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a. determining how many employees and what skills the organization needs.
b. forecasting the supply of people in the work force who will have the necessary qualifications to meet the firm's needs.
d. considering the status of current personnel
e. appraising performance
improved employee morale.
quality of work.
includes tours, introductions, and socialization.
A. interview of finalists.
B. tour of the building.
C. introductions to supervisors.
D. introductions to co-workers.
E. distribution of organizational manuals.
A.provide employees with feedback on performance.
B.provide the organization with information on its development programs.
C.provide a basis for reward distribution.
D. train employees on how to improve their performance.
E.provide employees with information on what they need to do to improve their performance.
the quality of selection programs.
A. a factory worker's level of output.
B. number of units sold for a salesperson.
C. a ranking system for an office worker.
D. batting average for a baseball player.
E. shooting percentage for a basketball player.
efforts to increase productivity and competitiveness.
wages and salaries.
conducting a wage/salary survey.
A. Vacation time
B. Health insurance
C. Pension plans
E. Child care
a group has more clout with management than an individual.
A. better pay.
B. job security.
C. safer working conditions.
D. fewer hours.
E. greater hours.
E. collective bargaining.
more conflict, prejudice, and discrimination.
Which of the following is not a secondary characteristic of diversity?
Primary characteristics of diversity typically involve all of the following categories except
Having a diverse workforce has many benefits. One benefit is
a greater ability to serve the needs of a diverse customer base.
All of the following are organizational benefits of fostering and valuing workforce diversity except
A. increased worker productivity.
B. reduced employee conflict.
C. reduced worker efficiency.
D. increased innovation from employees.
E. increased employee commitment.
What were laid-off employees at Medallion not given to help them in their transition?
A free tropical vacation
What is hindering Medallion's ability to restructure, address concerns, and build morale?
A diverse workforce has led to misunderstandings
Marketing creates value by
helping people obtain what they need and want.
Marketing is not manipulating customers into buying things they do not really want; it is
a systematic approach to satisfying customers.
When a customer hands the cashier $1 and receives a loaf of bread, which of the following has occurred?
Marketing is the facilitation of exchanges through
creating, pricing, promoting, and distributing goods.
The exchange process is
at the heart of all business.
An exchange is
giving up something in return for something else.
What most consumers want is not a product, but
a way to get a job done, solve a problem, or gain some enjoyment.
A marketer must understand buyers' needs and desires to determine what products to make available.
Transporting includes warehousing goods.
The financing function expedites purchases through making credit available.
Spending money to hire a sales force or to conduct marketing research does not involve risks.
Buying expedites the exchange process and marketers view it as a persuasive activity that is accomplished through promotion.
Marketers' efforts to understand customers' needs and desires in order to determine what products to market relates to which of the following functions of marketing?
Kiet has acquired a supply of canned fruits and vegetables. He does not yet have a buyer for them but he's using promotion and other activities to find a buyer. He is performing the marketing function of
When an organization hauls canned goods from the manufacturer to grocery stores, it is involved with which marketing function?
When a grocery store maintains refrigerators to hold ice cream until customers buy it, the store is engaged in the marketing function of
When a worker in the deli department of a grocery store designates a steak with little or no fat as an "AA" and another steak with more fat as a "B," the worker is participating in the marketing function of
When a computer manufacturer provides stores with credit to encourage them to carry their computers in stores, the manufacturer is involved in the marketing function of
Acme Inc. is surveying customers as to what kinds of services they would like the company to add. It is involved in the marketing function of
When a pharmaceutical company devotes a large proportion of its overall budget to researching and developing a drug that has potential to be a blockbuster but whose efficacy and safety remains unproven, the company is engaging in
Among the marketing functions are
financing, market researching, buying, and selling.
Everyone in the organization who interacts with customers must know what customers want.
If you build a better mousetrap, consumers will beat a path to your door.
The marketing concept is the basic philosophy that guides all marketing activities.
Customer satisfaction is a goal of the marketing concept.
balance meeting its own objectives and satisfying customer needs.
To implement the marketing concept, a company must do all of the following except.
A. have good information about what consumers want.
B. adopt a consumer orientation.
C. coordinate its efforts throughout the entire organization.
D. adopt a sales orientation.
E. achieve its own goals.
The goal of the marketing concept is
During the Industrial Revolution, new technologies fueled strong ________ for products and a production orientation held sway.
After the production orientation came the sales orientation of the mid-twentieth century. Supply exceeded demand for many products and ________ and _________ became the most important marketing activities.
Which of the following requires organizations to gather information about customer needs, share that information throughout the entire firm, and use that information to help build long-term relationships with customers?
In the twenty-first century, ________ remains an essential element of any marketing strategy to develop and manage long-term customer relationships.
The marketing concept states that an organization
should try to satisfy customer needs while also achieving its own goals.
A marketing strategy is a plan of action for developing, pricing, distributing, and promoting products that meet the needs of specific customers.
A target market is a group of people who have a need, purchasing power, and the desire and authority to spend money on goods, services, and ideas.
In the multi-segment approach, the marketer directs one marketing strategy toward a single market segment.
Psychographic characteristics of segmentation include personality characteristics, motives, and lifestyles.
