1. The types of Consumer Products include _____.

(1) Convenience products,

(2) Shopping products,
(3) Specialty products,
(4) Unsought products

2.The Principles of Economic Decision Making assume that:

(1) people face trade-offs;
(2) the cost of something is what you give up to get it;
(3) rational people think at the margin;
(4) people respond to incentives.

3. The 4 P's of Marketing include:

(1) Product, (2) Place, (3) Price, and (4) Promotion

4. The Principles Concerning People's Economic Interactions assume that:

(1) trade can make everyone better off;
(2) markets are usually a good way to organize economic activity;
(3) governments can sometimes improve market outcomes.

5. 14 General Principles of Management

Division of Labor, Authority, Discipline, Unity of Command, Unity of Direction,
Subordination of Individual Interests to the General Interest, Remuneration,
Centralization, Scalar Chain, Order, Equity, Stability of Tenure of Personnel,
Initiative, and Esprit de Corps

6. Abraham Maslow Hierarchy of Needs:

Proposes that individuals have a hiearchy of needs that need to be fulfilled in order.
The hierarchy includes physiological needs, safety, belongingness, esteem, and self-
actualization.

7. The controller's _____ responsibilities are primarily in nature, while the treasurer's
responsibilities are primarily related to _____. accounting; financial management

8. Accounts Payable Turnover Represents the number of times a company pays its
accounts payable during a period. A low ratio is favored because it is better to delay
payments as much as possible so that the money can be used for more productive
purposes. (Operating/Efficiency Ratio). _____ = Net Credit Purchases / Ave.
Accounts Payable

9. Accrual Basis Accounting

Revenue is recognized in the accounting period in which the revenue is earned,
regardless of when the associated revenue is received. (Recorded when the sale is
made, not when it is paid for.)
10.Adam Smith
a. Father of Economics Responsible for Division of Labor 1776: Tasks are subdivided
into individual jobs
b. Employees perform only the tasks relevant to their specialized function
c. Jobs tend to be small, but they can be performed efficiently
d. Proposes that production can be increased by dividing labor on to similar tasks

11.Administrative Law
Consists of the rules,orders, and decisions of administrative agencies. These agencies
are often given rule making, investigation, and enforcement powers.

12.Annuity
A series of equal dollar payments that continue for a specific number of years.

13.Annuity Due
A series of equal dollar payments that occur at the beginning of each period.

14.Attribution Theory
a. Making inferences about the causes of an individuals behavior. Examples:
b. Internal-failure due to self motivation
c. External- failure due mailly to factors beyond control: luck, resources

15.Authoritarianism
The belief that power and status differences should exist in an organization.

16.Authority (Management)
Managers must have the authority to give orders, but they must also keep in mind that
with authority comes responsibility.

17.Average Cost (Inventory)

Ending inventory units are costed using an average cost of goods available divided by
the units available for sale. (Example: Rope)

18.Backward Integration
A vertical integration strategy that involves entry into activities previously performed
by suppliers or other enterprises positioned along earlier stages of the industry value
chain system (supply chain focused).

19.Balance Sheet
Attempts to describe the financial condition of the firm at a point in time.
Includes: Assets, Liabilities, & Equity - "net assets" what remains after deducting
liabilities from assets.
20.Bankruptcy
Legal procedure for liquidating a business which cannot fully pay its debts out of its
current assets.

21.Basic Inventory Equation for Cost of Goods Sold (COGS)

Goods Available for Sale - Ending Inventory = Cost of Goods Sold (COGS)

22.Basic Inventory Equation for Ending Inventory

Beginning Inventory + Purchases = Goods Available for Sale - Cost of Goods Sold
(COGS) = ending inventory

23.Basic Inventory Equation for Goods

Beginning Inventory + Purchases = Goods

24. Board of Directors

A company's _____ is (are) potentially the most effective instrument of good
corporate governance.

25. Book Value per Share

Indicates the value of stock based on historical cost. The value of common
shareholders' equity in the books of the company is divided by the average common
shares outstanding. (Valuation and Growth Ratio)
_____ = Common SHE / Average Common Shares

26. Branches of the Federal Government

Includes an Executive, Legislative, and Judicial divisions.

28.Business Finance: The goal of the firm?

In finance, the commonly accepted goal of profit maximization is replaced with the
more complete goal of the maximization of shareholder wealth.

29.Cash Basis Accounting

Revenue is recognized in the accounting period in which the associated cash is
received, and Expenses are recognized in the accounting period that the cash is paid.

30.Cash Conversion Cycle

Measures how fast a company converts cash into more cash. It represents the number
of days a company pays for purchases, sells them, and collects the amount due. The
SHORTER the number of cycles, the better. (Operating/Efficiency Ratio)
_____ = Net Sales / Average Total Assets
31.Cash Ratio
Measures the ability of a company to pay its current liabilities using cash and
marketable securities. Marketable securities are short-term debt instruments that are
as good as cash. (Liquidity Ratio)
_____ = (Cash + Marketable Securities) / Current Liabilities

32.Centralization (Management)
Centralization - This principle refers to how close employees are to the decision-
making process. It is important to aim for an appropriate balance.

33.Civil Law
The system of law concerned with private relations between members of a community
rather than criminal, military, or religious affairs. Typically involves either money
damages or changes in a person's status or behavior.

34.Collectivism
Extent that people value duty to groups to which they belong, and value group
harmony. Collectivists tend to identify themselves by group membership and value
harmonious relationships with their members.

35.Concentric Diversification
A type of diversification strategy in which a company acquires or develops new
products or services, closely related to its core business or technology in order to enter
one or more new markets.

36.Conflict of interest
Exists when an individual must choose whether to advance his or her own interests,
those of the organization, or those of some other group.

37.Conglomerate Diversification
A type of diversification strategy in which a company acquires or merges in order one
or more new markets that are completely separate from the company's core business
or technology.

38.Constitution: The supreme law of the United States

39.Contract
An agreement between two or more persons to do, or to refrain from doing something
in exchange for something of value.

40.Convenience products
Relatively inexpensive products that merit little shopping effort. Examples are soft
drinks, aspirin, deodorant and snack food.
41.Corporate Culture
The set of key values, assumptions, understandings, and norms that is shared by
members of an organization and taught to new members as correct.

42.Corporate Governance
A general term relating to a formal system of accountability, oversight, and control to
limit unethical behavior in corporations.

43.Cost Accounting: Concerned only with the cost of a product or service.

44. The focal point of financial management in a firm is: the creation of value for
shareholders.

45.Criminal Law
A system of law concerned with the punishment of those who commit crimes; implies
that perpetrators of crimes are subject to imprisonment.

46. What are the two types of law: Criminal Law and Civil Law

47.Current Ratio
Measures whether or not a firm has enough resources to pay its debts over the next 12
months. (Liquidity Ratio)
_____ = Current Assets/Current Liabilies

48.Days Inventory Outstanding (Inventory Turnover in Days)

Represents the number of days inventory sits in the warehouse. In other words, it
measures the number of days from purchase of inventory to the sale of the same. The
SHORTER the number of days, the better. Take note that some use 365 days instead
of 360. (Operating/Efficiency Ratio)
_____ = 360 Days / Inventory Turnover

49.Days Payable Outstanding (Accounts Payable Turnover in Days or Payment

Period)
Measures the average number of days spent before paying obligations to suppliers.
The LONGER the number of days, the better. Take note that some use 365 days
instead of 360. (Operating/Efficiency Ratio)
_____ = 360 Days / Accounts Payable Turnover

50.Days Sales Outstanding (Receivable Turnover in Days)

Measures the average number of days it takes a company to collect a receivable. The
SHORTER the number of days, the better. Take note that some use 365 days instead
of 360. (Operating/Efficiency Ratio)
_____ = 360 Days / Receivable Turnover
51.Debt-Equity Ratio
Evaluates the capital structure of a company. A ratio of more than 1 implies that the
company is a leveraged firm; less than 1 implies that it is a conservative one.
(Leverage Ratio)
_____ = Total Liabilities / Total Equity

52.Debt Ratio
Measures the portion of company assets that is financed by debt (obligations to third
parties). Debt ratio can also be computed using the formula: 1 minus Equity Ratio.
(Leverage Ratio)
_____ = Total Liabilities / Total Assets

53.Deontology
Focuses on the preservation of individual rights and on the intentions associated with
a particular behavior rather than on its consequences.

54.Depreciation
A method of allocating the cost of a tangible asset over its useful life. Businesses
depreciate long-term assets for both tax and accounting purposes.

55.Direct Costs
A cost that is easily traceable to the cost object and is a result solely of the cost object.
(Example: Lye used to make bars of soap.)

56.Direct Labor
Cost of Labor used in production. (Example: assembly line workers)

57.Direct Material
Cost of materials used in production. (Examples: sheet metal, tires, fabric, etc.)

58.Discipline (Management)
Discipline must be upheld in organizations, but methods for doing so can vary.

59.Divestiture
The partial or full disposal of a business unit through sale, exchange, closure or
bankruptcy; typically resulting from a management decision to no longer operate a
business unit because it is not part of a core competency.

60.Dividend Pay-out Ratio

Determines the portion of net income that is distributed to owners. Not all income is
distributed since a significant portion is retained for the next year's operations.
(Valuation and Growth Ratio)
_____ = Dividend per Share / Earnings per Share
61.Dividend Yield Ratio
Measures the percentage of return through dividends when compared to the price paid
for the stock. A high yield is attractive to investors who are after dividends rather than
long-term capital appreciation. (Valuation and Growth Ratio)
_____ = Dividend per Share / Market Price per Share

62. Division of Labor or Work (Management)

When employees are specialized, output can increase because they become
increasingly skilled and efficient.

63.Dodd-Frank Act
Wall Street Reform and Consumer Protection Act
Adopted by congress in 2010 to address financial stability of the United States by
improving accountability and transparency in the financial system, to end "too big to
fail", to protect the American taxpayer by ending bailouts, to protect consumers from
abusive financial services practices, and for other purposes.

64.Double Declining Balance Depreciation

Double Declining Balance, An "accelerated" depreciation method (more expense is
recorded in the early periods of useful life and less in the later periods.)

65.Douglas McGregor
Proposed Theory X and Theory Y view of management.

66.Dr. William Ouchi

Proposed Theory Z view of management; a so-called "Japanese Management" style
popularized during the Asian economic boom of the 1980's.

67.Earnings per Share

Shows the rate of earnings per share of common stock. Preferred dividends is
deducted from net income to get the earnings available to common stockholders.
(Valuation and Growth Ratio)
_____ = (Net Income - Preferred Dividends ) / Average Common Shares Outstanding

68.When baking cookies, Monique can use real butter, margarine, vegetable oil, or
shortening and create basically the same cookie. From this information, you know that
demand for vegetable oil for baking is most likely _____. elastic

69.Emotional Intelligence
Ability to perceive and express emotion, assimilate emotion in thought, understand
and reason with emotion, and regulate emotion in oneself and others.
70. In organizational decision making, managers are able to exercise the greatest
degree of discretion in the enforcement of internal policies

71.English Common Law

The system from which the US Court system developed.

72.Equity (Management)
Managers should be fair to staff at all times, both maintaining discipline as necessary
and acting with kindness where appropriate.

73.Equity Multiplier
The reciprocal of equity ratio. (Leverage Ratio)
_____ = Total Assets / Total Equity.

