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This Document Contains Chapters 1 to 3 BPI001 Business Basics Multiple Choice Questions 1. What occurs when businesses sell products or services for more than they cost to produce? A. Expense B. Profit C. Loss D. Revenue Answer: B. Profit Rationale: This is the definition of profit. 2. What refers to the amount earned resulting from the delivery or manufacture of a product or from the rendering of a service? A. Expense B. Profit C. Loss D. Revenue Answer: D. Revenue Rationale: This is the definition of revenue. 3. Which of the following is not a type of business? A. Sole partnership B. Partnership C. Limited partnership D. Corporation Answer: A. Sole partnership Rationale: There is no such thing as a sole partnership, there is a sole proprietorship. 4. Which form of business recommends a legal agreement between two or more business partners that outlines core business issues? A. Sole proprietorship B. Partnership C. Corporation D. LLC Answer: B. Partnership Rationale: A partnership recommends a partnership agreement. 5. What is the fundamental difference found in a limited partnership? A. Only one partner is responsible for all of the partnership's losses B. Both partners are responsible for all of the partnership's losses C. Both partners are protected from being responsible for all of the partnership's losses D. None of the above Answer: C. Both partners are protected from being responsible for all of the partnership's losses Rationale: The limited partnership is like a general partnership except the law protects the limited partner from being responsible for all of the partnership's losses. 6. Partnership agreements typically include all of the following, except: A. Expectations for sharing profits and losses B. Partner's salary requirements C. Methods for conflict resolution D. Shareholder's expectations for a successful business Answer: D. Shareholder's expectations for a successful business Rationale: There are not any shareholders in a partnership. 7. What is a hybrid entity that has the legal protections of a corporation and the ability to be taxed (one time) as a partnership? A. Limited partnership B. Limited liability corporation C. Limited proprietorship D. Limited shareholder Answer: B. Limited liability corporation Rationale: This is the definition of LLC. 8. What analyzes the transactional information of the business so the owners and investors can make sound economic decisions? A. Accounting B. Bookkeeping C. Financial Accounting D. Managerial Accounting Answer: A. Accounting Rationale: This is the definition of accounting. 9. What involves preparing financial reports that provide information about the business's performance to external parties such as investors, creditors, and tax authorities? A. Accounting B. Bookkeeping C. Financial accounting D. Managerial accounting Answer: C. Financial accounting Rationale: This is the definition of financial accounting. 10. What involves analyzing business operations for internal decision making and does not have to follow any rules issued by standard-setting bodies such as GAAP? A. Accounting B. Bookkeeping C. Financial accounting D. Managerial accounting Answer: D. Managerial accounting Rationale: This is the definition of managerial accounting. 11. What describes the basic transaction data such as its date, purpose, and amount and includes cash receipts, canceled checks, invoices, customer refunds, employee time sheet, etc? A. Balance sheet B. Source document C. Transaction D. Financial statement Answer: B. Source document Rationale: This is the definition of source document. 12. Which of the following financial statements gives an accounting picture of property owned by a company and of claims against the property on a specific date? A. Balance sheet B. Statement of owner's equity C. Statement of cash flows D. Income statement Answer: A. Balance sheet Rationale: This is the definition of balance sheet. 13. What reports operating results (revenues minus expenses) for a given time period ending at a specified date? A. Balance sheet B. Statement of owner's equity C. Statement of cash flows D. Income statement Answer: D. Income statement Rationale: This is the definition of income statement. 14. What tracks and communicates changes in the shareholder's earnings? A. Balance sheet B. Statement of owner's equity C. Statement of cash flows D. Income statement Answer: B. Statement of owner's equity Rationale: This is the definition of statement of owner's equity. 15. What is an asset? A. A distribution of earnings to shareholders B. Refers to the amount earned resulting from the delivery or manufacture of a product or from the rendering of a service C. Refer to the costs incurred in operating and maintaining a business D. Anything owned that has value or earning power Answer: D. Anything owned that has value or earning power Rationale: This is the definition of asset. 16. What is a dividend? A. A distribution of earnings to shareholders B. Refers to the amount earned resulting from the delivery or manufacture of a product or from the rendering of a service C. Refer to the costs incurred in operating and maintaining a business D. Anything owned that has value or earning power Answer: A. A distribution of earnings to shareholders Rationale: This is the definition of dividend. 17. What is revenue? A. A distribution of earnings to shareholders B. Refers to the amount earned resulting from the delivery or manufacture of a product or from the rendering of a service C. Refer to the costs incurred in operating and maintaining a business D. Anything owned that has value or earning power Answer: B. Refers to the amount earned resulting from the delivery or manufacture of a product or from the rendering of a service Rationale: This is the definition of revenue. 18. What is the function of the marketing department? A. Deals with the strategic financial issues associated with increasing the value of the business while observing applicable laws and social responsibilities B. Includes the policies, plans, and procedures for the effective management of employees C. The function of selling a good or service and focuses on increasing customer sales, which increases company revenues D. The process associated with promoting the sale of goods or services. The marketing department supports the sales department by creating promotions that help sell the company's products Answer: D. The process associated with promoting the sale of goods or services. The marketing department supports the sales department by creating promotions that help sell the company's products Rationale: This is the definition of marketing. 19. What is the function of the sales department? A. Deals with the strategic financial issues associated with increasing the value of the business while observing applicable laws and social responsibilities B. Includes the policies, plans, and procedures for the effective management of employees C. The function of selling a good or service and focuses on increasing customer sales, which increases company revenues D. The process associated with promoting the sale of goods or services. The marketing department supports the sales department by creating promotions that help sell the company's products Answer: C. The function of selling a good or service and focuses on increasing customer sales, which increases company revenues Rationale: This is the definition of sales. 