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Business Management and Administration
Test Questions
Test 1 (28 questions)
Questions
What type of law is intended to enforce the rules and regulations of governmental agencies:
A. Procedural
B. Administrative
C. Statutory
D. Commercial
Arbitration is usually a binding process, which means that it
A. is costly and risky.
B. ends with imprisonment.
C. replaces the trial.
D. is confidential.
Daniel is developing a complex document that provides supporting evidence that his company made a good
decision when it expanded its operations overseas. What type of analytical report is Daniel writing?
A. Troubleshooting
B. Feasibility
C. Justification
D. Cause and effect
Employees can demonstrate their customer service mindset by using good
A. business activities.
B. promotional plans.
C. marketing strategies.
D. phone skills.
Which of the following presents the most accurate picture of how a business is doing financially:
A. Total income
B. Operating expenses
C. Net profit
D. Gross profit
Preparing wills and setting up guardianships are types of financial services that often are provided by
A. attorneys.
B. beneficiaries.
C. courts.
D. executors.
What do companies often use to assign and track various business tasks?
A. Customer database
B. Surveillance system
C. Accountability matrix
D. Magnetic cards
Jack is a computer programmer who is struggling to fix a glitch with his company's new computer network. During a get-together with some friends who also work in technology, Jack brings up his dilemma. His friend Janelle suggests a process that helped her solve a similar problem that she experienced a few weeks ago. Two other friends, Tim and Susan, provide some suggestions as well. In this situation, Jack and his friends are transferring knowledge by
A. conducting a formal interview.
B. forming a strategic alliance.
C. applying Groupthink strategies.
D. participating in a community of practice.
If Delia needs to determine the dollar amount of office supplies that her company purchases from the XRT Company each month, she should review
A. customer invoices.
B. production status reports.
C. sales reports.
D. accounts-payable records.
A benefit of using project management software is that it
A. provides job training for team members.
B. eliminates computer coding problems.
C. reduces the need to monitor costs.
D. creates a variety of evaluative reports.
A company that wishes to lower its risk management costs might start its own __________ insurance company, which is a type of corporate self-insurance.
A. captive
B. medical malpractice
C. professional liability
D. compulsory
On what type of purchase order are you most likely to find the following information:
This order covers the MRE Manufacturing Company's purchase of 1⁄2" rubber gaskets, Model # 62376 metal washers, and "Y" PVC piping beginning April 10, 2022 through March 31, 2024. The prices stated in your quotation dated January 31, 2020 are effective until March 31, 2024.
A. Blanket
B. Service
C. Referral
D. Custom
Which of the following is an example of a packaging issue that a business might negotiate with a vendor:
A. Implementing an electronic data exchange system to place orders
B. Extending product warranties from 12 months to 18 months
C. Requesting that the vendor waive restocking fees for returned products
D. Using labels and boxes that contain the business's logo
Which of the following types of regulations have a direct impact on operations management:
A. Advertising, environmental, antitrust
B. Environmental, employment and labor, insurance
C. Antitrust, tax codes, employment and labor
D. Privacy, antitrust, employment and labor
A company created a new production process that decreased the cooling time required for heat-treated manufactured parts. This method enabled employees to handle the parts more quickly in the next production step. The new production process was created in response to
A. regulations.
B. product design.
C. human factors.
D. technology.
Which of the following might occur during the litigation process:
A. Jury selection
B. Online dispute resolution
C. Arbitration
D. Attorney recertification
An organizational tool that can help you schedule a project and figure out the order of work you need to
complete is
A. a flow chart.
B. online collaboration platforms.
C. focus groups.
D. a to-do list.
A person who was interested in obtaining a seasonal job in the construction industry might contact a __________ for leads.
A. local merchant
B. county office
C. labor union
D. family friend
Even though Joseph has worked as an accountant for 20 years, he recently enrolled in a community college course to help him master the new software his department is using. He knows that if he doesn't keep up with current technologies, he could be replaced by a younger worker. This is an example of the importance of __________ in the workplace.
A. frequent training
B. ongoing education
C. mentorship programs
D. student loan forgiveness
The Prater Corporation wants to expand its market share by 6% next year. What type of goal has the company set?
A. Organizational
B. Ideological
C. Financial
D. Input
What should a project's statement of work include?
A. Terms and commitments
B. The results summary
C. A request for proposal
D. Charts and materials
Why do project managers develop a work breakdown structure (WBS) for complex projects?
A. To identify and better manage all project activities
B. To communicate costs associated with the project
C. To provide team members with feedback for improvement
D. To provide stakeholders with project objectives
While sequencing the necessary activities for a new construction project, a homebuilder determines that the
walls cannot be painted until the drywall has been completed. This is an example of which type of dependency?
A. Finish-to-finish
B. Start-to-finish
C. Finish-to-start
D. Start-to-start
The focus of the Six Sigma framework involves maximizing overall quality and
A. emphasizing innovation.
B. preventing problems.
C. hiring qualified employees.
D. expanding product lines.
Siobhan is utilizing risk-management technology to quantify the potential losses that her company would incur if a tornado destroyed its largest manufacturing plant. What technique is Siobhan using to forecast the likely losses?
A. Risk transference
B. Cost-benefit analysis
C. Risk modeling
D. Fundamental analysis
How can managers coordinate employees’ activities?
A. Share organizational charts with them.
B. Tell them what to do.
C. Give them the equipment they need.
D. Evaluate their results.
Burkhart Manufacturing is implementing a new, company-wide computer system. Nadine is in the process of identifying the skills that will be needed to manage the information and maintain the various software applications. What function of management is Nadine focusing on?
A. Training
B. Controlling
C. Planning
D. Staffing
Before launching a new product, marketers should obtain the support of top company leadership. This is an example of which aspect of change management?
