b) The exchange of goods and services in the market
c) The study of government laws
d) The process of managing a company
Answer:
b) The exchange of goods and services in the market
Explanation:
Commerce refers to the conduct of trade among economic agents. It involves the buying and selling of goods and services, especially on a large scale.
2. What is the 'Stock Market'?
a) A place to buy groceries
b) A market for selling art
c) A platform where shares of public companies are traded
d) A website for online shopping
Answer:
c) A platform where shares of public companies are traded
Explanation:
The stock market is a collection of markets and exchanges where regular activities of buying, selling, and issuance of shares of publicly-held companies occur.
3. What is 'Marketing'?
a) Keeping accounts of a business
b) Producing goods and services
c) Promoting and selling products or services
d) Saving money in a bank
Answer:
c) Promoting and selling products or services
Explanation:
Marketing is the action or business of promoting and selling products or services, including market research and advertising.
4. What is 'E-commerce'?
a) Writing emails
b) Selling goods in a physical store
c) Buying and selling goods or services using the internet
d) Drawing up business contracts
Answer:
c) Buying and selling goods or services using the internet
Explanation:
E-commerce refers to the buying and selling of goods or services using the internet, and the transfer of money and data to execute these transactions.
5. What is a 'Business Plan'?
a) A diary entry
b) A plan for a day's work
c) A document that outlines the future objectives and strategies for a business
d) A shopping list
Answer:
c) A document that outlines the future objectives and strategies for a business
Explanation:
A business plan is a written document describing a company's core business activities, objectives, and how it plans to achieve its goals.
6. What is 'Accounting'?
a) The process of hiring people
b) The process of recording financial transactions
c) Making advertisements
d) Selling stocks
Answer:
b) The process of recording financial transactions
Explanation:
Accounting is the process of recording, summarizing, analyzing, and reporting financial transactions of a business to oversight agencies, regulators, and the IRS.
7. What is 'Customer Service'?
a) Making products
b) The assistance and advice provided by a company to those people who buy or use its products or services
c) Buying stocks
d) Drawing advertisements
Answer:
b) The assistance and advice provided by a company to those people who buy or use its products or services
Explanation:
Customer service is the direct one-on-one interaction between a consumer making a purchase and a representative of the company that is selling it.
8. What is 'Human Resources'?
a) Natural resources like water and oil
b) The department of a business that deals with finding, screening, recruiting, and training job applicants
c) Resources used to make machines
d) The money a company uses
Answer:
b) The department of a business that deals with finding, screening, recruiting, and training job applicants
Explanation:
Human Resources (HR) is the division of a business that is charged with finding, screening, recruiting, and training job applicants, and administering employee-benefit programs.
9. What is 'Inflation'?
a) A type of marketing
b) The reduction of something
c) The act of inflating something
d) A general increase in prices and fall in the purchasing value of money
Answer:
d) A general increase in prices and fall in the purchasing value of money
Explanation:
Inflation is the rate at which the general level of prices for goods and services is rising, and, subsequently, the purchasing power of currency is falling.
10. What is a 'Budget'?
a) A plan for saving money
b) A digital form of currency
c) A plan for spending and saving money
d) A request for a loan
Answer:
c) A plan for spending and saving money
Explanation:
A budget is an estimation of revenue and expenses over a specified future period of time and is usually compiled and re-evaluated on a periodic basis.
11. What is 'Supply and Demand'?
a) A type of business
b) The amount of a commodity, product, or service available and the desire of buyers for it
c) A method of advertising
d) A banking term
Answer:
b) The amount of a commodity, product, or service available and the desire of buyers for it
Explanation:
Supply and demand is an economic model of price determination in a market. It postulates that, holding all else equal, in a competitive market, the unit price for a particular good will vary until it settles at a point where the quantity demanded will equal the quantity supplied.
12. What is 'Bankruptcy'?
a) Forgetting to pay a bill
b) The legal process for businesses or individuals who are unable to repay outstanding debts
c) The process of starting a new business
d) Taking a loan from a bank
Answer:
b) The legal process for businesses or individuals who are unable to repay outstanding debts
Explanation:
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor.
