Test your basic knowledge |

Small Business Management

Instructions:

Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can study here.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.

1. Business interruption insurance covers
market
key person insurance
lost income
Civil Rights Act

2. A written description of a new idea that projects marketing - operational - and financial aspects of a proposed business is known as...
Sales are increased; Goodwill is built-up and easily maintained
Income trends in the community
a business plan
Proprietorship

3. Which of the following is an intangible asset?
equity capital
Name of the business; Goodwill
advertising
the religion of the applicant

4. A common business credit/sales tern is...
factoring
Legal restrictions on activities
2/10 - N30
Income trends in the community

5. On a chart which plots sales - fixed and variable costs for a given period of time - the point where the sales and the total cost lines intersect is called the...
OSHA
break-even point
Repairs
description

6. The difference between current assets and current liabilities is...
revolving account; open-end credit
the religion of the applicant
working capital
Terms of the sale

7. Which of the following is NOT a way to reduce risks?
markdown
equity capital
Take on more risks
Indemnity

8. The form of legal organization that is owned and operated by one person is the...
consumer credit
proprietorship
Legal restrictions on activities
inventory turnover

9. Capital that is investe4d in the business by the owner(s) is known as...
trade credit
Census of banking
equity capital; personal capital
partnership

10. A source of debt capital would include
2/10 - N30
corporation
commercial loans
a 2% discount if invoice is paid within 10 days - net due in 30 days

11. An individual that assumes the risks associated with a new venture start-up can be referred to as a...
Unlimited liability; Limited management ability
Terms of the sale
entrepreneur
risk management

12. Which of the following is an internal problem that can contribute to the failure of a business?
sales promotions
economic base
Terms of the sale
Financial shortages

13. The difference between current assets and current liabilities is...
Indemnity
manufacturing business
Actively managed by stockholders
working capital; circulating capital

14. A business that purchases finished goods for resale is referred to as a...
the employment interview
revolving account; open-end credit
merchandising business
demographics

15. A strategy to minimize risk would be to...
economic order quantity
have good management
Actively managed by stockholders
Whether or not they have an acceptable accounts receivable ratio

16. The wealth produced in or near a community that provides employment and income to the local population is known as the...
economic base
Lack of expertise
revolving account; open-end credit
partnership

17. The current asset items consisting of cash - inventories - and accounts receivables is known as...
ADA
circulating capital
Name of the business; Goodwill
consumerism

18. A factor to be considered with the evaluation of a credit risk would be the...
a 2% discount if invoice is paid within 10 days - net due in 30 days
Commercial loans; Venture capitalists
credit application
mark-up

19. Life insurance that protects a firm against losses due to the death of a key employee is known as...
Installment credit
economic base
an entrepreneur
key person insurance

20. Which of the following is an example of a variable expense?
Repairs
credit application
economic order quantity
CBD

21. Which of the following are advantages of extending credit?
Sales are increased; Goodwill is built-up and easily maintained
Legal restrictions on activities
equity capital; personal capital
Name of the business; Goodwill

22. A point in business operations whereby total sales revenue equals total costs
break-even point
inventory turnover
variable expense
sales promotions

23. A small business is not...
Unlimited liability; Limited management ability
Actively managed by stockholders
Small Business Administration
Financial shortages

24. A strategy available to absorb risks would be...
working capital; circulating capital
to self-insure
consumer credit
Installment credit

25. Which of the following acts outlaws discrimination in employment based on race - color - religion - sex - pregnancy - or natural origin?
Directing
Civil Rights Act
fixed capital
American's with Disabilities Act

26. Rent is an example of a...
Financial shortages
the employment interview
fixed expense
revolving account; open-end credit

27. A document that lists the major responsibilities and tasks of the job is known as a job
partnership
Small Business Administration
description
OSHA

28. Which of the following is not a consideration concerning the selection of suppliers?
manufacturing business
Credit customers are more interested in quality and service than price
Whether or not they have an acceptable accounts receivable ratio
Repairs

29. Which of the following is an internal problem that can lead to business failure?
circulating capital
Better Business Bureau
Lack of expertise
a structured interview

30. Factors associated with evaluating a credit risk
equity capital
Small Business Administration
inventory control considerations
consumer credit

31. The combination of two or more individual's talents and capital serves as an advantage of the legal form of ownership known as a...
Better Business Bureau
partnership
Whether or not they have an acceptable accounts receivable ratio
to determine where the potential customers are

32. The art of making the public aware of one's products and/or services that are for sale can be referred to as...
Installment credit
Chamber of Commerce
Civil Rights Act
advertising

33. Which of the following are disadvantages of a corporation?
Some losses from bad debts and customers with fraudulent intentions are bound to occur
Legal restrictions on activities; Lack of personal interest
key person insurance
equity capital; personal capital

34. Which of the following are functions of management?
Whether or not they have an acceptable accounts receivable ratio
Chamber of Commerce
controlling; actuating
Divided authority among partners; Death or incapacity of one of the partners may end the partnership

35. A type of credit granted by retailers that is used by individuals or families for the satisfaction of their own wants is known as...
consumer credit
an entrepreneur
credit application
Credit customers are more interested in quality and service than price

36. A group of potential customers that are recognized as possessing purchasing power and unsatisfied needs defines...
market
American's with Disabilities Act
Chamber of Commerce
Repairs

37. Which of the following is NOT an advantage of a corporation?
Legal restrictions on activities
Installment credit
to self-insure
partnership

38. The statistical study of human populations with respect to their size - density - distribution - composition - and income is known as...
competition
to self-insure
break-even point
demographics

39. Which of the following has the disadvantage of no limit being placed on the owner's personal liability?
Proprietorship
fixed capital
Unlimited liability; Limited management ability
fixed expense

40. Which of the following statements is TRUE concerning consumer credit?
Credit customers are more interested in quality and service than price
Sales are increased; Goodwill is built-up and easily maintained
equity capital
Proprietorship

41. A plan which provides inducements to potential purchasers of products and/or services is called...
break-even point
sole proprietorship
sales promotions
Ease of starting; Profit incentive

42. Which of the following is an external problem and risk of business ownership?
revolving account; open-end credit
Chamber of Commerce
Tax burdens; Human resource planning
economic base

43. The simplest and most common legal form of business ownership is...
service business
advertising
Directing
sole proprietorship

44. Which of the following is NOT a consumer buying motive?
Indemnity
working capital
Credit customers are more interested in quality and service than price
Repairs

45. Selling a business's accounts receivable for cash to a third party is referred to as...
sole proprietorship
factoring
Take on more risks
CBD

46. Any capital that is invested in a business by the owner(s) can be called...
manufacturing business
equity capital
Chamber of Commerce
break-even point

47. Which of the following are disadvantages of a sole proprietorship?
manufacturing business
Unlimited liability; Limited management ability
Divided authority among partners; Death or incapacity of one of the partners may end the partnership
Civil Rights Act

48. The practice of trying to get something that is being sought by others under similar circumstances at the same time is known as...
competition
the employment interview
Some losses from bad debts and customers with fraudulent intentions are bound to occur
Repairs

49. A legal form of organization whereby a legal entity is authorized by a state to operate a business under the entity's charter or articles of incorporation is known as a...
corporation
Chamber of Commerce
circulating capital
to self-insure

50. The main objective in a market survey is...
Divided authority among partners; Death or incapacity of one of the partners may end the partnership
to determine where the potential customers are
Personal checks
2/10 - N30