Entre Study Guide, Final Exam
True/False
Indicate whether the statement is true or false.
____
1. Marketing involves all of the processes used to determine and satisfy the needs of customers and the
company.
____
2. A marketing strategy should always be consistent with the overall goals that have been set for the business.
____
3. Short-term goals are what you want your business to achieve in the next month.
____
4. A business’s marketing plan should never be included in the business plan.
____
5. Over the past 50 years, the U.S. market has changed from being a consumer-driven market to one that is
product-driven.
____
6. It has been found that often a small percentage of the product selection makes up the majority of the sales
revenue.
____
7. In a consumer-driven economy, entrepreneurs realize that sometimes they must include products in their mix
as a convenience for customers even though they may not be profitable.
____
8. Not all products have features.
____
9. Different products and services within the same category serve different customer needs.
____ 10. The objective of every pricing strategy is to increase profits.
____ 11. The total market for a product must be known in order for a market share to be determined.
____ 12. There will usually be more than one price that can be charged for a product.
____ 13. Pricing objectives should be developed only after prices have been set.
____ 14. Markup and markdown prices are two methods of competition-based pricing.
____ 15. When services are combined under one price, rather than making the customer pay for each individual part of
the service, they are said to be bundled.
____ 16. If you are buying an existing business, you should ask the current owner for important information in written
form.
____ 17. Fewer than 70,000 people in the United States own franchises, and the popularity of franchise ownership is
declining rapidly.
____ 18. Initial franchise fees are usually refundable if the franchise owner later decides to go into another line of
business.
____ 19. The Federal Trade Commission requires franchise sellers to give potential buyers a detailed disclosure
document at least ten business days before paying any money or legally committing to a purchase.
____ 20. Not all franchisors help buyers with marketing, merchandising, and site selection.
____ 21. According to some estimates, as many as 90 percent of all businesses, including the vast majority of smalland medium-sized companies, are owned by families.
____ 22. It is generally easier to start a new business than to take over an existing business or purchase a franchise.
____ 23. Income earned by a corporation is taxed twice: once as corporate income and again as individual income.
____ 24. Antitrust laws make monopolies in certain industries illegal; they also ban other types of business activities
that do not promote competition.
____ 25. The Federal Bureau of Investigation is the government agency that monitors activities such as false or
misleading advertising and price setting by competitors.
____ 26. Intellectual property is the original, creative work of an artist or inventor and may include such things as
songs, novels, artistic designs, and inventions.
____ 27. The copyright on a book remains in effect until the author dies.
____ 28. The Consumer Product Safety Act of 1972 requires all banks to calculate credit costs in the same way.
____ 29. A legally binding agreement between two or more persons or parties is called a license.
____ 30. Entrepreneurs should be able to handle minor legal matters themselves.
____ 31. Rules, policies, procedures, and budgets are important components of strategic planning.
____ 32. Organizing involves directing and leading people to accomplish the goals of the organization.
____ 33. The authoritative management style should never be used in today’s modern workplace.
____ 34. Comparing actual revenues and expenses with what was projected is an example of the controlling function of
management.
____ 35. Procedures are more specific than rules.
____ 36. 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.
____ 37. Successful inventory management involves balancing the costs of inventory with the benefits of having
inventory in stock.
____ 38. The perpetual inventory method keeps track of inventory levels on a weekly basis.
____ 39. The minimum amount of merchandise a business wants to keep in inventory is often referred to as the reorder
point.
____ 40. At least two people should be involved in taking a physical inventory.
____ 41. The cost of insurance tends to decrease as the value of the inventory insured increases.
____ 42. Two businesses with the same level of sales and expenses will have the same cash flow.
____ 43. One way to improve your cash receipts is to decrease your accounts receivable by getting customers who owe
you money to pay more quickly.
____ 44. Increasing payroll can improve a business’s cash flow.
____ 45. 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.
____ 46. Once an entrepreneur has identified his/her goals, it is time to develop a
a. marketing concept.
c. marketing strategy.
b. marketing layout.
d. marketing mix.
____ 47. A marketing strategy needs to address
a. market share.
b. distribution.
c. pricing.
d. all of the above
____ 48. Generally speaking, your marketing strategy will be determined mostly by your business’s
a. short-term goals.
b. medium-term goals.
c. long-term goals.
d. all goals should be given equal weight when developing a marketing strategy.
