Chapter 3

Question 1

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

Accepted Answer

Property and premise

Question 2

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 3

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

Projction

Question 4

A financial advisor who can explain in greater depth the types of business ownerships and the related tax benefits and l

Accepted Answer

Accountant

Question 5

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 6

A withholding tax that is a planned savings/retirement fund for every worker in the United States is called:

Accepted Answer

Social security tax

Question 7

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

Accepted Answer

Outstanding loan balance

Question 8

What term is used to describe the amount of time it takes to sell the product once it is on the shelf?

Accepted Answer

Turns and turnovers

Question 9

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 10

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

Accepted Answer

Workers compensation

Question 11

The reservoir of cash that is needed to stay ahead of creditors is called:

Accepted Answer

Operating capital

Question 12

Which of the following business plan essentials describes the plan for telling the world about the products offered

Accepted Answer

Marketing stategy

Question 13

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 skincare center

Question 14

Which of incorporates all activities that attract attention to skin care center and creates a positive Impression

Accepted Answer

Advertising

Question 15

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

Accepted Answer

Income

Question 16

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 17

Which advisor travels within a “territory” to sell products and equipment to skin care centers?

Accepted Answer

distributor sales consultant

Question 18

Accountants frequently refer to income as:

Accepted Answer

Revenue

Question 19

What type of compensation is based on a percentage of the dollar income an individual esthetician generates

Accepted Answer

Comission

Question 20

Which of the following categories generally accounts for 50% of the expenses for a skin care center?

Accepted Answer

Salaries and comissions

Question 21

A business owned by two or more persons is a:

Accepted Answer

Partnership

Question 22

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

Accepted Answer

Compensation

Question 23

Which of the descriptions listed below does NOT represent an element of a business plan?

Accepted Answer

liabilities

Question 24

Assets minus liabilities equals:

Accepted Answer

Net worth

Question 25

What is the purpose of an exit plan?

Accepted Answer

describes your strategy in case you decide to call it quits

Chapter 3

Questions 25

Chapter 3

Questions 25