Test Bank for Canadian Entrepreneurship and Small Business Management 11th Edition.

Test Bank for Canadian Entrepreneurship and Small Business Management 11th Edition By Wesley Balderson Beststudy284@gmail.com

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

1) The growth of small business in Canada has consistently 1) A) surpassed the growth of the Canadian economy as a whole.

B) fallen short of the growth of larger organizations in Canada.

C) been a matter of frustration for Canadian bankers.

D) been centred in the Maritime Provinces.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 01-01 Discuss the level of interest and activity in the small business sector.

Topic : 01-01 Nature and Development of entrepreneurship in Canada Source : Chapter 01 Test Bank > TB 01-01 The growth of small business in Canada has c...

2) The goal of social entrepreneurs is to 2) A) create a workplace environment that is friendly and caring.

B) create social change.

C) primarily earn a profit without hurting their customers' feelings.

D) have the freedom that comes by not being an employee.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 01-01 Discuss the level of interest and activity in the small business sector.

Topic : 01-01 Nature and Development of entrepreneurship in Canada Source : Chapter 01 Test Bank > TB 01-02 The goal of social entrepreneurs is to

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3) Self-employed people in Canada make up over

percent of the labour force.

3)

A) 10 B) 15 C) 20 D) 25 Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 01-01 Discuss the level of interest and activity in the small business sector.

Topic : 01-01 Nature and Development of entrepreneurship in Canada Source : Chapter 01 Test Bank > TB 01-03 Self-employed people in Canada make up over ...

4) Determining the number of new small businesses that are established each year 4) A) is a matter of reviewing new business listing in the Canada.411 website.

B) is not an interesting statistic.

C) has proved to be difficult, if not impossible.

D) is a straightforward process of examining new business registration records.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 01-01 Discuss the level of interest and activity in the small business sector.

Topic : 01-02 Increases in the Number of Business Establishments Source : Chapter 01 Test Bank > TB 01-04 Determining the number of new small business...

5) Today, small business owners are viewed 5) A) as people who are usually unemployable.

B) without much respect.

C) with suspicion.

D) very positively.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 01-01 Discuss the level of interest and activity in the small business sector.

Topic : 01-08 Improvement in the Image of Small Business Source : Chapter 01 Test Bank > TB 01-05 Today, small business owners are viewed

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6) The number of small business-related courses at Canadian colleges and universities has

in the past few years.

6) A) risen dramatically B) declined C) remained the same D) risen slightly Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 01-01 Discuss the level of interest and activity in the small business sector.

Topic : 01-05 Increases in the Number of Small Business-Related Courses at Colleges and Universities Source : Chapter 01 Test Bank > TB 01-06 The number of small business-related courses...

7) Recently, both the federal and provincial governments have been working to

small

businesses have to manage.

7) A) reduce the amount of red tape or bureaucracy B) reduce the number of employees C) increase the number of employees D) increase the taxes and reporting Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 01-01 Discuss the level of interest and activity in the small business sector.

Topic : 01-04 Increases in Government Interest and Programs Source : Chapter 01 Test Bank > TB 01-07 Recently, both the federal and provincial go...

8) The majority of small business owners are 8) A) employed elsewhere while running the small business.

B) single parents.

C) the managers of their business.

D) former executives in businesses in the same industry as their small business.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 01-02 Evaluate common methods of defining small business and explain why a defin Topic : 01-12 Lending Programs Source : Chapter 01 Test Bank > TB 01-08 The majority of small business owners are

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9) The BDC provides 9) A) funding for all small Canadian owned start-up businesses.

B) programs for small businesses that satisfy certain criteria.

C) management support for small businesses in the manufacturing industry.

D) access to customer credit reports for small businesses before they extend credit.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 01-02 Evaluate common methods of defining small business and explain why a defin Topic : 01-12 Lending Programs Source : Chapter 01 Test Bank > TB 01-09 The BDC provides

10) A net operating profit of $500,000 10) A) is a cut off point for the small business deduction.

B) is considered a goal for start-ups to achieve in their first 5 years of operations.

C) can rarely be sustained by small business in Canada.

D) usually ensures that a small business can obtain bank financing.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 01-02 Evaluate common methods of defining small business and explain why a defin Topic : 01-12 Lending Programs Source : Chapter 01 Test Bank > TB 01-10 A net operating profit of $500,000

11) Microbusinesses refer to 11) A) businesses that operate in the computer industry.

B) retail businesses with only one location.

C) totally paperless businesses.

D) businesses that employ fewer than five employees.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 01-02 Evaluate common methods of defining small business and explain why a defin Topic : 01-12 Lending Programs Source : Chapter 01 Test Bank > TB 01-11 Microbusinesses refer to

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12) Any business with less than

employees is considered a SME. 12)

A) 100 B) 250 C) 500 D) 1000 Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 01-02 Evaluate common methods of defining small business and explain why a defin Topic : 01-12 Lending Programs Source : Chapter 01 Test Bank > TB 01-12 Any business with less than employe...

13) Senior entrepreneurs 13) A) are a small and stable component of Canadian small businesses.

B) refer to senior citizens who own a business.

C) are rarely successful in their business venture.

D) refer to entrepreneurs who have owned their successful business for many years.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 01-03 Summarize the current extent of entrepreneurship and small business in Can Topic : 01-15 Senior Entrepreneurs Source : Chapter 01 Test Bank > TB 01-13 Senior entrepreneurs

14) Canadian small business activity is more dominant 14) A) in sectors that are not capital intensive.

B) in the same sectors as Canadian large businesses.

C) in areas where commercial rental rates are lower than the national average.

D) in locations populated primarily by senior citizens.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 01-03 Summarize the current extent of entrepreneurship and small business in Can Topic : 01-18 Entrepreneurial Activity by Industry Source : Chapter 01 Test Bank > TB 01-14 Canadian small business activity is more dom...

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15) The location of the most rapid growth in self-employment 15) A) is expected to decline rapidly in the next few years.

B) has been impossible to determine.

C) is of little interest to motivated new small business owners.

D) has been Ontario and Alberta during the past 10 years.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 01-03 Summarize the current extent of entrepreneurship and small business in Can Topic : 01-19 Entrepreneurial Activity by Region Source : Chapter 01 Test Bank > TB 01-15 The location of the most rapid growth in sel...

16) Men and women entrepreneurs tend to 16) A) have gender specific backgrounds.

B) start their businesses at roughly the same age.

C) have similar backgrounds.

D) work the same number of hours in their businesses.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 01-03 Summarize the current extent of entrepreneurship and small business in Can Topic : 01-16 Female Entrepreneurs Source : Chapter 01 Test Bank > TB 01-16 Men and women entrepreneurs tend to

17) Almost

percent of Canadian University students believe they will one day become

an entrepreneur.

17) A) 20 B) 30 C) 40 D) 50 Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 01-03 Summarize the current extent of entrepreneurship and small business in Can Topic : 01-14 Young Entrepreneurs Source : Chapter 01 Test Bank > TB 01-17 Almost percent of Canadian Universit...

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18) Statistics Canada has found that 99 percent of Canadian SMEs would be classified as 18) A) providing products to niche markets.

B) service or service related businesses.

C) providing health related services.

D) providing health related products.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 01-03 Summarize the current extent of entrepreneurship and small business in Can Topic : 01-18 Entrepreneurial Activity by Industry Source : Chapter 01 Test Bank > TB 01-18 Statistics Canada has found that 99 percent ...

19) The majority of innovations and inventions that society benefits from today 19) A) were the responsibility of individuals in small businesses.

B) were developed in University research labs.

C) have been imported from countries with strong research centres.

D) were developed in large businesses with significant research funding.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 01-04 Examine the various career and entrepreneurial opportunities retail offers Topic : 01-22 Innovations and Inventions Source : Chapter 01 Test Bank > TB 01-19 The majority of innovations and inventions t...

20) Traditional thinking has been that 20) A) the larger the organization, the more likely it is to dominate innovation in its industry.

B) the larger the organization, the greater its rate of growth.

C) the larger the organization, the less likely it is to succeed.

D) the larger the organization, the greater the opportunity to be more productive and

profitable.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 01-04 Examine the various career and entrepreneurial opportunities retail offers Topic : 01-23 Productivity and Profitability Source : Chapter 01 Test Bank > TB 01-20 Traditional thinking has been that

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21) Small businesses are generally able to respond 21) A) to changes in the economy less quickly than large businesses.

B) to changes in competition at the same speed as large businesses.

C) to changes in government policies more quickly than large businesses.

D) without any long term impact to large business innovation.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 01-04 Examine the various career and entrepreneurial opportunities retail offers Topic : 01-24 Flexibility Source : Chapter 01 Test Bank > TB 01-21 Small businesses are generally able to respo...

22) Small business owners contribute to the communities in which they operate in non-business

ways 22) A) if they are asked to do so.

B) to a greater extent than employees of a large corporation might do.

C) on a more limited basis than large corporations.

D) because owners of small businesses often are driven by a desire to be liked.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 01-04 Examine the various career and entrepreneurial opportunities retail offers Topic : 01-27 Social Contributions Source : Chapter 01 Test Bank > TB 01-22 Small business owners contribute to the comm...

23) Which of these is NOT one of the eight attributes of success listed by Peters and Waterman

in their study of successful corporations?

23) A) Unbiased Action B) Staying close to the customer C) Productivity through people D) Simple Form - Lean staff Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 01-04 Examine the various career and entrepreneurial opportunities retail offers Topic : 01-23 Productivity and Profitability Source : Chapter 01 Test Bank > TB 01-23 Which of these is NOT one of the eight attri...

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24) Of businesses operating in Canada with less than $2 million in sales, less than one percent

are 24) A) successful.

B) paying taxes.

C) viable long term.

D) foreign owned.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 01-04 Examine the various career and entrepreneurial opportunities retail offers Topic : 01-25 Canadian Ownership Source : Chapter 01 Test Bank > TB 01-24 Of businesses operating in Canada with less ...

25) The current period of rapid change 25) A) is generally believed to be almost finished.

B) is only imaginary and doesn't stand up to close scrutiny.

C) is not significant.

D) is expected to continue.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 01-05 Explain the probable future environment for entrepreneurship and the small Topic : 01-28 Small Business and the Future Source : Chapter 01 Test Bank > TB 01-25 The current period of rapid change

26) Computers allow the entrepreneur to 26) A) provide customers with more attractive receipts.

B) evade charging sales tax for their products.

C) manage large amounts of information as effectively as larger businesses.

D) process more transactions than larger businesses.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 01-05 Explain the probable future environment for entrepreneurship and the small Topic : 01-30 The Internet and Mobile Technology Source : Chapter 01 Test Bank > TB 01-26 Computers allow the entrepreneur to

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27) The small business competitive environment has been mostly affected by 27) A) the globalization of markets and big business's response to small business.

B) increasing fashion demands and the shrinkage of the middle class.

C) new product development and foreign currency rates of exchange.

D) better educated small business owners and free trade agreements.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 01-05 Explain the probable future environment for entrepreneurship and the small Topic : 01-32 Competitive Aspects of Markets Source : Chapter 01 Test Bank > TB 01-27 The small business competitive environment h...

28) The

are an attractive market for business owners and are the largest in Canada.

28)

A) Baby Boomers B) Generation X C) Generation Z D) Millennial generation Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 01-05 Explain the probable future environment for entrepreneurship and the small Topic : 01-31 Consumer Demographics Source : Chapter 01 Test Bank > TB 01-28 The are an attractive market for bu...

29) During downturns in the Canadian economy, small companies increase their focus on

to a greater degree than large businesses do.

29) A) profits B) innovation C) capital D) growth Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 01-05 Explain the probable future environment for entrepreneurship and the small Topic : 01-33 The Economy Source : Chapter 01 Test Bank > TB 01-29 During downturns in the Canadian economy, sm...

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30) It is generally felt that government regulation 30) A) protects society's interests.

B) puts small business at a competitive disadvantage to large business.

C) cannot be simplified.

D) is an equal burden to most business regardless of their size.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 01-05 Explain the probable future environment for entrepreneurship and the small Topic : 01-34 The Political Climate Source : Chapter 01 Test Bank > TB 01-30 It is generally felt that government regulat...

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Answer Key Test name: Chapter 01 Test Bank 1) A 2) B 3) B 4) C 5) D 6) A 7) A 8) C 9) B 10) A 11) D 12) C 13) B 14) A 15) D 16) C 17) D 18) B 19) A 20) D 21) C 22) B 23) A 24) D 25) D 26) C 27) A 28) D 29) B 30) B

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MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

1) Small businesses tend to be 1) A) labour intensive.

B) capital intensive.

C) balanced between labour and capital intensity.

D) successful.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 02-01 Summarize the advantages and disadvantages of business ownership as a star Topic : 02-03 Disadvantages of Small Business Ownership Source : Chapter 02 Test Bank > TB 02-01 Small businesses tend to be

2) Which is not an advantage of small business ownership?

2) A) Independence B) Challenge C) Skill development D) More free time Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 02-01 Summarize the advantages and disadvantages of business ownership as a star Topic : 02-02 Advantages of Small Business Ownership Source : Chapter 02 Test Bank > TB 02-02 Which is not an advantage of small business ...

3) The risks of self-employment include all of these EXCEPT 3) A) income uncertainty.

B) work more than 9-5 schedule.

C) the business takes over the life of the owner.

D) guaranteed income.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 02-01 Summarize the advantages and disadvantages of business ownership as a star Topic : 02-03 Disadvantages of Small Business Ownership Source : Chapter 02 Test Bank > TB 02-03 The risks of self-employment include all of ...

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4) The primary reason most people start their own business is to 4) A) build security for their family.

B) earn large sums of money.

C) use their skills/abilities.

D) gain independence.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 02-01 Summarize the advantages and disadvantages of business ownership as a star Topic : 02-02 Advantages of Small Business Ownership Source : Chapter 02 Test Bank > TB 02-04 The primary reason most people start their o...

5) SmartHalo's owners chose to skip traditional market research, and 5) A) bring their products directly to market using a crowd-funding site.

B) chose to look online to see if there were any similar products on the market.

C) hired a marketing firm to conduct their own marketing research.

D) manufactured thousands of the product hoping that they would sell.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 02-01 Summarize the advantages and disadvantages of business ownership as a star Topic : 02-01 The Small Business Decision: Personal Evaluation Source : Chapter 02 Test Bank > TB 02-05 SmartHalo's owners chose

6) In a recent RBC poll on Canadian Entrepreneurship, of the roughly 54 percent of Canadians

with entrepreneurial intentions, what percent had already been earning money entrepreneurially?

6) A) 25 B) 37 C) 56 D) 72 Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 02-01 Summarize the advantages and disadvantages of business ownership as a star Topic : 02-01 The Small Business Decision: Personal Evaluation Source : Chapter 02 Test Bank > TB 02-06 In a recent RBC poll on Canadian Entrepreneu...

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7) The ability to see, conceive, and create new and unique products/services is 7) A) innovativeness.

B) risk-taking.

C) product development.

D) locus of control.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 02-02 List the personal and organizational attributes of a successful small busi Topic : 02-05 Personality Characteristics Required By Successful Entrepreneurs Source : Chapter 02 Test Bank > TB 02-07 The ability to see, conceive, and create new...

8) Personal characteristics of successful entrepreneurs include 8) A) having a business degree.

B) risk taking and access to financial resources.

C) stubbornness.

D) risk taking and perseverance.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 02-02 List the personal and organizational attributes of a successful small busi Topic : 02-05 Personality Characteristics Required By Successful Entrepreneurs Source : Chapter 02 Test Bank > TB 02-08 Personal characteristics of successful entre...

9) Entrepreneurial traits include 9) A) risk adverse.

B) being a team player.

C) self-confidence.

D) works through others.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 02-02 List the personal and organizational attributes of a successful small busi Topic : 02-05 Personality Characteristics Required By Successful Entrepreneurs Source : Chapter 02 Test Bank > TB 02-09 Entrepreneurial traits include

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10) A recent significant trend is that the greatest growth of small business start-ups come from

those who have 10) A) family money.

B) post-secondary education.

C) internet programming skills.

D) interesting names.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 02-02 List the personal and organizational attributes of a successful small busi Topic : 02-04 Demographic Characteristics of Entrepreneurs Source : Chapter 02 Test Bank > TB 02-10 A recent significant trend is that the great...

11) Quite often, entrepreneurs tend to be 11) A) lawyers of family owned businesses.

B) children of parents that owned their own businesses.

C) not well educated.

D) limited to people between 30 and 50 years of age.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 02-02 List the personal and organizational attributes of a successful small busi Topic : 02-04 Demographic Characteristics of Entrepreneurs Source : Chapter 02 Test Bank > TB 02-11 Quite often, entrepreneurs tend to be

12) Profit Magazine found that owners of small- and medium-sized businesses on average

worked 12) A) 65 hours per week.

B) 54 hours per week.

C) 46 hours per week.

D) 40 hours per week.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 02-01 Summarize the advantages and disadvantages of business ownership as a star Topic : 02-03 Disadvantages of Small Business Ownership Source : Chapter 02 Test Bank > TB 02-12 Profit Magazine found that owners of small- ...

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13) Even though they own their own businesses, entrepreneurs must still answer to 13) A) their boss.

B) neighbours.

C) customers and suppliers.

D) no one.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 02-03 Explain the reasons some businesses succeed and others fail.

Topic : 02-07 Small Business Successes Source : Chapter 02 Test Bank > TB 02-13 Even though they own their own businesses, e...

14) Which of these is NOT a primary cause of small business failure?

14) A) Incompetence and inexperience B) Lack of financial capacity C) Management shows weakness by asking for help D) Lack of understanding financial information Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 02-03 Explain the reasons some businesses succeed and others fail.

Topic : 02-08 Small Business Failures Source : Chapter 02 Test Bank > TB 02-14 Which of these is NOT a primary cause of sma...

15) The major causes of business failure include 15) A) a manager not holding a business degree.

B) growing too quickly.

C) the type of small business.

D) the number of competitors.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 02-03 Explain the reasons some businesses succeed and others fail.

Topic : 02-08 Small Business Failures Source : Chapter 02 Test Bank > TB 02-15 The major causes of business failure include

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16) Which is NOT a characteristic of a successful small business?

16) A) High operating expenses B) Alertness to change C) Ability to attract and hold competent employees D) Thoroughness with operating details Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 02-03 Explain the reasons some businesses succeed and others fail.

Topic : 02-07 Small Business Successes Source : Chapter 02 Test Bank > TB 02-16 Which is NOT a characteristic of a successfu...

17) Which is not an external shock that can negatively affect small business success?

17) A) Downturn in the economy B) Loss of suppliers C) Poorly planned expansion D) Changes in interest or currency rates Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 02-03 Explain the reasons some businesses succeed and others fail.

Topic : 02-08 Small Business Failures Source : Chapter 02 Test Bank > TB 02-17 Which is not an external shock that can nega...

18) Which of these is NOT a specific area of managerial incompetence that contributes to small

business failure?

18) A) Lack of financial skill B) Poor or non-existent management information systems C) Company management does not ask for help D) Excessive controls on management expenses Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 02-03 Explain the reasons some businesses succeed and others fail.

Topic : 02-08 Small Business Failures Source : Chapter 02 Test Bank > TB 02-18 Which of these is NOT a specific area of man...

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19) Entrepreneurial skills are required to 19) A) maintain a business.

B) start a business.

C) solidify existing operations.

D) sell the business.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 02-04 Identify the differences between an entrepreneur and a manager.

Topic : 02-10 Entrepreneurial Skills Source : Chapter 02 Test Bank > TB 02-19 Entrepreneurial skills are required to

20) Managerial small business skills traits include 20) A) creativity.

B) skills in several functional areas.

C) innovativeness.

D) risk-taking.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 02-04 Identify the differences between an entrepreneur and a manager.

Topic : 02-11 Managerial Skills Source : Chapter 02 Test Bank > TB 02-20 Managerial small business skills traits incl...

21) In which situation would it be the most appropriate to utilize managerial skills?

21) A) Generating ideas B) Maintaining control of operations C) Generating solutions to problems D) Adding new products to the line Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 02-04 Identify the differences between an entrepreneur and a manager.

Topic : 02-11 Managerial Skills Source : Chapter 02 Test Bank > TB 02-21 In which situation would it be the most appr...

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22) Managerial skills are required to 22) A) expand product lines.

B) start a business.

C) develop new ideas.

D) maintain a business.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 02-04 Identify the differences between an entrepreneur and a manager.

Topic : 02-11 Managerial Skills Source : Chapter 02 Test Bank > TB 02-22 Managerial skills are required to

23) Which of these is NOT an entrepreneurial trait?

23) A) Flexibility B) Innovativeness C) Team player D) Independence Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 02-04 Identify the differences between an entrepreneur and a manager.

Topic : 02-10 Entrepreneurial Skills Source : Chapter 02 Test Bank > TB 02-23 Which of these is NOT an entrepreneurial tra...

24) Which is not one of the Ten Commandments for intrapreneur success?

24) A) Share credit wisely B) Come to work each day willing to be fired C) Ask for resources before asking for advice D) Honour your sponsor Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 02-05 Describe entrepreneurial development in large businesses.

Topic : 02-12 Entrepreneurial Success in Large Businesses Source : Chapter 02 Test Bank > TB 02-24 Which is not one of the Ten Commandments for...

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25) The primary motives of an intrapreneur are 25) A) independence, ability to advance, and gain corporate rewards.

B) promotion and other traditional corporate rewards such as office, staff, and power.

C) independence, opportunity to create, and money.

D) recognition, staff, and promotion.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 02-05 Describe entrepreneurial development in large businesses.

Topic : 02-12 Entrepreneurial Success in Large Businesses Source : Chapter 02 Test Bank > TB 02-25 The primary motives of an intrapreneur are

26) Many large organizations realize that to remain competitive, they need to encourage 26) A) entrepreneurial activity.

B) intrapreneurial activity.

C) risk-taking activity.

D) confidence-building activity.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 02-05 Describe entrepreneurial development in large businesses.

