ETS Business Exam Study Guide exam with correct answers 2024

Accounting: What costs should be considered when making non-routine decisions? (3) - correct answer The price of material, Factory overhead costs, and the price of labor Accounting: Total product/ units produced and sold equals?? - correct answer Product Cost per Unit Accounting: What is a general explanation of what the contribution margin is? - correct answer The difference between variable costs subtracted from sales Accounting: In a continuous budget plan how many months are generally planned? - correct answer 12 months Accounting: Which of the following is not one of the weaknesses of standard costing - correct answer It makes accounting for price increases more accurate Accounting: What are the potential ways to find the price of what a produced products should cost? (3) - correct answer Product cost concept, total cost concept, and variable cost concept Accounting: Which report is the connecting link between the income statement and the balance sheet? - correct answer Cash flow statement The net cash flow from operating activities normally differs from the amount of net income for the period. - correct answer True Accounting: Expense accounts would have a balance on which side? - correct answer Left side Accounting: A profit-making business operating as a separated legal entity and in which ownership is divided into shares of stock is known as a... - correct answer Corporation Accounting: A debt may slightly - correct answer Increase in an asset account Accounting: What would be classified as a current asset on the balance sheet - correct answer Accounts receivable Accounting: What are the elements of internal control? (3) - correct answer Control environment, monitoring, and control procedures. True or False: A cash distribution of earnings by a corporation to its stockholders is called a CASH DIVIDEND. The 3 conditions that a corporation must meet to pay a cash dividend are: sufficient retained earnings, sufficient cash, and formal action by the board of directors. - correct answer True Accounting: Factors in computing depreciation are? - correct answer Initial cost + residual value = depreciable Accounting: The statement of cash flows reports a firm's major cash inflows and outflows for a period. It provides useful information about a company's ability to do the following?? - correct answer Meet its financial obligations, generate cash from operations, and maintain and expand its operating capacity Accounting: True or False: Notes receivables are amounts that customers owe for which a formal, written instrument of credit has been issued. If longer than a year it is considered an investment. - correct answer True Accounting: The excess of current assets of a business over its current liabilities is called? - correct answer Working capital Accounting: What 2 categories are considered under period costs? - correct answer selling expenses and administrative expenses Accounting: The effect of a difference in the number of units sold, assuming no charge in unit sales price or unit cost is... - correct answer Quantity factor Accounting: A cost that will not be affected by later decisions is termed an - correct answer Sunk Cost Accounting: The unfavorable volume variance may be due to all but the following facts... - correct answer Unexpected increases in the cost of utilities Accounting: What budget allows for adjustments in activity levels? - correct answer Flexible budget Accounting: A budget that summarizes future plans for the acquisition of fixed assets is the... - correct answer Capital expenditures budget Accounting: What are the standard framework of guidelines for financial accounting used in any given jurisdiction, also known as accounting standards?? - correct answer GAAP Economics: What occurs when the price level rises? - correct answer People need to hold more money, so interest rates rise, making firms borrow and invest less Economics: The federal government enacted regulation in the 1960's requiring people to wear seatbelt in their cars. All of the following resulted from this regulation, EXCEPT: - correct answer Fewer pedestrians were killed in car accidents. Economics: Which of the following is true regarding the production possibilities frontier model of the economy? - correct answer Any point along the PPF represents an efficient level of production. Economics: If the price in a market happens to be above equilibrium, there will be a _____ in the market, and the price will tend to _____. - correct answer Surplus, drop Economics: The price elasticity of demand tends to be more elastic... - correct answer At points further up and to the left along the demand curve Economics: If a tax imposed on a good and the incidence of the tax ends up falling more heavily on the buyers than on the sellers, this will be because... - correct answer Demand is less elastic than supply for that good Economics: If the quantity traded in a market is less than the equilibrium quantity... - correct answer The value to consumers for additional units is greater than the cost to sellers of producing those units. Economics: A given tax will cause a bigger deadweight loss if demand and supply are... - correct answer Elastic Economics: What is a statement is true regarding international trade? - correct answer For the importing country, the gains from international trade outweigh the losses. Economics: What statement is true regarding the revenues of a firm? - correct answer The marginal revenue and the average revenue are equal to the price Economics: Suppose the price of fish increases, so households now buy less fish and more chicken. This will cause the... - correct answer