Products usually have both favorable and unfavorable attributes.
The first major step of a marketing strategy is to
A marketing strategy consists of
selecting a target market and developing a marketing mix to satisfy it.
After analyzing its own resources and unique abilities, a company is now trying to determine what group of customers it can satisfy with a good or service. It is in the process of choosing a
Salt, sugar, and many agricultural products are sold using which of the following approaches?
If a company develops an advertising campaign that targets a segment of consumers with a certain income and education, the company is using the following segmentation variable:
If a company markets to a segment of people who have a certain lifestyle, the type of segmentation being used is
The marketing mix is a combination of
product, price, promotion, and distribution.
Which of the following can be changed quickly to stimulate demand or respond to competitors' actions?
Distribution is sometimes referred to as
A marketing information system is a framework for accessing information about customers.
Secondary data are information observed and recorded or collected regularly from sources inside and outside the organization.
Buying behavior is the decision processes and actions of people who buy and use products.
Attitude is a social variable of buying behavior.
A person's buying behavior may be affected by his or her social roles.
Marketing research is
used to guide marketing decisions.
When High Tech Stereo Company wanted to alter its products, its managers began their research by analyzing sales figures. This is an example of
secondary data gathering.
Which type of data is probably least expensive to collect?
A marketing research representative who interviews shoppers in a mall is collecting the following type of information:
If a company is studying the decision processes and actions of people who purchase and use products, the company is focusing on
Which of the following is a psychological variable of buyer behavior?
C. Reference groups
D. Social classes
C. Social class
E. Reference group
When Bill Wilson became a father he became increasingly interested in health and began to look for household items that were safe for use around young children. His new perspective is related to his
Social forces influence marketing strategy.
Technological forces do not influence marketing strategy.
The forces in the marketing environment are totally uncontrollable.
Social concerns have led marketers to design and market safer toys for children, prescription drugs, and safer and healthier food products.
Competitive and economic forces in the marketing environment include technological issues.
Which of the following is not a competitive or economic force in the marketing environment?
Laws and regulations
Which of the following is not a social force in the marketing environment?
Marketing requires creativity and a consumer focus because the marketing environment can
change quickly and dramatically.
Which of the following environmental forces influence marketing strategy by dictating what elements cannot be included in advertising?
Political, legal, and regulatory forces
Which of the following is not an influence on the marketing environment?
Computers and advances that improve new-product development are associated with
The public's opinions and attitudes toward living standards, ethics, and the environment are considered
Purchasing power, recession, and inflation are associated with
What does Ventura Motors make?
Midsize and luxury vehicles
What is the problem Ventura Motors is experiencing?
Its latest model cost more than expected to develop and is selling slowly
Raw materials are natural products taken from the earth and are a subset of business products.
Products can be goods, services, and ideas.
Of the thousands of products introduced every year, most succeed.
New product ideas can come from customers.
Most new product ideas are rejected during the business analysis phase.
Consumers spend very little time planning where to buy shopping products.
Profits are negative in the growth stage.
Most new product ideas are rejected during which stage because they seem inappropriate for the organization?
If a nationwide sandwich shop company introduces a new sandwich in the Midwest to try out its marketing strategy before offering the product across the country, it is using
During which stage does the firm gear up for full-scale production, distribution, and promotions?
A light bulb used to provide light for workers on an assembly line would be classified as what type of product?
A gallon of milk is an example of a
Industrial products such as lumber, cotton, and iron are classified as
7-UP, Cherry 7-UP Antioxidant, and Diet 7-UP are products in Dr. Pepper Snapple Group's
7-UP product line.
If a product is experiencing negative profits and the company is spending a great deal of money on advertising to make consumers aware of the product, the product is most likely in the following life cycle stage:
A product's profits peak and start to decline during which of the life cycle stages?
If a company is eliminating certain models of a product and cutting back on expenditures, the product is most likely in which life cycle stage?
Diet Coke is a
Private distributor brands
are owned and controlled by a wholesaler or retailer.
Price discounts are often employed to boost sales.
Price is the least flexible variable in the marketing mix.
Pricing objectives are influenced solely by marketing mix decisions.
Maximizing profits and sales, boosting market share, maintaining the status quo, and survival are common pricing objectives.
Price skimming is charging a low price to help a product enter the market and gain market share rapidly.
Penetration pricing is less flexible than price skimming.
The perceived value of a product by consumers is an important consideration when pricing that product
__________ encourages consumers to make purchases based on emotion, rather than rational considerations about the price.
Because buyers have limited ____________, they must allocate them in such a way as to obtain the products they most desire.
The financial value placed on an object involved in an exchange is
Which of the following is the most flexible variable in the marketing mix?
Price is an important factor in the marketing mix for all of the following reasons except
A. it affects product image.
B. it is very flexible.
C. it directly affects revenue and profits.
D. it is the most visible element in the firm's marketing mix.
E. the ability to set a price depends in large part to the supply and demand for a product.
A. Maintaining the status quo
B. Boosting market share
C. Maximizing profits and sales
The pricing policy that allows a company to cover a product's development costs most quickly is
When a computer company initially charged a low price for a new computer and then raised the price after gaining a large market share, it was using which pricing strategy?
