MBA ETS Major Field Test
Questions With Revised Correct
Answers
BEST UPDATED!!
Cash Accounting - ANSWER recognizes transactions only
when payment is exchanged.
Capital stock - ANSWER amount of common and preferred
shares that a company is authorized to issue, recorded on the
balance sheet under shareholders' equity;
amount of capital stock is the maximum amount of shares that
a company can ever have outstanding
Asset - ANSWER resource with economic value that an
individual, corporation or country owns or controls with the
expectation that it will provide future benefit.
,Current assets - ANSWER all the assets of a company that
are expected to be sold/used as a result of standard biz ops
over the next year;
includes cash/cash equivalents, accts receivable, inventory,
prepaid expenses, marketable securities
Non current assets - ANSWER long-term investments not
easily converted to cash or are not expected to become cash
within the year; includes investments, intellectual property,
real estate, and equipment
Theory of Constraints - ANSWER every process/op is a
series of activities, and there is a WEAK LINK (aka bottleneck)
that hinders output
Special Order Decisions - ANSWER focus on whether a
specially priced order should be accepted or rejected; fixed
costs excluded from special orders
Make or buy decisions - ANSWER whether or not to
manufacture a product in house or purchase it from 3rd party
,Transfer pricing - ANSWER allows for estab. of prices for
goods/services exchanged btwn legal entities of the same
group
Sell or process further decision - ANSWER choice of selling
a product now or processing it further to earn more revenue
Forecasting - ANSWER using current and historic cost data
to predict future costs
Cash budget - ANSWER estimates cash inflows/outflows
over a specific period of time
Variance analysis - ANSWER study of deviations of actual
behavior vs. forecasted behavior and how it affects biz
performance
Cost behavior - ANSWER the ways in which costs react to
changes in biz activity
, variable costs - ANSWER costs that vary with the quantity
of output produced; include direct labor costs, costs of raw
materials used, utility costs
fixed costs - ANSWER Costs that DO NOT vary with the
quantity of output produced; includes interest payments, rent,
salaries
break-even analysis - ANSWER tells you how many units of
a product must be sold to cover the fixed and variable costs of
production
break-even point - ANSWER the level of production at
which the costs of production = the revenues for a product
target profit - ANSWER expected amount of profit achieved
by the end of designated accounting period; comes from the
budgeting process, compared to actual profit in income
statement
absorption costing - ANSWER AKA "full costing"; includes
all direct costs assoc. w/ manufacturing a product; allocates
fixed overhead costs to all units produced
Questions With Revised Correct
Answers
BEST UPDATED!!
Cash Accounting - ANSWER recognizes transactions only
when payment is exchanged.
Capital stock - ANSWER amount of common and preferred
shares that a company is authorized to issue, recorded on the
balance sheet under shareholders' equity;
amount of capital stock is the maximum amount of shares that
a company can ever have outstanding
Asset - ANSWER resource with economic value that an
individual, corporation or country owns or controls with the
expectation that it will provide future benefit.
,Current assets - ANSWER all the assets of a company that
are expected to be sold/used as a result of standard biz ops
over the next year;
includes cash/cash equivalents, accts receivable, inventory,
prepaid expenses, marketable securities
Non current assets - ANSWER long-term investments not
easily converted to cash or are not expected to become cash
within the year; includes investments, intellectual property,
real estate, and equipment
Theory of Constraints - ANSWER every process/op is a
series of activities, and there is a WEAK LINK (aka bottleneck)
that hinders output
Special Order Decisions - ANSWER focus on whether a
specially priced order should be accepted or rejected; fixed
costs excluded from special orders
Make or buy decisions - ANSWER whether or not to
manufacture a product in house or purchase it from 3rd party
,Transfer pricing - ANSWER allows for estab. of prices for
goods/services exchanged btwn legal entities of the same
group
Sell or process further decision - ANSWER choice of selling
a product now or processing it further to earn more revenue
Forecasting - ANSWER using current and historic cost data
to predict future costs
Cash budget - ANSWER estimates cash inflows/outflows
over a specific period of time
Variance analysis - ANSWER study of deviations of actual
behavior vs. forecasted behavior and how it affects biz
performance
Cost behavior - ANSWER the ways in which costs react to
changes in biz activity
, variable costs - ANSWER costs that vary with the quantity
of output produced; include direct labor costs, costs of raw
materials used, utility costs
fixed costs - ANSWER Costs that DO NOT vary with the
quantity of output produced; includes interest payments, rent,
salaries
break-even analysis - ANSWER tells you how many units of
a product must be sold to cover the fixed and variable costs of
production
break-even point - ANSWER the level of production at
which the costs of production = the revenues for a product
target profit - ANSWER expected amount of profit achieved
by the end of designated accounting period; comes from the
budgeting process, compared to actual profit in income
statement
absorption costing - ANSWER AKA "full costing"; includes
all direct costs assoc. w/ manufacturing a product; allocates
fixed overhead costs to all units produced
