Test Bank to accompany Boone, Contemporary Business, 20th Edition
Package Title: Chapter 1, Testbank
Course Title: Boone, Contemporary Business, 20th Edition
Chapter Number: 1
Question type: Multiple Choice
1) _____ are businesslike establishments that have primary objectives other than returning profits
to their owners.
a) Entrepreneurs
b) Strategic alliances
c) Brands
d) Not-for-profit organizations
Answer: d) Not-for-profit organizations
Difficulty: Easy
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Knowledge
2) Accountants think of profits as:
a) the overall sales of a company in comparison with its top competitor.
b) the difference between a firm’s revenues and the expenses incurred in generating them.
c) the value of the products or services sold during a financial year.
d) the difference between the capital and revenue obtained through selling stocks.
Answer: b) the difference between a firm’s revenues and the expenses incurred in generating
them.
Difficulty: Easy
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Knowledge
3) For successful companies, which of the following statements is true?
a) They often adapt to changes in customer tastes.
b) They spend less time on technology-related projects.
c) They refrain from all kinds of competition.
d) They strive to reduce the standards of living of their respective countries.
Answer: a) They often adapt to changes in customer tastes.
Copyright © 2025
,Test Bank to accompany Boone, Contemporary Business, 20th Edition
Difficulty: Easy
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Comprehension
4) All of these statements are true regarding businesses EXCEPT:
a) Some businesses are not motivated by profit growth.
b) Businesses provide goods and services necessary to an economic system.
c) Businesses are the economic pulse of a nation.
d) Businesses are nonprofit organizations that provide services to the public.
Answer: d) Businesses are nonprofit organizations that provide services to the public.
Difficulty: Easy
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Comprehension
5) Jason is an accountant. When he is looking at clients’ books, for him, profits are _____.
a) the difference between revenues and expenses
b) the sum of commissions earned and receipts
c) the difference between sales and expenses
d) the sum of sales and expenses
Answer: a) the difference between revenues and expenses
Difficulty: Easy
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Comprehension
6) In the U.S. economy, _____ are considered the reward for the risk of entering a business.
a) revenues
b) concessions
c) profits
d) sales
Answer: c) profits
Copyright © 2025
,Test Bank to accompany Boone, Contemporary Business, 20th Edition
Difficulty: Easy
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Knowledge
7) Which of these are essential because it serves as a primary incentive for people to start compa-
nies, expand them, and provide consistently high-quality competitive goods and services?
a) Coupons
b) Profits
c) Discounts
d) Rebates
Answer: b) Profits
Difficulty: Easy
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Comprehension
8) Which of the following is NOT typically a part of the not-for-profit sector?
a) Labor unions
b) Religious organizations
c) Hotels
d) Museums
Answer: c) Hotels
Difficulty: Easy
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Knowledge
9) Which of the following is a public sector, not-for-profit organization?
a) Library
b) Museum
c) Charitable group
d) Labor union
Answer: d) Labor union
Copyright © 2025
, Test Bank to accompany Boone, Contemporary Business, 20th Edition
Difficulty: Easy
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Knowledge
10) The Allegany County Library provides a wide variety of library services to its neighborhood.
It also provides free online support to its members, and any fee collected from its members goes
directly to charity. The library is an example of a(n) _____.
a) not-for-profit organization
b) corporate organization
c) offshore unit
d) business conglomerate
Answer: a) not-for-profit organization
Difficulty: Medium
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Application
11) Stewart is a small business owner who runs a local coffee shop and a bakery. For Stewart,
_____ represents an earned reward for taking the risks of running the business.
a) government intervention
b) concessions
c) profits
d) long hours
Answer: c) profits
Difficulty: Medium
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Application
12) A tax law provision granted to not-for-profits by the Internal Revenue Service is called
_______.
a) strategic alliance
b) concession
c) consumer orientation
d) section 501(c)(3)
Copyright © 2025
Package Title: Chapter 1, Testbank
Course Title: Boone, Contemporary Business, 20th Edition
Chapter Number: 1
Question type: Multiple Choice
1) _____ are businesslike establishments that have primary objectives other than returning profits
to their owners.