Topic : 02-12 Entrepreneurial Success in Large Businesses Source : Chapter 02 Test Bank > TB 02-26 Many large organizations realize that to rem...

27) The decision-making style of an intrapreneur is 27) A) usually agree with those in upper management positions.

B) disagree with upper management decisions.

C) able to get others to agree to help achieve a dream.

D) follow dream with decisions.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 02-05 Describe entrepreneurial development in large businesses.

Topic : 02-12 Entrepreneurial Success in Large Businesses Source : Chapter 02 Test Bank > TB 02-27 The decision-making style of an intrapreneur...

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28) The time orientation of an entrepreneur is 28) A) short term-meeting quotas and budgets, weekly, monthly, quarterly, and the annual

planning horizon.

B) medium term (two to four years)-depending on the urgency to meet self-imposed and corporate timetable.

C) long term (15-20 year plan)-to ensure continued growth of business.

D) survival and achieving a 5-10 year growth of the business.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 02-05 Describe entrepreneurial development in large businesses.

Topic : 02-12 Entrepreneurial Success in Large Businesses Source : Chapter 02 Test Bank > TB 02-28 The time orientation of an entrepreneur is

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Answer Key Test name: Chapter 02 Test Bank 1) A 2) D 3) D 4) D 5) A 6) C 7) A 8) D 9) C 10) B 11) B 12) B 13) C 14) C 15) B 16) A 17) C 18) D 19) B 20) B 21) B 22) D 23) C 24) C 25) A 26) B 27) C 28) D

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MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

1) The entrepreneurial process outlined in the text includes 1) A) management of the business.

B) finding partners.

C) developing a relationship with major competitors.

D) developing quality of life goals.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 03-01 List the four stages of the entrepreneurial process.

Topic : 03-01 Entrepreneurial Process Source : Chapter 03 Test Bank > TB 03-01 The entrepreneurial process outlined in the ...

2) All businesses start with 2) A) a large sum of funds.

B) an idea.

C) strong relationships.

D) a mature marketplace.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 03-01 List the four stages of the entrepreneurial process.

Topic : 03-02 Ideas Source : Chapter 03 Test Bank > TB 03-02 All businesses start with

3) The stages in the entrepreneurial process proceed 3) A) simultaneously.

B) in whatever order makes the most sense in the circumstances.

C) sequentially.

D) based on the entrepreneur's strengths.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 03-01 List the four stages of the entrepreneurial process.

Topic : 03-01 Entrepreneurial Process Source : Chapter 03 Test Bank > TB 03-03 The stages in the entrepreneurial process pr...

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4) Which is not one of the four stages of the entrepreneurial process?

4) A) Development of a business plan B) Determination of the resources required C) Management of the business D) Idea generation Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 03-01 List the four stages of the entrepreneurial process.

Topic : 03-01 Entrepreneurial Process Source : Chapter 03 Test Bank > TB 03-04 Which is not one of the four stages of the e...

5) When thinking about possible business opportunities, you should not worry if 5) A) they appear to be impossible to create, sound silly or insignificant.

B) they are illegal.

C) they contravene government regulations.

D) they would take more start-up funding than is feasible.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 03-01 List the four stages of the entrepreneurial process.

Topic : 03-02 Ideas Source : Chapter 03 Test Bank > TB 03-05 When thinking about possible business opport...

6) A focus group involves 6) A) asking questions to solicit participant responses.

B) focusing a group of interested consumers on a new product.

C) a discussion among lenders and customers focused on pricing and payment terms.

D) a moderator leading a group of people through an open, in-depth discussion.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 03-02 Identify the sources of ideas for new ventures.

Topic : 03-03 Sources of New Ideas Source : Chapter 03 Test Bank > TB 03-06 A focus group involves

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7) Normally, before writing a full business plan, entrepreneurs will 7) A) ensure that they have enough funding to be successful.

B) engage in an opportunity assessment process.

C) hire key position employees.

D) visit a banker.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 03-02 Identify the sources of ideas for new ventures.

Topic : 03-04 Assessment of Business Opportunities Source : Chapter 03 Test Bank > TB 03-07 Normally, before writing a full business pla...

8) One of the best ways to develop a new idea is to 8) A) withdraw from your daily work and relax.

B) discuss with family and friends what they think you should do for a business.

C) explore your own dislikes and look for some business idea that would have you do

that work.

D) think about consumer habits and demands.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 03-02 Identify the sources of ideas for new ventures.

Topic : 03-03 Sources of New Ideas Source : Chapter 03 Test Bank > TB 03-08 One of the best ways to develop a new idea i...

9) Which is not a source of new ideas indicated in the textbook?

9) A) Lifestyles B) Occupations C) Hobbies D) Observations Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 03-02 Identify the sources of ideas for new ventures.

Topic : 03-03 Sources of New Ideas Source : Chapter 03 Test Bank > TB 03-09 Which is not a source of new ideas indicated...

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10) Fans who think they can do a better job selecting plays and managing their team than paid

professionals like coaches are called 10) A) coaching experts.

B) couch coaches.

C) armchair quarterbacks.

D) fantasy coaches.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 03-02 Identify the sources of ideas for new ventures.

Topic : 03-04 Assessment of Business Opportunities Source : Chapter 03 Test Bank > TB 03-10 Fans who think they can do a better job sele...

11) Qualitative assessments look at 11) A) non-quantitative factors.

B) how well sales are doing for a particular product.

C) market dominance metrics.

D) cash flow numbers.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 03-03 Summarize the qualitative aspects of evaluating business opportunities.

Topic : 03-05 Qualitative Assessment Source : Chapter 03 Test Bank > TB 03-11 Qualitative assessments look at

12) Two important capabilities that an owner manager ought to have are 12) A) pleasant personality and talent.

B) industry connections and knowledge.

C) good health and expertise in the fundamentals of management.

D) public image and banking contacts.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 03-03 Summarize the qualitative aspects of evaluating business opportunities.

Topic : 03-09 Capabilities Source : Chapter 03 Test Bank > TB 03-12 Two important capabilities that an owner man...

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13) A business opportunity assessment includes consideration of 13) A) impact on the entrepreneur's home life.

B) competitive advantage.

C) the entrepreneur's ability to manage people.

D) the possibilities for family succession.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 03-03 Summarize the qualitative aspects of evaluating business opportunities.

Topic : 03-11 Opportunity Assessment Source : Chapter 03 Test Bank > TB 03-13 A business opportunity assessment includes c...

14) One of the major causes of business failure is 14) A) unbalanced experience.

B) lack of family support.

C) wide ranging interests.

D) strong imagination.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 03-03 Summarize the qualitative aspects of evaluating business opportunities.

Topic : 03-10 Experience Source : Chapter 03 Test Bank > TB 03-14 One of the major causes of business failure ...

15) The major consideration when assessing your personal goals for the business is 15) A) happiness.

B) failure.

C) excitement.

D) income.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 03-03 Summarize the qualitative aspects of evaluating business opportunities.

Topic : 03-06 Goals Source : Chapter 03 Test Bank > TB 03-15 The major consideration when assessing your ...

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16) Offering a totally new product is 16) A) a sure way to succeed.

B) generally, a low-risk gamble.

C) one way to enter a market.

D) the best way to dominate a market in the long term.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 03-04 Describe the methods by which an entrepreneur can enter a market with a pr Topic : 03-12 Evaluating How to Break into the Market Source : Chapter 03 Test Bank > TB 03-16 Offering a totally new product is

17) If a business wishes to offer a product or service similar to one that is already in the market,

they should 17) A) try to make their product of service look the same as the existing product or service.

B) forget about this idea because it rarely works out well.

C) try to compete on the basis of price.

D) try to create a competitive advantage over the existing product or service.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 03-04 Describe the methods by which an entrepreneur can enter a market with a pr Topic : 03-12 Evaluating How to Break into the Market Source : Chapter 03 Test Bank > TB 03-17 If a business wishes to offer a product or s...

18) Businesses selling fad or novelty type products can succeed because these types of products 18) A) are usually inexpensive.

B) satisfy emotional needs.

C) have interesting operating characteristics.

D) are usually packaged in an appealing way.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 03-04 Describe the methods by which an entrepreneur can enter a market with a pr Topic : 03-12 Evaluating How to Break into the Market Source : Chapter 03 Test Bank > TB 03-18 Businesses selling fad or novelty type produ...

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19) Which is not one of the three major ways of entering a market?

19) A) Offer a totally new product to the market B) Offer an existing product to a different market or industry C) Offer a product or service similar to those already existing in the same market D) Offer a mediocre product to an existing market Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 03-04 Describe the methods by which an entrepreneur can enter a market with a pr Topic : 03-12 Evaluating How to Break into the Market Source : Chapter 03 Test Bank > TB 03-19 Which is not one of the three major ways of ...

20) When would you not offer a product or service similar to those already existing in the same

market?

20) A) If you can obtain some competitive advantage over the existing products or

businesses in the industry B) If the market is well served by the existing businesses in the industry C) If the market is large or growing enough to support an additional business D) If the level of satisfaction with existing businesses in the market is low Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 03-04 Describe the methods by which an entrepreneur can enter a market with a pr Topic : 03-12 Evaluating How to Break into the Market Source : Chapter 03 Test Bank > TB 03-20 When would you not offer a product or servic...

21) In order to be successful, a business should ensure that it has 21) A) a monopoly position.

B) ergonomic product design.

C) environmentally friendly aspects.

D) a competitive advantage.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 03-05 Recognize the ways that an entrepreneur can develop a strategic competitiv Topic : 03-13 Developing a Strategic Competitive Advantage Source : Chapter 03 Test Bank > TB 03-21 In order to be successful, a business should...

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22) Typically, in a service business, a major factor in generating revenue is 22) A) equipment in good working condition.

B) a suitable accounting system.

C) the expertise of the owner-manager.

D) office layout.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 03-05 Recognize the ways that an entrepreneur can develop a strategic competitiv Topic : 03-14 The Right Industry Source : Chapter 03 Test Bank > TB 03-22 Typically, in a service business, a major fa...

23) A recent report by Canadian Business suggested that future growth in the following areas

would provide a good chance for success in the future 23) A) services for small businesses.

B) recreational campground development.

C) bookstores.

D) supermarkets.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 03-05 Recognize the ways that an entrepreneur can develop a strategic competitiv Topic : 03-15 The Right Business Source : Chapter 03 Test Bank > TB 03-23 A recent report by Canadian Business suggest...

24) Some aspects of business that are more difficult for small businesses are 24) A) flexibility and innovation.

B) customer service and product quality.

C) price and location.

D) innovation and location.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 03-05 Recognize the ways that an entrepreneur can develop a strategic competitiv Topic : 03-16 The Right Aspect of the Business Source : Chapter 03 Test Bank > TB 03-24 Some aspects of business that are more diffi...

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25) Which is not a natural advantage for a small business?

25) A) Innovation B) Supplier volume C) Customer service D) Product quality Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 03-05 Recognize the ways that an entrepreneur can develop a strategic competitiv Topic : 03-16 The Right Aspect of the Business Source : Chapter 03 Test Bank > TB 03-25 Which is not a natural advantage for a small...

26) Two general types of information available to prospective small business owners are 26) A) paid data and free data.

B) primary data and secondary data.

C) high-quality data and empirical data.

D) micro data and macro data.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 03-06 Examine the types of information available to assist in the quantitative a Topic : 03-18 Sources of Information Source : Chapter 03 Test Bank > TB 03-26 Two general types of information available t...

27) Most provincial and territorial governments use

to assist small businesses.

27)

A) small business consultants B) online chat facilities C) case studies D) Skype Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 03-06 Examine the types of information available to assist in the quantitative a Topic : 03-18 Sources of Information Source : Chapter 03 Test Bank > TB 03-27 Most provincial and territorial governments ...

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28) Test marketing involves 28) A) asking potential customers how much they would pay for the product.

B) putting product into an existing outlet.

C) sending surveys to a significant number of customers in the industry.

D) simulating an actual market situation.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 03-06 Examine the types of information available to assist in the quantitative a Topic : 03-18 Sources of Information Source : Chapter 03 Test Bank > TB 03-28 Test marketing involves

29) Which is not a method of collecting primary data?

29) A) Observation B) Internet surveys C) Personal interviews D) Statistics Canada labour market surveys Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 03-06 Examine the types of information available to assist in the quantitative a Topic : 03-18 Sources of Information Source : Chapter 03 Test Bank > TB 03-29 Which is not a method of collecting primary ...

30) What method of collecting primary data has become the most popular survey method in

recent years, most likely because of its low cost and quick response time?

30) A) Observation B) Telephone surveying C) Personal interviews D) Test marketing Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 03-06 Examine the types of information available to assist in the quantitative a Topic : 03-18 Sources of Information Source : Chapter 03 Test Bank > TB 03-30 What method of collecting primary data has b...

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31) The breakdown method refers to 31) A) testing a product for incidence of breakdowns.

B) eliminating a demographic.

C) quality control.

D) impact of a product on customer relationships.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 03-07 Identify a systematic way to quantitatively assess an industry and evaluat Topic : 03-20 Preparing the Feasibility Analysis Source : Chapter 03 Test Bank > TB 03-31 The breakdown method refers to

32) What is a method of forecasting sales where the entrepreneur identifies each target market

and estimates potential daily sales to each?

32) A) Breakdown method B) Balance method C) Build-up method D) Sales margin method Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 03-07 Identify a systematic way to quantitatively assess an industry and evaluat Topic : 03-20 Preparing the Feasibility Analysis Source : Chapter 03 Test Bank > TB 03-32 What is a method of forecasting sales where ...

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33) The purpose of calculating market potential is 33) A) to arrive at a dollar or unit sales estimate for the total market.

B) to estimate the percentage of the total market potential the proposed business will

obtain.

C) to estimate the total amount of selling space in the market devoted to the merchandise the new business will sell.

D) to calculate the market share based on selling space.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 03-07 Identify a systematic way to quantitatively assess an industry and evaluat Topic : 03-21 Step 1: Calculate Market Potential Source : Chapter 03 Test Bank > TB 03-33 The purpose of calculating market potential ...

34) Market share means 34) A) the dollar volume of sales by the major business in a market.

B) the social responsibility of an industry with the communities in which it operates.

C) ease of entry into a market by a new business.

D) percentage of total market which a business controls.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 03-07 Identify a systematic way to quantitatively assess an industry and evaluat Topic : 03-22 Step 2: Calculate Market Share Source : Chapter 03 Test Bank > TB 03-34 Market share means

35) An important part of a feasibility analysis for a manufacturing business is 35) A) the ease of the manufacturing process.

B) the total dollars invested by owners.

C) the financial break-even point.

D) the relative newness of the product.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 03-07 Identify a systematic way to quantitatively assess an industry and evaluat Topic : 03-23 Step 3: Calculate Net Income and Cash Flow Source : Chapter 03 Test Bank > TB 03-35 An important part of a feasibility analysis ...

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Answer Key Test name: Chapter 03 Test Bank 1) A 2) B 3) C 4) D 5) A 6) D 7) B 8) D 9) A 10) C 11) A 12) C 13) B 14) A 15) D 16) C 17) D 18) B 19) D 20) B 21) D 22) C 23) A 24) C 25) B 26) B 27) A 28) D 29) D 30) B 31) B 32) C 33) A 34) D 35) C

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MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

1) Starting a business from scratch may be chosen by an entrepreneur because 1) A) it provides a sense of satisfaction.

B) it is the most likely strategy to lead to success.

C) customers are often sympathetic to such start-ups.

D) there is lots of government funding for this strategy.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 04-01 Describe the advantages and disadvantages of organizing a business from sc Topic : 04-01 Getting Started: Establishing the Business Source : Chapter 04 Test Bank > TB 04-01 Starting a business from scratch may be chos...

2) Starting a business from scratch can 2) A) reduce the usual risks inherent in a new business.

B) is a proven model for surviving the first few years of operation.

C) result in the least amount of start-up costs.

D) requires a significant personal investment of money from the entrepreneur.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 04-01 Describe the advantages and disadvantages of organizing a business from sc Topic : 04-01 Getting Started: Establishing the Business Source : Chapter 04 Test Bank > TB 04-02 Starting a business from scratch can

3) Which is not an advantage of organizing a small business from scratch?

3) A) The owner can personally select and train employees for the business B) The owner can develop his or her own information systems C) The owner can obtain the exact type of physical facilities they prefer D) The owner can resell existing inventory to the market Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 04-01 Describe the advantages and disadvantages of organizing a business from sc Topic : 04-02 Advantages of Organizing a Small Business from Scratch Source : Chapter 04 Test Bank > TB 04-03 Which is not an advantage of organizing a sm...

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4) Organizing a new business from scratch 4) A) eliminates the need to do significant market research.

B) often fails because of the lack of historical information.

C) is a good strategy for eliminating risk.

D) often overcomes the new owner's uncertainties.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 04-01 Describe the advantages and disadvantages of organizing a business from sc Topic : 04-03 Disadvantages of Organizing a Small business from Scratch Source : Chapter 04 Test Bank > TB 04-04 Organizing a new business from scratch

5) When a competent feasibility study has been done by a new business owner 5) A) it is possible to eliminate uncertainties.

B) starting a business from scratch is the most appropriate strategy.

C) demand after start-up is likely to be sufficient.

D) some uncertainties will always remain.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 04-01 Describe the advantages and disadvantages of organizing a business from sc Topic : 04-03 Disadvantages of Organizing a Small business from Scratch Source : Chapter 04 Test Bank > TB 04-05 When a competent feasibility study has been ...

6) A new business

has start-up problems.

6)

A) rarely B) only sometimes C) always D) never Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 04-01 Describe the advantages and disadvantages of organizing a business from sc Topic : 04-03 Disadvantages of Organizing a Small business from Scratch Source : Chapter 04 Test Bank > TB 04-06 A new business has start-up problems.

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7) Writing a business plan is essential for 7) A) both raising money and helping them understand the business.

B) raising money.

C) managing the new business.

D) attracting reliable suppliers.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 04-02 Discuss the importance of formulating and following a business organizatio Topic : 04-04 The Small Business Plan Source : Chapter 04 Test Bank > TB 04-07 Writing a business plan is essential for

8) A business plan helps to 8) A) attract customers.

B) generate growth.

C) direct retail store layout.

D) keep business growth on course.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 04-02 Discuss the importance of formulating and following a business organizatio Topic : 04-04 The Small Business Plan Source : Chapter 04 Test Bank > TB 04-08 A business plan helps to

9) Business plan formats and emphasis 9) A) are standard.

B) have headings but vary depending on the use.

C) reflect the adequacy of funding.

D) define success.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 04-02 Discuss the importance of formulating and following a business organizatio Topic : 04-05 Writing the Plan Source : Chapter 04 Test Bank > TB 04-09 Business plan formats and emphasis

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10) It is recommended that business plans 10) A) should be written by an outside consultant.

B) should be adapted from existing successful business plans.

C) should only be used when required by lenders.

D) should be written by the entrepreneur.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 04-02 Discuss the importance of formulating and following a business organizatio Topic : 04-05 Writing the Plan Source : Chapter 04 Test Bank > TB 04-10 It is recommended that business plans

11) It is advisable to 11) A) work on a business plan based on intuition.

B) draft sections of a business plan as information becomes available.

C) plan the preparation of your business plan.

D) work on a business plan in its entirety at once.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 04-02 Discuss the importance of formulating and following a business organizatio Topic : 04-05 Writing the Plan Source : Chapter 04 Test Bank > TB 04-11 It is advisable to

12) The executive summary 12) A) is primarily for investors.

B) is primarily for management.

C) is primarily for lenders.

D) is primarily for employees.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 04-02 Discuss the importance of formulating and following a business organizatio Topic : 04-05 Writing the Plan Source : Chapter 04 Test Bank > TB 04-12 The executive summary

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13) A business plan is of value to 13) A) start-ups.

B) both start-ups and established businesses.

C) established businesses.

D) new business owners.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 04-02 Discuss the importance of formulating and following a business organizatio Topic : 04-04 The Small Business Plan Source : Chapter 04 Test Bank > TB 04-13 A business plan is of value to

14) An analysis of competitors in a marketing plan would 14) A) consider suppliers' needs.

B) be written for investors.

C) assess legal restrictions.

D) determine who the competitors are.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 04-02 Discuss the importance of formulating and following a business organizatio Topic : 04-05 Writing the Plan Source : Chapter 04 Test Bank > TB 04-14 An analysis of competitors in a marketing pl...

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15) Which is not one of the three basic principles of the lean start-up process?

15) A) The summary is brought to consumers in a process referred to as customer

development, gaining feedback on the marketing mix, including customer acquisition.

B) The lean start-up process does not require a business plan as these types of businesses do not need external funding.

C) Rather than create an elaborate business plan, entrepreneurs draft a short summary about how their product or service can create value.

D) The entrepreneur engages in agile development, that is, building the product concurrently to obtaining customer feedback.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 04-02 Discuss the importance of formulating and following a business organizatio Topic : 04-04 The Small Business Plan Source : Chapter 04 Test Bank > TB 04-15 Which is not one of the three basic principl...

16) Which is not identified by critics as one of the disadvantages of using the lean start-up

process?

16) A) The potential business may struggle to get accurate feedback on unfinished products

or ideas.

B) Many business analysts confirm the concept is not always appropriate for traditional small businesses.

C) The method could eliminate good ideas as there is no clear method of deciding when an idea should be removed or eliminated.

D) Research has indicated that speed to market is more important than the selection of an appropriate business strategy.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 04-02 Discuss the importance of formulating and following a business organizatio Topic : 04-04 The Small Business Plan Source : Chapter 04 Test Bank > TB 04-16 Which is not identified by critics as one of...

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17) Some well-known investors insist on business owners 17) A) with relevant industry experience.

B) with engaging personalities.

C) who are well funded.

D) who are younger than 55.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 04-03 List the essential components of a small business plan.

Topic : 04-09 Describe the Management Team Source : Chapter 04 Test Bank > TB 04-17 Some well-known investors insist on business...

