Q&A Hero

Q: Which of the following steps would help decrease business risks? A. Making specific plans for and arrangements to deal with foreseeable events B. Assuming employees will follow basic workplace etiquettes without a written code of conduct C. Ensuring employees have easy access to valuable assets D. Having separate codes of conduct for employees at different tiers of the management

Q: Restaurants, clothing retailers, barbers, and beauticians face relatively low risks of loss from nonpayment because: A. most customers prefer making upfront payments for such products and services. B. few people have credit cards which limits their ability to buy products. C. they only offer credit to loyal customers who they are sure will repay the amount. D. most of them provide credit only by accepting credit cards, which reduces the risk of nonpayment.

Q: Which of the following is true of offering direct credit to customers? A. It discredits the business's reputation. B. It always decreases business risk. C. It ensures on-time payment from customers. D. It increases sales for the business.

Q: Payment for injury or damage that occurs during the use of a business's products is referred to as _____. A. product liability B. professional immunity C. product immunity D. personal liability

Q: The risk from customers primarily arises from: A. injuries suffered while on business property. B. high prices of the products or services. C. discontent with the customer service provided by the business. D. not being provided credit to purchase products.

Q: The _____ is a series of acts by Congress that prohibit discrimination on the basis of race, color, religion, sex, or national origin. A. Civil Rights Act of 1991 B. Age Discrimination in Employment Act of 1967 C. Americans with Disabilities Act of 1990 D. Rehabilitation Act of 1973

Q: Which of the following acts provide training for workers who are injured on the job? A. The Age Discrimination in Employment Act of 1967 B. The Americans with Disabilities Act of 1990 C. The Civil Rights Act of 1991 D. The Rehabilitation Act of 1973

Q: The Age Discrimination in Employment Act makes it illegal to: A. discriminate against people who are older than 40 years of age. B. employ minors at a workplace. C. provide preferential treatment to employees over 50 years of age. D. provide work opportunities to school students.

Q: Ted, a 46-year-old IT professional, recently attended a job interview at Acton Org. He was not offered the job. Ted tried to find the reasons for his disqualification and the company could not provide a satisfactory explanation. He later learned that he was refused the job due to his age as the job position was offered to a 23-year-old who had just graduated from college. Which of the following laws protect Ted from such discriminations? A. ADA B. OSHA laws C. Sarbanes-Oxley Act D. ADEA

Q: Which of the following is a protected class established by the EEOC? A. Age B. Sex C. Marital status D. Political affiliation

Q: States of being that are expressly prohibited from suffering discrimination are called _____. A. vulnerable groups B. endangered sections C. protected classes D. ethnic majorities

Q: Which one of the following government agencies was created to enforce safety in the workplace? A. EEOC B. OSHA C. SBA D. IRS

Q: _____ refers to laws and governmental rules that limit the freedom of business owners to manage their businesses as they please. A. Employee branding B. Benchmarking C. Arraignment D. Regulation of the workplace

Q: The most common form of _____ is the pilfering of items of small value, such as office supplies and small hand tools, or actions such as making copies for their children to use at school or otherwise using company resources to make personal items. A. violation of governmental regulations B. contract violation C. property risk D. employee theft

Q: Misappropriation of business property by employees of that business is referred to as: A. employee branding. B. employee theft. C. employee attrition. D. employee engagement.

Q: The level of probability that the future economic state of the business will be worse than expected is referred to as _____. A. business risk B. economic certainty C. business continuity D. business amortization

Q: Small businesses are not eligible to obtain government subsidies.

Q: Joint ventures are partnerships through which two or more businesses combine to undertake a specific economic activity.

Q: Surety bonds repay employers for losses caused by dishonest or negligent employees.

Q: Business interruption insurance provides funds to pay the ordinary operating expenses of your business if it is forced to close temporarily because of an insured event.

Q: All businesses within an industry have to pay the same amount, as decided by the state, as unemployment insurance.