a) Entrepreneurs
b) Strategic alliances
c) Brands
d) Not-for-profit organizations
Answer: d) Not-for-profit organizations
Difficulty: Easy
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Knowledge
2) Accountants think of profits as:
a) the overall sales of a company in comparison with its top competitor.
b) the difference between a firm’s revenues and the expenses incurred in generating them.
c) the value of the products or services sold during a financial year.
d) the difference between the capital and revenue obtained through selling stocks.
Answer: b) the difference between a firm’s revenues and the expenses incurred in generating
them.
Difficulty: Easy
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Knowledge
3) For successful companies, which of the following statements is true?
a) They often adapt to changes in customer tastes.
b) They spend less time on technology-related projects.
c) They refrain from all kinds of competition.
d) They strive to reduce the standards of living of their respective countries.
Answer: a) They often adapt to changes in customer tastes.
Copyright © 2025
,Test Bank to accompany Boone, Contemporary Business, 20th Edition
Difficulty: Easy
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Comprehension
4) All of these statements are true regarding businesses EXCEPT:
a) Some businesses are not motivated by profit growth.
b) Businesses provide goods and services necessary to an economic system.
c) Businesses are the economic pulse of a nation.
d) Businesses are nonprofit organizations that provide services to the public.
Answer: d) Businesses are nonprofit organizations that provide services to the public.
Difficulty: Easy
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Comprehension
5) Jason is an accountant. When he is looking at clients’ books, for him, profits are _____.
a) the difference between revenues and expenses
b) the sum of commissions earned and receipts
c) the difference between sales and expenses
d) the sum of sales and expenses
Answer: a) the difference between revenues and expenses
Difficulty: Easy
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Comprehension
6) In the U.S. economy, _____ are considered the reward for the risk of entering a business.
a) revenues
b) concessions
c) profits
d) sales
Answer: c) profits
Copyright © 2025
,Test Bank to accompany Boone, Contemporary Business, 20th Edition
Difficulty: Easy
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Knowledge
7) Which of these are essential because it serves as a primary incentive for people to start compa-
nies, expand them, and provide consistently high-quality competitive goods and services?
a) Coupons
b) Profits
c) Discounts
d) Rebates
Answer: b) Profits
Difficulty: Easy
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Comprehension
8) Which of the following is NOT typically a part of the not-for-profit sector?
a) Labor unions
b) Religious organizations
c) Hotels
d) Museums
Answer: c) Hotels
Difficulty: Easy
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Knowledge
9) Which of the following is a public sector, not-for-profit organization?
a) Library
b) Museum
c) Charitable group
d) Labor union
Answer: d) Labor union
Copyright © 2025
, Test Bank to accompany Boone, Contemporary Business, 20th Edition
Difficulty: Easy
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Knowledge
10) The Allegany County Library provides a wide variety of library services to its neighborhood.
It also provides free online support to its members, and any fee collected from its members goes
directly to charity. The library is an example of a(n) _____.
a) not-for-profit organization
b) corporate organization
c) offshore unit
d) business conglomerate
Answer: a) not-for-profit organization
Difficulty: Medium
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Application
11) Stewart is a small business owner who runs a local coffee shop and a bakery. For Stewart,
_____ represents an earned reward for taking the risks of running the business.
a) government intervention
b) concessions
c) profits
d) long hours
Answer: c) profits
Difficulty: Medium
Learning Objective: LO 1.1 Define business.
Section Reference: 1.1 What is Business?
AACSB: Analytic
Bloom code: Application
12) A tax law provision granted to not-for-profits by the Internal Revenue Service is called
_______.
a) strategic alliance
b) concession
c) consumer orientation
d) section 501(c)(3)
Copyright © 2025
