Saylor Academy BUS101 Exam Questions
and Correct Answers
Question 1
In comparing your financial statements between the current and previous years, you
find that you would like to be able to compare specific items on your income
statement to specific elements of your business activities. What should you use?
Correct Answer
Vertical percentage analysis
Question 2
SWOT Analysis
Correct Answer
Strengths, Weaknesses, Opportunities, and Threats: A technique to structure group
discussion to identify the internal and external forces that drive the company's
position in the market. Used effectively, a SWOT analysis can organize data and
information and determine the areas that a company needs to focus on in order to
move forward.
Question 3
Cash Flow Statement
Correct Answer
Tells what went into and came out of the company in cash. This is necessary
because accounting sometimes deals with revenues and expenses that are not real
cash. Looking at the actual cash flow gives a better idea of how well the company
can meet its cash obligations.
Page 1 of 19
,Question 4
Managerial Accounting
Correct Answer
Targeted toward individuals INSIDE the business. Used by managers to make
decisions concerning the day-to-day operations of a business. Reports are tailored
to the needs of individual managers, and the purpose of such reports is to supply
relevant, accurate, timely information in a format that will aid managers in making
decisions. It is based not on past performance, but on current and future trends,
which does not allow for exact numbers.
Question 5
Consumer Confidence
Correct Answer
An economic indicator measuring the degree of optimism that consumers feel
about the overall state of the economy and their personal financial situation.
Question 6
Income Statement
Correct Answer
Also called profit and loss statement and gives an account of what the company
sold and spent in the year. Sales (also called revenues), or what the company sold in
products and services less any expenses (expenses are divided into a number of
categories) less taxes gives the company's income. The income statement
summarizes all this type of activity for the year.
Page 2 of 19
, Question 7
Deflation
Correct Answer
Occurs when too many goods are available or when there is not enough money
circulating to purchase those goods.
For example, if a particular type of car becomes highly popular, other manufacturers
start to make a similar vehicle to compete. Soon, car companies have more of that
vehicle style than they can sell, so they must drop the price to sell the cars.
Companies that find themselves stuck with too much inventory must cut costs
somewhere, which often leads to layoffs. Unemployed individuals do not have
enough money available to purchase expensive items, which continues the trend.
Question 8
Earnings Per Share
Correct Answer
A company's net income divided by all the shares outstanding.
Question 9
Let's assume that the inflation rate in a given year in the US was 1.5%. Let's also
assume that in the following year, the inflation rate in the US was 0.8%. What do
these figures imply about the US economy?
Correct Answer
Healthy economic growth is indicated
Question 10
Reserve requirement
Correct Answer
A central bank regulation employed by most of the world's central banks that sets
the minimum fraction of customer deposits and notes that each commercial bank
must hold as reserves rather than lend out.
Page 3 of 19
and Correct Answers
Question 1
In comparing your financial statements between the current and previous years, you
find that you would like to be able to compare specific items on your income
statement to specific elements of your business activities. What should you use?
Correct Answer
Vertical percentage analysis
Question 2
SWOT Analysis
Correct Answer
Strengths, Weaknesses, Opportunities, and Threats: A technique to structure group
discussion to identify the internal and external forces that drive the company's
position in the market. Used effectively, a SWOT analysis can organize data and
information and determine the areas that a company needs to focus on in order to
move forward.
Question 3
Cash Flow Statement
Correct Answer
Tells what went into and came out of the company in cash. This is necessary
because accounting sometimes deals with revenues and expenses that are not real
cash. Looking at the actual cash flow gives a better idea of how well the company
can meet its cash obligations.
Page 1 of 19
,Question 4
Managerial Accounting
Correct Answer
Targeted toward individuals INSIDE the business. Used by managers to make
decisions concerning the day-to-day operations of a business. Reports are tailored
to the needs of individual managers, and the purpose of such reports is to supply
relevant, accurate, timely information in a format that will aid managers in making
decisions. It is based not on past performance, but on current and future trends,
which does not allow for exact numbers.
Question 5
Consumer Confidence
Correct Answer
An economic indicator measuring the degree of optimism that consumers feel
about the overall state of the economy and their personal financial situation.
Question 6
Income Statement
Correct Answer
Also called profit and loss statement and gives an account of what the company
sold and spent in the year. Sales (also called revenues), or what the company sold in
products and services less any expenses (expenses are divided into a number of
categories) less taxes gives the company's income. The income statement
summarizes all this type of activity for the year.
Page 2 of 19
, Question 7
Deflation
Correct Answer
Occurs when too many goods are available or when there is not enough money
circulating to purchase those goods.
For example, if a particular type of car becomes highly popular, other manufacturers
start to make a similar vehicle to compete. Soon, car companies have more of that
vehicle style than they can sell, so they must drop the price to sell the cars.
Companies that find themselves stuck with too much inventory must cut costs
somewhere, which often leads to layoffs. Unemployed individuals do not have
enough money available to purchase expensive items, which continues the trend.
Question 8
Earnings Per Share
Correct Answer
A company's net income divided by all the shares outstanding.
Question 9
Let's assume that the inflation rate in a given year in the US was 1.5%. Let's also
assume that in the following year, the inflation rate in the US was 0.8%. What do
these figures imply about the US economy?
Correct Answer
Healthy economic growth is indicated
Question 10
Reserve requirement
Correct Answer
A central bank regulation employed by most of the world's central banks that sets
the minimum fraction of customer deposits and notes that each commercial bank
must hold as reserves rather than lend out.
Page 3 of 19