74.Equity Ratio
Determines the portion of total assets provided by equity (i.e. owners' contributions
and the company's accumulated profits). Equity ratio can also be computed using the
formula: 1 minus Debt Ratio. (Leverage Ratio)
_____ = Total Equity / Total Assets

75.Equity Theory of Motivation

Effort and rewards is affected by perception of others in the organization...when
receiving rewards, it does not appear equitable, motivation drops. (based on perceived
value of rewards)

76.Esprit de Corps (Management)

Organizations should strive to promote team spirit and unity.

77.Ethics
Principals and standards that guide behavior within the business community. Ethical
or unethical behavior is often determined by the organization’s stakeholders.

78.Executive Orders
Orders issued by the president in order to enforce the law.

79.Expectancy Theory of Motivation

Effort will lead to increased performance and that performance will lead to some
expected outcome (bonus, promotion, etc.) the greater my motivation will be.

80.Federal Sentencing Guidelines for Organizations

Passed by congress in 1991 focused on guidelines for organizations; Exempts
organizations from extreme penalties based the unethical actions of individual
employees.
81. Fiedler's Contingency Model
Model designed to diagnose weather a leader is task-oriented or relationship-oriented
and match leader style to the situation

82. FIFO (Inventory)

Inventory Oldest items inventory are sold first. (Example: Fruit)

83. Fixed Cost

Expenses that do not change as a function of the activity of a business, within the
relevant period. (Examples: Rent, Utilities, etc.)

84.Forward Integration
A vertical integration strategy that involves entry into value chain system activities
closer to the end user (distribution chain focused).

85.Fraud
Any purposeful communication that deceives, manipulates, or conceals facts in order
to create a false impression.

86.Frederick Winslow Taylor

-Scientific Management 1911: Developed standard method for performing each job
-Selected workers with appropriate abilities for each job.
-Trained workers in standard method.
-Provided wage incentives to workers for increased output.
-Did not acknowledge variance among workers.
-Did not appreciate social context of work and higher needs of workers.

87.Fundamental Attribution Error

Attributing own actions to external factors and others actions to internal factors.

88.Generally Accepted Accounting Principles (GAAP)

A framework of accounting standards, rules and procedures defined by the
professional accounting industry, which has been adopted by nearly all publicly
traded U.S. companies.

89 Goal: A desired future that the organization attempts to realize.

90.Great Man Approach

Leadership perspective that sought to identify the inherited traits leaders possessed
that distinguished them from people who were not leaders.

91.Gross Profit Rate

Evaluates how much gross profit is generated from sales. Gross profit is equal to net
sales (sales minus sales returns, discounts, and allowances) minus cost of sales.
(Profitability Ratio)
_____ = Gross Profit / Net Sales

92.Henri Favol
Developed the 14 General Principles of Management

93.Horizontal Diversification
Type of diversification under which a firm develops or acquires new products that are
different from its core business or technology, but which may appeal to its current
customers.

94.Horizontal Integration
A strategy in which a company acquires or merges in order to gain with additional
business activities at the same level of the value chain (same level of production
across multiple industries).

95.Income Statement
Presents the results of the operations of an entity over a peroid of time.
Includes: Revenues, Expenses, Income, Gains & Losses

96.Indirect Cost
A cost that supports more than one cost objects and must be "allocated" to those
various cost objects (Example: Electricity used at a plant.)

97.Individualism
Extent that people value independence and person uniqueness. Individualists tend to
value personal freedom, self-sufficiency, control over themselves, being appreciated
for unique qualities.

98. The market price of a share of common stock is determined by:

individuals buying and selling the stock.

99.In-Group
A group in which a manager, often subconsciously, classifies team members as
proven to be loyal, trustworthy, and skilled. Managers give this group most of their
attention, providing challenging and interesting work, and offering opportunities for
additional training and advancement. This group also gets more one-to-one time with
the manager. Often, people in this group have a similar personality and work-ethic to
their manager. (Theory Y)

100.Initiative (Management)
Employees should be given the necessary level of freedom to create and carry out
plans.

101. Interdependence
The extent to which team members depend on each other for information, resources,
or ideas to accomplish their tasks.

102.Inventory Turnover
Represents the number of times inventory is sold and replaced. Take note that some
authors use Sales in lieu of Cost of Sales in the above formula. A high ratio indicates
that the company is efficient in managing its inventories. (Operating/Efficiency Ratio)
____ = = Cost of Sales / Average Inventory

103 The decision function of financial management can be broken down into the
_____ decisions.
investment, financing, and asset management

104.Joint Venture
A business arrangement in which two or more parties agree to pool their resources for
the purpose of accomplishing a specific task.

105.Judicial Decisions
Decisions about an individual lawsuit by federal or state courts.

106.Key Elements of a Binding Contract

Competent Parties (not drugged, mentally impared, etc.), excludes Minors (must be
18), Consideration (each side must contribute something of value), and Mutual Assent
(each side must be clear - write it down).

107.Law
A rule of conduct or action prescribed or formally recognized as binding or enforced
by a court of law or another agency.

108.Leader Member Exchange

Belief that leadership is individualized for each subordinate. Each dyad involves a
unique exchange independent of other dyads. Puts employees into either in-group or
out-group categories.

109.LIFO (Inventory)
Most recent items added to inventory are sold first. (Example: Ore from Mining)

110.Liquidation
When a company's operations are brought to an end, and its assets are divvied up
among creditors and shareholders, according to the priority of their claims because
said company can no longer pay its obligations.

111.Locus of Control
Defines whether a person places the primary responsibility for what happens to him or
her within himself/herself or on outside forces.

112.Management Accounting
Concerned with identification, measurement, accumulation, analysis, preparation,
interpretation, and communication of financial information used my management to
plan and evaluate and control within an organization to assure appropriate use of and
accountability of resources.

113.Manufacturing Overhead
Indirect factory-related costs that are incurred when a product is manufactured.
(Examples: facility costs, indirect labor, machine set up costs, quality control, etc.)

114.Market Development
A strategy in which company focuses on expanding the potential market through new
users or new uses.

115.Marketing
The management process through which goods and services move from concept to the
customer.

116.Market Penetration
A strategy adopted by companies for new and existing products to attract larger
number of buyers and a larger market share.

117."Shareholder wealth" in a firm is represented by:the market price per share of

the firm's common stock.

118.Maslow's Hierarchy of Needs:

Physiological needs, Safety, Belongingness, Esteem, and Self-actualization

119. The long-run objective of financial management is to:

maximize the value of the firm's common stock.

120.Max Weber
Bureaucracy: 
Focused on the organization as a whole
Organizations needed division of labor with clear definitions of authority and
responsibility.
Positions organized in a hierarchy of authority.

121.Mission
An organizations reason for existing.
122.Mission Statement
Broadly states the basic scope and operations that distinguishes it from similar types
of organizations.

123.Moral Philosophy
Refers in particular to the principles or rules that people use to decide what is right or
wrong.

124.Net Working Capital

Determines if a company can meet its current obligations with its current assets; and
how much excess or deficiency there is. (Liquidity Ratio)
_____ = Current Assets - Current Liabilities

125.Operating Cycle
Measures the number of days a company makes 1 complete cycle; i.e. purchase
merchandise, sell them, and collect the amount due. A shorter cycle means that the
company generates sales and collects cash faster. (Operating/Efficiency Ratio)
_____ = Days Inventory Outstanding + Days Sales Outstanding

126.Order (Management)
The workplace facilities must be clean, tidy and safe for employees. Everything
should have its place.

127.Ordinances: These are laws of local government bodies

128.Ordinary Annuity
A series of equal dollar payments that occur at end of each period.

129.Out-Group
A group in which a manager, often subconsciously, classifies team members as either
untrustworthy, unmotivated, or incompetent. This group's work is often restricted and
unchallenging. Group members tend to have less access to the manager, and often
don't receive opportunities for growth or advancement. (Theory X)

130.Path-Goal Theory
Contingency approach to leadership on which the leaders responsibility is to increase
subordinates motivation by clarifying the behaviors necessary for task
accomplishment and rewards.
131.Period Cost
l costs incurred by a company that are not considered product costs. (Examples:
Administration Expenses or Selling Expenses)

132.Periodic Inventory Accounting

No transactions are recorded in the inventory account until the end of the accounting
period. Merchandise purchases are recorded in a purchases account.
Inventory is counted and costed at the end of each accounting period. The inventory
account beginning balance is adjusted to physical inventory amount and the difference
is added to or subtracted from periodic Cost of Goods Sold.

133.Perpetual Inventory Accounting

Merchandise purchases are added to the inventory account when the merchandise is
received. Cost of Goods Sold is computed and subtracted from the inventory account
as sales are recorded.

134.Perpetuity: An annuity that continues forever.

135.Plan
A blueprint specifying the resource allocations, schedules, and other actions,
necessary for attaining goals.

136.Planning
Determining the organizations goals and the means for achieving them the most
fundamental management function; the most controversial management function.

137.Power Distance
Extent that people accept unequal distribution of power in a society.

138.Price-Earnings Ratio
Used to evaluate if a stock is over- or under-priced. A relatively low ratio could
indicate that the company is under-priced. Conversely, investors expect high growth
rate from companies with high ratio. (Valuation and Growth Ratio)
_____ = Market Price per Share / Earnings per Share

139.Primary Stakeholders
Those whose continued association is absolutely necessary for a firm’s survival.
Employees, customers, investors, government, etc.

140.Product Costs
Cost of the various products manufactured and sold by a company. (Examples:
Inventory Costs or Cost of Prodcution
141.Product Development
The process of designing, creating and marketing new products or services to benefit
customers.

142. A tort of negligence of requires:

proof of breach of a statutory or common-law duty.

143.Public Company Accounting Oversight Board (PCAOB)

In the US, the _____ has been given the power to adopt auditing, quality control,
ethics, and disclosure standards for public companies and their auditors as well as
investigate and discipline those involved.

144.Pulsing
Beatrice Foods, the maker of Reddi-Wip topping, spends almost 40 percent of its
entire advertising budget during November and December. Its advertising budget is
spent evenly over the next 10 months. Beatrice is using what kind of a media
schedule?

145.Quick Ratio (Acid Test Ratio)

Gauges a company's liquidity. (Liquidity Ratio)
_____ = (Cash + Marketable Securities + Accounts receivable) / Current Liabilities

146.Receivable Turnover
Measures the efficiency of extending credit and collecting the same. It indicates the
average number of times in a year a company collects its open accounts. A high ratio
implies efficient credit and collection process. (Operating/Efficiency Ratio)
_____ = Net Credit Sales / Average Accounts Receivable

147.Relativist
Takes cultural norms into consideration and therefore there can be no absolute right or
wrong.

148.Remuneration (Management)
Employee satisfaction depends on fair remuneration for everyone. This includes
financial and non-financial compensation.

149.Retrenchment
A strategy used to cut expenses with the goal of becoming a more financial stable
business by reducing the diversity or the overall size of the operations of the
company.

