Mid-term Practice Test, Business 100, Northern Virginia Community College
Following are the tests given in past classes. The Alert Student can expect similar questions.
Thank you (foot)notes:
Business 100, Test # 1, Chapters 1, 2, 3, 4, 5, 6 Name __________________
Circle the most correct letter.
1 – 36 @ 3 pts ea. – 6 Bonus questions @ 2 pts ea. – max 100 pts Date __________________
1. Raw materials, buildings, and machinery are _________ resources.
2. What resource tells the managers of a business how effectively other resources are being combined and used?
3. The relationship between sales and profits can be written as
A) sales revenues + expenses = profit.
B) loss + profit = sales revenue.
C) profit – expenses = sales revenue.
D) expenses + loss = sales revenue + profit.
E) sales revenue – expenses = profit.
4. Public utilities are often referred to as
A) sole proprietorships.
B) monopolistic competitors.
5. Customers expect a firm’s products to
A) boost sales.
B) be profitable.
C) earn a reasonable return on investment.
D) be available everywhere.
E) be safe, reliable, and reasonably priced.
6. Tony Blankley is applying for a mortgage to purchase his first home. His credit rating is mediocre due to several late payments on his credit cards and car loan. He is upset because his friend Jerry was offered an interest rate 3 percent less than what Tony was offered by the same mortgage company. This mortgage company’s actions were
A) unethical–both Tony and Jerry should have been charged the same interest rates, regardless of their credit histories.
B) ethical–this is just a part of doing business because credit history is an important indicator of future payments.
C) illegal–subjective factors may not be used when determining which credit offers may be extended to certain customers.
D) unethical if Tony is a minority and Jerry is not.
E) unethical and illegal–customers must all be treated the same.
7. Business ethics
A) is laws and regulations that govern business.
B) is the application of moral standards to business situations.
C) do not vary from one person to another.
D) is most important for advertising agencies.
E) is well-defined rules for appropriate business behavior.
8. Each Saturday night, someone in the community called the local police to control the noisy, riotous activity at Billy Bob’s Tavern. However, Mr. Bob never took action on his own and ignored the problem. Eventually, local residents forced him out of business. Mr. Bob might be in business today had he
A) been less responsive to the community’s needs.
B) simply reopened his business in the same location.
C) worked more with the community to solve the problem.
D) read all complaint letters over coffee.
E) asked the police to stop bothering him.
9. Purchasing products or materials in other nations and bringing them into one’s own country is
10. Faisal Alam purchases a Turkish rug from a local rug gallery in Dallas, Texas. Which of the following best describes this transaction?
A) Faisal Alam is simply a consumer, and the retailer imported the rug from Turkey.
B) Faisal Alam is the consumer, and the retailer exported the rug from Turkey.
C) The original rug manufacturer from Turkey imported the materials to make the rug.
D) Faisal Alam is a direct importer in this situation because she is purchasing a product made in Turkey.
E) Faisal Alam is a direct exporter in this situation because the money she is spending will go to manufacturers in Turkey.
11. Which of the following best defines balance of trade?
A) Purchasing products in other countries and bringing them into one’s own country.
B) The total value of a nation’s exports minus the total value of its imports, over some period of time.
C) The total flow of money into the country minus the total flow of money out of the country, over some period of time.
D) The ability to specialize in the production of a specific product and trade it for other needed products.
E) The ability to produce a certain product more efficiently than any other nation.
12. When a country imports more than it exports, it has a(n)
A) trade surplus.
B) favorable balance of trade.
C) favorable exchange role.
D) unfavorable balance of trade.
E) favorable balance of payments.
13. When the United States levies a tax on textiles from India, this tax is a type of
A) export duty.
14. China is selling school supplies in the United States for very low prices, even lower than the prevailing prices in China, and thus making it extremely difficult for American manufacturers to compete. This is referred to as
C) an embargo.
15. Rebecca owns and operates a large hardware store in Missouri that employs about fifty people. She delegates some of the decision making to two managers, but she remains the only owner. Rebecca’s business is organized as a
C) sole proprietorship.
D) limited partnership.
E) limited-liability corporation.