A. Sponsorship
B. Involvement
C. Readiness
D. Impact
Answers
B
C
C
D
C
A
C
D
D
D
A
A
D
B
C
A
A
C
B
A
A
A
C
B
C
A
D
A
Test 2 (21 questions)
Questions
1. Serena is responsible for making business decisions on Logan's behalf, which includes looking out for his best interests. In this situation, Serena is the __________, and Logan is the __________.
A. executor; advocate C. principal; executor
B. advocate; agent. D. agent; principal
The form of business organization that limits the losses and the risks of the owner(s) is a
A. sole proprietorship. C. consignment.
B. general partnership. D. corporation.
Which of the following is a benefit of using mediation to resolve disputes:
A. Higher payouts for defendants C. Decisions that carry more weight
B. Cost-effectiveness and efficiency D. Unbiased third-party decision maker
Once you know your group's purpose, what should you do next?
A. Volunteer a new idea.
B. Find out what people know about the subject.
C. Agree on ground rules.
D. Contribute in a useful way.
Which of the following types of goods do marketers classify according to their uses:
A. Specialty C. Shopping
B. Convenience D. Industrial
Which type of decision is most likely to have a long-term impact on your life?
A. Simple C. Routine
B. Limited D. Extensive
Jordan buys a sofa from a local furniture store that advertises "90 days same as cash." She's able to
have the sofa delivered to her house immediately without paying anything. However, if she doesn't pay
for the sofa within the 90-day period, she'll be subject to finance charges. Jordan bought the sofa using a
__________ credit account.
A. regular C. budget
B. revolving D. installment
Which of the following is a requirement for a good accounting system:
A. It should be replaced every two or three years.
B. It should be updated annually.
C. It should eliminate the need for an accountant.
D. It should provide needed information quickly.
Which of the following is subtracted from operating cash flow to find free cash flow:
A. Capital expenditures C. Acquisitions
B. Dividends D. Earnings
What must companies achieve in order to continue to exist?
A. Short-term goals C. Quick sales
B. Long-term goals D. Immediate changes
To write text on your web page, you need to use __________ software.
A. web-editing C. defragmentation
B. computer-aided design (CAD) D. keylogger
Projects are short-term undertakings that create
A. boosts in revenue. C. unique goods or services.
B. marketing campaigns. D. new business opportunities.
Which of the following supply chain issues is primarily a result of globalization:
A. Members in a supply chain need to have a clear understanding of how the larger network operates.
B. Companies need to personalize products and packaging to appeal to multiple customer segments.
C. Supply chain networks are much smaller and less complex than they were in previous eras.
D. It is easier than ever for companies to differentiate their products from the competition.
The first step of protecting a business's digital assets is taking an inventory. This includes what
information is on what media, where the information is located, and
A. costs associated with the information. C. how the information is accessed.
B. order of information importance. D. how the information will be used.
Kevin is planning to paint a house. He draws a simple graph that shows the sequence of tasks that will be done from beginning to end of the project. For example: 1) Buy supplies, 2) Prepare house for painting, 3) Paint house, and so on. This is an example of a
A. work breakdown structure. C. scope management plan.
B. network diagram. D. project charter.
Brianna only uses one type of coffee machine because she believes it does the best job of grinding
coffee beans. This is an example of which type of quality?
A. Conformance C. Value
B. Excellence D. Satisfaction
The overall purpose of the Six Sigma quality-management framework is to satisfy customers and
A. simplify activities. C. improve technology.
B. lower costs. D. identify needs.
One of the goals of change management is
A. to obtain buy-in from stakeholders. C. to keep the people involved to a minimum.
B. to limit the effects of a change. D. to reduce the time it takes to make a change.
Before a bar of soap is bought by a customer, it goes through a long production process. First, the raw materials are shipped to a manufacturer that blends the soap and molds it into bars. Then, the bars are sent to a packaging plant to be put into boxes and printed with labels. Finally, the bars are shipped to distributors throughout the country where they are sold to customers. The relationship among the raw materials distributor, the soap manufacturer, the packaging plant, and the stores where the soap is sold
can be described as a
A. supply chain network. C. manufacturing route.
B. route of production. D. distribution network.
What is an important aspect of managerial directing?
A. Creating systematic approaches for activities
B. Interviewing job applicants
C. Developing long-term business objectives
D. Providing employees with instructions
Which of the following is a technological tool that a financial institution might use to quantify potential losses related to investment portfolios:
A. Risk modeling C. Risk assumption
B. Fraud detection D. Intrusion detection
Answers
D
D
B
C
D
D
C
D
A
B
A
C
B
C
B
B
B
A
A
D
A
Test 3 (18 questions)
Questions
Rosa is writing a business letter to Alex Smith, whom she has never met. Which of the following salutations should Rosa use:
A. To Whom It May Concern:
B. Dear Mr. Smith:
C. Dear Alex:
D. Dear Alex Smith:
Which of the following is an example of a personal vision:
A. I will learn how to effectively manage my personal finances.
B. I will earn an associate degree in business administration.
C. I will complete my first 5K race in under 30 minutes.
D. I will share my love of food with others by being a chef.
Rebecca recently terminated her relationship with a financial-services provider. The financial planner misled Rebecca about her financial status so that she would continue to pay for their services. This example demonstrates the importance of selecting a financial-services provider who is
A. open-minded.
B. competent.
C. diligent.
D. objective.
Which of the following business trends affects HR management:
A. Costs of business going down
B. Globalization
C. No restructuring
D. Lack of new technology
After knowledge has been captured and organized, it should be
A. deleted.
B. guarded.
C. shared.
D. sold.
What is the link that connects producers and consumers so that both benefit?
A. Marketing
B. Handling
C. Shipping
D. Purchasing
Why is it important for businesses to store information for future use?
A. To establish quality control
B. To make it accessible
C. To maintain data accuracy
D. To ensure confidentiality
Henry works in a business's receiving room. While working, Henry was lifting and setting down heavy boxes when he experienced back and abdominal pain. What type of workplace injury did Henry receive?