150.Return on Assets
Measures return on investment and is used in evaluating management's efficiency in
using assets to generate income. (Profitability Ratio)
_____ = Net Income / Average Total Assets

151.Return on Sales
Also known as "net profit margin" or "net profit rate", it measures the percentage of
income derived from dollar sales. Generally, the higher the ROS the better.
(Profitability Ratio)
_____ = Net Income / Net Sales

152.Return on Stockholders' Equity

Measures the percentage of income derived for every dollar of owners' equity.
(Profitability Ratio)
_____ = Net Income / Average Stockholders' Equity

153.Safety
McNeil Consumer Healthcare ran ads for its Tylenol brand pain reliever that claimed
it was "least likely to interact with your prescription medicines." In terms of Maslow's
hierarchy of needs, the ad is most likely trying to show how it satisfies ________
needs.

154.Sarbanes Oxley Act

Public Company Accounting Reform and Investor Protection Act
Adopted by congress in 2002 to address the loss of corporate regulations necessary to
protect the public. Also to addresses the loss in confidence in financial reporting and
corporate ethics.

155.Scalar Chain (Management)

Employees should be aware of where they stand in the organization's hierarchy, or
chain of command.

156.In marketing research, a firm might consider using secondary data over primary
data because. secondary data usually cost less.

157.Secondary Stakeholders
Do not typically engage in transactions with a company and thus are not essential for
its survival. Media, trade associations, special interest groups, community

158.Securities Act of 1935

Established the SEC Securities and Exchange Commission with the explicit authority
to establish the rules, standards, and procedures used to account for transactions and
events. Also to establish the form and content of published financial reporting.

159.Self Serving Bias

Attributing our successes to internal factors and our failures to external factors.

160 The Sarbanes-Oxley Act of 2002 (SOX) was largely a response to:a series of
corporate scandals involving Enron, WorldCom, Global Crossing, Tyco and
numerous others.

161. A(n) _____ would be an example of a principal, while a(n) _____ would be an
example of an agent. shareholder; manager
162.Shopping products
Products that require comparative shopping behavior because it is usually more
expensive than a convenience product and is found in fewer stores. Examples are
major appliances, furniture and clothing.

163.Social Responsibility
Refers to an organizations obligation to maximize its positive impact on stakeholders
and to minimize its negative impact.

164.Specialty products
Particular products for which consumers search extensively and are reluctant to accept
product substitutes. Examples are particular brands of perfumes, Steinway pianos and
Rolls-Royce cars.

165.Specific Identification (Inventory)

Inventory items are tagged with their cost. (Example: automobiles)

166.Stability of Tenure of Personnel (Management)

Managers should strive to minimize employee turnover. Personnel planning should be
a priority.

167.Stare Decisis
The doctrine under which courts adhere to precedent on questions of law in order to
insure certainty, consistency, and stability in the administration of justice with
departure from precedent permitted for compelling reasons (adhere to a precedent).

168.Statement of Cash Flows

Provides information about a company's cash receipts and cash payments during a
specific period of time. Includes all 10 elements of financial statements: assets,
liabilities, equity, net income, income, gains, losses, Statement of 'X' Equity,
Investments by Owners, Distributions to Owners.

169.Statement of Equity or Statement of Retained Earnings (Capital)

Bridges the gap between the income statement and the balance sheet.
Arrangement depends on type of organization:
Proprietorship: Statement of Owners Equity
Partnership: Statement of Partners Equity
Corporation: Statement of Stockholders Equity
In addition, it contains: Investments by Owners and Distribution to owners

170.Statutes
Written laws enacted by the legislative branch of either the federal or state
governments.

171.Straight-Line Deprecation
Straight Line Depreciation - (estimated value/useful life)
Equal amounts of depreciation expense are recorded in each period of the useful life
of the asset, if not disposed of prior to the end of estimated useful life.
The value is divided among estimated life of item.

172.Strategic Management
Set of decisions and actions used to implement strategies that will provide a
competitively superior fit between the organization and its environment so as to
achieve organizational goals.

173.Subordination of Individual Interests to the General Interest (Management)

he interests of one employee should not be allowed to become more important than
those of the group. This includes managers.

174.Sustainability
_____ refers to meeting the needs of the present without compromising the ability of
future generations to meet their own needs.

175.Teleology
A general or moral philosophy which states that acts are morally right or acceptable if
they produce some desired result, such as realization of self-interest or unity. (egoism
(good for oneself) or utilitarianism (good for the group))

176.temporal discrepancies.
By having Valentine's Day candy on the store shelves four weeks before February
14th and not in July when customers are not buying it, a distributor overcomes:

177.Theory X of Management
Employees dislike work and must be threatened with punishment.

178.Theory Y of Management
Employees like work, self-direction and seek responsibility and have creativity.

179.Theory Z of Management
Focused on increasing employee loyalty to the company by providing a job for life
with a strong focus on the well-being of the employee, both on and off the job.

180.Times Interest Earned

Measures the number of times interest expense is converted to income, and if the
company can pay its interest expense using the profits generated. EBIT is earnings
before interest and taxes. (Leverage Ratio)
_____ = EBIT / Interest Expense

181.Time Value of Money

A dollar received today is worth more than a dollar received in the future.

182.Tort
A civil wrong committed against a individual. (negligence, malpractice, etc.)

183.Total Asset Turnover

Measures overall efficiency of a company in generating sales using its assets. The
formula is similar to ROA, except that net sales is used instead of net income.
(Operating/Efficiency Ratio)
_____ = Net Sales / Average Total Assets

184. Transactional Leadership

Leadership is a transaction or exchange process between leaders and followers. Could
mean more work for more pay or more work for additional time off.

185. Transformational Leadership

Characterized by the ability to bring about significant change in followers and the
organization.

186.Treaties
Compacts or agreements made between our nation and other nations of the world.

187.Tuckman's Stages of Team Development

The process of (1) Forming - orientation break the ice, (2) Storming - marked by
conflict disagreement, (3) Norming - establishment of order and cohesion, (4)
Performing - marked by cooperation and problem solving.

188.Two divisions of criminal law

Includes: Felonies (punishment over a year) and Misdemeanors (punishment under a
year)

189.Uniform Commercial Code (UCC)

One uniform act that has been promulgated in attempts to harmonize the law of sales
and other commercial transactions in all 50 states.
It covers things such as sale of goods, credit, and bank transactions. All states have
adopted the entire UCC except Louisiana that only adopted parts of it.

190.Unity of Command (Management)

Employees should have only one direct supervisor.

191.Unity of Direction (Management)

Teams with the same objective should be working under the direction of one manager,
using one plan. This will ensure that action is properly coordinated.
192.Unsought products
Products unknown to the potential buyer or a known product that the buyer does not
actively seek. Examples are a product that is brand-new to the market and products
like encyclopedias, burial plots and insurance policies that young consumers do not
actively seek and buy.

193.Variable Costs
Expenses that vary directly with changes in activity or changes in volume.

194.Vertical Integration
A strategy in which a company performs value chain activities along more than one
stage of an industry's value chain system (different stages of production and/or
distribution in the same industry).

195.Virtual Team
A team made up of geographically or organizationally dispersed members who share
a common purpose and are linked primarily through advanced information
technologies.

196.Virtue Ethics
Assumes that what is moral in a given situation is not only what conventional
morality requires, but also what the mature person with a good moral character would
deem appropriate.
Immanuel Kant argued that there are some things that ought to be done, and others
that ought not to be done merely by virtue of being rational.

197.Vision
A picture of an ambitious, desirable future for the organization or team

198.Whistleblowing
Exposing an employer's wrongdoing to individuals outside the organization/company.
Thee outsiders may be the media or government regulators.

198 Accounting: What costs should be considered when making non-routine

decisions? -The price of material,
 -Factory overhead costs,
-the price of labor

199 Accounting: Total product/ units produced and sold equals? Product Cost per
Unit

200 Accounting: What is a general explanation of what the contribution margin is?
The difference between variable costs subtracted from sales

201 Accounting: In a continuous budget plan how, many months are generally
planned? 12 months
202 Accounting: Which of the following is not one of the weaknesses of standard
costing? It makes accounting for price increases more accurate

203 Accounting: What are the potential ways to find the price of what a produced
product should cost?
-Product cost concept,
-total cost concept,
-variable cost concept

204 Accounting: Which report is the connecting link between the income statement
and the balance sheet? Cash flow statement

205 The net cash flow from operating activities normally differs from the amount of
net income for the period. True

206 Accounting: Expense accounts would have a balance on which side?

Left side

207 Accounting: A profit-making business operating as a separated legal entity and in

which ownership is divided into shares of stock is known as a...
Corporation

208 Accounting: A debt may slightly: Increase in an asset account

209 Accounting: What would be classified as a current asset on the balance sheet
Accounts receivable

210 Accounting: What are the elements of internal control? (3)

-Control environment,
-monitoring,
-control procedures.
211 A cash distribution of earnings by a corporation to its stockholders is called a
CASH DIVIDEND. The 3 conditions that a corporation must meet to pay a cash
dividend are: sufficient retained earnings, sufficient cash, and formal action by
the board of directors. True

212 Accounting: Factors in computing depreciation are?

Initial cost + residual value = depreciable

213 Accounting: The statement of cash flows reports a firm's major cash inflows and
outflows for a period. It provides useful information about a company's ability to
do the following: Meet its financial obligations, generate cash from operations,
and maintain and expand its operating capacity
214 Accounting: True or False: Notes receivables are amounting that customers owe
for which a formal, written instrument of credit has been issued. If longer than a
year it is considered an investment. True

215 Accounting: The excess of current assets of a business over its current liabilities
is called? Working capital

216 Accounting: What 2 categories are considered under period costs?

selling expenses and administrative expenses

217 Accounting: The effect of a difference in the number of units sold, assuming no
charge in unit sales price or unit cost is...
Quantity factor

218 Accounting: A cost that will not be affected by later decisions is termed an
Sunk Cost

219 Accounting: The unfavorable volume variance may be due to all but the
following facts...
Unexpected increases in the cost of utilities

220 Accounting: What budget allows for adjustments in activity levels?

Flexible budget

221 Accounting: A budget that summarizes future plans for the acquisition of fixed
assets is the: Capital expenditures budget

222 Accounting: What are the standard framework of guidelines for financial
accounting used in any given jurisdiction, also known as accounting standards??
GAAP

223 Economics: What occurs when the price level rises?

 People need to hold more money, so interest rates rise, making firms borrow and
invest less

224 Economics: The federal government enacted regulation in the 1960's requiring
people to wear seatbelt in their cars. All of the following resulted from this
regulation, EXCEPT:
Fewer pedestrians were killed in car accidents.

225 Economics: Which of the following is true regarding the production possibilities
frontier model of the economy?
Any point along the PPF represents an efficient level of production.

226 Economics: If the price in a market happens to be above equilibrium, there will
be a _____ in the market, and the price will tend to _____.
Surplus, drop

227 Economics: The price elasticity of demand tends to be more elastic...

At points further up and to the left along the demand curve

228 Economics: If a tax imposed on a good and the incidence of the tax ends up
falling more heavily on the buyers than on the sellers, this will be because...
Demand is less elastic than supply for that good

229 Economics: If the quantity traded in a market is less than the equilibrium
quantity...
The value to consumers for additional units is greater than the cost to sellers of
producing those units.

230 Economics: A given tax will cause a bigger deadweight loss if demand and
supply are Elastic

231 Economics: What is a statement is true regarding international trade?

For the importing country, the gains from international trade outweigh the losses.