When a company sets a low price for a new product to discourage competition from entering the market, it is using the
penetration pricing strategy.
If a company's goal is to develop an image of having very high-quality luxury products, it should employ a
prestige pricing strategy.
If a cosmetics company is selling eye shadow priced at $11.99 rather than $12, it is using
Pharmaceutical companies sometimes use which of the following pricing strategies to price their over-the-counter drugs?
Physical distribution includes inventory control, transportation, warehousing, and materials handling.
Exclusive distribution makes a product available in as many outlets as possible.
Distribution channels for consumer products and business products are the same.
The best products in the world will not be successful unless companies make them available where and when consumers want to buy them.
A marketing channel is a group of marketing organizations that move products from producers to consumers.
Retailers generally buy from producers or from other wholesalers and sell to other retailers but not ultimate consumers.
Whether to distribute a product intensively, selectively, or exclusively depends on buyer behavior, the nature of the target market, and the competition.
A marketing channel includes all of the following except
E. secondary stakeholders.
The major variable of the marketing mix that uses marketing middlemen is
If XYZ Company buys televisions from a manufacturer and then sells them to department stores, it is probably a
An example of a product distributed through Channel B, producer to retailer to consumer, is
a chair from Target.
Which distribution channel would be likely for fruits and vegetables sold at a roadside stand?
Producer to consumer
Services are usually distributed through
direct marketing channels.
Convenience products such as bread, milk, and gum would probably be marketed
uses only a small proportion of all available outlets to expose products.
High-quality items such as musical instruments, sailboats, and airplanes would probably use what distribution coverage?
Inventory handling, transportation, and warehousing are all examples of activities of
The type of transportation specifically noted for its flexibility in transporting products is
Which of the following modes of transportation is the least expensive for many products?
All of the following activities are associated with warehousing goods except
Factors such as characteristics of the intended audience, the objective, and the platform used can all affect how an advertising campaign is constructed and its message.
The Internet is not a valid advertising medium.
Promotion is used only to sell products.
Advertising is direct, two-way communication with buyers and potential buyers.
The role of promotion is to communicate with individuals, groups, or organizations to facilitate an exchange directly or indirectly.
The use of a pull strategy means that marketers attempt to motivate middlemen to make a product available to their customers.
Stimulating demand is especially important when a firm is using a pull strategy.
Marketers are blurring the lines between television ads and the Internet by directing consumers to a website for more information.
The form of communication that attempts to facilitate a marketing exchange by influencing people, groups, or organizations is
Many people incorrectly equate promotion with
When Honda pays a television network to air its commercial, it is using
When an airline company reacts to a plane crash with press conferences, news releases, and having company employees work with the families of survivors and victims of the crash, the company is focusing on which of the following elements?
When Gillette asks supermarkets to give its new razors shelf space, it is using a
If a manufacturer offers a wholesaler a special incentive to carry a new product line, which strategy is being applied?
When Snapple seeks to use viral ads on the Internet to introduce its new beverage to consumers before introducing it to supermarkets, it uses
a pull strategy.
When a company uses advertising and sales promotion to inform consumers about a product so they will ask retailers to stock it, which strategy is being used?
Effective promotional positioning uses promotion to
create and maintain an image of a product in consumers' minds.
Miller targets its MGD 64 beer at those who want to drink beer without consuming many calories. This is
What might allow Deluxe Chips to spend its marketing dollars more effectively?
Matching products to neighborhoods and conducting micromarketing campaigns
What is Deluxe Chips planning in order to accommodate its market's changing tastes?
Adding a line of healthier snacks
Technology and the Internet have dramatically changed the business environment.
Marketers' new ability to convert all types of communications into digital media has created inefficient, expensive ways of connecting businesses and consumers and improved the flow and the usefulness of information.
People spend more time on e-mail than they do on social networking sites.
The Internet often impedes business transactions, making them slower and less efficient.
The Internet has helped marketers to reach target markets that were previously inaccessible to many businesses.
________ are the channel that most observers think will dominate digital communication in the future.
Social networking sites
Google is challenging established companies in all but one of the following industries:
Conducting _____ means carrying out the goals of business through the use of the Internet.
_________ uses all digital media, including the Internet and mobile and interactive channels, to develop communication and exchanges with customers.
___________ are electronic media that function using digital codes and include media available via computers and other digital devices, such as cell phones and smart phones.
The phenomenal growth of digital media has provided new ways of conducting business.
Internet markets are highly different from traditional markets.
E-business has had much more impact in certain industries where the cost of business and customer transactions has been very high.
In the future, most significant competitiveness gains will come from improvements in _____.
Which of the following is an industry that may not experience large decreases in the cost of communication gained from the digital communications?
A roadside fruit seller
Why is investment trading less expensive online?
Because investors can buy and sell investments themselves without hiring a trader.
Which of the following industries is not cited in your text as one that has been significantly affected by the Internet?
All of the following firms are examples of businesses that could not exist without digital media except
A. Best Buy.
C. Second Life.
The Internet is not considered a distribution channel.
Digital media make it easy for companies to add benefits and services to enhance products.
