CONFIDENTIAL MGT028/JUNE2021/MIDTERM

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UNIVERSITY TEKNOLOGI MARA

MIDTERM TEST
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COURSE : INTRODUCTION TO BUSINESS

COURSE CODE : MGT028
DATE : JUNE 2021
TIME : 8.00 PAGI – 10.00 PAGI
SEMESTER : MARCH – AUGUST 2021

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of TWO (2) parts: PART A (25 Questions)
PART B (25 Questions)

2. Answer ALL questions in Part A and B.

3. Do not bring any material into the examination room unless permission is given by
the invigilator.

4. Answer All Questions in English.

CONFIDENTIAL MGT028/JUNE2021/MIDTERM

PART A - True/False Questions (50 marks)

1. PROFIT means the amount of money that a business earns after all expenses have
been deducted from sales revenue. (TRUE)

2. Goal is an objective that a business hopes and plans to achieve. (TRUE)

3. Long-term goals are set by middle managers of a business. (FALSE)

4. Management is the process of planning and executing the conception, pricing,

promotion and distribution.(TRUE)

5. Information system interrelated components that collect, processes, stores and

distributes information to support the activities of a business.(FALSE)

6. In economics, land refers to natural resources such as farmlands, soil, air, water,
fishing grounds, rivers, forests, minerals. (TRUE )

7. Regulated or Mixed Economy System is determined by individuals or private

business operating freely in the economy. It means the business activities are run
independently without the government guidance or interference. (FALSE)

8. Inflation refers to people’s level or quality of life.(FALSE)

9. Most successful sole proprietors also have strong organizational skills, leadership
skills and communications skills. (TRUE)

10. A partnership is a business own by two or more people. (TRUE)

11. In a general partnership, all partners have limited liability, they are personally liable
for all obligations of the firm. (FALSE)

12. Low taxation is the income tax on the profits of a cooperative, higher than that of a
corporation. (TRUE)

13. Low return on investment is one of the advantages of being in corporative types of
business entities. (TRUE)

14. The cooperative and corporation company do not set profit as the main objective of
existence. (TRUE)

15. An advantage of the partnership is limitation in size. (TRUE)

16. For a sole-proprietorship business, the annual financial statement must be submitted
to the Inland Revenue board for tax purpose. (FALSE)

17. A procedure is a specific action to be taken with respect to situation. (TRUE)

18. Supervisors are responsible for providing strategic direction for the organization.
(FALSE)

19. Reward power is control over tangible benefits that people value. (TRUE)
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20. Douglas McGregor’s suggested that people who have an inherent dislike of work are
Theory Y type of workers. (FALSE)

21. Ishikawa diagram is used to organize and show visually the possible causes of a
problem. (FALSE)

22. Legitimate power is the power to discipline, punish and withhold rewards. (FALSE)

23. A sender refers to anyone who wants to convey or seek information, idea or concept
to another person. (TRUE)

24. Noise is any disturbances that interferes or become a barrier to the message
reaching the receiver. (TRUE)

25. Individuals may have some information that may not be interesting but useful to
some people. This is a gossip. (TRUE)
CONFIDENTIAL MGT028/JUNE2021/MIDTERM

PART B - Multiple Choices Questions (50 marks)

1. The activity of planning, leading, organizing and controlling is the functions of

_______________

A. management
B. marketing
C. business
D. finance

2. Which one of the following is NOT advantage of free economic system?

A. Freedom of contract
B Opportunity to compete
C. Freedom of choice
D. Conflict of interest

3. The basic forms of free market that create privately held business include the
following, EXCEPT:

A. private product
B. private ownership of property
C. private enterprise
D. freedom of choice
4. Which of the following statements refers to the Regulated or Mixed Economy?

A. Business activities are run independently without the government guidance or

interference
B. Production of goods and services is not left entirely to individuals or private
companies
C. The system is called capitalism
D. The entrepreneur or individual who organized a business risks time, money
and effort, he or she should be allowed to make as large a profit as possible

5. Mission is the _________ by which is business can fulfill its purpose. It indicates
_________ a business will achieve its purpose.