232 Economics: What statement is true regarding the revenues of a firm?

The marginal revenue and the average revenue are equal to the price

233 Economics: Suppose the price of fish increases, so households now buy less fish
and more chicken. This will cause the...
CPI to measure more inflation than there really is

234 Economics: The unemployment that results because it takes time for workers to
search for the jobs that best suit their tastes and skills is called?
Frictional unemployment
235 Economics: What occurs when the Fed reduces the reserve requirement?
The money multiplier gets bigger

236 Economics: In a housing bust what would an economist expect the price of homes
to do?
Make prices go down because of excess supply

237 Economics: What does balance of payment (BOP) mean?

The method countries use to monitor all international monetary transactions at a
specific period of time.

238 Economics: What is an example events would decrease the supply of money?
The banks increasing their amount of excess reserve

239 Economics: What is money?

A store of value and a medium of exchange

240 Economics: What market types describes most modern economics?

Mixed economy

241 Economics: Rational people make decisions on the margins. Which statement
would NOT result in a purchase of the product being analyzed? MC > MB

242 Economics: How does the federal reserve control the money supply?
Prints more as needed

243 Economics: Tariffs generate tax revenue for the firms that hold an import license
False

244 Economics: What 2 terms are used to describe the aggregate supply curve and
how it is shaped? Long run and short run

245 Economics: If the price of a good is artificially set below the equilibrium price,
what does this create? Shortage of goods.

246 Economics: What is the name of unwanted side effects of the production of
goods?
Negative externality

247 Economics: The gains from specialization and trade are based on comparative
advantage. True
248 Finance: The more frequent the compounding, the higher the future value, other
things being equal. True

249 Finance: For a given amount, the lower the discount rate, the less the present
value
False

250 Finance: Under which of the following conditions will a future value calculated
with simple interest exceed a future value calculated with compound interest at
the same rate? This is not possible with positive interest rates

251 Finance: A level stream of cash payments that continues indefinitely is known as
a perpetuity; one that continues for a limited number of years is called an annuity.
What type of statement is this?
Regarding present and future values of streams of cash payments

252 Finance: The decision rule for net present value is to

Accept all projects with positive net present values

253 Finance: One comes reason for issuing 2 distinct classes of common stock is to:
Restrict voting privileges from some shareholders

254 Finance: Treasury bills have a beta of zero? True

255 Finance: As the coupon rate of a bond increases, the bonds':

Interest payments increase

256 Finance: If a stock's P/E ratio is 13.5 at a time when earning $3 per year, what is
the stock's current price? $40.50 (13.5 * 3)

257 Finance: What are the 3 service/ product provided to corporations by financial
markets and institutions?
Valuation of the company, financing, and contracts to manage risk

258 Finance: Cost of capital is the return investors could expect. True

259 Finance: A firm's mixture of long-term financing and equity financing is called...
Capital structure

260 Finance: The weighted average cost of capital is adjusted for tax savings. True

261 Finance: If there is a total of $800 on the balance sheet and long term bonds
account for $200, what is the weighted percentage that the long term bonds hold?
25% (200/800= .25 *100)
262 Finance: Financial statement analysis is assuming relationships between the items
of the balance sheet and the profit and loss account. True

263 Finance: You've been saving up to buy the Godot Company. The total cost will
be $10 million. You currently have about $2.3 million. If you can earn 5% on
your money, how long will you wait? 20 million

264 Finance: What is an example of perpetuity?

$10,000 annual payments from a trust fund forever

265 Law: It requires proof of breach of a statutory or common-law duty. is an

example of? Tort of negligence

266 Law: What is not true when it regards a seller's rights to reduce legal liability in
the sale on non-comsusmer goods?
The seller can disclaim all implied warranties by simply stating that there are no
implied warranties.

267 Law: The establishment clause holds that

The government cannot pass laws that promote religion or show preference for
one religion over another.

268 Law: If an injured party entered into an activity with knowledge that it may be
dangerous and voluntarily assumed that risk, which defense to the tort of
negligence might be asserted?
Assumption of risk

269 Law: In order to assert a design defect, a plaintiff might be able to show that a
reasonable alternative design was available and that the defendant's failure to
adopt the alternative design rendered the product unreasonably dangerous. True

270 Law: The Sherman act protect consumers from?

Trade and commerce against unlawful restraints and monopolies

271 Law: Violations of OSHA can result in (3)

criminal penalties, fines, and termination

272 Law: Fair debt collection practices protect consumers from: being harassed

273 Law: Violations of the clean water act can result in (3)
Criminal charges, cleaning up the polluted area, and fines

274 Law: What are the requirements of all contracts (4)

 Consideration, legality, capacity, and agreement

275 Law: What is the type of damage that would be used to recognize wrongdoing
when no monetary loss is shown? Punitive

276 Law: A partner in an LLC can be held liable for the debts of the LLC? False

277 Law: A plaintiff in a lawsuit is not responsible for minimizing the damages they
suffer as a result of the defendant's actions. False

278 Law: An example of intangible personal property? Copyrights

279 Law: A stock certificate issued by a corporation that evidences ownership of a

specified number of shares in the corporation. True

280 Law: A corporation is a legal entity created and recognized by state law. It can
consist of only one natural person identified under a common name. False

281 Law: What are the legal defenses of a criminal culpability (3)
Mistake of fact, statue of limitations, and duress

282 Law: Civil law deals with the rights and duties exiting between individual
persons, and persons and the government, and the relief available when rights are
violated.
True

283 Law: In an agency relationship, the principal owes a duty to the agent. True

284 Law: Our fundamental rights include (4)

-Marriage and procreation,
-interstate travel,
-all first amendment rights,
-privacy and voting

285 Law: If a person who is sufficiently intoxicated to lack mental capacity enters
into a contract, voiding the contract is an option to that person. True

286 Law: All contracts must be in writing even those contracts to be performed within
one year. False

287 Law: What is one of the defenses to product liability

Comparative negligence and liability
288 Law: Punitive damages are awarded to punish the breaching party. True

289 Law: Negligence per se if an example of an intentional tort against a person.

False

290 Management: Surface level diversity (3)

Race/ ethnicity, age, and physical disabilities

291 Management: Disadvantages of teams (3)

-Disadvantages of group decision making,
-social loafing,
-initially high employee turnover

292 Management: Pay variability includes (3)

Stock options, commission, and piecework

293 Management: The stages of team development includes (3)

forming, performing, and norming

294 Management: Job redesign techniques include (3)

Combining tasks, redesigning jobs, and forming natural work units

295 Management: The 4 management functions are planning, organizing, leading, and
controlling. True

296 Management: Scientific management is throughly studying and testing different

work methods to identify the best, most efficient way to complete a job. True

297 Management: Companies cannot be prosecuted or punished if management did

not know about unethical behavior. True

298 Management: When a multinational company has offices/plants in different

countries and uses the same rules, guidelines, policies, and procedures, this is
referred to as: Global consistency

299 Management: The vertical and horizontal configuration oaf departments

authority, and jobs within a company is: Organizational structure

300 Management: Social loafing is behavior in which team members withhold their
efforts and fail to perform their share of the work. True

301 Management: Bona Fide occupational qualifications is defining as reasonably

necessary for the normal operation of that particular business. True
302 Maslow's hierarchy of need are self-actualization, safety, belongingness,
physiological, and esteem. True

303 Management: Leader and manager have 2 different goals in mind and are not the
same. True

304 Management: Self-control or self-management is a system which managers and

workers control their own behavior. True

305 Management: Quality is a product or service that has deficiencies and satisfies the
customer. False

306 Management: Type of inventories are (3)

Raw materials, component parts, and finished goods

307 Management: Environmental change, environmental complexity, and rescue

scarcity are the basic components of external environments. True

308 Management: 2 types of feedback are constructive and destructive. True

309 Management: Total quality management is an approach that seeks to improve

quality and performance which will meet or exceed customer expectations. True

310 Management: What are the steps in the strategy planning process (3)
Situational analysis, choosing strategic alternative, and assessing need for change

311 Management: Strategic dissonance

Discrepancy between a company's intent and managerial actions

312 Management: Strategic reference points are used to measure whether a firm has
developed sustainable competitive advantages

313 Management: There are 3 types of res to consider when choosing strategic
alternatives; risk avoiding, risk seeking and risk taking. False

314 Marketing: Marketing penetration is marketing strategy that tries to increase

market share amount existing customer. True

315 Marketing: The 4 categories of portfolio matrix are stars, problem, child or
questions mark, cash cows, and dog. True

316 Marketing: Purchasing power is a comparison of income verses the relative cost
of a set standard of goods and services in difference geographic areas. True
317 Marketing: Dumping is the sale of an exported product at a price higher than that
charged for the same or a like product in the home market of the exporter. False

318 Marketing: A straight re-buy is a situation in which the purchaser reorders the
same goods or service without looking for new information or investigation other
suppliers. True

319 Marketing: Inelastic demand is demand without regard to price. An increase or

decrease in the product prices ill not significantly affect the demand for the
product True

320 Marketing: The business market has were customer than the consumer market:
True

321 Marketing: The 4 criteria of market segmentations are substantiality,

identifiability, accessibility, and responsiveness. True

322 Marketing: The 3 levels of distribution intensity are intensive distribution,

selective distribution and distribution exclusive. True

323 Marketing: The Robinson-Patman act of 1936 was enacted in response to price
discrimination. True

324 Marketing: The questionnaire design has 3 basic designs; open ended questions,
close ended questions, and scaled response questions. True

325 Marketing: Organizations that exists to achieve goals rather than profits called
non profit organizations

326 Marketing: If Starbucks were to offer free coffee to first time customers it would
be practicing which strategic alternative: Market development

327 Marketing: A firm that engages in environmental management attempts to change

Legal regulations

328 Marketing: A marketing campaign aimed at ____ should emphasize speed and
convenience: Generation Y

329 Marketing: On a recent vacation, Doug enjoyed shampoo that the hotel provided
so much that he wants to buy it for his home. This is an example of
An internal information searches

330 Marketing: The extent to which an individual conduct an external search depends
on perceived risk, knowledge, level of interest in the godson service and
 Prior experience

331 Marketing: Cecilia, a recent emigre from Argentina, decides to open a savings
account at a certain bank because they have a bilingual teller. This is an example
of which influence on consumer buying decisions
Cultural

332 Marketing: An effective away to increase business with existing customers and
retain current customers it to Build relationship

333 Marking: ____ Is the process where distinct market segments are identified
Market segmentation

334 Marketing: Toyota promotes its Sienna minivan as a safe and practical vehicle for
families. This is an example of
Family life cycle segmentations

335 Marketing: In Starbucks ____ will occur if its new VIA line of instant coffee
leads to reduced sales of its coffee beans Cannibalization

336 Marketing: In market research, a ____ is a necessary because it is difficult to

impossible to take a census of or interview all possible users of a certain product
Sample

337 Marketing: What is an example of a non-profit organization

The university of Chicago

338 Marketing: A janitor finds a vacuum that is much more powerful and efficient
than his current model. This is an example of.
How consumers recognize unfulfilled wants

339 MIS: The amount of data that can be transferred from one point to another in a
certain time period usually one second is: Bandwidth