A. Closed wound
B. Strain
C. Open wound
D. Sprain
What is Claire doing when she reviews a report that compares the purchase transactions of the company's four largest customers?
A. Analyzing service performance
B. Preparing a purchasing forecast
C. Conducting a sales analysis
D. Organizing an inventory report
Which of the following is a non-price issue that a business might negotiate with a vendor when purchasing
expensive, complex equipment:
A. Post-sale service
B. Compensation
C. Volume reductions
D. Payment terms
A job applicant who writes to a business that is advertising positions available may include in the letter an offer
to call the business at a certain time to
A. discuss salary and benefits.
B. provide personal information.
C. schedule an interview.
D. ask questions about the company.
During the project-closure process group, which of the following should project teams do:
A. Approve deliverables and sign all project documents
B. Create issue logs for problems encountered during the project
C. Celebrate their successful project completion together
D. Develop a work breakdown structure to show all work completed
What is the purpose of key performance indicators (KPIs)?
A. To change the project plan
B. To eliminate risk
C. To communicate the project plan to stakeholders
D. To measure project progress
Quality management is a
A. philosophy.
B. technique.
C. six-step process.
D. tool.
Which of the following quality management frameworks uses martial arts terminology to identify individuals necessary for its implementation:
A. ITIL
B. Six Sigma
C. CMMI
D. Quality Max
A plant manager or a department head would be an example of which level of management?
A. Middle
B. Operating
C. Supervisory
D. Top
An organization with a wide span of control usually
A. has a lack of middle managers.
B. uses a divisional organizational structure.
C. does not give managers enough direct reports.
D. gives little control to the CEO.
When a marketing manager goes on vacation, the marketing staff does not know what tasks to do and does not
feel like it can work ahead on anything. This example illustrates that
A. directing motivates employees.
B. directors must build group dynamics.
C. directing is a continuous process.
D. directing is the starting point of action.
Answers
D
D
D
B
C
A
B
B
C
A
C
C
D
A
B
A
A
D
Terms
Business Law - 5%
Types of Laws
Administrative law: deals with the rules and regulations that have been established by governmental agencies
implements the rules and regulations, which also involves resolving disputes
Statutory law: consists of the laws passed by the legislature
Commercial law (business law or trade law): a body of laws that regulates business activities
Procedural law: the set of rules that govern how legal cases are handled and resolved
establishes the rules of the court and the methods used to ensure the rights of individuals in the court system
Business Structure
Consolidation: acquiring smaller companies
Merger: when one company absorbs another
Franchise: a business whereby the owner licenses its operations—along with its products, branding, and knowledge—in exchange for a franchise fee
Corporation: a legal entity that is separate and distinct from its owners
Can enter contracts, loan and borrow money, sue and be sued, hire employees, own assets, and pay taxes.
Owners/shareholders losses and risks are limited to their investment in the corporation.
Tax advantage: retaining earnings at a lower tax rate than non-corporations
Closed corporation: a corporation that is held by a limited number of shareholders and is not publicly traded
Open corporation: a corporation whose ownership shares are available for exchange on a public market
Owners don’t need daily involvement in business
Sole proprietorship: a type of enterprise owned and run by only one person and in which there is no legal distinction between the owner and the business entity
Owner has unlimited liability for debts
Joint venture: a combination of two or more parties that seek the development of a single enterprise or project for profit, sharing the risks associated with its development
Brings in people with different cultures to work together
Consignment: a purchase arrangement whereby products are sent to a retailer who pays for the products only upon their sale.
Limited Liability Company (LLC): distributes the profits/losses to its owners, but shields personal assets from business debt like a corporation
Not taxable itself and distributes the profits to its owners
General partnership: a business arrangement by which two or more individuals agree to share responsibilities, assets, profits, and financial and legal liabilities of a jointly-owned business
Limited partnership: day-to-day operations are controlled by one or more general partners and funded by limited or silent partners who are legally responsible for losses based on the amount of their investment
Settlements/Disputes
Arbitration: binding (they can replace a trial); is a way to resolve a dispute outside of court with a neutral third party
faster and less expensive than litigation
arbitrator's decision is final and enforceable
Mediation: intervention of a third person (mediator) into a dispute to assist the parties in negotiating jointly acceptable resolution of issues in conflict; flexible
informal
mediator doesn't make a decision, but instead helps the parties find a solution
Litigation: the process of resolving a dispute in court (civil)
involves filing a lawsuit, exchanging information, and going to trial if necessary
Not all litigation cases require a jury, but for the ones that do, jury selection is an important part of that process.
Online dispute resolution: a low-cost option for those whose issues are not worth the cost of litigation
Procedural due process: ensures that individuals and businesses who are sued or charged with a crime have opportunity to present evidence on their behalf before a court can impose a penalty
Substantive due process: ensures that the government does not take away our fundamental rights
Takings Clause: requires the U.S. government to pay a fair price for any private property that it takes for public use
Sovereign immunity: protects a federal government from lawsuits brought against it in foreign courts.
Demand letter: informs person of legal dispute
Used in small-claim disputes to inform and ask for relief
Relief: course of action that would satisfy lawsuit filer
Warning letter: indicates a problem
Infringement lawsuit: breaking lawor violating an agreement, which may lead to legal consequences and the need for the defendant to respond with appropriate measures.
Law Terms
Indictment is a court-issued statement that formally charges an individual with a crime
Injunction is a court order forbidding a business or a person to perform
certain activities.
