Hospitality
Which of the following security measures is often found in hotels and resorts:
A. Property Management System
B. Metal Detectors
C. Electronic Key Cards
D. Radio Frequency Pocket Tags
C. Electronic Key Cards
When a business lowered its prices during a bad economic time, it demonstrated __________ pricing. A. realistic
B. exchange
C. competitive
D. flexible
D. Flexible. Because pricing is a tug-of-war and a constant quest for balance, businesses must be willing to be flexible and adjust their prices as necessary. For example, during bad economic times, customers are cautious about how they spend their money, and businesses may need to lower prices to attract these customers. Realistic pricing means prices are what customers expect to pay. Competitive pricing involves being aware of the prices others are charging and pricing your own products accordingly. Exchange price is the amount of money that the buyer is willing to pay and the seller is willing to accept for a good or service.
A minor league sports team displays the logo of a local business on its jerseys in exchange for sponsorship money. This collaboration is an example of a(n)
A. public relations campaign.
B. customer support network.
C. supply chain.
D. affinity partnership.
D. Affinity partnership. Affinity partnerships are strategic relationships formed among companies or organizations for mutual benefit. A sports team displaying a business logo on its jerseys is an example of an affinity partnership. The sports team benefits from the sponsorship money, while the business benefits from the increased brand exposure. This collaboration is not an example of a supply chain, which is a system of processes involved in the production and distribution of a product. It is not an example of a customer support network or a public relations campaign.
What function of money enables a person to save their wealth until it is needed?
A. Incentive
B. Unit of Measure
C. Store of Value
D. Medium of Exchange
C. Money serves as a store of value because it enables individuals to save or store their wealth (in the form of money) easily and compactly.
When a customer is injured in an accident at a place of business, employees should try to:
A. Examine the injured customer.
B. Determine the severity of the injury.
C. Move the customer to a comfortable area.
D. Keep the incident to themselves.
B. The action that is needed depends upon how severe the injury is. The customer should not be moved until qualified medical personnel have examined the customer to determine the proper course of action.
Operating costs that do not increase or decrease with changes in production are called __________ expenses.
A. mixed
B. variable
C. fixed
D. semi-variable
C. Fixed. Operating costs that do not increase or decrease with changes in production are called fixed expenses. Variable expenses fluctuate along with production. Semi-variable, or mixed, expenses are fixed until a certain level of production is reached; after that, they become variable.
Annie recently started a new business. When selecting employees, she chose the applicants she knew personally rather than the individuals she had never met before. This is an example of
A. objectivity.
B. nepotism.
C. puffery.
D. fairness.
B. Nepotism. Nepotism is the practice of using one's power or influence to benefit one's friends or relatives. Choosing your friends and family members for a job, like Annie did, is an example of nepotism in action. This is not an example of fairness or objectivity; rather, it is an example of unfairness and subjectivity. Puffery involves making an unsubstantiated claim for personal gain, such as overstating a business's year-one profits to attract potential investors. Puffery is not demonstrated in this example.
A business that fails to protect its employees from unnecessary risk or health hazards on the job may be sued for
A. negligence.
B. incompetence.
C. libel.
D. misrepresentation.
A. Negligence. A business might be sued for negligence if it does not take reasonable precautions to protect workers from risks or health hazards on the job. The basis of negligence is that the problems could have been easily avoided if the business had made some minor adjustments. Consequently, businesses usually try to make the workplace as safe as possible in order to avoid being sued for negligence. Misrepresentation involves making unrealistic claims about products. Libel is making false statements that harm an individual's reputation. Incompetence involves not having the skills or abilities necessary to perform satisfactorily.
It is difficult to make decisions that can cause you harm, which is why financial professionals often act unethically due to
A. loss aversion.
B. sunk costs.
C. conformity.
D. self-interest.
D. Self-interest. It is natural to look out for yourself! Self-interest, however, can bias decision-making. It is difficult to make the ethical choice if it goes against your own well-being, which is why finance professionals sometimes act unethically to protect themselves. Loss aversion is the tendency to avoid a loss at all costs, even when attempting to avoid that loss can lead to negative consequences. Conformity is the tendency to behave in the same way that everyone else does rather than exercising one's own judgment. Sunk costs are costs that have already been incurred and thus cannot be recovered.
When preparing income tax documents for clients who have placed trust in them, accountants have a responsibility to:
A. have conflicts of interest.
B. be as subjective as possible
C. put their own interests before those of the clients.
D. act in the best interests of those clients.
D. Fiduciaries have a legal obligation to act in the best interest of their clients. Accountants are not always considered fiduciaries, but they typically are when they are performing services like tax services and business consulting.
