Question 1

Which of the following choices contains a C that is not one of the traditional Five C's of Credit?

Accepted Answer

A)  Character, Capital, Capacity 
B)  Character, Capital, Collateral 
C)  Capital, Collateral, Consistency 
D)  Character, Conditions, Collateral 
A)  Character, Capital, Capacity 
B)  Character, Capital, Collateral 
C)  Capital, Collateral, Consistency 
D)  Character, Conditions, Collateral

Question 2

The Widget Company sells 1,000 widgets annually at a price of $35 each. If the company's pricing policies adhere to a 40% markup of selling price, the cost of each widget is

Accepted Answer

A)  $14. 
B)  $21. 
C)  $28. 
D)  $32. 
A)  $14. 
B)  $21. 
C)  $28. 
D)  $32.

Question 3

The basic types of credit cards include all of the following except

Accepted Answer

A)  entertainment credit cards. 
B)  retailer credit cards. 
C)  bank credit cards. 
D)  collective establishment credit cards. 
A)  entertainment credit cards. 
B)  retailer credit cards. 
C)  bank credit cards. 
D)  collective establishment credit cards.

Question 4

Under certain circumstances, local, state, and federal laws must be considered in setting prices in a small business.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is not one of the Four Credit Questions (FCQ) used in evaluating the credit status of an applicant?

Accepted Answer

A)  Can the buyer pay as promised? 
B)  Will the buyer pay? 
C)  Does the buyer have sufficient viable credibility? 
D)  Can the buyer be force to pay? 
A)  Can the buyer pay as promised? 
B)  Will the buyer pay? 
C)  Does the buyer have sufficient viable credibility? 
D)  Can the buyer be force to pay?

Question 6

With ____, the customer obtains possession of goods or services when they are purchased, with payment due when billed at a later date.

Accepted Answer

A)  an open charge account 
B)  an installment account 
C)  a revolving account 
D)  a selective account 
A)  an open charge account 
B)  an installment account 
C)  a revolving account 
D)  a selective account

Question 7

Marie will account for the costs incurred by a her firm in producing its products (e.g., materials, machinery, etc.) as a part of its

Accepted Answer

A)  general overhead expenses. 
B)  costs of manufacturing. 
C)  cost of goods sold. 
D)  manufacturing overhead expenses. 
A)  general overhead expenses. 
B)  costs of manufacturing. 
C)  cost of goods sold. 
D)  manufacturing overhead expenses.

Question 8

A penetration price strategy is most practical when there exists little threat of short-term competition in the market or when startup costs must be recovered rapidly.

Accepted Answer

A) True 
 B)False

Question 9

The bad-debt ratio is the ratio of bad debts to total sales.

Accepted Answer

A) True 
 B)False

Question 10

Quality Cars, an independent used-car dealership, utilizes long-term consumer credit in its business. Typically, consumers are allowed to place a 15 percent down payment on an automobile. Then, over a period of 48 months, the consumer is allowed to make payments on the balance of the account, which includes compound interest of 2 percent monthly on the unpaid portion. Quality Cars is employing ____ in its business.

Accepted Answer

A)  open charge accounts 
B)  installment accounts 
C)  revolving accounts 
D)  selective accounts 
A)  open charge accounts 
B)  installment accounts 
C)  revolving accounts 
D)  selective accounts

Question 11

Which one of the following is not true with respect to pricing in a small business?

Accepted Answer

A)  Continual price adjustments can be both costly to the seller and confusing to buyers. 
B)  In some situations, local, state, and federal laws must be considered when setting prices. 
C)  Conducted properly, price determination is an exact science. 
D)  Systems of discounts are often used to adjust prices to meet a variety of market needs. 
A)  Continual price adjustments can be both costly to the seller and confusing to buyers. 
B)  In some situations, local, state, and federal laws must be considered when setting prices. 
C)  Conducted properly, price determination is an exact science. 
D)  Systems of discounts are often used to adjust prices to meet a variety of market needs.

Question 12

American Express and Diner's Club are examples of entertainment credit cards.

Accepted Answer

A) True 
 B)False

Question 13

Costs incurred by a firm in actually producing a product (e.g., materials, machinery, etc.) are considered to be a part of

Accepted Answer

A)  general overhead expenses. 
B)  costs of manufacturing. 
C)  cost of goods sold. 
D)  manufacturing overhead expenses. 
A)  general overhead expenses. 
B)  costs of manufacturing. 
C)  cost of goods sold. 
D)  manufacturing overhead expenses.

Question 14

List at least three pricing strategies, and give an example of a company using each.

Accepted Answer

The strategies listed in the b

Question 15

The policy of pricing on the basis of what the traffic will bear will work only for nonstandardized products in markets in which little or no competition exists.

Accepted Answer

A) True 
 B)False

Question 16

You Make the Call-Situation 3
Paul Bowlin owns and operates a tree removal, pruning, and spraying business in a large metropolitan area with a population of approximately 200,000. The business started in 1975 and has grown to the point where Bowlin uses one and sometimes two crews, with four or five employees on each crew. Pricing has always been an important tool in gaining business, but Bowlin realizes that there are ways to entice customers other than quoting the lowest price. For example, he provides careful cleanup of branches and leaves, takes out stumps below ground level, and waits until a customer is completely satisfied before taking payment. At the same time, he realizes his bids for tree removal jobs must cover his costs. In this industry, Bowlin faces intense price competition from operators with more sophisticated wood-processing equipment, such as chip grinders. Therefore, he is always open to suggestions about pricing strategy.

