Worksheets2023 Principles of Entrepreneurship Spring Exam Review
Total questions: 80
Worksheet time: 1hrs 20mins
A change in the way websites are accessed that requires new, expensive computer equipment is an example of a risk related to
technology changes
economic conditions
economic conditions
competitors' actions
Which of the following is not a strategy for dealing with a risk?
assign the risk
avoid the risk
transfer the risk
assume the risk
Which of the following is not a risk associated with doing business in another country?
language barriers
different laws, customs, and cultures
high travel and shipping costs
all of the these are risks
Jorge is supervising new employees with no experience in food service at a concession stand in an amusement park. Which management style should he use?
authoritative management
democratic management
mixed management
participatory management
Which of the following functions of management would apply when grouping tasks into departments?
planning
organizing
implementing
controlling
Preparing detailed plans that will provide strategies for achieving goals and objectives in a one-year period is
strategic planning
intermediate-range planning
short-term planning
none of these
Which of the following is not considered inventory?
dolls for a toy store
component parts of a product
vacuum cleaners owned by a maid service
all of these are considered inventory
Which of the following is the least important consideration for the layout of a wholesale business?
organization
efficiency
safety
appearance
Which of the following is the least important consideration when organizing the layout of a retail business?
lighting
window displays
aisle space
organization of supplies
Which of the following service businesses would consider the same location factors as a retail business?
exterminating company
lawn service
hair salon
on-site computer repair service
Which of the following is not a location option for a retail business?
downtown area
industrial park
community shopping center
warehouse
The legal form of business that is the simplest to establish is the
sole proprietorship
partnership
S corporation
limited liability company
A business’s credit policies need to specify all of the following EXCEPT
what products may be purchased on credit
what the terms of the credit will be
to whom the credit will be extended
the age and ethnicity of the customers who will be offered credit
Most credit cards are considered
installment loans
collateral loans
secured loans
unsecured loans
A business probably could not buy insurance to cover risks associated with any of the following EXCEPT
change in economic conditions
competitors’ actions
change in consumer demand
a fire that disrupts business
Which of the following is NOT one of the basic strategies for dealing with risk?
avoid the risk
transfer the risk to another party
assume the risk
deny the risk exists
The dollar amount of all sales with any returns subtracted is called
gross profit
gross sales
net sales
net income
Which of the following is a strategy a business can use to encourage faster payment?
increase the amount of time your customers have to pay their bills
offer discounts on bills paid right away
send shipments early to show customers you trust them
all of the above strategies will encourage faster payment
This inventory method keeps track of inventory levels on a daily basis.
manual inventory method
perpetual inventory method
periodic inventory method
point-of-sale inventory method
All of the following are concerns about inventory that managers must address EXCEPT
reducing inventory turnover
not ending up with out-of-date items
maintaining a wide assortment of stock
keeping stock levels as low as possible without sacrificing performance or service
Outlines for appropriate employee behavior and actions are called
procedures
policies
rules
mandates
The process of setting standards for the operation of a business and ensuring those standards are met is called
staffing
supervising
controlling
implementing
A management style in which employees are involved in decision making and the manager provides less direction is called
democratic management
authoritative management
mixed management
autocratic management
The person in a business who is responsible for planning, organizing, staffing, implementing, and controlling the operations of a business is the
employee
chairman of the board
intern
manager
Most businesses need all of the following types of supplies and equipment EXCEPT
office supplies
fixtures
furniture
lawn mowers
After a business owner leases or purchases a facility, he or she needs to design the layout, or
enterprise zone
floor plan
vendor space
trade area
In this type of lease, the landlord pays building insurance and the tenant pays rent, taxes, and any other expenses.
short-term lease
net lease
percentage lease
gross lease
The buying and selling of products or services over the Internet is known as
e-commerce
digital shopping
virtual economics
B2B commerce
The geographic area from which you expect to attract customers is called the
trade area
opportunity zone
target market
enterprise zone
Local governments control the types of buildings that can be built in different areas through the use of
copyrights
licenses
zoning regulations
trademarks
This law protects small businesses from unfair pricing practices.
