Entrepreneurship Sr.. Exam Study Guide 2013
True/False
Indicate whether the statement is true or false.
____
1. Getting a product to the market in a timely manner is an important component of the distribution phase.
____
2. There are no intermediaries involved in the manufacturer to consumer distribution option, and it is the most
cost-effective.
____
3. Retail businesses, service businesses, and manufacturing businesses all tend to use the same channels of
distribution.
____
4. Most manufacturers sell directly to customers.
____
5. Small companies generally use advertising agencies to create their advertisements since they do not have the
expertise to create their own ads.
____
6. Determining the effectiveness of online advertising is more accurate than other forms of traditional
advertising.
____
7. Television reaches too broad an audience to be effective for most businesses.
____
8. Most small, local businesses would be wasting their time and money to advertise in a national magazine like
Ebony or Sports Illustrated.
____
9. One similarity between advertising and publicity is that a business must pay for them both.
____ 10. It is important for the salesperson to uncover and identify the customer’s needs, issues, and concerns so that
they can be addressed throughout the sales process.
____ 11. Customers are mainly interested in the features of a product or service, rather than the benefits they will
receive.
____ 12. Lower-level needs are not usually met through personal selling.
____ 13. Problem resolution requires the salesperson to adopt the customer’s point of view.
____ 14. Little time is usually spent on emotional buying decisions.
____ 15. Using the telephone to promote your product is called spamming.
____ 16. Rules, policies, procedures, and budgets are important components of strategic planning.
____ 17. Organizing involves directing and leading people to accomplish the goals of the organization.
____ 18. The authoritative management style should never be used in today’s modern workplace.
____ 19. Comparing actual revenues and expenses with what was projected is an example of the controlling function of
management.
____ 20. Procedures are more specific than rules.
____ 21. As a business owner, it is important for you never to make exceptions to rules, policies, and procedures once
they are established because if you do, customers and employees will become confused.
____ 22. Successful inventory management involves balancing the costs of inventory with the benefits of having
inventory in stock.
____ 23. The perpetual inventory method keeps track of inventory levels on a weekly basis.
____ 24. The minimum amount of merchandise a business wants to keep in inventory is often referred to as the reorder
point.
____ 25. At least two people should be involved in taking a physical inventory.
____ 26. The cost of insurance tends to decrease as the value of the inventory insured increases.
____ 27. Two businesses with the same level of sales and expenses will have the same cash flow.
____ 28. One way to improve your cash receipts is to decrease your accounts receivable by getting customers who owe
you money to pay more quickly.
____ 29. Increasing payroll can improve a business’s cash flow.
____ 30. The three most important elements of a company’s financial strength are its assets, liabilities, and owner’s
equity.
Multiple Choice
Identify the choice that best completes the statement or answers the question.
____ 31. The component of the marketing mix that involves the locations and methods used to make products available
to customers is called
a. promotion.
c. selling.
b. distribution.
d. shipping.
____ 32. In which of the following distribution options does the manufacturer not get involved in selling?
a. manufacturer to consumer
b. manufacturer to retailer to consumer
c. manufacturer to agent to wholesaler to retailer to consumer
d. the manufacturer is involved in selling in all of the distribution options
____ 33. Storing products in warehouses at various points through the channels of distribution
a. allows channel members to balance supply and demand of products.
b. reduces the cost of the products.
c. decreases the risk that products may be damaged or stolen while stored.
d. all of the above.
____ 34. A type of online ad that changes the background of the page being viewed is called a
a. floating ad.
c. pop-up ad.
b. banner ad.
d. wallpaper ad.
____ 35. The best advertising method to use to reach a lot of people quickly is
a. online advertising.
c. newspaper advertising.
b. television advertising.
d. billboards.
____ 36. Newspaper advertising
a. is relatively expensive.
b. targets a wide geographic area.
c. reaches large numbers of people who may not be interested in your product or service.
d. is rarely used by small businesses.
____ 37. The act of establishing a favorable relationship with customers and the general public is called
a. public relations.
c. publicity.
b. self-promotion.
d. advertising.
____ 38. Some customers will know exactly what they want, and the fulfillment of their needs is referred to as
a. a cost-benefit analysis.
c. need satisfying.
b. problem resolution.
d. personal gratification.
____ 39. Which of the following is probably an emotional buying decision?
a. Juan rushes to the card shop to buy a Valentine card for his brand new girlfriend.
b. The McDougal family spends all afternoon visiting different appliance stores in search of
a new dishwasher.
c. Amber drops into the college bookstore to buy the textbooks she will need for her classes
this semester.
d. Lester carefully compares the benefits and features of several automobiles before deciding
which one he will purchase.
