40 Practise MCQs - Correct answers shown after question 40 3 Practise SAQs follow the MCQs

Quest Ans Quest Ans Quest Ans Quest Ans Quest Ans Quest Ans Ques Ans Ques Ans 1 2 3 4 5 B E A B D 6 7 8 9 10 A E D C E 11 12 13 14 15 E A E C E 16 17 18 19 20 D E D E A 21 22 23 24 25 C C/E B C A 26 27 28 29 30 C E B C B 31 33 34 35 C D E E 36 37 38 39 40 E A E B C 32 A/E

Question 1 - Which of these basic ideas is correct? Bookkeeping is the total system, what happens after that is not accounting. Accounting collects information, analyzes it, and then gives it to people who need it. Bookkeeping analyzes information. Bookkeeping measures performance. Accounting records information but cannot analyze it.

Question 2 - Users of accounting information include: regulators. unions. controllers. investors. All of the above. Question 3 - As you develop your new product you go through stages. The most correct order is: screen, analyze, prototype. test, screen, commercialize. commercialize, research, screen. prototype, service analysis, commercialize. focus group, then observation.

Question 4 - Your performance in your part-time job has been so successful that the owner has asked you to be marketing manager for one of the company's products when you graduate. When you apply the marketing concept to your product, you will focus on: the 4 Ps. the customer and the 4 Ps. just the customer. profits and the customer. the mix.

Question 5 - If you became a professional accountant you would provide: management services. tax planning. a check to make sure that the GAAP have been followed. All of the above. None of the above.

Question 6 - Long-term loans, corporate bonds, and preferred stock are all: long-term financing. equity financing. short-term financing. equally expensive. stock exchange financing.

Question 7 - The basic equation that accounting rests on is: A+L=E E=AxL L-E=A L-A-B A-L=E

Question 8 - One way you could start a small business is to purchase an existing company. If you do that, you will: owe the liabilities. own the assets.

have some equity. All of the above. None of the above.

Question 9 - You work for a small company in your part-time job, and recently your boss asked you to recommend how to collect some data about the market. Which of the following would be the best recommendation? secondary data and observation experimentation and primary data primary and secondary data collecting then analyzing an online survey

Question 10 - In economic terms, which of the following defines utility? synthetic, not natural products a product that has multiple uses Utility is a psychological construct, not an economic one. need for energy and water a want that is satisfied

Question 11 - Small business firms sometimes run into a cash crunch. Liquidity is, therefore, critical and is: depreciation. a concern of the chartered central bank. all the cash you have. just the cash and the securities that you have in the bank. the ease and speed with which an asset can be converted into cash.

Question 12 - The Bank of Canada: is the central bank. is run by the federal Finance Minister. lends the chartered banks the money they need to operate. is the largest investment dealer. buys and sells debentures.

Question 13 - The current ratio is:

inventory/equity. debt/equity. current assets x current liabilities x 100. quick assets/liabilities. current assets/current liabilities.

Question 14 - Even if you are not an accountant, you deal with accounting issues, one of which is a budget. A budget is: a statement of revenues and costs. internal. an estimate. All of the above. None of the above. Question 15 - Other sources of funds beyond banks include: caisses populaires. Life insurance companies. foreign markets. venture capital firms. All of the above.

Question 16 - Life insurance companies: share risks. collect premiums. invest in mortgages and bonds. All of the above. None of the above.

Question 17 - The V.P. Finance, who runs the finance department, will: exert financial control. manage cash. carry out management functions. do financial planning. All of the above.

Question 18 - When considering how profitably your company is operating, you

examine: inventory turnover. sales and the return on your investment. depreciation and liquidity. tangible and intangible assets. the price of the Canadian dollar.

Question 19 - The value package for Westjet Airlines would include: friendly flight attendants. on-time arrivals. the fun of travel. comfortable seats. All of the above.