CPI to measure more inflation than there really is Economics: The unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills is called? - correct answer Frictional unemployment Economics: What occurs when the Fed reduces the reserve requirement? - correct answer The money multiplier gets bigger Economics: In a housing bust what would an economist expect the price of homes to do? - correct answer Make prices go down because of excess supply Economics: What does balance of payment (BOP) mean? - correct answer The method countries use to monitor all international monetary transactions at a specific period of time. Economics: What is an example events would decrease the supply of money? - correct answer The banks increasing their amount of excess reserve Economics: What is money? - correct answer A store of value and a medium of exchange Economics: What market types describes most modern economics? - correct answer Mixed economy Economics: Rational people make decisions on the margins. Which statement would NOT result in a purchase of the product being analyzed - correct answer MC > MB Economics: How does the federal reserve control the money supply? - correct answer Prints more as needed Economics: Tariffs generate tax revenue for the firms that hold an import license - correct answer False Economics: What 2 terms are used to describe the aggregate supply curve and how it is shaped? - correct answer Long run and short run Economics: If the price of a good is artificially set below the equilibrium price, what does this create? - correct answer Shortage of goods. Economics: What is the name of unwanted side effects of the production of goods? - correct answer Negative externality Economics: The gains from specialization and trade are based on comparative advantage - correct answer True Finance: The more frequent the compounding, the higher the future value, other things being equal - correct answer True Finance: For a given amount, the lower the discount rate, the less the present value - correct answer False Finance: Under which of the following conditions will a future value calculated with simple interest exceed a future value calculated with compound interest at the same rate? - correct answer This is not possible with positive interest rates Finance: A level stream of cash payments that continues indefinitely is known as a perpetuity; one that continues for a limited number of years is called an annuity. What type of statement is this? - correct answer Regarding present and future values of streams of cash payments Finance: The decision rule for net present value is to - correct answer Accept all projects with positive net present values Finance: One comes reason for issuing 2 distinct classes of common stock is to - correct answer restrict voting privileges from some shareholders Finance: Treasury bills have a beta of zero? - correct answer True Finance: As the coupon rate of a bond increases, the bonds' - correct answer interest payments increase Finance: If a stock's P/E ratio is 13.5 at a time when earning $3 per year, what is the stock's current price? - correct answer $40.50 (13.5 * 3) Finance: What are the 3 service/ product provided to corporations by financial markets and institutions? - correct answer Valuation of the company, financing, and contracts to manage risk Finance: Cost of capital is the return investors could expect - correct answer True Finance: A firm's mixture of long term financing and equity financing is called... - correct answer Capital structure Finance: The weighted average cost of capital is adjusted for tax savings - correct answer True Finance: If there is a total of $800 on the balance sheet and long term bonds account for $200, what is the weighted percentage that the long term bonds hold? - correct answer 25% (200/800= .25 *100) Finance: Financial statement analysis is assuming relationships between the items of the balance sheet and the profit and loss account - correct answer True Finance: You've been saving up to buy the Godot Company. The total cost will be $10 million. You currently have about $2.3 million. If you can earn 5% on your money, how long will you wait? - correct answer 20 million Finance: What is an example of perpetuity? - correct answer $10,000 annual payments from a trust fund forever Law: It requires proof of breach of a statutory or common-law duty. is an example of? - correct answer Tort of negligence Law: What is not true when it regards a seller's rights to reduce legal liability in the sale on non-comsusmer goods? - correct answer The seller can disclaim all implied warranties by simply stating that there are no implied warranties. Law: The establishment clause holds that - correct answer The government cannot pass laws that promote religion or show preference for one religion over another. Law: If an injured party entered into an activity with knowledge that it may be dangerous and voluntarily assumed that risk, which defense to the tort of negligence might be asserted? - correct answer Assumption of risk Law: In order to assert a design defect, a plaintiff might be able to show that a reasonable alternative design was available and that the defendant's failure to adopt the alternative design rendered the product unreasonably dangerous. - correct answer True Law: The Sherman act protect consumers from? - correct answer Trade and commerce against unlawful restraints and monopolies Law: Violations of OSHA can result in (3) - correct answer criminal penalties, fines, and termination Law: Fair debt collection practices protect consumers from - correct answer being harassed Law: Violations of the clean water act can result in (3) - correct answer Criminal charges, cleaning