13. What is a 'Franchise'?
a) A government organization
b) A type of insurance
c) A license that allows an individual or group to carry out commercial activities using a company's brand
d) A type of business plan
Answer:
c) A license that allows an individual or group to carry out commercial activities using a company's brand
Explanation:
A franchise is a type of license that a party (franchisee) acquires to allow them to have access to a business's proprietary knowledge, processes, and trademarks in order to allow the party to sell a product or provide a service under the business's name.
14. What is 'Corporate Social Responsibility'?
a) A company's initiative to take responsibility for its effects on environmental and social well-being
b) A plan for a corporation's future
c) A corporation's responsibility to its employees
d) A social event hosted by a corporation
Answer:
a) A company's initiative to take responsibility for its effects on environmental and social well-being
Explanation:
Corporate Social Responsibility (CSR) is a type of international private business self-regulation that aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in or supporting volunteering or ethically-oriented practices.
15. What is 'Gross Profit'?
a) The total sales of a company
b) The total loss of a company
c) The profit a company makes after paying its taxes
d) The profit a company makes after deducting the costs associated with making and selling its products
Answer:
d) The profit a company makes after deducting the costs associated with making and selling its products
Explanation:
Gross profit is the profit a company makes after deducting the costs associated with making and selling its products, or the costs associated with providing its services. It is a company's residual profit after selling a product or service and deducting the costs associated with its production and sale.
16. What is a 'Balance Sheet'?
a) A list of a company's debts
b) A summary of a company's financial transactions
c) A financial statement showing a company's assets, liabilities, and equity
d) A record of a company's sales and purchases
Answer:
c) A financial statement showing a company's assets, liabilities, and equity
Explanation:
A balance sheet is a financial statement that provides a snapshot of what a company owns and owes, as well as the amount invested by shareholders. It includes the company's assets, liabilities, and shareholders' equity.
17. What is 'Retail' in commerce?
a) The sale of goods in bulk
b) The sale of services only
c) The sale of goods to the public in relatively small quantities
d) Online selling only
Answer:
c) The sale of goods to the public in relatively small quantities
Explanation:
Retail involves the selling of goods to consumers in small quantities for personal use, not for resale. Retail transactions are typically done in stores, online, or through other channels.
18. What is 'Wholesale' in commerce?
a) The sale of services in large quantities
b) The sale of goods to the public in small quantities
c) The sale of goods in large quantities, typically to be resold by retailers
d) A type of discount offered to customers
Answer:
c) The sale of goods in large quantities, typically to be resold by retailers
Explanation:
Wholesale refers to the selling of goods in large quantities at lower prices, typically to retailers or other businesses, who then sell them to the end consumers.
19. What does 'B2C' stand for?
a) Business to Consumer
b) Business to Company
c) Buy to Create
d) Business to Commerce
Answer:
a) Business to Consumer
Explanation:
B2C stands for Business to Consumer. It refers to the process of selling products and services directly between a business and consumers who are the end-users of its products or services.
20. What is 'Inventory' in business?
a) The total amount of money a business has
b) The furniture and fixtures in a business
c) A complete list of items such as property, goods in stock, or the contents of a building
d) The employees working in a business
Answer:
c) A complete list of items such as property, goods in stock, or the contents of a building
Explanation:
Inventory in business refers to the goods available for sale and raw materials used to produce goods available for sale. It represents one of the most important assets of a business.
21. What is 'Digital Marketing'?
a) Selling digital products only
b) Marketing using digital channels, platforms, and technologies
c) Marketing through television and radio
d) The use of digital calculators in marketing
Answer:
b) Marketing using digital channels, platforms, and technologies
Explanation:
Digital marketing is the component of marketing that utilizes the internet and online-based digital technologies such as desktop computers, mobile phones, and other digital media and platforms to promote products and services.