People
Agent: a person or business that is authorized to conduct certain activities with third parties on the behalf of another person or business (the principal)
Communications - 6%
Reports
Analytical reports: summarize information about issues, opportunities, or problems; uses data to analyze information and draw conclusions
Justification reports: provide facts and data that support a previous decision or action (ie. profits or market share realized from a business expansion overseas)
Feasibility report: summarizes the positive and negative consequences of taking a certain course of action that has not yet occurred
Troubleshooting reports: address specific problems with a process
Cause and effect reports: provide information about a variety of scenarios under different circumstances—if actions A and B happen, then the probable result will be C
helps the business consider pros and cons of each scenario to determine which action it should take
Customer Relations 2%
Economics - 5%
Taxes
Property taxes: paid on land and buildings
Local governments use property taxes to finance community initiatives such as schools and parks
Excise tax: a special government tax on certain items (e.g., gasoline) that is included in the price that consumers pay
Indirect; deters people from purchasing (ie. tobacco)
Income taxes: levied on income earned from a job or other sources.
Estate taxes: a tax on your right to transfer property at your death
Net profit: the amount of money left after all operating expenses are subtracted from gross profit
Gross profit: the profit a company makes after subtracting only the direct costs of producing goods (production costs only); no interest/taxes
Currency speculation: risky because it can create an artificial demand for currency,
leading to high inflation
Types of goods
Industrial goods: products purchased by producers for resale, to make other goods, or to use in business operations
Five classifications: materials, parts, installations, equipment, and supplies.
Marketers classify industrial goods according to their uses.
Consumer goods
Convenience goods: consumer products that are purchased frequently and with minimal effort
Examples include food, beverages.
Often low-cost, non-durable items that are easily accessible.
Shopping goods: more durable and usually more expensive
Examples include furniture, televisions, and electronics
Consumers buy these items less frequently and spend time comparing options
Specialty goods: relatively rare, considered luxury purchases
Examples include sports cars, designer handbags, and fine art
Consumers are willing to spend time and effort researching these products
Unsought goods: necessities that are rarely sought out by the consumer without an immediate need
Examples include life insurance and pre-paid funeral expenses
Consumers require considerable marketing efforts to purchase these products
Pegged currency: set by a country's government to mirror another country's currency.
Stability in currency
Free floating currency: value fluctuates based on supply/demand
Direct exchange rate quotation: Number of a foreign currency that one dollar could buy
Indirect quote: number of a country’s dollars that one unit of a foreign currency could buy
Spot exchange rate: the current exchange rate at which a currency can be bought or sold for immediate delivery.
Forward exchange rate: the agreed-upon exchange rate for a currency transaction that will occur at a future date.
Price fixing: an illegal business agreement in which businesses agree on prices of their goods or services, resulting in little choice for the customer
Yield Percentage: an annual dividend divided by the current stock price
Dividend: the distribution of a company's earnings to its shareholders
Loss-leader pricing: prices a product lower than its production cost in order to attract customers or sell other, more expensive products
Considered illegal if eliminates competition
Cost-plus pricing: Calculate your costs and add a mark-up
Provides a consistent rate of return; needs market research
Disregard for customer and willingness to pay
Competitive pricing: Set a price based on what the competition charges
Might risk selling at a loss
Price skimming: Set a high price and lower it as the market evolves
Penetration pricing: Set a low price to enter a competitive market and raise it later
Psychological pricing: describes the business practice of setting prices lower than a whole number (ie. $99.99)
Value-based pricing: Base your product or service’s price on what the customer believes it’s worth
Price lining: selling different products at different price points to cater to customers who are looking for different levels of quality, convenience, and value (ie. Basic plan $4, Standard plan $6, Pro plan $8)
Cannibalization strategy: a sales loss caused by a company's introduction of a new product that displaces one of its own older products; can occur when a new product is similar to an existing product and both share the same customer base
Product extension: creating new products that are variations of existing products (ie. different sizes or flavors of a candy bar)
Product bundles: combinations of several products for sale as one composite
Emotional Intelligence - 8%
Personal vision: a mental picture of a person's ideal future—a broad, long-term statement that deals with an individual's hopes, ambitions, and core values.
Goals: concrete, specific, and measurable end results that an individual plans to achieve.
Attitudes can be helped with humor.
Stereotyping: to believe unfairly that all people or things with a particular characteristic are the same
Discrimination: treating some people differently from others
Prejudice: preconceived opinion that is not based on reason or actual experience
Financial Analysis - 6%
Accounting method
Cash basis: major accounting method that recognizes revenues and expenses at the time cash is received or paid out
ie. If a customer gives you $5 for lemonade today, you record that $5 today. If you buy lemons for $2 today, you record that expense today.
Accrual accounting: recognizes income at the time the revenue is earned and records expenses when liabilities are incurred regardless of when cash is received or paid.
ie. If someone buys lemonade on credit (they promise to pay next week), you still count it as money made today. If you order lemons but haven’t paid for them yet, you still count it as money spent.
Bank Types
Savings and Loans banks: typically are private institutions owned by customers or shareholders, though some are publicly traded companies
Receive savings from individuals and use those funds to provide loans — primarily residential mortgages
Commercial banks: typically provide a broader range of financial offerings
Often includes credit cards, wealth management, and investment banking services
Mortgage bank: specializes in originating and/or servicing mortgage loans
Investment bank: acts as an intermediary in large and complex financial transactions.
usually involved when a startup company prepares for its launch of an initial public offering (IPO, first issuance of stock) and when a corporation merges with a competitor.
Cooperative banks: owned by their customers and follow the cooperative principle of one person, one vote
Investments
Mutual funds: ownership investments in which a variety of stocks from different corporations or agencies (usually from different industries) are combined into one investment
Money market accounts: lending investments in which individuals lend a minimum amount of money to a bank to earn interest.
Heirs/Wills
Most people hire attorneys to prepare their wills to make sure that their assets are distributed properly.
Guardianships: manage assets for minor children (provided by attorneys because wills and guardianship papers are legal documents)
Wills and guardianship papers often are filed with the appropriate court
Executors: individuals who carry out the terms of the will
Beneficiaries: the heirs
Assets/Liabilities
Equity: the assets a company already owns.
Dividend: a sum of money paid to an investor or stockholder as earnings on an investment.