340 MIS: What are the benefits that an extranet offers an organization (3)
Coordination, feedback, and cost reduction

341 MIS: Companies sell directly to consumers: Business to consumer

342 MIS: Structure manages highly centralized information systems: Global

343 MIS: The series of well defined phases performed in sequence that serves as a
framework for developing a system or project is
System development life cycle (SDLC)
344 MIS: Data and information that is volatile and can be lost when power is turned
off
Main memory

345 MIS: Unauthorized use of computer data for personal gain is: Computer fraud

346 MIS: GIS stands for: Global information system

347 MIS: Allows for small business to reach customers across the globe: e-business

348 MIS: Commonly accepted types of global organizations

Multinational, international, and transnational

349 MIS: Term used when fraudulent emails seem to come from a legitimate source
Phishing

350 MIS: A network interface card allows: Computers to connect to a network

351 MIS: RAM stands for: random access memory

352 Software is classified broadly as: System software and application software

353 MIS: Software for creating storing, maintaining, and accessing database files is a
Database management system

354 MIS: What components are a part of data hierarchy: Field, record, and file

355 MIS: Waterfall, Agile, Iterative, and release are all different types of
Software development lifecycles

356 MIS: First step in standard SDLC: Planning

357 MIS: Global information system is defined in terms of two dimensions

control and coordination

358 MIS: Windows XP is an application not an operating system: False

359 MIS: An ERP solution, such as PeoplSoft is something that is used across a
company. True
360 MIS: Supply chain management is the process of working with suppliers and
other partners in the supply chain to improve procedures for delivery products
and services. True

361 MIS: The supply chain is an integrated network organized with suppliers,
transportation companies, and brokers. They also are used to deliver goods and
services to consumers. True

362 MIS: Information systems increase the cost of products and services in an
organization. False

363 MIS: Viruses, worms, and Trojan programs are types of non-intentional threats
False.

364 Stats: The balances scorecard includes what performance perspectives?

Customer, financial, and internal

365 Stats: A lamp manufacturer has developed 5 lamp bases and 4 lampshades that
are interchangeable. How many different arrangements of base and shade can be
offered? 20 (4*5)

366 Stats: A one-time variation that is explainable: Irregular variation

367 Stats: Quality control systems include what components (3)

Performance standard or goal,
means of measuring actual performance,
and comparison of actual performance with the standard to form the basis for
corrective action

368 Stats: A conditional probability is the probability that

A particular event will occur given that another event has occurred

369 Stats: Steps in Hypothesis testing (3)

Formulate a decision rule,
select a level of significance,
identify the test statistic

370 Stats: A mathematical equation or formula that helps a firm in determining the
economic order, quantity, and the frequency of ordering to keep goods or services
flowing to the customer without interruption or delay is
Inventory modeling

371 Stats: the critical path method (CPM) assumes

 Activity time estimates are accurate and stable, once an activity is started it
continues uninterrupted until it is completed, and the project network defines a
correct sequence of work in terms of technology and workflow

372 Stats: Queue time is a fancy word for: wait time

373 Stats: The value of the observation that appears the most frequently is: the mode

374 Stats: Joint probability is

mutually exclusive, 2 events that occur simultaneously, and joins 2 or more
events

375 Stats: A sample selected so that each item or person in the population has the
same chance of being included is: a simple random sample

376 Stats: A _____ estimate that is a single value derived from a sample and used to
estimate a population value: point estimate

377 Stats: As you get further away from the mean, in a normal curve distribution,
your probability gets: Lower

378 Stats: A _____ is a value used to determine whether to reject the null hypothesis
Test statistic

379 Stats: A normal distribution is bell shaped, symmetrical, and asymptotic (t/f)
True

380 Stats: A null hypothesis is a statement developed to prove numerical evidence

(t/f)
False

381 Stats: A statistical process control is utilized to ensure that a process is operating
at its full potential (t/f) True

382 Stats: In a permutation, the order of arrangement does not matter (t/f) False

383 Stats: A population is the entire set of individuals or objects of interest or the
measurements obtained from all individuals (t/f) True

384 Stats: A standard deviation is a constant interval throughout a normal curve

distribution (t/f) True

385 Stats: When controlling a six sigma process, statistical process control (SPC) is
an extremely effective methodology (t/f) False
386 Stats: Mutually exclusive is defined as the occurrence of one event and that none
of the other events can occur at the same time (t/f) True

387 Stats: A hypothesis is a statement about a sample subject to test (t/f) False

388 Net working capital: current assets less short term liabilities

389 Within the context of the capital asset pricing model, the risk measure known as
beta is often computed by regressing the return of the company stock against the
return on the market portfolio

390 When the OPEC reduces production by 10% and the growth rate of the world
economy begins to escalate. How will the simultaneous occurrence of these
events affect the equilibrium price and quantity in the world petroleum market
Price will increase, but the quantity is indeterminate

391 As a result of the US government imposing tariffs own foreign steel imports
employment in the :US steel industry would increase

392 In an economy the unemployment rate is 10% and the inflation rate is 2%. An
appropriate fiscal policy in this phrase of the business cycle would be to
increase government spending

393 What is an appropriate federal reserve avian to stimulate the US economy

reduce the reserve requirement

394 A firm that would like to know whether it has enough cash to meet its bills would
be most likely to use which category of financial ratio
liquidity

395 In a period of rising prices, which inventory valuation method would generally
yield both the lowest ending inventory valve and the lowest net income figure
LIFO

396 In the statement of cash flows, the section for cash flows from operating activities
will include: a decrease in accounts payable

397 Frederick Taylor developed what pay principle: incentive pay

398 When a domestic firm permits a foreign company to manufacture and sell its
product in exchange for a fee or royalty, the process is termed: licensing

399 web 2.0 is: social networking sites

400 What type of investment constraints on services marketing: inseparability

401 The principal difference between variable costing and absorption costing centers
on:

a) whether variable manufacturing costs should be included as product costs

b) whether fixed manufacturing costs should be included as product costs
c) whether fixed manufacturing costs and fixed selling and administrative costs
should be included as product costs
d) none of these.

402 General Bikes is debating which marketing research options to employ. The
traditional person-to-person methods have been effective; however, the new
director of market research is campaigning for online-based research. What
argument for this method might he/she use?
a) Consumers are more relaxed at home in front of their computers, therefore it is
more likely the responses will be truthful
b) Online research has been standardized for each industry, making it easier to
understand them
c) A well-designed, Internet-based marketing research project can cost less
and yield information faster than offline research
d) Person-to-person methods most often incorporate researcher bias into the
surveys and observations

403 Which of the following is an appropriate Federal Reserve action to stimulate the
United States economy?
a) Selling government bonds on the open market
b) Increasing the discount rate
c) Reducing the reserve requirement
d) Cutting taxes

404 A small number of people with complementary skills who are committed to a
common purpose, a set of performance goals, and an approach for which they
hold themselves mutually accountable is referred to as a
a) committee
b) task force
c) group
d) team

405 A company is considering producing a product for a new market. The fixed costs
required for manufacturing and delivering the product is $50,000. Labor and
material costs are estimated to be approximately $25.00 per product. If the
 product is sold for $35.00 each, the firm's break-even volume would be:
a) 50,000 units
b) 5,000 units
c) 2500 units
d) 500 units

406 A problem associated with equity theory is that:

a) it focuses on providing incentives for the long run when most workers are
mainly concerned with incentives that apply to their current situation
b) managers have a hard time applying it to real-world situations because of its
abstract nature
c) worker motivation is based on perceptions of fairness, and the perceptions
workers have about their contributions are not always accurate
d) it is concerned with the nature of the job itself rather than with what motivates
the workers who perform the job

407 All of the financial statements are for a period of time except the
a) Income statement
b) Owner's equity statement
c) Balance sheet
d) Statement of cash flows

408 By assembling computers only after customers have paid them for, resulting in a
lower finished goods inventory, Dell Computer Co. achieved:
a) Increased quality
b) A competitive advantage
c) Increased responsiveness
d) Increased innovation
e) None of the above

409 The Bill of Rights refers to:

a) the inalienable rights found at the beginning of the Constitution
b) the first ten amendments to the Constitution
c) a specific listing of individual rights found in the original text of the
Constitution.
d) a grouping of individual rights set forth by the United States Supreme Court
shortly after the Constitution was ratified by the states

410 Fiedler proposes that all of the following determine whether a task- or
relationship-oriented style is more effective except:
a) Situational favorableness
b) Leader-member relations
c) Task structure
d) Position power
411 Which one of the following statements is correct given the following exchange
rates?
US $ per 1 foreign unit
Country FRI THU
South Africa 0.1028 0.1023
Thailand 0.0284 0.0286

a) On Thursday, one U.S. dollar was equal to 0.1023 South African rand.
b) On Friday, one Thai baht was equal to $35.21.
c) Both the South African rand and the Thai baht appreciated against the U.S.
dollar from Thursday to Friday.
d) The South African rand appreciated from Thursday to Friday against the
U.S. dollar.
e) The U.S. dollar depreciated from Thursday to Friday against the Thai baht.

412 Family branding refers to a group of

a) similar brands of products from different makers
b) different brands of products from different makers within the same industry
c) different products marketed under a single brand name
d) similar products sold by small, family-owned firms

413 A project has a net present value of zero. Which one of the following best
describes this project?
a) The project has a zero percent rate of return.
b) The project requires no initial cash investment.
c) The project has no cash flows.
d) The summation of all of the project's cash flows is zero.
e) The project's cash inflows equal its cash outflows in current dollar terms

414 A firm that would like to know whether it has enough cash to meet its bills would
be most likely to use which category of financial ratio?
a) Liquidity
b) Leverage
c) Efficiency
d) Profitability

415 A major competitor of XYZ, Inc. suddenly creates a new type of product that
makes XYZ's products obsolete. This is an example of which type of force in the
environment?
 a) General environment
b) Task environment
c) Economic environment
d) Legal environment
e) Political environment

416 Which of the following is not one of the four primary functional areas of a firm?
a) human resources
b) legal
c) marketing
d) operations

417 When employees use email, word processors, electronic scheduling / calendars,
they are using which of the following?
a) Transaction processing systems
b) Process control systems
c) Office automation systems
d) Decision support systems

418 Which of the following statements about a systems flowchart is true?

a) It is used in systems design to define and describe each piece of data.
b) It is a method of writing programs using only three basic constructs: sequence,
selection and repetition.
c) It documents the sequence of processing steps that take place in an
information system.
d) It documents the logical design of an information system.