18) A business plan should include 18) A) location impact on industry history.

B) product failure statistics.

C) social media contact information for management.

D) industry and market forecasts.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 04-03 List the essential components of a small business plan.

Topic : 04-06 Components of the Plan Source : Chapter 04 Test Bank > TB 04-18 A business plan should include

19) What is the last component in a condensed business plan?

19) A) Describe the management team.

B) Plan the financing.

C) Plan the marketing approach.

D) Assess the risk.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 04-03 List the essential components of a small business plan.

Topic : 04-06 Components of the Plan Source : Chapter 04 Test Bank > TB 04-19 What is the last component in a condensed bu...

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20) What is the first component in a condensed business plan?

20) A) Describe the management team.

B) Prepare a table of contents.

C) Establish business objectives.

D) Assess the risk.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 04-03 List the essential components of a small business plan.

Topic : 04-06 Components of the Plan Source : Chapter 04 Test Bank > TB 04-20 What is the first component in a condensed b...

21) Which is not a question typically addressed in the Executive Summary?

21) A) How will it make money?

B) What are your short-term exit strategies?

C) What advantages does the business have?

D) Why will you be successful?

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 04-03 List the essential components of a small business plan.

Topic : 04-08 Prepare a Synopsis of the Plan in an Executive Summary and Background Statement Source : Chapter 04 Test Bank > TB 04-21 Which is not a question typically addressed ...

22) What is not typically included when describing the owner-manager in a business plan?

22) A) Qualifications B) Experience C) Education D) Family status Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 04-03 List the essential components of a small business plan.

Topic : 04-09 Describe the Management Team Source : Chapter 04 Test Bank > TB 04-22 What is not typically included when describi...

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23) Which of these is not typically described in the Business Objectives section of a business

plan?

23) A) Business size B) Production levels C) Profit margins D) Performance levels Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 04-03 List the essential components of a small business plan.

Topic : 04-10 Establish Business Objectives Source : Chapter 04 Test Bank > TB 04-23 Which of these is not typically described in...

24) New laws can mostly negatively 24) A) impact management passion.

B) influence customer attraction.

C) affect proposed marketing practices.

D) change product usefulness.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 04-03 List the essential components of a small business plan.

Topic : 04-11 Plan the Marketing Approach Source : Chapter 04 Test Bank > TB 04-24 New laws can mostly negatively

25) A saturation index refers to 25) A) the number of units of products owned by customers in the trading area.

B) the ratio of competing retail sales to competing retail space.

C) the frequency with which customers encounter products in retail outlets.

D) the age and history of a product.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 04-03 List the essential components of a small business plan.

Topic : 04-12 Describe the Selection of the Location Source : Chapter 04 Test Bank > TB 04-25 A saturation index refers to

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26) Which of these is not one of the four major financial aspects that should be planned in

advance of opening a business?

26) A) Establish capital requirements and make feasibility projections B) Determine sources of funding C) Plan the accounting and bookkeeping systems D) Determine financial personnel evaluation measures Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 04-03 List the essential components of a small business plan.

Topic : 04-14 Plan the Financing Source : Chapter 04 Test Bank > TB 04-26 Which of these is not one of the four major ...

27) The personnel plan would include the 27) A) plan for hiring, training, and managing those who will work in the business.

B) computer systems that would contain job descriptions.

C) accounting system that contains payroll information.

D) renovation required for physical facilities.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 04-03 List the essential components of a small business plan.

Topic : 04-15 Plan the Personnel Source : Chapter 04 Test Bank > TB 04-27 The personnel plan would include the

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28) The following advice is offered to new entrepreneurs 28) A) it is good business to risk your own savings.

B) assume that you could possibly lose at least half of your personal investment in a

business.

C) if you are very confident of your likely success, don't be distracted by thoughts of losing it all.

D) don't risk more than you can afford to lose.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 04-03 List the essential components of a small business plan.

Topic : 04-17 Assess the Risk Source : Chapter 04 Test Bank > TB 04-28 The following advice is offered to new entre...

29) Which is not a control element to measure business plan progress?

29) A) Inventory control B) Production control C) Customer control D) Disbursements Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 04-03 List the essential components of a small business plan.

Topic : 04-19 Measuring Plan Progress Source : Chapter 04 Test Bank > TB 04-29 Which is not a control element to measure bu...

30) Business owners would consider incorporation mostly because 30) A) they wish to limit liability.

B) it presents a more sophisticated looking image.

C) they are confused by a partnership arrangement.

D) it makes them feel successful from the beginning.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 04-03 List the essential components of a small business plan.

Topic : 04-16 Investigate the Legal Requirements Source : Chapter 04 Test Bank > TB 04-30 Business owners would consider incorporation...

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Answer Key Test name: Chapter 04 Test Bank 1) A 2) C 3) D 4) B 5) D 6) C 7) A 8) D 9) B 10) D 11) C 12) A 13) B 14) D 15) B 16) D 17) A 18) D 19) D 20) B 21) B 22) D 23) C 24) C 25) B 26) D 27) A 28) D 29) C 30) A

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MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

1) It is argued in the text that the most significant advantage of buying a business is 1) A) it has already been registered with the authorities.

B) it has inventory.

C) it has an established image and track record.

D) to avoid being sued.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 05-01 Describe the advantages and disadvantages of purchasing an ongoing busines Topic : 05-02 Advantages of Purchasing Source : Chapter 05 Test Bank > TB 05-01 It is argued in the text that the most signi...

2) Which of these is not an advantage of purchasing an existing small business?

2) A) Established marketing structure B) Existing employees C) More opportunity to be creative D) Increased number of competitors Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 05-01 Describe the advantages and disadvantages of purchasing an ongoing busines Topic : 05-02 Advantages of Purchasing Source : Chapter 05 Test Bank > TB 05-02 Which of these is not an advantage of purcha...

3) According to the text, most businesses that are for sale 3) A) are only marginally successful.

B) have valuable locations to transfer to a new owner.

C) provide a steady base on which it can be expanded.

D) have solid banking arrangements in place.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 05-01 Describe the advantages and disadvantages of purchasing an ongoing busines Topic : 05-03 Disadvantages of Purchasing Source : Chapter 05 Test Bank > TB 05-03 According to the text, most businesses that ...

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4) Goodwill 4) A) is the process of extending credit to needy customers.

B) measures the added value of a product.

C) always exists so long as a business operates.

D) is essentially a business's favourable reputation.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 05-01 Describe the advantages and disadvantages of purchasing an ongoing busines Topic : 05-03 Disadvantages of Purchasing Source : Chapter 05 Test Bank > TB 05-04 Goodwill

5) Common sources of businesses for sale include 5) A) supermarket ad boards.

B) trade journals.

C) yellow pages (hard copy or web-based).

D) FAQ pages.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 05-02 Identify the sources of businesses that are for sale.

Topic : 05-04 Sources of Businesses for Sale Source : Chapter 05 Test Bank > TB 05-05 Common sources of businesses for sale includ...

6) If a business is not listed as being for sale 6) A) its privacy should be respected.

B) then it won't be for sale.

C) it's not worth investigating it.

D) a prospective purchaser can ask the owner if they would be interested in selling.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 05-02 Identify the sources of businesses that are for sale.

Topic : 05-04 Sources of Businesses for Sale Source : Chapter 05 Test Bank > TB 05-06 If a business is not listed as being for sal...

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7) Government departments 7) A) are not likely to be aware of business for sale.

B) are never connected with individual businesses.

C) may be aware of businesses for sale.

D) often act as brokers in connecting purchasers and sellers of businesses.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 05-02 Identify the sources of businesses that are for sale.

Topic : 05-06 Government Departments Source : Chapter 05 Test Bank > TB 05-07 Government departments

8) Which is not a common source of businesses for sale?

8) A) Internet B) Real estate brokers C) Community centre ad board D) Word of mouth Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 05-02 Identify the sources of businesses that are for sale.

Topic : 05-04 Sources of Businesses for Sale Source : Chapter 05 Test Bank > TB 05-08 Which is not a common source of businesses f...

9) Industry analysis may not be required if 9) A) a buyer has considerable experience in the industry.

B) the cost to do so would be prohibitive.

C) there is no information readily available.

D) the industry is not dominated by one large business.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 05-03 Explain how to evaluate a business that is for sale.

Topic : 05-12 Industry Analysis Source : Chapter 05 Test Bank > TB 05-09 Industry analysis may not be required if

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10) A noncompete clause is designed to guard against 10) A) the previous owner starting a similar business in any market area.

B) future owners starting a similar business in any market area.

C) future owners starting a similar business in the same market area.

D) the previous owner starting a similar business in the same market area.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 05-03 Explain how to evaluate a business that is for sale.

Topic : 05-12 Industry Analysis Source : Chapter 05 Test Bank > TB 05-10 A noncompete clause is designed to guard aga...

11) When purchasing a business, non-liquid assets 11) A) should be considered not to have any value.

B) should be subjected to an independent appraisal.

C) should by ignored for business planning purposes.

D) should be valued at 20% of total fixed assets.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 05-03 Explain how to evaluate a business that is for sale.

Topic : 05-13 Financial Condition of the Business Source : Chapter 05 Test Bank > TB 05-11 When purchasing a business, non-liquid asset...

12) Strong customer relations is usually an indicator 12) A) of a market with few competitors.

B) of a high-demand product or service.

C) of good management and employees.

D) of low pricing.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 05-03 Explain how to evaluate a business that is for sale.

Topic : 05-16 External Relationships—Suppliers and Customers Source : Chapter 05 Test Bank > TB 05-12 Strong customer relations is usually an indi...

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13) Which is not one of the four approaches to valuing a business?

13) A) Market Value B) Asset Value C) Equity Value D) Earnings Value Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 05-04 Describe the methods used in determining the price to pay for a business.

Topic : 05-18 Determining the Price or Value of a Business Source : Chapter 05 Test Bank > TB 05-13 Which is not one of the four approaches to v...

14) Market value is 14) A) the price where demand and supply meet.

B) the lowest amount that a seller will accept in the market.

C) the average of the three most recent sales transactions in an industry.

D) the net realizable value of a business's fixed assets.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 05-04 Describe the methods used in determining the price to pay for a business.

Topic : 05-19 Market Value Source : Chapter 05 Test Bank > TB 05-14 Market value is

15) The times earnings method is also called 15) A) productivity velocity method.

B) return on investment accelerator.

C) efficiency measure.

D) price-earnings ratio.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 05-04 Describe the methods used in determining the price to pay for a business.

Topic : 05-21 Earnings Value Source : Chapter 05 Test Bank > TB 05-15 The times earnings method is also called

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16) An offer to purchase will most likely be made 16) A) to the seller's CEO. B) by the buyer or through a realtor or lawyer.

C) by the buyer's banker on behalf of the buyer.

D) anonymously (until accepted).

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 05-04 Describe the methods used in determining the price to pay for a business.

Topic : 05-23 The Purchase Transaction Source : Chapter 05 Test Bank > TB 05-16 An offer to purchase will most likely be mad...

17) Which of these provinces have not passed legislation requiring greater financial disclosure by

franchisors?

17) A) Manitoba B) Alberta C) Ontario D) Saskatchewan Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 05-05 Explain the significance of franchising in the Canadian economy.

Topic : 05-25 History and Background of Franchising Source : Chapter 05 Test Bank > TB 05-17 Which of these provinces have not passed leg...

18) One of the attractive benefits of being a franchisee is 18) A) future income is a high certainty.

B) it can replace a lost job.

C) there is no need to learn about an industry in depth.

D) the total freedom of owning your own business.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 05-05 Explain the significance of franchising in the Canadian economy.

Topic : 05-25 History and Background of Franchising Source : Chapter 05 Test Bank > TB 05-18 One of the attractive benefits of being a fr...

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19) According to research, traditional franchise businesses include 19) A) hotels.

B) construction.

C) retailing.

D) soft drink bottlers.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 05-05 Explain the significance of franchising in the Canadian economy.

Topic : 05-25 History and Background of Franchising Source : Chapter 05 Test Bank > TB 05-19 According to research, traditional franchise...

20) The fastest growing sector in the Canadian economy is the 20) A) service sector.

B) professional sector.

C) manufacturing sector.

D) import/export sector.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 05-05 Explain the significance of franchising in the Canadian economy.

Topic : 05-25 History and Background of Franchising Source : Chapter 05 Test Bank > TB 05-20 The fastest growing sector in the Canadian e...

21) Under a franchising arrangement 21) A) a franchisor owns an outlet.

B) both the franchisor and the franchisee operate an outlet.

C) a franchisee owns an outlet.

D) a franchisee develops the best system for their outlet.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 05-06 Explain the types of franchises available for small business.

Topic : 05-26 What is Franchising?

Source : Chapter 05 Test Bank > TB 05-21 Under a franchising arrangement

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22)

is a type of franchise.

22) A) Manufacturer-retailer-directed B) Wholesaler-retailer-directed C) Retailer-service depot D) Service-retailer depot

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 05-06 Explain the types of franchises available for small business.

Topic : 05-28 Wholesaler-Retailer-directed Franchise Source : Chapter 05 Test Bank > TB 05-22 is a type of franchise.

23) A franchise system can best be characterized as 23) A) a voluntary chain.

B) a money-making machine.

C) a business excellence strategy.

D) an approach to market dominance.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 05-06 Explain the types of franchises available for small business.

Topic : 05-26 What is Franchising?

Source : Chapter 05 Test Bank > TB 05-23 A franchise system can best be characterized...

24) When a manufacturer of a product grants a dealer the right to sell the product, normally in an

exclusive geographic area.

24) A) Manufacturer-retailer-directed franchise B) Wholesaler-retailer-directed franchise C) Retailer-service depot D) Manufacturer-directed franchise Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 05-06 Explain the types of franchises available for small business.

Topic : 05-27 Manufacturer-Directed Franchise Source : Chapter 05 Test Bank > TB 05-24 When a manufacturer of a product grants a de...

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25) Established franchises can provide 25) A) guaranteed cash flow.

B) franchisee success.

C) instant brand recognition.

D) healthy opportunities for franchisee creativity.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 05-07 List the relative strengths and weaknesses of franchising as a method of s Topic : 05-31 Proven market for the product or service Source : Chapter 05 Test Bank > TB 05-25 Established franchises can provide

26) Franchisee training is most likely to involve 26) A) Internet research.

B) personal industry reading.

C) competitor research.

D) site visits.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 05-07 List the relative strengths and weaknesses of franchising as a method of s Topic : 05-32 Services the franchisor may provide Source : Chapter 05 Test Bank > TB 05-26 Franchisee training is most likely to involv...

27) Potential franchisees will usually have to provide 27) A) the names of relatives who have succeeded in business.

B) collateral.

C) a current health certificate.

D) their work history.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 05-07 List the relative strengths and weaknesses of franchising as a method of s Topic : 05-44 Finding a Franchise Source : Chapter 05 Test Bank > TB 05-27 Potential franchisees will usually have to p...

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28) Which is not a common franchise agreement restriction?

28) A) Product or service offered B) Line forcing C) Exaggeration of financial success D) Remodelling clauses Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 05-07 List the relative strengths and weaknesses of franchising as a method of s Topic : 05-37 Restrictions on the Contract Source : Chapter 05 Test Bank > TB 05-28 Which is not a common franchise agreement re...

29) Which is not a potential disadvantage of franchising?

29) A) Proven dispute resolution methods B) Saturation of the market C) Cost of the franchise D) Lack of security Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 05-07 List the relative strengths and weaknesses of franchising as a method of s Topic : 05-33 Potential Disadvantages of Franchising Topic : 05-35 Cost of the franchise Topic : 05-38 Saturation of the market Topic : 05-39 Lack of security Source : Chapter 05 Test Bank > TB 05-29 Which is not a potential disadvantage of fra...

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30) Which is not a typical question that a potential franchise should find answers to prior to

purchasing a franchise?

30) A) Does the franchisor have expertise in production, finance, and marketing?

B) Are most of the expenses of the franchise a function of the fees from the sale of

franchises?

C) How many franchises are in the organization?

D) How successful is each of the members of the franchise organization?

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 05-08 Explain how to evaluate a franchise opportunity.

Topic : 05-47 Financial stability of franchise Source : Chapter 05 Test Bank > TB 05-30 Which is not a typical question that a poten...

31) A proven franchise offers 31) A) greater opportunity and more freedom.

B) small market share and weaker competition.

C) lower risk and higher financial investment.

D) higher returns and reduced employee turnover.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 05-08 Explain how to evaluate a franchise opportunity.

Topic : 05-46 Unproven versus proven franchise Source : Chapter 05 Test Bank > TB 05-31 A proven franchise offers

32) Of the following elements, a potential franchisor should be concerned most about 32) A) supply chains.

B) renewal and termination terms.

C) hours of business operation.

D) future Canadian/US dollar exchange rates.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 05-08 Explain how to evaluate a franchise opportunity.

Topic : 05-52 Contract length and renewal and termination terms Source : Chapter 05 Test Bank > TB 05-32 Of the following elements, a potential franc...

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33) Franchises with territorial protection 33) A) are the most desirable.

B) are increasing in frequency.

C) are generally not possible.

D) are illegal due to non-competition laws.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 05-08 Explain how to evaluate a franchise opportunity.

Topic : 05-50 Territorial protection Source : Chapter 05 Test Bank > TB 05-33 Franchises with territorial protection

34) Becoming a franchisor 34) A) is a retirement strategy.

B) is a way of reducing one's management pressures.

C) is inevitable in a successful business.

D) is a form of entrepreneurship.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 05-09 Explain how to organize a franchising system.

Topic : 05-54 The Entrepreneur as Franchisor Source : Chapter 05 Test Bank > TB 05-34 Becoming a franchisor

35) Secret shoppers 35) A) refers to customers who pretend not to be interested in making a purchase.

B) means asking someone else to make your purchase in their name.

C) is a strategy used by some franchisors.

D) are used by government agencies to detect tax fraud.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 05-09 Explain how to organize a franchising system.

Topic : 05-56 How Does Someone Become a Franchisor?

Source : Chapter 05 Test Bank > TB 05-35 Secret shoppers

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36) Converting existing chain outlets into franchises is called 36) A) mini-franchises.

B) branchising.

C) piggybacking.

D) teamchising.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 05-09 Explain how to organize a franchising system.

Topic : 05-57 Franchising in the Future Source : Chapter 05 Test Bank > TB 05-36 Converting existing chain outlets into franc...

37) Future growth of franchising will 37) A) reduce employment numbers.

B) make competition more difficult for small businesses in certain industries.

C) result in less competition.

D) lead to more monopolies.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 05-09 Explain how to organize a franchising system.

Topic : 05-57 Franchising in the Future Source : Chapter 05 Test Bank > TB 05-37 Future growth of franchising will

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Answer Key Test name: Chapter 05 Test Bank 1) C 2) D 3) A 4) D 5) B 6) D 7) C 8) D 9) A 10) D 11) B 12) C 13) C 14) A 15) D 16) B 17) D 18) B 19) D 20) A 21) C 22) B 23) A 24) D 25) C 26) D 27) D 28) C 29) A 30) B 31) C 32) B 33) A 34) D 35) C 36) B 37) B

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MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

1) Small businesses need financing 1) A) to fund a start-up and as capital for ongoing operations.

B) to reduce the risk of losing their personal funds.

C) in order to support price competition.

D) to keep their administrative offices modern-looking.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 06-01 Describe the financing problems experienced by small businesses.

Topic : 06-01 Small Business Financing Source : Chapter 06 Test Bank > TB 06-01 Small businesses need financing

2) Financing difficulties of small business are often 2) A) due to bias against entrepreneurs.

B) a symptom of management problems.

C) because there are too many small businesses.

D) a symptom of small business as a cause of unemployment.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 06-01 Describe the financing problems experienced by small businesses.

Topic : 06-01 Small Business Financing Source : Chapter 06 Test Bank > TB 06-02 Financing difficulties of small business are...

3) A common financial problem in a small business is 3) A) an excess of personal funds.

B) punitive conditions in government grants.

C) lack of knowledge of financing sources.

D) taxation of profits.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 06-01 Describe the financing problems experienced by small businesses.

Topic : 06-01 Small Business Financing Source : Chapter 06 Test Bank > TB 06-03 A common financial problem in a small busine...

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4) One financing dilemma that entrepreneurs face is that funds are needed 4) A) and there are often too many offers to provide funding.

B) for inclusion in local telephone books.

C) and entrepreneurs have too much in the form of personal funds to get financing.

D) for expansion as the business grows.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 06-01 Describe the financing problems experienced by small businesses.

Topic : 06-01 Small Business Financing Source : Chapter 06 Test Bank > TB 06-04 One financing dilemma that entrepreneurs fac...

5) "Cash is king" refers to the need to 5) A) fund promotional events.

B) hire competent employees.

C) market effectively.

D) pay bills as they come due.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 06-02 Identify the types of start-up capital the entrepreneur may require.

Topic : 06-02 The Importance of Capital and Planning Source : Chapter 06 Test Bank > TB 06-05 Cash is king refers to the need to

6) Investors are most likely to want to know 6) A) the owners' vacation plans.

B) the identity of key employees.

C) how much money is needed by the business.

D) the product price structure of key competitors.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 06-02 Identify the types of start-up capital the entrepreneur may require.

Topic : 06-02 The Importance of Capital and Planning Source : Chapter 06 Test Bank > TB 06-06 Investors are most likely to want to know

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7) "Burn rate" refers to 7) A) the rate at which inventory is being sold.

B) how much money is being spent each month.

C) employee turnover.

D) the frequency with which new businesses in the industry fail.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 06-02 Identify the types of start-up capital the entrepreneur may require.

Topic : 06-02 The Importance of Capital and Planning Source : Chapter 06 Test Bank > TB 06-07 Burn rate refers to

8) For a lender or investor, it is helpful to divide required funding into two categories: 8) A) start-up costs and ongoing operating requirements.

B) personal funds and investor funds.

C) debt funding and equity funding.

D) capital costs and start-up costs.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 06-02 Identify the types of start-up capital the entrepreneur may require.

