Question 1

International trade and globalization are very important to Canada.

Accepted Answer

A) True 
 B)False

Question 2

Customer loyalty is the ultimate indicator that a company has met and exceeded customer needs.

Accepted Answer

A) True 
 B)False

Question 3

Small business owner Barry Shain has always paid all of his current bills on time. However, this year he has more bills coming due than normal. Which type of ratio would help him evaluate whether he is likely to have enough cash to continue meeting his obligations over the next year?

Accepted Answer

A)  liquidity ratio 
B)  managerial ratio 
C)  leverage ratio 
D)  profitability ratio

Question 4

A core competence is something that a company does well internally.

Accepted Answer

A) True 
 B)False

Question 5

Companies today cannot just provide what the customer want as there are many companies that do that already but to be really successful they must satisfy customers beyond their expectations.

Accepted Answer

A) True 
 B)False

Question 6

Porter's five forces model focuses on the five forces that shape competition within an industry.

Accepted Answer

A) True 
 B)False

Question 7

One of the critical success factors for any business is providing value.

Accepted Answer

A) True 
 B)False

Question 8

XYZ company has just opened a factory in Bangladesh. Bangladesh has different laws than in Canada. The age that the law allows for young people to be employed full-time is much lower than in Canada. If XYZ hires employees who are younger than allowed by law in Canada but legal in Bangladesh what is the most likely outcome?

Accepted Answer

A)  The company will save money but will have a negative reputation. 
B)  The company might have negative articles written about it in the newspaper. 
C)  The company will be charged under Canadian law. 
D)  The company will be charged under international law.

Question 9

What is conducted to understand whether the entrepreneur's or CEO's vision is logical and feasible and whether the strategies used to pursue the vision will lead to success?

Accepted Answer

A)  a competitive analysis 
B)  an industry analysis 
C)  an internal analysis 
D)  a SWOT analysis

Question 10

The statement of cash flows shows the cash flowing into and out of a company.

Accepted Answer

A) True 
 B)False

Question 11

Yvon Chouinard, Patagonia founder, believes in making the best products to inspire and implement solutions to the environmental crisis. He hires employees who appreciate the outdoors and share his vision. This is an example of building a business with employees who are motivated to support the company's mission.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following shows the money flowing into and out of a company through its operating, investing, and financing activities?

Accepted Answer

A)  retained earnings 
B)  statement of cash flows 
C)  income statement 
D)  operating budget

Question 13

AlumiPlate's SWOT analysis revealed that potential competitors would find it difficult to begin operations in this specialized metal-coating industry. Using the terminology of SWOT, this is an example of which of the following?

Accepted Answer

A)  strength 
B)  economy of scale 
C)  opportunity 
D)  threat

Question 14

Geoff has been looking at some liquidity ratios for K&M Enterprises. This indicates that he wants to know whether the company is likely to face problems in repaying its debts.

Accepted Answer

A) True 
 B)False

Question 15

Revenue, expenses, and net income are the key sections found on a statement of cash flows.

Accepted Answer

A) True 
 B)False

Question 16

A vision statement outlines why the company exists and where it's going in the future. It clearly states the goals and objectives of the company and helps decision makers plan for future actions.

Accepted Answer

A) True 
 B)False

Question 17

Customers who visit any Good As New Appliance Repair Centre see a framed statement prominently displayed near the front door. The plaque describes the company's fundamental purposes. In part, it states that "All Good As New Centres operate under the belief that every customer deserves good quality parts, fast and dependable service, and a fair price." The words on this plaque probably reflect which of the following of Good As New?

Accepted Answer

A)  strategic plan 
B)  mission statement 
C)  corporate agenda 
D)  corporate charter

Question 18

Pro forma income statements forecast the assets a company will need in the next accounting period.

Accepted Answer

A) True 
 B)False

Question 19

What does the management of information provide to various levels of the organization?

Accepted Answer

A)  access to instant information 
B)  executive dissemination 
C)  bottom-up flow of information 
D)  decision-making support

Question 20

Stakeholders are affected by the decisions that the business makes, and therefore the business has a responsibility to consider them in those decisions.

Accepted Answer

A) True 
 B)False

Exam 7: Understanding the Business

International trade and globalization are very important to Canada.

Customer loyalty is the ultimate indicator that a company has met and exceeded customer needs.

Small business owner Barry Shain has always paid all of his current bills on time. However, this year he has more bills coming due than normal. Which type of ratio would help him evaluate whether he is likely to have enough cash to continue meeting his obligations over the next year?

A core competence is something that a company does well internally.

Companies today cannot just provide what the customer want as there are many companies that do that already but to be really successful they must satisfy customers beyond their expectations.

Porter's five forces model focuses on the five forces that shape competition within an industry.

One of the critical success factors for any business is providing value.

What is conducted to understand whether the entrepreneur's or CEO's vision is logical and feasible and whether the strategies used to pursue the vision will lead to success?

The statement of cash flows shows the cash flowing into and out of a company.

Which of the following shows the money flowing into and out of a company through its operating, investing, and financing activities?

AlumiPlate's SWOT analysis revealed that potential competitors would find it difficult to begin operations in this specialized metal-coating industry. Using the terminology of SWOT, this is an example of which of the following?

Geoff has been looking at some liquidity ratios for K&M Enterprises. This indicates that he wants to know whether the company is likely to face problems in repaying its debts.

Revenue, expenses, and net income are the key sections found on a statement of cash flows.

A vision statement outlines why the company exists and where it's going in the future. It clearly states the goals and objectives of the company and helps decision makers plan for future actions.

Pro forma income statements forecast the assets a company will need in the next accounting period.

What does the management of information provide to various levels of the organization?

Stakeholders are affected by the decisions that the business makes, and therefore the business has a responsibility to consider them in those decisions.