A. way, goals
B. reason, when
C. means, how
D. result, what

6. Which of the following is the definition of profit?

A. The amount of money that a business earns after all expenses have been
deducted from sales revenue
B. The amount of money invested by owner into a business
C. The amount of money that is paid to the government bodies yearly
D. The gross income of the business after the end of its financial term
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7. Process of planning and executing the conception, pricing, promotion and distribution
refer to:

A. Marketing
B. Finance
C. Management
D. Accounting

8. Labour is human efforts for production purposes. Listed below are work done by
people who are unskilled EXCEPT:

A. Rubber tapper
B. Rubbish collector
C. Operator
D. Teacher

9. There are several features of successful sole proprietorship EXCEPT?

A. One-man Ownership
B. Separate Business Entity
C. Unlimited Liability
D. Fewer Formalities

10. Which of the following statements are TRUE regarding disadvantages of Sole
Proprietorship?

I. Incurs all losses

II. Sole proprietor has limited liability
III. Sole proprietor has limited access to fund
IV. Sole proprietor has limited skills.

A. I, II, III and IV

B. I, II and III
C. I, III and IV
D. I and IV

11. _____________ is an association of two or more partners as co-owners of a

business with the aim of making profit.

A. Partnership
B. Sole Proprietorships
C. Cooperation
D. Corporative

12. Sales Manager, Financial controller, Account Manager are examples of __________.

A. First-Line Managers.
B. Top Management.
C. Middle Managers.
D. Lower level Managers.
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13. The owners of a corporation are called __________.

A. shareholder
B. stakeholder
C. partners
D. members

14. Which statements are TRUE regarding the characteristics of a successful sole
proprietorship?
I. They are willing to accept sole responsibility for the firm’s performance
II. They are willing to work long hours
III. Most successful sole proprietors have strong organizational, leadership and
communication skill
IV. Many successful proprietors have had previous experience working in
industry

A. I and II
B. I, II and III
C. II, III and IV
D. All of the above

15. The advantages of cooperative business are as follows, EXCEPT

A. The members have limited liability

B. The income tax on the profits of cooperation business is slightly higher
than that of a corporation
C. The cooperative business sale goods and reasonable prices
D. Each member is entitled to one vote in electing the Board of Directors

16. Which of the following are disadvantages of Free Enterprise System?

A. Individuals and companies are free to supply their own capital and operate
their own businesses
B. Seller and buyers have the right to exchange goods and services on terms
that they are acceptable to all parties concerned
C. Some services which are not marketable not be produced efficiently by some
private sectors
D. All financial information can be kept secret

17. Conceptual skills are required least by _____________.

A. Top management
B. Middle management
C. Lower management
D. Marketing managers

18. Plan developed by managers can be classified as ____________.

A. Long term plan

B. Moderate term plan
C. Strategic and operational plans
D. Short term plan
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19. ___________________translates the sender’s ideas into a systematic set of symbols

or a language expressing the communicator’s purpose.

A. Encoding
B. Recoding
C. Coding
D. Decoding

20. Which of the following are the basic components in communication process.

A. Sender, channel, message, receiver, feedback and noise

B. Sender, encoder, decoder, facilitator, receiver
C. Sender, channel, message, receiver, end-user
D. Sender, originator, facilitator, encoder, decoder, noise

21. The process of administering and coordinating resource efficiently and to achieve the
goals of the organization is refer to?

A. Management
B. Planning
C. Operation
D. Organization

22. People who can influence the behaviour of others without having to rely on force or
those accepted by others is referring to?

A. Follower
B. Manager
C. Leader
D. Public

23. Leadership involves the following EXCEPT

A. Creating a vision of the future

B. Devising strategy for achieve that vision
C. Targeting their organization objectives
D. Communicating the vision so that everyone understands and believes in it

24. The process of controlling begins with ______________________ and ends with
______________.

A. set performance standard …………………. take corrective action

B. set performance standard …………………. make comparison
C. measure actual performance ……………… set performance standard
D. measure actual performance ……………… take corrective action

25. A type of communication system in which messages move downward and upward is
called ____________ communication.

A. horizontal
B. vertical
C. lateral
D. cluster