419 The primary purpose of the statement of cash flows is to report

a) A company's investing transactions
b) A company's financing transactions
c) Information about cash receipts and cash payments of a company
d) The net increase or decrease in cash

420 In service blueprinting, which line separates front office activities from back
office activities?
a) Line of visibility
b) Line of intervention
c) Line of influence
d) Line of support

421 The common characteristic possessed by all assets is

a) Long life
b) Great monetary value
 c) Tangible nature
d) Future economic benefit

422 The longest path through the network, in terms of time, is referred to as the
a) activity-on-node path
b) path of greatest slack
c) critical path
d) scheduling path

423 A legal institution associated with an independent judiciary relying on case

precedents is called
a) common law system
b) civil law system
c) theocratic law system
d) None of the above

424 Which of the following is not part of the accounting process?

a) Recording
b) Identifying
c) Financial decision making
d) Communicating

425 What is the median of 26, 30, 24, 32, 32, 31, 27 and 29?
a) 32 b) 29. c) 30 d) 29.5. e) 30.5

426 Under the common law, the ____ must be the mirror image of the ____
a) contract, consideration.
b) contract, offer
c) offer, acceptance
d) acceptance, offer

427 Sue and Neal are twins. Sue invests $5,000 at 7 percent when she is 25 years old.
Neal invests $5,000 at 7 percent when he is 30 years old. Both investments
compound interest annually. Both Sue and Neal retire at age 60. Which one of the
following statements is correct assuming that neither Sue nor Neal has withdrawn
any money from their accounts?
a) Sue will have less money when she retires than Neal.
b) Neal will earn more interest on interest than Sue.
c) Neal will earn more compound interest than Sue.
 d) If both Sue and Neal wait to age 70 to retire, then they will have equal amounts
of savings.
e) Sue will have more money than Neal as long as they retire at the same
time

428 In general, the __________ difficult it is for an organization to enter an industry

as a new competitor, the __________ are the barriers to entry to this industry
a) Less; lower
b) More; lower
c) More; higher
d) Less; higher

429 An open access good (or common property good), such as a fishery:
a) Is rival but not excludable
b) Is both rival and excludable
c) Is neither rival nor excludable
d) Is not rival but is excludable

430 A differentiation strategy enables a business to address the five competitive

forces by
a) lessening competitive rivalry by distinguishing itself
b) having brand-loyal customers become more sensitive to prices
c) increasing economies of scale
d) serving a broader market segment

431 Only one of the following statements is false at the long-run equilibrium for a
firm in a monopolistically competitive industry. Which one is false?
a) Price equals Average Total Cost, like a competitive firm
b) Price exceeds marginal cost, like a monopolist
c) Firms make zero economic profit, like a competitive firm
d) Firms produce at the bottom of the ATC curve, like a competitive firm

432 Dreamland Pillow Company sells the "Old Softy" model for $20 each. One
pillow requires two pounds of raw material and one hour of direct labor to
manufacture. Raw material costs $3 per pound and direct production labor is paid
$4 per hour. Fixed supervisory costs are $2,000 per month and Dreamland rents
its factory on a five-year lease for $4,000 per month. All costs are considered
costs of production.

Another firm has offered to produce "Old Softy" and sell them to Dreamland for
 $12 each. Dreamland cannot avoid the factory lease payments, but can avoid all
labor costs if it does not produce these pillows. Under these conditions, how
many "Old Softy" pillows must Dreamland sell to earn monthly gross profits of
$1,000?
a) 417. b) 500. c) 625 d) 875.

The correct answer is 625 Pillows Gross Profit = Net Sales - Cost of Goods Sold
Since you are buying pillows and not manufacturing pillows your variables costs
are the cost of purchasing each pillow which is $12. Although the problem
doesn't specifically state it, you should assume that $12 buys the whole pillow
(labor and materials). You still have to cover the cost of the lease of $4,000 but
since you don't have employees to supervise you can avoid the fixed cost of
supervision.
Break Even Analysis Selling Price = 20 Variable Costs = 12
Contribution Margin per unit = 8 Contribution Margin Ratio = 8/20 = .4 or 40%
Fixed Costs = 4000 (unavoidable cost of the factory lease)
Break-Even Units = 4000/8 = 500 Units ($0.00 Gross Profit)
Break-Even Sales = 4000/.4 = $10,000 (also 500 x 20)
Desired Profit of $1,000
Fixed Costs ($1000) + Desired Profit ($4000) = $5,000
5000/8=625 Units or 5000/.4 = $12,500 in Sales

433 When a trial is conducted with a jury, the judge determines issues of ____ and the
jury determines questions of ____
a) evidence, law.
b) law, evidence
c) law, fact
d) fact, law

434 The central processing unit (CPU) in a personal computer contains the
a) control unit and primary memory
b) control unit and arithmetic/logic unit
c) arithmetic/logic unit and bus
d) arithmetic/logic unit only

435 Marketers must constantly monitor their competitors' products, prices,

distribution, and promotional efforts because the:
a) competitors may be violating the truth-in-advertising laws
b) actions of competitors may threaten the firm's monopoly position
c) actions of competitors may create an oligopoly within an industry
d) new product offerings by a competitor may require adjustments to one or
more components of the firm's marketing mix
436 What is the major distinction between executive and independent agencies?
a) Executive agencies govern business issues while independent agencies regulate
individual matters.
b) The president has greater control over executive agencies.
c) The Administrative Procedure Act regulates independent agencies but not
executive agencies.
d) Subpoenas may be issued by independent agencies; executive agencies do not
have subpoena power.

437 Primary value chain activities that involve the effective layout of receiving dock
operations (inbound logistics) and support value chain activities that include
expertise in process engineering (technology development) characterize what
generic strategy?
a) differentiation
b) overall cost leadership
c) differentiation focus
d) stuck-in-the-middle

438 Managers at ABC, Inc. analyze the current situation of their organization and
then develop plans to help their organization to accomplish its mission and
achieve its goals. This is known as:
a) Synergy planning
b) Strategy formulation
c) Functional planning
d) SWOT analysis

439 Which of the following terms refers to the phenomenon in which group members
are pressured to conform in decision making?
a) Group consensus
b) Brainstorming
c) Group norms
d) Groupthink

440 If the Federal Reserve decides to decrease the money supply, which of the
following most likely will occur?
a) An increase in private investment and consumer expenditure
b) A decrease in private investment and consumer expenditure
c) An increase in private investment and a decrease in consumer expenditure
d) A decrease in private investment and an increase in consumer expenditure

441 Business torts consist of:

a) interference with contractual relations.
b) disparagement.
 c) fraudulent misrepresentation
d) All of the above

442 Miller Brothers Hardware paid an annual dividend of $1.15 per share last month.
Today, the company announced that future dividends will be increasing by 2.6
percent annually. If you require a 12 percent rate of return, how much are you
willing to pay to purchase one share of this stock today?
a) $12.23 b) $12.55 c) $12.67 d) $12.72

443 The incomes of a group of 50 loan applicants are obtained. Which level of
measurement is income?
a) Nominal
b) Ordinal
c) Interval
d) Ratio
e) None of the above

444 Which of the following is an assumption of Theory Y as developed by Douglas

McGregor?
a) Workers seek responsibility.
b) Workers dislike work.
c) Workers prefer direction.
d) Workers are interested in monetary gains.

445 Steel, paper, paints, and chemicals are examples of industries that most likely use
a) batch production systems
b) repetitive production systems
c) continuous production systems
d) mass production systems

446 Dreamland Pillow Company sells the "Old Softy" model for $20 each. One
pillow requires two pounds of raw material and one hour of direct labor to
manufacture. Raw material costs $3 per pound and direct production labor is paid
$4 per hour. Fixed supervisory costs are $2,000 per month and Dreamland rents
its factory on a five-year lease for $4,000 per month. All costs are considered
costs of production.
How many pillows must Dreamland produce and sell each month to earn a
monthly gross profit of $1,000?
a) 300. b) 350. c) 600. d) 700

447 What is the measure that indicates how precise a prediction of Y is based on X or,
conversely, how inaccurate the prediction might be?
a) Regression equation
b) Slope of the line
 c) Standard error of estimate
d) Least squares principle

448 An example of an unfair trade practice is:

a) EU Government policy prohibiting imports of U.S. Beef
b) EU prohibitions of Latin American bananas
c) US tariffs on European steel
d) All of the above

449 The channels of distribution create all of the following utilities EXCEPT
a) time
b) place
c) form
d) possession

450 Routine physical examinations are conducted annually as part of a health service
program for the employees. It was discovered that 8% of the employees needed
corrective shoes, 15% needed major dental work and 3% needed both corrective
shoes and major dental work. What is the probability that an employee selected at
random will need either corrective shoes or major dental work?
a) 0.20
b) 0.25
c) 0.50
d) 1.00
e) None of the above
451 Sessler Manufacturers made two announcements concerning its common stock
today. First, the company announced that the next annual dividend will be $1.75 a
share. Secondly, all dividends after that will decrease by 1.5 percent annually.
What is the maximum amount you should pay to purchase a share of this stock
today if you require a 14 percent rate of return?
a) $11.29
b) $12.64
c) $13.27
d) $14.00
e) $14.21

452 In ___________, provincial governments play a substantial role in trade and

investment regulation
a) China
b) Norway
c) Indonesia
d) Canada
453 Douglass Interiors is considering two mutually exclusive projects and have
determined that the crossover rate for these projects is 11.7 percent. Project A has
an internal rate of return (IRR) of 15.3 percent and Project B has an IRR of 16.5
percent. Given this information, which one of the following statements is correct?

a) Project A should be accepted as its IRR is closer to the crossover point than is
Project B's IRR.
b) Project B should be accepted as it has the higher IRR.
c) Both projects should be accepted as both of the project's IRRs exceed the
crossover rate
d) Neither project should be accepted since both of the project's IRRs exceed the
crossover rate.
e) You cannot determine which project should be accepted given the
information provided.

454 There are 10 rolls of film in a box and 3 are defective. Two rolls are to be
selected without replacement. What is the probability of selecting a defective roll
followed by another defective roll?
a) 1/2, or 0.50
b) 1/4, or 0.25
c) 1/120, or about 0.0083
d) 1/15, or about 0.07

455 The process of collecting information about the external marketing environment
is called:
a) environmental management
b) marketing research
c) marketing management
d) environmental scanning

456 Which Foreign Direct Investment (FDI) attempts to acquire particular resources
at a lower real cost than could be obtained in the home country?
a) Market-seeking FDI
b) Efficiency-seeking FDI
c) Resource-seeking FDI
d) Strategic asset-seeking FDI

457 ____ planning normally is performed by middle managers and typically has a
one-year time frame
a) Strategic planning
b) Tactical planning
 c) Operational planning
d) Contingency planning

458 The two international treaties that govern patent protection are
a) Paris Convention and Patent Cooperation Treaty
b) International Patent Patrol and Patent Treaty
c) Patent Protection Treaty and International Patent Patrol
d) Patent Protection Treaty and Patent Cooperation Treaty

459 In a large firm, the pool of applicants for the positions of sales manager and sales
associate consists of three men and three women. If each candidate has an equal
chance of being selected, what is the probability that both positions will be filled
by men?
a) 0.20
b) 0.25
c) 0.33
d) 0.50

460 Maxwell has been named to an upper-level management position at QVC. He will
be working with transportation media, order processing, and development of
marketing channels. Maxwell is involved in developing _____ strategies.
a) product
b) distribution
c) promotional
d) marketing

461 The principle of diversification tells us that:

a) concentrating an investment in two or three large stocks will eliminate all of
the unsystematic risk.
b) concentrating an investment in three companies all within the same industry
will greatly reduce the systematic risk.
c) spreading an investment across five diverse companies will not lower the total
risk.
d) spreading an investment across many diverse assets will eliminate all of the
systematic risk.
e) spreading an investment across many diverse assets will eliminate some of
the total risk

462 The effect whereby slight demand variability is magnified as it moves back
upstream in the supply chain is known as
a) the bullwhip effect
b) postponement
c) collaborative replenishment
d) direct-response delivery
463 A nuclear power plant uses electronic sensors linked to computers to continually
monitor processes and make instant (real-time) adjustments that control the
power generation process. This is an example of a(n):
a) Transaction processing system
b) Decision support system
c) Enterprise collaboration system
d) Process control system

464 Within the context of the capital asset pricing model (CAPM), the risk measure
known as beta is often computed by regressing the return of the company's stock
against the
a) return on the company's bonds
b) return on the market portfolio
c) change in the gross domestic product
d) change in the consumer price index

465 A department manager telephoned two managers in other departments to discuss

a cost savings idea that would benefit their departments as well as her own.
Which of the following most accurately defines the communication channel that
the manager was using?
a) Upward
b) Lateral
c) Downward
d) Hierarchical.