16. Which of the following is necessary for starting a sole proprietorship?
A) A contract
B) An agreement
C) An application to the secretary of state
D) Articles of proprietorship
E) No specific legal documents
17. Juan wants to make money, so he starts his own business as a sole proprietor. He likes this form of business because
A) he will get to keep all of the profits the business makes.
B) profit is guaranteed since he will be the only owner.
C) it will provide a steady income for him.
D) he has to split the profits with only one other person.
E) he has to pay small dividends to the other owners.
18. Which of the following is an advantage of a sole proprietorship?
A) The owner has unlimited liability.
B) The business ceases to exist when the owner dies.
C) There is a limit to the amount one person can borrow.
D) Profits are taxed as individual income.
E) There is one-person control of all aspects of the business.
19. Which of the following is not a disadvantage of sole proprietorships?
A) Unlimited liability
B) Lack of capital
C) Double taxation
D) Lack of continuity
E) Limited management skills
20. The person who assumes full co-ownership of a partnership, including unlimited liability, is a
A) sole proprietor.
D) limited partner.
E) general partner.
21. Which of the following would least likely be stated in the articles of partnership?
A) Who will make the final decisions
B) How much each partner will invest
C) What the duties of each partner are
D) What products the company will sell
E) What will happen if a partner dies or wants to dissolve the partnership
22. Bill Russell and Tom Hanks decide to start a partnership and offer accounting services. Which of the following is the best way to start this partnership?
A) They should orally discuss how they want the partnership to work and who is responsible for certain areas.
B) They should determine the exact way the business should be run and have a witness listen to their oral discussion.
C) They should let a third party, such as a consultant or an attorney, draft whatever agreement the consultant or attorney thinks is appropriate.
D) They should carefully draft an articles of partnership together, outlining each partner’s responsibilities and other important information.
E) With the help of an attorney, they should draft a partnership agreement that states each partner’s duties and investments.
23. Carol wants to start a business to sell handmade jewelry. She is very competent at making the jewelry and teaching others to make it, and she has saved a reasonable amount of money to start the business. Who of the following would make the best partner for Kerry?
A) Bill, an artist with a real flair for new-aged jewelry design
B) Ashley, Kerry’s best friend who is fun to hang out with and good at solving problems
C) Natalie, who has business experience with accounting, management, and marketing
D) Janette, who used to work at the jewelry counter at a department store
E) Darla, an engineer with industrial management experience but no money
24. With regard to taxation of partnerships, which of the following statements is correct?
A) Profits are taxed twice.
B) Each partner is taxed in the same way as a sole proprietor.
C) Taxes are paid on a partnership’s profits, after which each partner pays taxes on his or her share of the profits.
D) A partnership is exempt from taxes.
E) The partnership is taxed as a separate entity.
25. Susan has a commercial laundry service that has been growing rapidly. She wants to continue to grow the business, but she needs access to more money and does not want to risk her personal assets. Susan contacts her lawyer to see if all the legal requirements are met to start the process of
B) selling her business.
E) corporate opening.
26. According to the text, which state offers the lowest organizational costs for corporations?
D) New York
27. A small business is all but which one of the following?
A) Independently owned
B) Operated for profit
C) Dominant in its field
D) Difficult to manage
E) Demanding of the owner’s time and attention
28. A company generally needs more than __________ employees in order to be considered large.
29. What is the primary reason that so many new businesses fail?
A) Owner does not work hard enough
B) Mismanagement resulting from lack of business know-how
C) Low employee quality for new businesses
D) Lack of brand-name recognition
E) Inability to compete with well-established brand names
30. Businesses are generally placed into three broad categories: service industries, production industries, and __________ industries.
31. Which one of the following is not a reason for starting a small business?
A) Desire to determine one’s own destiny
B) Willingness to find and accept a challenge
C) Desire for a guaranteed financial return
D) Desire for independence
E) Desire to create a new business
32. The organized effort of individuals to produce and sell, for a profit, the products and services that satisfy society’s needs through the facilities available on the Internet is referred to as
33. A company such as Amazon will have a different way of making business decisions than Barnes and Noble because
A) both companies sell books to their consumers, but the books are different and the companies are expanding their product lines.
B) Barnes and Noble must be concerned with its regular retail operations while Amazon only has an online presence to think about.