Digital media have fundamentally altered the marketing mix.
One of the greatest drawbacks of digital marketing is the ability of marketers and customers to easily share information.
A Nielsen Marketing Research study revealed that, on average, consumers spend more time e-mailing than on social networking sites.
The most flexible element of the marketing mix is price.
Consumer consumption patterns have not changed very much over time.
Digital marketing can enhance the value of products.
Which of the following is not a difference between digital media and traditional media?
Digital media make communications more confusing.
Which of the following is a downside to digital media?
What is not an essential difference between digital and traditional media?
Digital media require a completely different marketing mix.
One of the most common ways marketers can utilize digital media is for
One aspect of marketing that has not changed with digital media is the importance of achieving the right ________.
The Internet is a new ________ for making products available at the right time, at the right place, and in the right quantities.
Marketers' ability to process orders electronically and increase the speed of communications thereby reducing costs, inefficiencies, and redundancies most relates to which element of the marketing mix?
______ is the most flexible element of the marketing mix.
Online social networks are a valuable part of marketing because they change the way consumers communicate with each other and with firms.
Digital media are more consumer-driven than traditional media.
Blogs are always positive for companies.
Some companies have begun to use podcasts as internal tools for teams working on projects that require a great deal of documentation.
With customer-generated video content increasingly available, some companies are using it instead of professional advertising firms.
Companies sometimes utilize Facebook and similar sites to help generate interest about new products.
Consumers' tendency to trust other consumers over corporations is one factor behind the rise in consumer-generated information.
A _______ is a web-based meeting place for friends, family, co-workers and peers that lets users create a profile and connect with other users for the purposes that range from getting acquainted, to keeping in touch, to building a work related network.
Social networks have existed in one form or another for more than _______ years.
What is not a popular service offered by social networking sites?
Which service allows users to "like" a company's profile and thereby interact and build a relationship with the firm?
When seeking out information on a new product, consumers tend to trust _________ over _________.
other consumers, corporations
Marketers who learn where online users are likely to express their thoughts and opinions can use these forums to do all of the following except
A. interact with them.
B. address problems.
C. promote their companies.
D. get feedback.
E. find out consumers' home addresses.
Media sharing sites tend to allow businesses to be more _______ than reactive because they do not permit companies to respond to or interact with customers.
_____ are websites where users can add to or edit the content of posted articles.
Which of the following is not a reason why a Fortune 500 company might maintain a blog?
To spread negative information
__________ are audio or video files that can be downloaded from the Internet via a subscription that automatically delivers new content to listening devices or personal computers.
The little black and white squares that sometimes appear in magazines, posters, and store displays which let a consumer with a smart device view a website, video, or image with additional marketing information is known as a(n)
Many companies believe podcasts will do all of the following except
A. create brand awareness.
B. promote their products.
C. encourage customer loyalty.
D. be convenient.
E. become the most popular avenue for conveying information.
become the most popular avenue for conveying information.
_______ is the most popular online social networking site in the world.
What is a likely reason that Myspace now lags behind Facebook?
A failure to innovate
When a message gets shared from person to person many times, ________ has occurred.
Which of the following can be used by businesses to update consumers on company activities and respond to questions and complaints via very short, concise messages?
_______ allow users to develop avatars that live and play online, and sometimes even have their own currency.
Marketing over mobile devices has been facilitated by _______, which allow(s) users to perform a variety of functions, such as playing games or comparing product prices from different stores.
According to Forrester Research, which of the following groups of Internet users is most likely to post ratings and reviews of products and companies and to comment on blogs?
The surest way to ensure that you do not fall prey to scams or identity theft online is never to divulge important personal information online.
Intellectual property is technically protected by laws and regulations, but companies still suffer billions of dollars in losses related to intellectual property theft each year.
The correct blend of traditional and new digital media marketing will vary depending on the business, its size, and its target market.
Marketers accustomed to traditional media usually find the transition to digital media easy.
Phishing is a scam in which con artists counterfeit a well-known website and send out e-mails directing victims to it.
Illegal sharing of Internet content is not a major intellectual property problem.
Shopping in a store raises more privacy concerns than shopping online.
Why does shopping online raise more privacy concerns than shopping in a store?
What is the number-one consumer complaint to government agencies when it comes to the Internet and identity theft?
______ permit website operators to track how often a user visits the site, what he or she looks at while there, and in what sequence, but they also allow Web users to customize services and content.
___________ occurs when criminals obtain personal information that allows them to impersonate someone else in order to use the person's credit to obtain financial accounts and make purchases.
The practice of ______ involves companies offering to harvest personal information from social networking and other sites.
_____________ includes any attempt to conduct fraudulent activities online, such as by deceiving consumers into releasing personal information.
Which of the following requires companies to get users' consent before using cookies to track their information?
The fine line between protecting intellectual property and ______ makes it difficult to address online piracy.
freedom of speech
What is the best way not to become a victim of online fraud or identity theft?
Never give out your personal information.
According to the text, which of the following is not a reason consumers use to rationalize the pirating of software, videogames, movies, and music?
