Salon Fundamentals Chapter 3

Question 1

Which of the following is a typical commission rate for an employee to receive when selling retail to a client?

Accepted Answer

8% to 15%

Question 2

If the skin care center’s income is greater than the operating expenses, the skin care center is operating at a(n):

Accepted Answer

profit

Question 3

Which of the following statements best describes the order in which to count back change to a client?

Accepted Answer

coins first, then bills

Question 4

Determining how many other skin care centers and estheticians are in the area is the first step in gauging the:

Accepted Answer

market need

Question 5

Assets minus liabilities equals:

Accepted Answer

net worth

Question 6

Which of the following terms comprises all the property a person owns?

Accepted Answer

assets

Question 7

The most effective form of advertising is often:

Accepted Answer

word-of-mouth

Question 8

Which of the following measurements per esthetician allows for an efficient working space?

Accepted Answer

120 to 150 square feet

Question 9

Insurance is a type of:

Accepted Answer

risk management

Question 10

The three basic elements of a personal financial statement are:

Accepted Answer

assets, liabilities and net worth

Question 11

An advisor on borrowing money, signing rental agreements and assuming tax responsibilities is a(n):

Accepted Answer

lawyer

Question 12

The most selective and efficient form of advertising for a local business is considered to be:

Accepted Answer

direct mail

Question 13

Which of the following operating expenses is paid on the profits of a business?

Accepted Answer

income tax

Question 14

Which of the following strategies involves shaping of your public image in ways other than advertising?

Accepted Answer

public relations

Question 15

Which of the following skills is essential to be a successful skin care center owner?

Accepted Answer

ability to manage the financial operations of a skin care center

Question 16

A skin care center should keep all records of daily sales and services for at least:

Accepted Answer

six months

Question 17

A suggested telephone answering tip is to answer the phone within how many rings?

Accepted Answer

two rings

Question 18

Which of the following terms defines salaries or commissions for yourself and your employees, including payroll taxes?

Accepted Answer

compensation

Question 19

A reserve of cash that can be drawn upon to meet operating expenses in the event of a slow month or two is a(n):

Accepted Answer

line of credit

Question 20

An insurance policy that covers the actual skin care center equipment and physical location in case of natural disaster:

Accepted Answer

property or premise

Question 21

Accountants frequently refer to income as:

Accepted Answer

revenue

Question 22

What is the title given to a form of operating agreement in which a fee is paid to a parent corporation?

Accepted Answer

franchise

Question 23

Which of the following items is NOT considered to be part of an individual's total assets?

Accepted Answer

outstanding loan balance

Question 24

A type of business ownership owned by one person who is in complete control of the business is a:

Accepted Answer

sole proprietorship

Question 25

Of the following descriptions, which does NOT represent a way an employee can be paid?

Accepted Answer

income tax

Question 26

Which type of business is owned by shareholders or members who have funds invested in the company?

Accepted Answer

corporation

Question 27

What is the name given to all payments received from clients for services performed and home care products purchased?

Accepted Answer

income

Question 28

Unhappy clients often don't complain, they:

Accepted Answer

just don't return

Question 29

What is the purpose of an exit plan?

Accepted Answer

describes your strategy in case you decide to call it quits

Question 30

The most important factor to consider when opening a skin care business is:

Accepted Answer

location

Question 31

Inventory is also referred to as which of the following terms?

Accepted Answer

stock in quantity

Question 32

The central company document that the owner and employees use to make decisions is a:

Accepted Answer

business plan

Question 33

Which of the following items does a skin care center owner apply for before collecting tax on products or services sold?

Accepted Answer

State Sales Tax Permit

Question 34

An estimate of what you think you will earn in revenues and what you think you will pay out in expenses is called a(n):

Accepted Answer

projection

Question 35

Which of the following insurance policies is state-controlled and required by law?

Accepted Answer

worker’s compensation

Question 36

On a personal financial statement, all the money owed is called:

Accepted Answer

liabilities

Question 37

A business owned by two or more persons is a:

Accepted Answer

partnership

Question 38

Which type of rent allows owners to predict monthly expenses carefully?

Accepted Answer

fixed rent

Salon Fundamentals Chapter 3

Questions 38

Salon Fundamentals Chapter 3

Questions 38