MBA Exit Exam Full comprehensive questions and verified answers
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Acid-Test Ratio - (ANSWER)The ratio of current assets And current liabilities also called quick ratio. The
ratio equals the sum of a company's cash, short term investments, and accounts receivable divided by its
current liabilities. This ratio shows how well of business is able to cover it short term obligations.
A quick ratio of one means - (ANSWER)The most liquid assets of a business or equal to its total deaths in
the business will just manage to repay all his debts by using its cash, marketable securities, and accounts
receivable.
A quick ratio of more than one means - (ANSWER)Indicates that the most liquid assets of a business
exceed its total debts.
A quick ratio of less than one means - (ANSWER)Indicates that a business would not be able to repay all
its debts by using its most liquid assets
net income from operations - (ANSWER)gross profit - operating expenses
change in equity equation - (ANSWER)Beginning Balance + Additional Investments=Ending Balance
Retained Earnings Equation - (ANSWER)Beginning Retained Earnings + Net Income - Dividends = Ending
Retained Earnings
permanent accounts - (ANSWER)balance sheet accounts whose balances are carried forward to the next
accounting period
temporary accounts - (ANSWER)Revenue, expense, and dividend accounts whose balances a company
transfers to Retained Earnings at the end of an accounting period.
The book value of an asset is equal to the - (ANSWER)d. asset's cost less accumulated depreciation.
Which of the following organizations is most likely
,MBA Exit Exam Full comprehensive questions and verified answers
ACTUAEXAM 2026 TEST!! Graded A+ | 2026|2027 EXAM UPDATE
to use project financing?
(A) A small start-up
(B) A financial services firm with an extensive client list
(C) A large consumer goods company
(D) A large public utility involved ininfrastructure development - (ANSWER)(D) A large public utility
involved in infrastructure development
Prosco Ltd. employs a process cost system. Inspection of units occurs at the 50 percent mark. Defective
units are then removed from the process, and their cost ($4.50) is absorbed by the good units. Prosco
has recently been approached by a firm wishing to buy the defective units for a special use. The firm
would require Prosco to modify the defective units at a unit cost of $2.00. If Prosco sells the defective
units to the firm for $5.00 each, how would Prosco's reported income be affected?
(A) It would decrease by $4.50 per unit sold.
(B) It would decrease by $1.50 per unit sold.
(C) It would increase by $3.00 per unit sold.
(D) It would increase by $5.00 per unit sold. - (ANSWER)(C) It would increase by $3.00 per unit sold.
If you were the holder of a call option (having cost you $2) on some stock with an exercise price of$20, it
would be best for you to exercise your option when the market price is at
(A) $18
(B) $20
(C) $22
(D) $24 - (ANSWER)(D) $24
The sales division of a corporation is considering an internal product transfer because of excess demand.
What is the lowest acceptable transfer price for the product?
(A) The amount that the company would have to pay to acquire a similar product
(B) The variable cost of producing a unit of product
(C) The full absorption cost of producing a unit of product
, MBA Exit Exam Full comprehensive questions and verified answers
ACTUAEXAM 2026 TEST!! Graded A+ | 2026|2027 EXAM UPDATE
(D) The difference between the market price and the costs recaptured by transferring internally -
(ANSWER)(D) The difference between the market price and the costs recaptured by transferring
internally
The Mart, a large retail chain, is considering whether or not to close down a division. The division's
projected income statement for the next year follows.
-Sales $20,000,000
-Cost of goods sold 17,000,000
-Gross profit 3,000,000
-Operating costs:
-Building rents $2,500,000
-Store clerk salaries 3,000,000
-Store utilities 1,200,000
-Allocated home office cost 700,000
-Total operating costs 7,400,000
-Anticipated loss ($4,400,000)
The building rents arise from long-term leases that cannot be cancelled. If The Mart closed down this
division, what would be the increase in company profits?
(A) $700,000
(B) $1,200,000
(C) $3,000,000
(D) $4,400,000 - (ANSWER)(B) $1,200,000
Which of the following should be reported net of tax on a corporation's income statement?
