MAJOR FIELD TEST BUSINESS EXAM 2026/2027
QUESTIONS AND ANSWERS RATED A+
✔✔Securities Act of 1935 - ✔✔Established the SEC Securities and Exchange
Commission with the explicit authority to establish the rules, standards, and procedures
used to account for transactions and events. Also to establish the form and content of
published financial reporting.
✔✔Management Accounting - ✔✔Concerned with identification, measurement,
accumulation, analysis, preparation, interpretation, and communication of financial
information used my management to plan and evaluate and control within an
organization to assure appropriate use of and accountability of resources.
✔✔Cost Accounting - ✔✔Concerned only with the cost of a product or service.
✔✔Product Costs - ✔✔Cost of the various products manufactured and sold by a
company. (Examples: Inventory Costs or Cost of Prodcution
✔✔Period Cost - ✔✔ll costs incurred by a company that are not considered product
costs. (Examples: Administration Expenses or Selling Expenses)
✔✔Direct Costs - ✔✔A cost that is easily traceable to the cost object and is a result
solely of the cost object. (Example: Lye used to make bars of soap.)
✔✔Indirect Cost - ✔✔A cost that supports more than one cost objects, and must be
"allocated" to those various cost objects (Example: Electricity used at a plant.)
✔✔Direct Material - ✔✔Cost of materials used in production. (Examples: sheet metal,
tires, fabric, etc.)
✔✔Direct Labor - ✔✔Cost of Labor used in production. (Example: assembly line
workers)
✔✔Manufacturing Overhead - ✔✔Indirect factory-related costs that are incurred when a
product is manufactured. (Examples: facility costs, indirect labor, machine set up costs,
quality control, etc.)
✔✔Variable Costs - ✔✔Expenses that vary directly with changes in activity or changes
in volume.
✔✔Fixed Cost - ✔✔Expenses that do not change as a function of the activity of a
business, within the relevant period. (Examples: Rent, Utilities, etc.)
✔✔Adam Smith - ✔✔Father of Economics
,Responsible for Division of Labor 1776:
Tasks are subdivided into individual jobs
Employees perform only the tasks relevant to their specialized function
Jobs tend to be small, but they can be performed efficiently
Proposes that production can be increased by dividing labor on to similar tasks
✔✔Frederick Winslow Taylor - ✔✔Scientific Management 1911: Developed standard
method for performing each job
Selected workers with appropriate abilities for each job.
Trained workers in standard method.
Provided wage incentives to workers for increased output.
Did not acknowledge variance among workers.
Did not appreciate social context of work and higher needs of workers.
✔✔Max Weber - ✔✔Bureaucracy:
Focused on the organization as a whole
Organizations needed division of labor with clear
definitions of authority and responsibility.
Positions organized in a hierarchy of authority.
✔✔Henri Favol - ✔✔Developed the 14 General Principles of Management
✔✔14 General Principles of Management - ✔✔Division of Labor, Authority, Discipline,
Unity of Command, Unity of Direction, Subordination of Individual Interests to the
General Interest, Remuneration, Centralization, Scalar Chain, Order, Equity, Stability of
Tenure of Personnel, Initiative, and Esprit de Corps
✔✔Division of Labor or Work (Management) - ✔✔When employees are specialized,
output can increase because they become increasingly skilled and efficient.
✔✔Authority (Management) - ✔✔Managers must have the authority to give orders, but
they must also keep in mind that with authority comes responsibility.
, ✔✔Discipline (Management) - ✔✔Discipline must be upheld in organizations, but
methods for doing so can vary.
✔✔Unity of Command (Management) - ✔✔Employees should have only one direct
supervisor.
✔✔Unity of Direction (Management) - ✔✔Teams with the same objective should be
working under the direction of one manager, using one plan. This will ensure that action
is properly coordinated.
✔✔Subordination of Individual Interests to the General Interest (Management) - ✔✔he
interests of one employee should not be allowed to become more important than those
of the group. This includes managers.
✔✔Remuneration (Management) - ✔✔Employee satisfaction depends on fair
remuneration for everyone. This includes financial and non-financial compensation.
✔✔Centralization (Management) - ✔✔Centralization - This principle refers to how close
employees are to the decision-making process. It is important to aim for an appropriate
balance.
✔✔Scalar Chain (Management) - ✔✔Employees should be aware of where they stand
in the organization's hierarchy, or chain of command.
✔✔Order (Management) - ✔✔The workplace facilities must be clean, tidy and safe for
employees. Everything should have its place.
✔✔Equity (Management) - ✔✔Managers should be fair to staff at all times, both
maintaining discipline as necessary and acting with kindness where appropriate.
✔✔Stability of Tenure of Personnel (Management) - ✔✔Managers should strive to
minimize employee turnover. Personnel planning should be a priority.
✔✔Initiative (Management) - ✔✔Employees should be given the necessary level of
freedom to create and carry out plans.
✔✔Esprit de Corps (Management) - ✔✔Organizations should strive to promote team
spirit and unity.
✔✔Abraham Maslow - ✔✔Hierarchy of Needs:
Proposes that individuals have a hiearchy of needs that need to be fulfilled in order.
