Archive for February 2018

Fidelity bonds help to:

Fidelity bonds help to: 




A. protect against losses from crimes committed against the business.

B. cover losses incurred due to governmental audits.

C. cover losses incurred by the employer due to employee embezzlement.

D. cover abnormal losses from credit customers not paying their bills.





Answer: C

Which of the following is true of co-insurance?

Which of the following is true of co-insurance? 




A. It is an amount of loss that is specifically excluded by the insurance contract.

B. It requires that an owner carry insurance equal to a stated minimum percentage of the market value of their property.

C. It results in the decrease of the amount of premium that the insurance company collects from businesses.

D. It is the amount of an asset for which a company will write an insurance policy.


Answer: B

Crux Inc. and Synapse Inc. are two competing businesses in the same city. They use the services of the same insurance company and have taken the same policy. Crux has a higher deductible than Synapse for the policy. Which of the following statements would be true in this case?

Crux Inc. and Synapse Inc. are two competing businesses in the same city. They use the services of the same insurance company and have taken the same policy. Crux has a higher deductible than Synapse for the policy. Which of the following statements would be true in this case? 




A. Both companies are not paying any premium.

B. Synapse pays a higher premium than Crux.

C. Both the companies pay the same premium.

D. Crux pays a higher premium than Synapse.



Answer: B

Which of the following is true of insuring the property of a business?

Which of the following is true of insuring the property of a business? 




A. All the value of a property has insurable value.

B. The value of land is the most commonly insured property.

C. The value of the historical significance of a building often cannot be insured.

D. The lower the deductible, the lower the policy premium payments will be.




Answer: C

Insurable value is defined as:

Insurable value is defined as: 




A. the amount of an asset for which a company will write an insurance policy.

B. the entire value of the property of a business.

C. the value of the historical significance of a building.

D. the amount of fees that a business has to pay to an insurance company.



Answer: A

Liability insurance protects a business against:

Liability insurance protects a business against: 




A. disgruntled former employees filing suites.

B. current employees setting up businesses which turn into competition for the organization.

C. losses incurred due to the death of a key employee.

D. claims from harm caused by inadvertent consequences of actions of the business or its employees.




Answer: D

Which of the following is true of insurance coverages?

Which of the following is true of insurance coverages? 




A. Vehicle liability insurance is mandated by the legislatures of all the states and territories of the United States.

B. Workers' compensation insurance is mandatory in all the states and territories of the United States.

C. Industries and businesses that have frequent seasonal layoffs pay lower amounts of unemployment premiums than do those that have stable employment.

D. A fixed amount of unemployment insurance is collected from all industries.



Answer: A

The most common mandatory insurance coverage includes:

The most common mandatory insurance coverage includes: 




A. liability for damages caused by vehicle accidents.

B. liability for loss of sales during recession.

C. travel cancellation liability.

D. damage at workplace caused by disgruntled employees.



Answer: A

Which of the following is true of insurance?

Which of the following is true of insurance? 




A. All risks are insurable.

B. An insurance company only charges a fee for large businesses with over 100 employees.

C. Insurance companies make profits by requiring a relatively large fee compared to the amount of loss that is possible.

D. The insurance company makes a profit by collecting premiums from many businesses for the same set of risks.



Answer: D

Which of the following is true of using internal audits to manage risk?

Which of the following is true of using internal audits to manage risk? 




A. Every small business owners conduct internal audits on their own.

B. Internal audits have a fixed structure decided by the government and all employers are required to comply.

C. The owner should provide sufficient authority to the auditor to ensure that he or she can accomplish the goals of the audit.

D. The owner should accept that the auditor has final authority when it comes to approving the audit plan.


Answer: C

A(n) _____ is a valuable process that can greatly help an employer with the issues of keeping risks at acceptable levels. It is strictly a management tool which is not provided to outsiders; it can be structured and conducted in any systematic manner the owner finds acceptable.

A(n) _____ is a valuable process that can greatly help an employer with the issues of keeping risks at acceptable levels. It is strictly a management tool which is not provided to outsiders; it can be structured and conducted in any systematic manner the owner finds acceptable. 




A. adverse possession

B. internal audit

C. external audit

D. internal control



Answer: B

Which of the following statements is true regarding the OSHA Act?

Which of the following statements is true regarding the OSHA Act? 