(A) Discontinued operations
(B) Operating income
(C) Gross profit
ACTUAEXAM 2026 TEST!! Graded A+ | 2026|2027 EXAM UPDATE
Acid-Test Ratio - (ANSWER)The ratio of current assets And current liabilities also called quick ratio. The
ratio equals the sum of a company's cash, short term investments, and accounts receivable divided by its
current liabilities. This ratio shows how well of business is able to cover it short term obligations.
A quick ratio of one means - (ANSWER)The most liquid assets of a business or equal to its total deaths in
the business will just manage to repay all his debts by using its cash, marketable securities, and accounts
receivable.
A quick ratio of more than one means - (ANSWER)Indicates that the most liquid assets of a business
exceed its total debts.
A quick ratio of less than one means - (ANSWER)Indicates that a business would not be able to repay all
its debts by using its most liquid assets
net income from operations - (ANSWER)gross profit - operating expenses
change in equity equation - (ANSWER)Beginning Balance + Additional Investments=Ending Balance
Retained Earnings Equation - (ANSWER)Beginning Retained Earnings + Net Income - Dividends = Ending
Retained Earnings
permanent accounts - (ANSWER)balance sheet accounts whose balances are carried forward to the next
accounting period
temporary accounts - (ANSWER)Revenue, expense, and dividend accounts whose balances a company
transfers to Retained Earnings at the end of an accounting period.
The book value of an asset is equal to the - (ANSWER)d. asset's cost less accumulated depreciation.
Which of the following organizations is most likely
,MBA Exit Exam Full comprehensive questions and verified answers
ACTUAEXAM 2026 TEST!! Graded A+ | 2026|2027 EXAM UPDATE
to use project financing?
(A) A small start-up
(B) A financial services firm with an extensive client list
(C) A large consumer goods company
(D) A large public utility involved ininfrastructure development - (ANSWER)(D) A large public utility
involved in infrastructure development
Prosco Ltd. employs a process cost system. Inspection of units occurs at the 50 percent mark. Defective
units are then removed from the process, and their cost ($4.50) is absorbed by the good units. Prosco
has recently been approached by a firm wishing to buy the defective units for a special use. The firm
would require Prosco to modify the defective units at a unit cost of $2.00. If Prosco sells the defective
units to the firm for $5.00 each, how would Prosco's reported income be affected?
(A) It would decrease by $4.50 per unit sold.
(B) It would decrease by $1.50 per unit sold.
(C) It would increase by $3.00 per unit sold.
(D) It would increase by $5.00 per unit sold. - (ANSWER)(C) It would increase by $3.00 per unit sold.
If you were the holder of a call option (having cost you $2) on some stock with an exercise price of$20, it
would be best for you to exercise your option when the market price is at
(A) $18
(B) $20
(C) $22
(D) $24 - (ANSWER)(D) $24
The sales division of a corporation is considering an internal product transfer because of excess demand.
What is the lowest acceptable transfer price for the product?
(A) The amount that the company would have to pay to acquire a similar product
(B) The variable cost of producing a unit of product
(C) The full absorption cost of producing a unit of product
, MBA Exit Exam Full comprehensive questions and verified answers
ACTUAEXAM 2026 TEST!! Graded A+ | 2026|2027 EXAM UPDATE
(D) The difference between the market price and the costs recaptured by transferring internally -
(ANSWER)(D) The difference between the market price and the costs recaptured by transferring
internally
The Mart, a large retail chain, is considering whether or not to close down a division. The division's
projected income statement for the next year follows.
-Sales $20,000,000
-Cost of goods sold 17,000,000
-Gross profit 3,000,000
-Operating costs:
-Building rents $2,500,000
-Store clerk salaries 3,000,000
-Store utilities 1,200,000
-Allocated home office cost 700,000
-Total operating costs 7,400,000
-Anticipated loss ($4,400,000)
The building rents arise from long-term leases that cannot be cancelled. If The Mart closed down this
division, what would be the increase in company profits?
(A) $700,000
(B) $1,200,000
(C) $3,000,000
(D) $4,400,000 - (ANSWER)(B) $1,200,000
Which of the following should be reported net of tax on a corporation's income statement?
(A) Discontinued operations
(B) Operating income
(C) Gross profit