22. What is 'Gross Margin'?
a) The total sales of a company
b) The difference between revenue and cost of goods sold
c) The total profit after deducting all expenses
d) The margin of error in financial statements
Answer:
b) The difference between revenue and cost of goods sold
Explanation:
Gross margin is a company's net sales revenue minus its cost of goods sold (COGS). It is the amount the company retains after incurring the direct costs associated with producing the goods and services it sells.
23. What is a 'Business Model'?
a) A type of business organization
b) A plan for the successful operation of a business
c) A model of a business building
d) A statistical model in business analysis
Answer:
b) A plan for the successful operation of a business
Explanation:
A business model describes the rationale of how an organization creates, delivers, and captures value in economic, social, cultural, or other contexts. It is a plan for the operation of a business, identifying revenue sources, customer base, products, and details of financing.
24. What is 'Monopoly' in commerce?
a) A popular board game
b) A market structure characterized by a single seller, selling a unique product in the market
c) A large corporation
d) The practice of having multiple suppliers
Answer:
b) A market structure characterized by a single seller, selling a unique product in the market
Explanation:
In commerce, a monopoly exists when a specific individual or enterprise is the only supplier of a particular commodity. This contrasts with a monopsony which relates to a single entity's control of a market to purchase a good or service.
25. What is 'Corporate Governance'?
a) The process of electing a CEO
b) The laws that regulate corporate taxation
c) The system of rules, practices, and processes by which a company is directed and controlled
d) The structure of a company's executive board
Answer:
c) The system of rules, practices, and processes by which a company is directed and controlled
Explanation:
Corporate governance involves balancing the interests of a company's many stakeholders, such as shareholders, senior management executives, customers, suppliers, financiers, government, and the community.
26. What is 'Net Profit'?
a) The total revenue of a business
b) The profit after deducting all operating expenses, interest, and taxes
c) The profit before tax deductions
d) The total sales made in a year
Answer:
b) The profit after deducting all operating expenses, interest, and taxes
Explanation:
Net profit, also known as net income or net earnings, is a measure of the profitability of a venture after accounting for all costs and taxes. It is the actual profit after working expenses not included in the calculation of gross profit have been paid.
27. What are 'Assets' in business?
a) The debts a company owes
b) The employees of a company
c) Resources owned by a business that have economic value
d) The total sales of a business
Answer:
c) Resources owned by a business that have economic value
Explanation:
In business, assets are resources owned by the company which have economic value. Assets can be anything from physical property, like real estate and machinery, to intangible items, like patents and trademarks.
28. What is 'Brand Equity'?
a) The total value of a company's stock
b) The value associated with a brand’s name and reputation
c) The equity raised through brand promotion
d) The annual revenue generated by a brand
Answer:
b) The value associated with a brand’s name and reputation
Explanation:
Brand equity refers to the value a brand adds to a product or service. This value is based on the perception and experiences of the customer, and it can influence their decision to choose one product over another.
29. What is 'Corporate Social Responsibility' (CSR)?
a) A strategy for global expansion
b) A business model for maximizing profits
c) A company's initiative to assess and take responsibility for its effects on environmental and social wellbeing
d) A financial strategy for reducing tax liabilities
Answer:
c) A company's initiative to assess and take responsibility for its effects on environmental and social wellbeing
Explanation:
Corporate Social Responsibility (CSR) is a self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public. It often involves sustainable environmental practices and ethical decision-making.
30. What is 'Economic Growth'?
a) The increase in the value of stocks
b) The increase in the amount of goods and services produced by an economy
c) The growth of a company's profits
d) The opening of new stores or branches
Answer:
b) The increase in the amount of goods and services produced by an economy
Explanation:
Economic growth is an increase in the production of goods and services in an economy. Increases in capital goods, labor force, technology, and human capital can all contribute to economic growth.
31. What is 'Liquidity' in finance?
a) The profitability of a company
b) The solvency of a company
c) The ease with which an asset can be converted into cash
d) The ability of a company to meet its long-term debts
Answer:
c) The ease with which an asset can be converted into cash
Explanation:
Liquidity refers to how quickly and easily an asset can be converted into cash without significantly affecting its price. Cash is considered the most liquid asset.
