FBLA Entrepreneurship Test Questions

Most startup companies can expect to need _____ capital than they anticipate.

More

The primary cause of small business failures is:

Management Mistakes

Entrepreneurs tend to be overly ______ and misjudge the ______ requirements to start a new business.

Optimistic; Financial

The ability to develop new ideas is known as:

Creativity

Which one of the following is usually included on the cover page of the business plan?

Disclaimer

Which one of the following management skills should a prospective team member possess?

Prepared to Recruit High-Quality People

Which one of the following is not true regarding a business plan?

A business plan is a document that describes the success factor of an ongoing business.

Which one of the following is not a part of the executive summary section of the Business Plan?

Competition Information

Which one of the following is an overview of the business plan intended to capture reader interest?

Executive Summary

Which one of the following should be included in the environmental and industry analysis section of the business plan?

Trends at the national and international levels that could influence the business.

Which one of the following should be identified form among the main competitors to the planned business?

Quality Leader

Which one of the following is not a part of the marketing research and evaluation section of the business plan?

Potential for Long Term Growth

All business plan information includes assumptions based on information available. How should this be addressed in the business plan?

The differing results if and when results differ from projections should be included.

Every business plan contains forecasts that include risk. What is one positive way to address risk?

The business plan should present alternatives.

Developing a business plan is a good way to:

Prevent costly oversights in the creation of a business.

Which one of the following is true concerning the product/service description section of the business plan?

Plans to expand the product line or service.

Which one of the following would be the most relevant important consideration in the selection of the right geographic location for a service business.

Proximity to Customers

Which one of the following benefits to the community in which the business is or will be located should be addressed in the business plan?

Job Creation

Which one of the following risks can be controlled or at least adequately prepared for?

Unexpected Development Costs

The financial plan section of the business plan is an important component. Which one of the following is not required?

Statement of Changed in Equity

Which one of the following would not be a recommended attribute for the business management team member?

Someone Whom the Owner Knows Personally

Which stage of the creative process involved viewing similarities and differences in the information collected?

Transformation

_____ is a process in which a small group of people interacts to produce a large quantity of imaginative ideas.

Brainstorming

A _______ is any distinctive word, phrase, symbol, name, or log a firm uses to distinguish itself or its products.

Trademark

Because of technology, entrepreneurs now have access to _______ opportunities.

International

GAAP stands for which one of the following?

Generally Accepted Accounting Principles

Which one of the following allows a firm to plan its short-term cash needs?

Cash Budget

Management Accounts Receivables does not include which one of the following?

Providing incentives for customers to make larger purchases by reducing the prices.

Which one of the following is not a factor in managing Accounts Receivable?

Paying creditors for purchases timely.

Which one of the following is an example of a single-entry accounting?

Checkbook

When a financial statement is depicted in percentages for each item it is:

Common-Sized

An accounting system should have the following characteristics.

Easy to use, accurate, and consistent

Establishing ________ will aid a business in developing key operational areas such as service and innovation.

Core Competencies

_______ is a road map of the tactics and actions an entrepreneur draws up to fulfill the company's mission, goals, and objectives.

Strategy

When determining the initial capital requirements for a business, what is the differentiation made regarding assets?

Identifying assets as short-term or long-term.

The small business can fail for a variety of reasons. There are actions that management can take to avoid most through careful planning. Which one is management least able to take action to avoid or recover from?

Industry Weakness

One way to reduce the need for a business to borrow is to carry little to no inventory and order items from the suppliers when they are sold to the customer. Which one of the following is not a risk related to this policy?

Increased carrying costs to store inventory.

Conditions are one of the five Cs of credit. Which one of the following phrases defines conditions?

Current economic, industrial, and firm-specific prospects for the loan period.

Capital is one of the five Cs of credit. Which one of following phrases defines capital?

Borrower's financial net worth.

Collateral is one of the five Cs of credit. Which one of the following phrases defines collateral?

Resale value of the secure items if repossession becomes a reality.

Character is one of the five Cs of credit. Which one of the following phrases defines character?

Customer's integrity, willingness, and potential ability to repay the loan

Capacity is one of the five Cs of credit. Which one of following phrases defines capacity?

Ability to repay the debt from ongoing business operations.

The five forces model includes potential entrants, suppliers, buyers, substitutes, and:

Rivalry between existing firms.

Which one of the following is not a source of primary data in marketing research?

Census Reports

Which one of the following describes customer-oriented pricing strategies?

Focused on target markets and demands.

A(n) ________ represents clients who buy or sell specialized goods or seasonal products.

Broker

A ________ is what a customer gains from the product or service feature.

Benefit

A _________ sells products to the ultimate consumer.

Retailer

Large companies primarily use a 1960s strategy called ________ as a way to encourage people to buy their products.

Mass Marketing

Which segmentation variable would be less productive regarding the 15-18 age group?

Political Party Preference

Which one of the following is not a source of secondary data in marketing research?

