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saint mgt320 final exam




Question;While a sole proprietorship gives the owner maximum;flexibility in running the business, it also;r: makes the company a prime target for an;acquisition or merger.;creates a sense of isolation.;makes it difficult to hire management talent;to help grow the business.;makes it difficult to sell.;1 of 1;Comments;Question 2. Question;A partnership is;r: taxed like a corporation.;not subject to the double taxation of some;other forms of business.;taxed at the lowest rate for an individual.;taxed under capital gains laws as all profits;are considered to come from appreciated assets.;Comments;Question 3. Question;An owner should choose an S-corporation form of ownership;when he/she;r: has an established company that is;suffering losses due to double taxation.;is starting up a company and anticipating;either net losses or high profits with large dividends.;owns a company in which net profits before any;compensation to shareholders are less than $100,000 per year.;has an existing sole proprietorship and wants;to lower the tax bill through deducting fringe benefits as business expenses.;1 of 1;Comments;Question 4. Question;When choosing a form of ownership, the entrepreneur should;realize that;r: it is difficult if not impossible to;change forms of ownership once the company is established.;the expense of changing forms of ownership;makes it prohibitively expensive to change.;the most common form of ownership is the;partnership and is the least expensive to establish.;he/she will most likely change the form of;ownership as the company grows in size and revenues.;0 of 1;Comments;Question 5. Question;Which of the following is a disadvantage of the corporation;form of ownership?;r: An inability to accumulate capital;The unlimited liability to the members of the;board;Double taxation on profits and individuals;The lack of continuity;1 of 1;Comments;Question 6. Question;An S-corporation form of ownership overcomes which;disadvantage of the regular or "C" corporation form of ownership?;r;The double taxation issue;The expense and difficulty of formation;The amount of regulation and red tape involved;in its operation;The potential loss of control by the founder;1 of 1;Comments;Question 7. Question;One disadvantage of the proprietorship is;r: the least regulated form of business;ownership.;limited personal liability.;excessive access to capital.;limited skills and abilities.;1 of 1;Comments;Question 8. Question;Sole proprietorships characteristically are;r: fairly complex to create.;subject to special legal restrictions.;expensive to create.;easy to discontinue.;1 of 1;Comments;Question 9. Question;If a partnership is formed without an agreement, the;partnership is automatically subject to the;r: Certification of Incorporation laws.;Uniform Partnership Act.;Limited Liability Company Act.;Revised Uniform Limited Partnership Act.;1 of 1;Comments;Question 10. Question;A limited partnership is a modification of a(n);form of ownership.;r: sole proprietorship;general partnership;corporation;S-corporation;1 of 1;Comments;Question 11. Question;A significant disadvantage of a partnership is;r: the unlimited personal liability for;all partners.;the inability to attract either additional;capital or new partners due to the complexity of rewriting the agreement.;the difficulty of disposing a partnership;interest without dissolving the partnership.;the regulatory complexity under which a;partnership must be formed and operated.;1 of 1;Comments;Question 12. Question;A corporation doing business in the state in which it is;incorporated is considered to be a(n) ________ corporation.;r: alien;domestic;foreign;local;1 of 1;Comments;Question 13. Question;Depreciation is;r;the difference between the total sources available to the owner and the total;uses of those assets.;listed as a source of funds because it is a;noncash expense, deducted as a cost of doing business.;the owner's total investment at the company's;inception plus retained earnings.;creditors' total claims against the firm's;assets.;0 of 1;Comments;Question 14. Question;The ________ ratio measures the owner's rate of return on;the investment in the business.;r;net profit-to-equity;net profit on sales;quick profit;net sales-to-working capital;1 of 1;Comments;Question 15. Question;As a general rule, financial analysts suggest that a small;business maintain a(n) ________ ratio of at least 2:1.;r;debt-to-net worth;current;inventory turnover;quick;0 of 1;Comments;Question 16. Question;are those items of value the business owns;are those things