Return on capital (ROC): financial ratio that compares a company's profits to the capital invested in the business; measures how well a company uses its capital to generate profits.
Higher the better
(Earnings before interest and tax)/(total capital)
Credit accounts
Budget accounts: a form of short-term credit
do not charge interest if the user makes payments on time
if a customer doesn't pay the amount in full by the end of the payment period, s/he is subject to finance charges applying to the full time period
For example, "90 days same as cash" means that customers can purchase goods on credit with the same advantages they would have with cash purchases.
Revolving credit accounts: the maximum amount of money that the credit user can owe (credit limit) is set at the time the credit account is opened
Regular credit accounts (open credit accounts): allow credit users to buy at any time during a set period
credit user is expected to pay the entire amount that is due + interest for the purchases made during that period at the end
Installment credit account: designed to handle one credit transaction, which is paid in installments within a certain time period
credit user makes a down payment and signs an agreement to pay monthly installments until the total is paid.
Free cash flow: a measure of a company's performance; cash that is left over after a company has paid its general operating expenses and capital expenditures
Operating cash flow - capital expenditures
Capital expenditures include equipment, buildings, and other property.
Dividends: sums of money paid by a company to its shareholders out of its profits.
Quantity discount: a deduction from the seller's (vendor's) price for purchasing large volumes or dollar amounts of goods
Rebate: a return of part of the price that a customer pays for a product; a sum of money that is paid back to you
Stock mutual fund: a company that pools money from many investors and invests the money in securities such as stocks, bonds, and short-term debt
Time value of money concept: money in the present is worth more than the future
Information broker: an individual or organization that specializes in gathering, organizing, analyzing, and selling information to clients for various purposes
Facilitates access to valuable information and knowledge, helps make informed decisions in their business objectives
Collect data for marketing and other business purposes
Discount broker: will buy and sell securities on your behalf; focus on executing trades at lower costs with limited advice
Cater to self-directed investors who prefer to manage their own investment portfolios and are primarily focused on executing trades efficiently and cost-effectively
Online broker: charges the lowest fees; provide self-directed investment services through online platforms
Full-service broker: offers investing advice in exchange for a fee or commission; serve as financial advisors, offering a wide range of services and expertise to help clients navigate investing, financial planning, and wealth management
Provide personalized guidance and support to help clients achieve their financial goals and build long-term wealth
Bottom Line: the final total of an account, balance sheet, or other financial document
Income statement: presents revenue, expenses, and net income
Revenue; cost of sales; sales, general, and administrative expenses; other operating expenses; non-operating income and expenses; gains and losses; non-recurring items; net income; and EPS (earnings per share)
Amortization: an accounting technique used to periodically lower the book value of a loan or an intangible asset over a set period of time (accounts for depreciation)
Bank reconciliation: summarizes banking and business activity, comparing the bank's account balance with internal financial records
Payroll records: the combined documents pertaining to payroll that businesses must maintain for each individual that they employ
Asset records: include details regarding a business's furniture, equipment, and other items that enable the business to operate
Fees
Interference Fees: a fee paid between banks for the acceptance of card-based transactions
Payment processor fees: paid to the merchant services provider that makes it possible for your business to accept credit cards; charges levied by the company facilitating the transaction
Interchange fees: charged by the card-issuing bank (the bank that issued the card to the customer) to the merchant's bank (the acquiring bank) for each transaction processed
Assessment fees (swipe fees): charged on the total of your monthly sales for each credit card brand and is paid entirely to the credit card associations; helps their brand
Imposed by the card networks for using their network infrastructure and brand
Invoices: lists goods purchased, price, terms of sale and total amount due
Dummy invoice: a blank form on which the contents of a shipment are listed by receiving workers
Not a genuine financial transaction but is created for testing, practice, or demonstration purposes
Bookkeeping system: software systems that are programmed with a set of rules that are specifically for recording financial information and various financial transactions
Single- entry: recording transactions in a single column, where each transaction is entered once, either as revenue or an expense
Best for small businesses or limited transactions
Does not provide a complete picture of the business's financial health
Double-entry: records every transaction twice, once as a debit and once as a credit
Ensures that every transaction has an equal and opposite effect on the financial statements and provides a complete picture of the business's financial health
Computerized: using accounting software to record and organize financial transactions
Financial quotas: used to make salespeople conscious of the cost and profit implications of what they sell
Master budget: a company's central financial planning document
Covers a full fiscal year
Includes “lower-level” budgets — like a sales budget and a labor budget, cash flow forecasts, financial statements, and a financial plan
Voided cash receipts: subtracted from total receipts to determine net intake
Price to cash flow ratio: measures the value of a stock's price relative to its operating cash flow per share
Share price/per-share operating cash flow
Operating cash flow: adds back non-cash expenses such as depreciation and amortization to net income
Subtract capital expenditures from cash flow from operations
Balance sheet: a financial statement that reports a company's assets, liabilities, and shareholder equity
Represents basic accounting equation (Assets = Liabilities + Equity)
Liability: debts owed
Debtor: the party that owes the money (debt)
Creditor: the party that loaned the money
Information Management - 6%
Records/Reports
Accounts payable: the money that a business owes to others
Production status report: a document that provides information about the status of a production process
include details about production volume, efficiency, and quality, as well as any issues that may be affecting the process
Invoice: a document that a seller issues to a buyer outlining the goods or services provided, the quantities, the agreed prices for these items, and the total amount that the buyer owes
Sales report: a comprehensive record of all the sales activity taking place within a company over a certain period of time
core KPIs, team performance, number of goods sold, net revenue retention, net sales, profits, and customer acquisition costs
Balance sheet: assets, equity, liabilities
Cash flow statement: operating activities, investments, and financial activities
Project management software is the ability to generate reports that summarize a variety of information (ie. expenses, timing, and activity data)
Some software can provide cost and variance analyses.
Software
Web-editing software: develops and edits text and graphics for the web pages that are posted to websites
Computer-aided design (CAD) software: used to develop 3D images.