Some feel there's no reason for it to be illegal
Which of the following enables website visitors to customize services, such as virtual shopping carts, as well as the particular content they see when they log onto a website?
It is up to businesses and entrepreneurs to develop _______ to achieve business success using existing and future technology.
IOWatch experienced low end-user interest and drew little ___________ as a result.
After accepting a position at IOWatch, Paul realized quickly that he did not have sufficient experience in _________________.
Accounting is the recording, measurement, and interpretation of financial information.
Only businesses use accounting information to demonstrate how their funds are being used.
The terms accounting and bookkeeping are interchangeable because they mean almost the same thing.
Bookkeeping is only one aspect of accounting and involves the recording of routine, day-to-day business transactions.
Budgets are valuable tools because they break down cash inflows and outflows to help individuals and organizations clearly see where financial problems may lie.
records, measures, and interprets financial data.
If Evelyn Chang is a self-employed, state-certified accountant who provides various types of accounting services for different companies and organizations, she is probably a
Certified Public Accountant.
officially express an unbiased opinion about the accuracy of a firm's financial statements.
A. work for a corporation, government, or other organization to prepare and analyze its financial information.
B. have titles such as controller or internal auditor.
C. prepare and interpret a firm's financial statements.
D. express an official unbiased opinion regarding the accuracy of a client's financial statements.
E. take part in internal planning and decision making.
B. the Internal Revenue Service.
Billy Banker has to decide whether to lend the Safe Toy Company $10,000 to pay suppliers. He will
review the company's financial statements.
Although the terms accounting and bookkeeping are often used interchangeably, a point of distinction is that the scope of bookkeeping tends to be
In accounting, a ledger is a time-ordered list of accounting transactions.
Assets are a firm's economic resources.
The accounting cycle is a system of analyzing and interpreting business transactions in separate accounts in order to maintain the balance of the accounting equation.
All business transactions can be classified as assets, liabilities, or owner's equity.
The accounting cycle collects, records, and analyzes raw data constantly through the business's life cycle.
When the financial statements are completed and an accountant has attested that the firm followed GAAP, a firm's books are said to be "closed," and the accounting cycle begins anew for the next accounting period.
What is owners' equity?
All the money that the firm has that does not need to be paid back
What are the fundamentals of the accounting process?
The accounting equation and the double-entry bookkeeping system
Which of the following is the first step in the accounting cycle?
Examine source documents.
What is the last step that must be done before a firm's books can be closed for an accounting cycle?
A CPA must attest that good principles were used in the preparation of the document.
Which of the following equations is equivalent to the accounting equation?
Owners' equity = assets - liabilities
Double-entry bookkeeping is a system of recording and classifying business transactions
in separate accounts in order to maintain the accounting equation.
The accounting cycle includes all but which of the following?
Generate annual reports.
In double-entry bookkeeping, after gathering together and analyzing source documents and recording each financial transaction in a journal, a financial manager, bookkeeper, or accountant next
posts transactions in a ledger.
All of the following represent assets except
E. a bank loan.
a bank loan.
The debts Anna's Flowers owes to the Small Business Administration and her company's suppliers represent which of the following?
A. Owners' equity
At the end of each accounting period, the dollar amounts in all the revenue and expense accounts on the income statement are moved into an account called "Retained Earnings."
Income statements show revenue, expenses, and income over a period of time.
Only business organizations have revenue to report.
Cost of goods sold is calculated by subtracting the ending inventory from the beginning inventory.
Expenses can be incurred daily.
Expenses can be incurred daily.
Net income is the profit (or sometimes loss) after all expenses, excluding taxes, have been deducted from revenue.
An accounting term that is synonymous with revenue is
Net income is
earnings after taxes.
An income statement shows
revenues, expenses, and net income over a period of time.
The financial document that shows a company's revenue, expenses, and profits over a period of time is called a(n)
Do-It-Yourself Home Repair Shop started the accounting period with $10,000 worth of shovels in inventory. During the accounting period, it purchased $5,000 worth of shovels and sold $7,500 worth. What is its cost of goods sold?
All of the following could be expense accounts except
A. interest expense.
B. retained expense.
C. general and administrative expense.
D. research and development expense.
E. depreciation expense.
When an accountant allocates the cost of a piece of equipment over a period of time, this is called
When a company wants to place a value on a physical asset for its balance sheet, it must
reduce the value by the amount the asset has depreciated.
The net income of a company is equal to the total profits minus
The information presented in an income statement could be described using which of the following equations?
Revenues - expenses = net income
Balance sheets show revenues, expenses, and profits.
Balance sheets show assets, liabilities, and expenses over a period of time.
A balance sheet shows the financial position of an organization at any given moment in time.
Liquidity is judged by how easily an asset can be turned into cash.
Owners' equity includes owners' contributions to their business along with income retained to finance growth and development.
Owners' equity includes financial obligations to short-term creditors and amounts owed to suppliers to goods and services purchased on credit.