Topic : 06-03 Determining the Amount of Funds Needed Source : Chapter 06 Test Bank > TB 06-08 For a lender or investor, it is helpful to d...

9) Capital requirements = Start-up costs plus Operating requirements minus 9) A) owner's assets available for investment.

B) owner's knowledge, skills, and abilities.

C) owner's character, credit, and credentials.

D) owner's focus on competing businesses.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 06-02 Identify the types of start-up capital the entrepreneur may require.

Topic : 06-03 Determining the Amount of Funds Needed Source : Chapter 06 Test Bank > TB 06-09 Capital requirements = Start-up costs plus O...

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10) The start-up phase financing period will generally be 10) A) two to six months.

B) one to two years.

C) one to three months.

D) two months.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 06-03 Explain the stages of venture funding.

Topic : 06-04 Start-Up Costs Source : Chapter 06 Test Bank > TB 06-10 The start-up phase financing period will gen...

11) What would most likely not be considered a start-up cost?

11) A) Rent deposit B) Prepaid insurance C) Licenses and permits D) Loan repayment Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 06-03 Explain the stages of venture funding.

Topic : 06-04 Start-Up Costs Source : Chapter 06 Test Bank > TB 06-11 What would most likely not be considered a s...

12) A method of financing that allows the business to withdraw and deposit funds on an ongoing

basis as long as the total amount withdrawn, at any point in time, does not exceed the approved amount is called 12) A) mortgage.

B) traditional bank loan.

C) personal guarantee.

D) line of credit.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 06-03 Explain the stages of venture funding.

Topic : 06-05 Ongoing Operating Costs Source : Chapter 06 Test Bank > TB 06-12 A method of financing that allows the busine...

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13) A personal net worth and capability statement 13) A) is no one's business.

B) will usually justify borrowing.

C) is more descriptive than numeric.

D) is similar to a business balance sheet.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 06-03 Explain the stages of venture funding.

Topic : 06-06 The Owner's Net Worth Source : Chapter 06 Test Bank > TB 06-13 A personal net worth and capability statemen...

14) Trade credit is a form of 14) A) cost-cutting.

B) debt financing.

C) equity financing.

D) interest payment.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 06-03 Explain the stages of venture funding.

Topic : 06-07 Determining Types of Financing Source : Chapter 06 Test Bank > TB 06-14 Trade credit is a form of

15) Which is not a risk-capital market traditionally involved in financing a firm's growth?

15) A) Leveraged buy-outs B) Angel investor C) Venture-capital market D) Public-equity market Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 06-04 Illustrate a method for determining the amount of capital required.

Topic : 06-08 Business Stages and Financing Source : Chapter 06 Test Bank > TB 06-15 Which is not a risk-capital market tradition...

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16) Early-stage business financing for SMEs include 16) A) seed capital and start-up funds.

B) second and third stage financing.

C) traditional acquisitions.

D) leveraged buyouts.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 06-04 Illustrate a method for determining the amount of capital required.

Topic : 06-08 Business Stages and Financing Source : Chapter 06 Test Bank > TB 06-16 Early-stage business financing for SMEs incl...

17) The majority of new businesses in Canada rely on 17) A) government grant programs.

B) small business funding from a chartered bank.

C) supplier credit.

D) self-funding (personal financing).

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 06-04 Illustrate a method for determining the amount of capital required.

Topic : 06-08 Business Stages and Financing Source : Chapter 06 Test Bank > TB 06-17 The majority of new businesses in Canada rel...

18) The type of financing sought is likely to be dictated by 18) A) the entrepreneur's commitment to the venture.

B) the strength of competition.

C) the type of opportunity a business is pursuing.

D) the nature of the target market.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 06-04 Illustrate a method for determining the amount of capital required.

Topic : 06-08 Business Stages and Financing Source : Chapter 06 Test Bank > TB 06-18 The type of financing sought is likely to be...

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19) Development financing is often provided by 19) A) venture capitalist.

B) tax incentive programs.

C) provincial government aid programs.

D) social networking.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 06-04 Illustrate a method for determining the amount of capital required.

Topic : 06-08 Business Stages and Financing Source : Chapter 06 Test Bank > TB 06-19 Development financing is often provided by

20) A disadvantage of equity financing is 20) A) dilution of ownership interest.

B) the pressure to pay dividends.

C) the appearance of failure.

D) interest expense.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 06-05 Identify the sources of equity and debt funds available to start and opera Topic : 06-09 Equity Financing Source : Chapter 06 Test Bank > TB 06-20 A disadvantage of equity financing is

21) Small business owners sometimes use personal credit cards to 21) A) repay bank borrowing.

B) finance the start-up phase.

C) pay employees.

D) control interest expense.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 06-05 Identify the sources of equity and debt funds available to start and opera Topic : 06-09 Equity Financing Source : Chapter 06 Test Bank > TB 06-21 Small business owners sometimes use personal...

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22) The informal risk-capital market refers to 22) A) low-risk high-return business ventures.

B) handshake borrowing.

C) other businesses who will help a new entry into the market.

D) business angels.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 06-05 Identify the sources of equity and debt funds available to start and opera Topic : 06-09 Equity Financing Source : Chapter 06 Test Bank > TB 06-22 The informal risk-capital market refers to

23) When an entrepreneur solicits small investments and/or donations from the public to fund the

start-up of their company, this is referred to as 23) A) using business angels.

B) using corporate investors.

C) crowd-funding.

D) bootstrap financing.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 06-05 Identify the sources of equity and debt funds available to start and opera Topic : 06-09 Equity Financing Source : Chapter 06 Test Bank > TB 06-23 When an entrepreneur solicits small investme...

24) What is not a common characteristic of Canadian Angel investors?

24) A) Male B) Under 50 years old C) Well-educated D) Are or were entrepreneurs Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 06-05 Identify the sources of equity and debt funds available to start and opera Topic : 06-09 Equity Financing Source : Chapter 06 Test Bank > TB 06-24 What is not a common characteristic of Canad...

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25) An entrepreneur relying on personal investment including retained earnings to fund the

startup of a business is called

financing.

25)

A) bootstrap B) risky C) networking D) burn rate Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 06-05 Identify the sources of equity and debt funds available to start and opera Topic : 06-10 Bootstrap Financing Source : Chapter 06 Test Bank > TB 06-25 An entrepreneur relying on personal investme...

26) What is the name of the non-for-profit organization that may provide access to start-up and

growth funds to young entrepreneur who are 39 or younger?

26) A) Canada Small Business Financing Program B) Business Development Bank C) Futurpreneur D) Canadian Federation of Independent Businesses Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 06-06 Explain the considerations in obtaining equity or debt financing.

Topic : 06-11 Debt Financing Source : Chapter 06 Test Bank > TB 06-26 What is the name of the non-for-profit organ...

27) Choosing a particular lender may be most influenced by 27) A) friendliness and understanding of the lender.

B) the entrepreneur's experiences in a previous venture.

C) the need for privacy.

D) length of the term and the use of the funds.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 06-06 Explain the considerations in obtaining equity or debt financing.

Topic : 06-12 Determining the Term of Financing Source : Chapter 06 Test Bank > TB 06-27 Choosing a particular lender may be most inf...

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28) Demand loans are usually most appropriate for 28) A) funding inventory.

B) delivery equipment.

C) when cash flow is a problem.

D) situations where lenders and borrowers are good friends.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 06-06 Explain the considerations in obtaining equity or debt financing.

Topic : 06-12 Determining the Term of Financing Source : Chapter 06 Test Bank > TB 06-28 Demand loans are usually most appropriate fo...

29) What would not be considered a long-term loan?

29) A) Demand loans B) Mortgage C) Bonds D) Debentures Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 06-06 Explain the considerations in obtaining equity or debt financing.

Topic : 06-12 Determining the Term of Financing Source : Chapter 06 Test Bank > TB 06-29 What would not be considered a long-term loa...

30) "Collateral" refers to 30) A) other business being done with the lender.

B) security given for a loan.

C) alternative sources of funding.

D) the benefits received form dealing with a particular lender.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 06-07 Describe the elements to include when preparing a proposal to obtain finan Topic : 06-15 The Proposal Source : Chapter 06 Test Bank > TB 06-30 Collateral refers to

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31) A business should provide a lender with the following 31) A) sample products for the lenders own use.

B) gifts to show their appreciation.

C) up to date information.

D) personal information about employees.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 06-07 Describe the elements to include when preparing a proposal to obtain finan Topic : 06-17 Lender Relations Source : Chapter 06 Test Bank > TB 06-31 A business should provide a lender with the ...

32) A lender will want to know the following in order to assess an applicant's management

ability 32) A) the applicant's level of knowledge about the business.

B) the applicant's personal interests and hobbies.

C) how well-liked the applicant is by their employees.

D) performance evaluations received by the applicant when they were employed.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 06-07 Describe the elements to include when preparing a proposal to obtain finan Topic : 06-14 The Applicant's Management Ability Source : Chapter 06 Test Bank > TB 06-32 A lender will want to know the following in ...

33) What is not normally provided to potential lender in order to judge an applicant's

creditworthiness?

33) A) Personal Information B) Present debt and past lending history C) Will the applicant bank with the lender?

D) Amount of debt the applicant has invested Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 06-07 Describe the elements to include when preparing a proposal to obtain finan Topic : 06-16 The Applicant's Background and Creditworthiness Source : Chapter 06 Test Bank > TB 06-33 What is not normally provided to potential l...

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Answer Key Test name: Chapter 06 Test Bank 1) A 2) B 3) C 4) D 5) D 6) C 7) B 8) A 9) A 10) A 11) D 12) D 13) D 14) B 15) A 16) A 17) D 18) C 19) A 20) A 21) B 22) D 23) C 24) B 25) A 26) C 27) D 28) A 29) A 30) B 31) C 32) A 33) D

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MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

1) A marketing plan is not 1) A) a generalized document.

B) a guide for implementing marketing decision making.

C) based on a collection of marketing details for future planning.

D) an annually prepared document.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 07-01 Describe the role of marketing planning in a business enterprise.

Topic : 07-02 The Marketing Plan Source : Chapter 07 Test Bank > TB 07-01 A marketing plan is not

2) Most successful marketing plans are based on 2) A) the entrepreneurs' commitment to the product.

B) secondary and primary marketing research data.

C) financial resources.

D) a scattergun approach.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 07-01 Describe the role of marketing planning in a business enterprise.

Topic : 07-02 The Marketing Plan Source : Chapter 07 Test Bank > TB 07-02 Most successful marketing plans are based on

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3) The marketing plan should be prepared

production or manufacturing decisions are

made.

3) A) after B) at the same time as C) before D) without regard to when Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 07-01 Describe the role of marketing planning in a business enterprise.

Topic : 07-02 The Marketing Plan Source : Chapter 07 Test Bank > TB 07-03 The marketing plan should be prepared ...

4) Which is not a question that the marketing plan is designed to answer?

4) A) How do we get there?

B) Where have we been?

C) What resources do we need?

D) Where do we want to go?

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 07-01 Describe the role of marketing planning in a business enterprise.

Topic : 07-02 The Marketing Plan Source : Chapter 07 Test Bank > TB 07-04 Which is not a question that the marketing p...

5) Marketing plans should 5) A) be developed from scratch each year.

B) be repeated without being redrawn if they have worked well.

C) be based on proven business intuition.

D) provide for continuity from annual plan to annual plan.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 07-02 List the major steps in creating a marketing plan.

Topic : 07-03 Characteristics of a Marketing Plan Source : Chapter 07 Test Bank > TB 07-05 Marketing plans should

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6) What is not an important characteristic of a marketing plan identified in the textbook?

6) A) It should be based on the hopes and dreams of the organization.

B) It should provide a strategy for accomplishing the company mission or goal.

C) It should be simple and short.

D) It should specify performance criteria that will be monitored and controlled.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 07-02 List the major steps in creating a marketing plan.

Topic : 07-03 Characteristics of a Marketing Plan Source : Chapter 07 Test Bank > TB 07-06 What is not an important characteristic of a...

7) What is not one of the facts needed for market planning?

7) A) What are the pricing changes in the market, who has initiated these changes, and

why?

B) What are the overall objectives of the company for the next ten years?

C) What are the market's attitudes concerning competitive products?

D) What channels of distribution supply consumers, and how do they function?

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 07-02 List the major steps in creating a marketing plan.

Topic : 07-03 Characteristics of a Marketing Plan Source : Chapter 07 Test Bank > TB 07-07 What is not one of the facts needed for mark...

8) A marketing system is 8) A) different from a marketing plan.

B) the process by which you prepare a marketing plan.

C) the same as the marketing plan.

D) has more to do with business management than with marketing itself.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 07-03 Explain why understanding the external environment of the organization is Topic : 07-04 The Marketing System: Influences on the Small Business Source : Chapter 07 Test Bank > TB 07-08 A marketing system is

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9) In connection with marketing, an owner manager 9) A) can do nothing to alleviate the consequences of certain external and uncontrollable

factors.

B) can do some things to effectively respond to certain external and uncontrollable factors.

C) is rarely subject to uncontrollable factors.

D) can monitor uncontrollable factors so as to avoid them.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 07-03 Explain why understanding the external environment of the organization is Topic : 07-04 The Marketing System: Influences on the Small Business Source : Chapter 07 Test Bank > TB 07-09 In connection with marketing, an owner manag...

10) Which is not an external influence of a firm's marketing system?

10) A) Economy B) Competition C) Technology D) Products Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 07-03 Explain why understanding the external environment of the organization is Topic : 07-04 The Marketing System: Influences on the Small Business Source : Chapter 07 Test Bank > TB 07-10 Which is not an external influence of a firm...

11) The textbook identifies four important marketing variables. They are 11) A) product, price, place, and promotion.

B) preferences, policies, placement, and price.

C) positives, promotion, preconditions, and population.

D) price, promotions, priorities, and place.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 07-03 Explain why understanding the external environment of the organization is Topic : 07-05 The Marketing Mix Source : Chapter 07 Test Bank > TB 07-11 The textbook identifies four important marke...

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12) Situation analysis refers to 12) A) where a business is likely to be in the near future.

B) where a business is currently.

C) where a business fits relative to its competition.

D) where a business has been.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 07-03 Explain why understanding the external environment of the organization is Topic : 07-07 Defining the Business Situation Source : Chapter 07 Test Bank > TB 07-12 Situation analysis refers to

13) A company's mission 13) A) outlines its position in society.

B) describes the nature of the business.

C) explains what profit levels the owner hopes to accomplish.

D) reflects what customers want.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 07-03 Explain why understanding the external environment of the organization is Topic : 07-04 The Marketing System: Influences on the Small Business Source : Chapter 07 Test Bank > TB 07-13 A company's mission

14) Psychographic segmentation 14) A) is based on psychological wellness in the target market.

B) is based on personality types.

C) requires psychological testing of customers.

D) is based on buyer behaviour.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 07-04 Recognize the importance of marketing research.

Topic : 07-08 Market Segmentation and Target Marketing: Beyond the Basics Source : Chapter 07 Test Bank > TB 07-14 Psychographic segmentation

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15) A market segment that produces the most revenue 15) A) is the key to maximizing profits.

B) is the most difficult to access.

C) does not necessarily produce the most profit.

D) produces the most loyal customers.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 07-04 Recognize the importance of marketing research.

Topic : 07-08 Market Segmentation and Target Marketing: Beyond the Basics Source : Chapter 07 Test Bank > TB 07-15 A market segment that produces the most reve...

16) Consumers looking for lasting value and tangible benefits are most likely to be 16) A) in their 20s.

B) teenagers.

C) seniors.

D) non-existent.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 07-04 Recognize the importance of marketing research.

Topic : 07-08 Market Segmentation and Target Marketing: Beyond the Basics Source : Chapter 07 Test Bank > TB 07-16 Consumers looking for lasting value and tang...

17) Which is not a characteristic of market segmentation noted by Lawrence Stevenson?

17) A) Meaningful B) Measurable C) Mutually exclusive D) Mundane Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 07-04 Recognize the importance of marketing research.

Topic : 07-08 Market Segmentation and Target Marketing: Beyond the Basics Source : Chapter 07 Test Bank > TB 07-17 Which is not a characteristic of market segm...

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18) Which is not a way to divide the market into smaller groups based on the characteristics of

the customer and buying situation, as indicated in the textbook?

18) A) Demographic B) Geographic C) Physiographic D) Price sensitivity Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 07-04 Recognize the importance of marketing research.

Topic : 07-08 Market Segmentation and Target Marketing: Beyond the Basics Source : Chapter 07 Test Bank > TB 07-18 Which is not a way to divide the market into...

19) Which of these is not a key to establishing an effective relationship marketing program?

19) A) Identify the most profitable customer groups.

B) Solicit further information on customers.

C) Develop products and services that are solely beneficial to the organization.

D) Start with proper segmentation and target marketing.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 07-05 Describe effective customer relationship programs and why they are importa Topic : 07-11 Customer Relationship Marketing Source : Chapter 07 Test Bank > TB 07-19 Which of these is not a key to establishing ...

20) CRM stands for 20) A) Customer Relationship Marketing.

B) Customer Recall Monitoring.

C) Customer Relationship Metrics.

D) Customer Relationship Management.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 07-05 Describe effective customer relationship programs and why they are importa Topic : 07-11 Customer Relationship Marketing Source : Chapter 07 Test Bank > TB 07-20 CRM stands for

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21) Generally, it is recognized that 21) A) new customers are better sources of revenue than existing customers.

B) it costs a business more to attract than to retain a customer.

C) retaining customers can be more costly than attracting a new one.

D) new customers and existing customers represent the same financial considerations.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 07-05 Describe effective customer relationship programs and why they are importa Topic : 07-11 Customer Relationship Marketing Source : Chapter 07 Test Bank > TB 07-21 Generally, it is recognized that

22) The textbook recommends that chances of retaining a customer depend primarily on 22) A) relating to customers without change so long as it seems to be working.

B) offering services that seem to be relevant to the market.

C) sticking with existing business practices.

D) customer satisfaction with the business.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 07-05 Describe effective customer relationship programs and why they are importa Topic : 07-11 Customer Relationship Marketing Source : Chapter 07 Test Bank > TB 07-22 The textbook recommends that chances of reta...

23) One of the best tools in customer relationship marketing (CRM) is the use of 23) A) a database to track customer buying habits, personal information, and anything else

that is relevant.

B) a handshake to confirm that a deal has been made.

C) a personal style of customer interaction where you can call them by name.

D) secondary data to create stereotypes of individuals that fit within those categories.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 07-05 Describe effective customer relationship programs and why they are importa Topic : 07-11 Customer Relationship Marketing Source : Chapter 07 Test Bank > TB 07-23 One of the best tools in customer relationsh...

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24) Before developing a marketing strategy, goals and objectives should be 24) A) creative and broadly defined.

B) consistent with the owners' wishes.

C) realistic and specific.

D) subjected to ongoing and continuous revisions.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 07-06 Explain the reasons for identifying marketing goals and objectives.

Topic : 07-12 Establishing Goals and Objectives Source : Chapter 07 Test Bank > TB 07-24 Before developing a marketing strategy, goal...

25) Marketing strategy and action decisions address the question 25) A) "what is our favourite way to market?"

B) "what are our goals?"

C) "who is our target market?"

D) "how do we get there?"

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 07-06 Explain the reasons for identifying marketing goals and objectives.

Topic : 07-12 Establishing Goals and Objectives Source : Chapter 07 Test Bank > TB 07-25 Marketing strategy and action decisions addr...

26) Marketing action and strategy decisions budgets 26) A) are useful in preparing the business's financial plan.

B) are freestanding.

C) are unrelated to other budgets in the business.

D) define borrowing needs.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 07-06 Explain the reasons for identifying marketing goals and objectives.

Topic : 07-12 Establishing Goals and Objectives Source : Chapter 07 Test Bank > TB 07-26 Marketing action and strategy decisions budg...

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27) Once the marketing goals and objectives are established, 27) A) customers can start responding to the marketing effort.

B) the entrepreneur can begin to develop the marketing strategy and action plan to

achieve them.

C) suppliers will want to provide products or services to your organization.

D) investors will wish to become associated with your organization.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 07-06 Explain the reasons for identifying marketing goals and objectives.

Topic : 07-13 Defining Marketing Strategy and Action Programs Source : Chapter 07 Test Bank > TB 07-27 Once the marketing goals and objectives are ...

28) Weak signals from a monitoring process 28) A) should be tracked until the end of the budget period.

B) should lead to modification in the existing marketing effort.

C) should lead to increase borrowing.

D) should result in terminations of poorly performing employees.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 07-07 Explain the importance of monitoring the marketing plan.

Topic : 07-15 Monitoring Progress of Marketing Actions Source : Chapter 07 Test Bank > TB 07-28 Weak signals from a monitoring process

29) Well-prepared marketing plans 29) A) should succeed as planned.

B) are not possible.

C) will likely not succeed exactly as expected.

D) will result in respectable profits.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 07-07 Explain the importance of monitoring the marketing plan.

Topic : 07-16 Contingency Planning Source : Chapter 07 Test Bank > TB 07-29 Well-prepared marketing plans

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30) Which is not a reason for the failure of a business due to its marketing plan?

30) A) Lack of a real plan B) Unrealistic goals C) Lack of an adequate situation analysis D) Anticipated competitive moves Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 07-07 Explain the importance of monitoring the marketing plan.

Topic : 07-17 Why Some Plans Fail Source : Chapter 07 Test Bank > TB 07-30 Which is not a reason for the failure of a b...

31) Product deficiencies often result from 31) A) rushing the product to market.

B) corporate sabotage.

C) poor consumer education.

D) unacceptably low pricing.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 07-07 Explain the importance of monitoring the marketing plan.

