Entre2 ASK Practice Exam Part 3 (#26-37)

What do financial institutions often develop to be able to identify and offer the types of services that their customers want and need?

• Marketing process

• Promotional plan

• Traffic pattern

• Accurate profile

Answer explanation

Accurate profile. To be able to identify and offer the types of services that their customers want and need, financial institutions first need to know who their customers are. Developing an accurate profile of their customers will allow financial institutions to meet their customers' needs. For example, they need to know the common characteristics of their customers such as average age, income level, education, etc. Then, they can tailor their services to fit that profile. For example, a financial institution whose customers are senior citizens will offer different services than an institution whose customers are families with young children. A traffic pattern indicates the path that customers follow after entering the financial institution. A promotional plan is a framework for the promotional activities of a business. Marketing is the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.

At Catherine's company, every employee has his/her own permanent record that includes information regarding his/her hiring, evaluations, promotions, reprimands, and terminations. These files are known as __________ records.

• asset

• tax

• personnel

• inventory

Answer explanation

Personnel. Just as a student has a permanent record at school, an employee has a permanent record at his/her place of employment. These files are known as personnel records. Businesses keep employee information regarding hiring, evaluations, promotions, reprimands, and terminations. Tax records are documents about monies that individuals or businesses must pay to the government. An asset record is a document about something of value that the business owns. An inventory record is a document containing information related to the goods that a business has on hand or on order.

A business posting "authorized employees only" signs to keep customers away from certain areas is an example of a

• service policy.

• safety procedure.

• personnel policy.

• health procedure.

Answer explanation

Safety procedure. Many businesses develop safety policies and procedures to protect employees as well as customers. Posting an "authorized employees only" sign is an example of a safety procedure because it restricts access to certain areas that may be hazardous to untrained individuals. Only those employees who are authorized are allowed to enter those areas, which protects other employees and customers from potential harm. A business posting "authorized employees only" signs is not an example of a service policy, a personnel policy, or a health procedure.

Most businesses establish policies against racial or ethnic jokes and inappropriate physical contact on the job to create and maintain a(n)

• affirmative action classification.

• equal-opportunity employment status.

• diversified workforce.

• nonhostile work environment.

Answer explanation

Nonhostile work environment. Most businesses establish policies against racial or ethnic jokes and inappropriate physical contact on the job because these activities usually are considered to be harassment. If businesses ignore harassment, the work environment often becomes hostile because some employees may feel intimidated or threatened. Policies against inappropriate behavior help create and maintain a nonhostile work environment. Establishing policies against racial or ethnic jokes, and inappropriate physical contact on the job do not create and maintain an equal-opportunity employment status, a diversified work force, or an affirmative action classification.

Maurice, a coffee shop owner, is choosing a new vendor to supply his shop with napkins, cups, and other paper products. He has several vendors to choose from, and he's not sure which to pick. For the best results, Maurice should choose the supplier who

• has the best reputation in the community.

• has the lowest prices.

• has the most advanced technology.

• views relationships as partnerships.

Answer explanation

Views relationships as partnerships. Ideally, Maurice should be able to develop a partnership with his vendor. When he and the vendor are both working together toward the same goal, he's more likely to get the results he wants. Suppliers and vendors should be part of the team. Although it's nice to find a supplier with a low price, this shouldn't be at the top of Maurice's priority list. Always choosing the supplier with the lowest price can lead to suppliers who aren't invested in his shop's success and who only care about their bottom line. Choosing a supplier with advanced technology and a good reputation is also important, but the first priority for Maurice should be to choose a vendor who's willing to work together with his company to meet their specific goals.

Cookery Manufacturing orders heating elements from the Kenton Company to produce ovens. Recently, customers complained to Cookery that their ovens were not heating properly. Cookery researched the issue, and determined that the customers purchased ovens with defective heating elements. Kenton and Cookery took action by replacing the defective parts for the customers. In this situation, Cookery and Kenton maintained a positive working relationship by

• changing the production process.

• collecting information about a new product.

• working together to resolve a problem.

• developing a standards plan.

Answer explanation

Working together to resolve a problem. To maintain positive relationships, businesses and their vendors must work together to resolve problems. In the example, Cookery and Kenton worked together to replace defective heating elements supplied by Kenton that were used in ovens that Cookery produced and sold. The situation does not indicate that the two companies were collecting information about a new product, changing the production process, or developing a standards plan.

Why would the SCW Company conduct a break-even analysis?

• To ensure that the company is complying with regulations

• To compare its business's activities with its competitors' activities

• To evaluate its income in relation to its expenses

• To determine the optimal selling price for a good or service

Answer explanation

To determine the optimal selling price for a good or service. A break-even analysis is an assessment that identifies various levels of sales that a business needs to achieve to reach the break-even point at various prices. The break-even point is the level of sales at which revenues equal total costs. By examining the various sales levels in relation to their break-even points, the business can determine the optimal selling price for a particular good or service. When a business obtains and analyzes information about its competitors, it is conducting a competitive analysis. A business reviews its income statement to evaluate its income in relation to its expenses. The business obtains information from the government to ensure that it is complying with regulations.

Businesses use budgets to manage their

• discount policies.

• accounting methods.

• income and expenses

• production functions.

Answer explanation

Income and expenses. A budget is an estimation of income and expenses. Businesses use budgets as a tool to manage their money—the money they earn (income) and the money they spend (expenses). An accounting method (e.g., accrual) is the way in which a business records and tracks its finances. The budget may affect a business's discount policies and production functions, but these factors are not the primary reasons for a business to develop a budget.

Before starting their business ventures, which of the following would entrepreneurs recognize first:

• Regulations

• Associations

• Reductions

• Opportunities

Answer explanation

Opportunities. An opportunity is a circumstance that presents itself as a favorable means to meet an objective. Before entrepreneurs think about opening their businesses, the first step they take is to recognize or identify that the circumstance exists to turn it into a business. Regulations are rules or laws that someone must follow. Regulations in various businesses are recognized after the opportunity is established. Associations, such as trade associations, are groups of people in the same industry or geographic area who form a society to solve their common problems. Reductions refer to the elimination or cutting back of something, such as programs or monies.

Which of the following is a factor that affects the final cost of a product to a business buying goods for resale:

• Markdowns

• Discounts

• Shrinkage

• Commissions

Answer explanation

Discounts. Discounts are often given to buyers as an incentive to pay early, to buy early, or to purchase larger quantities. A discount reduces the unit cost of a given item. Inventory shrinkage is losses of inventory from such causes as shoplifting, employee theft, breakage, misplaced goods, or poor record keeping. Commissions are a form of income for salespeople calculated as a percentage of their sales. Markdowns are reductions in the selling price of goods, not in the purchase price.