20. What is the rate at which the net present value of an investment equals zero? A. Internal rate of return (IRR) B. Return on investment (ROI) C. Cash flow analysis D. Break-even analysis Answer: A. Internal rate of return (IRR) Rationale: This is the definition of IRR. 21. What is a means to conduct a periodic check on the company's financial health? A. Internal rate of return (IRR) B. Return on investment (ROI) C. Cash flow analysis D. Break-even analysis Answer: C. Cash flow analysis Rationale: This is the definition of cash flow analysis. 22. What is the point at which revenues equal costs? A. Break-even point B. Cash flow analysis C. ROI D. IRR Answer: A. Break-even point Rationale: This is the definition of break-even point. 23. Which of the following is not accomplished by human resources management? A. Employee recruitment B. Employee training C. Employee vacation scheduling D. Employee appraisals Answer: C. Employee vacation scheduling Rationale: The HR department does not schedule employee vacations, it might track vacation time taken, but it does not schedule the vacations. 24. What is calculated by dividing the firm's sales by the total market sales for the entire industry? A. Break-even point B. IRR C. Market share D. Income statement Answer: C. Market share Rationale: This is how to calculate market share. 25. Which of the following is not a reason to increase market share? A. Economies of scale B. Reputation C. Increased bargaining power D. Nearing production capacity Answer: D. Nearing production capacity Rationale: If an organization is near its production capacity and it experiences an increase in market share, it could cause the organization's supply to fall below its demand. 26. Which of the following is not a part of the marketing mix? A. Product B. Price C. Point D. Promotion Answer: C. Point Rationale: The four Ps include product, price, place, and promotion. 27. What is the division of a market into similar groups of customers? A. Market management B. Market mix C. Market communications D. Market segmentation Answer: D. Market segmentation Rationale: This is the definition of market segmentation. 28. Which of the following represents geographic segmentation? A. Based on regional variables such as region, climate, population density, and population growth rate B. Based on variables such as age, gender, ethnicity, education, occupation, income, and family status C. Based on variables such as values, attitudes, and lifestyles D. Based on variables such as usage rate, usage patterns, price sensitivity, and brand loyalty Answer: A. Based on regional variables such as region, climate, population density, and population growth rate Rationale: This is geographic segmentation. 29. Which of the following represents psychographic segmentation? A. Based on regional variables such as region, climate, population density, and population growth rate B. Based on variables such as age, gender, ethnicity, education, occupation, income, and family status C. Based on variables such as values, attitudes, and lifestyles D. Based on variables such as usage rate, usage patterns, price sensitivity, and brand loyalty Answer: C. Based on variables such as values, attitudes, and lifestyles Rationale: This is psychographic segmentation. 30. Which of the following is not one of the four phases in the product life cycle? A. Growth B. Decline C. Place D. Introduction Answer: C. Place Rationale: The product life cycle includes the four phases a product progresses through during its life cycle including introduction, growth, maturity, and decline. 31. What is a standardized set of activities that accomplishes a specific task, such as processing a customer's order? A. Transaction B. Business process C. Expense D. Marketing Answer: B. Business process Rationale: This is the definition of business process. 32. What is the analysis and redesign of workflow within and between enterprises? A. Business process B. Management information system C. Transaction D. Business process reengineering Answer: D. Business process reengineering Rationale: This is the definition of business process reengineering. 33. What is operations management? A. A field concerned with the use of technology in managing and processing information B. The function of selling a good or service and focuses on increasing customer sales, which increases company revenues C. The function that plans for, develops, implements, and maintains IT hardware, software, and the portfolio of applications that people use to support the goals of an organization D. The management of systems or processes that convert or transforms resources into goods and services Answer: D. The management of systems or processes that convert or transforms resources into goods and services Rationale: This is the definition of operations management. 34. What is information technology? A. A field concerned with the use of technology in managing and processing information B. The function of selling a good or service and focuses on increasing customer sales, which increases company revenues C. The function that plans for, develops, implements, and maintains IT hardware, software, and the portfolio of applications that people use to support the goals of an organization D. Includes the methods, tasks, and techniques organizations use to produce goods and services Answer: A. A field concerned with the use of technology in managing and processing information Rationale: This is the definition of information technology. 35. What is management information systems? A. A field concerned with the use of technology in managing and processing information B. The function of selling a good or service and focuses on increasing customer sales, which increases company revenues C. a general name for the business function and academic discipline covering the application of people technologies, and procedures—collectively called information systems—to solve business problems D. Includes the methods, tasks, and techniques organizations use to produce goods and services Answer: C. a general name for the business function and academic discipline covering the application of people technologies, and procedures—collectively called information systems—to solve business problems Rationale: This is the definition of management information systems. True/False Questions 36. Human resources management includes the policies, plans, and procedures for the effective management of employees (‘human resources'). Answer: True Rationale: This is the definition of human resources management. 37. Accounting deals with the strategic financial issues associated with increasing the value of the business while observing applicable laws and social responsibilities. Answer: False Rationale: This is the definition of finance, not accounting. 