the business owes.;r;Assets, liabilities;Liabilities, assets;Ratios, equities;Equities, liabilities;1 of 1;Comments;Question 17. Question;is one indication that a small business may be;undercapitalized.;r: A current ratio below 1:1;A quick ratio above 2:1;A debt-to-net worth ratio above 1:1;A net-sales-to-working capital ratio equal to;3:1;1 of 1;Comments;Question 18. Question;In the balance sheet, intangible assets include items such;as;r: goodwill.;copyrights and patents.;Both A and B;accounts receivable.;1 of 1;Comments;Question 19. Question;A high debt ratio;r;means that creditors provide a large percentage of the company's total;financing.;gives a small business more borrowing;capacity.;decreases the chances that creditors will lose;money if the business is liquidated.;decreases the creditor's interest in the;business.;1 of 1;Comments;Question 20. Question;The ________ is built on the basic accounting equation;Assets = Liabilities + Owner's Equity.;r: income statement;sources and uses of funds statement;balance sheet;cash budget;1 of 1;Comments;Question 21. Question;ratios indicate how efficiently the small firm is;being managed.;r: Liquidity;Profitability;Leverage;Operating;1 of 1;Comments;Question 22. Question;The ________ ratio is the liquidity ratio most commonly used;as a measure of short-term solvency.;r;working capital ratio;quick;debt-to-net worth;turnover;0 of 1;Comments;Question 23. Question;The ________ shows what assets the business owns and what;claims creditors and owners have against those assets.;r;balance sheet;income statement;sources and uses of funds statement;pro forma;0 of 1;Comments;Question 24. Question;are those things that a business owes, they;represent creditors' claims against the business.;r: Assets;Liabilities;Owners' equities;Liquidities;1 of 1;Comments;Question 25. Question;The cash budget is based on the ________ method of;accounting.;r;cash;financial;accrual;hybrid;1 of 1;Comments;Question 26. Question;The budgeting strategy that evaluates the necessity of every;item on the budget each year by starting with a zero in each budget category is;called;r: accrual budgeting.;cash budgeting.;zero-based budgeting.;cash flow budgeting.;1 of 1;Comments;Question 27. Question;measures a company's liquidity and its ability to;pay its bills and other financial obligations on time by tracking the flow of;cash into and out of the business over a period of time.;r: Forecasting;Cash Flow;Cash on hand;None of the above;1 of 1;Comments;Question 28. Question;Marking down inventory items that don't sell will result in;r;keeping the inventory lean.;reduction in inventory turnover ratio.;paying expenses on time.;all of the above.;0 of 1;Comments;Question 29. Question;The purchases for inventory and production lead sales. This;statement means that;r: purchases for inventory and production;provide sales leads.;the bills for inventory typically must be paid;before sales are generated.;cash must be available in order to pay for the;purchases.;Both B and C;1 of 1;Comments;Question 30. Question;The statement, "collection of accounts receivable lags;behind sales," means that;r;the collection of funds in the accounts receivable is always late.;customers always are late in paying their;bills.;the customers who purchased goods on credit;may not pay until a month or more later.;None of the above;0 of 1;Comments;Question 31. Question;A cash budget is only as accurate as the ________ forecast;from which it is derived.;r: profit;receivables;income;sales;1 of 1;Comments;Question 32. Question;Many successful, growing, and profitable businesses fail;because they;r: become insolvent.;don't have adequate cash to meet the sales.;don't have management expertise.;Both A and B;0 of 1;Comments;Question 33. Question;The first step to building a workable credit policy is;r;screening customers carefully before granting them credit.;establishing a firm credit policy in writing.;developing a policy for pursuing past-due;accounts.;creating a thorough credit application.;0 of 1;Comments;Question 34. Question;An arrangement in which customers mail their payments on;account to a post office box which the company's bank monitors, from which it;collects the payments, and then immediately deposits the payments into the;firm's interest-bearing account is called a;r: zero balance account.;lockbox.;sweep account.;credit reference.;1 of 1;Comments;Question 35. Question;A ________ is a contract in which a business selling an;asset on credit gets a security interest in that asset, protecting the;company's legal rights in case the buyer fails to pay.;r;security agreement;lock