Accepted Answer

The answer of You Make the Call-Situation 3
Paul Bowlin owns...

Question 17

In many lines of business, trade credit terms are so firmly set by tradition that a unique policy is difficult for a small firm to implement.

Accepted Answer

A) True 
 B)False

Question 18

Every applicant is credit worthy to some degree.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following is true with respect to installment accounts?

Accepted Answer

A)  A down payment is normally required. 
B)  Large purchases are usually not covered by this form of credit. 
C)  By law, finance charges cannot exceed 20 percent of the purchase price. 
D)  Short-term consumer credit is provided. 
A)  A down payment is normally required. 
B)  Large purchases are usually not covered by this form of credit. 
C)  By law, finance charges cannot exceed 20 percent of the purchase price. 
D)  Short-term consumer credit is provided.

Which of the following choices contains a C that is not one of the traditional Five C's of Credit?

The Widget Company sells 1,000 widgets annually at a price of $35 each. If the company's pricing policies adhere to a 40% markup of selling price, the cost of each widget is

The basic types of credit cards include all of the following except

Under certain circumstances, local, state, and federal laws must be considered in setting prices in a small business.

Which of the following is not one of the Four Credit Questions (FCQ) used in evaluating the credit status of an applicant?

With ____, the customer obtains possession of goods or services when they are purchased, with payment due when billed at a later date.

Marie will account for the costs incurred by a her firm in producing its products (e.g., materials, machinery, etc.) as a part of its

A penetration price strategy is most practical when there exists little threat of short-term competition in the market or when startup costs must be recovered rapidly.

The bad-debt ratio is the ratio of bad debts to total sales.

Which one of the following is not true with respect to pricing in a small business?

American Express and Diner's Club are examples of entertainment credit cards.

Costs incurred by a firm in actually producing a product (e.g., materials, machinery, etc.) are considered to be a part of

List at least three pricing strategies, and give an example of a company using each.

The policy of pricing on the basis of what the traffic will bear will work only for nonstandardized products in markets in which little or no competition exists.

In many lines of business, trade credit terms are so firmly set by tradition that a unique policy is difficult for a small firm to implement.

Every applicant is credit worthy to some degree.

Which of the following is true with respect to installment accounts?

The Entrepreneurial Life

Entrepreneurial Integrity and Ethics

Getting Started

Franchises and Buyouts

The Family Business

The Business Plan: Visualizing the Dream

The Marketing Plan

The Human Resources Plan: Managers, Owners, Allies, and Directors

The Location Plan

Understanding a Firms Financial Statements

Forecasting Financial Requirements

A Firms Sources of Financing

Planning for the Harvest

Building Customer Relationships

Product and Supply Chain Management

Promotional Planning

Global Opportunities for Small Business

Professional Management in the Entrepreneurial Firm

Managing Human Resources

Managing Operations

Managing the Firms Assets

Managing Risk in the Small Business

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Exam 16: Pricing and Credit Decisions

Which of the following choices contains a C that is not one of the traditional Five C's of Credit?

The Widget Company sells 1,000 widgets annually at a price of $35 each. If the company's pricing policies adhere to a 40% markup of selling price, the cost of each widget is

The basic types of credit cards include all of the following except

Under certain circumstances, local, state, and federal laws must be considered in setting prices in a small business.

Which of the following is not one of the Four Credit Questions (FCQ) used in evaluating the credit status of an applicant?

With ____, the customer obtains possession of goods or services when they are purchased, with payment due when billed at a later date.

Marie will account for the costs incurred by a her firm in producing its products (e.g., materials, machinery, etc.) as a part of its

A penetration price strategy is most practical when there exists little threat of short-term competition in the market or when startup costs must be recovered rapidly.

The bad-debt ratio is the ratio of bad debts to total sales.

Which one of the following is not true with respect to pricing in a small business?

American Express and Diner's Club are examples of entertainment credit cards.

Costs incurred by a firm in actually producing a product (e.g., materials, machinery, etc.) are considered to be a part of

List at least three pricing strategies, and give an example of a company using each.

The policy of pricing on the basis of what the traffic will bear will work only for nonstandardized products in markets in which little or no competition exists.

In many lines of business, trade credit terms are so firmly set by tradition that a unique policy is difficult for a small firm to implement.

Every applicant is credit worthy to some degree.

Which of the following is true with respect to installment accounts?

The Entrepreneurial Life

Entrepreneurial Integrity and Ethics

Getting Started

Franchises and Buyouts

The Family Business

The Business Plan: Visualizing the Dream

The Marketing Plan

The Human Resources Plan: Managers, Owners, Allies, and Directors

The Location Plan

Understanding a Firms Financial Statements

Forecasting Financial Requirements

A Firms Sources of Financing

Planning for the Harvest

Building Customer Relationships

Product and Supply Chain Management

Promotional Planning

Global Opportunities for Small Business

Professional Management in the Entrepreneurial Firm

Managing Human Resources

Managing Operations

Managing the Firms Assets

Managing Risk in the Small Business

Filters