serves many functions in the production system such as low purchase cost, flexible production, and good resale value a. Supplies b. Raw materials C. General purpose equipment d. Operating materials 14) A calculation of sales less the cost of goods sold produces the a. Net profit b. gross profit C. operating income d. gross income 9) A marketing strategy is generally comprised of four sections which are a. Price, precision, place, promotion b. Product, price, promotion, and distribution (place) c. Promotion, preservation, distribution (place) d. Proliferation, promotion, price, product 15) Current assets, accounts receivable, and inventory required in day-to-day operations describe a. working capital b. net income c. liabilities d. short term earnings 10) A is determined by dividing current assets by current liabilities, describes the firm's relative liquidity. a. Liability ratio b. Debt ratio C. Asset ratio d. Current ratio 16) Income keeps flowing and not interrupted if venture fails, flexibility and lower costs of launching startup, reduction of risk of transition to entrepreneurial life are advantages of _business startups. a. Short-term b. Internet, online C. part-time d. sole proprietor 11) Financing with debt rather than with equity is known as a. leverage b. anchorage C. owner's equity d. capitalization 17) A firm's ability to pay its debt as it comes due, its profitability from assets, the amount of debt, and the rate of return earned by the owners on their equity investment are is the amount of interest owed to a responsibility of the Board of Director b. multiple ways to look at the same financial statement C. results of a solid marketing plan d. factors Impacting the firm's financial situation 12) On an income statement, lenders on borrowed money a. borrowing cost b. financing Costs C. lending expense d. working capital costs do not vary at all with volume. a. Variable b. Net c. Fixed d. Operation 13) Local laws and zoning ordinances prohibit many types of businesses. a. Community b. confectionary C. sole proprietorship d. home-based to meet demand. 19) Increases in sales very often require an a. decrease in assets b. increase in assets C. decrease in debt d. Increase in debt 26) 20) An organizational relationship that links two or more independent business entities in a common endeavor is called a. corporation projections b. business chains c. a strategic alliance d. supply relations have control over the firm, have liability limited to the investments, and can transfer ownership without affecting the firm's operations. a. Stockholders b. Top management C. Debtors d. Creditors 21) Profits less withdrawals (dividends) over the life of the business are categorized as _interest rates vary with the changes in the prime rate a. Sub prime b. Capital C. Primary d. Floating a. retained earnings b. operation income C. gross income d. net earnings 22) Rent, employee salaries, insurance, and office supplies are examples of a place costs b. fixed costs C. gross expenses d. place expenses 28) Depreciation is an operating expense because a. all companies depreciate assets b. they are short term liabilities c. they are actual expenses incurred for providing a product to customers d. liabilities are expenses 23) Costs related to marketing and selling a firm's product or service, general and administrative expenses, and depreciation are found in the section of an income statement a. COGS b. Net expenses C. Owner's equity d. Operating expenses 29) A is a report showing a firm's assets, liabilities, and owners' equity at a specific point in time a. Income Statement b. Balance sheet C. Cash Flow Analysis d. Profit and Loss Statement 30) A _outlines the basic concept underlying a business. a. Marketing plan b. Asset statement C. Operation statement d. business plan 24) A _marketing strategy recognizes the existence of several distinct segments but focuses on only the most profitable segment. a. non-essential b. multiple-segment c. single-Segment d. profitable segment 31) Total debt divided by total assets is the calculation for a_ a. debt ratio. b. asset ratio C. capital ratio d. usage ratio 25) Accounts payable, accrued expenses, and short-term notes are categorized as a. Current debt b. Current assets C. Accrued margin d. Term liability 32) A reports firm's income (cash) when it is received and expenses when they are paid. a. Profit and Loss Statement b. Balance Sheet C. Net Operating Sheet d. Cash Flow Statement 33) What is the difference between B2B and B2C business models? a. B2B sells to businesses and B2B sells to consumers b. B2B sells to consumers and B2B sells to businesses c. B2B have many customers and B2C have a few high spending customers d. There is no difference between B2B and B2C business models 39) Ordinary, or regular, corporations chartered by the state and taxed by the federal government as separate legal entities are called a. S corporations b. C Corporations C. LLC Corporations d. B Corporations 34) 40) is cost related to fixed assets, such as a building or equipment, distributed over its useful life. a. Earning expenses b. Operation costs C. Depreciation d. Interest expenses is loans and mortgages with maturities greater than one year a. Long-Term Liabilities b. Short-Term Assets c. Long-Term Debt d. Long-Term Assets 41) 35) The degree to which a firm has working capital available to meet maturing debt obligations is called a. Debt coverage b. liquidity c. asset usage d. leverage relates to buying or