1. Foods 2 Enterprise
Review questions

2. 1. The Cooper Company decided to sell stock to raise capital
1.The Cooper Company decided to sell stock to raise capital. Under which form of business organization does the company operate? 
A. Corporation 
B. Franchise 
C. Partnership 
D. Sole Proprietorship A

3. Which is a major advantage to buying a franchise?
A. Freedom in making business decisions 
B. Guaranteed profit on all goods sold 
C. High cost of supplies and equipment 
D. Management training and technical assistance provided  D

4. 3. Which term can be defined as the conception, pricing, promotion, and distribution of products and services to satisfy customer wants and needs?
A. Entrepreneurship
B. Marketing
C.  Marketing concept
D.  Target marketing B

5. D 4. Who are the people to whom a business plans to sell its products?
A. Administrators
B. Consumers
C.  Sales staff
D.  Target customers D

6. A 5. What are marketing objectives? A. Goals B. Products C. Sales
D.  Strategies A

7. 6. Who are the people most likely to buy a specific product or service?
A. Buyers
B. Consumers
C.  Customers
D.  Target customers D

8. 7. Before offering a service or product for sale, determine that there is:
A. A demand for the product.
B. A niche in the market.
C.  Enough inventory available.
D.  Opportunity for sales. A

9. 8. Of the major factors contributing to the success of a small business, which one is affected by the lack of working capital?
A. Financing
B. Image
C.  Management
D.  Planning A

10. 9. Jessica asks many questions and conducts research when attempting to solve problems related to her business. What personal characteristic does this represent?
A. Creativity
B. Inquisitiveness
C.  Persistence
D.  Responsibility B

11. 10. The inability to interpret financial records demonstrates a lack of:
A. Competence of the entrepreneur.
B. Image development.
C.  Management planning.
D.  Product/service planning. A

12. 11. There are no coffee shops on Hatteras Island
11. There are no coffee shops on Hatteras Island. Mike thinks that a coffee/bagel shop would have commercial value. His idea is considered a/n:
A. Corporation.
B. Mission.
C.  Opportunity.
D.  Partnership. C

13. 12. Why is sole proprietorship the most common form of business ownership?
A. Legal assistance is needed for start up in this form.
B. Limited liability of sole proprietorships is a desirable benefit.
C.  Money can be raised easily by issuing shares of stock.
D.  The government assumes little control over sole proprietorships. D

14. 13. If a price is reduced, what must happen to continue to break even?
A. Conduct market feasibility study
B. Sell fewer items
C.  Sell more items
D.  Sell to new customers C

15. 14. What must the company know in advance to predict when it will begin making a profit?
A. Break-even point
B. Credit card sales
C.  Net profit income
D.  Turnover rate A

16. 15. What is the covering, wrapper, or container in which merchandise is placed for retail sale?
A. Boxing
B. Labeling
C.  Packaging
D.  Wrapping C

17. 16. What is the amount added to the cost of an item to cover expenses and ensure profits?
A. Markup
B. Prestige pricing
C.  Price skimming
D.  Profit A

18. D 17. What is net income to a business? A. Costs B. Inventory C. Loss
D.  Profit D

19. B 18. What is NOT used to construct a cash flow statement? A. Expenses
B. Inventory
C.  Net income (or loss)
D.  Revenues B

20. 19. What financial statement tells an entrepreneur what his/her business is worth at a given time?
A. Balance sheet
B. Cash flow statement
C.  Ledger
D.  Profit and loss statement A

21. 20. What expenses will stay constant with the number of items produced?
A. Break even point
B. Fixed costs
C.  Liabilities
D.  Variable costs B

22. A 21. What does an income statement show the business owner?
A. Amount of profit or loss
B. Break-even point
C.  Stock turnover rate
D.  Total production costs A

23. 22. Using a 100% markup and taking off one cent to give the impression of bargain prices, what is the RETAIL price of an item whose wholesale cost is $20.00?
A. 40
B. 39.99
C.  30
D.  29.99 B

24. 23. FACS students practice making several products before choosing which one to sell. The result of that practice is called a/an :
A. Carrier.
B. Mock.
C.  Profile.
D.  Prototype. D

