: Introduction to business management for the entrepreneur

: Introduction to business management for the entrepreneurChapter 1: Introduction to business management for the entrepreneur 1. Cyril and Cindy used _______ as factors of production to manufacture the curtains and blinds. (pg 9) 1) Entrepreneurship, capital, money and labour 2) Entrepreneurship, creativity, capital and labour 3) Entrepreneurship, capital, labour and natural resources 4) Entrepreneurship, labour, natural resources and skils 2. Consumers wanted curtains made according to their individual needs and preferences, rather than buying ready-made curtains that were manufactured in bulk. This is an example of the influence that the ________environment has on Chetty’s Curtain Creations.( pg 12-13) 1) Economic- is influenced by the political, social, technological and international environments, but conversely, influences the other environments significantly. 2) Social and cultural- consists of may dimensions, including culture, language, religion and customs 3) Technological- changes in technology have a dramtic influence on the lives of individuals and business. 4) Physical- includes the essential resources required by people and businesses 3. An increase in the inflation rate may result in a decrease in the sales of new curtains and blinds. This is an example of the influence that the environment has on Chetty’s Curtain Creations. 1) International- all the environments are influence each other and businesses directly or indirectly. 2) Social and cultural- consists of may dimensions, including culture, language, religion and customs 3) Technological- changes in technology have a dramtic influence on the lives of individuals and business. 4) Economic- is influenced by the political, social, technological and international environments, but conversely, influences the other environments significantly. 4. The primary objective of Chetty’s Curtain Creations is to______. 1) Satisfy consumers’ needs 2) Launch a marketing campaign 3) Include a bigger variety of products in their product range 4) Make a profit (pg 27) Page 1 of 161 BSM 1602 EXAM BANK MAY 2015- MAY 2019 BUSINESS MANAGEMENT 1B 5. Management is a business management function and involves the coordination of all the business functions. The fundamental/ ,main management tasks include the following_________. (pg 26) 1) Planning, coordination, control and leading 2) Planning, control, leading and organising 3) Organising, control, leading and communication 4) Delegation, leading, organising and control 6. Which one of the following is not a characteristic of an entrepreneur? 1) He/she manages and existing enterprise 2) He/she starts his own enterprise 3) He/she is creative and innovative 4) He/she is responsible for growth Chapter 2: The general management function 7. Fatima was the administrative manager and Paulina acted as her assistant. They were responsible for answering the telephone, handling enquiries and complaints, placing orders, etcetera. This division of tasks refers to _________. 1) Planning- Adequate planning is needed; in the long, medium and short term. 2) Organising- this means taking decisions on how to divide up the work that is to be completed 3) Leading- involves the effective supervision and motivation of employees 4) Control- this included monitoring performance, in other words, comparing what should have been done with what was actually done. Corrective action should be considered if a gap is found to exist. 8. The way in which Cyril and Cindy assist subordinates to achieve the objectives of the business, refers to_____________ (pg 41-43) 1) Delegation- is the process whereby tasks are allocated to employees with the necessary power and responsibility to enable them to do the tasks. 2) Co-ordination- is the process by which the various functions in the business are treated as a functional unit so that its objectives can successfully be achieved. 3) Discipline- shapes the behaviour of employees so that their conduct helps to ensure the successful operation and achievement of the objectives of the business. Page 2 of 161 BSM 1602 EXAM BANK MAY 2015- MAY 2019 BUSINESS MANAGEMENT 1B 4) Motivation- is the process in which the entrepreneu and manager persuade the employees that they should voluntarily do their work as well as possible 9. The middle management of Chetty’s Curtain Creations is responsible for planning__________. ( pg 20-22) 1) Strategic- The final authority and responsibility for carrying out management duties will be taken on a strategic level. 2) Functional- is responsible for a certain departmental function, for instance marketing, purchasing or production. 