32. What is 'Market Research'?
a) The process of researching new markets to enter
b) The practice of analyzing the stock market for investment opportunities
c) The systematic gathering, recording, and analyzing of data about customers, competitors, and the market
d) The process of setting market prices for products
Answer:
c) The systematic gathering, recording, and analyzing of data about customers, competitors, and the market
Explanation:
Market research is the process of gathering, analyzing, and interpreting information about a market, including information about the target market, customers, and competitors. It's a key factor in maintaining competitiveness over competitors.
33. What is a 'Monopoly' in the market?
a) A market condition where many sellers are present
b) A market condition where there is only one seller in the market
c) A large retail store
d) A popular board game
Answer:
b) A market condition where there is only one seller in the market
Explanation:
A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity. This contrasts with a competitive market, where there are many sellers.
34. What is 'Outsourcing'?
a) The practice of selling products outside the country
b) The practice of buying all supplies from a single source
c) The practice of hiring another company to perform services that are typically done within a company
d) The process of moving the business to a new location
Answer:
c) The practice of hiring another company to perform services that are typically done within a company
Explanation:
Outsourcing is a business practice in which services or job functions are farmed out to a third party. Companies may outsource tasks such as payroll processing, accounting, distribution, and many other important functions.
35. What is 'Inflation'?
a) The process of inflating a balloon
b) The increase in prices of goods and services over time
c) The increase in production of goods
d) The increase in a company's sales
Answer:
b) The increase in prices of goods and services over time
Explanation:
Inflation is the rate at which the general level of prices for goods and services is rising, and, subsequently, the purchasing power of currency is falling. Central banks attempt to limit inflation to avoid deflation and keep the economy running smoothly.
36. What is 'Supply Chain Management'?
a) The management of a company's internal supplies
b) The process of buying and storing supplies
c) The coordination of production, inventory, location, and transportation among participants in a supply chain
d) Managing the supply and demand of a product
Answer:
c) The coordination of production, inventory, location, and transportation among participants in a supply chain
Explanation:
Supply chain management involves managing the flow of goods and services, including all processes that transform raw materials into final products. It involves the active streamlining of a business's supply-side activities to maximize customer value and gain a competitive advantage in the marketplace.
37. What is a 'Budget'?
a) A plan for spending and saving money
b) A digital form of currency
c) A plan for a day's work
d) A request for a loan
Answer:
a) A plan for spending and saving money
Explanation:
A budget is an estimation of revenue and expenses over a specified future period of time and is usually compiled and re-evaluated on a periodic basis. Budgets can be made for a variety of individual or business needs or just about anything else that makes and spends money.
38. What is 'Digital Marketing'?
a) Marketing through television and radio
b) Selling digital products only
c) Marketing using digital channels, platforms, and technologies
d) The use of digital calculators in marketing
Answer:
c) Marketing using digital channels, platforms, and technologies
Explanation:
Digital marketing encompasses all marketing efforts that use an electronic device or the internet. Businesses leverage digital channels such as search engines, social media, email, and other websites to connect with current and prospective customers.
39. What is 'Gross Margin'?
a) The total sales of a company
b) The difference between revenue and cost of goods sold
c) The total profit after deducting all expenses
d) The margin of error in financial statements
Answer:
b) The difference between revenue and cost of goods sold
Explanation:
Gross margin is the difference between revenue and cost of goods sold (COGS) divided by revenue. Gross margin is expressed as a percentage. Generally, it is calculated as the selling price of an item, less the cost of goods sold.
40. What is a 'Business Model'?
a) A type of business organization
b) A plan for the successful operation of a business
c) A model of a business building
d) A statistical model in business analysis
Answer:
b) A plan for the successful operation of a business
Explanation:
A business model is a plan for the successful operation of a business, identifying sources of revenue, the intended customer base, products, and details of financing. It describes the rationale of how an organization creates, delivers, and captures value.
41. What is 'Net Income'?
a) The total amount of money a company earns
b) The amount of money a company makes after paying all its costs and expenses
c) The income generated from investments
d) The income received before any deductions
Answer:
b) The amount of money a company makes after paying all its costs and expenses
Explanation:
Net income, also known as net profit, is the amount of money a company makes after deducting all its operating expenses, interest, taxes, and other expenses from its total revenue. It's a key indicator of a company's financial health.