Topic : 07-17 Why Some Plans Fail Source : Chapter 07 Test Bank > TB 07-31 Product deficiencies often result from

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Answer Key Test name: Chapter 07 Test Bank 1) A 2) B 3) C 4) C 5) D 6) A 7) B 8) C 9) B 10) D 11) A 12) D 13) B 14) D 15) C 16) A 17) D 18) C 19) C 20) A 21) B 22) D 23) A 24) C 25) D 26) A 27) B 28) B 29) C 30) D 31) A

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MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

1) Marketing activities 1) A) are sometimes overlooked by entrepreneurs.

B) are often overlooked by entrepreneurs.

C) are never overlooked by entrepreneurs.

D) are always overlooked by entrepreneurs.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 08-01 Recognize the importance of the marketing mix.

Topic : 08-01 The Role of the Marketing Mix in Small Business Source : Chapter 08 Test Bank > TB 08-01 Marketing activities

2) A key element in a marketing plan is 2) A) reflecting what the entrepreneur feels is right.

B) establishing the correct marketing mix.

C) using the entrepreneur's personal strengths.

D) emphasizing the negative aspects of the competition.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 08-01 Recognize the importance of the marketing mix.

Topic : 08-01 The Role of the Marketing Mix in Small Business Source : Chapter 08 Test Bank > TB 08-02 A key element in a marketing plan is

3) Creating an easy-to-use product 3) A) is a strategy for winning industry competitions.

B) doesn't overcome unreasonable pricing.

C) is a way to create value for customers.

D) provides feelings of financial accomplishment.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 08-01 Recognize the importance of the marketing mix.

Topic : 08-01 The Role of the Marketing Mix in Small Business Source : Chapter 08 Test Bank > TB 08-03 Creating an easy-to-use product

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4) "Innovators" is used in the text to describe 4) A) creative producers of new products.

B) new industries.

C) adaptations of existing products.

D) first customers.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 08-02 Explain how products and services are created.

Topic : 08-06 Determine factors that may accelerate product or service adoption Source : Chapter 08 Test Bank > TB 08-04 Innovators is used in the text to describe

5) Faster adoption rates can result from 5) A) products that operate on both electric and battery power.

B) better delivery services.

C) good communication of a product's significant advantages.

D) good economic times.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 08-02 Explain how products and services are created.

Topic : 08-06 Determine factors that may accelerate product or service adoption Source : Chapter 08 Test Bank > TB 08-05 Faster adoption rates can result from

6) Which is not a phase of the product life cycle?

6) A) Depart B) Introduction C) Maturity D) Growth Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 08-02 Explain how products and services are created.

Topic : 08-05 Understand the product life cycle Source : Chapter 08 Test Bank > TB 08-06 Which is not a phase of the product life cyc...

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7) Which is a phase of the product life cycle?

7) A) Inception B) Peak C) Maturity D) Downturn Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 08-02 Explain how products and services are created.

Topic : 08-05 Understand the product life cycle Source : Chapter 08 Test Bank > TB 08-07 Which is a phase of the product life cycle?

8) Which is not a factor identified in the textbook to speeding up product adoption?

8) A) Complexity B) Divisibility C) Relative advantage D) Durability Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 08-02 Explain how products and services are created.

Topic : 08-06 Determine factors that may accelerate product or service adoption Source : Chapter 08 Test Bank > TB 08-08 Which is not a factor identified in the text...

9) Distribution channel refers to 9) A) the route used by a delivery service.

B) the path from producer to consumer.

C) the movement of raw materials through the production process.

D) the markets in which a company advertises its product or service.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 08-03 Explain the differences in marketing to consumers and marketing to busines Topic : 08-09 Developing the Distribution System Source : Chapter 08 Test Bank > TB 08-09 Distribution channel refers to

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10) Which is not one of the standard classification system categories of consumer products?

10) A) Sought after products B) Specialty products C) Convenience products D) Shopping products Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 08-03 Explain the differences in marketing to consumers and marketing to busines Topic : 08-07 Understand how the consumer classifies the product or service Source : Chapter 08 Test Bank > TB 08-10 Which is not one of the standard classificat...

11) Products that are purchased only after comparison with similar products are

products.

11)

A) convenience B) unsought C) specialty D) shopping Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 08-03 Explain the differences in marketing to consumers and marketing to busines Topic : 08-07 Understand how the consumer classifies the product or service Source : Chapter 08 Test Bank > TB 08-11 Products that are purchased only after compa...

12) Products that inspire substantial brand or product loyalty in customers are

products.

12)

A) convenience B) unsought C) specialty D) shopping Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 08-03 Explain the differences in marketing to consumers and marketing to busines Topic : 08-07 Understand how the consumer classifies the product or service Source : Chapter 08 Test Bank > TB 08-12 Products that inspire substantial brand or p...

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13) Products that are purchased with minimal effort are

products.

13)

A) convenience B) unsought C) specialty D) shopping Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 08-03 Explain the differences in marketing to consumers and marketing to busines Topic : 08-07 Understand how the consumer classifies the product or service Source : Chapter 08 Test Bank > TB 08-13 Products that are purchased with minimal eff...

14) What is a channel decision of how many distributors or dealers will be allowed to sell the

product?

14) A) Multi-level marketing B) Channel length C) Channel intensity D) Channel size Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 08-03 Explain the differences in marketing to consumers and marketing to busines Topic : 08-12 Channel Intensity Source : Chapter 08 Test Bank > TB 08-14 What is a channel decision of how many distr...

15) Three general bases used for pricing in a small business are 15) A) cost, demand, and competition.

B) packaging, location, and demand.

C) ease of use, special features, and demographics.

D) supply chain, cost, and hours of operation.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 08-04 Discuss three methods of price setting.

Topic : 08-14 Setting the Price for the Good or Service Source : Chapter 08 Test Bank > TB 08-15 Three general bases used for pricing in a sm...

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16) Most markets today tend to be 16) A) price-dependent.

B) price-aware.

C) product-focused.

D) price-sensitive.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 08-04 Discuss three methods of price setting.

Topic : 08-16 Demand-Based Pricing Source : Chapter 08 Test Bank > TB 08-16 Most markets today tend to be

17) When price is set based on the intersection between units demanded and price offered is 17) A) competition-based pricing.

B) cost-based pricing.

C) demand-based pricing.

D) value-based pricing.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 08-04 Discuss three methods of price setting.

Topic : 08-16 Demand-Based Pricing Source : Chapter 08 Test Bank > TB 08-17 When price is set based on the intersection ...

18) Value-based pricing depends on 18) A) undercutting the price of competitor products.

B) associating product and their benefits.

C) having loyal customers.

D) the cash flow needs of the business.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 08-04 Discuss three methods of price setting.

Topic : 08-18 Value-Based Pricing Source : Chapter 08 Test Bank > TB 08-18 Value-based pricing depends on

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19) The pricing type that adds a percentage markup reflecting the profit objective of the firm to

costs is called 19) A) demand-based pricing.

B) competition-based pricing.

C) cost-based pricing.

D) none of these answers are correct.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 08-04 Discuss three methods of price setting.

Topic : 08-15 Cost-Based Pricing Source : Chapter 08 Test Bank > TB 08-19 The pricing type that adds a percentage mark...

20) "Build a better mousetrap" refers to: 20) A) product design challenges.

B) a pricing strategy.

C) marketing to demographically mixed markets.

D) attracting significant numbers of customers.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 08-05 Identify the major steps in a promotion campaign.

Topic : 08-19 Promotion Source : Chapter 08 Test Bank > TB 08-20 Build a better mousetrap refers to:

21) The common theme of all forms of promotion is 21) A) they are all successful to some extent.

B) they are fun.

C) they all cost money.

D) they all result in generating sales dollars.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 08-05 Identify the major steps in a promotion campaign.

Topic : 08-19 Promotion Source : Chapter 08 Test Bank > TB 08-21 The common theme of all forms of promotion i...

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22) Traditional promotion methods 22) A) are sometimes not feasible for start-ups.

B) are generally no longer used.

C) are usually used by small enterprises.

D) usually are not well received by the buying public.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 08-05 Identify the major steps in a promotion campaign.

Topic : 08-19 Promotion Source : Chapter 08 Test Bank > TB 08-22 Traditional promotion methods

23) Advertising is 23) A) strong in developing awareness of a product.

B) weak in developing interest in a product.

C) weak in increasing desire to purchase a product.

D) medium in achieving product purchase.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 08-05 Identify the major steps in a promotion campaign.

Topic : 08-20 Steps in a Promotional Campaign Source : Chapter 08 Test Bank > TB 08-23 Advertising is

24) Promotional themes should 24) A) be combined to be more effective.

B) reflect responsiveness to target needs.

C) provide lots of information for the consumer to consider.

D) focus on the technical strengths of the product.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 08-05 Identify the major steps in a promotion campaign.

Topic : 08-20 Steps in a Promotional Campaign Source : Chapter 08 Test Bank > TB 08-24 Promotional themes should

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25) The percentage of sales method of setting the promotional budget 25) A) usually results in a "good" number.

B) uses a percentage that makes the entrepreneur feel comfortable.

C) is not often used.

D) is theoretically weak.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 08-05 Identify the major steps in a promotion campaign.

Topic : 08-20 Steps in a Promotional Campaign Source : Chapter 08 Test Bank > TB 08-25 The percentage of sales method of setting th...

26) What form of promotion is generating positive awareness of your company?

26) A) Guerilla marketing B) Search engine optimization C) Public relations D) Pay-per-click advertising Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 08-06 Compare and contrast different promotional tools.

Topic : 08-21 Types of Promotion Source : Chapter 08 Test Bank > TB 08-26 What form of promotion is generating positiv...

27) Email marketing is just

to customers via the Internet.

27)

A) direct marketing B) online blogs C) gamification D) public relations Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 08-06 Compare and contrast different promotional tools.

Topic : 08-21 Types of Promotion Source : Chapter 08 Test Bank > TB 08-27 Email marketing is just to custome...

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28) Co-op advertising 28) A) is advertising done by a co-op form of business.

B) is advertising based on competitors agreeing to a common theme.

C) occurs when a manufacturer and a retailer share advertising costs.

D) reflects the goodwill of market leaders by not criticizing each other's products.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 08-06 Compare and contrast different promotional tools.

Topic : 08-21 Types of Promotion Source : Chapter 08 Test Bank > TB 08-28 Co-op advertising

29) Tradeshows 29) A) don't address decision makers.

B) are most appropriate for large businesses.

C) are expensive.

D) are cost-effective.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 08-06 Compare and contrast different promotional tools.

Topic : 08-21 Types of Promotion Source : Chapter 08 Test Bank > TB 08-29 Tradeshows

30) A disadvantage of radio advertising is 30) A) there is short exposure.

B) the reach is too wide.

C) it is inexpensive.

D) it caters to a target audience.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 08-06 Compare and contrast different promotional tools.

Topic : 08-21 Types of Promotion Source : Chapter 08 Test Bank > TB 08-30 A disadvantage of radio advertising is

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31) An advantage of Internet advertising is 31) A) its focus on the local market.

B) it is inexpensive.

C) that it is personalized.

D) reaches a segmented audience.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 08-06 Compare and contrast different promotional tools.

Topic : 08-21 Types of Promotion Source : Chapter 08 Test Bank > TB 08-31 An advantage of Internet advertising is

32) Guerilla marketing refers to 32) A) advertising that attacks competitors.

B) creative, catchy, and low-cost promotion.

C) secret marketing initiatives.

D) entrepreneurs who are hands on marketers.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 08-06 Compare and contrast different promotional tools.

Topic : 08-21 Types of Promotion Source : Chapter 08 Test Bank > TB 08-32 Guerilla marketing refers to

33) Gamification 33) A) refers to marketing in the gaming industry.

B) is the set of relationships between a business and its customers.

C) uses game thinking to affect behaviour.

D) is a process allowing consumers to compete for product.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 08-06 Compare and contrast different promotional tools.

Topic : 08-21 Types of Promotion Source : Chapter 08 Test Bank > TB 08-33 Gamification

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34) Snapchat 34) A) is a relatively new form of social networking where participants chat in real time on

their mobile devices.

B) is the description of a shared promotional campaign.

C) means that advertising content is legitimate.

D) describes a set of key objectives in a marketing campaign.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 08-06 Compare and contrast different promotional tools.

Topic : 08-21 Types of Promotion Source : Chapter 08 Test Bank > TB 08-34 Snapchat

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Answer Key Test name: Chapter 08 Test Bank 1) A 2) B 3) C 4) D 5) C 6) A 7) C 8) D 9) B 10) A 11) D 12) C 13) A 14) C 15) A 16) D 17) C 18) B 19) C 20) D 21) C 22) A 23) A 24) B 25) D 26) C 27) A 28) C 29) D 30) A 31) B 32) B 33) C 34) A

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MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

1) A ledger is a(n) 1) A) book that records customer contacts.

B) running balance of accounts.

C) accounting record of banking transactions.

D) record of salaries and wages paid to employees.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 09-01 Identify the fundamentals of small business accounting.

Topic : 09-04 Classifying Transaction Totals Source : Chapter 09 Test Bank > TB 09-01 A ledger is a(n)

2) Which is not one of the primary users of financial information as identified in the textbook?

2) A) Entrepreneurs B) Lenders C) Customers D) Government Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-01 Identify the fundamentals of small business accounting.

Topic : 09-01 The Need for Financial Records Source : Chapter 09 Test Bank > TB 09-02 Which is not one of the primary users of fin...

3) Accounting transactions are recorded

in a record called a journal.

3)

A) chronologically B) alphabetically C) numerically D) in order of value Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-01 Identify the fundamentals of small business accounting.

Topic : 09-03 Recording Transactions Source : Chapter 09 Test Bank > TB 09-03 Accounting transactions are recorded

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4) A statement of changes in financial position 4) A) is the same as a cash flow statement.

B) presents the extent to which sales changed from the previous fiscal period.

C) presents changes in balance sheet accounts from one period to the next.

D) summarizes a business's changes in its market position.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-01 Identify the fundamentals of small business accounting.

Topic : 09-05 Summarizing Data Source : Chapter 09 Test Bank > TB 09-04 A statement of changes in financial position

5) Balance sheet items are generally listed in order of 5) A) quantum.

B) age.

C) frequency of the underlying transactions.

D) liquidity.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 09-01 Identify the fundamentals of small business accounting.

Topic : 09-05 Summarizing Data Source : Chapter 09 Test Bank > TB 09-05 Balance sheet items are generally listed in ...

6) The accounting cycle consists of 6) A) recording, classifying, and summarizing.

B) sale, collection, and banking.

C) purchasing, presenting, and selling.

D) investing, selling, and collecting.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 09-01 Identify the fundamentals of small business accounting.

Topic : 09-02 The Accounting Cycle Source : Chapter 09 Test Bank > TB 09-06 The accounting cycle consists of

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7) Double-entry recording in accounting means that the amounts of each transaction are

recorded 7) A) once.

B) twice.

C) three times.

D) four times.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-01 Identify the fundamentals of small business accounting.

Topic : 09-03 Recording Transactions Source : Chapter 09 Test Bank > TB 09-07 Double-entry recording in accounting means t...

8) Which of these best describes accounting systems?

8) A) Small businesses use several different types of accounting systems.

B) Most accounting systems are appropriate for many different sizes of business.

C) Affordability is the most important factor in choosing an accounting system.

D) The number of transactions are not a relevant factor when choosing a computer-based

accounting system.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-02 List the various types of accounting systems a small business can use.

Topic : 09-06 Accounting Systems for the Small Business Source : Chapter 09 Test Bank > TB 09-08 Which of these best describes accounting sys...

9) Which of these best describes the use of manual accounting systems in Canada today?

9) A) All small businesses use manual accounting systems.

B) Very few small businesses use manual accounting systems.

C) Small retail businesses with less than ten employees use manual accounting systems.

D) Nearly one million small businesses use manual accounting systems.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 09-02 List the various types of accounting systems a small business can use.

Topic : 09-07 Manual Systems Source : Chapter 09 Test Bank > TB 09-09 Which of these best describes the use of man...

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10) Outsourcing financial activities 10) A) is dangerous because of loss of control.

B) can be less costly than doing it in-house.

C) is rarely satisfactory.

D) often is found to be too expensive for small businesses.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-02 List the various types of accounting systems a small business can use.

Topic : 09-08 Outsourcing Financial Activities Source : Chapter 09 Test Bank > TB 09-10 Outsourcing financial activities

11) Which is not a financial activity that businesses commonly outsource?

11) A) Payroll B) Accounts payable C) Budgeting D) Sales Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-02 List the various types of accounting systems a small business can use.

Topic : 09-08 Outsourcing Financial Activities Source : Chapter 09 Test Bank > TB 09-11 Which is not a financial activity that busin...

12) Variance analysis refers to 12) A) calculations of the extent of different kinds of activities.

B) degrees of tolerance limits in manufacturing.

C) an investigation of differences between budget and actual numbers.

D) understanding how a business's performance differs from that of its competitors.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-03 Describe how technology can help the small business manage its finances.

Topic : 09-11 Short-Term Financial Planning Source : Chapter 09 Test Bank > TB 09-12 Variance analysis refers to

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13) Projected financial statements can also be called 13) A) balancing sheets.

B) pro forma financial statements.

C) cash flow statements.

D) government required financial statements.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-03 Describe how technology can help the small business manage its finances.

Topic : 09-11 Short-Term Financial Planning Source : Chapter 09 Test Bank > TB 09-13 Projected financial statements can also be c...

14) Which is not an advantage of accounting software applications?

14) A) Increased operating costs B) Increased speed and accuracy of maintaining records C) Improved and more timely information for managers D) Improved service to customers Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-03 Describe how technology can help the small business manage its finances.

Topic : 09-09 Small Business Computer Systems Source : Chapter 09 Test Bank > TB 09-14 Which is not an advantage of accounting soft...

15) Rate-of-return measures 15) A) how quickly first-time customers return to a store and make a second purchase.

B) the financial soundness of a capital investment decision.

C) the sales returns and allowances experience.

D) poor credit experience indicated by returned (bounced) cheques from credit

customers.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-03 Describe how technology can help the small business manage its finances.

Topic : 09-12 Long-Term Financial Planning Source : Chapter 09 Test Bank > TB 09-15 Rate-of-return measures

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16) Payback method measures 16) A) the frequency with which a supplier reimburses a business for increasing its purchases

of merchandise.

B) how quickly a business repays bank financing.

C) speed of repayment of a small business's founder's original cash investment.

D) the number of years it takes for a capital investment to pay for itself.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 09-03 Describe how technology can help the small business manage its finances.

Topic : 09-12 Long-Term Financial Planning Source : Chapter 09 Test Bank > TB 09-16 Payback method measures

17) The break-even point is when 17) A) sales dollars equal the total of fixed and variable costs.

B) is the point at which all existing customer demands have been satisfied.

C) total costs do not exceed the sum of borrowed and invested capital.

D) total sales match the total sales of a business's major competitor.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 09-03 Describe how technology can help the small business manage its finances.

Topic : 09-12 Long-Term Financial Planning Source : Chapter 09 Test Bank > TB 09-17 The break-even point is when

18) What can also be used to help the business owner decide whether to expand the scope of

operations?

18) A) Variance analysis B) Break-even analysis C) Variable cost analysis D) Fixed cost analysis Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-03 Describe how technology can help the small business manage its finances.

Topic : 09-12 Long-Term Financial Planning Source : Chapter 09 Test Bank > TB 09-18 What can also be used to help the business o...

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19) An income statement can show a profit 19) A) as long as sales prices are greater than cost to produce.

B) even though a business's cash position may have deteriorated.

C) if selling prices remain competitive.

D) in times of increasing demand.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-04 Illustrate how to evaluate the financial operations of the small business.

Topic : 09-14 Management of Current Financial Position Source : Chapter 09 Test Bank > TB 09-19 An income statement can show a profit

20) What type of accounting system is used in which a transaction need not involve a case

transfer to be recorded?

20) A) cash-based B) cheque-based C) accrual-based D) break-even-based Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-04 Illustrate how to evaluate the financial operations of the small business.

Topic : 09-14 Management of Current Financial Position Source : Chapter 09 Test Bank > TB 09-20 What type of accounting system is used in wh...

21) Financial ratios are 21) A) helpful for isolating and analyzing weaknesses in a business.

B) used to define management responsibilities.

C) usually not meaningful because businesses differ from one another.

D) mostly used by lenders.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 09-04 Illustrate how to evaluate the financial operations of the small business.

Topic : 09-15 Evaluation of Financial Statements Source : Chapter 09 Test Bank > TB 09-21 Financial ratios are

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22) Productivity ratios measure 22) A) total manufacturing output.

B) quality of life.

C) employee satisfaction.

D) efficiency.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 09-04 Illustrate how to evaluate the financial operations of the small business.

Topic : 09-15 Evaluation of Financial Statements Source : Chapter 09 Test Bank > TB 09-22 Productivity ratios measure

23) Inventory turnover refers to 23) A) the need to replace old inventory with fresh product.

B) the frequency with which new models are brought to the market.

C) number of times inventory is sold in a year.

D) customer handling of merchandise on display frequency in a retail operation.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-04 Illustrate how to evaluate the financial operations of the small business.

Topic : 09-15 Evaluation of Financial Statements Source : Chapter 09 Test Bank > TB 09-23 Inventory turnover refers to

24) The expense ratio is 24) A) expense item divided by sales.

B) expenses divided by equity.

C) expenses divided by profit.

D) expense item divided by assets.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-04 Illustrate how to evaluate the financial operations of the small business.

Topic : 09-15 Evaluation of Financial Statements Source : Chapter 09 Test Bank > TB 09-24 The expense ratio is

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25) What is net profit before tax divided by owner's equity?

25) A) Gross margin B) Quick ratio C) Debt ratio D) Return on Investment Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-04 Illustrate how to evaluate the financial operations of the small business.

Topic : 09-15 Evaluation of Financial Statements Source : Chapter 09 Test Bank > TB 09-25 What is net profit before tax divided by own...

26) What is calculated by the formula sales minus cost of goods sold?

26) A) Gross margin B) Quick ratio C) Debt ratio D) Return on Investment Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-04 Illustrate how to evaluate the financial operations of the small business.