___________ is an account showing money owed to a company by its clients or customers.
The financial document that has been likened to a snapshot of how the company's finances are doing at that moment is called a(n)
The financial statement that represents an accumulation of all of a company's transactions since it began is the
The balance sheet uses all of the following account titles to describe assets except
A. accounts receivable.
B. cash. C. inventory.
D. current assets.
E. deferred income taxes.
A company's assets that can be easily converted into cash are called
A company's short-term financial obligations are called its
The balance sheet uses all of the following account titles to describe liabilities except
A. sales revenue.
B. accounts payable.
C. current liabilities.
D. taxes payable.
E. wages payable.
The owners' contributions to a company and all earnings retained to finance continued growth and product development are
All of the following would be considered owners' equity accounts except
A. common stock.
B. preferred stock.
C. stockholders' equity.
D. accounts payable.
E. retained earnings.
All of a firm's unpaid financial obligations are occasionally consolidated into an account called
Negative cash flow always indicates that a company is in financial trouble.
Ratio analysis brings the information on financial statements into sharper focus so that a firm's managers and others can measure its productivity, profitability, and sources of financing relative to other firms.
After ratios are computed, it is not much help to compare them with those of similar organizations.
Profitability ratios measure how efficiently a firm uses its assets to generate $1 of sales.
Liquidity ratios show how fast a company can turn current assets into cash to pay off short-term debt.
Debt utilization ratios measure how much debt a company is using relative to other sources of capital.
The financial statement that explains how a firm's cash changed from the beginning of the accounting period to the end is called the
statement of cash flows.
Information found on the company's income statement and balance sheet is extracted from these documents and examined more closely through the use of
Ratio analysis is used to determine all of the following except
A. what a firm is worth.
B. how much a firm made or lost.
C. how a firm compares to others in the industry.
D. how a firm compares to its stated goals.
E. how a company's cash flows changed from the beginning to the end of an accounting period.
Profitability ratios are used to measure
how much income (net or operating) a firm generates relative to its assets, equity, and sales.
One of the best ways to analyze a company's financial performance is to compare its ratios with those of
companies in the same industry.
Return on assets and return on equity are examples of which type of ratio?
Asset utilization ratios are used to measure
how efficiently the firm uses its assets to generate $1 in sales.
Morgan was asked to extend trade credit to a restaurant she hadn't serviced before. She asked to see its balance sheet to determine if it could pay its bills. She divided its current assets by current liabilities to get its
The ratio that reflects a company's liquidity after excluding inventory is which type of ratio?
If a company is relying on borrowing and credit too extensively, this will probably be reflected in which ratio?
What is the problem at BrainDrain?
BrainDrain is on the verge of financial ruin
What have you done to identify and fix BrainDrain's problems?
You have asked for a complete set of the company's financial statements
Fiat money is backed by gold.
Money is a medium of exchange.
The most important characteristic of money is its acceptability for purchase of goods and services.
When currency is stable, it provides no incentive to save.
The three important functions of money are that it serves as a medium of exchange, a measure of value, and a store of value.
Because the U.S. government promises that its metallic coins and paper money are legally acceptable as a means of exchange for products, they are considered which type of money?
Money has all the following characteristics except
C. difficulty to counterfeit.
As a medium of exchange, money
eliminates the cumbersome barter system.
The primary advantage of using money instead of bartering is that money is more
easily divided into small units.
When used to accumulate wealth, money functions as a
store of value.
Using commodities such as corn, livestock, or artisanal goods is not an effective means of exchange because the system lacks
When a dollar bill is handled hundreds of times and is still being used, it has which of the following characteristics?
In some countries with very high inflation rates, citizens must spend their money as fast as they receive it in order to keep up with or stay ahead of the rapidly rising prices of consumer goods. Under these conditions, money is said to lack
When inflation is very high, money is no longer a ______ means of exchange.
Funds in a demand deposit account cannot be withdrawn without a 24-hour notice.
A checking account is also called a demand deposit account.
A savings account is the same thing as a money market account.
Certificates of deposit are accounts with funds that usually cannot be withdrawn without advance notice and/or have limits on the number of withdrawals per period.
Credit cards have become an increasingly popular substitute for money because of their convenience and acceptance by merchants around the world.
Another name for a checking account is a
is a written order to a bank to pay the indicated party the amount specified on the check from money on deposit.
The acronym NOW, when used in financial circles, stands for ___________ and is a type of interest-bearing checking account.
negotiable order of withdrawal
Another name for a savings account is a(n)
Money market accounts differ from interest-bearing checking accounts in that
owners can write only a limited number of checks, and there may be a minimum amount allowed for each check.
In general, the longer the term of a certificate of deposit, the
higher its interest rate.
Credit cards are
preapproved lines of credit granted by a bank or finance company.
If consumers do not pay off their entire credit card balance, they will
have to pay interest on the unpaid amount.
Behind all forms of "near money" stands
people's faith in their ability to exchange them for currency.
The Federal Reserve Board is responsible for supervising the insurance funds that protect deposits in member institutions, such as FDIC insured banks.
The Federal Reserve Board regulates U.S. financial institutions.
When the Fed buys securities, it decreases the money in circulation.
When the Fed raises the discount rate, it is easier to borrow money.
The Federal Reserve provides national check processing.
The Federal Reserve System was established by Congress in 1913 to
regulate the banking industry.
The Federal Reserve System is responsible for
creating a stable environment for economic growth.