A. It covers employees in mining, transportation, and state and local governments.

B. OSHA offers consultation services to employers for a fee.

C. It requires businesses to report any accidents that result in a fatality or in the hospitalization of three or more employees within 24 hours.

D. OSHA-defined "low-hazard" industries are exempt from the record keeping requirements of the regulations.



Answer: D

Julia recently set up a factory that manufactures shoes. To ensure that her business complies with the basic OSHA regulations, which of the following steps should she take?

Julia recently set up a factory that manufactures shoes. To ensure that her business complies with the basic OSHA regulations, which of the following steps should she take? 




A. She must provide medical examinations for all her employees.

B. She must set up a system that reports any workplace accident within 72 hours.

C. She must request the Technical Assistance Program to conduct an inspection of her factory.

D. She must make her employees aware of all the EEOC rules that pertain to her business.


Answer: A

Which of the following is true of the ADA Technical Assistance Program?

Which of the following is true of the ADA Technical Assistance Program? 




A. It provides specific advice to a business concerning how to comply with the pertinent requirements.

B. It provides inspection of the workplace to determine compliance.

C. It provides affirmation services to all businesses.

D. It provides its services only to large businesses that have more than 500 employees.


Answer: A

Which of the following helps limit risk from violation of tax regulations?

Which of the following helps limit risk from violation of tax regulations? 




A. The owner should make payments to creditors by borrowing from tax money.

B. The owner should understate revenues and overstate deductible expenses.

C. The owner should take cash from the businesses before it is recorded as revenue.

D. The owner should hire an accountant and a lawyer who are expert in tax issues.



Answer: D

Which of the following should be undertaken in order to reduce a business's exposure to the risk of violating tax regulations?

Which of the following should be undertaken in order to reduce a business's exposure to the risk of violating tax regulations? 




A. Understate revenues and overstate deductible expenses

B. Reconcile the cash register tape to the cash register contents every day

C. Take cash from the businesses before it is recorded as revenue

D. Borrow from tax money in order to make payments to creditors


Answer: B

Which of the following should be included in an employee contract for a key employee?

Which of the following should be included in an employee contract for a key employee? 




A. Offer rewards for providing adequate termination notice

B. Specify that the employee must work at the organization for a minimum of two years

C. Detail the consequences of insubordination within the workplace

D. Encourage employees to poach clients from competitors




Answer: A

Axion Inc. is a small business started by Robert. As the business grew, he decided to implement new company policies that would ensure that his employees are not encouraged to set up competition against Axion. Which of the following techniques should he adopt to achieve this?

Axion Inc. is a small business started by Robert. As the business grew, he decided to implement new company policies that would ensure that his employees are not encouraged to set up competition against Axion. Which of the following techniques should he adopt to achieve this? 





A. Lay off employees who seem most likely to go into competition with Axion

B. Groom other candidates to replace the employees currently working at Axion

C. Cross train the employees to neutralize job specialization

D. Negotiate contracts with key employees that limit their freedom to go into competition





Answer: D

The most common form of employee collusion is:

The most common form of employee collusion is: 




A. selling trade secrets to competition.

B. theft of cash and inventory.

C. lying about work hours.

D. lying about absences.



Answer: B

Jacob often manipulates charges on his travel expenses to indicate higher amounts when he travels for the company he works for. Trent, the accounts manager, accepts fake bills and assists Jacob in deceiving the company. They split the profits made this way. This is an example of theft by:

Jacob often manipulates charges on his travel expenses to indicate higher amounts when he travels for the company he works for. Trent, the accounts manager, accepts fake bills and assists Jacob in deceiving the company. They split the profits made this way. This is an example of theft by: 




A. adverse possession.

B. employee collusion.

C. employee nonfeasance.

D. vendor fraud.



Answer: B

Martin, an employee at a boutique store, is required to handle store displays and also ensure that all the sales records tally at the end of each business day. However, he committed fraud by recording fake sales and then keeping the products to himself. Which of the following managerial concepts would have helped the store avoid this deception?

Martin, an employee at a boutique store, is required to handle store displays and also ensure that all the sales records tally at the end of each business day. However, he committed fraud by recording fake sales and then keeping the products to himself. Which of the following managerial concepts would have helped the store avoid this deception? 




A. Adverse possession

B. Separation of duties

C. Accession

D. Rule against perpetuities


Answer: B

Which of the following represents the problem with legal protection methods for intellectual property?