____ 49. Product characteristics that will satisfy consumer needs are called
a. packaging.
c. labeling.
b. branding.
d. features.
____ 50. Creating an image for a product in the customer’s mind is called
a. advertising.
c. labeling.
b. positioning.
d. distributing.
____ 51. A business’s percentage of the total sales generated by all companies in the same market is called
a. return on investment.
c. market share.
b. investment share.
d. saturation.
____ 52. Establishing informal ties with people who can help your business grow is called
a. networking.
c. selling.
b. brainstorming.
d. promoting.
____ 53. Pricing that is determined by how much customers are willing to pay for a product or service is called
a. supply-side pricing.
b. time-based pricing.
c. markup pricing.
d. demand-based pricing.
____ 54. This type of pricing technique starts out with a low introductory price with the goal of building a strong
customer base.
a. bundling
c. price skimming
b. penetration pricing
d. prestige pricing
____ 55. If a store sells snow shovels for half-price in the middle of the summer, the store is offering customers a
a. cash discount.
c. seasonal discount.
b. quantity discount.
d. trade discount.
____ 56. Which of the following is not an advantage of buying an existing business?
a. There are prior records of revenues, expenses, and profits, making financial planning
easier.
b. Capital is not required for a new business since it already exists.
c. The seller may be willing to train the new owner.
d. Financial arrangements can be easier.
____ 57. If you are considering buying an existing business, ask the current owner to provide you with a complete
financial accounting of operations for at least
a. the past six months.
c. the past three years.
b. the past year.
d. the past ten years
____ 58. Weekly or monthly payments made by the local owner to the franchise company are called
a. royalty fees.
c. startup costs.
b. initial franchise fees.
d. advertising fees.
____ 59. A franchisee
a. can never have his/her franchise agreement terminated once it is signed.
b. has more freedom to make decisions than other entrepreneurs.
c. can typically plan on paying more for equipment and supplies than other entrepreneurs.
d. is dependent on the performance of other franchisees in the chain.
____ 60. A business owned exclusively by one person is called a
a. sole proprietorship.
c. retailer.
b. partnership.
d. corporation.
____ 61. A unit of ownership in a corporation is called a
a. dividend.
c. certificate of deposit.
b. share of stock.
d. bond.
____ 62. A corporation’s board of directors is responsible for all of the following except
a. electing the corporation’s officers.
b. determining the salaries of company executives.
c. the day-to-day management of the corporation.
d. setting the corporation’s rules for conducting business.
____ 63. The main reason entrepreneurs set up corporations is because
a. they are the easiest and least-expensive form of business ownership.
b. they are much more prestigious than other forms of ownership.
c. it is easier to raise money as a corporation than as a partnership or sole proprietorship.
d. the personal assets of shareholders may not be taken to pay the debts of the corporation.
____ 64. This law protects small businesses from unfair pricing practices.
a. Clayton Act
c. Sherman Act
b. Robinson-Patman Act
d. Wheeler-Lea Act
____ 65. Local governments control the types of buildings that can be built in different areas through the use of
a. trademarks.
c. copyrights.
b. licenses.
d. zoning regulations.
____ 66. 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.
____ 67. 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
____ 68. 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.
____ 69. 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.
____ 70. Guidelines for the daily operations of a business are called
a. rules.
c. procedures.
b. policies.
d. mandates.
____ 71. 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.
____ 72. 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
____ 73. 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
____ 74. 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
____ 75. The dollar amount of all sales with any returns subtracted is called
a. gross profit.
c. gross sales.
b. net income.
d. net sales.
Entre Study Guide, Final Exam
Answer Section
TRUE/FALSE
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
T
T
F
F
F
T
T
F
T
F
T
T
F
F
T
T
F
F
T
T
T
F
T
T
F
T
F
F
F
T
F
F
F
T
T
F
T
F
T
T
F
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
42.
43.
44.
45.
ANS:
ANS:
ANS:
ANS:
F
T
F
T
PTS:
PTS:
PTS:
PTS:
1
1
1
1
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
PTS:
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
MULTIPLE CHOICE
46.
47.
48.
49.
50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.
61.
62.
63.
64.
65.
66.
67.
68.
69.
70.
71.
72.
73.
74.
75.
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
ANS:
C
D
A
D
B
C
A
D
B
C
B
C
A
D
A
B
C
D
B
D
C
D
A
C
B
B
D
B
A
D