Questions About The General Business Elements

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  • 1/25 Questions

    When an individual or business has debts that are greater than their assets and cannot be paid, they are in a state of?

    • Profit
    • Bankruptcy
    • Growth
    • Expansion
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About This Quiz

Explore fundamental business concepts in this quiz covering price ceilings, management roles, interest rates, marketing, corporation structures, and capitalism. Ideal for learners seeking to understand essential business elements and their applications.

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  • 2. 

    When two or more people operate a business and share the profits and losses, they own what type of business?

    • Corporation

    • Partnership

    • Franchise

    • Cooperative

    Correct Answer
    A. Partnership
    Explanation
    When two or more people operate a business and share the profits and losses, they own a partnership. In a partnership, the individuals involved contribute resources, skills, and capital to the business. They also share the responsibilities and liabilities of the business. This type of business structure allows for shared decision-making and a more flexible management structure compared to other types of businesses.

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  • 3. 

    A salesperson who meets the customers face to face and persuades them to buy, is involved in what type of selling?

    • Organizational Selling

    • Telemarketing

    • Personal Selling

    • Team Selling

    Correct Answer
    A. Personal Selling
    Explanation
    A salesperson who meets customers face to face and persuades them to buy is involved in personal selling. This type of selling involves direct interaction between the salesperson and the customer, allowing for personalized communication and the opportunity to build relationships. Unlike telemarketing, which involves selling over the phone, personal selling allows for a more personal and tailored approach to selling products or services. Organizational selling typically refers to selling to other businesses, while team selling involves multiple salespeople working together to close a sale.

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  • 4. 

    What do you call a statement that is attached to a product giving information about its contents?

    • Libel

    • Label

    • Packaging

    • Warranty

    Correct Answer
    A. Label
    Explanation
    A statement that is attached to a product giving information about its contents is called a label. A label provides important details such as ingredients, nutrition facts, warnings, and instructions for use. It helps consumers make informed decisions and ensures product safety and compliance with regulations.

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  • 5. 

    The arrangement of the Advertising copy and art on the printed page?

    • Layout

    • Heading

    • Copy

    • Text

    Correct Answer
    A. Layout
    Explanation
    The correct answer is "Layout". In the context of advertising, layout refers to the arrangement of the advertising copy and art on the printed page. It involves the strategic placement of elements such as headings, copy, and text to create an appealing and effective design. A well-designed layout can attract attention, convey the message clearly, and guide the reader's eye through the advertisement.

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  • 6. 

    A person who assumes the responsibility and the risk for starting and operating a business?

    • Manager

    • Entrepreneur

    • Administrator

    • Stockholder

    Correct Answer
    A. Entrepreneur
    Explanation
    An entrepreneur is a person who assumes the responsibility and the risk for starting and operating a business. They are individuals who have the vision and drive to identify opportunities, bring together resources, and take calculated risks to create and grow a successful business venture. Entrepreneurs are known for their innovation, creativity, and willingness to take on challenges in order to achieve their goals. They play a crucial role in the economy by creating jobs, driving innovation, and contributing to economic growth.

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  • 7. 

    People in an organization that make decisions and interpret policies are called:

    • Marketing

    • Management

    • Advertising

    • Human Resources

    Correct Answer
    A. Management
    Explanation
    The term "management" refers to the group of individuals within an organization who are responsible for making decisions, setting goals, and interpreting policies. They are typically in charge of overseeing the overall operations and ensuring that the organization's objectives are met. Marketing, advertising, and human resources are all important functions within an organization, but they are specific departments or areas of responsibility that fall under the broader umbrella of management.

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  • 8. 

    Which economic system allows the means for production and distribution to be privately owned?

    • Socialism

    • Marxism

    • Capitalism

    Correct Answer
    A. Capitalism
    Explanation
    Capitalism is an economic system that allows the means for production and distribution to be privately owned. In a capitalist system, individuals and businesses have the freedom to own and control their own resources, such as land, factories, and businesses. They can use these resources to produce goods and services, and then distribute them in the market for profit. This system promotes competition and individual initiative, as individuals are motivated by the potential for profit. In contrast, socialism and Marxism advocate for collective or state ownership of the means of production and distribution.

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  • 9. 

    A sale that the retailer uses to remove leftover items from the selling floor?

    • Lost Leader

    • Liquidation Sale

    • Clearance Sale

    • Seasonal Sale

    Correct Answer
    A. Clearance Sale
    Explanation
    A clearance sale is a type of sale that a retailer uses to remove leftover items from the selling floor. This means that the retailer wants to get rid of these items to make space for new merchandise or to make room for seasonal items. Clearance sales usually offer significant discounts on the remaining items to entice customers to purchase them. This type of sale is often held at the end of a season or when the retailer wants to clear out excess inventory.

