Entrepreneurship
Practice Test
1.
Jorge operates an import/export business. He employs 40 people in an office in San Antonio, and 50 people in an office in Mexico City. Jorge’s business is classified as a
a.
joint venture
b.
mini-national
c.
incubator
d.
all of the above
2.
A business that is chartered by the state and whose owners aren’t personally responsible for the business’s debts is called a
a.
corporation
b.
limited partnership
c.
sole proprietorship
d.
general partnership
3.
Mitchell borrowed $30,000 to purchase equipment for his new noodle-making factory. The terms of the loan include 5 percent interest over five years. He should categorize this loan as a
a.
current asset
b.
current liability
c.
long-term liability
d.
fixed asset
4.
The American Golf Ball Company took out a loan for $10,000, using as collateral $20,000 worth of pink golf balls stored in the warehouse. This strategy for raising money is called
a.
accounts receivable financing
b.
a signature loan
c.
an equipment loan
d.
inventory financing
5.
A company’s market share measures
a.
a firm’s percentage of the total sales volume generated by all competitors in a market
b.
a company’s relative standing in relation to its competitors
c.
a company’s ability to gather, record, and analyze market data
d.
a company’s ability to satisfy customer’s wants and needs
6.
Money raised by selling part ownership in a business is called
a.
equity capital
b.
debt capital
c.
dividends
d.
inventory financing
7.
If a business needs to make an immediate purchase of window-cleaning supplies, the supplies would be purchased from funds in
a.
petty cash
b.
customer credit
c.
cash deficit
d.
bad debt
8.
Seamus sold $500 worth of soccer balls, but $100 worth of balls were returned because they would not go into the goal. $400 represents Seamus’
a.
gross sales
b.
net profit
c.
net sales
d.
gross profit
9.
If each employee is responsible to only one manager, this business uses
a.
horizontal organization
b.
a line-and-staff organization
c.
line organization
d.
default organization
10.
A health spa that also sells health foods is an example of selling a
a.
good with accompanying services
b.
service only
c.
service with accompanying goods
d.
goods only