The Federal Reserve provides all of the following services except
A. using monetary policy to control the money supply.
B. regulating financial institutions.
C. managing regional and national check clearing.
D. managing the deposit insurance of banks in the Federal Reserve System.
E. offering certificates of deposit for interested individuals.
offering certificates of deposit for interested individuals.
To carry out its function of controlling the supply of money, the Federal Reserve Board
uses monetary policy.
When the Federal Reserve sells investments, it
decreases the money supply.
If the Federal Reserve System wanted to increase the money supply, it would most likely take which action first?
Buy securities on the open market
Which of the following is not a tool used by the Fed to implement its monetary policy?
Individual savings accounts
When the Fed increases the reserve requirement, it
decreases the money supply.
Commercial banks offer a variety of services, particularly commercial loans and checking accounts.
Savings and loan associations have traditionally specialized in savings accounts and home mortgages.
A credit union is owned and controlled by a larger bank.
Mutual savings banks are similar to savings and loan associations except that they are owned by their depositors.
The Federal Deposit Insurance Corporation (FDIC) was established in 1933 to help stop bank failures throughout the country during the Great Depression.
The oldest and largest of all financial institutions are
Commercial banks have traditionally
relied on checking and savings accounts for funds.
Which of the following limited commercial banks from engaging in certain high-risk trading activities and raised the required capital they must hold on their balance sheets?
The primary business of savings and loan associations has been
savings accounts and mortgages.
The financial institution that traditionally concentrated on long-term loans, such as mortgages, and is sometimes called a thrift, is a(n)
savings and loan association.
If employees of a local school district conduct their financial business through the same financial institution that they own and only they are allowed to join, the institution is probably a(n)
The major difference between banks and credit unions is that
credit unions are owned and controlled by depositors.
Which of the following is similar to a savings and loan association except that it is owned by its depositors?
Mutual savings bank
Mutual funds spread the risk of investing across many securities.
Finance companies buy and sell stocks and bonds for their customers.
An example of electronic funds transfers (EFT) is using an automated teller machine to withdraw cash.
Investment bankers offer short-term loans at substantially higher interest rates than banks.
Advantages of direct deposits of paychecks and other income to consumers include convenience, safety, and potential interest earnings.
Which of the following is not a type of pension fund?
A. Individual retirement accounts
B. Corporate insurance plans for employees
C. Insurance company life insurance plans
D. Social Security
E. Roth individual retirement accounts
A mutual fund allows many small investors to
invest in a diversified stock market portfolio.
If a person invests in the stock market through a firm that pools funds from a large number of people and buys and professionally manages stock from a number of diversified companies, that person is investing in a(n)
Money market funds are a form of mutual fund that
invests in short-term debt securities issued by governments and corporations.
A nonbanking institution that buys and sells stocks and other securities for customers is a(n)
Which of the following reduces the cost of handling bank transactions and are found in banks, airports, and other public places?
Automated teller machines
__________ has allowed consumers to perform an ever-widening array of financial and banking functions from their personal or work computers.
typically function as the lender of last resort for individuals and businesses with poor credit ratings or whose other lines of credit have been exhausted.
Which of the following permit deposits and withdrawals to be made directly to a bank account through the use of magnetic tape?
During the financial crisis, many large banks saw their capital base grow.
Most experts believe that banks will continue to consolidate and get larger over time.
The U.S. government created the Troubled Asset Relief Program (TARP) in an effort to prevent economic collapse during the most recent financial recession.
Rapid advances and technological innovations are requiring the banking industry to change.
Under the Troubled Asset Relief Program (TARP), most of the big banks in the U.S. either needed a cash infusion from the U.S. Treasury or were forced to sell preferred stock to the Treasury in order to stay in business.
What has challenged the banking industry and forced it to undergo changes?
Rapid technological changes
Which was not a problem during the most recent financial crisis?
Escalating home values
What is one of the things that the Troubled Asset Relief Program (TARP) allowed the government to do to help financial institutions?
Buy up hundreds of millions of dollars of preferred shares of banking securities
Which is not an area of the banking industry listed in your text as experiencing rapid changes?
The basic structure of credit unions
With regard to financial institutions, what is a shrinking capital base?
When an institution's amount of debt in relation to equity increases
Which of the following actions did the Federal Reserve not take during the most recent financial crisis to stave off economic collapse?
Allowed most of the largest banks to fail
Which of the following unprecedented actions did the Federal Reserve take during the most recent financial crisis?
Lending money at the discount window to nonbanking institutions like brokerage firms
What is the product Dr. Hill has developed?
A highly scratch-resistant and light-weight lens
What issue is holding Dr. Hill back from developing his product into a business?
He does not know enough about finance
One aspect of financial management involves managing cash flow for a business on a daily, weekly, monthly, and yearly basis.
A lockbox is a technique for getting cash into a business's account faster.
A marketable security is a temporary investment of cash.
Commercial paper is issued by large companies and backed by collateral.
Eurodollar deposits can only be made at banks located in London.
Transaction balances are cash on hand to pay everyday expenses.
Cash, investments, accounts receivable, and inventory are also known as
Which of the following is a current asset?