Defragmentation applications: rearrange files on a computer hard drive to facilitate faster data access
Keylogger software: a computer program that tracks all of the computer user's keystrokes and clicks
Data
Association learning: type of data mining; reveals certain relationships among data sets
Cluster detection is a type of pattern recognition that identifies distinct subcategories within a data set
Classification: practice that classifies new data into predetermined categories.
Knowledge Management - 7%
Organization tactics
Accountability matrix: a table that assigns tasks to workers and tracks the workers'
progress in relation to various business or project activities
Includes word processing or spreadsheet applications
Surveillance system: consists of audio/visual equipment that is used to monitor various activities
Corporate surveillance: the practice of businesses monitoring and extracting information from their users, clients, or staff
Magnetic cards: (e.g., debit cards, credit cards) contain data that can be read by electronic devices
Knowledge mapping software: captures a business's information sources and information flow in a graphic format
help businesses determine if there are underused sources of knowledge or breakdowns/gaps in knowledge sharing
Intranet: a business's internal computer network.
one of many sources of a company's knowledge
Production: helps track projects and finances by generating cost reports and journal entries
View budgets in real time
Fast-tracking: a process in which team members complete tasks concurrently, focusing on them simultaneously rather than sequentially
ARCI matrix: accountable, responsible, consulted, and informed; defines roles and responsibilities
Transferring knowledge
Tacit knowledge: knowledge consisting of personal opinions, experiences, expertise, or understanding that is not easily articulated, stored, or quantified
employees' tacit knowledge is often instrumental in helping the business succeed and achieve its organizational goals
Channel discussion: gathering a group of people together to talk about the ways in which they perform their work, the challenges that they encounter, and the actions they take to overcome their challenges.
other group members may learn new techniques to use to perform their jobs
Parliamentary procedure: standard set of rules used to officiate and document a formal meeting.
Employees
Other
Broker: arranges transactions between a buyer and a seller
Knowledge leader: the person in charge of an organization’s knowledge management
Operational
Product manager: responsible for the development of products for an organization
Own the product strategy behind a product, specify its functional requirements, and manage feature releases
Supply chain manager: in charge of every stage of an organization's supply chain (purchasing raw materials to production); ensure that the product comes at just the right time and coordinate storage for it
Line Supervisor: responsible for directing, coordinating and evaluating the work of line personnel; oversee and manage the daily operations of personnel
Inventory Manager: oversees a warehouse team and monitors a company's inventory levels to ensure it has enough stock to sell
Quality management: the act of overseeing all activities and tasks that must be accomplished to maintain a desired level of excellence
Finance
Chief Financial Officer: senior manager responsible for overseeing the financial activities of an entire company
Credit analyst: analyze the credit worthiness of customers and potential customers, and to assist in the ongoing management and modeling of credit risk thereafter
Must access character and collateral before issuing credit
Accounting
Accountant: oversees the day-to-day transactions of companies, including sales transactions, expense payments and tax reporting
Tech
Chief Information Officer: responsible for a company's information technology strategy
Sales
Sales Representative: responsible for selling products and meeting customer needs while obtaining orders from existing or potential sales outlets
Salesperson: greeting customers, helping them find items in the store, and ringing up purchases
Distribution
Channel member: one business in a network of businesses that helps a producer channel their products to consumers
Industrial user: a business that buys materials, services, or goods that will be used to make other goods or used in the operation of the company
Legalities
Reverse engineering: the process of examining the makeup of an existing product on the market
a competitor can apply the findings to recreate the product
legal practice; hinders the ability to maintain trade secrets for certain types of processes, ingredients, etc.
Process fragmentation: limiting the amount of information employees have about an entire process; lessens the risk that the company's trade secret will be revealed.
Copyrights: legally protect written and artistic works
Trademarks: protect brand names, logos, slogans, and other indicators of a company's source
Patents: protect inventions/processes
Non-compete agreement: prevents former employees from competing with their former employer
Groups
Community of practice: an informal group of similar people; group members share ideas, discuss problems, and brainstorm solutions
transferring their knowledge among themselves
Groupthink: a situation that occurs when conforming to the group becomes more important than expressing individual judgment and ideas
Strategic alliance: an arrangement that involves two or more businesses entering into a relationship by combining complementary resources for the benefit of all parties;
usually short-term or for a single project/transaction
Marketing - 1%
Marketing is responsible for linking the production of goods, services, and ideas with the consumption of those items by consumers.
Operations - 24%
Lean operations: a business methodology that aims to eliminate waste and increase efficiency
Reports
Sales analysis: analyze and compare product movement, customer activity, salesperson performance, etc.
Purchasing forecast (demand forecasting): predicting future demand for goods and services.
Key part of procurement, or getting products
Security
Fraud: deceiving or cheating an individual or a business out of money or property
Pilferage: theft of small sums of money or inexpensive items.
Data
Scatter diagram (scatter plot): a graphical representation of two variables that is used to determine cause and effect.
Histogram: shows the distribution of a variable
Check sheet: a form for collecting data on the spot
Flow chart: analyzes a sequence of events and uncover the relationships within it.
Focus groups help you collect data from people on a
specific topic.
Purchase orders
Advance order: is a regular order that is placed now with delivery requested at a future time; usually not one-time
Company names, addresses, contact details (both buyers + sellers), identifier for the order, Date issued, Detailed description of each item being ordered, Price per unit of each item, Specific dates for each delivery phase, including quantities expected per delivery, Payment conditions agreed upon by both parties, Calculated total cost, Any specific requirements regarding packaging, labeling, or delivery procedures
Reorder purchase order: a request to a supplier to replenish stock that has reached a reorder point
Open: the order is placed but the goods have not yet been received, or it can mean that only part of the order has been received.
