SMALL BUSINESS ADMINISTRATION
EXAM 1 QUESTIONS AND ANSWERS
/. More businesses are started by people ages - Answer-✅25-34
/.Minorities cite what as the primary barrier to entrepreneurship? - Answer-
✅Discrimination
/.Most of today's immigrant entrepreneurs come to the US with very few resources but a
lot of what? - Answer-✅Dedication and Desire
/.The most major threat to family businesses is - Answer-✅Management Succession
/.To avoid failure you must - Answer-✅Understand how to make and read financial
statements, manage others, and differentiate products from the competition.
/.Small businesses employ fewer than - Answer-✅100 people
/.Small businesses make up how much of all US businesses? - Answer-✅99.7%
/.Small businesses aggregation of factors that sets it apart from its competitors is -
Answer-✅A company's competitive advantage
/.The question "What business am I in?" answers a company's - Answer-✅mission
statement
/.Strengths and weaknesses are a part of a company's - Answer-✅Internal business
environment
/.Purchasing rival companies products, taking them apart, and analyzing them is called -
Answer-✅Benchmarking
/.Cost leadership has several inherent dangers such as - Answer-✅over focus on cost
to elimination of other strategies
/.What strategy selects one or more market segments, identifies customers needs, and
responds to satisfy? - Answer-✅Focus Strategy
, /.Strategic management for small businesses uses - Answer-✅Short planning,
encouragement of employee cooperation, informal structure, and allowing of flexibility.
/.The most critical disadvantage of sole proprietorship is - Answer-✅Unlimited personal
liability
/.If a partnership is formed without an agreement, the partnership is automatically
subjected to what - Answer-✅The Uniform Partnership Act
/.Which of the following is true about the content of a standard partnership agreement? -
Answer-✅It specifies how the partnership may be dissolved and how assets will be
divided
/.A corporation receives its authority to operate from - Answer-✅the State
/.An S-Corp form of ownership overcomes which disadvantage of the regular C-Corp
form of ownership? - Answer-✅the Double taxation issue
/.A limited liability company differs from an S-Corp in - Answer-✅that it is not subject to
the same amount of restrictions
/.One advantage of buying an existing business is - Answer-✅equipment is installed
and production capacity is known
/.The process of gathering information about the company, valuing the company, and
performing a detailed review of all records, agreements and compliance is called -
Answer-✅Due Dilligence
/.Which of the following statements concerning the financing of a business purchase is
true? - Answer-✅The buyer should be able to make payments on the loans out of the
company's cash flow
/.The valuation method that is commonly used but tends to oversimplify the valuation
process is called - Answer-✅the balance sheet method
/.At the broadest level of the location decision, entrepreneurs usually identify regions of
the country that - Answer-✅are experiencing substantial population growth
/.When selecting a city, an entrepreneur will need to factor into her decision - Answer-
✅the population density, growth trends, the nature of the competition, and the cost of
the location.
/.The area from which a small business expects to draw customers over a reasonable
time span is - Answer-✅the trading area
EXAM 1 QUESTIONS AND ANSWERS
/. More businesses are started by people ages - Answer-✅25-34
/.Minorities cite what as the primary barrier to entrepreneurship? - Answer-
✅Discrimination
/.Most of today's immigrant entrepreneurs come to the US with very few resources but a
lot of what? - Answer-✅Dedication and Desire
/.The most major threat to family businesses is - Answer-✅Management Succession
/.To avoid failure you must - Answer-✅Understand how to make and read financial
statements, manage others, and differentiate products from the competition.
/.Small businesses employ fewer than - Answer-✅100 people
/.Small businesses make up how much of all US businesses? - Answer-✅99.7%
/.Small businesses aggregation of factors that sets it apart from its competitors is -
Answer-✅A company's competitive advantage
/.The question "What business am I in?" answers a company's - Answer-✅mission
statement
/.Strengths and weaknesses are a part of a company's - Answer-✅Internal business
environment
/.Purchasing rival companies products, taking them apart, and analyzing them is called -
Answer-✅Benchmarking
/.Cost leadership has several inherent dangers such as - Answer-✅over focus on cost
to elimination of other strategies
/.What strategy selects one or more market segments, identifies customers needs, and
responds to satisfy? - Answer-✅Focus Strategy
, /.Strategic management for small businesses uses - Answer-✅Short planning,
encouragement of employee cooperation, informal structure, and allowing of flexibility.
/.The most critical disadvantage of sole proprietorship is - Answer-✅Unlimited personal
liability
/.If a partnership is formed without an agreement, the partnership is automatically
subjected to what - Answer-✅The Uniform Partnership Act
/.Which of the following is true about the content of a standard partnership agreement? -
Answer-✅It specifies how the partnership may be dissolved and how assets will be
divided
/.A corporation receives its authority to operate from - Answer-✅the State
/.An S-Corp form of ownership overcomes which disadvantage of the regular C-Corp
form of ownership? - Answer-✅the Double taxation issue
/.A limited liability company differs from an S-Corp in - Answer-✅that it is not subject to
the same amount of restrictions
/.One advantage of buying an existing business is - Answer-✅equipment is installed
and production capacity is known
/.The process of gathering information about the company, valuing the company, and
performing a detailed review of all records, agreements and compliance is called -
Answer-✅Due Dilligence
/.Which of the following statements concerning the financing of a business purchase is
true? - Answer-✅The buyer should be able to make payments on the loans out of the
company's cash flow
/.The valuation method that is commonly used but tends to oversimplify the valuation
process is called - Answer-✅the balance sheet method
/.At the broadest level of the location decision, entrepreneurs usually identify regions of
the country that - Answer-✅are experiencing substantial population growth
/.When selecting a city, an entrepreneur will need to factor into her decision - Answer-
✅the population density, growth trends, the nature of the competition, and the cost of
the location.
/.The area from which a small business expects to draw customers over a reasonable
time span is - Answer-✅the trading area
