FINANCE MC
Which of the following statements about following directions is true:
A. Most people don't need to ask questions about directions.
B. Restating directions in your own words helps clarify them.
C. Hearing directions is the same as listening to them.
D. You should avoid taking notes while listening to directions.
B. Restating directions in your own words helps clarify them.
When you restate the directions, the person giving the directions can correct any misunderstanding you may have had about what you are to do. Listening is more than hearing. Listening is an active behavior that involves understanding, evaluating, and responding to what is being said. Asking questions and taking notes will also help you to understand and to follow directions accurately.
16. Collette wants to fill out at least five job applications this week. What standard has she set for her success?
A. Past performance
B. An objective measure
C. Outperforming others
D. Improvement
B: An objective measure.
Collette has set an objective measure for her success—filling out five job applications this week. If she fills out less than five, she will not consider her goal to have been achieved. In this case, she is not basing her success standard on past performance, improvement, or outperforming others.
Explain the concept of private enterprise
Ownership and Control:
Businesses owned and operated by private individuals or non-governmental entities unlike public enterprises, which are government-owned.
Profit Motive:
Unlike non-profit organizations or public entities, private businesses operate with the aim of maximizing financial returns for their owners or shareholders.
Market-driven Operations:
Private enterprises operate within market economies, where supply and demand dynamics determine business activities.
They compete for customers and resources in the open market, responding to consumer needs and market conditions to thrive and succeed.
Describe types of business activities
Operational Activities: Day-to-day business activities that are directly related to generating revenue.
Investing Activities: Activities involve the acquisition and disposal of long-term assets and investments.
Financing Activities: Financing activities involve transactions with the company's owners and creditors.
Explain the use of feedback for personal growth
Personal growth is known as a person’s ability to assess their own strengths and weaknesses and address them using their own finding as well and feedback from others
Why are resources considered limited?
A. Everyone has resources, and they change.
B. Entrepreneurs do not invest enough in them.
C. There are not enough so that everyone can have as much of them as desired.
D. There are so many that people must decide which ones to choose at any one time.
C: There are not enough so that everyone can have as much of them as desired.
People want or demand more resources than exist or can be produced easily. Economics is the study of satisfying unlimited wants with limited resources. Everyone has unlimited wants that change.
38. When making an economic decision, comparing the costs of an action to the benefits received is called
A. rational choice.
B. upside/downside decision-making.
C. cost/benefit analysis
D. critical thinking
C: Cost/Benefit analysis.
Cost/Benefit analysis is a systematic decision-making process that compares the costs of an action to the benefits received. A cost/benefit analysis helps businesspeople make rational, well-informed choices. Upside/Downside decision-making and critical thinking are not methods of economic decision-making.
Explain the types of economic systems
An economic system is a method in which governments/societies are able to distribute resources/goods across various regions.
Traditional Economy
Relies on customs and traditions of the past, having a strong reliance on natural resources
Command/Planned Economy
Where a government controls the production and price of goods
Mixed Economy
Combines elements of capitalism and socialism, maintaining a level of economic freedom while the government can intervene
Market Economy
Economic decisions (such as pricing of goods and services) are dictated by citizens and business only
Describe factors that affect the business environment
Economic Conditions
i.e Exchange Rates, Inflation Rates
Technological Factors
Benefitting from breakthroughs, or facing challenges in competition with them. (E.g BlackBerry)
Political and Legal Factors
Factors like taxation, tariffs, employment law, competition regulation (Monopolies)
Describe the nature of emotional intelligence
Emotional intelligence can be described as the ability to manage, understand, and control emotions. It incorporates skills that allow individuals to form better relationships and social interactions which can help to day to day life.
To determine a client's financial situation, a financial advisor might
A. track how many clients need urgent financial assistance.
B. research how many others are in a similar financial situation.
C. ask the client to fill out a questionnaire regarding his/her finances.
D. advise the client to follow a strict budget.
C: Ask the client to fill out a questionnaire regarding his/her finances.
To determine a client's financial situation, a financial advisor might ask the client to fill out a questionnaire regarding his/her finances. The questionnaire might ask about income, expenses, and investments. The advisor would not research or track people or clients unrelated to the particular client in question. After determining the client's financial situation, the advisor might advise the client to follow a strict budget.
32. What documents will you access to determine cash receipts from customers when preparing cash flow statements?
A. Income statement and accounts receivable
B. Balance sheet and accounts receivable
C. Income statement and accounts payable
D. Balance sheet and accounts payable
A: Income statement and accounts receivable.
To determine cash receipts from customers, you will need to identify the net sales amount on the income statement, add in the beginning balance in accounts receivable, and subtract the ending balance in accounts receivable. The balance sheet shows a business's assets, liabilities, and owner's equity. Accounts payable would be used to determine cash payments.
Describe the nature of taxes
Taxes are mandatory contributions levied on individuals or corporations by a government entity
In ontario, we have harmonized sales tax, personal income tax, etc.
Government stated: “to support the federal, provincial and territorial, and municipal levels of government.”
Primarily used to raise revenue for government expenditures
to support the programs and services it offers (education, health care, military, etc.)