Includes details such as the PO number, date, vendor information, billing and shipping addresses, item descriptions, quantities, unit prices, total prices, subtotal, shipping and handling charges, tax, and the total amount
Blanket order (Standing): an order that covers all or part of a retailer's seasonal requirements; allows for multiple deliveries over a period of time
typically are placed several months before the season and do not contain detailed specifications or shipping dates.
Drop shipment: bypasses delivery to the intermediary and delivering the product directly to the customer
Standard (regular): need for a sporadic order, one-off purchases, and orders where the details of the order are exceptionally important; complete set of specifications such as price and quantity with clearly defined payment and delivery timelines as well as location
An office intends to buy a few desks and chairs. This could be a one-off purchase where the contract would be closed once the goods are delivered to the office in perfect condition
Planned: same as standard but omits delivery information (no date/location)
Contract: a buyer and a supplier might negotiate a set of terms that states that the buyer can order items from the supplier at a discount during events that the buyer hosts, provided that the supplier is listed as a sponsor for the event
Special order: an extra order or an order for an item specially requested by a customer
Backorders: a retailer's order for a product that is temporarily out of stock with the supplier
Buffer inventory: extra inventory stored at your warehouse in case of the unexpected
Manufacturing inventory: the process of tracking the supplies, materials, and products being used, made, and sold by a manufacturer
Aggregate: categorizes items by level of need
Just-in-time: goods are received from suppliers only as they are needed
8/80 rule: no package should take less than eight hours or more than 80 hours to complete
Inventory
Maintenance inventory: refers to items the business uses to maintain the facility (ie. cleaning supplies and light bulbs)
Perpetual inventory: a record of inventory information that is continuously updated
Customary inventory: sometimes used to describe the regularly stocked goods that the business carries; the standard or typical level of inventory a business aims to maintain
Supply Chain
Production route: the sequence of steps in the manufacturing process for a product
Manufacturing routing: shows the series of steps that are needed to manufacture a finished product
Distribution network: system of warehouses and transportation methods used to deliver those finished products to customers
Commercialization: product goes into full-scale production, a marketing plan is put in place, service and sales training are conducted, and the product's life cycle begins
Exclusive distribution: occurs when the product manufacturer allows a distribution partner to limit the sales of a product [usually luxury]
Intensive distribution: a marketing strategy that involves making a company's products available to customers in as many places as possible (used in consumer goods)
Selective: a balance between intensive and exclusive distribution (ie. certain power tools only through one or two retailers)
Reverse distribution [channel]: when the consumer sells products back to the company
Returning defective items/items they no longer want
Regulations
Environmental regulations: protect the environment and natural resources
Aspects of operations that are directly affected by environmental law include location, supply chains, transportation, and manufacturing.
Employment/labor laws
Affect operations as they relate to regulations affecting human resources
Insurance law
Affects operations like manufacturing processes and human resources management
Advertising regulation is unlikely to directly affect operations management
Antitrust laws may affect some aspects of supply chain management but also affect other areas of business management.
Tax codes affect operations management only indirectly, if
at all
Privacy regulation doesn't always affect operations management; where it does, it only affects certain industries.
Professional Development - 5%
Job searching
Labor union: group of workers who have joined together for a common purpose to improve the terms and conditions under which employees work.
Local labor unions are good sources for job leads particularly for such industries as construction which usually hires seasonal workers
Many local unions operate some type of worker placement service for industries in their area.
County offices: government organization that handles administrative tasks
provide resources such as job leads, training programs, and workshops tailored to specific industries
collaborate with local businesses to identify job openings and may offer services like resume building, interview preparation, and career counseling to support individuals in finding employment.
Local merchants: firsthand knowledge of job openings and can provide leads to individuals seeking work within their communities
Goals
Organizational goals: affect the overall organization
may involve things such as increasing efficiency levels, growing the business, or expanding market share
Ideological goals: involve the vision and general purpose of the company's existence
Financial goals: address the company's income and expenses
Project Management - 7%
Project Schedules
Statement of work (SOW): a document that outlines the terms, commitments, and conditions of the project.
includes information about the project's activities, timelines, and deliverables.
The project team and the project's stakeholders should agree to the SOW contents before beginning the project
Project objectives are provided to stakeholders, which may also include information about the costs associated with the project.
Request for proposal: a document that solicits (asks for) bids for an activity, project, or order from vendors
Results summary: contains the results of the project and is provided to stakeholders upon completion of the project
Work breakdown structure (WBS): the process of dividing project tasks into meaningful components to complete the project.
Helps the project manager identify tasks and effectively schedule, assign, and monitor complex project activities.
Network diagram: plan and track a project from beginning to end
Scope management plan: defines the project's purpose and rationale, the results to be achieved, and the products to be developed
Project charter: a written overview of a project that includes information such as the project purpose, goals, and products
identifies the project manager and authorizes them to begin work on the project
Business case: a document that provides the necessary business information to determine if the project is a worthwhile investment
Dependencies
Finish-to-start dependency: a successor activity cannot start until a previous activity has finished; most common type
one task has to be completed before the next task can start
A finish-to-finish dependency: a successor activity cannot finish until a predecessor has finished.
two tasks have to finish at the same time
Start-to-start relationship: a situation in which a successor activity cannot start until a predecessor activity has started.