Topic : 09-15 Evaluation of Financial Statements Source : Chapter 09 Test Bank > TB 09-26 What is calculated by the formula sales minu...

27) What is calculated by the formula accounts receivable divided by daily credit sales?

27) A) Sales ratio B) Collection period C) Inventory turnover D) Liquidity ratio Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-04 Illustrate how to evaluate the financial operations of the small business.

Topic : 09-15 Evaluation of Financial Statements Source : Chapter 09 Test Bank > TB 09-27 What is calculated by the formula accounts r...

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28) One key advantage of offering credit is 28) A) it is a social responsibility to operate a business.

B) interest on overdue accounts is a major source of income.

C) it creates sales volume which can then be used to borrow more funds from a bank.

D) it results in increased sales.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 09-05 Explain the important aspects of credit management for the small business.

Topic : 09-17 Advantages of Credit Use Source : Chapter 09 Test Bank > TB 09-28 One key advantage of offering credit is

29) Which is not a disadvantage of offering credit listed in the textbook?

29) A) Bad debts B) Competitors for credit C) Slow payers D) Increased administrative cost Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-05 Explain the important aspects of credit management for the small business.

Topic : 09-18 Disadvantages of Credit Use Source : Chapter 09 Test Bank > TB 09-29 Which is not a disadvantage of offering cred...

30) A credit collection policy is likely to include 30) A) forced jail time if debts are not paid.

B) physical intimidation after customer refusals to pay.

C) various actions to be taken after a debt has been outstanding for 30, 45, 60, 75, or 90

days.

D) public announcements which identifies the customer who has refused to pay their debt.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 09-05 Explain the important aspects of credit management for the small business.

Topic : 09-19 Management of a Credit Program Source : Chapter 09 Test Bank > TB 09-30 A credit collection policy is likely to incl...

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31) Credit cards and online banking 31) A) are not favoured by small business due to bank charges.

B) surpass the use of cash and cheques in Canada.

C) depend on the belief that cash on hand is at high risk for in-store robbery and theft.

D) are universally used by consumers of all ages.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 09-05 Explain the important aspects of credit management for the small business.

Topic : 09-20 Use of Bank Debit and Credit Cards Source : Chapter 09 Test Bank > TB 09-31 Credit cards and online banking

32) Fees from credit card companies are usually from

, depending on volume.

32)

A) .5 to 1.0 percent of sales B) 1.5 to 6.0 percent of sales C) 2.5 to 8.0 percent of sales D) 4.0 to 10.0 percent of sales Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-05 Explain the important aspects of credit management for the small business.

Topic : 09-20 Use of Bank Debit and Credit Cards Source : Chapter 09 Test Bank > TB 09-32 Fees from credit card companies are usually ...

33) Credit bureaus are used to 33) A) evaluate customers before granting them credit.

B) obtain borrowed funds.

C) build a new business's reputation.

D) justify bank borrowing.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 09-05 Explain the important aspects of credit management for the small business.

Topic : 09-20 Use of Bank Debit and Credit Cards Source : Chapter 09 Test Bank > TB 09-33 Credit bureaus are used to

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Answer Key Test name: Chapter 09 Test Bank 1) B 2) C 3) A 4) C 5) D 6) A 7) B 8) A 9) D 10) B 11) D 12) C 13) B 14) A 15) B 16) D 17) A 18) B 19) B 20) C 21) A 22) D 23) C 24) A 25) D 26) A 27) B 28) D 29) B 30) C 31) B 32) B 33) A

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MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

1) Entrepreneurs are typically 1) A) strongest in marketing.

B) weakest in production management.

C) equally talented in production, marketing, and financial management.

D) weaker in areas of marketing and financial management than in managing the

production process.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 10-01 Explain the production process.

Topic : 10-01 Management of Internal Operations Source : Chapter 10 Test Bank > TB 10-01 Entrepreneurs are typically

2) The owner-manager's task is to 2) A) maximize production to utilize 100% of the business's capacity.

B) produce goods as quickly as possible.

C) organize production so as to produce goods efficiently.

D) ensure that production satisfies its customers' demands.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 10-01 Explain the production process.

Topic : 10-02 The Production Process Source : Chapter 10 Test Bank > TB 10-02 The owner-manager's task is to

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3) PERT is: 3) A) production evaluation and revision tasks.

B) priority evaluation and review technique.

C) production evaluation and revision technique.

D) performance evaluation and review technique.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 10-01 Explain the production process.

Topic : 10-02 The Production Process Source : Chapter 10 Test Bank > TB 10-03 PERT is:

4) TQM is 4) A) a small business certification of environmental compliance.

B) a philosophy of management.

C) a process of technical quality methodology.

D) a traditional method of product pricing.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 10-01 Explain the production process.

Topic : 10-03 Total Quality Management Source : Chapter 10 Test Bank > TB 10-04 TQM is

5) ISO 9000 is 5) A) able to provide an effective marketing hook.

B) a cost-cutting strategy.

C) a regulatory standard for global shipping practices.

D) an International Scheme of Organization for owner-managed businesses.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 10-01 Explain the production process.

Topic : 10-03 Total Quality Management Source : Chapter 10 Test Bank > TB 10-05 ISO 9000 is

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6) Management must make sure that physical facilities 6) A) do not harm their public image.

B) are efficient and up to date.

C) match their competitors' facilities.

D) provide a pleasant work space.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 10-02 Describe the management of the components of the physical facilities of a Topic : 10-04 Physical Facilities Source : Chapter 10 Test Bank > TB 10-06 Management must make sure that physical faci...

7) Which of these site factors are of minimum importance for a manufacturing business?

7) A) Setback and window space B) Space and access C) Frontage and access D) Building exteriors and floor space Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 10-02 Describe the management of the components of the physical facilities of a Topic : 10-04 Physical Facilities Source : Chapter 10 Test Bank > TB 10-07 Which of these site factors are of minimum i...

8) Which of these site factors are of critical importance for a service business?

8) A) Parking and configuration B) Surroundings and stairways C) Utilities and expansion potential D) Age and expansion Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 10-02 Describe the management of the components of the physical facilities of a Topic : 10-04 Physical Facilities Source : Chapter 10 Test Bank > TB 10-08 Which of these site factors are of critical ...

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9) For retailing firms, which aspects of building improvement potential are critical?

9) A) Surrounding area B) Streets and walks C) Expansion D) Building exterior and interior Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 10-02 Describe the management of the components of the physical facilities of a Topic : 10-04 Physical Facilities Source : Chapter 10 Test Bank > TB 10-09 For retailing firms, which aspects of buildi...

10) The interior layout of facilities can 10) A) dictate marketing strategies.

B) determine staffing needs of the financial management area.

C) impair the budget process.

D) greatly enhance productivity.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 10-02 Describe the management of the components of the physical facilities of a Topic : 10-05 Layout Source : Chapter 10 Test Bank > TB 10-10 The interior layout of facilities can

11) Compared to product layouts, process layouts usually 11) A) are used in single-product manufacturing environments.

B) are more modern.

C) are more expensive and require more management time to ensure efficiency.

D) result in greater sales of product.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 10-03 List the types of layouts used in small manufacturing firms.

Topic : 10-06 Layouts for Manufacturing Firms Source : Chapter 10 Test Bank > TB 10-11 Compared to product layouts, process layouts...

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12) Process layouts are based on the premise that 12) A) it is more efficient for products to move back and forth to processes.

B) it is more efficient for processes to move back and forth to product areas.

C) segregating processes is more important than outsourcing.

D) outsourcing processes is more cost effective than purchasing equipment for use in-

house.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 10-03 List the types of layouts used in small manufacturing firms.

Topic : 10-06 Layouts for Manufacturing Firms Source : Chapter 10 Test Bank > TB 10-12 Process layouts are based on the premise tha...

13) Product layout provides for economies of 13) A) scale and labour.

B) volume and production.

C) time and space.

D) cost and time.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 10-03 List the types of layouts used in small manufacturing firms.

Topic : 10-06 Layouts for Manufacturing Firms Source : Chapter 10 Test Bank > TB 10-13 Product layout provides for economies of

14) Production processes move to the product in 14) A) process layout.

B) fixed-position layout.

C) small factories.

D) high-tech industries.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 10-03 List the types of layouts used in small manufacturing firms.

Topic : 10-06 Layouts for Manufacturing Firms Source : Chapter 10 Test Bank > TB 10-14 Production processes move to the product in

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15) According to the textbook, which of these is not one of the key areas to consider in planning

the interior of a manufacturing plant?

15) A) Location of utility outlets for machines B) Adequate lighting capability throughout C) Grid layout plan D) Safety aspects Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 10-03 List the types of layouts used in small manufacturing firms.

Topic : 10-06 Layouts for Manufacturing Firms Source : Chapter 10 Test Bank > TB 10-15 According to the textbook, which of these is...

16) What type of production process would be used when manufacturing an airplane?

16) A) Product layout B) Process layout C) Fixed-position layout D) Grid layout Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 10-03 List the types of layouts used in small manufacturing firms.

Topic : 10-06 Layouts for Manufacturing Firms Source : Chapter 10 Test Bank > TB 10-16 What type of production process would be use...

17) Different areas in a retail store 17) A) should be equally accessible.

B) differ from one another in terms of productivity.

C) are more or less comfortable for customer shopping purposes.

D) all contribute equally to income.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 10-04 List the factors to consider in planning the layout of a retail store.

Topic : 10-07 Layouts for Retail Firms Source : Chapter 10 Test Bank > TB 10-17 Different areas in a retail store

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18) Free-flow layout refers to 18) A) a layout that gives customers more time to browse.

B) retail stores that do not charge for shopping carts.

C) a layout strategy often used in car dealerships.

D) a design strategy that is available for free to download from the Internet.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 10-04 List the factors to consider in planning the layout of a retail store.

Topic : 10-07 Layouts for Retail Firms Source : Chapter 10 Test Bank > TB 10-18 Free-flow layout refers to

19) For purposes of layout guidance 19) A) service firms are considered to be manufacturing operations with a retail customer

base.

B) service firms can be classified into a standard format.

C) service firms mostly use the free flow strategy.

D) service firms tend to be so diverse that it is not possible to provide standard information.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 10-04 List the factors to consider in planning the layout of a retail store.

Topic : 10-08 Layouts for Service Firms Source : Chapter 10 Test Bank > TB 10-19 For purposes of layout guidance

20) Retail store product placement requires 20) A) determining profit contribution and customer preferences.

B) charging premiums to suppliers.

C) ranking profitability and identifying high traffic areas.

D) municipal guidance by way of safety by laws.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 10-04 List the factors to consider in planning the layout of a retail store.

Topic : 10-07 Layouts for Retail Firms Source : Chapter 10 Test Bank > TB 10-20 Retail store product placement requires

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21) Critics of what firm contend that store layouts are designed to ensure people spend more time

shopping and therefore could spend more than they originally planned?

21) A) IKEA B) Real Canadian Superstore C) Home Depot D) Costco Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 10-04 List the factors to consider in planning the layout of a retail store.

Topic : 10-07 Layouts for Retail Firms Source : Chapter 10 Test Bank > TB 10-21 Critics of what firm contend that store layo...

22) Successful retail layout starts with creating appropriate 22) A) simplicity.

B) window displays.

C) classification of merchandise.

D) allocation of selling versus non-selling space.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 10-04 List the factors to consider in planning the layout of a retail store.

Topic : 10-07 Layouts for Retail Firms Source : Chapter 10 Test Bank > TB 10-22 Successful retail layout starts with creatin...

23) The space at the front of a retail store is referred to as the 23) A) storytelling zone.

B) layering area.

C) grid layout.

D) threshold or decompression zone.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 10-04 List the factors to consider in planning the layout of a retail store.

Topic : 10-07 Layouts for Retail Firms Source : Chapter 10 Test Bank > TB 10-23 The space at the front of a retail store is ...

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24) Which of these is not one of the keys to creating effective window displays?

24) A) Boldness and innovation B) Display variety C) Minimalism D) Storytelling Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 10-04 List the factors to consider in planning the layout of a retail store.

Topic : 10-07 Layouts for Retail Firms Source : Chapter 10 Test Bank > TB 10-24 Which of these is not one of the keys to cre...

25) In a small business, inventory management is important because 25) A) generally there are limited economic resources.

B) customers will stop coming in to make purchases if the inventory is not well-

managed.

C) otherwise employees will not be happy.

D) inventory variety is usually the key to success.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 10-05 Explain the methods of purchasing and controlling inventories in a small b Topic : 10-09 Purchasing and Controlling Inventories Source : Chapter 10 Test Bank > TB 10-25 In a small business, inventory management is...

26) Which is not a place where small businesses purchase their inventory?

26) A) Manufacturer B) Wholesaler C) Customer D) Retailer Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 10-05 Explain the methods of purchasing and controlling inventories in a small b Topic : 10-10 Sources of Supply Source : Chapter 10 Test Bank > TB 10-26 Which is not a place where small businesses ...

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27) Which is generally not one of the criteria used by small businesses to evaluate suppliers?

27) A) Services offered B) Cost C) Dependability D) Personability Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 10-05 Explain the methods of purchasing and controlling inventories in a small b Topic : 10-11 Evaluating Suppliers Source : Chapter 10 Test Bank > TB 10-27 Which is generally not one of the criteria u...

28) Order lead time refers to 28) A) the length of time before needing to reorder inventory items.

B) the length of time taken to process an order and transport the item(s).

C) the length of time before a customer wishes to have goods delivered.

D) the length of time before competitors begin to stock a specialty item.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 10-05 Explain the methods of purchasing and controlling inventories in a small b Topic : 10-12 Determining Order Quantities Source : Chapter 10 Test Bank > TB 10-28 Order lead time refers to

29) What does JIT stand for?

29) A) just-in-time.

B) just-in-threshold.

C) judged-in-tolerance.

D) just-in-tolerance.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 10-05 Explain the methods of purchasing and controlling inventories in a small b Topic : 10-12 Determining Order Quantities Source : Chapter 10 Test Bank > TB 10-29 What does JIT stand for?

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30) A-B-C analysis refers to 30) A) an inventory analysis system that tracks Alternative Buying Choices.

B) management's analysis of Active Buying Customs in their industry.

C) Activity Based Cost allocation in a retail store.

D) an inventory management system which evaluates the efficiency with which products

A, B, and C are managed.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 10-05 Explain the methods of purchasing and controlling inventories in a small b Topic : 10-12 Determining Order Quantities Source : Chapter 10 Test Bank > TB 10-30 A-B-C analysis refers to

31) Shrinkage describes 31) A) reducing inventory levels due to sales without replacement of stock.

B) decreasing purchasing power of sales dollars.

C) loss of inventory.

D) increasing inadequacy of floor space as volume increases.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 10-05 Explain the methods of purchasing and controlling inventories in a small b Topic : 10-13 Inventory Control Source : Chapter 10 Test Bank > TB 10-31 Shrinkage describes

32) What unit of control is suitable for firms with large amounts of inventory at a relatively low

per-unit value?

32) A) Dollar inventory control B) Per unit inventory control C) ABC analysis D) Minimum-turnover method Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 10-05 Explain the methods of purchasing and controlling inventories in a small b Topic : 10-13 Inventory Control Source : Chapter 10 Test Bank > TB 10-32 What unit of control is suitable for firms w...

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33) Which is not a component of supply chain management?

33) A) Movement and storage of raw material B) Finished goods from the point of origin to the point of consumption C) Work-in-process inventory D) Labour availability in local area Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 10-05 Explain the methods of purchasing and controlling inventories in a small b Topic : 10-15 Supply Chain Management Source : Chapter 10 Test Bank > TB 10-33 Which is not a component of supply chain...

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Answer Key Test name: Chapter 10 Test Bank 1) D 2) C 3) B 4) B 5) A 6) B 7) A 8) C 9) D 10) D 11) C 12) A 13) D 14) B 15) C 16) C 17) B 18) A 19) D 20) C 21) A 22) B 23) D 24) C 25) A 26) C 27) D 28) B 29) A 30) D 31) C 32) A 33) D

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MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

1) It is a commonly held belief that HR fundamentals 1) A) apply only to larger organizations.

B) are mostly a matter of intuition.

C) are never of much value.

D) are applied mostly to please the market.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 11-01 Explain the importance of human resources management to the small business Topic : 11-01 Human Resources Management And the Small Business Source : Chapter 11 Test Bank > TB 11-01 It is a commonly held belief that HR fundame...

2) Employees in small companies 2) A) generally feel unsatisfied.

B) are more likely to rate their workplace as "good."

C) do not usually have close relationships with the business owner(s).

D) usually want to be owners.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 11-01 Explain the importance of human resources management to the small business Topic : 11-01 Human Resources Management And the Small Business Source : Chapter 11 Test Bank > TB 11-02 Employees in small companies

3) Eventually most successful small business owners 3) A) learn how to manage their successful business on their own.

B) find that their workload tends to diminish.

C) manage to transition to the new business levels without too much difficulty.

D) develop a management team.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 11-01 Explain the importance of human resources management to the small business Topic : 11-01 Human Resources Management And the Small Business Source : Chapter 11 Test Bank > TB 11-03 Eventually most successful small business ow...

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4) A recent survey found that 91 percent of small business owners 4) A) increased the time and money invested in employee labour management.

B) decreased the time and money invested in employee labour management.

C) believe training is important to grow their business.

D) decreased the time and money invested in employee training.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 11-01 Explain the importance of human resources management to the small business Topic : 11-01 Human Resources Management And the Small Business Source : Chapter 11 Test Bank > TB 11-04 A recent survey found that 91 percent of sma...

5) A study by the Canadian Federation of Independent Business found that roughly

percent of small businesses had difficulty finding qualified labour.

5) A) 20 B) 25 C) 35 D) 50 Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 11-01 Explain the importance of human resources management to the small business Topic : 11-01 Human Resources Management And the Small Business Source : Chapter 11 Test Bank > TB 11-05 A study by the Canadian Federation of Indepe...

6) If an employee fails, then it is ultimately the responsibility of 6) A) society.

B) fellow workers.

C) the person who hired them.

D) the educational system.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 11-02 Illustrate the methods of planning for hiring and training employees.

Topic : 11-02 Planning for Human Resources Source : Chapter 11 Test Bank > TB 11-06 If an employee fails, then it is ultimately ...

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7) Personnel requirements 7) A) generally reflect customer preferences.

B) are often developed as part of a feasibility analysis.

C) are dependent on available labour force.

D) cannot be planned for.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 11-02 Illustrate the methods of planning for hiring and training employees.

Topic : 11-02 Planning for Human Resources Source : Chapter 11 Test Bank > TB 11-07 Personnel requirements

8) Job descriptions should include 8) A) job titles, pay scales, and pension arrangements.

B) a questionnaire to determine an employee's thinking.

C) a history of why previous personnel have failed in the position.

D) what is to be done, how it is to be done, and why it is to be done.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 11-02 Illustrate the methods of planning for hiring and training employees.

Topic : 11-02 Planning for Human Resources Source : Chapter 11 Test Bank > TB 11-08 Job descriptions should include

9) According to a CFIB study, the most common methods of recruitment for small businesses

were 9) A) referrals from friends and employees.

B) hiring from other businesses.

C) media ads.

D) government agencies.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 11-02 Illustrate the methods of planning for hiring and training employees.

Topic : 11-04 Sources of Employees Source : Chapter 11 Test Bank > TB 11-09 According to a CFIB study, the most common m...

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10) Which is not an advantage of hiring workers from educational institutions?

10) A) Bring new ideas B) Are innovative C) Have lots of experience D) Help identify new opportunities Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 11-02 Illustrate the methods of planning for hiring and training employees.

Topic : 11-04 Sources of Employees Source : Chapter 11 Test Bank > TB 11-10 Which is not an advantage of hiring workers ...

11) Checking of references for job applicants is considered 11) A) to be a screening device.

B) to be an invasion of privacy.

C) to be generally unreliable.

D) to be a waste of time.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 11-03 Identify the principles of effective human resources management for the sm Topic : 11-05 The Screening Process Source : Chapter 11 Test Bank > TB 11-11 Checking of references for job applicants is...

12) Offers of employment should include 12) A) a request for a convenient start date from the employee's point of view.

B) an advance on salary.

C) terms and conditions associated with the job.

D) a request for vacation dates.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 11-03 Identify the principles of effective human resources management for the sm Topic : 11-06 Candidate Selection AND Notification of the Hiring Selection Source : Chapter 11 Test Bank > TB 11-12 Offers of employment should include

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13) Reviewing social media sites in order to research applicants is a growing practice and 13) A) it has been determined to be an illegal practice.

B) applicants have begun to voluntarily disclose what negative content might be found.

C) discussion with applicants will usually cancel any negative findings.

D) 33 percent of businesses that do so have opted not to hire someone as a result of this

review.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 11-03 Identify the principles of effective human resources management for the sm Topic : 11-05 The Screening Process Source : Chapter 11 Test Bank > TB 11-13 Reviewing social media sites in order to res...

14) A helpful tool in employment interviewing is 14) A) reference checking.

B) an interview guide.

C) an application form.

D) employment tests.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 11-03 Identify the principles of effective human resources management for the sm Topic : 11-05 The Screening Process Source : Chapter 11 Test Bank > TB 11-14 A helpful tool in employment interviewing is

15) Don't assume that a candidate is telling the truth; a major HR firm notes that

percent

of job applications contain a major falsehood.

15) A) 15 B) 20 C) 25 D) 35 Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 11-03 Identify the principles of effective human resources management for the sm Topic : 11-06 Candidate Selection AND Notification of the Hiring Selection Source : Chapter 11 Test Bank > TB 11-15 Don't assume that a candidate

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16) Leadership experts claim that 16) A) good leaders put their own interests first in order to be fully dedicated.

B) leaders are born and cannot be taught.

C) leadership can be learned.

D) experienced leaders are careful not to give away decision making to others.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 11-04 Describe the skill areas an owner-manager can strengthen to improve person Topic : 11-11 The Owner-Manager as Leader and Personnel Manager Source : Chapter 11 Test Bank > TB 11-16 Leadership experts claim that

17) Time management in a small business is difficult because 17) A) owner managers have personal obligations as well as their business obligations.

