Multiple Choice Questions

1. Which of the following is part of the guidelines for building a successful Web strategy for a small e-company?

a. have advanced technology

b. bring advertising revenue by selling banners

c. have a lot of products on sale

d. fill a niche

2. The ______ is the cost a company incurs to generate each purchase.

a. CSA

b. CPA

c. CMA

d. CTA   

3. The key to promoting a Web site is networking, building relationships with other companies, customers, trade associations, ______ , and other Web sites your company's customers visit.

a. e-mail access

b. on-line directories

c. shopping carts

d. all of the above

4. Reasons for leaving a Web site without purchasing are:

a. for security purposes, multiple steps are necessary to get to the check out page

b. insufficient product information

c. having to check back to view items in the shopping cart

d. having a phone number when encountering problems

5. Which technology encrypts the customer's data as the information travels across the Internet?

a. Secure Socket Layer

b. virus protection

c. firewall

d. none of the above

6. One of the Internet's greatest strengths is its ______ nature.

a. efficiency

b. interactive

c. collectivistic

d. atavistic

7. Investors mainly want to see that entrepreneurs:

a. have inflated the projections

b. will make profit immediately

c. have realistic expectations about income and expenses

d. all of the above

8. ______ measure the financing supplied by the company's owners against that supplied by its creditors and serve as a gauge of the depth of a company's debt.

a. Leverage ratios

b. Operating ratios

c. Liquidity ratios

d. Profitability ratios

9. Projecting financial statements helps the small business owner to:

a. transform business goals into reality

b. measure liquidity of the firm

c. calculate his/her return on the amount invested in the company

d. track and monitor current expenses

10. Evaluates the firm's overall performance and show how effectively it is putting its resources to work. This is called:

a. accounts receivable turnover ratio

b. operating ratios

c. debt to equity ratio

d. all of the above

11. One important characteristic of bartering is that:

a. no cash is being exchanged when bartering

b. the value of exchange of products or services could vary

c. the exchange is in cash only

d. the value of the products must be identical and the difference can be paid in cash

12. The American Collector's Association has found that only about ______  of accounts over 90 days delinquent will be paid voluntarily.

a. 5%

b. 2%

c. 10%

d. 13%

13. When it comes to trade credit, the small business owner:

a. should know that its use makes little difference in the company cash flow and therefore should be avoided

b. should only consider it if they have a strong accounts receivables situation

c. should avoid it as it generally leads to overextension of his/her credit line

d. should almost always take advantage of it

14. Foreign trade zones were created in:

a. 1902

b. 2001

c. 1992

d. 1934

15. Entrances should invite entry. The way to accomplish this is to:

a. offer discounts

b. have large doors and attractive displays set back from the doorway that can lure customers into the store

c. have displays as close to the entry of the store as possible

d. have a big sign to attract customers

16. The manufacturing layout that groups workers and equipment according to the general function performed, and that works best with short production runs or when there are considerable variations in the finished product, is called:

a. function layout

b. product layout

c. process layout

d. fixed-position layout

17. KHA.com started selling sporting goods designed for senior citizens who live in retirement homes and apartments. KHA.com is selling its products using a:

a. senior citizens strategy

b. niche strategy

c. mass strategy

d. community strategy

18. What is CVV or CVV2?

a. customer tracking technology

b. card verification value

c. credit verification value

d. customer verification value

19. As a general rule, financial analysts suggest that a small business maintain a(n) ______ ratio of at least 2:1.

a. current

b. inventory turnover

c. quick

d. debt-to-net worth

20. The first step to building a workable credit policy is:

a. establishing a firm credit policy in writing

b. screening customers carefully before granting them credit

c. developing a policy for pursuing past-due accounts

d. creating a thorough credit application

21. A glass manufacturer that requires an extremely pure, very fine type of sand in its production process would be most concerned with which location criteria?

a. wage rates

b. proximity to raw materials

c. business climate

d. proximity to markets

22. Each time an ad is displayed on a Web site is called a(n):

a. filtering

b. loading

c. clustering

d. impression

23. In reviewing the company's balance sheet, Andy noticed that the total asset is stated as $5,500,000 and the total liability is $3,250,000. There is no paid-in capital or value for common stock. What are the company's retained earnings?

a. $8,750,000

b. unable to determine with the information given

c. there are no retained earnings

d. $2,250,000

24. The cash budget is based on the method of accounting.

a. accrual

b. hybrid

c. financial

d. cash

25. At the broadest level of the location decision, entrepreneurs usually identify regions of the country that:

a. are experiencing substantial population growth

b. consist of the most employed inhabitants

c. have many professional sports teams

d. contain many car drivers