38. Break-even analysis is the point at which revenues equal costs. Answer: False Rationale: This is the definition of break-even point, not break-even analysis. 39. For profit corporations primarily focus on making money and all profits and losses are shared by the business owners. Answer: True Rationale: This is the definition of for profit corporations. 40. A loss occurs when businesses sell products or services for less then they cost to produce. Answer: True Rationale: This is the definition of loss. Fill in the Blank Questions 41. ____________ are similar to sole proprietorships, except that this legal structure allows for more than one owner. Answer: Partnerships 42. A limited _______________ is much like a general partnership except for one important fundamental difference; the law protects the limited partner from being responsible for all of the partnership's losses. Answer: Partnership 43. ____________ is the actual recording of the business's transactions, without any analysis of the information. Answer: Bookkeeping 44. ____________ accounting involves preparing financial reports that provide information about the business's performance to external parties such as investors, creditors, and tax authorities. Answer: Financial 45. ___________ represents the ability of the business to pay its bills and service its debt. Answer: Solvency 46. ____________ are a distribution of earnings to shareholders. Answer: Dividends 47. The income statement reports a company's ____________ income, or the amount of money remaining after paying taxes Answer: Net 48. ____________ deals with the strategic financial issues associated with increasing the value of the business while observing applicable laws and social responsibilities. Answer: Finance 49. ____________ segmentation is based on variables such as usage rate, usage patterns, price sensitivity, and brand loyalty. Answer: Behavioral 50. Operations management is the management of systems or processes that convert or transforms ___________ into goods and services. Answer: Resources Essay Questions 51. Define the three common business forms. Answer: Sole proprietorship-The sole proprietorship is a business form in which a single person is the sole owner and is personally responsible for all the profits and losses of the business. Partnership-Partnerships are similar to sole proprietorships, except that this legal structure allows for more than one owner. Each partner is personally responsible for all the profits and losses of the business. Corporation-The corporation is the most sophisticated form of business entity and the most common among large companies. The corporation (also called, organization, enterprise, or business) is an artificially created legal entity that exists separate and apart from those individuals who created it and carry on its operations. In a corporation, the business entity is separate from the business owners. 52. List and describe the seven departments commonly found in most organizations. Answer: Accounting provides quantitative information about the finances of the business including recording, measuring, and describing financial information. Finance deals with the strategic financial issues associated with increasing the value of the business, while observing applicable laws and social responsibilities. Human resource management (HR) includes the policies, plans, and procedures for the effective management of employees (human resources). Sales is the function of selling a good or service and focuses on increasing customer sales, which increases company revenues. Marketing is the process associated with promoting the sale of goods or services. The marketing department supports the sales department by creating promotions that help sell the company's products. Operations management is the management of systems or processes that convert or transforms resources into goods and services. Transportation (also called logistics) is part of operations management. Management information systems (MIS) is a general name for the business function and academic discipline covering the application of people technologies, and procedures—collectively called information systems—to solve business problems. 53. Describe a transaction and its importance to the accounting department. Answer: All businesses operate using the same basic element, the transaction. A transaction is an exchange or transfer of goods, services, or funds involving two or more people. Each time a transaction occurs a source document captures all of the key data involved with the transaction. The source document describes the basic transaction data such as its date, purpose, and amount and includes cash receipts, cancelled checks, invoices, customer refunds, employee time sheet, etc. The source document is the beginning step in the accounting process and serves as evidence that the transaction occurred. Financial statements are the written records of the financial status of the business that allow interested parties to evaluate the profitability and solvency of the business. Solvency represents the ability of the business to pay its bills and service its debt. The financial statements are the final product of the accountant's analysis of the business transactions. Preparing the financial statements is a major undertaking and requires a significant amount of effort. Financial statements must be understandable, timely, relevant, fair, and objective in order to be useful. The accounting department prepares all of the financial statements. 54. Identify the four primary financial statements used by most organizations. Answer: Balance sheet.-The balance sheet gives an accounting picture of property owned by a company and of claims against the property on a specific date. The balance sheet is based on the fundamental accounting principle that assets = liabilities + owner's equity. Income statement-The income statement (also referred to as earnings report, operating statement, and profit-and-loss (P&L) statement) reports operating results (revenues minus expenses) for a given time period ending at a specified date. Revenue refers to the amount earned resulting from the delivery or manufacture of a product or from the rendering of a service. Statement of owner's equity-The statement of owner's equity (also called the statement of retained earnings or equity statement) tracks and communicates changes in the shareholder's earnings. Profitable organizations typically pay the shareholders dividends. Dividends are a distribution of earnings to shareholders. Statement of cash flows-Cash flow represents the money an investment produces after subtracting cash expenses from income. The statement of cash flows summarizes sources and uses of cash, indicates whether enough cash is available to carry on routine operations, and offers an analysis of all business transactions, reporting where the firm obtained its cash and how it chose to allocate the cash. The cash flow statement shows where money comes from, how the company is going to spend it, and when the company will require additional cash. 55. Define the relationship between sales and marketing, along with a brief discussion of the marketing mix. Answer: Sales is the