Q: Contractual provisions of insurance policies that specify what risks the insurance company is assuming are called coverages.

Q: Identifying risks is the first task to be completed before a comprehensive insurance program can be developed for a business.

Q: The ADA Technical Assistance Program provides inspection and affirmation services to help small businesses.

Q: In managing risk from violation of tax regulations, small business owners should make paying taxes their first financial priority.

Q: Risk from loss of key personnel and former employees setting up competition against your business can be managed by negotiating employment contracts with those key employees.

Q: Employee collusion has never been found to be a source of employee theft.

Q: Adverse possession occurs when an owner of real property does not enforce property rights and allows a nonowner to use the property as if it were his or her own.

Q: Copyrights, trademarks, and patents provide automatic full protection to small business owners.

Q: The advantage of legal protection methods for intellectual property is that there are multiple government agencies in each area that will assist a small business owner in maintaining their legal rights.

Q: Managing risks to tools, equipment, inventory, and other physical assets is largely a function of developing and enforcing appropriate business policies and procedures.

Q: Customers can never be a source of risk for businesses.

Q: Employees whose experience and skills are critical to the success of a business are called key employees.

Q: The OSHA is a commission established to enforce the provisions of the Equal Employment Opportunity Act.

Q: The most common form of employee theft is the pilfering of items of small value.

Q: Risk is the probability that future economic state of the business will be better than expected.

Q: Pledging receivables will get an owner about one-half of the amount that can be collected, whereas, factoring can immediately get an owner _____ percent of the amount due. A. 90-95 B. 75-80 C. 40-45 D. 20-25

Q: Giving a third party legal rights to debts owed by the business in order to provide assurance that borrowed money will be repaid is called _____. A. operating leases B. factoring receivables C. capital leases D. pledging receivables

Q: Selling the rights to collect accounts receivable to an entity outside the business is called _____. A. factoring B. pledging C. reconciling D. outsourcing

Q: A(n) _____ is a closed receptacle for money, the keys to which are not available to those who physically handle the receptacle. A. inventory B. lock box C. lease D. safety stock

Q: Which of the following policies is a minimum standard for managing customer credit? A. Providing cash discounts to customers who delay payments B. Continuing credit sales to customers who become significantly late in paying C. Authorizing credit sales without any credit check to every individual customer D. Filing suits and liens against the assets of customers who default on payment

Q: Which of the following goals need to be addressed for extending credit to customers? A. Getting as many customers as possible B. Arranging a loan and making regular payments of interest C. Keeping the number of bad accounts as low as possible D. Increasing the time between a credit sale and cash receipt

Q: Which of the following is a disadvantage of providing credit to customers? A. It delays the receipt of cash. B. It decreases the sales revenue. C. It lowers the chances of repeat business. D. It increases the cost of selling.

Q: Which of the following is an advantage of providing credit to customers? A. It reduces the need to borrow money. B. It speeds up the receipt of cash. C. It reduces the cost of selling. D. It ensures all customers make on-time payments.

Q: _____ refers to money that is owed to a business by its customers who purchased a product on credit. A. Pledging receivable B. Accounts receivable C. Factoring receivable D. Accounts payable

Q: Intangibility, inseparability, and perishability are the three characteristics of services that impact operations choices and decision making.

Q: Planning, organizing, and staffing are primarily the responsibility of operations management.

Q: A lease is simply a rental agreement that specifies a minimum period of time for which one must make rental payments.

Q: The time value of money is the concept that a dollar received today is worth much more than is a dollar to be received at some time in the future.

Q: Assigning a high value to inventory results in increased sales margin and reported profit, but at the price of paying increased income taxes.

Q: Disposal value is based on determining the price of either a new asset or a used asset for which there is an organized market.

Q: An arm's length transaction is a business deal where the parties have a prior relation or affiliation, but where the business is conducted as if they were unrelated.

Q: Short-term assets are also known as operating assets.