box;cash on delivery agreement;None of the above;1 of 1;Comments;Question 36. Question;Once a credit account becomes past due, a small business;owner should;r: wait patiently, the customer will most;likely pay the bill sooner or later.;turn the account over to a collection agency;the day it becomes past due.;contact the customer immediately, ask for full;payment, and set a deadline.;call the "deadbeat" in the middle of;the night and make harassing and threatening remarks until he pays.;1 of 1;Comments;Question 37. Question;is not one of the three estimates a financial;analyst suggests.;r;Optimistic;Pessimistic;Standard;Most likely;0 of 1;Comments;Question 38. Question;When it comes to gathering market research on customers;most small companies tend to be;r: as good at it as large companies.;at a severe disadvantage in comparison to;large companies.;data rich, lots of facts, but information;poor, little in a useful form.;less effective at defining the research;problem than larger companies.;1 of 1;Comments;Question 39. Question;One of the first steps in building a marketing plan is;identifying a small company's ________, the group of customers at whom the;company aims its products and services.;r;target market;competitors;customers;Both A and C;1 of 1;Comments;Question 40. Question;refers to developing, maintaining, and managing;long-term relationships with customers so that they will want to keep coming;back.;r;Customer Relationship Management;Customer Retention Management;Customer Management Software;Customer Reassurance Management;0 of 1;Comments;Question 41. Question;One "natural" advantage small businesses have over;large business, which can be a significant competitive advantage, is;r;relationship marketing.;their ability to conduct market research.;their lower costs.;their ability to serve many highly diverse;target markets.;1 of 1;Comments;Question 42. Question;Companies with strong reputations for quality follow certain;guidelines, such as;r;establishing long-term relationships with suppliers.;fostering individual effort and pride of;workmanship.;rewarding employees for compliance to rules;and procedures.;building an extensive quality inspection;system with many quality inspectors.;1 of 1;Comments;Question 43. Question;A business plan for the small business owner;r: is of relatively little importance due;to the dynamic nature of the marketplace.;is synonymous with the marketing plan.;tends to stress how the entrepreneur will;operate rather than detailing what he/she wants to accomplish.;contains both a marketing plan and a financial;plan.;1 of 1;Comments;Question 44. Question;Small businesses can compete with larger rivals with bigger;budgets by employing unconventional, low-cost creative techniques known as;r: market research.;astonishing customer service.;guerrilla marketing techniques.;psychographics.;1 of 1;Comments;Question 45. Question;The marketing plan should include certain key objectives;such as;r: determining product costs through;market research.;pinpointing the specific target markets a;small business will serve.;determining what costing strategies to use.;discovering what the company's ETDB index is.;1 of 1;Comments;Question 46. Question;Entrepreneurs who recognize demographic, social, and;cultural trends as they emerge have the opportunity to ________ their companies;from the competition in meaningful ways.;r: integrate;differentiate;placate;mediate;1 of 1;Comments;Question 47. Question;The right price for a product depends on which factors?;r: A small company cost structure;The desired image the company wants to create;in its customers' minds;An assessment of what the market will bear;All of the above;1 of 1;Comments;Question 48. Question;is the process of creating and delivering desired;goods and services to customers, and involves all of the activities associated;with winning and retaining loyal customers.;r;Marketing;Personal selling;Promotion;Advertising and public relations;1 of 1;Comments;Question 49. Question;Small businesses are able to maintain a leadership role in;innovation by;r;using their size, flexibility, and speed to their advantage.;spending much more money on R & D than;large companies do.;foreseeing trends better and far enough in;advance that they can spread innovation costs over several years.;making better use of technology than large;companies.;1 of 1;Comments;Question 50. Question;The marketing goal of a small business is to treat each;customer as a(n);r;individual.;group;profit center.;cost center.;1 of 1;Comments


Paper#46058 | Written in 18-Jul-2015

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