function of selling a good or service and focuses on increasing customer sales, which increases company revenues. A salesperson has the main activity of selling a product or service. Many industries require a license before a salesperson can sell the products, such as real estate, insurance, and securities. Marketing is the process associated with promoting the sale of goods or services. The marketing department supports the sales department by creating promotions that help sell the company's products. Marketing communications seek to build product or service awareness and to educate potential consumers on the product or service. The classic components of marketing include the four Ps in the marketing mix: product, price, place, and promotion. The marketing mix includes the variables that marketing managers can control in order to best satisfy customers in the target market. Product-the physical product or service offered to the consumer. Product decisions include function, appearance, packaging, service, warranty, etc. Price-takes into account profit margins and competitor pricing. Pricing includes list price, discounts, financing, and other options such as leasing. Place (distribution)-associated with channels of distribution that serve as the means for getting the product to the target customers. Attributes involved in place decisions include market coverage, channel member selection, logistics, and levels of service. Promotion-related to the communication and selling to potential consumers. An organization can perform a break-even analysis when making promotion decisions. If an organization knows the value of each customer, it can determine whether additional customers are worth the coast of acquisition. Attributes involved in promotion decisions involve advertising, public relations, media types, etc. 56. Define business process reengineering and explain how an organization can use IT to transform its business. Answer: A business process is a standardized set of activities that accomplishes a specific task, such as processing a customer's order. Business process reengineering (BPR) is the analysis and redesign of workflow within and between enterprises. In business process reengineering, the project team starts with a clean sheet of paper and redesigns the process to increase efficiency and effectiveness. The project team does not take anything for granted and questions all the aspects of the process and the business. The reengineering project team obtains dramatic process improvement by redesigning processes that cross departments. Most of the major opportunities for process improvement exist in cross-departmental processes. Information technology usually plays a key role in process improvement by making possible a radically faster and almost paperless process. However, IT is only an enabling factor. BPI002 Business Process Multiple Choice Questions 1. What is a business process? A. A standardized set of activities that accomplish a specific task, such as processing a customer's order. B. Result in a product or service that is received by an organization's external customer. C. Invisible to the external customer but essential to the effective management of the business and include goal setting, day-to-day planning, performance feedback, rewards, and resource allocation. D. Attempts to understand and measure the current process, and make performance improvements accordingly. Answer: A. A standardized set of activities that accomplish a specific task, such as processing a customer's order. Rationale: This is the definition of business process. 2. What is a customer facing process? A. A standardized set of activities that accomplish a specific task, such as processing a customer's order. B. Result in a product or service that is received by an organization's external customer. C. Invisible to the external customer but essential to the effective management of the business and include goal setting, day-to-day planning, performance feedback, rewards, and resource allocation. D. Attempts to understand and measure the current process, and make performance improvements accordingly. Answer: B. Result in a product or service that is received by an organization's external customer. Rationale: This is the definition of customer facing process. 3. What is a business facing process? A. A standardized set of activities that accomplish a specific task, such as processing a customer's order. B. Result in a product or service that is received by an organization's external customer. C. Invisible to the external customer but essential to the effective management of the business and include goal setting, day-to-day planning, performance feedback, rewards, and resource allocation. D. Attempts to understand and measure the current process, and make performance improvements accordingly. Answer: C. Invisible to the external customer but essential to the effective management of the business and include goal setting, day-to-day planning, performance feedback, rewards, and resource allocation. Rationale: This is the definition of business facing process. 4. What is the continuous process improvement model? A. A standardized set of activities that accomplish a specific task, such as processing a customer's order. B. Result in a product or service that is received by an organization's external customer. C. Invisible to the external customer but essential to the effective management of the business and include goal setting, day-to-day planning, performance feedback, rewards, and resource allocation. D. Attempts to understand and measure the current process, and make performance improvements accordingly. Answer: D. Attempts to understand and measure the current process, and make performance improvements accordingly. Rationale: This is the definition of continuous process improvement model. 5. Which of the following is not one of the three key steps involved in business process improvement? A. Measure what matters to most customers B. Monitor the performance of key individuals C. Assign accountability for process improvement D. Monitor the performance of key business processes Answer: B. Monitor the performance of key individuals Rationale: Monitor the performance of key individuals is not one of the three key steps involved in business process improvement. 6. Which of the following is not one of the important characteristics of business processes? A. The processes have internal users B. The processes have external users C. The processes occur only within organizations D. The processes occur across organizations Answer: C. The processes occur only within organizations Rationale: Business processes occur across organizations, not only within organizations. 7. Which of the following is one of the important characteristics of business processes? A. The process is cross-departmental B. The process is based on how work should be done across organizations C. The process occurs only within organizations D. The process has internal users only Answer: A. The process is cross-departmental Rationale: Processes are cross-departmental. 