3) Operational - is concerned with all the activities regarding the daily tasks of the business. 4) organisational 10. Cyril and Cindy should be aware of the key components to reshape the would of the new economy and utilise the knowledge and ideas of their employees. This statement refers to____________. (pg 19-20) 1) New communication technologies- Communication technologies are responsible for enormous change in the business world 2) Globalisation- Multinational businesses have global offices and production facilities. 3) Knowledge management- is a process. of discovering and connecting a business’s intellectual resources. 4) Alliances across business borders 11. Which one of the following is not a strategic planning that has to be executed at the top management level of Chetty’s Curtain Creations? (pg 27-28) 1) To decide on the vision and mission of the enterprise 2) To plan the strategy and policy of the enterprise 3) To do the budgets of the enterprise 4) To work out the operational strategy of the enterprise (pg 23) 12. At Chetty’s Curtain Creations, Cyril and Cindy aim to persuade their employees to voluntarily do their work to the best of their ability. This statement refers to __________. 1) Leading- to the management function that guides people within a business in such a way that they voluntarily cooperate or work together to achieve the objectives of the business as effectively as possible.(pg 38). 2) Motivation- is the process in which the entrepreneur and manager persuade the employees that they should voluntarily do their work as well as possible. Page 3 of 161 BSM 1602 EXAM BANK MAY 2015- MAY 2019 BUSINESS MANAGEMENT 1B 3) Co-ordination - is the process by which the various functions in the business are treated as a functional unit so that its objectives can successfully be achieved. 4) Control- By exercising control, an entrepreneur ensures that people carry out instructions according to plan. 13. Additional or short-term objectives that are set to improve working conditions or to provide quality curtains an blinds at Chetty’s Curtain Creations, can be classified as the _________ objectives. 1) Main- of small businesses is usually to make a profit. 2) Strategic3) Overall 4) Secondary 14. When Cyril and Cindy allocate power and responsibility to sub-ordinator employees, it refers to ______. ( pg 41-42) 1) Co-ordination- is the process by which the various functions in the business are treated as a functional unit so that its objectives can successfully be achieved. 2) Discipline- shapes the behaviour of employees so that their conduct helps to ensure the successful operation and achievement of the objectives of the business. 3) Delegation- is the process whereby tasks are allocated to employees with the necessary power and responsibility to enable them to do the tasks. 4) Decision-making- various possible solutions are considered for problems and the best solution is chosen. Chapter 3: The financial function 15. Which financial statement will Cyril and Cindy consult if they want to evaluate the financial status of Chetty’s Curtain Creations at the end of a certain accounting period? 1) Income statement 2) Balance sheet 3) Pro forma income statement 4) Cash budget 16. The items acquired for long-term use in Chetty’s Curtain Creations, such as land, equipment, machinery and furniture with an expected useful business life measured in years, are known as __________. (pg 50-51) 1) Current liabilities- are accounts payable, notes payable to banks, accrued expenses (wages, salaries), taxes payable, the current portion (due within one year) of long-term debt and other obligations owing to creditors due within one year. Page 4 of 161 BSM 1602 EXAM BANK MAY 2015- MAY 2019 BUSINESS MANAGEMENT 1B 2) Current assets- any other item that could be converted into cash within one year in the normal course of business. 3) Non-current assets are assets acquired for long-term use in a business, 4) Non-current abilities- are amounts owed by the company over long periods of time. 5) Non-current assets- are assets acquired for long-term use in a business 17. Cyril and Cindy applied for financing of R100 000 to finance the purchasing of industrial sewing machines, over-lockers, workbenches and chairs. This form of financing can be classified as _______ term capital. 