The executives of an airline recently determined that the cost of their extensive employee training program was too high and decided to terminate the program. What is a possible consequence of this decision?
A. Decreased quality of customer service
B. Increased number of repeat customers
C. Reduced focus on productivity by management
D. Stronger financial standing
A. Decreased quality of customer service. The costs of customer service training programs are a challenge for the hospitality and tourism industry, especially with high turnover rates. However, training is essential to customer service, and without it, quality is sure to suffer. Terminating a customer service training program is not likely to lead to an increased number of repeat customers or a stronger financial standing. Although the training program has been terminated, management will not reduce its productivity focus.
What is the primary goal of corporate promotion?
A. To explain a specific feature
B. To create a certain image
C. To publicize a service
D. To sell a product
B. To create a certain image. The primary goal of corporate promotion is to create a certain image of the company in the eyes of the consumer. This is accomplished by informing consumers about the company, its ideas, and its philosophy. Unlike product promotion, institutional or corporate promotion does not attempt to sell a good or service. The goal of corporate promotion is not to explain a specific feature.
One of the customer benefits of warranties and guarantees is the right to
A. free training.
B. legal recourse.
C. lower prices.
D. personalized service.
B. Legal recourse. There are many different kinds of benefits from warranties and guarantees. Consumer benefits from warranties and guarantees include legal recourse if a company does not fulfill its obligations under a warranty or a guarantee. The courts will uphold a legitimate claim and see that the customer obtains satisfaction. The benefits of warranties and guarantees do not include lower prices, personalized service, and free training.
One reason why creditors review a business's income statement is to decide if the business will be able to
A. develop new products.
B. repay a loan.
C. increase staff.
D. expand operations.
B. Repay a loan. Creditors are responsible for deciding whether a business should be given a loan. The income statement helps creditors assess the business’s creditworthiness and the risk of extending credit to the business. It provides the evidence needed to prove that the business can pay back the loan. Expanding operations, developing new products, and increasing staff are some of the reasons why a business might apply for a loan and need to provide creditors with its income statement.
Which of the following situations is a potential external risk to a business:
A. An employee is injured on the job.
B. Management delays approval for the yearly budget.
C. An inaccurate inventory count leads to missing products.
D. The inflation rate changes over time.
D. Inflation is an external, macroeconomic phenomenon that can have a major impact on companies and the economy as a whole. Inflation can pose risks to businesses by altering the habits of consumers and devaluing the business’s liquid assets.
At the end of each day, Bob, owner of Bob's Barbecue, deposits the restaurant's cash in the bank. Laura, a manager at Bob's Barbecue, keeps track of the restaurant's accounting journals. This separation of duties is an example of a(n)
A. bank reconciliation.
B. petty cash fund.
C. internal control.
D. external control.
C. Internal control. Internal accounting controls are policies and procedures that are created and enforced to ensure the reliability of accounting systems. Examples of internal controls include separations of duties, access control/authorization, documentation, physical audits, trial balances, reconciliations, and approval authority. Separation of duties is the dividing of accounting responsibilities so that no one person oversees the lifespan of a single financial transaction. By separating the duties that pertain to Bob's Barbecue's finances, Bob is safeguarding his restaurant from theft, fraud, and other financial issues. A petty cash fund is a small amount of money kept on hand by a business for business purchases. A bank reconciliation is a comparison of a business's internal accounting records to its bank account statements. External controls also impact business operations, but the source of these controls is outside the business, rather than in.
When Jamie develops a questionnaire, she places very broad questions at the beginning of the questionnaire and progressively includes questions that are narrower in scope toward the end of it. What sequencing format is Jamie using to develop the questionnaire?
A. Branching
B. Funnel
C. Bridging
D. Remote
B. Funnel. The funnel approach involves asking very broad questions at the beginning of the questionnaire. This helps the respondents focus and get comfortable with the survey. Then, the questionnaire progressively asks the questions that are narrower in scope toward the end of the questionnaire. The funnel approach helps researchers organize the questionnaire in a way that prevents question-order bias. Branching is a technique that requires respondents to go to another place in the questionnaire to answer specific questions if they respond a certain way to the initial question. Bridging and remote are not questionnaire formats.