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  • 10. 

    An actual count of the merchandise in stock is called?

    • Physical Inventory

    • Physical Distribution

    • Merchandising

    Correct Answer
    A. Physical Inventory
    Explanation
    Physical inventory refers to the process of physically counting and verifying the actual quantity of merchandise or goods present in stock. It involves conducting a physical count of all items, comparing it with the recorded inventory, and identifying any discrepancies. This accurate count helps businesses to determine the actual value of their inventory, identify any losses or theft, and make informed decisions regarding purchasing, sales, and restocking. Physical inventory is an essential practice for maintaining accurate inventory records and ensuring efficient inventory management.

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  • 11. 

    The upper limit to the amount that can be charged for a specific good or service is a:

    • Price Ceiling

    • Price Range

    • Price Strategy

    • Equilibrium Price

    Correct Answer
    A. Price Ceiling
    Explanation
    A price ceiling refers to the maximum price that can be charged for a specific good or service. It is a government-imposed restriction that prevents prices from rising above a certain level. This is often done to protect consumers from excessive price increases and to ensure affordability. A price ceiling can create shortages in the market if it is set below the equilibrium price, as suppliers may be unwilling or unable to provide the good or service at that price. Therefore, a price ceiling is the correct term for the upper limit on pricing.

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  • 12. 

    An amount of money charged for the use of borrowed money or credit:

    • Budget

    • Loan

    • Bank Fee

    • Interest

    Correct Answer
    A. Interest
    Explanation
    Interest is the correct answer because it refers to the amount of money charged for borrowing funds or using credit. It is typically calculated as a percentage of the loan amount or credit balance and is paid by the borrower to the lender as compensation for the use of the money. Interest rates can vary depending on factors such as the loan term, creditworthiness of the borrower, and prevailing market conditions.

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  • 13. 

    Name the diagram that shows the positions, responsibilities, and reporting lines of personnel in a business?

    • Balance Sheet

    • Company Code of Conduct

    • Organizational Chart

    • The Diagram of Doom

    Correct Answer
    A. Organizational Chart
    Explanation
    An organizational chart is a diagram that displays the hierarchy, roles, and reporting relationships within a company. It visually represents the positions and responsibilities of personnel, allowing for a clear understanding of the structure of the organization. This chart helps employees and stakeholders to identify who they report to, who their subordinates are, and who they collaborate with. It is a valuable tool for effective communication, decision-making, and understanding the overall functioning of the business.

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  • 14. 

    What type of business is owned by the stockholders?

    • Partnership

    • Corporation

    • Sole Proprietorship

    • Cooperative

    Correct Answer
    A. Corporation
    Explanation
    A corporation is a type of business that is owned by stockholders. In a corporation, ownership is divided into shares of stock, which are owned by individuals or other entities. Stockholders have limited liability, meaning their personal assets are protected in case the corporation faces financial difficulties. They also have the ability to transfer their ownership by buying or selling shares of stock. Corporations typically have a board of directors who oversee the company's operations and make important decisions. Overall, the ownership structure and legal protections make the corporation an attractive option for investors and businesses seeking to raise capital.

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  • 15. 

    What term means all of the following: planning, designing, selling, promoting, and servicing of products?

    • Management

    • Marketing

    • Advertising

    • Finance

    Correct Answer
    A. Marketing
    Explanation
    Marketing encompasses all of the activities mentioned in the question, such as planning, designing, selling, promoting, and servicing products. It involves identifying customer needs, creating products that satisfy those needs, and effectively communicating the value of the products to customers. Marketing also involves managing customer relationships, conducting market research, and analyzing market trends to make informed business decisions. Therefore, marketing is the term that best describes all of the mentioned activities.

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  • 16. 

    A report that tells the financial status of a business?

    • Balance Sheet

    • Income Statement

    • Quarterly Earnings Report

    • Individual Expense Report

    Correct Answer
    A. Balance Sheet
    Explanation
    A balance sheet is a financial statement that provides a snapshot of a business's financial position at a specific point in time. It presents the company's assets, liabilities, and shareholders' equity, giving an overview of its financial status. The balance sheet helps stakeholders assess the company's solvency, liquidity, and overall financial health. It is different from an income statement, which shows the company's revenue, expenses, and net income over a specific period. A quarterly earnings report focuses on the company's financial performance for a particular quarter, while an individual expense report details the expenses of an individual within the business.

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  • 17. 

    The person to whom a check is written is called the?