two tasks can start together, but one can't finish until the other has begun
A start-to-finish relationship: a successor activity cannot finish until a predecessor activity has started
one task can't finish until another task has started
Output goals: performance goals; a goal defined by its desired output, or result
Improvement goals: clear benchmarks, outlining specific achievements or milestones one aims to accomplish in their career journey
Short range planning: take 12 months or less
Strategic planning: a process in which an organization's leaders define their vision for the future and identify their organization's goals and objectives
Important for top level managers; helps reach company vision
Tactical planning: the process of taking an overarching strategic plan and creating actionable short and medium-term timelines to achieve your goals
Management
Scope Management: the process whereby the outputs, outcomes and benefits are identified, defined and controlled
Knowing what you want, setting boundaries, sticking to your plan, dealing with changes, and staying organized
Stakeholder Management: the process by which you organize, monitor and improve your relationships with your stakeholders
Build positive relationships, manage expectations, address concerns, and ensure stakeholder buy-in and support for the project
KPIs (Key performance indicators): readings that enable a manager to assess progress toward the achievement of objectives
Quality Management - 4%
Six Sigma: a quality improvement framework that involves continuously setting higher goals of perfection; focuses on customer satisfaction and cost reduction
builds upon previous goals to set higher goals that continuously improve the quality of the business's goods, services, or processes
steps the business takes to improve quality help prevent problems in the future
Critics of Six Sigma claim that the framework tends to stifle innovation because the focus is on continuously improving existing processes
ITIL (Information Technology Infrastructure Library): consists of a set of publications that specify how to provide high-quality information technology (IT) services and ensure effective IT service management
CMMI (Capability Maturity Model Integration): increase process effectiveness and improve overall business performance
Can be used in product/service development, management, and acquisition.
PDCA continuous improvement technique
Plan, Do, Check Act
Risk Management - 5%
Insurance Company
Captive insurance company: wholly owned by a parent company and is a form of self-insurance
parent company is able to pay its premiums to its own captive insurer to protect the company against particular forms of risk
Professional liability insurance: protects businesses against claims of negligence; can be owned by parent company or third party
Medical malpractice insurance: protects healthcare professionals from claims of medical negligence or injury
Insurance underwriting association: group of insurance underwriters
Insurance underwriting: the process of evaluating a risk to determine if the insurance company will insure it and then pricing it
Risk retention group: a type of insurance company that is owned by its members—its policyholders
retains and controls its liability rather than transferring its risks to another entity; keeps profits
Insurance brokers: deal with many insurance carriers/products to meet the needs of their clients.
Long-term care insurance: designed to cover long-term services and supports
Term life insurance: a contract between you and an insurance company for a defined period, typically between 10 and 30 years
Disability insurance: will provide income in the event a worker is unable to perform their work due to disability
Universal life insurance: a type of permanent life insurance
Beneficiaries receive inheritance
Risk modeling: quantifies the potential losses that they would incur if certain events took place, such as a tornado destroying a company's largest manufacturing plant
very complex process, businesses usually rely on risk-management technology to aid in the analyses and forecasts
Stress testing: determine a particular financial instrument's stability in different extreme events
Data aggregation: pulling together data from several disparate systems into one central repository or database
Corporate governance: the system by which directors handle their responsibility toward shareholders
Fraud detection software: detect problems, such as policy violations, embezzlement, and suspicious social networking activity in real time
Intrusion detection systems (e.g., firewalls): are designed to protect the business's computer systems from unauthorized access.
Risk assumption: an individual or business assumes or accepts responsibility for the possibility of loss (risk) that results from a specific event or action (in insurance)
Cost-benefit analysis: involves quantifying the costs and benefits of a certain project to determine the most appropriate course of action to pursue
Risk transference is a risk-response strategy that involves moving the impact of a risk to someone or something else (another party like insurance)
Insurance: Purchasing insurance policies (such as property insurance or liability insurance) to transfer the financial consequences of damage or legal claims from the individual or business to the insurance company.
Outsourcing: Hiring a third-party service provider to handle specific tasks (like payroll or IT services), thus transferring the associated operational risks to that provider.
Contracts: Utilizing contractual agreements that include indemnity clauses, where one party agrees to bear the costs or damages related to specific risks arising from the contract.
Strategic Management - 9%
Management levels
Middle: responsible for the daily functioning of the business
serves as a liaison between top-level and supervisory management
Top: develops broad company plans
Supervisory (operating): implements management plans through direct supervision of workers.
Managerial control
Feedback control: after a business activity has been completed.
Feedforward: bases and establishes procedures by predicting or anticipating activities and their outcomes.
Concurrent control: monitoring business activities as employees perform them.
Coercive attitudes: using aggressive behavior or bullying to get another person to do something
Change management
Sponsorship: involves gaining support for the change at the top executive level of the company
Key aspect of change management!
Involvement: including the right people in the design and implementation of the change
Impact: assessing and addressing how changes will affect people
Readiness: preparing people to adapt to the changes.
Planning
Tactical planning: short-range planning (one year or less) of specific actions that the business will take
involve day-to-day operating activities and are usually implemented by lower-level managers
Strategic planning: long-term planning (more than one year) and focuses on the general future of the company
usually developed by upper management.
Roleplay Ideas
Structure
30 sec - 1 min: intro/restate problem
8 min: body of written
State/introduce PI
Answer PI
Show strategy/answer prompt in a way that relates to PI
30 sec - closing/summary + questions
Creative Ideas & Strategies
AI and Machine Learning
Promotion
VR Hotel Room Tours
Loyalty programs
Interactive Social Media Campaigns
Limited edition products
Price promotions at seasonal peaks
Branded merch
Giveaways or sweepstakes or coupons & premiums
Live events or workshops
Banner ads, box holder flyers
Electronic check in/out or with phones
QR Codes and Hyperlinks
Amplified word of mouth
Post sales experience
SWOT & PEST & Marketing Mix
ROI ((Net income / Cost of investment) x 100)
AIDA Model (Attention, Interest, Desire/Decision, and Action)
List out roles and PIs
Timeline
Costs & Budget
Long/Short term objectives
Premade Acronym Ideas
Safety
Security Assistance First aid Emergency relief
Customer or Employee Relations
Truthfulness Respect Understanding Safety/security Transparency
Read the room Empathize Solution Offer assistance Lead them through your idea Verify that it is ok with them Extend help and ask for feedback
Finance or Accounting
Values Expenses Revenue Index Fact check You’re done!
Service
Safety Efficiency Response Values Effectiveness
Promotion
Make fun experiences Overall satisfaction Recreational Environment
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