Income tax is the portion of annual earnings that’s paid to government
Sales tax is a consumption tax imposed on the sale of goods and services (HST)
Property tax is an ad valorem tax on the value of a property
Describe the functions of prices in markets
Price is the value in money placed on a good or service
Function: can affect the value that a customer places on an item
Helps establish a company’s or product’s image
Many use price as a criteria for quality
Function: can give a competitive edge
Function: the price of an item is part of the business’s end goal of making a profit
Define the concept of opportunity cost
Opportunity cost is the cost losing the second-best option when given limited resources. It is used to decide which decision is better. It compares the cost and benefits of multiple ideas in order to get the best use out of available resources.
Generally, which action negatively impacts a person’s credit score the most?
A. A credit card account is not used.
B. A capital loss on the sale of stocks.
C. Non-payment on credit card bills for 5 months in a row.
D. The approval for a 20-year fixed-rate mortgage loan.
C
Credit scores are based on several factors (payment history, types of credit used, length of credit history, new credit, etc.) A credit score is not affected by the daily price of stocks, mutual funds or bonds. The approval of a mortgage suggests that the person has a satisfactory or high credit score. Depending on the number of credit cards opened and in the person’s name, it could have a negative OR positive effect depending on the debt to credit ratio. Late payments and missed payments negatively impact a person’s score.
68. A company with a small budget has lots of sensitive customer data on file. If it wants to keep this information safe, what should it do?
A. Focus on prevention by training all employees to protect data
B. Hire a team of cybersecurity experts
C. Save money by only teaching one department to protect data
D. Wait until a breach occurs to develop a protection plan
A: Focus on prevention by training all employees to protect data.
Keeping data safe and protected requires a company-wide focus on security. This means training all employees to use practices that protect customer and company data. This sort of training should be conducted before a breach ever occurs. Hiring a team of cybersecurity experts would be unrealistic for a company with a small budget. The company should not teach only one department to protect data as a cost-saving measure. If a breach occurs because some employees were not trained, the company will end up spending a lot more money in the long run.
Describe the concept of economies of scale
Are cost advantages reaped by companies when production becomes efficient
When more units of a good or service are produced on a larger scale with fewer inputs
Companies achieve EOS by increasing production and lowering costs
Happens due to costs (variable & fixed) being spread over a larger number of goods
Can sometimes occurs as a result of increasing the size of a business
Explain how organizations adapt to today's market
Agile Decision Making
Being able to pivot easily and enhancing flexibility as well as decision making processes. Quicker adjusting to new market conditions.
Embracing Digital Change
Taking action to adopt e-commerce, communication, data analytics, and automation technologies to the digital world.
R&D
Continuous innovation is essential for staying relevant. Investing in research and development (R&D) helps organizations create new products, services, or processes that meet evolving customer needs
Describe external resources useful to entrepreneurs during concept development
They use research which could be indirect and direct.
Indirect research looks at the trends of similar products/services, reviews on where they went wrong or right, to gain success by comparison.
Direct - It is the speaking to/questioning markets for their satisfactions in the past.
What is most likely to lower the cost of a car insurance policy?
A. Being a new driver less than 25 years old.
B. Completing a safe driving course.
C. Purchasing a new car.
D. Having a good health history.
B
There are many ways to lower the cost of car insurance. A good driving record is paramount. In addition, some auto insurance companies offer discounts for drivers who successfully complete a safe driving course at an accredited institution. High deductibles and certain car safety and security features are also ways to reduce premiums.
94. When faced with an ethical dilemma, a manager should consider the impact that her/his actions and decisions will have on
A. pay raises, employees, and society.
B. pay raises, bonuses, and the company's profits.
C. employees, society, and the company's profits.
D. suppliers, employees, and society.
C: Employees, society, and the company's profits.
To make ethical decisions, managers should consider the impact that their actions will have on their employees, the society, and their companies' profits. Managers have an obligation to all three. They must look after the welfare of their employees, they have a moral responsibility to protect the greater society, and they must help their companies to be as profitable as possible. Pay raises, bonuses, and suppliers are not necessarily things that managers need to consider when faced with an ethical dilemma. In fact, managers may make more ethical decisions when financial rewards are not taken into consideration.
Identify the impact of small business or entrepreneurship on market economies
Job creation
Due to the nature of flexibility with the market of small businesses jobs will be made more rapidly
Increased competition
More small businesses = more competition, leading to a healthier economy (higher quality products/services, lower pricing, etc.)
Community development
Small businesses provide a sense of warmth to the community, increasing the sense of community identity
Determine economic utilities created by business activities
FORM
Refers to how much value a consumer receives from a product/service in a way that they actually need
TIME
Companies analyze how to create or maximize the time utility of their products and adjust the production and logistical planning process
PLACE
Refers to making goods/services available in locations that allow consumers to easily access products/services
POSSESSION
Premise behind this utility is that customers should be able to use a specific good/service as soon as they’re able to purchase or obtain it
Discuss the use of cost-volume-profit analysis
It is a financial planning tool used by leaders to determine short-term strategies for their business.
This tool is beneficial for businesses as it can help determine how many units the business needs to sell to break even (cover all costs) and start gaining profit. It also allows the business owners to get a better understanding of how their costs affect their profits, thus improving their decision making.