    • Payee

    • Payer

    • Checker

    • Checkee

    Correct Answer
    A. Payee
    Explanation
    The person to whom a check is written is called the payee. The payee is the individual or entity that will receive the payment indicated on the check. They are the intended recipient of the funds and can deposit or cash the check. The payer is the person who writes the check, the checker is not a term used in this context, and checkee is not a recognized term in relation to checks.

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  • 18. 

    Pilferage is another name for?

    • The age of a pilfer

    • Employer Compensation

    • Employee Theft

    Correct Answer
    A. Employee Theft
    Explanation
    Pilferage is another term used to refer to employee theft. This means that when employees steal items or money from their workplace, it is commonly known as pilferage. It is a form of dishonesty where employees take advantage of their access and trust within the organization to unlawfully take possessions that do not belong to them.

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  • 19. 

    A system of recording that shows a retailer the goods he has on hand, the items he has sold and their value?

    • Physical Inventory

    • Inventory Control

    • Return on Investment

    • Record Keeping

    Correct Answer
    A. Inventory Control
    Explanation
    Inventory control is a system of recording that shows a retailer the goods he has on hand, the items he has sold, and their value. This system allows the retailer to keep track of their inventory levels, monitor sales, and determine the value of their stock. By implementing effective inventory control practices, retailers can optimize their inventory levels, reduce costs, and ensure that they have the right products available to meet customer demand.

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  • 20. 

    What is the term that means, "Let the buyer beware."

    • Caveat Emptor

    • Caveat Venditor

    • E pluribus unum

    • Veni, vidi, vici

    Correct Answer
    A. Caveat Emptor
    Explanation
    The term "Caveat Emptor" means "Let the buyer beware." This principle suggests that it is the responsibility of the buyer to be cautious and aware of potential risks or flaws in a product or transaction. It places the burden of due diligence on the buyer rather than the seller. This term is often used in the context of consumer protection and encourages individuals to be informed and cautious when making purchases.

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  • 21. 

    The continuous striving of businesses to gain larger shares of their respective markets?

    • Market Share

    • Market Potential

    • Competition

    • Market Vulnerability

    Correct Answer
    A. Competition
    Explanation
    The continuous striving of businesses to gain larger shares of their respective markets is referred to as competition. In order to increase their market share, businesses compete with one another by offering better products, lower prices, or superior customer service. This constant competition drives businesses to innovate and improve, ultimately benefiting consumers with more choices and better products.

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  • 22. 

    You have limited liability when you invest in this type of business?

    • Sole Proprietorship

    • Partnership

    • Franchise

    • Corporation

    Correct Answer
    A. Corporation
    Explanation
    When you invest in a corporation, you have limited liability, meaning that your personal assets are protected and you are only liable for the amount you have invested in the business. This is because a corporation is a separate legal entity from its owners, known as shareholders, and it provides a shield of protection for their personal assets. In contrast, in a sole proprietorship or partnership, the business owner(s) are personally liable for the debts and obligations of the business, which puts their personal assets at risk. A franchise is a business model where an individual operates a business under the brand and guidance of a larger company, and the liability depends on the specific terms of the franchise agreement.

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  • 23. 

    Name the person who buys the merchandise that a retail store carries in stock.

    • Employee

    • Retailer

    • Consumer

    • Customer

    Correct Answer
    A. Customer
    Explanation
    A customer is the person who purchases the merchandise that a retail store carries in stock. They are individuals who visit the store and make a transaction by buying the products or services offered by the retailer. Customers are an essential part of any retail business as they generate revenue and contribute to the success of the store.

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  • 24. 

    Products that carry the label of the retailer who sells them rather than the manufacturer's brand name is called what?

    • Private Brands

    • Family Brands

    • Service Brands

    • Corporate Brands

    Correct Answer
    A. Private Brands
    Explanation
    Private brands are products that are labeled with the retailer's name instead of the manufacturer's brand name. These brands are developed and owned by the retailer themselves and are often sold exclusively in their stores. Private brands allow retailers to differentiate themselves from competitors and offer unique products to their customers. They are also known as store brands or own brands.

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  • 25. 

    A system by which assortments of similar merchandise are offered at the same prices, for example, $100, $150, and $200 suits?

    • Price Fixing

    • Brands

    • Product Lines

    • Price Lines

    Correct Answer
    A. Price Lines
    Explanation
    Price lines refer to a system where assortments of similar merchandise are offered at the same prices. This means that different products within a price line, such as suits priced at $100, $150, and $200, will all be sold at their respective fixed prices. This pricing strategy allows customers to easily understand and compare the prices of different products within the same category. It also helps retailers to manage their inventory and pricing structure more efficiently.

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Quiz Review Timeline (Updated): Nov 16, 2023 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Nov 16, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Feb 17, 2014
    Quiz Created by
    John Rogers

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