8. Which of the following is a business facing process? A. Marketing process B. Sales process C. Billing process D. Budgeting Answer: D. Budgeting Rationale: Budgeting is a business facing process. 9. Which of the following is a customer facing process? A. Strategic planning B. Distribution C. Training D. Tactical planning Answer: B. Distribution Rationale: Distribution is a customer facing process. 10. What is the analysis and redesign of workflow within and between enterprises? A. Customer facing process B. Business process reengineering C. Continuous process improvement D. Business process management Answer: B. Business process reengineering Rationale: This is the definition of business process reengineering. 11. What attempts to understand and measure the current process, and make performance improvements accordingly? A. Customer facing process B. Business process reengineering C. Continuous process improvement D. Business process management Answer: C. Continuous process improvement Rationale: This is the definition of continuous process improvement. 12. What is the activity of creating a detailed flow chart or process map of a work process showing its inputs, tasks, and activities, in a structured sequence? A. Business process modeling B. Business process model C. Business process management D. Business process reengineering Answer: A. Business process modeling Rationale: This is the definition of business process modeling. 13. What is a graphic description of a process, showing the sequence of process tasks, which is developed for a specific purpose and from a selected viewpoint? A. Business process modeling B. Business process model C. Business process management D. Business process reengineering Answer: B. Business process model Rationale: This is the definition of business process model. 14. Business process modeling (or mapping) is the activity of creating a detailed flow chart or process map of a work process showing: A. Inputs, tasks, and activities in a structured sequence B. Resources, tasks, and inputs in a structured sequence C. Resources, timeframes, and tasks in a structured sequence D. Inputs, tasks, and costs in a structured sequence Answer: A. Inputs, tasks, and activities in a structured sequence Rationale: Inputs, tasks, and activities in a structured sequence. 15. A set of one or more process models details the many functions of a system or subject area with graphics and text and its purpose is to: A. Focus attention on the process model interfaces B. Expose process detail quickly and in a controlled manner C. Encourage inaccuracies in describing the process model D. All of the above Answer: A. Focus attention on the process model interfaces Rationale: B should expose process detail gradually, not quickly and C should encourage accuracy, not inaccuracies. 16. What integrates all of an organization's business process to make individual processes more efficient? A. Business process modeling B. Business process model C. Business process management D. Business process reengineering Answer: C. Business process management Rationale: This is the definition of BPM. 17. Which of the following is not a business process term? A. Business process B. Business process model C. Business process model tools D. Business process reengineering Answer: C. Business process model tools Rationale: Business process management tools is the correct term. 18. What is used to create an application that is helpful in designing business process models and also helpful in simulating, optimizing, monitoring, and maintaining various processes that occur within an organization? A. Business process modeling B. Business process model C. Business process management tools D. Business process reengineering Answer: C. Business process management tools Rationale: This is the definition of business process management tools. 19. Which of the following is not a criterion to determine the importance of a process for reengineering practitioners? A. Is the process broken? B. Is the process antiquated? C. Does the process fall above best in class? D. Is the process crucial for productivity improvement? Answer: C. Does the process fall above best in class? Rationale: C should state does the process fall below best in class? 20. Which of the following represent the managerial approach to reengineering projects? A. Define the scope, plan, evaluate, analyze, approve, execute B. Define the scope, evaluate, analyze, plan, approve, execute C. Define the scope, analyze, evaluate, plan approve, execute D. Varies depending on the project Answer: C. Define the scope, analyze, evaluate, plan approve, execute Rationale: Define the scope, analyze, evaluate, plan, approve, and execute is the managerial approach to reengineering projects. True/False Questions 21. Business process management tools are used to create an application that is helpful in designing business process models and also helpful in simulating, optimizing, monitoring, and maintaining various processes that occur within an organization. Answer: True Rationale: This is the definition of business process management tools. 22. Business process management (BPM) integrates all of an organization's business process to make individual processes more efficient. BPM can be used to solve a single glitch or to create one unifying system to consolidate a myriad of processes. Answer: True Rationale: This is the definition of business process management. 23. Strategic planning is a customer facing business process. Answer: False Rationale: Strategic planning is a business facing business process. 24. Product development is a customer facing business process. Answer: True Rationale: Product development is a customer facing business process. 25. Business process reengineering is the analysis and redesign of workflow within and between enterprises. Answer: True Rationale: This is the definition of BPR. Fill in the Blank Questions 26. Business process modeling (or __________) is the activity of creating a detailed flow chart or process map of a work process showing its inputs, tasks, and activities, in a structured sequence. Answer: Mapping 27. A business process model is a graphic description of a __________, showing the sequence of process tasks, which is developed for a specific purpose and from a selected viewpoint. Answer: Process 28. Continuous process improvement model attempts to understand and _________ the current process, and make performance improvements accordingly. Answer: Measure 29. Business process reengineering is the analysis and redesign of _________ within and between enterprises. Answer: Workflow 30. Customer facing processes result in a product or service that is received by an organization's ___________ customer. Answer: External 31. ________________ facing processes are invisible to the external customer but essential to the effective management of the business and include goal setting, day-to-day planning, performance feedback, rewards, and resource allocation. Answer: Business 32. A business ____________ is a standardized set of activities that accomplish a specific task, such as processing a customer's order. Answer: Process 33. Business processes transform a set of inputs into a set of ___________ for another person or process by using people and tools. Answer: Outputs 34. Manufacturing is a ________ facing process. Answer: Customer 35. Budgeting is a ___________ facing process. Answer: Business Essay Questions 36. Describe business processes and their importance to an organization. Answer: A business process is a standardized set of activities that accomplish a specific task, such as processing a customer's order. Business processes transform a set of inputs into a set of outputs (goods or services) for another person or process by using people and tools. Without processes organizations would not be able to complete activities. 