up the polluted area, and fines Law: What are the requirements of all contracts (4) - correct answer Consideration, legality, capacity, and agreement Law: What is the type of damage that would be used to recognize wrong doing when no monetary loss is shown? - correct answer Punitive Law: A partner in an LLC can be held liable for the debts of the LLC? - correct answer False Law: A plaintiff in a lawsuit is not responsible for minimizing the damages they suffer as a result of the defendant's actions - correct answer False Law: An example of intangible personal property? - correct answer Copyrights Law: A stock certificate issued by a corporation that evidences ownership of a specified number of shares in the corporation - correct answer True Law: A corporation is a legal entity created and recognized by state law. It can consist of only one natural person identified under a common name. - correct answer False Law: What are the legal defenses of a criminal culpability (3) - correct answer Mistake of fact, statue of limitations, and duress Law: Civil law deals with the rights and duties exiting between individual persons, and persons and the government, and the relief available when rights are violated. - correct answer True Law: In an agency relationship, the principal owes a duty to the agent. - correct answer True Law: Our fundamental rights include (4) - correct answer Marriage and procreation, interstate travel, all first amendment rights, and privacy and voting Law: If a person who is sufficiently intoxicated to lack mental capacity enters into a contract, voiding the contract is an option to that person. - correct answer True Law: All contracts must be in writing even those contracts to be performed within one year - correct answer False Law: What is one of the defenses to product liability - correct answer Comparative negligence and liability Law: Punitive damages are awarded to punish the breaching party - correct answer True Law: Negligence per se if an example of an intentional tort against a person - correct answer False Management: Surface level diversity (3) - correct answer Race/ ethnicity, age, and physical disabilities Management: Disadvantages of teams (3) - correct answer Disadvantages of group decision making, social loafing, and initially high employee turnover Management: Pay variability includes (3) - correct answer Stock options, commission, and piecework Management: The stages of team development includes (3) - correct answer forming, performing, and norming Management: Job redesign techniques include (3) - correct answer Combining tasks, redesigning jobs, and forming natural work units Management: The 4 management functions are planning, organizing, leading, and controlling - correct answer True Management: Scientific management is throughly studying and testing different work methods to identify the best, most efficient way to complete a job - correct answer True Management: Companies cannot be prosecuted or punished if management did not know about unethical behavior - correct answer True Management: When a multinational company has offices/plants in different countries and uses the same rules, guidelines, policies, and procedures, this is referred to as - correct answer Global consistency Management: The vertical and horizontal configuration oaf departments authority, and jobs within a company is - correct answer Organizational structure Management: Social loafing is behavior in which team members withhold their efforts and fail to perform their share of the work - correct answer True Management: Bona Fide occupational qualifications is defines as reasonably necessary for the normal operation of that particular business - correct answer True Maslow's hierarchy of need are self actualization, safety, belongingness, physiological, and esteem. - correct answer True Management: Leader and manager have 2 different goals in mind and are not the same - correct answer True Management: Self control or self management is a system which managers and workers control their own behavior - correct answer True Management: Quality is a product or service that has deficiencies and satisfies the customer - correct answer False Management: Type of inventories are (3) - correct answer Raw materials, component parts, and finished goods Management: Environmental change, environmental complexity, and rescue scarcity are the basic components of external environments - correct answer True: Management: 2 types of feedback are constructive and destructive - correct answer True Management: Total quality management is an approach that seeks to improve quality and performance which will meet or exceed customer expectations - correct answer True Management: What are the steps in the strategy planning process (3) - correct answer Situational analysis, choosing strategic alternative, and assessing need for change Management: Strategic dissonance - correct answer Discrepancy between a company's intent and managerial actions Management: Strategic reference points are used to measure whether a firm has - correct answer developed sustainable competitive advantages Management: There are 3 types of res to consider when choosing strategic alternatives; risk avoiding, risk seeking and risk taking - correct answer False Marketing: Marketing penetration is marketing strategy that tries to increase market share amoung existing customer - correct answer True Marketing: The 4 categories of portfolio matrix are stars, problem, child or questions mark, cash cows, and dog - correct answer True Marketing: Purchasing power is a comparison of income verses the relative cost of a set standard of goods and services in difference geographic areas - correct