Q: Bar coding is used to reduce the cost of perpetual inventory systems.

Q: The periodic inventory method is the most expensive method of maintaining records.

Q: The three primary inventories of manufacturing are raw materials, work in process, and finished goods.

Q: The cost of ordering inventory is far greater than the cost of owning and holding inventory.

Q: Economic order quantity (EOQ) is also called reorder point.

Q: Deciding when to place an order to purchase inventory is determined by (1) the rate of sales and (2) the time required to receive new stock.

Q: The total cost of keeping inventory is the sum of the cost to buy the inventory, the cost to store, protect, and maintain inventory, and the cost of making an order to purchase inventory.

Q: For a small business, the amount and type of inventory held for resale is not important because the supply of inventory and demand of customers can be matched at all times.

Q: Factoring receivables to a commercial lender is usually less expensive than pledging receivables.

Q: One of the policies for managing customer credit requires business owners to maintain constant "aging" of accounts to quickly identify customers who become delinquent.

Q: In small businesses, providing credit to customers decreases the need to borrow cash.

Q: Current practice is for small businesses to only provide direct credit to customers.

Q: Describe techniques to manage and improve the operations of a business.

Q: What are the two major types of leases? Discuss the advantages and disadvantages of leasing.

Q: Identify the advantages and disadvantages of renting capital assets as opposed to buying.

Q: Define capital budgeting. Briefly explain the two most commonly used financial ratios for comparing investment alternatives including their advantages and disadvantages.

Q: Discuss the four accounting methods to value capital assets.

Q: Discuss the periodic and perpetual inventory approaches to maintaining inventory records.

Q: Discuss the just-in-time inventory system.

Q: Describe economic order quantity (EOQ) and its application in small businesses.

Q: (p. 520; 522) How can a business use its accounts receivable as a source of financing?

Q: Describe the pros and cons of offering credit to customers.

Q: To meet the high production demand, Jack Wilsonthe owner of JG Sawmillsneeds to invest in a frame saw. He has narrowed down to two choices: a double cut frame CZ84 saw with chipper and a HY-200 saw with double arbor bearings. The cost of CZ84 will be $91,000, whereas the cost of HY-200 will be $110,000. The salvage value of each type is $0 (zero) and both will have a useful life of 4 years. Consider a product that costs $5 to make, and is sold for $15. What is the productivity ratio? A. 2:1B. 1:1C. 1:3D. 3:1

Q: Scenario-JG SawmillsTo meet the high production demand, Jack Wilsonthe owner of JG Sawmillsneeds to invest in a frame saw. He has narrowed down to two choices: a double cut frame CZ84 saw with chipper and a HY-200 saw with double arbor bearings. The cost of CZ84 will be $91,000, whereas the cost of HY-200 will be $110,000. The salvage value of each type is $0 (zero) and both will have a useful life of 4 years. What would James choose if he based his decision on the return on investment (ROI)? A. He would choose HY-200 because it has a higher ROI of 0.48.B. He would choose CZ84 because it has a higher ROI of 0.58.C. He would choose HY-200 because it has a higher ROI of 0.58.D. He would choose CZ84 because it has a higher ROI of 0.48.

Q: Lily, a restaurant owner, is planning to invest in a multi-purpose ZS-13 baking oven. The oven costs $20,000 and will have a useful life of 10 years. The payback each year is $8,000. Assuming that the money is received evenly across the year, what will be the payback period if she decides to purchase the oven? A. 1 year and 5 months B. 3 years and 3 months C. 2 years and 1 month D. 2 years and 6 months

Q: The amount of time it takes a business to earn back the funds it paid out to obtain a capital asset is referred to as the _____. A. payback period B. synodic period C. chargeback period D. grace period

Q: _____ refers to the process of deciding among various investment opportunities to create a specific spending plan. A. Factoring receivables B. Cash budgeting C. Inventory valuation D. Capital budgeting