37. Differentiate between customer facing processes and business facing processes. Answer: Customer facing processes result in a product or service that is received by an organization's external customer. Business facing processes are invisible to the external customer but essential to the effective management of the business and include goal setting, day-to-day planning, performance feedback, rewards, and resource allocation. 38. Compare the continuous process improvement model and business process reengineering. Answer: Many organizations began business process improvement with a continuous improvement model. A continuous process improvement model attempts to understand and measure the current process, and make performance improvements accordingly. Business process reengineering (BPR), is the analysis and redesign of workflow within and between enterprises. BPR relies on a different school of thought than continuous process improvement. In the extreme, BPR assumes the current process is irrelevant, does not work, or is broken and must be overhauled from scratch. Such a clean slate enables business process designers to disassociate themselves from today's process and focus on a new process. It is like the designers projecting themselves into the future and asking: What should the process look like? What do customers want it to look like? What do other employees want it to look like? How do best-in-class companies do it? How can new technology facilitate the process? 39. Describe business processes and their importance to an organization. Answer: Business process modeling (or mapping) is the activity of creating a detailed flow chart or process map of a work process showing its inputs, tasks, and activities, in a structured sequence. A business process model is a graphic description of a process, showing the sequence of process tasks, which is developed for a specific purpose and from a selected viewpoint. A set of one or more process models details the many functions of a system or subject area with graphics and text and its purpose is to: expose process detail gradually and in a controlled manner; encourage conciseness and accuracy in describing the process model; focus attention on the process model interfaces; provide a powerful process analysis and consistent design vocabulary. 40. Explain business process management along with the reason for its importance to an organization. Answer: The latest area to discover the power of technology in automating and reengineering business process is business process management. Business process management (BPM) integrates all of an organization's business process to make individual processes more efficient. BPM can be used to solve a single glitch or to create one unifying system to consolidate a myriad of processes. Many organizations are unhappy with their current mix of software applications and dealing with business processes that are subject to constant change. These organizations are turning to BPM systems that can flexibly automate their processes and glue their enterprise applications together. BPI003 Hardware and Software Multiple Choice Questions 1. What is information technology? A. Any computer-based tool that people use to work with information and support the information and information-processing needs of an organization B. The set of instructions that the hardware executes to carry out specific tasks C. Consists of the physical devices associated with a computer system D. An electronic device operating under the control of instructions stored in its own memory that can accept, manipulate, and store data Answer: A. Any computer-based tool that people use to work with information and support the information and information-processing needs of an organization Rationale: This is the definition of information technology. 2. What is software? A. Any computer-based tool that people use to work with information and support the information and information-processing needs of an organization B. The set of instructions that the hardware executes to carry out specific tasks C. Consists of the physical devices associated with a computer system D. An electronic device operating under the control of instructions stored in its own memory that can accept, manipulate, and store data Answer: B. The set of instructions that the hardware executes to carry out specific tasks Rationale: This is the definition of software. 3. What is hardware? A. Any computer-based tool that people use to work with information and support the information and information-processing needs of an organization B. The set of instructions that the hardware executes to carry out specific tasks C. Consists of the physical devices associated with a computer system D. An electronic device operating under the control of instructions stored in its own memory that can accept, manipulate, and store data Answer: C. Consists of the physical devices associated with a computer system Rationale: This is the definition of hardware. 4. What is an input device? A. The actual hardware that interprets and executes the program (software) instructions and coordinates how all the other hardware devices work together B. The computer's main memory, which consists of the random access memory (RAM), cache memory, and the read-only memory (ROM) that is directly accessible to the central processing unit (CPU) C. Equipment designed to store large volumes of data for long-term storage D. Equipment used to capture information and commands Answer: D. Equipment used to capture information and commands Rationale: This is the definition of input device. 