Which of the following represents the problem with legal protection methods for intellectual property? 




A. There is no governmental agency that will assist small business owners in maintaining their legal rights.

B. The cost of legal protection for intellectual property is so high that it is practically useless for a small business owner.

C. Legal protection methods for intellectual property are primarily "reserved" for large businesses.

D. Legal protection methods can only be offered for tangible property and not intellectual property.

E. Holding legal rights to intellectual property provides the owner solely with grounds to pursue lawsuits against infringement.


Answer: A

Which of the following helps manage risks to physical assets of a business?

Which of the following helps manage risks to physical assets of a business? 




A. Employees should be allowed easy access of physical assets to assist them with their work.

B. Inspections should be deemed necessary only when an item is reported missing.

C. A manager's signature must be required to confirm that an item has been returned to its proper storage.

D. Only clerical-level employees need to sign for removing items from storage.


Answer: C

Ted's business, situated near the Missouri River, was partially destroyed when the river overflowed after a deluge. Which of the following measures would've helped Ted minimize the effect of the flood from interrupting the operations of his business?

Ted's business, situated near the Missouri River, was partially destroyed when the river overflowed after a deluge. Which of the following measures would've helped Ted minimize the effect of the flood from interrupting the operations of his business? 



A. Creating provisions for subcontracting work

B. Developing an informal code of ethics for all employees to follow

C. Ensuring that all employees have easy access to all assets

D. Securing valuable assets from low-level employees



Answer: A

Which of the following steps would help decrease business risks?

Which of the following steps would help decrease business risks? 




A. Making specific plans for and arrangements to deal with foreseeable events

B. Assuming employees will follow basic workplace etiquettes without a written code of conduct

C. Ensuring employees have easy access to valuable assets

D. Having separate codes of conduct for employees at different tiers of the management



Answer: A

Restaurants, clothing retailers, barbers, and beauticians face relatively low risks of loss from nonpayment because:

Restaurants, clothing retailers, barbers, and beauticians face relatively low risks of loss from nonpayment because: 




A. most customers prefer making upfront payments for such products and services.

B. few people have credit cards which limits their ability to buy products.

C. they only offer credit to loyal customers who they are sure will repay the amount.

D. most of them provide credit only by accepting credit cards, which reduces the risk of nonpayment.




Answer: D

Which of the following is true of offering direct credit to customers?

Which of the following is true of offering direct credit to customers? 




A. It discredits the business's reputation.

B. It always decreases business risk.

C. It ensures on-time payment from customers.

D. It increases sales for the business.



Answer: D

The risk from customers primarily arises from:

The risk from customers primarily arises from: 




A. injuries suffered while on business property.

B. high prices of the products or services.

C. discontent with the customer service provided by the business.

D. not being provided credit to purchase products.

Answer: A

The Age Discrimination in Employment Act makes it illegal to:

The Age Discrimination in Employment Act makes it illegal to: 




A. discriminate against people who are older than 40 years of age.

B. employ minors at a workplace.

C. provide preferential treatment to employees over 50 years of age.

D. provide work opportunities to school students.



Answer: A

Ted, a 46-year-old IT professional, recently attended a job interview at Acton Org. He was not offered the job. Ted tried to find the reasons for his disqualification and the company could not provide a satisfactory explanation. He later learned that he was refused the job due to his age as the job position was offered to a 23-year-old who had just graduated from college. Which of the following laws protect Ted from such discriminations?

Ted, a 46-year-old IT professional, recently attended a job interview at Acton Org. He was not offered the job. Ted tried to find the reasons for his disqualification and the company could not provide a satisfactory explanation. He later learned that he was refused the job due to his age as the job position was offered to a 23-year-old who had just graduated from college. Which of the following laws protect Ted from such discriminations? 




A. ADA

B. OSHA laws

C. Sarbanes-Oxley Act

D. ADEA



Answer: D

The most common form of _____ is the pilfering of items of small value, such as office supplies and small hand tools, or actions such as making copies for their children to use at school or otherwise using company resources to make personal items.

The most common form of _____ is the pilfering of items of small value, such as office supplies and small hand tools, or actions such as making copies for their children to use at school or otherwise using company resources to make personal items. 




A. violation of governmental regulations

B. contract violation

C. property risk

D. employee theft



Answer: D
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