____ 40. Which of the following is not an example of a sales promotion?
a. a contest
c. a free sample
b. a radio advertisement
d. a coupon
____ 41. The person in a business who is responsible for planning, organizing, staffing, implementing, and controlling
the operations of a business is the
a. shop steward.
c. manager.
b. intern.
d. employee.
____ 42. Which of the following is not generally thought of as part of the organizing function?
a. organizing tasks into departments
c. allocating resources
b. assigning tasks
d. strategic planning
____ 43. A management style in which employees are involved in decision making and the manager provides less
direction is called
a. democratic management.
c. autocratic management.
b. mixed management.
d. authoritative management.
____ 44. The process of setting standards for the operation of a business and ensuring those standards are met is called
a. supervising.
c. controlling.
b. staffing.
d. implementing.
____ 45. Guidelines for the daily operations of a business are called
a. rules.
b. policies.
c. procedures.
d. mandates.
____ 46. All of the following are concerns about inventory that managers must address except
a. maintaining a wide assortment of stock.
b. reducing inventory turnover.
c. not ending up with out-of-date items.
d. keeping stock levels as low as possible without sacrificing performance or service.
____ 47. This inventory method involves taking a physical count of your merchandise at regular intervals, such as
weekly or monthly.
a. point-of-sale inventory method
c. manual inventory method
b. perpetual inventory method
d. periodic inventory method
____ 48. This type of budget shows the projections of a business’s cash flow.
a. sales budget
c. production budget
b. cash budget
d. general budget
____ 49. Which of the following is not a strategy a business can use to encourage faster payment?
a. increase the amount of time your customers have to pay their bills
b. offer discounts on bills paid right away
c. hire a collection agency to track down customers who are late with their payments
d. all of the above
____ 50. The dollar amount of all sales with any returns subtracted is called
a. gross profit.
c. gross sales.
b. net income.
d. net sales.
Completion
Complete each statement.
51. ____________________ of distribution are the routes that products and services take from the time they are
produced to the time they are consumed.
52. People or businesses such as agents and wholesalers that move products between the manufacturer and the
consumer are called ____________________.
53. A direct channel moves the product directly from the ____________________ to the consumer.
54. ____________________ is a paid form of communication sent out by a business about a product or service.
55. A special type of television advertisement called a(n) ____________________ can last a half hour or more
and go into great depth about the product being offered.
56. ____________________-mail advertising includes fliers, catalogs, letters, and other correspondence sent to
target customers through the mail.
57. A(n) ____________________ release is a written statement meant to inform the media of an event or product.
58. ____________________ are the physical characteristics or capabilities of the product or service.
59. ____________________ buying decisions are based on the logical reasoning of customers.
60. A(n) ____________________ is a refund offered to people who buy a product.
61. An organizational ____________________ is a plan that shows how the various jobs in a company relate to
one another.
62. ____________________ includes all of the activities involved in obtaining, training, and compensating the
employees of a business.
63. Combining authoritative and democratic management styles is called ____________________ management.
64. A(n) ____________________ manual contains all of the rules, policies, and procedures that a business should
follow in order to function effectively.
65. Beginning inventory + Purchases – ____________________ = Ending inventory
66. A(n) ____________________ card is a paper inventory record for a single item.
67. The costs of holding inventory are known as ____________________ costs.
68. The stock ____________________ rate is the rate at which the inventory of a product is sold and replaced
with new inventory.
69. ____________________ sales is the dollar amount of all sales.
70. The ____________________ point is the volume of sales that must be made to cover all of the expenses of a
business.
Entrepreneurship Sr.. Exam Study Guide 2013
Answer Section
TRUE/FALSE
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T
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MULTIPLE CHOICE
31.
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ANS:
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B
C
A
D
B
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A
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C
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B
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COMPLETION
51. ANS: Channels
PTS: 1
52. ANS: intermediaries
PTS: 1
53. ANS: manufacturer
PTS: 1
54. ANS: Advertising
PTS: 1
55. ANS: infomercial
PTS: 1
56. ANS: Direct
PTS: 1
57. ANS: press
PTS: 1
58. ANS: Features
PTS: 1
59. ANS: Rational
PTS: 1
60. ANS: rebate
PTS: 1
61. ANS: structure
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PTS: 1
62. ANS: Staffing
PTS: 1
63. ANS: mixed
PTS: 1
64. ANS: operations
PTS: 1
65. ANS: Sales
PTS: 1
66. ANS: stock
PTS: 1
67. ANS: carrying
PTS: 1
68. ANS: turnover
PTS: 1
69. ANS: Gross
PTS: 1
70. ANS: breakeven
PTS: 1