selling of products or services over the Internet. a. Traditional selling b. Personal selling C. Retailing d. E-Commerce 36) The governing body of a corporation, elected by the stockholders to elect the firm's officers (top management), approve top management's strategic plans and policies, review top management's performance, and declare dividends is the a. Employees Associations b. Unions C. Stockholders d. Board of directors 42) A report that shows the profit or loss from a firm's operations over a given period of time is the a. Balance Sheet b. Income Statement C. Cash Flow Sheet d. Current Position Statement 43) A _focus on sales forecasts and customer profiles. a. Profit projection b. Promotion strategies C. Price projections d. Market analysis 37) Private individuals who invest in others' entrepreneurial ventures are referred to as a. sharks b. co-venturers c. business angels d. white knights 44) A business has the advantages of low start-up and overhead costs and convenience for family and lifestyle a. Home-based b. Brick and Mortar C. Debt financed d. Equity financed 38) reports transactions only when cash is received or a payment is made. a. Cash-Basis accounting b. Cash-Flow accounting c. Accrual statements d. Transactional reports 45) Five factors that affect are: amount of sales, cost of goods sold, operating expenses, interest expense, and taxes a. Owner equity b. General debt C. Net income d. Gross income 51) One form of business ownership is a _which is a business owned by one person, who bears unlimited liability for the enterprise. a. sole proprietorship b. single partnership c. unicorporation d. LLC 46) The two main concerns in selecting a location for a business are a. Rent and taxes b. Business environment conditions and customer accessibility c. Taxes and business environment conditions d. Customer accessibility and rent 52)___ on financial statements the cost of producing or acquiring goods or services to be sold by a firm a. Net expenses b. Operating expenses c. Financial costs d. cost of goods sold can be converted to cash within the firm's operating cycle. a. Current assets b. Accrued assets C. Operating income d. Net cash flow 53) Gross fixed assets less accumulated depreciation is referred to as a. Net Fixed Assets b. Depreciation allotment C. Adjusted Gross Fixed Assets d. Capitalization 48) A legal entity formed by two or more co-owners to carry on a business for profit is called 54). a. corporation b. sole proprietorship C. dualistic agreement d. partnership are cost reductions that occur when companies increase production. The fixed costs, like administration, are spread over more units of production. Sometimes the company can negotiate to lower its variable costs as well. a. Alternated costs b. Economies of scale C. Cost diminishment d. Multiunit production 55) 49) A lender who advances the amount of ABC Corp's cost of goods sold for a specific customer order is providing a long term debt b. asset composition c. purchase-order financing d. customer regression _are reports about a firm's financial performance and resources a. Performance Sheets b. Liability Compositions c. Financial Statements d. Asset Positions 50) One way to obtain finances for a business is_ which is the process of raising very small investments from a large number of investors through online platforms. a. multifunding b. crowdfunding C. numerical investing d. low risk funding 56) Traditional physical store from which businesses have historically operated are often called a. brick-and-mortar stores b. retailers C. wholesalers d. sales agents N 57) are interest rates charged by a commercial bank on loans to its most creditworthy customers a. Nominal interest rates b. Provisional loan rates C. Preferential interest rates d. Prime interest rates 63) For a company stockholders have limited liability but pay personal income taxes on the business profits. a. Limited liability b. C corporation c. K corporation d. T corporation 58) Income that may be distributed to the owners or reinvested in the company is called a. gross income b. net income c. operating income d. overall income 64) In a formal marketing plan; a profile of key management personnel, overall strengths and weaknesses (SWOT), related products being marketed or tested, and likelihood of competitors' entry into a target market focus on__ a. customers b. sales C. capacity d. competition 59) Cash Flows from are inflows and outflows resulting from the sale or purchase of equipment or another depreciable asset a. investment activities b. operations c. gross sales d. retained earnings 65) The difference from other forms of business ownership, a is a separate legal entity, it reports its income and pays any taxes related to its profits, dividends paid to shareholders are taxed as personal income. a. partnership b. corporation C. proprietorship d. composition 60) A marketing philosophy focus is on consumers' needs, which is most consistent with long-term success of the firm. a. Sales oriented b. Production C. Consumer-oriented d. Competitor-oriented Extra credit: In financial terminology, what is a "dead cat drop"? (1 point) 61) Advantages of choosing the _business form are liability is limited to investment in the corporation and it passes taxable income or losses to shareholders. a. C corporation b. L corporation C. Scorporation d. K corporation 62) Earnings before interest and taxes are paid is called _ a. gross income b. net income C. operating income d. net sales