MGT 101 Midterm – Flashcards
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Which of the following are organized for profit and provide goods and services?
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businesses
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In accounting terms, profits are ... ?
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the difference between revenues and expenses
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... is essential because it serves as a primary incentive for people to start companies, expand them, and provide consistently high-quality competitive goods and services
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Profit
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Timber Trails, a northwest lumber company, utilizes ... as its primary production factor.
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Natural Resources
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Technology, tools, information, and physical facilities for the operation of a business are examples of ...
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Capital
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The human resources of a firm refer to ...
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everyone who works for the business
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Businesses that operate in an environment where success or failure is determined by how well they match and counter the offerings of competitors are operating under ...
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the private enterprise system
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In this book The Wealth of Nations, the Scottish economist Adam Smith was the first person to describe ...
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capitalism
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When Greenlawn Inc. finds itself losing contracts because Lo-Price Lawn Co. charges less money, Greenlawn responds by lowering its bids. This reaction demonstrates ...
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the invisible hand of competition
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All of the following are basic rights within a private enterprise system EXCEPT ...
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guaranteed profits
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The number of people aged 65 and over will ... by 2030.
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double
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When a business employs an outside company to handle all customer correspondence and phone calls, the business is ... its customer service department
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outsourcing
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When Google opened offices in Tokyo, London, and Sydney, they were utilizing ... by relocating business activities to lower-cost locations overseas
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offshoring
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The new employer-employee partnership has led to all of the following EXCEPT ...
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increased job security
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In business, ... refers to the ability to see better and different ways of doing business
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creativity
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A company removes a profitable product from the market because it may be dangerous. This company is demonstrating ...
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ethical behavior
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When management considers social and economic issues in decision making, the company is practicing ...
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social responsibility
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Businesses should ...
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find the balance between doing what is right and what is profitable
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... are responsible for conducting employee training programs that help spot potential fraud and abuse within a firm.
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Ethics Compliance Officer
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Which of the following is not an example of unethical or illegal acts in the workplace?
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whistle-blowing
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Technology has ... ethical issues
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expanded the range of
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Embellishing your resume shows a lack of ... and ...
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honesty and integrity
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Mica learns that her company is secretly dumping untreated waste into the city sewage systems, and she informs the local EPA office. All of the following describe Mica's ethical situation EXCEPT:
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She is showing loyalty.
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Development of a corporate culture to support business ethics occurs on each of the following levels EXCEPT ethical ...
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success
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Which of the following can improve ethical reasoning in a company?
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Practical Training Sessions
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The ... of a coffee-growing company includes its employees, customers, suppliers, and the community members where the company is located
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stakeholders
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During the olympics, several Nike ads were aired that demonstrated the company's sponsorship of various events. Nike was using ... to align their marketing efforts with charitable giving.
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cause-related marketing
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Rene's boss has offered him a raise if Rene agrees to spend the night with her. This is an example of:
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sexual harassment
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Companies that adhere to high ethical standards ...
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often make better investments in the long run
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Sofia is an investment advisor and wants to recommend a stock she happens to own. How should Sofia best deal with this potential conflict of interest?
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She should disclose the fact that she owns the stock while making the recommendation
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Giving employees responsibility and authority to make decisions about their work is called ...
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empowerment
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In many companies, shared decision-making authority extends to all of the following EXCEPT
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selecting members of the board of directors
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A team consists of a group of people with ... skills and ... are responsible and accountable for accomplishing team objectives
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complementary; all team members
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When Toyota was faced with serious quality problems and was forced to recall thousands of vehicles, the company quickly formed a temporary group of employees to brainstorm the problem. This is an example of ...
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problem-solving
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Faith works in the bakery at Whole Foods Market. As part of a ... team, she shares in the responsibility of managing her department's work schedule and ordering baking supplies.
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self-managed
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During the performance stage, team members ...
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focus on solving problems
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Jason's team has reached an agreement about the role each member is expected to play. Jason's team has reached the ... stage.
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norming
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At a celebratory gathering in a restaurant, Nicholas presents his team members with personal thank-you notes in appreciation for their hard work on a project. Nicholas and his team are in the ... stage of team development.
