SOM 122 EXAM 1 ACCURATE STUDY GUIDE
Business - Answers - any activity that seeks to make a profit by satisfying needs
through selling goods and services and generating revenue
Organization - Answers - group of people who work together to accomplish a specific
purpose
Selling - Answers - exchange of goods or services for agreed sum of money
Revenue - Answers - total amount of money that selling of goods/services produces
during defined period of time
Expenses - Answers - costs incurred in running the business, such as salaries and rents
Goods - Answers - tangible products such as food, clothing, supplies, books,
appliances, etc
Services - Answers - intangible products such as education, recreation, or health care
Quality of life - Answers - society's general well being as measured by standard of
living, health care, educational opportunities, freedom, happiness, and environmental
health (human development)
Standard of living - Answers - how many goods and services people can buy with the
money they have
Entrepreneurs - Answers - take larger risk in starting business compared to employees
who work for business
Stakeholders - Answers - those who have any sort of stake/interest in the business
Certainty - Answers - perfect knowledge that has total security from error, mental state
of no doubt
Risk - Answers - situation where probability of a variable is known but when a mode of
occurrence or actual value of occurrence is not
Uncertainty - Answers - situation which involves imperfect/unknown info
For profit organization - Answers - Formed to make money/profit by selling goods and
services
, Nonprofit organization - Answers - Earn enough profit to cover expenses to further their
goals
Lifeblood of business - Answers - profit
Profit formula - Answers - REVENUE - EXPENSES = PROFIT
18th century economy - Answers - Agricultural economy with workforce employed in
agriculture and producing/selling goods made on farms and ranches
Late 19th-early 20th century economy - Answers - Industrial economy focused on
selling manufactured goods
Late 20th century economy - Answers - Service economy
Community support by businesses - Answers - Produce goods and services, provide
paychecks and benefits, pay taxes, donate for community causes
Economic forces - Answers - Tension between freedom and restraint
Technological forces - Answers - Effect on productivity and security
Competitive forces - Answers - Influence on customers, employees, etc
Social forces - Answers - Impact on demographics
Global forces - Answers - Effect on trade and stability
Legal/regulatory/political forces - Answers - Rules business must follow
Stakeholders in business - Answers - Owners, Customers, Employees, Suppliers,
Distributors, Lenders, Nearby communities, Gov regulators, Interest groups, Media
Guiding principle - Answers - what is going to make the firm the most money in the long
run?
Business cycle - Answers - management → marketing(consumers), finance(capital
markets), accounting(capital markets), operations(employees + labor)
Ethics - Answers - principles of right and wrong that influence behavior; instruct how
people deal with and treat one another
Values - Answers - relatively permanent and deeply held underlying beliefs/attitudes;
determine people's behavior; underpinning for ethical and legal systems
Business - Answers - any activity that seeks to make a profit by satisfying needs
through selling goods and services and generating revenue
Organization - Answers - group of people who work together to accomplish a specific
purpose
Selling - Answers - exchange of goods or services for agreed sum of money
Revenue - Answers - total amount of money that selling of goods/services produces
during defined period of time
Expenses - Answers - costs incurred in running the business, such as salaries and rents
Goods - Answers - tangible products such as food, clothing, supplies, books,
appliances, etc
Services - Answers - intangible products such as education, recreation, or health care
Quality of life - Answers - society's general well being as measured by standard of
living, health care, educational opportunities, freedom, happiness, and environmental
health (human development)
Standard of living - Answers - how many goods and services people can buy with the
money they have
Entrepreneurs - Answers - take larger risk in starting business compared to employees
who work for business
Stakeholders - Answers - those who have any sort of stake/interest in the business
Certainty - Answers - perfect knowledge that has total security from error, mental state
of no doubt
Risk - Answers - situation where probability of a variable is known but when a mode of
occurrence or actual value of occurrence is not
Uncertainty - Answers - situation which involves imperfect/unknown info
For profit organization - Answers - Formed to make money/profit by selling goods and
services
, Nonprofit organization - Answers - Earn enough profit to cover expenses to further their
goals
Lifeblood of business - Answers - profit
Profit formula - Answers - REVENUE - EXPENSES = PROFIT
18th century economy - Answers - Agricultural economy with workforce employed in
agriculture and producing/selling goods made on farms and ranches
Late 19th-early 20th century economy - Answers - Industrial economy focused on
selling manufactured goods
Late 20th century economy - Answers - Service economy
Community support by businesses - Answers - Produce goods and services, provide
paychecks and benefits, pay taxes, donate for community causes
Economic forces - Answers - Tension between freedom and restraint
Technological forces - Answers - Effect on productivity and security
Competitive forces - Answers - Influence on customers, employees, etc
Social forces - Answers - Impact on demographics
Global forces - Answers - Effect on trade and stability
Legal/regulatory/political forces - Answers - Rules business must follow
Stakeholders in business - Answers - Owners, Customers, Employees, Suppliers,
Distributors, Lenders, Nearby communities, Gov regulators, Interest groups, Media
Guiding principle - Answers - what is going to make the firm the most money in the long
run?
Business cycle - Answers - management → marketing(consumers), finance(capital
markets), accounting(capital markets), operations(employees + labor)
Ethics - Answers - principles of right and wrong that influence behavior; instruct how
people deal with and treat one another
Values - Answers - relatively permanent and deeply held underlying beliefs/attitudes;
determine people's behavior; underpinning for ethical and legal systems