Clayton Act
Wheeler-Lea Act
Robinson-Patman Act
Sherman Act
A corporation’s board of directors is responsible for all of the following EXCEPT
determining the salaries of company executives
setting the corporation’s rules for conducting business
the day-to-day management of the corporation
electing the corporation’s officers
A business owned exclusively by one person is called a
sole proprietorship
partnership
limited liability company
corporation
Which of the following is NOT an advantage to buying an existing business?
the seller may be willing to train the new owner
there are prior records of revenues, expenses, and profits, making financial planning easier
financial arrangements can be easier
capital is not required because the business already exists
How low you set your reorder point depends on all of the following except
the number of customers you have each month.
how many units of the item you sell each month.
how important it is to you not to be out of stock.
how long it takes your supplier to get the merchandise to you.
A reorder point
is an order to a supplier for additional items.
is a predetermined level of inventory that signals when new stock must be purchased.
should only be set for products that have high sales.
none of these
To make sure you do not run out of stock unexpectedly, you can
establish a reorder point for each product that you sell.
store extra inventory at a warehouse.
use only suppliers who guarantee to deliver in one day.
all of these
Determining the amount of inventory to keep in stock is particularly difficult for owners of new businesses because
their insurance may not cover damage to stored inventory.
they need to take advantage of quantity discounts.
they do not know what their level of sales will be.
all of these
For a retail business, inventory consists of
merchandise to be resold to customers.
parts needed to produce the business's finished product.
supplies.
all of these
An estimate of how much you will pay for merchandise is
a quantity discount.
a letter of intent.
the financing terms.
a quote.
Sources of vendor information include all of the following except
trade magazines.
SCORE.
the Internet.
insurance agencies.
All of the following are important for a manufacturing business's layout except
exits should be clearly marked.
hazardous materials should be stored safely.
work teams should be situated close together.
supervisors should sit near each other.
The layout of an on-site service business
is not important.
should be similar to a retail business.
needs an attractive window display.
should emphasize organization.
In designing a layout for a retail business, you should
place the cash register in the back of the store.
leave at least 4 feet of aisle space.
always use fluorescent lighting.
all of these
The layout, outside sign, and window displays of your business
are less important than the name of your business.
should match your image.
should never be changed.
should be similar to other retail businesses in the area.
A possible location for a business has rent of $975 per month and projected traffic of 9,600 customers per month. Rent per customer is
$0.98.
$0.10.
$0.11.
$0.08.
A lease in which the landlord receives a percentage of the tenant's revenue each month in addition to rent is a
tax-free lease.
percentage lease.
gross lease.
net lease.
Most entrepreneurs lease business space because
it helps them obtain financing.
they prefer to stay in a particular location.
they lack the money to purchase property.
all of these
A key factor in determining where an industrial business locates is
availability of good employees.
drive-by traffic.
adequate parking.
property of nearby businesses.
Which of the following is a disadvantage of running a virtual business?
It requires a lot of startup capital.
Competing with larger, established businesses is difficult.
Collecting information about customer behavior is difficult.
Maintaining a website requires special expertise.
Operating a home-based business
offers tax savings.
increases networking opportunities.
makes business expansion easier.
all of these
Neighborhood shopping centers
are good locations for stores selling goods or services that people need to purchase frequently.
typically have low rent.
are typically anchored by a supermarket.
all of these
Which of the following is not an element of a tort?
Duty
Injury
Causation
Capacity
The Federal Trade Commission monitors all of the following activities except
price setting by competitors.
the sale of unhealthful foods.
false or misleading advertising.
price discrimination.
A copyright lasts
for the life of the author plus 50 years.
for 20 years.
until the author dies.
for the life of the author plus 70 years.
