DECA Principles Cluster Exam
Questions And Answers Latest Update
2025
To create organizational structure, it is important to identify the company's
A. registered trademarks and patents
B. basic values and future direction
C. advertising and marketing strategies
D. existing capital and liquid assets CORRECT ANSWERS B
Basic values and future direction. Organizational culture refers to the values, ideals,
customs, traditions,
and habits of employees working together at a particular business. Trademarks,
patents, advertising, and
marketing strategies may reflect a company's organizational culture, but are not likely to
be considered in
the creation of organizational culture. Existing capital and liquid assets are unlikely to
impact the creation
of organizational culture.
During the discovery process, an entrepreneur must determine whether the proposed
business venture will
A. create loyal customers
B. generate large profits
C. meet a need or want
D. require financial risk CORRECT ANSWERS C
Meet a need or a want. During the discovery process, an entrepreneur needs to ensure
that the business
idea meets an actual need or want of consumers to ensure success. Entrepreneurs do
not predict
whether a business venture will generate large profits or create loyal customers during
the discovery
process. Since all business ventures require financial risk, no discovery is needed.
Which of the following situations includes money being used as a medium of exchange
A. an individual trades a $20 bill for four $5 bills
B. an individual pays $500 to purchase a laptop
C. an individual places $2,000 into a savings account
D. an individual takes out a $10,000 car loan CORRECT ANSWERS B
An individual pays $500 to purchase a laptop. When money is accepted in exchange for
goods such as a
laptop, it is being used as a medium of exchange. When one denomination of cash is
exchanged for
,another, it has not been exchanged for goods. Money placed into a savings account is
being used as a
store of value for future use. A loan represents deferred payments, not a medium of
exchange.
Which of the following is a cost of credit?
A. annual fees
B. lower prices
C. budget credit
D. credit unions CORRECT ANSWERS A
Annual fees. Some credit card providers require users to pay an annual fee for the
privilege of using their cards. These fees vary from card to card, depending on the
services supplied by the credit card company. Higher prices are a cost of credit. Budget
credit is a type of credit. Credit unions are sources of credit.
When developing a personal budget and determining net cash flow, it is important to
keep a detailed record of all
A. income and spending
B. set monthly expenses
C. income sources
D. charitable contributions CORRECT ANSWERS A
Income and spending. To determine your net cash flow and develop an accurate
personal budget, you
must account for all income and spending. Set monthly expenses, income, and
charitable contributions
impact a personal budget and net cash flow, but any one of these alone is not sufficient
to create the
budget and determine cash flow.
When filling out a check, which of the following is written in the "pay to the order of"
area:
A. Name of bank or institution cashing the check
B. Name of person or business receiving the funds
C. the total check amount spelled out in words
D. name of bank institution holding the funds CORRECT ANSWERS B
Name of person or business receiving the funds. The name of the person or business to
be paid is listed
in the "pay to the order of" area of a check, rather than the bank being used to cash it.
The check amount
is spelled out in words on the line below the "pay to the order of" area. The name of the
bank institution
holding the funds is already printed on the check.
Which of the following has traditionally offered the largest range of banking services:
A. online banks
B. credit unions
,C. thrifts
D. commercial banks CORRECT ANSWERS D
Commercial banks. Commercial banks have long offered a broad range of banking
services to serve the
needs of individuals and businesses. These services usually include accepting deposits,
issuing loans,
and offering investment products. Credit unions, thrifts, and online banks have
traditionally offered fewer
services than commercial banks.
If an investor wants to receive a guaranteed rate of return that is higher than rates
offered by savings accounts and does not need access to the funds for an extended
period, which of the following investments would be the best choice
A. money market account
B. government bonds
C. certificate of deposit
D. online savings accounts CORRECT ANSWERS B
Government bonds. Since bonds offer a guaranteed rate of return if they are kept for a
set period of time,
they are a good choice for an investor who does not need access to the funds. Money
market accounts,
certificates of deposit, and online savings accounts do not offer rates of return much
higher than a
traditional savings account.
