1. The term laissez-faire means that: a. the government should regulate industries b. key industries should be owned by the government there should be limited intervention by upper level managers in business activity the government should leave business activities to function according to the laws of economics Which of the following is used to compare a company's financial performance to its most significant competitor's financial performance? 2. time series analysis valuation analysis trend analysis cross sectional analysis a. c. d. 3. If the inventory turnover ratio of your firm has been declining, why might that be so? a. b. c. d. the firm may have high levels of stock outs the firm may have a high level of obsolete inventory the firm has not invested enough money in raising employee salaries the firm has too many stock investments 4. Sole proprietorship, partnership, and corporation are the three basic forms of establishinga form of a business venture. a. True b. False 5. Economics is the study of how scarce resources are used to produce outputs-goods and services for distribution among people. True b. False e managerial accountants prepare financial statements to help users both inside and outside b. False 6. Whil of the organization, financial accountants prepare reports for internal users only. True 7. Which of the following is not true for a sole proprietor? a. you have complete control over your business b. you get all the income earned by the business C. you have limited liability d. any profits earned are taxed as personal income 8. A corporation is a legal entity that has limited growth potential because of the difficulty in raising capital and the inability to access the market. b. False a. True 9. Which of the following is an advantage of the corporate form of an organization? a. limited liability b. ease of transfer of ownership C. greater access to financial resources d. owners and managers are not always the same people- the agency