C) Amazon is strictly an online retailer, and Barnes and Noble is strictly a traditional retailer without concerns about online issues.
D) both companies manage large inventories using unique distribution channels and techniques.
E) Amazon is a much newer company than Barnes and Noble and will therefore have a different way of making business decisions.
34. All of the following are specialized informational resources for e-business except __________ systems.
A) customer tracking
B) order tracking
C) computer hardware
D) order fulfillment
E) online content-monitoring
35. Which of the following would be considered a revenue stream?
B) Subscription fees
C) Sales of products
D) Sales of services
E) All of the above
36. A cookie
A) is an ethical concern.
B) is a small piece of software code.
C) allows the sender to track the user’s movement on the Internet.
D) is a privacy concern.
E) is all of the above.
BONUS QUESTIONS 2 POINTS each
Give four reasons why someone should study business — and describe
5) What is the difference between B2B and B2C?
Business 100, Test #2, Chapters 7, 8, 10, 11 Name _________________
Circle Correct Letter. 105 max (extra credit) Date _________________
43 questions @ 2 points each; three essay @ five points each
Use the following to answer questions 1-5:
Centrum Springs, Inc.
Riley has worked for Centrum Springs, Inc. for many years and has now been given the opportunity to advance in the company. His manager is retiring and hopes that Riley will take over for him. However, even though Riley is a very experienced employee, there are many things that he still needs to learn. Riley has trained many new employees, but he has never held a management position before. Riley still needs to have a general understanding of what it takes to be a manager.
There are many problems in Riley’s department. There are no plans to fall back on in case the initial plan fails. More important, Riley will need to learn how to direct people in such a way that makes them want to do more than they absolutely have to. Riley feels that this is a great opportunity, and he is anxious to learn everything to be a great manager. He knows that if he performs well in this position, he will have the opportunity to move up the corporate ladder.
1. Riley’s usual duties represent which of these areas?
A) Financial management
B) Operations management
C) Marketing management
D) Human resources management
E) Administrative management
2. The different resources available to all managers include all of these except
3. When Riley learns all that it takes to be a manager, he will be involved in
A) marketing, planning, hiring, and training.
B) controlling, organizing, planning, and leading.
C) leading, motivating, hiring, and firing.
D) planning, controlling, leading, and motivating.
E) leading, motivating, training, and organizing.
4. In the department where Riley works, what types of plans are lacking?
5. If Riley were to take this first step up the corporate ladder, he would be classified as a
A) top manager.
B) strategic manager.
C) tactical manager.
D) middle manager.
E) general manager.
6. Management can achieve its goals by coordinating what four types of resources?
A) Financial, material, organizational, and operational
B) Informational, human, controllable, and tangible
C) Tangible, intangible, human, and financial
D) Human, material, financial, and intangible
E) Material, informational, human, and financial
7. Coordinating people and the other resources of an organization to achieve the goals of the organization is the process of
16. Planning, organizing, leading/motivating, and controlling make up the
A) four organizational goals every firm wants to achieve.
B) step-by-step management procedure.
C) four basic functions in the management process.
D) process of coordinating people and other resources to achieve the goals of the organization.
E) steps taken to achieve an organization’s operational plans.
. __________ is called the first management function because all other management functions depend on it.
. When the management of a large grocery store heard that Super Wal-Mart may be coming to town, they developed alternative courses of action they could take if their competitive landscape changed. What type of plan did they develop?
34. A(n) __________ is a type of plan designed to implement tactical plans.
C) operational plan
D) contingency plan
E) management objective
35. A plan that outlines alternative courses of action is called a(n) __________ plan.
36. The process of influencing people to work toward a common goal is
C) a sign of an autocratic leader.
D) a hands-off approach.
37. Grouping resources and activities to efficiently and effectively accomplish a result is called
E) goal setting.
38. The process of evaluating and regulating ongoing activities to ensure that goals are achieved is known as
39. The ethical violations of many traders on Wall Street in the 1980s led to the downfall of several investment companies, demonstrating that employee goals were not aligned with company goals. This indicates a failure of which basic managerial function?
