“1) Entrepreneurial education:
a. more courses are being offered in entrepreneurship
b. has become extremely popular
c. universities are not able to meet the demand
d. all of the above

2) Which of the following is not a common characteristic of
entrepreneurs?
a. Desire for responsibility
b. High energy level
c. Preference for moderate risk
d. Business plan expertise

3) More businesses fail because of ________ than for any
other reason.
a. poor choice of location
b. incompetent management
c. insufficient capital
d. theft by employees

4) Earl was a financial consultant who liked to work with
his hands, especially in making furni-
ture. He quit his rat race financial job to start a small custom
furniture business. After strug-
gling for several years, he closed it and went back to
financial services. Earl discovered that
there was a big difference between making furniture for
himself and running a customer furni-
ture manufacturing business. Tom s business failed because
of:
a. an inability to access start-up capital
b. poor financial control
c. his lack of experience
d. uncontrolled growth

5) The key ingredient-the crucial element-to avoiding the
failure of a new business is:
a. technical expertise regarding the product
b. the business plan
c. knowing the business
d. differentiating the business and product from the
competition

Unit 1 Examination
41
BAM 418 – Small Business Management

6) A knowledge based business economy favors small business
because:
a. information technology is driving cost of managing and
transmitting knowledge lower
b. small businesses are more successful
c. the cost of managing and transmitting knowledge is very low
d. Both A and C

7) Copreneurs are:
a. business magazines targeted towards entrepreneurs
b. entrepreneurial couples who work together as co-owners of
their business
c. personality traits of entrepreneurs
d. none of the above

8) The most important change due to expansion occurs in:
a. organizational structure
b. personnel assignments
c. managerial expertise
d. inventory and financial control procedures

9) Customer service, convenience, speed and quality are all
examples of:
a. learning to manage people effectively
b. generating more revenue
c. setting your business apart from others
d. small businesses

10) How is the strategic planning process for small
companies different from that for large companies?
a. It should be conducted by top management and provided to
lower management.
b. The process should be informal and not overly structured
a shirtsleeve approach.
c. The planning horizon should cover at least five years
into the future.
d. The process should begin with setting objectives and
conclude with competitive analysis.

16) A partnership agreement sets how the partners will be
compensated. Normally,
a. both general and limited partners are permitted salaries,
but all silent or dormant partners
are compensated only by sharing in the profits.
b. partners are not entitled to salaries or wages, but are
compensated by a share of the profits
of the business.
c. while the agreement establishes payout schedules, it does
not spell out what constitutes
profit.
d. the general partner s salary is set at 2 times the
salaries of the limited partners.

20) Shares the corporation itself owns are called:
a. preferred stock
b. common stock
c. treasury stock
d. bonds
21) In franchising, the reputation of the franchiser is
dependent on:
a. the quality of the goods and services provided
b. the brand name recognition and appeal
c. their locations and popularity with the local customer
d. the rate of growth and the number of national outlets1) Entrepreneurial education:a. more courses are being offered in entrepreneurshipb. has become extremely popularc. universities are not able to meet the demandd. all of the above2) Which of the following is not a common characteristic of
entrepreneurs?a. Desire for responsibilityb. High energy levelc. Preference for moderate riskd. Business plan expertise3) More businesses fail because of ________ than for any
other reason.a. poor choice of locationb. incompetent managementc. insufficient capitald. theft by employees4) Earl was a financial consultant who liked to work with
his hands, especially in making furni-ture. He quit his rat race financial job to start a small custom
furniture business. After strug-gling for several years, he closed it and went back to
financial services. Earl discovered thatthere was a big difference between making furniture for
himself and running a customer furni-ture manufacturing business. Tom s business failed because
of:a. an inability to access start-up capitalb. poor financial controlc. his lack of experienced. uncontrolled growth5) The key ingredient-the crucial element-to avoiding the
failure of a new business is:a. technical expertise regarding the productb. the business planc. knowing the businessd. differentiating the business and product from the
competitionUnit 1 Examination41BAM 418 – Small Business Management6) A knowledge based business economy favors small business
because:a. information technology is driving cost of managing and
transmitting knowledge lowerb. small businesses are more successfulc. the cost of managing and transmitting knowledge is very lowd. Both A and C7) Copreneurs are:a. business magazines targeted towards entrepreneursb. entrepreneurial couples who work together as co-owners of
their businessc. personality traits of entrepreneursd. none of the above8) The most important change due to expansion occurs in:a. organizational structureb. personnel assignmentsc. managerial expertised. inventory and financial control procedures9) Customer service, convenience, speed and quality are all
examples of:a. learning to manage people effectivelyb. generating more revenuec. setting your business apart from othersd. small businesses10) How is the strategic planning process for small
companies different from that for large companies?a. It should be conducted by top management and provided to
lower management.b. The process should be informal and not overly structured
a shirtsleeve approach. c. The planning horizon should cover at least five years
into the future.d. The process should begin with setting objectives and
conclude with competitive analysis.16) A partnership agreement sets how the partners will be
compensated. Normally,a. both general and limited partners are permitted salaries,
but all silent or dormant partnersare compensated only by sharing in the profits.b. partners are not entitled to salaries or wages, but are
compensated by a share of the profitsof the business.c. while the agreement establishes payout schedules, it does
not spell out what constitutesprofit.d. the general partner s salary is set at 2 times the
salaries of the limited partners.20) Shares the corporation itself owns are called:a. preferred stockb. common stockc. treasury stockd. bonds21) In franchising, the reputation of the franchiser is
dependent on:a. the quality of the goods and services providedb. the brand name recognition and appealc. their locations and popularity with the local customerd. the rate of growth and the number of national outlets”