During the first year that Rick owned his new car, the vehicle seemed to spend more time in the repair shop than it did on the road. Rick contacted the auto manufacturer and demanded his money back because the car seemed to be defective, but the manufacturer refused. A member of the Better Business Bureau agreed to act as an impartial third party in the dispute. The BBB member studied the facts of the case, determined that the car was indeed defective, and decided how much money the carmaker would be required to refund to Rick. This is an example of
A. automation.
B. attrition.
C. arbitration.
D. arbitron.
C. Arbitration. When two parties engage in a dispute that they are unlikely to resolve on their own, an impartial third party may step in. The impartial third party, called an arbitrator, hears both sides' arguments, studies the facts of the case, and then determines a remedy for the situation. This process is called arbitration. The Arbitron Ratings Company uses consumer-generated data to analyze radio advertising. Attrition is a natural reduction in numbers of people due to death, retirement, job changes, etc. Automation is a production method in which machines do tasks automatically.
What is the most important piece of information that a cash flow statement provides?
A. Amount of money expected
B. Beginning of tax year
C. Cost of maintenance
D. Statistics from industry
A. Amount of money expected. How much money will flow into and out of a business is typically the most important piece of information that a cash flow statement provides. Businesses need to know whether they will have enough cash coming in to meet monthly obligations. For example, if businesses discover that they will not collect enough money, they can plan a sale to generate more income or tighten their credit policies. Predicting the cost of maintenance is only a small part of estimating expenses in a cash flow statement. Businesses decide when their tax year will begin. Many businesses use industry statistics when developing their cash flow statements.
Which of the following statements about feasibility studies is true:
A. The feasibility study is essentially the written business model.
B. The feasibility study is completed before the business plan is developed.
C. Each feasibility study must focus on only one potential business model.
D. A feasibility study is not necessary if similar businesses already exist.
B. A feasibility study can be used to determine the viability of several business alternatives, regardless of whether similar businesses already exist. The feasibility study pinpoints the strengths and weaknesses of each alternative.
To reconcile cash, which of the following should businesses do:
A. Total up the money in each of the company's cash registers.
B. Multiply the cash received by the total number of receipts.
C. Compare cash received with receipts or transaction records.
D. Divide the transaction total by the amount of cash received.
C. Compare cash received with receipts or transaction records. To reconcile cash, a business should compare the total amount of cash received with the total on transaction records or receipts. For example, if a business wanted to reconcile its cash daily, it would count the amount of money in its cash registers and then look at all the sales receipts to make sure the numbers match. Reconciling cash does not involve any multiplication or division. Simply counting up the cash in cash registers would not be enough to reconcile a business's cash for any given period.
The owner of Doxie Dog Rescue wrote an article about the organization's latest fundraising campaign and emailed it to three local newspapers. She hopes that at least one of the three papers will run the article for free in their publication. Doxie Dog's owner is using a __________ to promote her organization's activities.
A. editorial
B. press kit
C. matte release
D. letter to the editor
C. Matte release. Generally used as filler material in written publication, a matte release is an article that is not generated by a publication's staff. Instead, businesses write these matte releases and submit the material to be printed by one or more media outlets. The business benefits from free promotion, and the publication benefits because the content takes up space. A matte release may be contained in a press kit. An editorial is generally written by a staff member of a publication. A letter to the editor is a form of editorial that is generally written by readers of the publication.
What requirement of a legally enforceable contract requires that both of the parties who are entering into the contract are sane, sober, and of legal age? A. Capacity
B. Genuineness of assent
C. Consideration
D. Legality of purpose
A. Capacity. Certain conditions must be met for a contract to be legally enforceable. Capacity involves having the mental and cognitive ability to make and understand the agreement and the consequences of their actions. If one party is a child or is found to be mentally challenged or impaired, the contract is invalid and unenforceable. Consideration means that the agreement must include something of value that both parties bargain for. Genuineness of assent means that all parties know what they are agreeing to. Legality of purpose means that the agreement must not violate any laws.
During the decline stage, a company may choose to discontinue a product and sell off the remaining inventory in a process known as
A. a super sale.
B. penetration pricing.
C. foreclosure.
D. liquidation.
D. Liquidation. During the decline stage, a company may choose to discontinue a product and sell off the remaining inventory in a process known as liquidation (converting assets to cash). Penetration pricing is a strategy used during the introduction stage, where marketers price a product low to achieve rapid market acceptance. A company may or may not sell inventory in a super sale—they often sell it to another company, not retail customers. A foreclosure occurs when a person or business can no longer make payments on a piece of property.
Harvest strategies are typically used on __________ products.
A. digital
B. new
C. physical
D. outdated
D. Harvest strategies typically involve a reduction of investments in a product that is considered outdated or redundant. Businesses allocate their resources and “harvest” the maximum profits by focusing on newer or more lucrative investments.