Question 20 - You have decided to start your own small business. The critical distribution consideration will be: your facility location. the type of business that will be beside you. your loading dock. high-speed highway access. the size of the local labour pool. Question 21 - Your business has grown quickly and you decide that you must raise funds through long-term financing, which could: commit yourself to an annual fixed dividend payment. give stock purchasers an opportunity for growth, but raise your costs. commit yourself to paying interest. All of the above. None of the above. Question 22 - What do you get when you buy a common stock? the potential for growth or loss. first priority for dividends. interest. a tax deduction. dividends.

Question 23 - Which demographic variable are most important to the makers of Viagra? ethnicity and income age and gender age and income social class and race gender and race

Question 24 - Which of the following is an example of primary data? a survey conducted by the local chamber of commerce an article about a competitors strategy in Canadian Business a focus group interview conducted by a consulting firm to discover what your customers like about your shopping mall last years sales performance reports None of the above.

Question 25 - Which one of these items is an operating expense to the local Pizza Pizza store? napkins. anchovies. pepperoni. cheese. pizza dough.

Question 26 - As a marketing manager for the product you need to: hit the target. choose the right segment. choose the right mix for the right target or segment. consider geographics and demographics. All of the above.

Question 27 - You realize that the product's marketing needs to be refocused on different market segments. Faced with the responsibility of recommending market segments you would consider: observation, but not geographics.

public relations not publicity. advertising and promotion. social and political environments. product-use variables and psychographics.

Question 28 - Investors who prefer less risk buy preferred stock because: preferred shares are traded only on the world's most reputable stock exchanges. preferred shareholders get paid dividends before common shareholders. preferred shares have residual value as collectables. preferred shareholders get to buy the company's products at a discount. preferred shareholders get to vote twice as often on company matters.

29 - Demographics can include: education, life cycle, and gender. race, education, life cycle, and gender. gender. life cycle and gender. None of the above.

Question 30 - As consumers we are subject to many influences including: observation and experimentation. psychological and personal. economic and primary. problem recognition. All of the above.

Question 31 - Costs like property taxes on the factory, the cost of a new information technology system, and the salary costs of upper management would be classified as: variable costs. irrelevant costs. fixed costs. gross profit. economic costs.

Question 32 - Price skimming is a strategy that is often used for:

consumer electronics. new movies. new varieties of cat food. pizza. automobiles.

Question 33 - Money is not just a way of handling exchanges of goods and services because it also: in Canada, is a non-demand currency. mutualizes over time. expands. is storable, and allows things to be counted. is on the M-1, not on the M-2.

Question 34 - Getting a good idea to market is tough. Then the real battle begins: for survival. To increase the chances of surviving, a marketing campaign can use: labels. trademarks. brands. patents. All of the above.

Question 35 - Brand loyalty is measured by: recognition. preference. purchasing. insistence. A, b, and d.

Question 36 - The objective(s) of promotion are: positioning the product and adding value. adding value. communication. controlling sales volume and communication. controlling sales volume, positioning the product, adding value, and communication.

Question 37 - The Bank of Canada: is in charge of managing the money supply. is the biggest of the big six chartered private banks. wastes the money. prints the money. spends the money.

Question 38 - Your credit card: is part of the mutual market. is cheap money. is a demand deposit account because you can draw on it any time. is money. is not money.

Question 39 - Canadians who use money and lend money are part of the: intermediaries. Canadian financial system. the fourth pillar. M-2. M-1.

Question 40 - Distribution: has become an important asset in reducing delivery times. is a "back-room" issue, not relevant to customers. is part of overall marketing strategy. is now dependent on hub scheduling. Both a and c.

Answers to the MCQs

3 Short Answer Questions - suggested answers follow question 3

Question 1 In the mid-1990s after relying very heavily on Michael Jordan, a star professional basketball player with e Chicago Bulls, Nike added two new spokes-persons to its roster: Mia Hamm, Captain of the World champion USA Womens Soccer Team and Tiger Woods why? What do you suppose Nikes product marketing strategists were thinking when they made these two endorsement decisions?

Question 2

Does the Mercedes Benz automobile company employ a pricing policy of penetration or skimming? Explain and justify your answer.