40. A company like Motorola might establish a goal of reducing its inventory by 50 percent over the next year. To ensure that it reaches this goal, the company could monitor its progress on a quarterly or monthly basis. If the managers at Motorola discover that there is a danger of not achieving this goal, they can take corrective action to adjust for the deficiency. This is a description of the managers’ __________ function.
41. If you were a manager, how would you use the grapevine?
Essay — Answer on back page Five Points.
Use the following to answer questions 42-47:
Dramatic Expressions is a home decorating company that sells many different household accessories ranging from candles to entertainment centers. Wanda is the CEO of the company. She feels that there is not enough specialization within the company and wants to organize the business in a different way. Wanda thinks that the company would be more effective if it were to switch to a new way of organization. For example, there could be a manager in charge of the candles, a different manager in charge of the entertainment centers, and so on.
Another issue that Wanda wants to resolve is that of delegation. She believes that if she could improve her delegating, employees would feel more empowered and want to go above and beyond what they are required to do. There are certain reasons that Wanda has a hard time delegating to others, but she is confident that the problem will be overcome if she works on it.
42. What type of departmentalization does Wanda want to switch to?
A) By function
B) By product
C) By location
D) By customer
E) By responsibility
43. What would be an alternative to specialization if negative consequences were to develop at Dramatic Expressions?
44. Wanda should address all of the following when it comes to organizing the business except
A) job design.
B) regulating behavior.
C) establishing a chain of command.
45. Wanda could best improve delegation by
A) increasing specialization.
B) explaining the purpose of each task.
C) investing the capital necessary for success.
D) changing each job station.
E) decreasing job specialization.
46. What could be a possible reason for Wanda not wanting to delegate work?
A) The employee was unreliable.
B) The employee was not a likable individual.
C) The employee was well-organized.
D) The work involved strict planning.
E) The work took place in an undesirable venue.
. Generally, human resources management is a responsibility shared by line managers and
A) top management.
D) HRM specialists.
E) vestibule centers.
48. At a large book publishing company like Houghton Mifflin, we would expect human resources management to be handled by __________. At a small local print shop, human resources management would probably be __________.
A) a vice president; completely ignored
B) the owner; handled at the vice-presidential level
C) a specialist; assigned to the vice president for personnel management
D) a departmental secretary; completely ignored
E) the personnel manager; the responsibility of the owner
49. Employee compensation systems are generally developed and administered by __________, and pay increases and promotions are usually recommended by __________.
A) top management; HRM specialists
B) unions; line managers
C) HRM specialists; line managers
D) top management; unions
E) professional HR consultants; HRM staff personnel
50. Information on evolving technologies, industry staffing practices, projected economic trends, the particular company’s future business ventures, new products, and projected expansions or contractions of certain product lines can be helpful in predicting
A) human resources supply.
B) level of industry unemployment.
C) human resources demand.
D) quality of new applicants in the job market.
E) trends in the global market with regard to new skills.
51. If the Colgate-Palmolive Company were to develop a replacement chart, the chart would show
A) key personnel along with possible replacements within the firm.
B) those key personnel who are scheduled to be replaced because of poor performance reviews.
C) the skills and experience of key personnel.
D) the time between purchase and replacement of each Colgate product, such as toothpaste.
E) the key items of capital equipment due for replacement within the fiscal year.
52. A computerized data bank containing information on the skills and experience of all employees is called
A) a replacement chart.
B) a skills inventory.
C) a compensation survey.
D) management development.
E) a human resources inventory.
53. The HRM specialists at A&C Company took the opportunity to increase productivity and decrease manual data analysis by using their microcomputer along with a commercial database management system (DBMS) to develop a __________. Now the company can readily identify specific organizational skills, eliminating the need to comb personnel files manually.
A) compensation survey
B) management development program
C) skills inventory
D) human resources inventory
E) replacement chart
54. A list of key personnel as well as possible successors within a firm is called
A) a replacement chart.
B) a skills inventory.
C) management inventory.
D) a wage survey.
E) performance appraisal.
55. When the National Basketball Association players were not able to negotiate a suitable contract, they stopped playing until an agreement could be reached. This is an example of a(n)
D) collective bargaining.
56. Five points: What is the formula for Managerial Success?
____________________ + _______________________= Performance