1) Medium - 2) Long – setting goals for sales growth and profitability over a minimu of three to five years 3) Short- is generally concerned with profit planning or budgeting 4) Intermediate18. The ability of Chetty’s Curtain Creations to pay monthly accounts such as salaries, interest, suppliers, water and electricity, is called liquidity. There are various formulas that can be applied to work out liquidity ratios. Identify the following formula_______. (pg 58-59) Current assets – inventory Current liabilities 1) Gearing ratio= Long-term Debt Long-term Debt + Total Equity 2) Current ration : = Current Assets Current Liabilities 3) Acid test (quick) ratio 4) Debt ratio= Total Assets – Total Equity Total Assets 19. Cyril and Cindy have to consider four decisions in their financial management activities. These four decisions refer to aspects such as _______. 1) Investment, dividend, forms of financing and record-keeping 2) Dividend, financing, investment and sources of capital 3) Interest, dividend, capital and investment 4) Investment, dividend, financing and record-keeping 20. The variable capital need of Chetty’s Curtain Creations can be described as capital that _________________. 1) Is needed to start the enterprise 2) The enterprise constantly needs in order to function profitably 3) The enterprise can do without from time to time Page 5 of 161 BSM 1602 EXAM BANK MAY 2015- MAY 2019 BUSINESS MANAGEMENT 1B 4) The enterprise needs to pay the variable costs such as raw materials and labour. 21. Capital that is needed to start and register Chetty’s Curtain Creations and to buy the building, equipment and initial stock or raw materials. Is known as the _________ capital need. 1) Fixed 2) Once-off 3) Variable 4) Permanent 22. The ability of Chetty’s Curtain Creations to pay its debts, even if the enterprises ceases to exist, is known as________________. 1) Liquidity- (a business’s ability to pay its bills as they become due and the extent to which the business is dependent on creditors’ funding) 2) Profitability 3) Solvency- (a business’s ability to pay its bills as they become due and the extent to which the business is dependent on creditors’ funding) 4) Breakeven point Chapter 4: The marketing function 23. Cindy discovered that she had to compete with various other curtain shops in the immediate vicinity of her enterprise. Her competitors can be classified as a(n) _________ in the SWOT analysis of Chetty’s Curtain Creations. 1) Opportunity 2) Strength 3) Threat 4) Weakness 24. To understand her market and to identify the needs and preferences of her customers, Cindy had to gather information through_________. 1) Market analysis- This section of the marketing plan uses much of the same information as the business plan. 2) A consumer analysis- A crucial part of the marketing plan is to perform a customer analysis. If entrepreneurs don’t know their clients’ needs and preferences, they won’t be able to satisfy them. 3) Market segmentation- can be defined as the identification of subsets of buyers within a market who share similar needs and who have similar buying processes. 4) Market research- is essential to the success of any business. It does not have to be expensive; the information can be obtained through existing sources, or by means of primary research. Page 6 of 161 BSM 1602 EXAM BANK MAY 2015- MAY 2019 BUSINESS MANAGEMENT 1B 25. A detailed document of how the curtains and blinds of Chetty’s Curtain Creations will be marketed and the time-related details for carrying out the activities, is known as the _______. 1) SWOT analysis- is based on the assumption that an effective strategy maximises the strengths and opportunities of a business and minimises its weaknesses and threats. 2) Marketing analysis 3) Marketing plan- is a detailed strategy of how a product or service will be marketed and the time-related details for carrying out the plan. 4) Marketing campaign 26. Suppose Cyril and Cindy decide to use special offers, discount on prices or gift to attract their customers. This method is known as _______ in a marketing strategy. 1) Sales promotions- Special promotions can be held periodically. The shop can distribute pamphlets every three months, advertise specials on hindquarters or family packs of meat. 2) Personal sales 3) Advertising 4) Publicity- can be secured by getting involved in community services and making donations to the needy. Chapter 5: Operations management 27. Cyril goes to the client’s homes to take measurements and then makes the curtains or blinds according to their needs and preferences. Which operation system does Chetty’s Curtain Creations use? 1) Continuous or repetitive 2) Job 3) Batch 4) Project 28. Macro-productivity refers to a nations’s entire production, the GDP (Gross domestic product) GDP per capita is the total output of _______. (pg 133) 1) A community divided by the total population 2) Capital divided by the total production 3) A company divided by the total number of products 4) A country divided by the total population 29. Cyril and Cindy’s knowledge and experience as well as the capital, labour and equipment are examples of __________ in the transformation process of Chetty’s Curtain Creations. Page 7 of 161 BSM 1602 EXAM BANK MAY 2015- MAY 2019 BUSINESS MANAGEMENT 1B 1) Raw materials 2) Inputs 3) Stock 4) Outputs 30. The transformation process in Chetty’s Curtain Creations can best be described as ________.