answer True Marketing: Dumping is the sale of an exported product at a price higher than that charged for the same or a like product in the home market of the exporter - correct answer False Marketing: A straight re-buy is a situation in which the purchaser reorders the same goods or service without looking for new information or investigation other suppliers - correct answer True Marketing: Inelastic demand is demand without regard to price. An increase or decrease in the product prices ill not significantly affect the demand for the product - correct answer True Marketing: The business market has were customer than the consumer market: - correct answer True Marketing: The 4 criteria of market segmentations are substantiality, identifiability, accessibility, and responsiveness - correct answer True Marketing: The 3 levels of distribution intensity are intensive distribution, selective distribution and distribution exclusive - correct answer True Marketing: The Robinson-Patman act of 1936 was enacted in response to price discrimination - correct answer True Marketing: The questionnaire design has 3 basic designs; open ended questions, close ended questions, and scaled response questions - correct answer True Marketing: Organizations that exists to achieve goals rather than profits called - correct answer non profit organizations Marketing: If Starbucks were to offer free coffee to first time customers it would be practicing which strategic alternative - correct answer Market development Marketing: A firm that engages in environmental management attempts to change - correct answer Legal regulations Marketing: A marketing campaign aimed at ____ should emphasize speed and convenience - correct answer Generation Y Marketing: On a recent vacation, Doug enjoyed shampoo that the hotel provided so much that he wants to buy it for his hime. This is an example of - correct answer An internal information search Marketing: The extent to which an individual conducts an external search depends on perceived risk, knowledge, level of interest in the godson service and - correct answer Prior experience Marketing: Cecilia, a recent emigre from Argentina, decides to open a savings account at a certain bank because they have a bilingual teller. This is an example of which influence on consumer buying decisions - correct answer Cultural Marketing: An effective away to increase business with existing customers and retain current customers it to - correct answer Build relationship Marking: ____ Is the process where distinct market segments are identified - correct answer Market segmentation Marketing: Toyota promotes its Sienna minivan as a safe and practical vehicle for families. This is an example of - correct answer Family life cycle segmentations Marketing: In Starbucks ____ will occur if its new VIA line of instant coffee leads to reduced sales of its coffee beans - correct answer Cannibalization Marketing: In market research, a ____ is a necessary because it is difficult to impossible to take a census of or interview all possible users of a certain product - correct answer Sample Marketing: What is an example of a non profit organization - correct answer The university of Chicago Marketing: A janitor finds a vacuum that is much more powerful and efficient than his current model. This is an example of. - correct answer How consumers recognize unfulfilled wants MIS: The amount of data that can be transferred from one point to another in a certain time period usually one second is - correct answer Bandwidth MIS: What are the benefits that an extranet offers an organization (3) - correct answer Coordination, feedback, and cost reduction MIS: Companies sell directly to consumers - correct answer Business to consumer MIS: Structure manages highly centralized information systems - correct answer Global MIS: The series of well defined phases performed in sequence that serves as a framework for developing a system or project is - correct answer System development life cycle (SDLC) MIS: Data and information that is volatile and can be lost when power is turned off - correct answer Main memory MIS: Unauthorized use of computer data for personal gain is - correct answer Computer fraud MIS: GIS stands for - correct answer Global information system MIS: Allows for small business to reach customers across the globe - correct answer e-business MIS: Commonly accepted types of global organizations - correct answer Multinational, international, and transnational MIS: Term used when fraudulent emails seem to come from a legitimate source - correct answer Phishing MIS: A network interface card allows - correct answer Computers to connect to a network MIS: RAM stands for - correct answer random access memory MIS: Software is classified broadly as - correct answer System software and application software MIS: Software for creating storing, maintaining, and accessing database files is a - correct answer Database management system MIS: What components are a part of data hierarchy - correct answer Field, record, and file MIS: Waterfall, Agile, Iterative, and release are all different types of - correct answer Software development lifecycles MIS: First step in standard SDLC - correct answer Planning MIS: Global information system is defined in terms of two dimensions - correct answer control and coordination MIS: Windows XP is an application not an operating system - correct answer False MIS: An ERP solution, such as PeoplSoft is something that is used across a company - correct answer True MIS: Supply chain management is the process of working with suppliers and other partners in the supply chain to improve procedures for delivery products and services. - correct