5. What is a CPU? A. The actual hardware that interprets and executes the program (software) instructions and coordinates how all the other hardware devices work together B. The computer's main memory, which consists of the random access memory (RAM), cache memory, and the read-only memory (ROM) that is directly accessible to the central processing unit (CPU) C. Equipment designed to store large volumes of data for long-term storage D. Equipment used to capture information and commands Answer: A. The actual hardware that interprets and executes the program (software) instructions and coordinates how all the other hardware devices work together Rationale: This is the definition of CPU. 6. What is the arithmetic logic unit? A. The actual hardware that interprets and executes the program (software) instructions and coordinates how all the other hardware devices work together B. Interprets software instructions and literally tells the other hardware devices what to do, based on the software instructions C. A type of CPU that can recognize as many as 100 or more instructions, enough to carry out most computations directly D. Performs all arithmetic operations (for example, addition and subtraction) and all logic operations (such as sorting and comparing numbers) Answer: D. Performs all arithmetic operations (for example, addition and subtraction) and all logic operations (such as sorting and comparing numbers) Rationale: This is the definition of arithmetic logic unit. 7. What is a complex instruction set computer chip? A. The actual hardware that interprets and executes the program (software) instructions and coordinates how all the other hardware devices work together B. Interprets software instructions and literally tells the other hardware devices what to do, based on the software instructions C. A type of CPU that can recognize as many as 100 or more instructions, enough to carry out most computations directly D. Performs all arithmetic operations (for example, addition and subtraction) and all logic operations (such as sorting and comparing numbers) Answer: C. A type of CPU that can recognize as many as 100 or more instructions, enough to carry out most computations directly Rationale: This is the definition of CISC. 8. Which of the following represents megahertz? A. The number of millions of CPU cycles per second B. The number of billions of CPU cycles per second C. A type of CPU that can recognize as many as 100 or more instructions, enough to carry out most computations directly D. Limit the number of instructions the CPU can execute to increase processing speed Answer: A. The number of millions of CPU cycles per second Rationale: This is the definition of megahertz. 9. What is the number of bits (0s and 1s) that can be processed by the CPU at any one time? A. Clock speed B. Word length C. Bus width D. Chip line width Answer: B. Word length Rationale: This is the definition of word length. 10. What is the size of the internal electrical pathway along which signals are sent from one part of the computer to another? A. Clock speed B. Word length C. Bus width D. Chip line width Answer: C. Bus width Rationale: This is the definition of bus width. 11. What is a protected memory space created by the CPU allowing the computer to create virtual machines? A. Volatility B. Virtualization C. Flash memory D. Cache memory Answer: B. Virtualization Rationale: This is the definition of virtualization. 12. What is roughly 1 million bytes? A. Megabyte B. Terabyte C. Kilobyte D. Gigabyte Answer: A. Megabyte Rationale: This is the definition of a megabyte. 13. What is an older secondary storage medium that uses a strip of thin plastic coated with a magnetically sensitive recording medium? A. Magnetic medium B. Magnetic tape C. Hard drive D. RAM Answer: B. Magnetic tape Rationale: This is the definition of magnetic tape. 14. What is a form of a stationary mouse on which the movement of a finger causes the pointer on the screen to move? A. Microphone B. Touch pad C. Pointing stick D. Touch screen Answer: B. Touch pad Rationale: This is the definition to touch pad. 15. What detects the presence or absence of a mark in a predetermined place (popular for multiple-choice exams)? A. Magnetic ink character reader B. Optical-character recognition C. Optical-mark recognition D. Point-of-sale Answer: C. Optical-mark recognition Rationale: This is the definition of optical-mark recognition. 16. What is similar to a desktop but has more powerful mathematical and graphics processing capabilities and can perform more complicated tasks in less time? A. Tablet B. PDA C. Workstation D. Minicomputer Answer: C. Workstation Rationale: This is the definition of workstation. 17. What is system software? A. Controls how the various technology tools work together along with the application software B. Controls the application software and manages how the hardware devices work together C. Provides additional functionality to the operating system D. Used for specific information processing needs, including payroll, customer relationship management, project management, training, and many others Answer: A. Controls how the various technology tools work together along with the application software Rationale: This is the definition of system software. 18. What is application software? A. Controls how the various technology tools work together along with the application software B. Controls the application software and manages how the hardware devices work together C. Provides additional functionality to the operating system D. Used for specific information processing needs, including payroll, customer relationship management, project management, training, and many others Answer: D. Used for specific information processing needs, including payroll, customer relationship management, project management, training, and many others Rationale: This is the definition of application software. 19. What organizes information on a hard disk in the most efficient way? A. Text protect B. Disk optimization C. File recovery D. Cash proof Answer: B. Disk optimization Rationale: This is the definition of disk optimization software. 20. What provides the tools for data retrieval, modification, deletion, and insertion? A. Data management B. Desktop publishing C. Email D. Groupware Answer: A. Data management Rationale: This is the definition of data management. True/False Questions 21. Utility software provides additional functionality to the operating system. Answer: True Rationale: This is the definition of utility software. 22. Disk optimization software helps save information if a computer crashes. Answer: False Rationale: Crash-proof software helps save information if a computer crashes. 23. A tablet is a pen-based computer that provides the screen capabilities of a PDA with the functional capabilities of a laptop or desktop computer. Answer: True Rationale: This is the definition of a tablet. 24. Volatility is a protected memory space created by the CPU allowing the computer to create virtual machines. Answer: False Rationale: Virtualization is a protected memory space created by the CPU allowing the computer to create virtual machines. 