Deck 21: Business Basics

Question 1

What involves analyzing business operations for internal decision making and does not have to follow any rules issued by standard-setting bodies such as GAAP?

A) Accounting
B) Bookkeeping
C) Financial accounting
D) Managerial accounting

Answer 1

D
Explanation: This is the definition of managerial accounting.

Question 2

Which form of business recommends a legal agreement between two or more business partners that outlines core business issues?

A) Sole proprietorship
B) Partnership
C) Corporation
D) LLC

Answer 2

B
Explanation: A partnership recommends a partnership agreement.

Question 3

What describes the basic transaction data such as its date,purpose,and amount and includes cash receipts,canceled checks,invoices,customer refunds,employee time sheet,etc.?

A) Balance sheet
B) Source document
C) Transaction
D) Financial statement

Answer 3

B
Explanation: This is the definition of source document.

Question 4

What is a dividend?

A) A distribution of earnings to shareholders
B) Refers to the amount earned resulting from the delivery or manufacture of a product or from the rendering of a service
C) Refer to the costs incurred in operating and maintaining a business
D) Anything owned that has value or earning power

Question 5

What is an asset?

A) A distribution of earnings to shareholders
B) Refers to the amount earned resulting from the delivery or manufacture of a product or from the rendering of a service
C) Refer to the costs incurred in operating and maintaining a business
D) Anything owned that has value or earning power

Question 6

What tracks and communicates changes in the shareholder's earnings?

A) Balance sheet
B) Statement of owner's equity
C) Statement of cash flows
D) Income statement

Question 7

What is the fundamental difference found in a limited partnership?

A) Only one partner is responsible for all of the partnership's losses
B) Both partners are responsible for all of the partnership's losses
C) Both partners are protected from being responsible for all of the partnership's losses
D) None of these

Question 8

What is revenue?

A) A distribution of earnings to shareholders
B) Refers to the amount earned resulting from the delivery or manufacture of a product or from the rendering of a service
C) Refer to the costs incurred in operating and maintaining a business
D) Anything owned that has value or earning power

Question 9

What reports operating results (revenues minus expenses)for a given time period ending at a specified date?

A) Balance sheet
B) Statement of owner's equity
C) Statement of cash flows
D) Income statement

Question 10

What involves preparing financial reports that provide information about the business's performance to external parties such as investors,creditors,and tax authorities?

A) Accounting
B) Bookkeeping
C) Financial accounting
D) Managerial accounting

Question 11

Which of the following financial statements gives an accounting picture of property owned by a company and of claims against the property on a specific date?

A) Balance sheet
B) Statement of owner's equity
C) Statement of cash flows
D) Income statement

Question 12

What refers to the amount earned resulting from the delivery or manufacture of a product or from the rendering of a service?

A) Expense
B) Profit
C) Loss
D) Revenue

Question 13

Which of the following is not a type of business?

A) Sole partnership
B) Partnership
C) Limited partnership
D) Corporation

Question 14

What analyzes the transactional information of the business so the owners and investors can make sound economic decisions?

A) Accounting
B) Bookkeeping
C) Financial Accounting
D) Managerial Accounting

Question 15

What occurs when businesses sell products or services for more than they cost to produce?

A) Expense
B) Profit
C) Loss
D) Revenue

Question 16

What is the function of the marketing department?

A) Deals with the strategic financial issues associated with increasing the value of the business while observing applicable laws and social responsibilities
B) Includes the policies, plans, and procedures for the effective management of employees
C) The function of selling a good or service and focuses on increasing customer sales, which increases company revenues
D) The process associated with promoting the sale of goods or services. The marketing department supports the sales department by creating promotions that help sell the company's products

Question 17

Partnership agreements typically include all of the following,except:

A) Expectations for sharing profits and losses
B) Partner's salary requirements
C) Methods for conflict resolution
D) Shareholder's expectations for a successful business

Question 18

What is a hybrid entity that has the legal protections of a corporation and the ability to be taxed (one time)as a partnership?

A) Limited partnership
B) Limited liability corporation
C) Limited proprietorship
D) Limited shareholder

Question 19

What is the rate at which the net present value of an investment equals zero?

A) Internal rate of return (IRR)
B) Return on investment (ROI)
C) Cash flow analysis
D) Break-even analysis

Question 20

What is the function of the sales department?

A) Deals with the strategic financial issues associated with increasing the value of the business while observing applicable laws and social responsibilities
B) Includes the policies, plans, and procedures for the effective management of employees
C) The function of selling a good or service and focuses on increasing customer sales, which increases company revenues
D) The process associated with promoting the sale of goods or services. The marketing department supports the sales department by creating promotions that help sell the company's products

Question 21

A limited _______________ is much like a general partnership except for one important fundamental difference; the law protects the limited partner from being responsible for all of the partnership's losses.

