Chap017 - Chapter 17 - Small Business Protection: Risk...

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Chapter 17 - Small Business Protection: Risk Management and Insurance Chapter 17 Small Business Protection: Risk Management and Insurance True / False Questions 1. (p. 554) Most business owners prefer to avoid risks to the extent possible. TRUE Difficulty: Medium 2. (p. 554) Risk is the probability that future states of being will be better than you expect. FALSE Difficulty: Medium 3. (p. 555) The most common form of employee theft is the pilfering of items of small value. TRUE Difficulty: Medium 4. (p. 556) OSHA rules in most industries do not apply to firms with fewer than 50 employees. FALSE Difficulty: Hard 5. (p. 558) Although customers are, by definition, the "reason for being" of any business, they also are the source of considerable business risk. TRUE Difficulty: Medium 17-1
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Chapter 17 - Small Business Protection: Risk Management and Insurance 6. (p. 559) The best strategy for managing any risk is to develop a business environment that eliminates the probability of the event occurring. FALSE Difficulty: Hard 7. (p. 561) Managing risks to tools, equipment, inventory and other physical assets is largely a function of developing and enforcing appropriate business policies and procedures. TRUE Difficulty: Medium 8. (p. 562) The advantage with legal protection methods for intellectual property is that there are multiple government agencies in each area that will assist a small business owner in maintaining their legal rights. FALSE Difficulty: Medium 9. (p. 562-563) Copyrights, trademarks and patents provide automatic protection to small business owners. FALSE Difficulty: Hard 10. (p. 563) Intellectual property is constantly under attack. TRUE Difficulty: Medium 17-2
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Chapter 17 - Small Business Protection: Risk Management and Insurance 11. (p. 564) Separation of duties is a core management technique to safeguard money and other valuable assets of a business. TRUE Difficulty: Medium 12. (p. 565) According to the Wells Report, the most costly employee frauds compared to total business assets occur in businesses with fewer than 20 employees. FALSE Difficulty: Hard 13. (p. 565) External oversight is the primary method of ensuring honesty in employees. FALSE Difficulty: Medium 14. (p. 566) Taxes imposed on small business include franchise or corporation taxes, income taxes, employee taxes, sales and use taxes, value-added taxes and property taxes. FALSE Difficulty: Medium 15. (p. 568) In managing risk from violation of tax regulations, small business owners should make paying taxes their first financial priority. TRUE Difficulty: Medium 17-3
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Chapter 17 - Small Business Protection: Risk Management and Insurance 16. (p. 569) Unfortunately, risks from violations of OSHA standards and regulations cannot be managed through proactive efforts. FALSE
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This note was uploaded on 11/21/2009 for the course MNGT 422X taught by Professor Godsey during the Spring '09 term at UNL.

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Chap017 - Chapter 17 - Small Business Protection: Risk...

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