QUESTIONS AND ANSWERS RATED A+
✔✔Securities Act of 1935 - ✔✔Established the SEC Securities and Exchange
Commission with the explicit authority to establish the rules, standards, and procedures
used to account for transactions and events. Also to establish the form and content of
published financial reporting.
✔✔Management Accounting - ✔✔Concerned with identification, measurement,
accumulation, analysis, preparation, interpretation, and communication of financial
information used my management to plan and evaluate and control within an
organization to assure appropriate use of and accountability of resources.
✔✔Cost Accounting - ✔✔Concerned only with the cost of a product or service.
✔✔Product Costs - ✔✔Cost of the various products manufactured and sold by a
company. (Examples: Inventory Costs or Cost of Prodcution
✔✔Period Cost - ✔✔ll costs incurred by a company that are not considered product
costs. (Examples: Administration Expenses or Selling Expenses)
✔✔Direct Costs - ✔✔A cost that is easily traceable to the cost object and is a result
solely of the cost object. (Example: Lye used to make bars of soap.)
✔✔Indirect Cost - ✔✔A cost that supports more than one cost objects, and must be
"allocated" to those various cost objects (Example: Electricity used at a plant.)
✔✔Direct Material - ✔✔Cost of materials used in production. (Examples: sheet metal,
tires, fabric, etc.)
✔✔Direct Labor - ✔✔Cost of Labor used in production. (Example: assembly line
workers)
✔✔Manufacturing Overhead - ✔✔Indirect factory-related costs that are incurred when a
product is manufactured. (Examples: facility costs, indirect labor, machine set up costs,
quality control, etc.)
✔✔Variable Costs - ✔✔Expenses that vary directly with changes in activity or changes
in volume.
✔✔Fixed Cost - ✔✔Expenses that do not change as a function of the activity of a
business, within the relevant period. (Examples: Rent, Utilities, etc.)
✔✔Adam Smith - ✔✔Father of Economics
,Responsible for Division of Labor 1776:
Tasks are subdivided into individual jobs
Employees perform only the tasks relevant to their specialized function
Jobs tend to be small, but they can be performed efficiently
Proposes that production can be increased by dividing labor on to similar tasks
✔✔Frederick Winslow Taylor - ✔✔Scientific Management 1911: Developed standard
method for performing each job
Selected workers with appropriate abilities for each job.
Trained workers in standard method.
Provided wage incentives to workers for increased output.
Did not acknowledge variance among workers.
Did not appreciate social context of work and higher needs of workers.
✔✔Max Weber - ✔✔Bureaucracy:
Focused on the organization as a whole
Organizations needed division of labor with clear
definitions of authority and responsibility.
Positions organized in a hierarchy of authority.
✔✔Henri Favol - ✔✔Developed the 14 General Principles of Management
✔✔14 General Principles of Management - ✔✔Division of Labor, Authority, Discipline,
Unity of Command, Unity of Direction, Subordination of Individual Interests to the
General Interest, Remuneration, Centralization, Scalar Chain, Order, Equity, Stability of
Tenure of Personnel, Initiative, and Esprit de Corps
✔✔Division of Labor or Work (Management) - ✔✔When employees are specialized,
output can increase because they become increasingly skilled and efficient.
✔✔Authority (Management) - ✔✔Managers must have the authority to give orders, but
they must also keep in mind that with authority comes responsibility.
, ✔✔Discipline (Management) - ✔✔Discipline must be upheld in organizations, but
methods for doing so can vary.
✔✔Unity of Command (Management) - ✔✔Employees should have only one direct
supervisor.
✔✔Unity of Direction (Management) - ✔✔Teams with the same objective should be
working under the direction of one manager, using one plan. This will ensure that action
is properly coordinated.
✔✔Subordination of Individual Interests to the General Interest (Management) - ✔✔he
interests of one employee should not be allowed to become more important than those
of the group. This includes managers.
✔✔Remuneration (Management) - ✔✔Employee satisfaction depends on fair
remuneration for everyone. This includes financial and non-financial compensation.
✔✔Centralization (Management) - ✔✔Centralization - This principle refers to how close
employees are to the decision-making process. It is important to aim for an appropriate
balance.
✔✔Scalar Chain (Management) - ✔✔Employees should be aware of where they stand
in the organization's hierarchy, or chain of command.
✔✔Order (Management) - ✔✔The workplace facilities must be clean, tidy and safe for
employees. Everything should have its place.
✔✔Equity (Management) - ✔✔Managers should be fair to staff at all times, both
maintaining discipline as necessary and acting with kindness where appropriate.
✔✔Stability of Tenure of Personnel (Management) - ✔✔Managers should strive to
minimize employee turnover. Personnel planning should be a priority.
✔✔Initiative (Management) - ✔✔Employees should be given the necessary level of
freedom to create and carry out plans.
✔✔Esprit de Corps (Management) - ✔✔Organizations should strive to promote team
spirit and unity.
✔✔Abraham Maslow - ✔✔Hierarchy of Needs:
Proposes that individuals have a hiearchy of needs that need to be fulfilled in order.