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adjourning
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Vanessa wants to encourage interaction among her team members and is planning to move to an open office space without cubicle walls. Vanessa is trying to promote ...
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team cohesiveness
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Team norms are ... and ... standards of behavior
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informal; unwritten
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Feedback ...
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helps determine whether a message was correctly interpreted.
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Deni uses a lot of gestures and facial expressions while communicating. These are examples of ... communication.
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nonverbal
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... listening is the basis for effective communication.
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Active
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Lucia is a manager who regularly communicates company news with her employees via e-mail. This is an example of a(n) ... communication channel.
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formal
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All of the following are examples of nonverbal communication EXCEPT:
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informal speech
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Professionals who are responsible for gathering, recording, reporting, and interpreting the financial information of an organization are ...
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Accountants
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The natural progression of a business begins with ...
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Financing
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... Activities focus on selling goods and services.
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Operating
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Public accounts typically perform all of the following tasks for a business client EXCEPT
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developing the firm's marketing strategy
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Emilio is not an employee of the Modesto Corporation, but was hired as a management consultant to provide unbiased advice about it's financial condition. Emilio is a(n) ...
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public accountant
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Raphael works as a tax accountant at a mid-sized manufacturing company. Raphael would be considered a ...
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management accountant
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The rules followed by accountants when preparing financial statements are referred to as ...
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Generally Accepted Accounting Practices (GAAP)
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All of the following are assets EXCEPT
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bank loans
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Which of the following represents the accounting equation?
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Assets = Liabilities + Owner's Equity
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Milwaukee Fabrication has $80 million in assets and $50 million in owner's equity. How much does the firm have in liabilities?
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$30 million
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Camden products buys a $600,000 machine by taking out a bank loan. The company's assets will ... by $600,000 while its liabilities will ... by $600,000.
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rise; rise
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Which of the following financial statements shows a firm's financial position at a particular date?
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Balance Sheet
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Which of the following is a non-cash expense?
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Depreciation
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Kwane wants to assess his firm's ability to meet its short-term obligations. Which of the following ratios are the most relevant?
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Liquidity Ratios
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Which of the following statements is correct?
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Budgets serve as a planning and control tool.
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One of the most important variables that determines how much a person saves is ...
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the person's age
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The difference between what you own and what you owe is called ...
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net worth
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All of the following are types of securities except ...
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cash
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... are short-term debt securities issued by governments, financial institutions, and corporations.
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Money market instruments
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Treasury bills have a minimum denomination of ...
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$1,000
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These securities are backed by a pool of mortgage loans purchased from lenders, such as savings banks.
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Mortgage pass-through security
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The basic form of corporate ownership is ...
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common stock
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An owner of which form of stock would receive dividend payments first?
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Preferred Stock
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Securities are issued and traded in the ...
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financial market
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When a company needs capital to purchase inventory, expand a plant, make major investments, acquire another firm, or pursue other business goals, it may sell a bond or stock issue to the investing public. This is done in which market?
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Primary Market
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The process used by an insurance company to determine whom to insure and how much to charge is called ...
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underwriting
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The SEC requires virtually all new public issues of corporate securities to be registered. As part of the registration process for a new security issue, the issuer must prepare a ...
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prospectus
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... is defined as the use of material nonpublic information about a company to make investment profits.
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Insider Trading
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The two largest stock markets in the world are the ... and the ...
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New York Stock Exchange; Nasdaq Stock Market
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The most common type of order is called a ... . It instructs the broker to obtain the best possible price - the highest price when selling and the lowest price when buying.
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Market Order
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The financial manager for a typical corporation is responsible for ... .
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determining the most appropriate sources and uses of funds
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The senior financial manager has the title of ...
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Chief Financial Officer
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Which of the following is the best definition of financial risk?
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Risk is the uncertainty regarding the gain or loss from an investment
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The gain or loss that results from an investment over a specified period of time is known as ...
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Return
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A(n) ... is a document that specifies the funds a firm will need for a period of time, the timing of inflows and outflows, and the most appropriate sources and uses of funds
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Financial Plan
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Kaitlyn's company needs to obtain funds in order to keep the business going; however, she does not want stockholders influencing the direction of her company. What type of financing should Kaitlyn acquire?
