Question 1

A _____ is best described as any independently owned and operated business that is not dominant in its competitive area and does not employ more than 500 people.

Accepted Answer

A)  publicly owned business
B)  limited liability company
C)  small business
D)  publicly traded company
E)  conglomerateF) B) and E)
G) C) and D)

Question 2

Small businesses may obtain funding from their suppliers in the form of a _____,which means that suppliers allow the business to take possession of the needed goods and services and pay for them at a later date or in installments.

Accepted Answer

A)  trust fund
B)  trade credit
C)  stock dividend
D)  non-recourse loan
E)  mutual fundF) A) and B)
G) A) and D)

Question 3

Which of the following is a disadvantage of small businesses?

Accepted Answer

A)  They lack the capacity to focus on narrow niches.
B)  They require a lot of money to start and maintain than do large ones.
C)  They have a high rate of failure.
D)  They lack the ability to adapt to changing market demands.
E)  They cannot operate in high technology industries.F) A) and B)
G) B) and D)

Question 4

Many small rural operations cannot obtain financing within their own communities because:

Accepted Answer

A)  small rural banks believe that small businesses lack the flexibility to adapt to changing market demands.
B)  small businesses require a huge sum of money as they often compete in the mass market.
C)  government regulations do not permit financing small rural businesses.
D)  small rural banks lack the necessary financial expertise to counter the risks involved with small-business loans.
E)  rural communities have various business guidelines that prohibit rural banks from financing small businesses.F) None of the above
G) A) and B)

Question 5

Which of the following is an advantage for small businesses that choose to enter the retailing industry?

Accepted Answer

A)  Retailing is a relatively difficult field to gain entry.
B)  Retailing requires a large capital investment in the initial stages.
C)  Retailing allows small business to focus on specific groups of consumers.
D)  Retailing requires sophisticated machinery and technical expertise.
E)  Retailing suffers from heavy competition and losses only in the initial stages.F) A) and B)
G) A) and C)

Question 6

Arnold approached a bank to get a loan for a business he planned to launch later that year.He explained his business idea and its capital requirements to the bank manager.The manager asked Arnold to provide a formal document that included a rationale for the business,an explanation of how it will achieve its goals,an analysis of the competition,and estimates of income and expenses,among other information.Which of the following documents does the bank expect from Arnold in this scenario?

Accepted Answer

A)  A business plan
B)  A cash flow statement
C)  A promissory note
D)  A balance sheet
E)  A marketing planF) B) and C)
G) D) and E)

Question 7

Industries such as wholesaling,services,and manufacturing are unattractive to entrepreneurs because these fields tend to be relatively difficult to enter and require high initial financing.

Accepted Answer

A) True 
 B)False

Question 8

The principal immediate threats to small and mid-sized businesses include:

Accepted Answer

A)  rapidly advancing technology.
B)  rising entrepreneurial spirit.
C)  reducing imports.
D)  escalating costs.
E)  increasing exports.F) C) and E)
G) A) and D)

Question 9

One of the main drawbacks of franchising is that it requires a franchisee to:

Accepted Answer

A)  invest a lot of time and effort in setting up the business.
B)  take sole responsibility for all decisions in the business.
C)  share the profits of the business with the franchiser.
D)  build the brand appeal for the franchise outlet on his or her own.
E)  invest considerable capital in national and local advertising programs.F) A) and C)
G) B) and D)

Question 10

Which of the following is a source of equity financing?

Accepted Answer

A)  Securing government loans
B)  Selling personal assets to raise funds
C)  Borrowing money from friends
D)  Securing short-term loans from a family member
E)  Receiving trade credit from suppliersF) C) and D)
G) A) and B)

Question 11

Which of the following statements best describes bartering?