25. 24. A system for verifying and maintaining the desired standards in a product or service is called:
A. Automation.
B. Inspection.
C.  Quality circle.
D.  Quality control. D

26. C 25. What is the process used to test a business idea or concept?
A. Business concept
B. Business plan
C.  Feasibility analysis
D.  Market survey C

27. B 26. What is a working model of a product? A. Production model
B. Prototype
C.  Sample
D.  Target product B

28. B 27. Product standards are developed to benefit the: A. Investor.
B. Consumer.
C.  Entrepreneur.
D.  Small business owner. B

29. B 28. A feasibility analysis determines if:
A. A business plan is necessary.
B. An idea is practical.
C.  Customers will buy the product.
D.  The money is available to start a new business. B

30. 29. The federal agency which provides assistance and advice on how small businesses can increase revenues and profits is the:
A. FTC.
B. IRS.
C.  SBA.
D.  SBI. C

31. 30. Which state agency provides businesses with information regarding employer responsibilities in relation to unemployment insurance?
A. Department of Development
B. Office of the Secretary of State
C.  State Department of Labor
D.  Workers'' Compensation Board C

32. 31. Which organization has as its purpose the stimulation of local economic growth?
A. Chamber of Commerce
B. Internal Revenue Service
C.  Small Business Development Center
D.  State Department of Labor A

33. 32. Who should the purchasing manager contact if there is something wrong with a shipment or an invoice?
A. Customer
B. Manufacturer
C.  Retailer
D.  Vendor D

34. 33. What step BEST describes the development of a marketing strategy?
A. Marketing mix
B. Pricing
C.  Purchased product
D.  Sharing ideas A

35. 34. What kind of plan is presented to potential lenders or investors to gain financial support?
A. Business
B. Financial
C.  Management
D.  Marketing A

36. 35. Target customers must be chosen with care when beginning a new business because they are the customers:
A. Asked to purchase a specific product or service.
B. Most likely to buy a specific product or service.
C.  That plan to buy a specific product or service.
D.  That are willing to take a risk on buying from a new business. B

37. 36. The Foods II class prepared 25 dozen cookies, but no one came to purchase them. What should be evaluated?
A. Financials
B. Marketing
C.  Operations
D.  Standards B

38. 37. If the Foods II class lost money on their project but all products were sold, what should be evaluated?
A. Financials
B. Marketing
C.  Operations
D.  Standards A

39. D 38. Advertising and promotion expenses for an ongoing business are:
A. Fixed costs.
B. Sales revenue.
C.  Start-up costs.
D.  Variable costs. D

40. 39. As she prepared to open her new flower shop, Jamesia made several trips to talk with an accountant. The fees paid for those consultations would be classified as:
A. Fixed costs.
B. Office expense.
C.  Start-up costs.
D.  Wages and salary C

41. C 40. Initial inventory for the business is which type of cost?
A. Fixed cost
B. Personal cost
C.  Start-up cost
D.  Variable cost C

42. B 41. When seeking a loan, an entrepreneur who has capacity:
A. Considers environmental conditions before applying for the loan.
B. Demonstrates the ability to repay the debt.
C.  Has insurance to cover business losses.
D.  Has made a personal investment in the business. B

43. A 42. A short-term loan is repayable in: A. One year. B. Two years.
C.  Five years.
D.  Twenty-five years. A

44. 43. Under which form of business ownership do owners have limited liability?
A. Corporation
B. General partnership
C.  Sole proprietorship
D.  Strategic alliance A

45. 44. Which type of business can own assets and borrow money without directly involving the people who own it, and, therefore, is more closely regulated by the government than other business organizations?
A. Corporation
B. Family-owned business
C.  General partnership
D.  Sole proprietorship A

46. C 45. Which form of incorporation would a church or charity use?
A. C-corporation
B. Limited Liability Company
C.  Nonprofit corporation
D.  Subchapter S corporation C

47. C 46. Which is a major disadvantage of a corporation?
A. Difficult to leave the business
B. Difficult to raise capital
C.  Double taxation
D.  Unlimited liability C

48. 47. Which is a major disadvantage to buying a franchise?
A. Equipment and supplies are less expensive.
B. No management or technical assistance is provided.
C.  The performance of other franchises impact on the franchisee.
D.  There is no guarantee of product consistency. C