin
D) Total revenue ” profit = contribution margin
When motivating employees, small business owners need to know that:
A) money always motivates and never loses its power to motivate.
B) today’s workers are more materialistic than in the past.
C) today’s workers are far more concerned about job security than money.
D) some of the greatest motivators are the simplestpraise, recognition, etc.
A(n) ________ is a promise or a set of promises for the breach of which the law gives a
remedy, or the performance of which the law recognizes as a duty.
A) agreement
B) UCC
C) warranty
D) contract
Which brain handles language, logic, and symbols?
A) Left
B) Right
C) Front
D) Back
________ is simply a “cash map” which shows the amount and the timing of cash
receipts and cash disbursements over time.
A) The income statement
B) A balance sheet
C) A cash budget
D) The pro forma
A pro forma financial statement means:
A) looking at the current financial statement.
B) looking at the past financial statement.
C) preparing the current financial statement.
D) preparing a projected financial statement.
Investors mainly want to see that entrepreneurs:
A) have inflated the projections.
B) have realistic expectations about income and expenses.
C) will make profit immediately.
D) All of the above
Which one of the following is not a goal of a buyer?
A) Buying the business at the lowest price possible
B) Outsmarting the seller
C) Negotiating favorable payment terms
D) Minimizing the amount of cash paid out front
The primary goal of marketing research is to:
A) discover potential competitors.
B) reduce the risks associated with business decisions.
C) determine how to allocate distribution resources.
D) help management choose the appropriate promotional tool.
The U.S. Commerce Department, the SBA, and the Trade Administration provide a
number of services. TOPthe trade opportunity programis one and through it
entrepreneurs can:
A) receive up-to-the minute pre-screened sales leads, including joint venture
possibilities.
B) establish business relationships in major markets by helping them make networking
contacts.
C) gain access to contact and product information for more than 82,000 foreign
distributors.
D) place advertisements that will reach thousands of foreign customers.
Many successful, growing, and profitable businesses fail because they:
A) become insolvent.
B) don’t have adequate cash to meet the sales.
C) don’t have management expertise.
D) Both A and B
The ________ suggests that the channels of communication between companies and
their customers run in both directions.
A) right to education
B) right to be heard
C) right to know
D) right to choice
The basic reorder point model assumes that:
A) the firm’s inventory usage rate is constant.
B) the lead time varies.
C) safety stock is set at 5%.
D) the demand pattern is constant.
________ allow(s) employees and/or managers (that is, the future owners) to purchase
the business gradually, which frees up enough cash to finance the venture’s future
growth.
A) A sale for cash plus a note
B) Leveraged buyouts (LBOs)
C) Employee stock ownership plans (ESOPs)
D) Selling to insiders
Probably the most important feature of a partnership agreement is:
A) that it identifies the name of the partnership.
B) that it states the purpose and location of the business.
C) that it determines how the partnership will pay taxes and fees.
D) that it resolves potential sources of conflict.
Working capital can be calculated by:
A) Current Asset – Current Liabilities.
B) Total Asset – Current Liabilities.
C) Total Liabilities – Total Asset.
D) Total Asset – Total Liabilities.
When a risk is evaluated in terms of how much it could affect a company’s ability to
operate, the risk is being assessed in terms of:
A) probability.
B) cost.
C) actuality.
D) severity.
A disadvantage of using friends and relatives as investors is:
A) they tend to demand more stock options.
B) familial seniority often conflicts with the “chain of command.”
C) they require more leniency with benefits and pay.
D) unrealistic expectations or misunderstood risks destroy friendships or family
relationships.
The Americans with Disabilities Act of 1990 requires that:
A) businesses with more than 25 employees comply fully with the Act by June 1993.
B) all buildings be remodeled to accommodate any disabled customer or employee.
C) all businesses must accommodate all disabled customers or job candidates,
regardless of the cost.
D) buildings occupied after January 23, 1993 must be designed to accommodate
disabled customers and job candidates.
Identify and explain the two profitability ratios a small business owner can use to
measure how effectively he/she is managing the business.
Discuss some security measures that a small business owner can take in regards to the
company’s e-commerce.
What are the small business’s responsibilities to its customers?
What characterizes companies that “get it right the first time,” that have an emphasis on
quality?
What can an entrepreneur do to be more effective at innovation?
Explain the concepts of countertrade and barter and what role they play in international
business.
Explain at least five of the factors that are feeding the entrepreneurial boom in the
United States and abroad.
Briefly describe the advantages and disadvantages of buying an existing business.
What role do corporate castoffs and corporate dropouts play in the growth of
entrepreneurship in the United States?
What are the nine general factors an entrepreneur should consider when choosing the
form of small business ownership? List and explain at least six of them.
Retailers have three pricing techniques available to them. Describe each technique,
explain why a retailer would use it, and offer advantages or disadvantages that exist for
each technique.
The government has created a number of laws and regulations in the area of consumer
protection. Discuss.
Under what circumstances should the small business owner consider borrowing money?
Explain the philosophy of Total Quality Management, naming the ten things a small
business owner should do to successfully implement a TQM program.
What role does barter play in improving a small firm’s cash flow?
Create three goals and objectives for the following small company:
An Internet database for small business exporters that offers to match domestic
entrepreneurs to foreign distributors, venture capitalists, and/or joint venture candidates.
The company takes a percentage fee for its service.
Explain the law of agency, who is an agent, what constitutes the relationship between an
agent and a principal, and under what conditions can the relationship be terminated?
What is an SBIC? How important is it as a source of small business capital? How does
it operate?
What are the big three of cash management? How does each impact the operation of the
small business?