Small Business Management Exam Review Questions With Correct Answers

Which of the following is the first step in the creative selling process? - Answer Preparation When a small business owner chooses a location for operations, he or she generally expects to move every few years. - Answer False If your funds are invested in a fixed asset, they are not available for paying bills. - Answer true The owners of a corporation are the corporate officers - Answer False ____ is carried to disconnect one segment of the operating system from another so that each part can operate at its optimum level - Answer Inventory According to the 80-20 rule, approximately 20% of a company's income comes from 80 percent of its products - Answer False Specialty goods are bought infrequently, often at exclusive outlets, after special effort by the customer to drive to the store. - Answer True In the context of small businesses, which of the following is true of consignment selling? - Answer With consignment selling, payments to suppliers are made only when the products are sold, rather than when they are received in stock. The ____ is the part of the business plan that outlines the entire plan, its major objectives and the expected results. - Answer Executive Summary Employee losses from accidents and occupational diseases are paid for under state workers' compensation laws. - Answer True Since the financial position of a small business is constantly changing, these changes need not be recorder for further analysis. - Answer False Small business owners need not tell their employees the reasons for being in business. - Answer False Candy bars, milk, and bread are examples of _____ goods - Answer Convenience Which of the following is an example of a tax or fee paid to operate a business? - Answer An incorporation tax Equal partnership is advisable in order to facilitate decision making - Answer False Markup involves adding products that are unrelated to the present product line - Answer false Right to work laws define areas in which an employer has the right to act freely as and employer, without interference from the union - Answer false A ______ provides the protection of limited liability for shareholders, but its earnings are taxed at both the corporate and shareholder levels - Answer C Corporation Questionnaires used for primary research should: - Answer be left to experts When inventory level determines the time to order, the order quantity is a fixed amount called the ______ - Answer Economic order quantity Which of the following sources of information about computer hardware, software, and training have systems already designed to handle specific problems and useful date, but may include a membership cost or a licensing fee? - Answer Industry Associations Making daily cash deposits and varying the deposit time from day to day are highly recommended to keep the probability of armed robberies down. - Answer true Which of the following is true about database marketing? - Answer It is a quick and efficient process for acquiring customers that involves obtaining meaningful consumer information and making marketing decisions Immediate-response advertising refers to purchasing and marketing other nations' products - Answer False One must use different incentives to motivate people at different times in their working lives. - Answer True Telecommuters in the US may suffer from the disadvantage of a lack of DSL service - Answer True Which of the following disabilities is covered under the Americans with Disabilities Act? - Answer Chemical dependency Which of the following is a reason for starting a new business? - Answer The owner has freedom to select his/her own competitive environment Retailers sometimes refer to losses from both theft by outsiders and theft by employees as ______ - Answer Shrinkage Service companies, which provide a service for customers, have some characteristics of both retailers and producers. - Answer True _____ are long, usually half-hour TV ads that help small firms keep growing and enter markets once dominated by giant competitors - Answer Infomercials ____ refers to the owners' net worth in the business after liabilities are subtracted from assets. - Answer Owners' equity Strategies are general statements that serve as short-term guides to managerial decision making - Answer False An advantage of government regulations for small businesses is that they require minimal paperwork. - Answer False Market research is the systematic gathering, recording, and analyzing of data relating to the marketing of goods and services. - Answer True Variable expenses rise in direct proportion to increase in sales volume. - Answer True Variable expenses rise in direct proportion to increase in sales volume. - Answer true Market Segmentation - Answer the process of dividing a market into meaningful, relatively similar, and identifiable segments or groups ______ means employers may hire or fire employees with or without cause at any time they choose. - Answer Employment at will