B) there are many operating crises in the normal course of a day.

C) there are no basic time management concepts to be applied.

D) most owner managers really don't care too much about time management.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 11-04 Describe the skill areas an owner-manager can strengthen to improve person Topic : 11-11 The Owner-Manager as Leader and Personnel Manager Source : Chapter 11 Test Bank > TB 11-17 Time management in a small business is diffi...

18) The components of the PRICE system of employee evaluation include 18) A) pinpoint, coach, and evaluate.

B) perform, report, and implement.

C) involve, create, and evaluate.

D) perfect, reexamine, and illustrate.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 11-04 Describe the skill areas an owner-manager can strengthen to improve person Topic : 11-16 Controlling and Evaluating Employee Performance Source : Chapter 11 Test Bank > TB 11-18 The components of the PRICE system of employ...

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19) Which is not required when terminating an employee?

19) A) Justifiable reasons for the termination provided B) Notice of two weeks provided C) Appropriate severance and vacation pay provided D) Documentation completed such as record of employment Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 11-04 Describe the skill areas an owner-manager can strengthen to improve person Topic : 11-18 Terminating the Employee Source : Chapter 11 Test Bank > TB 11-19 Which is not required when terminating an em...

20) Most employers find it advantageous to use a probationary period of

for new

employees.

20) A) two to three months B) two weeks C) three to six months D) six to twelve months Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 11-04 Describe the skill areas an owner-manager can strengthen to improve person Topic : 11-09 The Probationary Period Source : Chapter 11 Test Bank > TB 11-20 Most employers find it advantageous to use a...

21) Canadian job entry programs 21) A) provide training for unemployed or undertrained people for up to one year.

B) develop strategies for developing new businesses.

C) matches unemployed people with unions.

D) provide funds to test new solutions to labour-market-related problems.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 11-05 Identify the legal requirements relating to personnel of the small busines Topic : 11-21 Federal Government Source : Chapter 11 Test Bank > TB 11-21 Canadian job entry programs

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22) Wage subsidy programs 22) A) distribute much needed money to persons who don't make an adequate living wage.

B) are managed by industry and trade associations.

C) assist businesses to hire additional employees.

D) fill an employment gap amongst teenagers from families that need additional income.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 11-05 Identify the legal requirements relating to personnel of the small busines Topic : 11-21 Federal Government Source : Chapter 11 Test Bank > TB 11-22 Wage subsidy programs

23) In Canada, employment standards are established 23) A) by self-managed industries.

B) by public referendum.

C) by common practice.

D) at the Federal, Provincial and Territorial level.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 11-05 Identify the legal requirements relating to personnel of the small busines Topic : 11-22 Provincial and Territorial Governments Source : Chapter 11 Test Bank > TB 11-23 In Canada, employment standards are establis...

24) What level of government is responsible for such areas as licensing, zoning, hours of

operation, and building codes?

24) A) Federal B) Provincial C) Territorial D) Municipal Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 11-05 Identify the legal requirements relating to personnel of the small busines Topic : 11-23 Municipal Governments Source : Chapter 11 Test Bank > TB 11-24 What level of government is responsible for ...

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25) What is the employee accident and disability program required under provincial or territorial

law?

25) A) Wage Subsidy Program B) Workers' Compensation C) Employment Standards D) Code of Human Rights Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 11-05 Identify the legal requirements relating to personnel of the small busines Topic : 11-22 Provincial and Territorial Governments Source : Chapter 11 Test Bank > TB 11-25 What is the employee accident and disability...

26) Employers deduct government required amounts from employees and 26) A) hold them in trust until the employee leaves their employment.

B) invest these funds in a deferred profit-sharing plan.

C) must then remit these amounts to the government on a prescribed form.

D) disburse the total withheld from each employee prior to the employee's annual

vacation.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 11-06 Explain the procedures for administering a small business payroll.

Topic : 11-26 Payroll Book Source : Chapter 11 Test Bank > TB 11-26 Employers deduct government required amounts...

27) At the end of each calendar year, employers must issue a

to each employee.

27)

A) T1 B) T2 C) T3 D) T4 Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 11-06 Explain the procedures for administering a small business payroll.

Topic : 11-26 Payroll Book Source : Chapter 11 Test Bank > TB 11-27 At the end of each calendar year, employers ...

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28) An increasing number of small businesses have found it cost effective to hire another firm to

handle the payroll function. This process is called 28) A) outsourcing.

B) employee leasing.

C) right-sizing.

D) supply chain management.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 11-06 Explain the procedures for administering a small business payroll.

Topic : 11-26 Payroll Book Source : Chapter 11 Test Bank > TB 11-28 An increasing number of small businesses hav...

29) Owner-managers collect income tax on behalf of the government and remit them to 29) A) Canada Revenue Agency.

B) their auditors.

C) the Receiver General.

D) Canada Pension Plan.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 11-06 Explain the procedures for administering a small business payroll.

Topic : 11-26 Payroll Book Source : Chapter 11 Test Bank > TB 11-29 Owner-managers collect income tax on behalf ...

30) Contract employees are 30) A) not employees of the company.

B) employees of the company.

C) the same cost as regular employees.

D) not a legal option for manufacturing concerns.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 11-06 Explain the procedures for administering a small business payroll.

Topic : 11-27 Contract Employees Source : Chapter 11 Test Bank > TB 11-30 Contract employees are

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Answer Key Test name: Chapter 11 Test Bank 1) A 2) B 3) D 4) C 5) D 6) C 7) B 8) D 9) A 10) C 11) A 12) C 13) D 14) B 15) C 16) C 17) B 18) A 19) B 20) C 21) A 22) C 23) D 24) D 25) B 26) C 27) D 28) A 29) C 30) A

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MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

1) Many entrepreneurs get help growing their businesses by 1) A) forming a board of advisers.

B) creating a mentoring committee.

C) delegating management to an outside adviser.

D) getting onto a board of directors of another company in their industry.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 12-01 Illustrate how mentors, boards of directors, or boards of advisors can be Topic : 12-01 Advisors and Small Business Source : Chapter 12 Test Bank > TB 12-01 Many entrepreneurs get help growing their bu...

2) Before using someone as an adviser, an entrepreneur 2) A) should ensure that the person is independently well-off.

B) should develop a social relationship with them.

C) should assess or interview the person.

D) should get feedback from their own employees about the business having an adviser.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 12-01 Illustrate how mentors, boards of directors, or boards of advisors can be Topic : 12-02 Use of Advisors Source : Chapter 12 Test Bank > TB 12-02 Before using someone as an adviser, an entre...

3) The major desirable characteristic of a mentor is that they 3) A) have time available to work with a business.

B) have experience in the role.

C) work for no charge.

D) are close to the age of the entrepreneur.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 12-01 Illustrate how mentors, boards of directors, or boards of advisors can be Topic : 12-02 Use of Advisors Source : Chapter 12 Test Bank > TB 12-03 The major desirable characteristic of a ment...

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4) One of the identified functions of a board of advisers is 4) A) keeping the business's employees focused on their personal goals.

B) to raise capital for the business.

C) sharing their own marketing research.

D) supporting day-to-day activities of the business.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 12-01 Illustrate how mentors, boards of directors, or boards of advisors can be Topic : 12-02 Use of Advisors Source : Chapter 12 Test Bank > TB 12-04 One of the identified functions of a board o...

5) When selecting board members, it is advised that 5) A) candidates be subjected to background checks.

B) they have senior level executive positions in the industry.

C) they be willing to commit to the venture's mission.

D) they be close friends of relatives of the entrepreneur.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 12-01 Illustrate how mentors, boards of directors, or boards of advisors can be Topic : 12-02 Use of Advisors Source : Chapter 12 Test Bank > TB 12-05 When selecting board members, it is advised ...

6) A common mistake for entrepreneurs is to work with 6) A) whatever mentor is easy to find.

B) a mentor that specializes in business start-ups.

C) a mentor that is most inexpensive.

D) a mentor that is prepared to provide unlimited time.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 12-01 Illustrate how mentors, boards of directors, or boards of advisors can be Topic : 12-02 Use of Advisors Source : Chapter 12 Test Bank > TB 12-06 A common mistake for entrepreneurs is to wor...

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7) What is not normally expected to be provided by a board of advisors to a small business

owner?

7) A) Access B) Credibility C) Education D) Funding Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 12-01 Illustrate how mentors, boards of directors, or boards of advisors can be Topic : 12-02 Use of Advisors Source : Chapter 12 Test Bank > TB 12-07 What is not normally expected to be provided...

8) A recent survey indicates that only

percent of entrepreneurs had a mentor in place

when they started their business.

8) A) 13 B) 22 C) 27 D) 32 Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 12-01 Illustrate how mentors, boards of directors, or boards of advisors can be Topic : 12-02 Use of Advisors Source : Chapter 12 Test Bank > TB 12-08 A recent survey indicates that only p...

9) Compared to business and property taxes, income taxes 9) A) can be more complicated.

B) are less subject to interpretation.

C) only have a minimal impact on cash flow.

D) are straightforward to calculate.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 12-02 Explain the importance of understanding the nature of the Canadian tax sys Topic : 12-03 Taxation and Small Business Source : Chapter 12 Test Bank > TB 12-09 Compared to business and property taxes, inc...

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10) The area of tax management suffers from 10) A) the burden of uniform application across provinces.

B) the boredom that flows from relatively stable legislation.

C) the time it takes for the entrepreneur to prepare income tax returns.

D) the complexity of tax principles.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 12-02 Explain the importance of understanding the nature of the Canadian tax sys Topic : 12-03 Taxation and Small Business Source : Chapter 12 Test Bank > TB 12-10 The area of tax management suffers from

11) For tax purposes a business's income refers to 11) A) the business's total cash receipts.

B) profits the business makes.

C) total sales by the business.

D) the owners' salaries.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 12-02 Explain the importance of understanding the nature of the Canadian tax sys Topic : 12-03 Taxation and Small Business Source : Chapter 12 Test Bank > TB 12-11 For tax purposes a business's

12) Tax planning will address the issue of 12) A) executive loans.

B) cash flow.

C) bank borrowing.

D) inadequate sales.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 12-02 Explain the importance of understanding the nature of the Canadian tax sys Topic : 12-03 Taxation and Small Business Source : Chapter 12 Test Bank > TB 12-12 Tax planning will address the issue of

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13) One of the top concerns of small businesses is 13) A) total tax burden.

B) provincial labour laws.

C) workers' compensation.

D) government debt.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 12-02 Explain the importance of understanding the nature of the Canadian tax sys Topic : 12-03 Taxation and Small Business Source : Chapter 12 Test Bank > TB 12-13 One of the top concerns of small businesses ...

14) When a business has no tax liability, this means that it is 14) A) making large profits.

B) claiming more deductions than it should.

C) losing money.

D) not filing income taxes regularly.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 12-02 Explain the importance of understanding the nature of the Canadian tax sys Topic : 12-03 Taxation and Small Business Source : Chapter 12 Test Bank > TB 12-14 When a business has no tax liability, this m...

15) Which province or territory does the textbook indicate that they collect their own corporate

taxes?

15) A) Alberta B) Manitoba C) Nova Scotia D) Nunavut Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 12-02 Explain the importance of understanding the nature of the Canadian tax sys Topic : 12-03 Taxation and Small Business Source : Chapter 12 Test Bank > TB 12-15 Which province or territory does the textboo...

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16) The following are fundamental areas of tax management 16) A) tax deferral, continual tax planning, and legal liability.

B) personal world income, depreciation, and marginal tax rates.

C) income splitting, marginal tax rates, and deductibles.

D) tax funding, owners' equity, and total external debt.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 12-03 List 10 fundamental tax management principles the owner-manager should kno Topic : 12-04 General Tax Management Principles Source : Chapter 12 Test Bank > TB 12-16 The following are fundamental areas of tax m...

17) When contracting one's services out, care should be taken to 17) A) deal with local, readily accessible businesses.

B) seal the arrangement with a handshake with the owner personally.

C) deduct all employee benefits.

D) avoid an employment arrangement.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 12-03 List 10 fundamental tax management principles the owner-manager should kno Topic : 12-09 Deductibles Source : Chapter 12 Test Bank > TB 12-17 When contracting one's services

18) A good way to explore the distinction between employee and subcontractor is to 18) A) interview other small contractors.

B) perform an Internet search for discussion boards on the topic.

C) consult the CRA guide.

D) apply common sense.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 12-03 List 10 fundamental tax management principles the owner-manager should kno Topic : 12-09 Deductibles Source : Chapter 12 Test Bank > TB 12-18 A good way to explore the distinction betwee...

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19) Entrepreneurs often purchase club memberships in order to meet customers.

19) A) Such memberships are deductible as "business entertaining."

B) Such memberships are not deductible.

C) It is illegal to meet customers in a private club.

D) It is better to buy such memberships for good customers.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 12-03 List 10 fundamental tax management principles the owner-manager should kno Topic : 12-09 Deductibles Source : Chapter 12 Test Bank > TB 12-19 Entrepreneurs often purchase club membership...

20) Tax deferrals are 20) A) an unwritten rule of tax management.

B) considered illegal.

C) a sign of poor corporate citizenship.

D) considered unethical but legal.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 12-03 List 10 fundamental tax management principles the owner-manager should kno Topic : 12-06 Tax Deferral Source : Chapter 12 Test Bank > TB 12-20 Tax deferrals are

21) What allows the owner-manager to calculate the after-tax effects of extra income and

expenses?

21) A) Total tax rate B) Tax deferral C) Deductibles D) Marginal tax rate Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 12-03 List 10 fundamental tax management principles the owner-manager should kno Topic : 12-08 Marginal Tax Rates Source : Chapter 12 Test Bank > TB 12-21 What allows the owner-manager to calculate t...

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22) Individuals operating proprietorships and partnerships are required to remit

instalments for the taxes they incur.

22) A) monthly B) quarterly C) semi-annual D) annual Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 12-03 List 10 fundamental tax management principles the owner-manager should kno Topic : 12-05 Continual Tax Planning Source : Chapter 12 Test Bank > TB 12-22 Individuals operating proprietorships and pa...

23) The tax system for individuals in Canada is a(n)

system whereby a higher taxable

income results in a higher percentage tax liability.

23) A) unfair B) regressive C) progressive D) stable Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 12-03 List 10 fundamental tax management principles the owner-manager should kno Topic : 12-07 Income Splitting Source : Chapter 12 Test Bank > TB 12-23 The tax system for individuals in Canada is ...

24) SBD stands for 24) A) Small Business Development Act. B) Small Business Directors' Liability Program.

C) Small Business Design Initiative.

D) Small Business Deduction.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 12-04 Describe specific tax-related programs that apply to small business.

Topic : 12-10 Government Tax-Related Programs Source : Chapter 12 Test Bank > TB 12-24 SBD stands for

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25) Payments into deferred profit-sharing plans 25) A) represent an alternative to vacation pay.

B) are not deductible to the company.

C) are taxable to the employee only when received.

D) can include dividends declared but not yet paid.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 12-04 Describe specific tax-related programs that apply to small business.

Topic : 12-10 Government Tax-Related Programs Source : Chapter 12 Test Bank > TB 12-25 Payments into deferred profit-sharing plans

26) Which is not a tax deferral program?

26) A) Registered retirement savings plan B) Bonus deferral C) Tax-free savings account D) Capital gains Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 12-04 Describe specific tax-related programs that apply to small business.

Topic : 12-10 Government Tax-Related Programs Source : Chapter 12 Test Bank > TB 12-26 Which is not a tax deferral program?

27) The federal tax rate for incorporated businesses is 27) A) 16% on the first $50,000 of profit.

B) about 11%.

C) always the same as an individual's personal tax rate.

D) a deterrent to new ventures.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 12-04 Describe specific tax-related programs that apply to small business.

Topic : 12-11 The Incorporation Question Source : Chapter 12 Test Bank > TB 12-27 The federal tax rate for incorporated busine...

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28) In a proprietorship or partnership, payment to the owner is treated as 28) A) salary expense for the business.

B) bonus payments to the owner.

C) a corporate dividend.

D) a drawing from the business and is not a deductible expense.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 12-04 Describe specific tax-related programs that apply to small business.

Topic : 12-12 The Remuneration Question Source : Chapter 12 Test Bank > TB 12-28 In a proprietorship or partnership, payment ...

29) If the small business has sales of less than

per annum, no GST or HST collection and

remittance is required.

29) A) $25,000 B) $30,000 C) $50,000 D) $100,00 Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 12-04 Describe specific tax-related programs that apply to small business.

Topic : 12-14 Goods and Services Tax (GST) or Provincial Sales Taxes (PST) and HST Source : Chapter 12 Test Bank > TB 12-29 If the small business has sales of less than...

30) Value added taxes 30) A) are levied on sales revenue.

B) are levied on profits.

C) are of little worry to small businesses.

D) are based on customer credit terms.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 12-04 Describe specific tax-related programs that apply to small business.

Topic : 12-14 Goods and Services Tax (GST) or Provincial Sales Taxes (PST) and HST Source : Chapter 12 Test Bank > TB 12-30 Value added taxes

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31) An increased depreciation rate is 31) A) not allowed.

B) available to start-up businesses when needed to reduce income taxes owing.

C) only available in an election year.

D) allowed under a government accelerated capital cost allowance program.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 12-04 Describe specific tax-related programs that apply to small business.

Topic : 12-10 Government Tax-Related Programs Source : Chapter 12 Test Bank > TB 12-31 An increased depreciation rate is

32) Currently, CRA allows how much of a lifetime capital gains exemption on the shares of a

small business corporation?

32) A) $500,000 B) $750,000 C) $800,000 D) $1,000,000 Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 12-04 Describe specific tax-related programs that apply to small business.

Topic : 12-13 Transferring the Business: Capital Gains Source : Chapter 12 Test Bank > TB 12-32 Currently, CRA allows how much of a lifetime...

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Answer Key Test name: Chapter 12 Test Bank 1) A 2) C 3) B 4) D 5) C 6) A 7) D 8) B 9) A 10) D 11) B 12) B 13) A 14) C 15) A 16) C 17) D 18) C 19) B 20) A 21) D 22) B 23) C 24) D 25) C 26) D 27) B 28) D 29) B 30) A 31) D 32) C

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MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

1) Success and growth can 1) A) make a business more difficult to manage.

B) lead to streamlining and simplifying the management of a business.

C) help to overcome complexity.

D) make life as an owner manager simpler and more enjoyable.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 13-01 Describe the problems that success and growth can bring to the small busin Topic : 13-01 Small Business and Growth Source : Chapter 13 Test Bank > TB 13-01 Success and growth can

2) It is noted in the textbook that unless a business is growing 2) A) it's shrinking.

B) it's building debt.

C) it's stagnating.

D) it's losing employees.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 13-01 Describe the problems that success and growth can bring to the small busin Topic : 13-01 Small Business and Growth Source : Chapter 13 Test Bank > TB 13-02 It is noted in the textbook that unless a bu...

3) Effective planning for the future of a business requires 3) A) total sales revenue equal to equity invested times a factor of ten.

B) an understanding of the life cycle of the business.

C) the use of regional development plans for the business's market area.

D) connection with lenders.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 13-01 Describe the problems that success and growth can bring to the small busin Topic : 13-01 Small Business and Growth Source : Chapter 13 Test Bank > TB 13-03 Effective planning for the future of a busin...

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4) An acknowledged advantage of a larger growing business is 4) A) more influence in the industry.

B) more social contacts in the owner's community.

C) more comfortable corporate offices.

D) an easier time raising capital.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 13-01 Describe the problems that success and growth can bring to the small busin Topic : 13-01 Small Business and Growth Source : Chapter 13 Test Bank > TB 13-04 An acknowledged advantage of a larger growin...

5) Two distinctions between a small and large business are 5) A) employee morale and customer satisfaction.

B) more attractive window displays and speedier delivery of merchandise.

C) higher volume and larger transactions.

D) quality of life for employees and technology infrastructure.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 13-01 Describe the problems that success and growth can bring to the small busin Topic : 13-01 Small Business and Growth Source : Chapter 13 Test Bank > TB 13-05 Two distinctions between a small and large b...

6) Which is not what owner-managers should do to try to ensure long-term viability early in the

life of the business?

6) A) Need to understand the life cycle of the business B) Be aware of some of the more common growth problems a business is likely to face C) Take specific steps in planning for growth of the business D) Ensure the location infrastructure is suitable for long-term needs of the business Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 13-01 Describe the problems that success and growth can bring to the small busin Topic : 13-01 Small Business and Growth Source : Chapter 13 Test Bank > TB 13-06 Which is not what owner-managers should do t...

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7) Which is not an advantage of growing a business?

7) A) Requiring more time and energy of the owner to manage the business B) Raising capital more easily C) Attracting and retaining quality employees D) Building an asset out of the business that can be sold for more money Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 13-01 Describe the problems that success and growth can bring to the small busin Topic : 13-01 Small Business and Growth Source : Chapter 13 Test Bank > TB 13-07 Which is not an advantage of growing a busin...

8) To avoid the pitfalls of growth and changes in the market, which of these is not suggested

that owner-managers do to ensure long-term viability early in the life of the business?

8) A) Owner-managers need to understand the life cycle of the business to effectively plan

for the future.

B) Owner-managers should find creative ways to avoid paying taxes to suppliers and the government.

C) Owner-managers should be aware of some of the more common growth problems a business is likely to face.

D) Owner-managers should take specific steps in planning for the growth of the business.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 13-01 Describe the problems that success and growth can bring to the small busin Topic : 13-01 Small Business and Growth Source : Chapter 13 Test Bank > TB 13-08 To avoid the pitfalls of growth and changes ...

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9) The business cycle and the product life cycle 9) A) are sometimes the same as one another.

B) are always different.

C) are never determinable.

D) are of little value to know.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 13-02 Examine the characteristics of the stages in the business life cycle.

Topic : 13-02 The Business Cycle Source : Chapter 13 Test Bank > TB 13-09 The business cycle and the product life cycl...