466 Information systems are either operations or management systems. Which one of
the following would NOT be classified as an operations system?
a) Transaction processing systems
b) Process control systems
c) Functional information systems
d) Executive support systems

467 Which terms would make the following sentence true? Manufacturing companies
that benefit the most from activity-based costing are those where overhead costs
are a _________ percentage of total product cost and where there is ___________
diversity among the various products that they produce.
a) low, little
b) low, considerable
c) high, little
d) high, considerable
468 When a domestic firm permits a foreign company to manufacture and sell its
product in exchange for a fee or royalty, the process is termed
a) importing
b) exporting
c) licensing
d) countertrading

469 Which of the following statements is NOT correct concerning the Cash Budget?
a) It is not necessary to prepare any other budgets before preparing the
Cash Budget
b) The Cash Budget should be prepared before the Budgeted Income Statement
c) The Cash Budget should be prepared before the Budgeted Balance Sheet
d) The Cash Budget builds on earlier budgets and schedules as well as additional
data

470 A manager who chooses the wrong goals for the organization and makes poor use
of the organization's resources in pursuing these goals is said to have:
a) Low effectiveness/low efficiency
b) Low effectiveness/high efficiency
c) High effectiveness/low efficiency
d) High effectiveness/high efficiency
e) None of the above

471 In the late 1970's and 1980's, the U.S. car manufactures sought to limit ________
import to the U.S.?
a) Cuban
b) Asian
c) Japanese
d) Chinese

472 A standard marketing strategy that is modified only minimally for use in each of
the firm's foreign markets is a _____ marketing strategy.
a) lateral entry
b) unipolar
c) global
d) multidomestic

473 Priceless Treasures is an antique jewelry retailer. Priceless Treasures' owner,

Sally Thornton, wishes to replace the printed catalog with an online catalog.

Ms. Thornton decides to conduct a market research project to explore how

 Priceless Treasures' target customers would respond to the online catalog
approach.

Ms. Thornton plans to conduct an online survey of her customers. What is the
most significant problem with using this survey method rather than a traditional
mail approach?

a) Respondents may not answer the survey truthfully.

b) Customers who do not use the Internet will not be in the sample.
c) Respondents will not be able to see the entire survey and thus may answer only
part of it.
d) Online surveys cannot prevent multiple or inappropriate responses to complex
questions.

474 A project consists of 150 jobs. The expected completion time for each job is
given in days. The project has three critical paths with two jobs in common, J and
K. In order to finish the project one day early, the completion time should be
reduced one day for
a) each of the 150 jobs
b) each of the jobs on the three critical paths
c) either Job J or Job K
d) both Job J and Job K

475 The term "net working capital" refers to 

a) inventories, receivables, and current notes and investments
b) assets divided by liabilities
c) current assets less short-term liabilities
d) net assets left over after subtracting cost of goods sold

476 U.S. dollars deposited in a bank in Switzerland are called:

a) foreign depository receipts.
b) international exchange certificates.
c) francs.
d) Eurocurrency.
e) Eurodollars

477 Carefully dismantling and inspecting a competitor's product to look for design
features that can be incorporated into your own product is known as
a) concurrent design
b) design for manufacturability
 c) benchmarking
d) reverse engineering

478 A SWOT analysis examines a company's

a) strategies, weaknesses, opportunities, and threats
b) strengths, weaknesses, opportunities, and threats
c) strategies, weaknesses, opportunities, and tactical plans
d) strengths, weaknesses, operational plans, and threats

479 Saint Martin Hospital boasts one of the world's leading medical imaging
programs. Its radiology department specializes in the early detection of
particularly serious forms of stomach, intestinal, and colon cancer. The hospital
plans to invest in a new system of digital medical imaging and image
transmission technologies that will enable its radiologists to view and evaluate
intestinal scan results from anywhere in the world. 

With this investment, the hospital is attempting to overcome which of the

constraints of services 
marketing?
a) Inventory
b) Intangibility
c) Inconsistency
d) Inseparability

480 Under the Uniform Commercial Code (UCC) statute of frauds, which of the
following terms must be included in writing in order to satisfy the writing
requirement?
a) The price of the goods.
b) The quantity of the goods.
c) The signatures and names of the buyer and the seller
d) The time and place for delivery

481 A company's buying center encompasses:

a) a representative from each department within an organization
b) only a gatekeeper and a buyer
c) everyone who is involved in any aspect of the buying process
d) an exclusive top-notch buying department

482 The degree to which a product meets pre-established standards is known as

a) conformance
b) performance
 c) reliability
d) none of the above

483 The control of the money supply by the Federal Reserve System is known as
a) fiscal policy
b) supply-side policy
c) congressional policy
d) monetary policy

484 The economic entity assumption requires that the activities

a) Of different entities can be combined if all the entities are corporations
b) Must be reported to the Securities and Exchange Commission
c) Of a sole proprietorship cannot be distinguished from the personal economic
events of its owners
d) Of an entity be kept separate from the activities of its owner

485 In general, as the order size increases,

a) ordering costs decrease and carrying costs increase
b) ordering costs increase and carrying costs decrease
c) both ordering and carrying costs increase
d) both ordering and carrying costs decrease

486 The essence of common law is:

a) its prospective nature.
b) the concept of stare decisis
c) its flexibility.
d) the plain meaning doctrine.
487 Natural Monopolies are characterized by...
a) Economies of Scale (Increasing returns to scale)
b) Constant Returns to Scale
c) Diseconomies of Scale (Decreasing returns to scale)
d) Non-existent returns to Scale

488 A company had sales of $920,000 and fixed costs were $160,000. What was the
income from operations if the contribution margin ratio was 30 percent?
a) $116,000
b) $276,000
c) $484,000
d) $644,000

489 The organizational buying process has more steps than the consumer buying
process, which can be attributed to:
a) the limited number of suppliers in the B2B marketplace
b) the importance of integrating the responsibilities of the wholesalers or retailers
 c) interpersonal and environmental influences not seen in consumer buying
decisions
d) business purchasing that introduces new complexities that do not affect
consumers

490 In marketing research, a firm might consider using secondary data over primary
data because
A a) secondary data usually cost less
b) secondary data are usually more accurate
c) primary data are usually non specific
d) primary data are likely to be outdated.

491 The probability that a product will operate properly within an expected time
frame is the dimension of quality known as
a) durability
b) reliability
c) performance
d) serviceability

492 The Organization of the Petroleum Exporting Countries (OPEC) reduces

production by 10 percent, and the growth rate of the world economy begins to
escalate. How will the simultaneous occurrence of these events affect the
equilibrium price and quantity in the world petroleum market?
a) Price will increase, but quantity will remain unchanged.
b) Price will increase, but quantity is indeterminate.
c) Quantity will increase, but price is indeterminate.
d) Both price and quantity will increase.
493 What can we conclude if the coefficient of determination is 0.94?
a) Strength of relationship is 0.94
b) Direction of relationship is positive
c) 94% of total variation of one variable is explained by variation in the
other variable
d) All of the above are correct

494 Money is the key motivator in

a) Herzberg's motivation-hygiene theory
b) Maslow's hierarchy of needs
c) McGregor's Theory X and Theory Y
d) Taylor's scientific management

495 In the calculation of the arithmetic mean for grouped data, which value is used to
represent all the values in a particular class?
a) The upper limit of the class
b) The lower limit of the class
 c) The frequency of the class
d) The cumulative frequency preceding the class
e) The class midpoint.

496 On May 31, Company O's general ledger shows a cash balance of $5,123. The
May 31 bank statement shows a balance of $4,905. Other information is available
as follows: 
1. A May 31 deposit of $300 does not appear on the bank statement; but a $3
service charge does. 
2. A customer's $40 insufficient funds check has been returned with the bank
statement. 
3. Outstanding checks of $10, $15, and $100 are identified on May 
What is the correct cash balance on May 31?
a) $4,905
b) $5,080
c) $5,166
d) $5,204

What is the correct reconciled cash balance for May 31? $5,080
There are two parts of a reconciliation: Bank and General Ledger. The Bank has
information that has not recorded in the general ledger and the general ledger has
information that has not been recorded by the bank. Some things to keep in mind
about the bank statement. Bank Credits are positive and recorded as Debits
(additions) in your general ledger cash account. Bank Debits are negative and are
recorded as credits (negatives) in your general ledger cash account.
Start with the Bank Balance $4,905 and add any deposits that were made but did
not clear the bank in time to appear on the statement: $300. Then subtract the
outstanding checks that were written but have not yet cleared through the bank:
$125. Your adjusted bank
balance is $5,905+300-125 = $5,080
The ending balance in the General Ledger for cash is $5,123. Until you saw the
bank
statement you were not aware of the $3 bank service charge or the returned (NSF)
check you deposited for $40. You need to subtract both of these items from the
general ledger.
$5,123-3-40 = $5,080.

497 Based on his scientific management theory, Frederick Taylor developed what pay
principle?
a) Hourly pay
b) Incentive pay
c) Profit sharing
d) Monthly salary with bonus
498 When using a flexible budget, a decrease in activity within the relevant range:
a) decreases variable cost per unit
b) decreases total costs
c) increases total fixed costs
d) increases variable cost per unit

499 Which of the following is true with regard to an exculpatory clause?

a) An exculpatory clause excuses one party from liability for his/her own tortious
conduct.
b) Where one party has a superior bargaining position that has enabled him/her to
impose an exculpatory clause upon the other, the courts are inclined to nullify the
provision.
c) An exculpatory clause may be unenforceable for unconscionability.
d) All of the above are true

500 If the spread between the spot and forward exchange rates of two currencies
equals the interest rate difference between the two countries, this phenomenon is
referred to as
a) purchasing-power equality
b) commodity arbitrage
c) currency hedging
d) interest-rate parity

501 As the size of the sample increases, what happens to the shape of the sampling
means?
a) Cannot be predicted in advance
b) Approaches a normal distribute
c) Positively skewed
d) Negatively skewed

502 An information system that enables all business departments in the same firm to
share relevant information and data is called
a) an enterprise resource planning (ERP) system
b) a material requirements planning (MRP) system
c) a decision support system (DSS)
d) a point-of-sale (POS) system

503 Green desires to form a new company to manufacture lawn mowers. Green is
concerned 
about having his personal assets exposed to liability for the new company's
contracts and torts. 
Furthermore, he wants to retain control over the company's operations and growth
for the next few years. He will need an infusion of equity capital to begin
operations. He hopes to take the company public in about five years if it is
 advantageous to do so at the time. Which of the following types of associations
would be best for Green's new company?
a) Corporation
b) General partnership
c) Limited partnership
d) Member-managed limited-liability company

504 A valid contract may be unenforceable for which reason(s)?

a) Failure to satisfy the Statute of Frauds.
b) Running of the Statute of Limitations
c) Both (A) and (B)
d) A valid contract is always enforceable.