Accepted Answer

A)  It is the practice of small businesses trading their own products for the goods and services offered by other businesses.
B)  It is an agreement by which a financial institution promises to lend a business a predetermined sum on demand.
C)  It is the process in which suppliers allow a business to acquire needed goods and pay for them at a later date.
D)  It is the process in which a small-business owner provides personal property as collateral for a loan.
E)  It is a process by which an individual acquires the license to sell another's products or to use another's name in business.F) B) and E)
G) C) and E)

Question 12

Salma owns a Lebanese restaurant that employs around 25 people.She is solely responsible for the management of the restaurant.Her business has to compete with a larger chain of restaurants that offer the same cuisine.Salma's restaurant can be classified as a:

Accepted Answer

A)  multinational corporation.
B)  conglomerate.
C)  franchise.
D)  public sector holding.
E)  small business.F) C) and E)
G) B) and E)

Question 13

_____ is the process of creating and managing a business to achieve desired objectives.

Accepted Answer

A)  Entrepreneurship
B)  Bootstrapping
C)  Bootlegging
D)  Innovation
E)  BrainstormingF) All of the above
G) C) and D)

Question 14

Which of the following statements accurately describes intrapreneurs?

Accepted Answer

A)  Employees who become a part of a company's board of directors through internal promotions are referred to as intrapreneurs.
B)  Entrepreneurs who sell the rights to use their products to independent owners are intrapreneurs.
C)  Entrepreneurs who are involved in international business are referred to as intrapreneurs.
D)  Independent investors who help a company raise capital through internal financing are intrapreneurs.
E)  Individuals in large firms who take responsibility for the development of innovations within the organizations are intrapreneurs.F) A) and E)
G) A) and D)

Question 15

Which of the following is an advantage that purchasers of a popular franchise experience?

Accepted Answer

A)  They get access to the already established brand name or brand equity.
B)  They have great flexibility to make decisions for their individual franchise outlets.
C)  They can enjoy their total profits without having to share anything with the franchisers.
D)  They can easily add or delete a good or service from the existing product line.
E)  They are free to vary their operational processes based on their needs and constraints.F) A) and E)
G) A) and B)

Question 16

Retailing attracts entrepreneurs because gaining experience and exposure in retailing is relatively easy.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements is true of small businesses?

Accepted Answer

A)  They usually employ more than 500 people.
B)  They require less money to start and maintain than do large ones.
C)  They lack the flexibility to adapt to changing market demands.
D)  They offer a stress-free environment to their owners.
E)  They have a very low rate of failure.F) B) and C)
G) A) and E)

Question 18

Derek borrowed $50,000 from his mother for his new business venture.He promised that she would be a partner in the business and would be entitled to a significant percent of profits from the business at the end of the year.This is an example of _____.

Accepted Answer

A)  franchising.
B)  bartering.
C)  equity financing.
D)  initial public offering.
E)  bootlegging.F) C) and D)
G) A) and C)

Question 19

Chang is an interior designer who starts his own consulting firm.His friend Rachel is the owner of a coffee shop.Chang decorates Rachel's new coffee shop in exchange for a supply of coffee whenever his clients visit his office.Which of the following sources of funding does this scenario best illustrate?

Accepted Answer

A)  Mortgaging
B)  Bartering
C)  Trade credit
D)  Line of credit
E)  Equity financingF) B) and E)
G) D) and E)

Question 20

The act of financing one's business by using real personal assets is known as:

Accepted Answer

A)  debt financing.
B)  factoring.
C)  franchising.
D)  equity financing.
E)  bootlegging.F) C) and D)
G) B) and E)

Exam 5: Small Business,entrepreneurship,and Franchising

One of the main drawbacks of franchising is that it requires a franchisee to:

Correct Answer
verified

Small businesses may obtain funding from their suppliers in the form of a _____,which means that suppliers allow the business to take possession of the needed goods and services and pay for them at a later date or in installments.