25. Complex instruction set computer chips limit the number of instructions the CPU can execute to increase processing speed. Answer: False Rationale: Reduced instruction set computer (RISC) chips limit the number of instructions the CPU can execute to increase processing speed. Fill in the Blank Questions 26. ____________ is the set of instructions that the hardware executes to carry out specific tasks. Answer: Software 27. ____________ device is equipment used to see, hear, or otherwise accept the results of information processing requests. Answer: Output 28. ____________ access memory is the computer's primary working memory, in which program instructions and data are stored so that they can be accessed directly by the CPU via the processor's high-speed external data bus. Answer: Random 29. Magnetic _________ is a secondary storage medium that uses magnetic techniques to store and retrieve data on disks or tapes coated with magnetically sensitive materials. Answer: Medium 30. A(n) ____________ device is equipment used to send information and receive it from one location to another. Answer: Communication 31. A ____________ is designed to meet the computing needs of several people simultaneously in a small to medium-size business environment. Answer: Minicomputer 32. ____________ allows more than one piece of software to be used at a time. Answer: Multitasking 33. ____________ increases the cooperation and joint productivity of small groups of co-workers. Answer: Groupware 34. Cathode-ray tube (CRT) is a _________ tube that uses an electron gun (cathode) to emit a beam of electrons that illuminates phosphors on a screen as the beam sweeps across the screen repeatedly. Answer: Vacuum 35. ____________ is the number of billions of CPU cycles per second. Answer: Gigahertz Essay Questions 36. Describe the six major categories of hardware and provide an example of each. Answer: The six major categories of hardware include: Central processing unit (CPU) The actual hardware that interprets and executes the program (software) instructions and coordinates how all the other hardware devices work together (e.g., Intel processor). Primary storage The computer's main memory, which consists of the random access memory (RAM), cache memory, and the read-only memory (ROM) that is directly accessible to the central processing unit (CPU) (e.g., RAM). Secondary storage Equipment designed to store large volumes of data for long-term storage (e.g., diskette, hard drive, memory card, CD). Input devices Equipment used to capture information and commands (e.g., keyboard, scanner). Output devices Equipment used to see, hear, or otherwise accept the results of information processing requests (e.g., monitor, printer). Communication devices Equipment used to send information and receive it from one location to another (e.g., modem). 37. Identify the different computer categories and explain their potential business uses. Answer: Personal digital assistant (PDA)-A small hand-held computer that performs simple tasks such as taking notes, scheduling appointments, and maintaining an address book and a calendar. Laptop-A fully functional computer designed to be carried around and run on battery power. Laptops come equipped with all of the technology that a personal desktop computer has, yet weigh as little as two pounds. Tablet-A pen-based computer that provides the screen capabilities of a PDA with the functional capabilities of a laptop or desktop computer. Similar to PDAs, tablet PCs use a writing pen or stylus to write notes on the screen and touch the screen to perform functions such as clicking on a link while visiting a website. Desktop-Available with a horizontal system box (the box is where the CPU, RAM, and storage devices are held) with a monitor on top, or a vertical system box (called a tower) usually placed on the floor within a work area. Workstation-Similar to a desktop but has more powerful mathematical and graphics processing capabilities and can perform more complicated tasks in less time. Typically used for software development, web development, engineering, and ebusiness tools. Minicomputer (midrange computer)-Designed to meet the computing needs of several people simultaneously in a small to medium-size business environment. A common type of minicomputer is a server and is used for managing internal company networks and websites. Minicomputers are more powerful than desktop computers but also cost more, ranging in price from $5,000 to several hundred thousand dollars. Mainframe computer-Designed to meet the computing needs of hundreds of people in a large business environment. Mainframe computers are a step up in size, power, capability, and cost from minicomputers. Mainframes can cost in excess of $1 million. With processing speeds greater than 1 trillion instructions per second (compared to a typical desktop that can process about 2.5 billion instructions per second), mainframes can easily handle the processing requests of hundreds of people simultaneously. Supercomputer-The fastest, most powerful, and most expensive type of computer. Organizations such as NASA that are heavily involved in research and number crunching employ supercomputers because of the speed with which they can process information. 38. Explain the difference between primary and secondary storage. Answer: Primary storage-The computer's main memory, which consists of the random access memory (RAM), cache memory, and the read-only memory (ROM) that is directly accessible to the central processing unit (CPU). Secondary storage-Equipment designed to store large volumes of data for long-term storage (e.g., diskette, hard drive, memory card, CD). 39. List the common input, output, storage, and communication devices. Answer: Input devices-Equipment used to capture information and commands (e.g., keyboard, scanner) Output devices-Equipment used to see, hear, or otherwise accept the results of information processing requests (e.g., monitor, printer). Primary storage-The computer's main memory, which consists of the random access memory (RAM), cache memory, and the read-only memory (ROM) that is directly accessible to the central processing unit (CPU). Secondary storage - Equipment designed to store large volumes of data for long-term storage (e.g., diskette, hard drive, memory card, CD). Communication devices - Equipment used to send information and receive it from one location to another (e.g., modem). 40. Describe the eight categories of computers by size. Answer: Personal digital assistant (PDA)-a small hand-held computer that performs simple tasks such as taking notes, scheduling appointments, and maintaining an address book and a calendar. Laptop computer-a fully functional computer designed to be carried around and run on battery power. Tablet computer-a pen-based computer that provides the screen capabilities of a PDA with the functional capabilities of a notebook or desktop computer. Desktop computer-the most popular choice for personal computing needs. Workstation computer-Has more mathematical and graphics power than a desktop Minicomputer (sometimes called a mid-range computer)-designed to meet the computing needs of several people simultaneously in a small to medium-size business environment. Mainframe computer (sometimes just called a mainframe)-a computer designed to meet the computing needs of hundreds of people in a large business environment. Supercomputer-the fastest, most powerful, and most expensive type of computer. 41. Define the relationship between operating system software and utility software. Answer: Operating system software controls the application software and manages how the hardware devices work together, whereas utility software provides additional functionality to the operating system. Utility software includes antivirus software, screen savers, disk optimization software, and anti-spam software. Test Bank for Business Driven Technology Paige Baltzan 9780073376844, 9781259924927, 9781260727814, 9780073376905

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