10) The start-up stage of a business is known for its 10) A) expansion of product lines.

B) growth characteristics.

C) level sales results.

D) low profits.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 13-02 Examine the characteristics of the stages in the business life cycle.

Topic : 13-03 Introduction Source : Chapter 13 Test Bank > TB 13-10 The start-up stage of a business is known fo...

11) In the decline stage of a business 11) A) sales may decline but profits usually remain constant.

B) both sales and profits usually decline.

C) sales may increase for a while but profits decline steadily.

D) nothing can be done to halt the decline.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 13-02 Examine the characteristics of the stages in the business life cycle.

Topic : 13-06 Decline Source : Chapter 13 Test Bank > TB 13-11 In the decline stage of a business

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12) A business can become more competitive by 12) A) improving its factory decor.

B) adding new products or expanding to new markets.

C) lowering cost prices in order to increase sales.

D) firing employees.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 13-02 Examine the characteristics of the stages in the business life cycle.

Topic : 13-05 Maturity Source : Chapter 13 Test Bank > TB 13-12 A business can become more competitive by

13) At the end of a growth stage 13) A) a business will need to make changes in its business strategy.

B) a business will have significant cash balances on hand.

C) a business will be able to coast along without entering a decline stage.

D) a business will not have any competition.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 13-02 Examine the characteristics of the stages in the business life cycle.

Topic : 13-04 Growth Source : Chapter 13 Test Bank > TB 13-13 At the end of a growth stage

14) In what stage of the business life cycle does the owner's responsibility become much more

managerial?

14) A) Introduction B) Growth C) Maturity D) Decline Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 13-02 Examine the characteristics of the stages in the business life cycle.

Topic : 13-05 Maturity Source : Chapter 13 Test Bank > TB 13-14 In what stage of the business life cycle doe...

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15) The owner's role tends to be more technical and entrepreneurial in this stage of the business

cycle.

15) A) Introduction B) Growth C) Maturity D) Decline Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 13-02 Examine the characteristics of the stages in the business life cycle.

Topic : 13-03 Introduction Source : Chapter 13 Test Bank > TB 13-15 The owner's role tends

16) Most high-growth firms indicate that this is the stage of the business cycle at which the most

severe cash flow problems occur in.

16) A) Introduction B) Growth C) Maturity D) Decline Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 13-02 Examine the characteristics of the stages in the business life cycle.

Topic : 13-04 Growth Source : Chapter 13 Test Bank > TB 13-16 Most high-growth firms indicate that this is...

17) As a business grows 17) A) owners and employees tend to develop closer relationships.

B) it becomes easier to find and integrate new employees.

C) owners often need to let go of managing all parts of the operation.

D) departments and individuals begin to work together more productively.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 13-03 Explain how to sustain the business despite the difficulties created by gr Topic : 13-08 Owner-Manager Fatigue and Stress Source : Chapter 13 Test Bank > TB 13-17 As a business grows

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18) High growth firms in Canada 18) A) are able to accumulate significant cash balances to fund further growth.

B) inevitably become profitable.

C) usually fund growth from current sales.

D) often do not make any money for many years.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 13-03 Explain how to sustain the business despite the difficulties created by gr Topic : 13-12 Shortage of Cash Source : Chapter 13 Test Bank > TB 13-18 High growth firms in Canada

19) One of the biggest challenges facing growth companies is 19) A) financial planning.

B) marketing.

C) human resources.

D) technology.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 13-03 Explain how to sustain the business despite the difficulties created by gr Topic : 13-10 Human Resources Problems Source : Chapter 13 Test Bank > TB 13-19 One of the biggest challenges facing growth ...

20) Which is not one of the major problems created by growth of businesses indicated in the

textbook?

20) A) Lack of communication B) Low Profitability C) Too much Information D) Owner Lifestyle Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 13-03 Explain how to sustain the business despite the difficulties created by gr Topic : 13-07 Problems Created By Growth Source : Chapter 13 Test Bank > TB 13-20 Which is not one of the major problems creat...

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21) The following expense categories are particularly significant during growth periods 21) A) entertaining potential customers.

B) research and development of markets.

C) executive salaries.

D) rent.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 13-03 Explain how to sustain the business despite the difficulties created by gr Topic : 13-18 Is The Business One That Can Grow?

Source : Chapter 13 Test Bank > TB 13-21 The following expense categories are particu...

22) Before choosing to grow it is important to determine 22) A) whether the product can grow in sales.

B) if competitors will permit the business to grow.

C) how much it will cost to terminate employees if growth doesn't happen.

D) if customers will support the initiative.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 13-03 Explain how to sustain the business despite the difficulties created by gr Topic : 13-18 Is The Business One That Can Grow?

Source : Chapter 13 Test Bank > TB 13-22 Before choosing to grow it is important to d...

23) Which is not a common strategy for pursuing growth?

23) A) Find existing uses for the product or service B) Add new products or services C) Acquire other small companies D) Increase sales of existing products or services Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 13-03 Explain how to sustain the business despite the difficulties created by gr Topic : 13-21 How Should the Owner-Manager Pursue growth?

Source : Chapter 13 Test Bank > TB 13-23 Which is not a common strategy for pursuing ...

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24) The owner-manager should assess whether the needed

can be obtained to deal

effectively with growth.

24) A) cash, interest, and products B) capital, labour, and expertise C) time, energy, and commitment D) inputs and outputs Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 13-03 Explain how to sustain the business despite the difficulties created by gr Topic : 13-20 Does the Owner-Manager Have the Capabilities to Grow?

Source : Chapter 13 Test Bank > TB 13-24 The owner-manager should assess whether the ...

25) When it comes to growth, management often 25) A) injects their personal funds to finance growth.

B) puts more merchandise on the shelves and hopes for the best.

C) seeks guidance from suppliers for growth strategies.

D) overlooks the importance of planning.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 13-04 Illustrate the importance of planning for growth.

Topic : 13-22 Planning for Growth Source : Chapter 13 Test Bank > TB 13-25 When it comes to growth, management often

26) Human resource needs of growth can be addressed by 26) A) paying higher wages than competitors.

B) purchasing technology to control increased operations.

C) enhancing the skills of current employees.

D) advertising new job openings.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 13-04 Illustrate the importance of planning for growth.

Topic : 13-24 Understanding the Requirements of Growth Source : Chapter 13 Test Bank > TB 13-26 Human resource needs of growth can be addres...

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27) Growth planning requires attention to external forces such as 27) A) average cost per unit of product.

B) social and cultural norms.

C) owner's income goals.

D) age of company fleet of delivery vehicles.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 13-04 Illustrate the importance of planning for growth.

Topic : 13-24 Understanding the Requirements of Growth Source : Chapter 13 Test Bank > TB 13-27 Growth planning requires attention to extern...

28) As a business grows 28) A) it becomes more difficult to control.

B) it becomes easier to control.

C) control becomes a less significant concern.

D) it is better able to afford outsourcing managerial control.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 13-04 Illustrate the importance of planning for growth.

Topic : 13-24 Understanding the Requirements of Growth Source : Chapter 13 Test Bank > TB 13-28 As a business grows

29) Franchising is a strategy that may 29) A) overcome the weakness of a poor product.

B) provide management with more borrowed funds.

C) not be possible to control.

D) enable high growth with limited capital.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 13-04 Illustrate the importance of planning for growth.

Topic : 13-24 Understanding the Requirements of Growth Source : Chapter 13 Test Bank > TB 13-29 Franchising is a strategy that may

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30) Which is not a managerial control that would be implemented during business growth?

30) A) Ratio analysis B) Benchmarking C) Restrict sales volumes D) Margins Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 13-04 Illustrate the importance of planning for growth.

Topic : 13-24 Understanding the Requirements of Growth Source : Chapter 13 Test Bank > TB 13-30 Which is not a managerial control that would...

31) Which is not a step in the expansion plan?

31) A) Set Objectives B) Select the Best Alternatives C) Implementation D) Determine Alternatives Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 13-04 Illustrate the importance of planning for growth.

Topic : 13-23 The Expansion Plan Source : Chapter 13 Test Bank > TB 13-31 Which is not a step in the expansion pla...

32) The aim of this requirement of growth is to reduce the owner's span of control, allow

managers the space to make decisions, and let owners focus on planning and long-term strategy development of the business.

32) A) Organizational Change B) Intelligent Expansion C) Implementing Managerial Controls D) Additional Capital Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 13-04 Illustrate the importance of planning for growth.

Topic : 13-24 Understanding the Requirements of Growth Source : Chapter 13 Test Bank > TB 13-32 The aim of this requirement of growth is to ...

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Answer Key Test name: Chapter 13 Test Bank 1) A 2) C 3) B 4) D 5) C 6) D 7) D 8) B 9) A 10) D 11) B 12) B 13) A 14) C 15) A 16) B 17) C 18) D 19) C 20) C 21) B 22) A 23) A 24) B 25) D 26) C 27) B 28) A 29) D 30) C 31) C 32) A

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MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

1) One of the four possible "outcomes" for a business identified by the text is 1) A) sell the business to an employee.

B) merge with another business.

C) go global.

D) change its product line.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 14-01 Explain the importance of planning for the long-term and the possible tran Topic : 14-01 Long-Range Planning Source : Chapter 14 Test Bank > TB 14-01 One of the four possible outcomes for a bu...

2) If one tries to sell their business in a hurry 2) A) it is likely they will regret the move.

B) they can usually find someone who is anxious to be an entrepreneur.

C) they might get much less than it is worth.

D) it is possible to take advantage of certain income tax breaks.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-01 Explain the importance of planning for the long-term and the possible tran Topic : 14-01 Long-Range Planning Source : Chapter 14 Test Bank > TB 14-02 If one tries to sell their business in a hur...

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3) When an owner-manager wishes to retire, they generally want the business to continue to

prosper and grow and hope to realize a financial gain. This is referred to as 3) A) winning.

B) harvesting.

C) giving up.

D) capitulating.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-01 Explain the importance of planning for the long-term and the possible tran Topic : 14-01 Long-Range Planning Source : Chapter 14 Test Bank > TB 14-03 When an owner-manager wishes to retire, they...

4) Due to the number of firms hitting the marketplace at the same time, this could be

devastating to entrepreneurs looking to cash in on the sale of their firm. Brent Boyd forecasts that percent of firms will not actually find a buyer.

4) A) 50 to 60 B) 60 to 70 C) 70 to 80 D) 80 to 90 Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-01 Explain the importance of planning for the long-term and the possible tran Topic : 14-01 Long-Range Planning Source : Chapter 14 Test Bank > TB 14-04 Due to the number of firms hitting the marke...

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5) Which of these is not an option identified in the textbook for owner-managers who wish to

retire and no longer run their business?

5) A) Transferring ownership to family members B) Selling the business to an employee C) Capturing as much cash as possible by not paying suppliers and taxes D) Closing down the business or declaring bankruptcy Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-01 Explain the importance of planning for the long-term and the possible tran Topic : 14-02 Alternatives for the Business Source : Chapter 14 Test Bank > TB 14-05 Which of these is not an option identified i...

6) Owners who intend to sell their business should ensure that 6) A) the business is in a mature stage.

B) it can run without them.

C) they don't saturate the market.

D) there is lots of cash in the bank.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-01 Explain the importance of planning for the long-term and the possible tran Topic : 14-03 Succession Planning Source : Chapter 14 Test Bank > TB 14-06 Owners who intend to sell their business sho...

7) A big shock is usually in store for entrepreneurs when 7) A) competitors become aggressive.

B) banks require monthly interest payments on their loan.

C) key employees ask for a raise.

D) they receive the first offer for their business.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-01 Explain the importance of planning for the long-term and the possible tran Topic : 14-03 Succession Planning Source : Chapter 14 Test Bank > TB 14-07 A big shock is usually in store for entrepre...

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8) Prospective buyers are very interested in businesses that 8) A) have a friendly work atmosphere.

B) have established themselves as price leaders.

C) have consistent revenue.

D) don't rely on technology instead of people.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 14-01 Explain the importance of planning for the long-term and the possible tran Topic : 14-03 Succession Planning Source : Chapter 14 Test Bank > TB 14-08 Prospective buyers are very interested in bu...

9) Which is not a suggested tactic for owners in succession planning?

9) A) Start to prepare financial statements B) Grow stable revenue C) Get an evaluation of the firm D) Ensure you are an irreplaceable aspect of the business Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-01 Explain the importance of planning for the long-term and the possible tran Topic : 14-03 Succession Planning Source : Chapter 14 Test Bank > TB 14-09 Which is not a suggested tactic for owners i...

10) In a recent survey,

family businesses had no formal succession plans.

10)

A) 80 percent of B) very few C) second generation D) less than 25 percent of well-established Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 14-02 Review the unique characteristics and problems of owning a family business Topic : 14-04 Transferring Ownership to Family Members Source : Chapter 14 Test Bank > TB 14-10 In a recent survey, family businesses...

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11) There are many people who believe that 11) A) children always want to succeed their parents in the family business.

B) children are usually the best fit as successors in a family-owned business.

C) parents would be better-off to leave their children out of the family business.

D) parents may take too passive a role in attempting to interest their children in the

business.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-02 Review the unique characteristics and problems of owning a family business Topic : 14-04 Transferring Ownership to Family Members Source : Chapter 14 Test Bank > TB 14-11 There are many people who believe that

12) Some generally recognized ways to transfer a family-owned business to family members are 12) A) close the doors, walk away, and let the children assume operations.

B) through a gifting program or joint ownership.

C) by selling it to a third party who will guarantee to include the children as top

executives.

D) to hire the children as CEO's and let them assume management.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 14-02 Review the unique characteristics and problems of owning a family business Topic : 14-04 Transferring Ownership to Family Members Source : Chapter 14 Test Bank > TB 14-12 Some generally recognized ways to transfer a...

13) Family-owned business leaders often represent the greatest risk to the business when they 13) A) get out of touch with modern business practices.

B) become disabled or even die.

C) become too comfortable in their life style.

D) don't share authority.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 14-02 Review the unique characteristics and problems of owning a family business Topic : 14-04 Transferring Ownership to Family Members Source : Chapter 14 Test Bank > TB 14-13 Family-owned business leaders often represen...

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14) Two principles of success for family-owned businesses are 14) A) recognize the importance of objectivity and provide incentives for non-family

employees.

B) remember that family comes first and roles should be clearly defined.

C) meet regularly to discuss financial details of the business with family members who are involved in the business and use capable managers even if they are not family.

D) clarify the objectives of the business and make sure that suppliers deal only with family members.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-02 Review the unique characteristics and problems of owning a family business Topic : 14-04 Transferring Ownership to Family Members Source : Chapter 14 Test Bank > TB 14-14 Two principles of success for family-owned b...

15) Which is not a common method of transferring the business to family members?

15) A) Will B) Joint ownership C) Life line D) Purchase and sale of the business Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-02 Review the unique characteristics and problems of owning a family business Topic : 14-04 Transferring Ownership to Family Members Source : Chapter 14 Test Bank > TB 14-15 Which is not a common method of transferring...

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16) One specific tax consequence of transfers of business ownership within a family is 16) A) making more profit.

B) making less profit.

C) losing customers.

D) capital gains.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-02 Review the unique characteristics and problems of owning a family business Topic : 14-04 Transferring Ownership to Family Members Source : Chapter 14 Test Bank > TB 14-16 One specific tax consequence of transfers of...

17) The "deemed disposition" rule of transfers of business ownership to family members is that

the business is deemed to have been sold 17) A) at the value of its assets before depreciation.

B) at market price whether or not the market price was actually paid.

C) at the cost price of its assets before depreciation.

D) at the difference between the market price and the cost price of the assets of the

business.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-02 Review the unique characteristics and problems of owning a family business Topic : 14-04 Transferring Ownership to Family Members Source : Chapter 14 Test Bank > TB 14-17 The deemed disposition rule of transfers o...

18) Which is not a principle of success for family businesses?

18) A) Create flexible role structures B) Ensure competence C) Recognize the importance of objectivity D) Clarify objectives of family owners Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-02 Review the unique characteristics and problems of owning a family business Topic : 14-04 Transferring Ownership to Family Members Source : Chapter 14 Test Bank > TB 14-18 Which is not a principle of success for fami...

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19) A common reason for selling a small business is 19) A) to be able to spend more time on other areas of interest.

B) to start another small business.

C) to maximize the owner's return on their investment of time and capital.

D) to avoid having to repay some of the business's debt.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-03 Explain the critical considerations in selling the business to employees o Topic : 14-06 Selling the Business to Outsiders Source : Chapter 14 Test Bank > TB 14-19 A common reason for selling a small business...

20) Owners who have taken their small business public sometimes 20) A) regret their choice of stock exchange.

B) end up losing their gains through poor investment decisions.

C) avoid paying taxes on their gains.

D) wish they had sold their shares privately.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 14-03 Explain the critical considerations in selling the business to employees o Topic : 14-06 Selling the Business to Outsiders Source : Chapter 14 Test Bank > TB 14-20 Owners who have taken their small business p...

21) Going public is when an entrepreneur sells a percentage of their business to the public in an 21) A) IPO (initial public offering).

B) IPO (imminent privatization objective).

C) IPO (imminent public objectivization).

D) IPO (initial privatization objective).

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-03 Explain the critical considerations in selling the business to employees o Topic : 14-06 Selling the Business to Outsiders Source : Chapter 14 Test Bank > TB 14-21 Going public is when an entrepreneur sells a...

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22) Which is not a characteristic that may indicate the small business is in a favourable position

to go public?

22) A) The business can and does generate a return on equity of at least 20 to 25 percent.

B) The company is in an above-average growth position.

C) The company has at least $50 million in annual revenues.

D) The company has reached the point at which it needs a substantial amount of capital

for growth and expansion.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-03 Explain the critical considerations in selling the business to employees o Topic : 14-06 Selling the Business to Outsiders Source : Chapter 14 Test Bank > TB 14-22 Which is not a characteristic that may indicate t...

23) When going public, a business owner is likely to make use of 23) A) a business broker.

B) their industry or trade association.

C) an investment dealer.

D) a marketing firm.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 14-03 Explain the critical considerations in selling the business to employees o Topic : 14-06 Selling the Business to Outsiders Source : Chapter 14 Test Bank > TB 14-23 When going public, a business owner is likel...

24) An ESOP refers to an 24) A) Earnings to Share Operating Procedure.

B) Employee Share Ownership Plan.

C) Elevated Standardized Operational Program.

D) Employer Stock Options Plan.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-03 Explain the critical considerations in selling the business to employees o Topic : 14-05 Selling the Business to an Employee Source : Chapter 14 Test Bank > TB 14-24 An ESOP refers to an

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25) Public ownership is a good way to 25) A) raise a significant amount of capital.

B) engage a community.

C) increase sales.

D) share liabilities.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 14-03 Explain the critical considerations in selling the business to employees o Topic : 14-06 Selling the Business to Outsiders Source : Chapter 14 Test Bank > TB 14-25 Public ownership is a good way to

26) Which is not a step that should be part of a succession plan that sells the business to an

employee?

26) A) Identify the timeframe and exit strategy B) Choose the successor C) Make yourself irreplaceable D) Find a way to fund the transition Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-03 Explain the critical considerations in selling the business to employees o Topic : 14-05 Selling the Business to an Employee Source : Chapter 14 Test Bank > TB 14-26 Which is not a step that should be part of a...

27) The least desirable outcomes for a small business include 27) A) losing the respect of competitors.

B) prepaying income taxes.

C) losing a long-time employee.

D) closing down.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-04 Review information pertaining to the closing down of the business.

Topic : 14-07 Going Public Source : Chapter 14 Test Bank > TB 14-27 The least desirable outcomes for a small bus...

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28) It is easier for

to close down.

28)

A) a business that sells consumer products than a service business B) a limited company than a partnership business C) an unincorporated business than an incorporated business D) a manufacturing business than a service business Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 14-04 Review information pertaining to the closing down of the business.

Topic : 14-07 Going Public Source : Chapter 14 Test Bank > TB 14-28 It is easier for to close down.

29) Bankruptcy is just a form of 29) A) saving money.

B) exiting a business.

C) avoiding liabilities.

D) dealing with excess cash.

Question Details Accessibility : Keyboard Navigation Difficulty : Easy Learning Objective : 14-04 Review information pertaining to the closing down of the business.

Topic : 14-07 Going Public Source : Chapter 14 Test Bank > TB 14-29 Bankruptcy is just a form of

30) Many small businesses go into bankruptcy because 30) A) of a lack of profitability.

B) creditors are unfriendly.

C) the owners are tired of managing.

D) competitors have become more aggressive.

Question Details Accessibility : Keyboard Navigation Difficulty : Medium Learning Objective : 14-04 Review information pertaining to the closing down of the business.

Topic : 14-07 Going Public Source : Chapter 14 Test Bank > TB 14-30 Many small businesses go into bankruptcy bec...

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31) When it comes to debt obligations 31) A) no form of business has any protection.

B) business owners are always personally liable.

C) closing down a business eliminates those obligations.

D) an incorporated company has some protection.

Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 14-04 Review information pertaining to the closing down of the business.

Topic : 14-07 Going Public Source : Chapter 14 Test Bank > TB 14-31 When it comes to debt obligations

32) When closing down a business, an incorporated company is required to file

and

notify government agencies.

32) A) bankruptcy paperwork B) dissolution forms C) receivership forms D) forms for tax relief Question Details Accessibility : Keyboard Navigation Difficulty : Hard Learning Objective : 14-04 Review information pertaining to the closing down of the business.

Topic : 14-07 Going Public Source : Chapter 14 Test Bank > TB 14-32 When closing down a business, an incorporate...

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Answer Key Test name: Chapter 14 Test Bank 1) A 2) C 3) B 4) D 5) C 6) B 7) D 8) C 9) D 10) A 11) D 12) B 13) B 14) A 15) C 16) D 17) B 18) A 19) C 20) D 21) A 22) C 23) C 24) B 25) A 26) C 27) D 28) C 29) B 30) A 31) D 32) B

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