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Debt Capital
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Leverage ... the return to shareholders and ... the risk of their investment.
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increases; increases
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All of the following are examples of short-term funds EXCEPT:
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bonds
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When a firm receives goods or services from a supplier and agrees to pay for them at a later date, this arrangement is called ...
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trade credit
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Short-term assets are expected to be converted into cash within ...
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a year
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Mitch raises money from wealthy individuals and institutional investors for a variety of promising new companies. In exchange, he will become part owner of those businesses. Mitch is a(n) ...
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venture capitalist
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The term used to describe benefits produced by a merger or acquisition is ...
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synergy
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A(n) ... is a transaction in which one company buys another
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acquisition
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In the typical firm, the ... is the chief accounting manager.
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controller
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A company's financial plan should answer all of the following questions EXCEPT
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What is the contingency plan in case of bankruptcy?
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Traditionally, small businesses tended to be concentrated in the ... industry.
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retailing
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Although the average farm size has increased in recent years the majority of farmers operate as ... businesses.
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small
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... of small businesses are considered home-based businesses.
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About 50 percent
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All of the following are contributions of small businesses EXCEPT
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They provide more job security than large corporations
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Owners of small businesses can increase their chance of success if they:
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understand their own limitations
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Many businesses fall during the early years because of:
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inadequate financing
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According to surveys, the largest lenders to small businesses are ...
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commercial banks
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When the Small Business Administration (SBA) assists a small business in applying for a major loan, it acts as the lender's ...
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guarantor
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Martha is the owner of a very small technology start-up. She shares clerical staff, computers, and other business services with other small business owners. Martha is part of a(n) ...
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business incubator
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The stock of Old Germany Brewery is totally owned by the Prechter family. When the family elected to move from a sole proprietorship to a corporation, the greatest concern was ...
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double taxation
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For its favorable legal climate, as well as the ease and simplicity of its incorporation process, ... is the most popular state of incorporation for many members of the Fortune 500.
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Delaware
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The Board of Directors of a corporation is elected by the ...
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stockholders
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... must verify in writing the accuracy of their corporation's financial statements.
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CEOs and CFOs
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When a government unit owns and operations an organization, the arrangement is known as ...
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public ownership
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Which of the following statements is true regarding employee-owned corporations?
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Employees buy shares of stock in the company that employs them
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Entrepreneurs and small-business owners both have all of the following qualities EXCEPT:
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growth of their company
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Franz and Arlene had an idea for a different type of ice cream. They struggled to open their own small business, and later, to expand production and distribution. Their products are distributed nationwide and their sales continue to increase. Franz and Arlene are examples of
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classic entrepreneurs
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... are pioneers of innovations that benefit humanity
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Social entrepreneurs
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Financial success ...
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is part of the appeal of becoming an entrepreneur
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Concerning education and entrepreneurs, all of the following statements are correct EXCEPT:
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Obtaining a college degree in entrepreneurship is essential before starting your own business
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Information technology can help entrepreneurs in all of the following ways EXCEPT:
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ensure financial success
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Entrepreneurs possess all of the following traits EXCEPT:
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low self-confidence
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An overall idea for how to convert a business idea into a success is called ...
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vision
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All of the following are important characteristics of entrepreneurs EXCPET:
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dependence on others
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Which of the following statements best describes how entrepreneurs view failure?
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They view failure as a learning experience
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Katherine is a successful entrepreneur. She stays close to her customers and is constantly looking for effective strategies. She is also willing to make adjustments when necessary. Katherine is demonstrating ...
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tolerance for ambiguity
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Logan is an entrepreneur who takes personal responsibility for the success or failure of his actions rather than believing in luck or fate. Which characteristic best describes Logan's entrepreneurial philosophy?
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internal locus of control
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Kayla is opening a home health care business that she knows will do well in her community based on prior research. Although she must repay borrowed funds, Kayla chooses ... to maintain complete control over the business without having to answer to investors or partners.
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debt financing
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Lisa is trying to start a new business. A women's business network puts her in touch with an investor who is willing to invest in her company in exchange for an equity stake. This investor is a(n) ...
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angel investor
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... are specific geographic areas designated for economic revitalization.
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Enterprise zones