505 Keith is working on a computerized search through one of his company's massive
data files. The purpose of the search is to try to detect patterns in product sales.
Keith is engaged in:
a) data forecasting
b) marketing decision support systems
c) data mining
d) sales forecasting.

506 A system whereby products are delivered to warehouses on a continual basis,

where they are sorted, repackaged and distributed to stores without sitting in
inventory is known as
a) postponement
b) cross-docking
c) continuous replenishment
d) direct-response delivery

507 In the statement of cash flows, the section for cash flows from operating activities
will include which of the following?
a) Dividends paid
b) Issuance of common stock
c) A decrease in accounts payable
d) Purchase of a building financed entirely by a mortgage

508 Which of the following consists of factors that influence consumer buying power
and marketing strategies?
a) competitive environment
b) cultural environment
c) economic environment
d) regulatory environment
509 Standard deviation measures which type of risk?
a) total
b) nondiversifiable
c) unsystematic
d) systematic
e) economic

510 Based on the central limit theorem, the size of the sampling error is
a) Directly related to the sample size, i.e., the larger the sample size the larger the
sampling error
b) Directly related to the population mean, i.e., the larger the mean, the larger the
sampling error
c) Inversely related to the sample size, i.e., the larger the sample size the
smaller the sampling error
d) Inversely related to the population standard deviation, i.e., the smaller the
standard deviation, the larger the sampling error

511 In monopolistic competition, there are:

a) Many firms selling identical products
b) Many firms selling similar, but not identical products
c) A few firms selling similar, but not identical products
d) A few firms selling unique products with no close substitutes

512 Kershaw Bookstore had 500 units on hand at January 1, costing $18 each.
Purchases and sales during the month of January were as follows:
Date Purchases Sales Jan 14 375 @ $28
Jan 17 250 @ $20
Jan 25 250 @ $22
Jan 29 250 @ $32
Kershaw does not maintain perpetual inventory records. According to a physical
count, 375 units were on hand at January 31.

The cost of the inventory at January 31, under the LIFO method is:
a) $1,000
b) $6,750
c) $7,750
d) $8,000

513 In a period of rising prices, which inventory valuation method would generally
yield both the lowest ending inventory value and the lowest net income figure?
a) First in, first out (FIFO)
b) Last in, first out (LIFO)
c) Weighted average
d) Standard cost
514 Which of the following statements about the tort of negligence is true?
a) It cannot be used as a basis for liability for defective products.
b) It is a strict liability tort with no defenses.
c) It requires proof of some intentional conduct.
d) It requires proof of breach of a statutory or common-law duty.

515 M-commerce:
a) Involves buying, selling, marketing and servicing of products, services and
information over variety of networks
b) Uses commercial processes like multimedia advertising, product information
and customer support on the Web
c) Involves Internet security and payment mechanisms that ensure completion of
delivery and payment processes
d) All of the choices are correct

516 A company issued a $600,000, 12 percent, 90-day note payable to acquire an

office building. What is
the maturity value of the note?
a) $72,000
b) $600,000
c) $618,000
d) $672,000

517 In an economy the unemployment rate is 10 percent and the inflation rate is 1
percent. An appropriate fiscal policy in this phase of the business cycle would be
to
a) increase government spending
b) increase income taxes
c) decrease transfer payments
d) decrease the money supply

518 Priceless Treasures is an antique jewelry retailer. Priceless Treasures' owner,

Sally Thornton, wishes to replace the printed catalog with an online catalog.

Ms. Thornton decides to conduct a market research project to explore how

Priceless Treasures' target customers would respond to the online catalog
approach.

From data collected by the retail jewelers' trade association, Ms. Thornton learns
that sales of antique jewelry are rising and that the most common purchasers are
older, upper-income couples. Though initially reluctant to purchase online, these
customers are beginning to overcome their concerns. From United States Census
Bureau data, she learns that this population segment is growing in number and
 will continue to do so throughout the next two decades. At this point what should
Ms. Thornton do?

a) Summarize the research findings and recommend implementing the online

catalog as the firm's market is clearly growing.
b) Collect primary data to determine whether these trends and preferences
are reflected in Priceless Treasures' customer base.
c) Collect primary data on competitors to determine whether the online market
for antique jewelry is saturated.
d) End the study and retain the current system as the major customer segment is
clearly skeptical of online retailers.

519 You want to have $1 million in your savings account when you retire. You plan
on investing a single lump sum today to fund this goal. You are planning on
investing in an account which will pay 7.5 percent annual interest. Which of the
following will reduce the amount that you must deposit today if you are to have
your desired $1 million on the day you retire?

I. Invest in a different account paying a higher rate of interest.

II. Invest in a different account paying a lower rate of interest.
III. Retire later.
IV. Retire sooner.

a) I only
b) II only
c) I and III only
d) I and IV only
e) II and III only
520 The most appropriate level of market coverage for shopping goods is
a) intensive distribution
b) selective distribution
c) uniform distribution
d) exclusive distribution

521 requires proof of breach of a statutory or common-law duty: the tort of

negligence

522 documents the sequence of processing steps that take place in an information
system: systems flowchart

523 The Organization of the Petroleum Exporting Countries (OPEC) reduces

production by 10 percent, and the growth rate of the world economy begins to
escalate. How will the simultaneous occurrence of these events affect the
equilibrium price and quantity in the world petroleum market?
 Price will increase, but quantity is indeterminate

524 what would most likely occur as a result of the United States government's
imposing tariffs on foreign steel imports?
Employment in the United States steel industry would increase

525 In an economy the unemployment rate is 10 percent and the inflation rate is 1
percent. An appropriate fiscal policy in this phase of the business cycle would be
to: increase government spending

526 what is an appropriate Federal Reserve action to stimulate the United States
economy? Reducing the reserve requirement

527 If the spread between the spot and forward exchange rates of two currencies
equals the interest rate difference between the two countries, this phenomenon is
referred to as: interest-rate parity

528 Based on his scientific management theory, Frederick Taylor developed what pay
principle? incentive pay

529 When a domestic firm permits a foreign company to manufacture and sell its
product in exchange for a fee or royalty, the process is termed: licensing

530 An information system that enables all business departments in the same firm to
share relevant information and data is called: an enterprise resource planning
(ERP) system

531 The central processing unit (CPU) in a personal computer contains the control
unit and arithmetic/logic unit: refers to the difference between a company's cash
inflows and outflows in a given period. In the strictest sense, net cash flow refers
to the change in a company's cash balance as detailed on its cash flow statement.

532 Net Cash Flow: A model that describes the relationship between risk and
expected return and that is used in the pricing of risky securities. The general idea
behind

533 CAPM is that investors need to be compensated in two ways: time value of
money and risk. CAPM (Capital Asset Pricing Model)

534 Income Statement: Required When combined they tell you all about the
company Each provide unique financial information and no one statement will
tell you everything about a company's finances

535 Balance Sheet: Statement of Change in Equity

536 Statement of Cash Flows
Required When combined they tell you all about the company Each provide
unique financial information and no one statement will tell you everything about
a company's finances

537 Balance Sheet: Assets= Liabilities + Equity

538 Revenue - Expenses

* Short run measurement for a fixed time period, all it tells you is whether or not
the company was profitable

539 Income Statement

Measures the change in owners' investment in the company from the beginning of
the accounting period to the end of the accounting period

540 Statement of Change in Equity

Describes an unincorporated business, the owners investment

541 Capital: Describes a corporation, or the owners investment

542 Equity: In the statement of cash flows, the section for cash flows from operating
activities will include which of the following?
(A) Dividends paid
(B) Issuance of common stock
(C) A decrease in accounts payable
(D) Purchase of a building financed entirely by a mortgage

543 All of the following are true regarding a seller's rights to reduce legal liability in
the sale of non-consumer goods EXCEPT:
(A) The seller can disclaim consequential damages if it is done clearly and
conspicuously.
(B) The seller can limit the remedy available to the buyer if he or she does so
clearly and fairly.
(C) The seller can place reasonable conditions on the warranty coverage and a
shorter time limit of warranty coverage.
(D) The seller can disclaim all implied warranties by simply stating that
there are no implied warranties.

544 Which of the following should be shown net of tax on a corporation's income
statement?
(A) Discontinued operations
(B) Operating income
 (C) Gross profit
(D) Gain on sale of delivery truck

545 Net income $100,000;Depreciation expense $10,000;Net increase in accounts:

receivable $5,000;Net increase in accounts: payable $3,000;On the basis of the
information provided in the table above for a corporation, the corporation's net
cash flow from operating activities for the current year is:
(A) $98,000
(B) $102,000
(C) $108,000
(D) $118,0008

546 Littleton, Inc., has fixed costs of $75,000 per month, variable costs of $5 per unit,
and a sales price per unit of $30. What is the break-even quantity per month?
(A) 2,143
(B) 2,500
(C) 3,000
(D) 15,000

547 Web 2.0 is best represented by which of the following phenomena?

(A) Social networking sites 
(B) Word processing
(C) Internet browsers
(D) Text messaging

548 Financial Statements: are the business documents that companies use to report
the results of activities to various external user groups.

549 Accounting: is an information system. It measures business activities, processes

date into reports (including financial statements) and communicates results to
decision makers. Accounting is the “language of business”

550 Financial Accounting Provides information for decision makers outside the
entity.
Investors
Creditors
Government agencies
And the public

551 Managerial Accounting: Provides information for internal users, management

552 proprietorship is a single owner.

553 Partnership: Two or more parties are co-owners and each owner is a partner.
554 Limited Liability Company (LLC): One in which the business (not the owner)
is liable for the company's debt.

555 Corporation: Is a business owner by stockholder or shareholders who own stock

(common or preferred) representing shares of ownership in that corporation.

556 GAAP: Generally Accepted Accounting Principles

557 FASB: Financial Accounting Standards Board

558 IASB: International accounting Standards Board

559 The Accounting Equation: Assets = Liabilities + Owners Equity

560 Assets: Economic resources that are expected to produce a benefit in the future

561 Current assets: expected to be converted to cash, sold or consumed during

the next 12 months or business operations cycle. Whichever is longer.

562 Liabilities: Outside claims. Debts payable to creditors

563 Insider claims: Owners' Equity or Shareholders Equity

564 Revenues minus expenses to equal Net Income.

565 The Income Statement or Statement of Operations

Shows What a company did with it's Net Income.
566 The Statement of Retained Earnings Retained Earnings is the portion of net
income that has been kept by the company

567 Assets,
Liabilities
And Stockholders Equity
Or the accounting equation
The Balance Sheet or Statement of Financial Position reporting

568 The Statement of Cash Flows: reports three types of activities: Operating,
investing, and financing.

569 Operating:Cash flows from selling goods and providing services to customers

570 Investing: Cash flows from the purchase and sale of long-term assets
571 Financing: Borrowing and repayment of borrowed funds
Equity transactions, such as issuing stock, paying dividends, and repurchase of
company stock

572 Current Liabilities are the company’s debts that are due within one year or the
company’s operating cycle, whichever is longer.

573 Ledger a group of accounts. All the accounts of a business grouped together form
a book called the
ledger (or general ledger).

574 The trial balance: is a listing, in general ledger order (assets, liabilities, then
stockholders' equity), of the debit or credit balance in each account.