Correct Answer
verified

The principal immediate threats to small and mid-sized businesses include:

Correct Answer
verified

Salma owns a Lebanese restaurant that employs around 25 people.She is solely responsible for the management of the restaurant.Her business has to compete with a larger chain of restaurants that offer the same cuisine.Salma's restaurant can be classified as a:

Correct Answer
verified

A _____ is best described as any independently owned and operated business that is not dominant in its competitive area and does not employ more than 500 people.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

The act of financing one's business by using real personal assets is known as:

Correct Answer
verified

Many small rural operations cannot obtain financing within their own communities because:

Correct Answer
verified

Which of the following statements accurately describes intrapreneurs?

Correct Answer
verified

_____ is the process of creating and managing a business to achieve desired objectives.

Correct Answer
verified

Which of the following is a source of equity financing?

Correct Answer
verified

Which of the following is a disadvantage of small businesses?

Correct Answer
verified

Which of the following is an advantage that purchasers of a popular franchise experience?

Correct Answer
verified

Industries such as wholesaling,services,and manufacturing are unattractive to entrepreneurs because these fields tend to be relatively difficult to enter and require high initial financing.

Correct Answer
verified

Which of the following is an advantage for small businesses that choose to enter the retailing industry?

Correct Answer
verified

Retailing attracts entrepreneurs because gaining experience and exposure in retailing is relatively easy.

Correct Answer
verified

Derek borrowed $50,000 from his mother for his new business venture.He promised that she would be a partner in the business and would be entitled to a significant percent of profits from the business at the end of the year.This is an example of _____.

Correct Answer
verified

Which of the following statements is true of small businesses?

Correct Answer
verified

Which of the following statements best describes bartering?

Correct Answer
verified

Exam 5: Small Business,entrepreneurship,and Franchising

One of the main drawbacks of franchising is that it requires a franchisee to:

Correct AnswerverifiedShow Answer

Small businesses may obtain funding from their suppliers in the form of a _____,which means that suppliers allow the business to take possession of the needed goods and services and pay for them at a later date or in installments.

Correct AnswerverifiedShow Answer

The principal immediate threats to small and mid-sized businesses include:

Correct AnswerverifiedShow Answer

Salma owns a Lebanese restaurant that employs around 25 people.She is solely responsible for the management of the restaurant.Her business has to compete with a larger chain of restaurants that offer the same cuisine.Salma's restaurant can be classified as a:

Correct AnswerverifiedShow Answer

A _____ is best described as any independently owned and operated business that is not dominant in its competitive area and does not employ more than 500 people.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The act of financing one's business by using real personal assets is known as:

Correct AnswerverifiedShow Answer

Many small rural operations cannot obtain financing within their own communities because:

Correct AnswerverifiedShow Answer

Which of the following statements accurately describes intrapreneurs?

Correct AnswerverifiedShow Answer

_____ is the process of creating and managing a business to achieve desired objectives.

Correct AnswerverifiedShow Answer

Which of the following is a source of equity financing?

Correct AnswerverifiedShow Answer

Which of the following is a disadvantage of small businesses?

Correct AnswerverifiedShow Answer

Which of the following is an advantage that purchasers of a popular franchise experience?

Correct AnswerverifiedShow Answer

Industries such as wholesaling,services,and manufacturing are unattractive to entrepreneurs because these fields tend to be relatively difficult to enter and require high initial financing.

Correct AnswerverifiedShow Answer

Which of the following is an advantage for small businesses that choose to enter the retailing industry?

Correct AnswerverifiedShow Answer

Retailing attracts entrepreneurs because gaining experience and exposure in retailing is relatively easy.

Correct AnswerverifiedShow Answer

Derek borrowed $50,000 from his mother for his new business venture.He promised that she would be a partner in the business and would be entitled to a significant percent of profits from the business at the end of the year.This is an example of _____.

Correct AnswerverifiedShow Answer

Which of the following statements is true of small businesses?

Correct AnswerverifiedShow Answer

Which of the following statements best describes bartering?

Correct AnswerverifiedShow Answer

Correct Answer
verified

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verified

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verified

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verified

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verified

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verified

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verified

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verified

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verified

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verified

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