(pg 133) 1) Inputs (transport) – transformation (pay fees) – outputs (profit) 2) Inputs (Cyril and Cindy) – transformation (sewing) – outputs (curtains and blinds) 3) Inputs (knowledge, capital, labour, textiles) – transformation (sewing of curtains and blinds) – outputs (final products, curtains and blinds) 4) Inputs (ready-made curtains) – transformation (sewing of textiles) – outputs (curtains and blinds). 31. Capacity planning in Chetty’s Curtain Creations can be declined as the _____.(pg 140) 1) Size of the enterprice including the workbenches and machines 2) Greatest number of clients that order curtains and blinds 3) Greatest possible workload that the enterprise can handle within a certain period 4) Total number of employees employed at Chetty’s Curtain Creations 32. Cyril and the two seamstresses who help him with the sewing of curtains and blinds are organised around the operations process and they are placed on one area. This type of layout is called the ________ layout in the operations system. 1) Fixed-position 2) Process 3) Cell 4) Product 33. The volume at which total revenues are equal to total cost in Chetty’s Curtain Creations is known as the break-even____________. (pg 149-151) 1) Ordering quantity- A fixed order point (at a certain level of inventory) and a fixed quantity to be ordered are determined for each item according to a formula known as the economic 2) Analysis- determining the volume at which total revenues are equal to total cost, or when the cost to make equals the total cost to buy. 3) Volume 4) Point in units Page 8 of 161 BSM 1602 EXAM BANK MAY 2015- MAY 2019 BUSINESS MANAGEMENT 1B 34. The operations function of Chetty’s Curtain Creations will come to a standstill if there are no textiles, curtain fabric and accessories available, which implies a loss in production and in sales. This refers to the cost of _________ stock. 1) Opportunity 2) Insufficient 3) Ordering 4) storage Chapter 4: The purchasing function 35. Cyril is responsible for the purchasing function and if this function does not fulfill its responsibilities by supplying the right quality and quantity of function at optimum levels. This has a negative influence on the image of the enterprise. If the image of Chetty’s Curtain Creations is negative, which function does it affection? 1) Public relations function 2) Operations function 3) Marketing function 4) General management 36. When would Cyril ask questions such as the following “ Are purchasing policies, procedures and practices up to date, written and effective?’ or “is a programme in place for the development of purchasing and supply personnel as well as training plans and procedures?’ 1) During budgeting 2) In the evaluation of purchasing management 3) When formulating policies and procedures 4) During control in the purchasing function 37. At Chetty’s Curtain Creations purchasing activities are executed in logical steps, forming a cycle also known as the “elements of the purchasing processes” or the “purchasing procedure”. Steps one to four involve the following steps. 1) Determine the need 2) Select suppliers 3) Determine the price and conditions 4) Place the order What will the next logical step be? a. Receive the goods b. Handle any errors c. Manage, expedite and follow up the order d. Pay the suppliers Page 9 of 161 BSM 1602 EXAM BANK MAY 2015- MAY 2019 BUSINESS MANAGEMENT 1B 38. This purchasing budget starts with information regarding the sales forecast from the _________ function. 1) Marketing 2) Operational 3) Financial 4) Administrative 39. The guidelines, according to which Chetty’s Curtain Creations will identify select and manage their suppliers form part of the purchasing. 1) Objectives 2) Procedures 3) Budget 4) Policy 40. The first step that Chetty’s Curtain Creations has to follow when they select their suppliers, would be to ________. 1) Monitor suppliers 2) Set the criteria for evaluating suppliers 3) Compile a list of potential suppliers 4) Evaluate and select the suppliers 41. Chetty’s Curtain Creations buy their fabric from a local retailer. Which objective of the purchasing function was ignored? 