Question 22

Which of the following represents psychographic segmentation?

A) Based on regional variables such as region, climate, population density, and population growth rate
B) Based on variables such as age, gender, ethnicity, education, occupation, income, and family status
C) Based on variables such as values, attitudes, and lifestyles
D) Based on variables such as usage rate, usage patterns, price sensitivity, and brand loyalty

Question 23

What is operations management?

A) A field concerned with the use of technology in managing and processing information
B) The function of selling a good or service and focuses on increasing customer sales, which increases company revenues
C) The function that plans for, develops, implements, and maintains IT hardware, software, and the portfolio of applications that people use to support the goals of an organization
D) The management of systems or processes that convert or transform resources into goods and services

Question 24

What is the point at which revenues equal costs?

A) Break-even point
B) Cash flow analysis
C) ROI
D) IRR

Question 25

____________ are similar to sole proprietorships,except that this legal structure allows for more than one owner.

Question 26

A loss occurs when businesses sell products or services for less than they cost to produce.

Question 27

What is information technology?

A) A field concerned with the use of technology in managing and processing information
B) The function of selling a good or service and focuses on increasing customer sales, which increases company revenues
C) The function that plans for, develops, implements, and maintains IT hardware, software, and the portfolio of applications that people use to support the goals of an organization
D) Includes the methods, tasks, and techniques organizations use to produce goods and services

Question 28

What is the division of a market into similar groups of customers?

A) Market management
B) Market mix
C) Market communications
D) Market segmentation

Question 29

Which of the following is not a part of the marketing mix?

A) Product
B) Price
C) Point
D) Promotion

Question 30

Which of the following is not accomplished by human resources management?

A) Employee recruitment
B) Employee training
C) Employee vacation scheduling
D) Employee appraisals

Question 31

What is a means to conduct a periodic check on the company's financial health?

A) Internal rate of return (IRR)
B) Return on investment (ROI)
C) Cash flow analysis
D) Break-even analysis

Question 32

Break-even analysis is the point at which revenues equal costs.

Question 33

Which of the following represents geographic segmentation?

A) Based on regional variables such as region, climate, population density, and population growth rate
B) Based on variables such as age, gender, ethnicity, education, occupation, income, and family status
C) Based on variables such as values, attitudes, and lifestyles
D) Based on variables such as usage rate, usage patterns, price sensitivity, and brand loyalty

Question 34

Accounting deals with the strategic financial issues associated with increasing the value of the business,while observing applicable laws and social responsibilities.

Question 35

What is calculated by dividing the firm's sales by the total market sales for the entire industry?

A) Break-even point
B) IRR
C) Market share
D) Income statement

Question 36

Which of the following is not one of the four phases in the product life cycle?

A) Growth
B) Decline
C) Place
D) Introduction

Question 37

For profit,corporations primarily focus on making money and all profits and losses are shared by the business owners.

Question 38

What is management information systems?

A) A field concerned with the use of technology in managing and processing information
B) The function of selling a good or service and focuses on increasing customer sales, which increases company revenues
C) A general name for the business function and academic discipline covering the application of people, technologies, and procedures-collectively called information systems-to solve business problems
D) Includes the methods, tasks, and techniques organizations use to produce goods and services

Question 39

Human resources management includes the policies,plans,and procedures for the effective management of employees (human resources).

Question 40

Which of the following is not a reason to increase market share?

A) Economies of scale
B) Reputation
C) Increased bargaining power
D) Nearing production capacity

Question 41

____________ deals with the strategic financial issues associated with increasing the value of the business while observing applicable laws and social responsibilities.

Question 42

____________ are a distribution of earnings to shareholders.

Question 43

List and describe the seven departments commonly found in most organizations.

Question 44

Identify the four primary financial statements used by most organizations.

Question 45

____________ accounting involves preparing financial reports that provide information about the business's performance to external parties such as investors,creditors,and tax authorities.

Question 46

____________ is the actual recording of the business's transactions,without any analysis of the information.

Question 47

The income statement reports a company's ____________ income,or the amount of money remaining after paying taxes.

Question 48

Define the three common business forms.

Question 49

___________ represents the ability of the business to pay its bills and service its debt.

Question 50

____________ segmentation is based on variables such as usage rate,usage patterns,price sensitivity,and brand loyalty.

Question 51

Operations management is the management of systems or processes that converts or transforms ___________ into goods and services.

Question 52

Describe a transaction and its importance to the accounting department.

Question 53

Define the relationship between sales and marketing,along with a brief discussion of the marketing mix.