Final Exam

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Question #1

Mr. Caruana’s teaching skills can best be described as:

A amateurish, boorish, pontifical

B humdrum, unremarkable, repetitive

C mundane, tired, dull

D amazing, exciting, gifted

Question #2

Fixed costs, such as rent, insurance and utilities must be paid regardless of the the number of units produced and sold.

A TRUE

B FALSE

Question #3

A subsidy is a government payment to help a domestic business compete with foreign firms.

A FALSE

B TRUE

Question #4

The law of supply states that producers will offer more of a product as its price ______ and less of a product as its price ________.

A rises, rises

B rises, remains constant

C drops, rises

D rises, drops

Question #5

The 4 P’s of marketing include all of following, except:

A price

B production

C product

D promotion

Question #6

Antonio is paid $55,000 per year as a research analyst. This type of compensation is called a(n) _____.

A wage

B salary

C commission

D bonus

Question #7

Saleem, an electrician for FCG Electricals, is paid $40 for each hour he works during the day. After 5 p.m. and on weekends, he is paid the overtime rate of one and one-half times the regular hourly rate. In this scenario, Saleem is paid a _____.

A salary

B bonus

C wage

D commission

Question #8

Which of the following is the first step in the recruitment process?

A interviewing candidates

B conducting employment tests

C identifying job requirements

D reviewing applications and resumes

Question #9

Which of the following management functions is most likely to be responsible for planning for staffing needs, recruiting and hiring workers, providing for training and evaluating performance, determining compensation and benefits, and overseeing employee separation?

A human resource management

B research and development (R & D)

C human asset accounting

D change management

Question #10

Which of the following statements is true of management?

A Management principles do not apply to not-for profit organizations.

B Management is solely the process of reporting organizational successes and failures to investors and others.

C Management happens only at the top management levels.

D Management is the process of achieving organizational objective through people and other resources.

Question #11

Gross Revenue $60,000
Cost of Goods Sold $30,000
Gross Profit:
Indirect Expenses $10,000
Net Profit:

The Gross Profit is ____________ and the Net Profit is ______________.

A $20,000, $30,000

B $30,000, $40,000

C $90,000, $100,000

D $30,000, $20,000

Question #12

In most businesses a General Manager is required by law.

A TRUE

B FALSE

Question #13

All of the following are advantages of a partnership, except:

A No personal liability for the partners

B Avoidance of double taxation

C Combination of resources

D Ease of set up

Question #14

A limited liability corporation provides the least protection of the owner’s personal assets.

A TRUE

B FALSE

Question #15

The money used to finance the day to day operations of the business can come from:

A a but not b

B lines of credit

C net sales

D both a and b

Question #16

The two main considerations when deciding a business’ legal structure are: liability and tax implications

A TRUE

B FALSE

Question #17

Profit is generated when total income is greater than total expenses.

A FALSE

B TRUE

Question #18

Expenses generated by the actual production of the product or service are called indirect expenses.

A TRUE

B FALSE

Question #19

Expenses generated by maintaining the office are called indirect expenses.

A FALSE

B TRUE

Question #20

Accounts Receivable(s) is money owed to our business.

A FALSE

B TRUE

Question #21

All of the following could be considered “start-up” costs, except_____________?

A insurance

B phone system

C direct expenses

D utility deposits

Question #22

Manufacturers have a duty to warn against a ______________________ of their products.

A foreseeable misuse

B both b and c

C possible hazard

D occasional misuse

Question #23

A contract may be expressed or ___________________.

A implied by action

B instructed by action

C implied by relationship

D innate by action

Question #24

In order for a contractual offer to be valid, it must contain ___________________________.

A “language of potential”

B “language of protection”

C “language of provision”

D “language of promise”

Question #25

The gain or loss that results from an investment over a specified period of time is known as _____.

A risk

B return

C value

D probability

Question #26

The three elements of a legal contract are ___________________________.

A offer, activities, and consideration

B offer, acceptance, and consciences

C offer, acceptance, and convenience

D offer, acceptance, and consideration

Question #27

The ____ is a collection of financial markets in which previously issued securities are traded among investors.

A primary market

B super market

C secondary market

D government market

Question #28

Two types of municipal bonds exist. What are they?