The goal of financial managers who focus on current assets is to
maximize returns on short-term assets.
Good financial managers minimize the amount of cash available to pay bills in
Because having idle cash on hand is undesirable, a manager may choose to invest in
All of the following are ways to invest idle cash for the short term except
A. certificates of deposit.
C. Treasury bills.
D. commercial paper.
E. unsecured loans.
If a firm tries to produce goods just in time to meet sales demand, its level of inventory will tend to be
Current assets include all of the following except
A. accounts receivable.
B. accounts payable.
The principal is the amount of money a business pays to use a bank's funds.
Lenders first evaluate a borrower's history of borrowing and repaying loans by looking at the borrower's past credit history.
Unsecured loans are backed by collateral that the lender can claim if the borrower does not repay the loan.
Trade credit is the most widely used source of short-term financing.
Interest is a percentage of the principal that the bank charges for use of its money.
Dan bought three new trucks with a loan obtained from the First National Bank. If he fails to repay the loan, the bank will repossess the trucks. The trucks are
If a boat manufacturer orders 50 units of fiberglass material and secures trade credit, promising to pay the supplier at a later date, the manufacturer will record the amount to be paid as a(n)
The most widely used source of short-term financing is
A finance company that buys other companies' accounts receivable is known as a(n)
If a real estate developer borrows $100,000 from a bank and ends up paying back $120,000, the $100,000 represents the
If Linda Wilson borrows $20,000 to buy a car and ends up paying the lender a total of $24,000, the $4,000 difference represents the
If the interest rate on a loan changes according to the daily average of the prime rate over the life of the loan, the interest rate is said to be
The ______ is the interest rate commercial bank lenders charge their best customers.
Most business failures are the result of poor long-term financial planning.
An operating lease is a long-term contract that shows up on the balance sheet as an asset and a liability.
Fixed assets, such as production facilities, are expected to last for many years.
In capital budgeting, all assets and projects must be continually reevaluated to ensure they remain compatible with the organization's needs.
The longer a project or asset is expected to last, the smaller is its potential risk.
Plants, offices, and equipment are considered
The financial arrangements required for investment in fixed assets can be
challenging for even the most profitable organization.
Of the following, which would not be a fixed asset for the Sprocket and Widget Manufacturing Company?
$10,000 in T-bills
Which of the following is not a long-term asset?
B. A factory
C. An automobile
E. Heavy machinery
Long-term assets are also called what?
Long-term assets are
expected to last for many years.
Unless fixed assets are continually reevaluated for appropriateness,
businesses lose their competitive edge.
The amount of money budgeted for the purchase of long-term assets is called the
When a company invests a lot of money in a particular project, it is concerned about the amount of risk involved. In general, the longer the expected life of a project or asset, the potential risk is
Which of the following is the most risky?
Introducing a new product in a foreign market
The process of deciding what fixed assets, projects, and investments will earn profits for the firm beyond the costs necessary to fund them is called
A bond can be transferred from one owner to another.
A bond contract is also known as an indenture.
The par value is the interest rate on a bond.
Bonds can be issued only by corporations.
Two common means of financing with long-term liabilities are equity financing and debt financing.
Which of the following is an example of a long-term liability?
A method of long-term financing that requires repaying funds with interest is
Long-term liabilities are
debts that will be repaid over a number of years.
Items such as a bond's value, date, and rate are specified in the
must be repaid according to the terms set in its indenture.
The face value of a bond, its initial sales price, is typically ____.
The following are types of bonds except
Which of the following is a sequence of small bond issues of progressively longer maturity?
The market value of common stock is the price at which it is currently trading.
The capital in excess of par account is usually significantly smaller than the par value account on a balance sheet.
Retained earnings may be used to finance long-term assets.
Common stock is a safer investment than preferred.
An investment banker sells securities for corporations in secondary markets.
The last in line for the payment of profits are the
Stockholders who may receive dividends but cannot vote are called
The dollar amount printed on a stock certificate is known as its
The cash return as a percentage of a stock's price is called its
The only long-term funds that a company can generate internally are
If a company retains all of its earnings, then it will not pay
Corporations usually employ an investment banking firm to help sell their securities in ______, which is where firms raise their financial capital.
the primary market
Securities markets provide liquidity.
The primary market exists for the trading of previously issued securities.
In organized exchanges, investors buy and sell only for their own accounts.
The over-the-counter market is a network and does not have a central location for trading.
Securities markets provide all of the following except
A. a mechanism for buying and selling stocks and bonds.
B. the primary market where firms raise capital.
C. a secondary market where investors can buy and sell their stocks to other investors.
E. a federally insured place to deposit savings.
Which market exists so that corporations can sell stocks directly to the public?
The primary market
The two biggest stock markets in the United States are
New York Stock Exchange and NASDAQ.
Which of the following is a stock market performance measure that compares current stock prices with those in a specified base period?
The over-the-counter securities market
trades most corporate bonds and all U.S. government securities.
_________ and __________ are important measures to financial managers because they need to know how their stocks are performing compared to other stocks.
What does Glasspray sell?
Fiberglass spray equipment
What part of its business does Glasspray have a difficult time managing?
Current assets and liabilities
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