Interviews

Marketing research cannot help you identify which one of the following?

Markets for products that do not exist yet

There are four major components to inventory cost. Which one will cost you more if you order large quantities that you will eventually use?

Holding/Carrying Costs

A joint venture is different from a partnership in that the joint venture can be formed:

Only by two individuals.

The preparation of an organizational chart of current employees and documented job descriptions helps in the planning of the:

Workflow

The most valuable assets in a business are the:

Employees

What is the most efficient method-- because of its low cost and the fact that it allows a maximum amount of information to be covered in a short amount of time-- to use if you need to train a large number of employees on general company policy?

Lectures

If you need to train one or only a few employees concerning the details of a job, it is best to utilize:

On-The-Job-Training

Employee recruitment through the use of _________ will normally get a large number of responses, but many of these are unqualified or under qualified.

Help-Wanted Ads

Which one of the following questions is acceptable to ask when interviewing a perspective employee?

Have you ever been convicted of a felony?

Which one of the following is included as a component of an incentive-pay program?

Bonuses

Your _______ are not part of your "benefit" package.

Wages

Which part of the job description should include the "outcomes or results of the job?"

Task Statement

Some franchisers offer __________ including exclusive geographical distribution rights.

Territorial Protection

One of the major trends in franchising is the __________ of American franchise systems.

Internationalization

What is it called when a taxpayer reports and pays taxes dividends received from a corporation?

Double Taxation

Corporations are not allowed to pay for certain benefits for their employees and they are not considered income for the employees for tax purposes. Which one of the following is not of these benefits?

Stock Options

What will happen when a corporation lowers or eliminates its profit by paying out as much as they reasonably can to its owners?

The owners will pay individual income tax, but the corporation will avoid paying on its income.

What are the tax consequences of incorporating under subchapter S of the IRS code?

The income is passed though to the stockholders essentially as if the corporation was a partnership.

Which corporate form can provide pass-through tax treatment for shareholders?

LLC

When stock is transferred to an individual in exchange for services, how is the transaction treated?

Taxable income for the individual.

Which one of the following taxes is paid by business employers?

Unemployment Taxes

Why are business required to get a Federal Employer Identification Number?

Identifies the business for tax purposes

Which one of the following taxes is collected by business, but not an expense to them?

Sales Taxes

Social responsible is the obligation to have a positive effect on the four levels of society. Which level is the most important?

Economic

If a company decides to go green, which area of legal obligations is it attempting to satisfy?

Environmental Protection

The environmental analysis also is often called the _________ analysis.

SWOT

The formal statement of what a business expects expects in the way of ethical behavior is:

Code of Ethics

One measure of a company's level of social responsibility is the degree to which it encourages its employees to engage in:

Volunteer Service

If a small business contributes resources to the community which improves the quality of life, it is fulfilling which area of social responsibility?

Philanthropic

The highest, or ultimate, level of the pyramid of social responsibility is:

Philanthropic

What is an ethical perspective that deals with the consequences of one's own actions called?

Utilitarianism

Ralph Nader's "Nader's Raiders" were fighting to provide:

Consumer Protection

Employee stock options are required by law to meet a number of requirements. Which one of the following is one of the requirements of an incentive stock option?

The exercise price must be the fair market value of the stock at the time of issuance.

What laws control what a business can sell and where it can operate?

Zoning Laws

What is the term that makes a business entity responsible for any actions of the employee that are within the scope of his/ her employment?

Respondent Superior

Which one of the following is not a basis of prohibited employment discrimination under the federal laws related to discrimination?

Sexual Orientation

Many states require businesses to apply for a __________ to conduct business which is then renewed at specified intervals.

License

When the financial condition of a business becomes insolvent, what often occurs?

Bankruptcy

Congress passed an act in 1970 that has set workplace safety standards. What is this act called?

Occupational Safety and Health Act (OSHA)

Which one of the following insurances specifically covers job-related injuries?

Workers Compensation Insurance

____________ are at the very heart of the financial market for small businesses.

Commercial Banks

Which one of the following forms of business carries the least risk to the owner?

Corporation

The number of partners in a business organized as a partnership is limited by which of the following?

There is no limit to the number of partners a partnership business can have.

Which one of the following is not an example of the failure of the owners to treat the corporation as a separate entity from themselves?

The owners borrow startup capital using donated assets as collateral.

The debts of the business are ultimately the debts of the owners if the business cannot pay under which business form?

Partnership

What is the term for when an officer or director of a business identifies a business opportunity that would be valuable to his or her company, and uses that information for his or her own benefit or the benefit of a competitor?

Corporate Opportunity

The requirement that the employee not knowingly take action designed to harm the employer's business is an aspect of the duty of:

Loyalty

Which one of the following does not extend beyond the employment relationship (after termination)?

Duty not to Compete

Which one of the following is considered a break of loyalty?

Soliciting or introducing fellow employees to leave their jobs to join in a newly formed corporation.