A revenue bonds and general obligation bonds

B corporate bonds and general obligation bonds

C government bonds and mortgage pass-through security bonds

D revenue bonds and junk bonds

Question #29

Written communication in business should be:

A read before sending

B kept short

C possibly sent later

D all of the above

Question #30

___ are short-term securities issued by the U.S. Treasury and backed by the full faith and credit of the U.S. government

A Corporate Bonds

B Treasury bills

C CDs

D Commercial paper

Question #31

All of the following are types of securities EXCEPT _____.

A mutual funds

B bonds

C stock

D cash

Question #32

The difference between what you own and what you owe is your _____.

A net worth

B asset ratio

C gross worth

D debt factor

Question #33

A firm’s balance sheet shows its financial position over a period of time.

A TRUE

B FALSE

Question #34

If your costs are $10 per unit, what would be your selling price with a 40% markup?

A $4

B $14

C $11

D $24

Question #35

Frank, chief financial officer for a company, wants to take a look at the summary of expenses, revenues, and profits of the firm for the most recent quarter. He can best find this information by consulting the _____.

A Balance Sheet

B Income Statement

C Statement of Owners’ Equity

D Cash Flow Statement

Question #36

Which of the following financial statements shows a firm’s financial position on a particular date?

A Balance Sheet

B Statement of Cash Flows

C Income Statement

D Statement of Changes in Retained Earnings

Question #37

Jayce Products buys a $500,000 machine by taking out a bank loan. The company’s assets will _____ by $500,000 while its liabilities will _¬____¬¬ by $500,000.

A increase; increase

B increase; decrease

C decrease; decrease

D decrease; increase

Question #38

Milwaukee Fabrication has $80 million in assets and $50 million in owners’ equity. How much does the firm have in liabilities?

A $50 million

B $30 million

C $20 million

D $80 million

Question #39

All of the following are liabilities EXCEPT _____.

A wages payable

B accounts payable

C profits

D bank loans

Question #40

In a high-priced environment, a manufacturer would expect to sell _______ units, but have _______ revenue per unit.

A more, more

B more, less

C less, less

D less, more

Question #41

Revenue can be defined as:

A the amount of owner’s equity

B the total percentage of cost of goods sold to the amount of sales

C selling price multiplied by the number of units sold

D assets minus liabilities

Question #42

To provide reliable, consistent, and unbiased information to decision makers, accountants follow guidelines, or standards, known as _____.

A the accounting process

B Financial Accounting Standards Board (FASB)

C generally accepted accounting principles (GAAP)

D the accounting system

Question #43

All of the following are assets EXCEPT _____.

A inventory

B patents

C bank loans

D cash

Question #44

Variable costs are costs that:

A change with the number of units produced.

B are the same as fixed costs.

C don’t change with the number of units produced.

D none of the above

Question #45

Market segmentation may include:

A Psychographic – people with similar lifestyles, attitudes, opinions.

B Demographic – age, gender, income, education, family size, occupation.

C Geographic – region, population density, zip code.

D All of the above

Question #46

Walker is a loan officer for a bank and is reviewing the financial statements of a prospective borrower. As a user of accounting information, Walker is most interested in using this information _____.

A to evaluate financial soundness of potential clients

B in contract negotiations

C to plan and control daily operations

D to make an investment decision and estimate its future returns

Question #47

Ann owns a business and is reviewing her company’s current financial statements. As a user of accounting information, Ann is most interested in using this information to _____.

A plan and control activities

B evaluate credit risk

C evaluate The Federal Reserve’s monetary policy

D approve new issues of stocks and bonds

Question #48

The “price” element of marketing means the product or service must be available to consumers when they want it.

A FALSE

B TRUE

Question #49

Businesses selling to the consumer market is also known as:

A B2B

B C2B

C B2B2

D B2C

Question #50

The four goals of advertising are:

A attention, interest, desire and alternative

B observation, interest, desire and action

C attention, interest, desire and action

D attention, interest, desire and advantage

Question #51

There is a new emphasis in human resources for which of the following reason(s):

A Increased costs

B Increased productivity

C Increased legal complexities

D All of the above

Question #52

Autocratic leaders make decisions______________.

A offer little input

B on his or her own without consulting employees

C win loyalty of employees through friendship

D by including subordinates in the decision-making process

Question #53

The person who directs a firm’s management information systems and related computer operations is often called the ________.

A executive information manager

B financial advisor

C chief executive officer

D chief information officer

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