answer True MIS: The supply chain is an integrated network organized with suppliers, transportation companies, and brokers. They also are used to deliver goods and services to consumers - correct answer True MIS: Information systems increase the cost of products and services in an organization - correct answer False MIS: Viruses, worms, and Trojan programs are types of non-intentional threats - correct answer False. Stats: The balances scorecard includes what performance perspectives? - correct answer Customer, financial, and internal Stats: A lamp manufacturer has developed 5 lamp bases and 4 lampshades that are interchangeable. How many different arrangements of base and shade can be offered? - correct answer 20 (4*5) Stats: A one-time variation that is explainable - correct answer Irregular variation Stats: Quality control systems include what components (3) - correct answer Performance standard or goal, means of measuring actual performance, and comparison of actual performance with the standard to form the basis for corrective action Stats: A conditional probability is the probability that - correct answer A particular event will occur given that another event has occurred Stats: Steps in Hypothesis testing (3) - correct answer Formulate a decision rule, select a level of significance, and identify the test statistic Stats: A mathematical equation or formula that helps a firm in determining the economic order, quantity, and the frequency of ordering to keep goods or services flowing to the customer without interruption or delay is - correct answer Inventory modeling Stats: the critical path method (CPM) assumes - correct answer Activity time estimates are accurate and stable, once an activity is started it continues uninterrupted until it is completed, and the project network defines a correct sequence of work in terms of technology and workflow Stats: Queue time is a fancy word for - correct answer wait time Stats: The value of the observation that appears the most frequently is - correct answer the mode Stats: Joint probability is - correct answer mutually exclusive, 2 events that occur simultaneously, and joins 2 or more events Stats: A sample selected so that each item or person in the population has the same chance of being included is - correct answer a simple random sample Stats: A _____ estimate that is a single value derived from a sample and used to estimate a population value - correct answer point estimate Stats: As you get further away from the mean, in a normal curve distribution, your probability gets - correct answer Lower Stats: A _____ is a value used to determine whether to reject the null hypothesis - correct answer Test statistic Stats: A normal distribution is bell shaped, symmetrical, and asymptotic (t/f) - correct answer True Stats: A null hypothesis is a statement developed to prove numerical evidence (t/f) - correct answer False Stats: A statistical process control is utilized to ensure that a process is operating at its full potential (t/f) - correct answer True Stats: In a permutation, the order of arrangement does not matter (t/f) - correct answer False Stats: A population is the entire set of individuals or objects of interest or the measurements obtained from all individuals (t/f) - correct answer True Stats: A standard deviation is a constant interval throughout a normal curve distribution (t/f) - correct answer True Stats: When controlling a six sigma process, statistical process control (SPC) is an extremely effective methodology (t/f) - correct answer False Stats: Mutually exclusive is defined as the occurrence of one event and that none of the other events can occur at the same time (t/f) - correct answer True Stats: A hypothesis is a statement about a sample subject to test (t/f) - correct answer False Net working capital - correct answer current assets less short term liabilities Within the context of the capital asset pricing model, the risk measure known as beta is often computed by regressing the return of the company stock against the - correct answer return on the market portfolio When the OPEC reduces production by 10% and the growth rate of the world economy begins to escalate. How will the simultaneous occurrence of these events affect the equilibrium price and quantity in the world petroleum market - correct answer Price will increase, but the quantity is indeterminate As a result of the US government imposing tariffs own foreign steel imports - correct answer employment in the :US steel industry would increase In an economy the unemployment rate is 10% and the inflation rate is 2%. An appropriate fiscal policy in this phrase of the business cycle would be to - correct answer increase government spending What is an appropriate federal reserve avian to stimulate the US economy - correct answer reduce the reserve requirement A firm that would like to know whether it has enough cash to meet its bills would be most likely to use which category of financial ratio - correct answer liquidity In a period of rising prices, which inventory valuation method would generally yield both the lowest ending inventory valve and the lowest net income figure - correct answer LIFO In the statement of cash flows, the section for cash flows from operating activities will include - correct answer a decrease in accounts payable Frederick Taylor developed what pay principle - correct answer incentive pay When a domestic firm permits a foreign company to manufacture and sell its product in exchange for a fee or royalty, the process is termed - correct answer licensing web 2.0 is - correct answer social networking sites What type of investment constraints on services marketing - correct answer inseparability