The antitrust legislation law that bans false advertising is the
Wheeler–Lea Act.
Clayton Act.
Sherman Act.
Robinson–Patman Act.
Which of the following antitrust legislation laws makes it illegal to discriminate by charging different prices to costumers?
Clayton Act
Sherman Act
Robinson–Patman Act
Wheeler– Lea Act
Many companies establish themselves as S corporations
because they lose money in their early years.
to avoid strict government regulation.
to avoid tedious recordkeeping procedures.
so that individual shareholders do not have to pay taxes on the profits they earn.
A disadvantage of a corporation is
it is more difficult to set up than a sole proprietorship or a partnership.
double taxation.
it is subject to heavy government regulation.
all of these
The board of directors of a corporation
determines the salaries of the corporation's officers.
pays dividends to shareholders.
may be held liable for all company debts.
is responsible for the day-to-day management of the corporation.
Which of the following is not included in a partnership agreement?
How dividends are to be distributed
Conditions under which the partnership can be dissolved
Names of the partners
Rights of each partner to review accounting documents
An advantage of a partnership is that
the personal assets of partners may not be taken to pay off debts of the partnership.
it faces very little government regulation.
it is easy to raise capital.
it has the legal rights of a person.
A business that has the legal rights of a person and may have many owners is a
dual partnership.
sole proprietorship.
corporation.
partnership.
Which of the following is not a disadvantage of working in a family business?
Family politics often enter into decision-making.
A family business may offer less flexibility than other types of businesses.
The distinction between business life and private life is blurred.
There is often no exit strategy.
Franchisors may offer
to waive the royalty fees.
free nationwide advertising.
management and technical training.
to help finance the purchase.
If you decide to purchase a franchise, you will have to pay
royalty fees.
an initial franchise fee.
advertising fees.
all of these
When buying a business, you should do all of the following except
meet with the business seller.
inspect a list of all customers.
have a lawyer draw up the sales contract.
visit during business hours to observe the business in action.
An advantage of buying an existing business is that
less capital is required.
it is making a profit.
suppliers are lined up.
there will not be any customer goodwill.
To minimize the risks of international business, you should
conduct business in only one foreign country.
never partner with a company that is located in the country you are targeting.
learn about the other country's culture.
all of these
Which of the following injuries are not covered by workers' compensation insurance?
Injuries individuals afflict on themselves.
Injuries suffered during a fight that the injured employee starts.
Injuries suffered while violating employer policies.
all of these
All of the following are considered some of the most dangerous occupations in America except
farmers and ranchers.
garbage collectors.
construction workers.
nurses.
Uncollectible accounts
will not be a problem for a business that has established sound credit policies
are an expense to a business.
increase net income.
occur only with secured loans.
Rules, policies, and procedures, are important components of
strategic planning.
intermediate-range planning.
short-term planning.
none of these
Training and compensating the employees of a business is part of which of the following management functions?
Planning
Implementing
Staffing
Controlling
Policies
may apply to both employees and customers.
should be adhered to in all situations.
outline the appropriate behavior of those that work for you.
are instructions on how to perform a task correctly.
A policy for replacements, refunds, or repairs
is usually not necessary for most businesses.
will help maintain customer goodwill.
negatively impacts profits.
none of these.
All of the following should be recorded on an inventory record except
the item's stock number.
the item's cost.
the amount of inventory you currently have.
the maximum amount you want in inventory at any time.
Looking at all aspects of your business and determining the risks you face is called
risk management.
a recovery plan.
risk assessment.
risk assumption.
You transfer risk and protect yourself against the financial losses from some risks by
installing an alarm system.
installing surveillance systems.
purchasing insurance.
installing deadbolt locks.
The first step in buying insurance is to
determine the kinds of coverage you think you need.
identify the kinds of risks you would like to insure against.
determine the amounts of coverage you need.
choose an insurance agent.