1) To maintain good relations with suppliers 2) To have alternative suppliers 3) To apply effective stock control 4) The “just-in-time’ principle 42. To determine the optimum stock level, the purchasing function of Chetty’s Curtain Creations has to weigh up the cost of _______________. 1) Ordering stock against the cost of insufficient stock 2) Ordering stock against the cost of keeping stock 3) Keeping stock against the cost of insufficient stock 4) Ordering stock against the cost of unforeseen circumstances 43. Cindy decided to increase the staff capacity and appointed two seamstresses. The advertisement outlined which positions were offered and the type of experience and skills which were required. The experience and skills required are described in the job. 1) Analysis 2) Description Page 10 of 161 BSM 1602 EXAM BANK MAY 2015- MAY 2019 BUSINESS MANAGEMENT 1B 3) Specification 4) Appraisal 44. The activities carried out in searching for and inviting potential employees and suitable people to apply for the posts available in Chetty’s Curtain Creations, can be described as _________. 1) Induction and orientation 2) Human resource provision 3) Human resource planning 4) Recruitment (internal and /or external) 45. At Chetty’s Curtain Creations the ___________function is responsible for the procurement, development, compensation, integration, maintenance and effective use of a competent, motivated labour force. 1) Purchasing 2) Operations 3) Human resources 4) Personnel 46. If Cyril and Cindy wanted to change the employees’ working habits and levels of job performance to make them more effective in their current positions, it would mean that the employees would have to undergo. 1) Training 2) Orientation 3) Development 4) induction 47. Accurate information is a very important aspect in any enterprise, especially when making decisions. Information regarding suppliers (their prices, quality, quantity offered), stock needed, stock levels and delivery dates will be required by the ___________function. 1) Operations 2) Financial 3) Purchasing 4) Marketing 48. All the people that have a direct or indirect influence on Chetty’s Curtain Creations, such as the consumers, community, the employees and the suppliers, are known as the _______ groups of the enterprise. 1) Market 2) Support 3) Environment 4) Interest Page 11 of 161 BSM 1602 EXAM BANK MAY 2015- MAY 2019 BUSINESS MANAGEMENT 1B 49. One of the most important reasons why Cyril and Cindy must do financial recordkeeping of all the transactions in the enterprise, is that___________. 1) The Receiver or Revenue obliges them to keep financial records 2) It is evidence for the auditors that the accounting entries are correct 3) It helps them to plan the purchases of all the raw material and stock 4) The finance department must do it as part of their duties and activities 50. One of the most important stages or processing information is the collection of data. Which of the following aspects must be considered during this stage? 1) The staff collecting the data 2) The format in which data is collected 3) The methods used to collect data 4) The activities on which data is collected 5) The date and time data is collected Choose the correct combination a. a, b, c, d b. b, c, d, e c. a, b, c, d, e d. b, c, d 51. An information system that primarily serves the functions of planning, organising, leading and control at the management level of Chetty’s Curtain Creations, is known as the ______system. 1) Executive support system 2) Management information system 3) Decision support system 4) Transaction processing system 52. The difference between data and information is that information_____ 1) Refers to facts in an unprocessed format 2) Contains figures and also transactions recorded 3) Cannot be used in decision-making 4) Is processed data that can be used in decision-making 53. There are three important elements in the processing of information, namely_______. 1) Inputs, collecting and distribution 2) Collecting, processing and discarding 3) Inputs, processing outputs 4) Processing, inputs and distribution Page 12 of 161 BSM 1602 EXAM BANK MAY 2015- MAY 2019 BUSINESS MANAGEMENT 1B 54. The _____system is responsible for creating and maintaining systematic procedures and control of all the records in Chetty’s Curtain Creations. 1) Internet 2) Record-keeping 3) Mechanical 4) Records management Chapter 9 : The public relations function 55. The primary objective of the public relations function of Chetty’s Curtain Creations is to _____________ 1) Make a profit and establish goodwill in public 2) Establish goodwill in the public and promote prosperity 3) Create and maintain mutual knowledge within the enterprise 4) Promote and improve the image of the enterprise