AAMI Small Business Management Exam Questions and Answers 100% Pass

AAMI Small Business Management Exam Questions and Answers 100% Pass Sole Proprietorship - Correct Answer ✔️✔️-is a business owned by one person who is subject to claims or creditors. Partnership - Correct Answer ✔️✔️-is the voluntary association of two or more people who have combined their resources to carry on as co -owne rs of a lawful enterprise for their joint profit. Limited Partnership - Correct Answer ✔️✔️-involves at least one general partner and one or more limited partners. Corporation - Correct Answer ✔️✔️-is an artificial being, invisible, intangible, and existin g only in the contemplation of law, an entity that is something that has a distinct existence separate and apart from the existence of its individual members. S Corporation - Correct Answer ✔️✔️-comes from the IRS Code, which permits corporations to retain the limited -liability feature of regular corporations while being taxed as partnerships. Limited Liability Company - Correct Answer ✔️✔️-is not a corporation but a new form of business ownership (approved in most states since approximately 1994); combines aspects of partnerships with limited liability of a corporation; owners known as members. Demand - Correct Answer ✔️✔️-refers to how much (quantity) of a product or service is desired by buyers. Quantity Demanded - Correct Answer ✔️✔️-is the amount of a p roduct people are willing to buy at a certain price. Supply - Correct Answer ✔️✔️-represents how much the market can offer. Quantity Supplied - Correct Answer ✔️✔️-refers to the amount of a certain good producers are willing to supply when receiving a cert ain price. Law of Demand - Correct Answer ✔️✔️-if all other factors remain equal, the higher the price of a good, the less people will demand that good. The higher the price, the lower the quantity demanded. Law of Supply - Correct Answer ✔️✔️-demonstrates the quantities that will be sold at a certain price. The higher the price, the higher the quantity supplied. Equilibrium - Correct Answer ✔️✔️-when supply and demand are equal. Disequilibrium - Correct Answer ✔️✔️-whenever the price or quantity are not eq ual. Excess Supply - Correct Answer ✔️✔️-if the price is set too high, this will be created within the economy and cause market inefficiencies. Excess Demand - Correct Answer ✔️✔️-this is created when the price is set below the equilibrium price. Variable Expense - Correct Answer ✔️✔️-is a cost which is uniform per unit, but fluctuates in direct proportion to change in the related total activity or volume. Fixed Expenses - Correct Answer ✔️✔️-are a cost that, for a given period of time and range of activity called the relevant range, doesn't change in total, but becomes progressively smaller on a per unit basis as volume increases; these expenses do not increase with increased business, nor do they decrease with declining business activity. Average Pricing - Correct Answer ✔️✔️-an approach in which the total cost for a given period is divided by quantity sold in that period to set a price, regardless of variable and fixed costs. Operating Ratios - Correct Answer ✔️✔️-a comparison of profit and each item of ex pense in the income statement expressed as a percentage of sales income; can be compared to the industry standards in regard to measuring the possible growth of the business. Elasticity of Demand - Correct Answer ✔️✔️-the degree in which a change in price affects the quantity demanded. Elastic Demand - Correct Answer ✔️✔️-the demand that changes significantly when there is a change in the price of the product. Example would be a computer. Inelastic Demand - Correct Answer ✔️✔️-the demand that does not chang e significantly when there is a change in the price of the product. Example would be oil. Break -even analysis - Correct Answer ✔️✔️-is the point at which total sales revenue equals total operating costs, determined by formula or chart. Markup - Correct Ans wer ✔️✔️-is the difference between merchandise cost and selling price. Markdown - Correct Answer ✔️✔️-is a reduction of selling price below the original selling price. Penetration Pricing - Correct Answer ✔️✔️-pricing below normal to gain market share, acceptance.