42. What is 'Economic Recession'?
a) A period of temporary economic decline
b) A steady growth in the economy
c) A period of high inflation
d) A long-term increase in employment
Answer:
a) A period of temporary economic decline
Explanation:
An economic recession is a significant decline in economic activity spread across the economy, lasting more than a few months. It is visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.
43. What is 'Debt' in finance?
a) The amount of money one has in savings
b) Money owed by one party to another
c) The interest earned on savings
d) Money lent to a company by shareholders
Answer:
b) Money owed by one party to another
Explanation:
In finance, debt is an obligation that requires one party, the debtor, to pay money or other agreed-upon value to another party, the creditor. Debt is a deferred payment, or series of payments, which differentiates it from an immediate purchase.
44. What is 'Market Share'?
a) The total number of shares a company has issued
b) The percentage of total sales in an industry generated by a particular company
c) The total value of a company's stocks
d) The share of profits distributed to shareholders
Answer:
b) The percentage of total sales in an industry generated by a particular company
Explanation:
Market share refers to the portion or percentage of a market earned by a company or an organization. It is calculated by taking the company’s sales over the period and dividing it by the total sales of the industry over the same period.
45. What is 'Business Ethics'?
a) The rules for setting up a new business
b) The study of proper business policies and practices
c) The legal regulations that businesses must follow
d) The financial management of a company
Answer:
b) The study of proper business policies and practices
Explanation:
Business ethics is the study of appropriate business policies and practices regarding potentially controversial subjects including corporate governance, insider trading, bribery, discrimination, corporate social responsibility, and fiduciary responsibilities.
46. What is a 'Credit Score'?
a) A score that measures a company's profitability
b) A numerical expression based on a level analysis of a person's credit files
c) A score assigned to a business based on its sales
d) The total number of credit transactions a business has completed
Answer:
b) A numerical expression based on a level analysis of a person's credit files
Explanation:
A credit score is a numerical expression based on a level analysis of a person's credit files, to represent the creditworthiness of an individual. It is primarily based on a credit report, sourced from credit bureaus.
47. What is 'Diversification' in business?
a) Focusing on a single product line
b) The action of making or becoming more diverse or varied
c) Reducing the number of employees
d) Expanding business operations into a single market
Answer:
b) The action of making or becoming more diverse or varied
Explanation:
In business, diversification is the strategy of entering into new markets or industry sectors or creating new product lines. The idea is to broaden the scope of the business to reduce risks and capitalize on new opportunities.
48. What is 'Fixed Cost' in business?
a) A cost that changes with the level of production
b) A one-time expense
c) A cost that does not change with an increase or decrease in the amount of goods or services produced
d) The cost of purchasing fixed assets
Answer:
c) A cost that does not change with an increase or decrease in the amount of goods or services produced
Explanation:
Fixed costs are business expenses that are not dependent on the level of goods or services produced by the business. Examples include rent, insurance, salaries or loan payments.
49. What is 'Franchising'?
a) The process of selling a business
b) A method of doing business where a franchisor licenses trademarks and methods to a franchisee
c) The act of buying stocks in different companies
d) A type of business partnership
Answer:
b) A method of doing business where a franchisor licenses trademarks and methods to a franchisee
Explanation:
Franchising is a business model in which a business owner (franchisor) licenses its operations—along with its products, branding, and knowledge—in exchange for a franchise fee to another party (franchisee).
50. What is 'Gross Revenue'?
a) The total profit a company makes after expenses
b) The total amount of money a company earns before any expenses are subtracted
c) The revenue generated from sales alone
d) The total amount of capital raised by a company
Answer:
b) The total amount of money a company earns before any expenses are subtracted
Explanation:
Gross revenue, also known as gross sales, refers to the total sales of a company, unadjusted for the costs associated with generating those sales. It's a measure of a company's total income from sales before subtracting any expenses.
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