Question 3 You decide to set up a lemonade stand. You spend $10 on a big shiny jug. You spend $5 dollars on a wooden spoon. You spend $10 on an 1 foot by 4 foot piece of 3/4 inch plywood. You buy $5 worth of crayons, and you write "Lemonade Stand" on the plywood. 100 plastic cups cost $10. You decide to use 1 whole lemon in each cup. A lemon costs 30 cents. You decide to sell "sour" lemonade, i.e. you will not add any sugar. Your Mom says you can use all the tap water you want, from your house, for free. If you charge 50 cents a cup, how many cups of lemonade must you sell in order to break even?

Suggested Answers 1. Nike was seeking celebrity spoke persons / endorsers who could appeal to a target market outside of their traditional (i.e. less identified with young urban male) demographic. Nike chose began to use Mia Hamm in order to appeal to young women, and to Tiger Woods to appeal to the older, middle income, (probably suburban and Caucasian) demographic. Nikes market strategists were probably thinking that they needed to expand or change their message to include new market segments that previously had not been reached by their former promotional efforts. Possibly also relevant: product life cycle perhaps the market for high-end basketball shoes was saturated. Soccer was possibly identified as a high growth sport. Also, they may have felt than an aging population was turning away from playing pick-up basketball to playing golf

2. Mercedes Benz' pricing policy is "skimming". That is, Mercedes charges a relatively hgh price for its products. These are sold as "luxury" automobiles to the affluent end of the market. By charging a realatively high price to a relatively small market, Mercedes Benz homes to make a large profit margin on relatively small voluimes. 3. This is a straight forward breakeven calculation. Variable cost of making a cup of lemonade : 1 lemon @ 30 cents + 1 cup @ 10 cents = 40 cents Fixed costs of creating the business: jug @$10 + spoon @$5 + wood@$10 + crayons @$5 = $30 Break Even quantity can be calulated using the following formula BE = FC / SP - VC BE = $30 / 50 cents - 40 cents BE = $30 / 10 cents

BE = 300 cups of lemonade Chap 4

Financial Accounting keep the outsiders informed Managerial Accounting keeps the internal users informed. Professional Accountants: CA outside accountant for other firms. CMA works in industries on internal management accounting. CGA works in a private industry or CGA firm. Accounting Services: Auditing examining a companys financial records to see if it used proper procedures for its financial reports. Tax Services CA can help businesss save millions of dollars in taxes. Management Consulting Service help resolve problems in finance, production scheduling, and other areas. Accounting Equation: Assets = Liabilities + Owners Equity. Three Financial Statements are: Balance Sheets o Assets Current Assets Fixed Assets Intangible Assets o Liabilities Current Liabilities Accounts Payable Long-term Liabilities Income Statements o Revenues o Costs of Goods Sold Gross Profit o Operating Expenses Operating Income and Net Income Statement of Cash Flows o Cash Flows from Operations o Cash Flows from Investing

o Cash Flows from Financing Short-Term Solvency Ratios: Current Ratios: Current Assets / Current Liabilities Working Capital: Current Assets Current Liabilities Debt-to-Owners Ratio: Debt / Owners Equity Return on Equity: Net Income / Total Owners Equity Earnings Per Share: Net Income / Number of Common Shares Outstanding Chap 5 Four activities that comprise marketing mix are: Developing Pricing Promoting Placing products Four types of utility are: Time products are available when consumers demand it. Place customers can conveniently purchase them from a nearby store. Ownership ownership is transferred easily from store to customer. Form products are available, from raw material to a finished good. The Marketing Environments are: Political/Legal Social/Cultural Technological Economic Competitive Four Ps in Marketing: Price Product Place Promotion Four Market Segments are: Geographic Variables Demographic Variables

Psychographic Variables Product-Use Variables

Five Step Research Process are: Study the current situation Select a research method Collect data Analyze the data Prepare a report Four Research Methods are: Observation Surveys Focus Groups Experimentation

Four Influences on Consumer Behaviour are: Psychological Personal Social Cultural Five Step Consumer Buying Process: Problem/Need Recognition Information Seeking Evaluation of Alternatives Purchase Decisions Post-Purchase Evaluations Organizational Markets Industrial Market Reseller Market Government and Institutional Market