Which of the following types of businesses is most likely to have high liability insurance
costs
A. a landscaping service
B. an ice cream parlot
C. a clothing boutique
D. a skydiving operation CORRECT ANSWERS D
A skydiving operation. The cost of liability insurance is based on how likely the
purchaser is to be sued
for harm or injuries. A skydiving operation's liability insurance costs are likely to be high
because it is a
dangerous activity. An ice cream parlor, clothing boutique, and landscaping service are
less likely to be
sued than a skydiving service because they are not dangerous operations.
A business may review its accounting information to learn
A. what its sales revenues are
B. the size of its competitors' debts
C. how its products are being shipped
D. what industry trends to expect for next year CORRECT ANSWERS A
What its sales revenues are. A business may review its accounting information to learn
what its sales
, revenues are. Internal accounting records will not reveal the size of competitors' debts
or provide insights
into industry trends. Accounting records do not typically include information about
shipping.
Wan recently started a bicycle courier service. He has places $400 of his own money
into the business and purchased a new bike on credit for $800. When he creates a
balance sheet for his business, under which category will he list the $800 owned on the
bike?
A. liabilities
B. assets
C. owner's equity
D. stockholder's equity CORRECT ANSWERS A
Liabilities. Debts are listed as liabilities on a balance sheet. Assets are things of value
that the business
owns. The $400 that Wan invested in the business would be listed as owner's equity.
Stockholders'
equity refers to value held by investors.
Which of the following is most likely to increase a company's capital assets:
A. reducing operational expenses
B. obtaining a loan to make payroll
C. purchasing land for future expansion
D. collecting accounts recieveables CORRECT ANSWERS C
Purchasing land for future expansion. Capital assets are property that the company
permanently owns,
such as land, equipment, etc. Purchasing land increases a company's capital assets.
Obtaining a loan to
make payroll, reducing operational expenses, and collecting accounts receivables can
increase a
business's cash flow, but do not directly increase its capital assets.
Which of the following is a true statement regarding budgets
A. they are required by law
B. to be successful, they must stay the same from year to year
C. they are set for specific time periods
D. some businesses don't need them CORRECT ANSWERS C
They are set for specific time periods. Budgets are estimates of income and expenses
for specific time
periods. They are estimates and should be flexible—they don't need to stay the same
from year to year
to be successful. Budgets aren't required by law, but every business needs one to
operate!
Which of the following employees orientation activities is most likely to help a new hire
gain knowledge to perform his/her job:
Questions And Answers Latest Update
2025
To create organizational structure, it is important to identify the company's
A. registered trademarks and patents
B. basic values and future direction
C. advertising and marketing strategies
D. existing capital and liquid assets CORRECT ANSWERS B
Basic values and future direction. Organizational culture refers to the values, ideals,
customs, traditions,
and habits of employees working together at a particular business. Trademarks,
patents, advertising, and
marketing strategies may reflect a company's organizational culture, but are not likely to
be considered in
the creation of organizational culture. Existing capital and liquid assets are unlikely to
impact the creation
of organizational culture.
During the discovery process, an entrepreneur must determine whether the proposed
business venture will
A. create loyal customers
B. generate large profits
C. meet a need or want
D. require financial risk CORRECT ANSWERS C
Meet a need or a want. During the discovery process, an entrepreneur needs to ensure
that the business
idea meets an actual need or want of consumers to ensure success. Entrepreneurs do
not predict
whether a business venture will generate large profits or create loyal customers during
the discovery
process. Since all business ventures require financial risk, no discovery is needed.
Which of the following situations includes money being used as a medium of exchange
A. an individual trades a $20 bill for four $5 bills
B. an individual pays $500 to purchase a laptop
C. an individual places $2,000 into a savings account
D. an individual takes out a $10,000 car loan CORRECT ANSWERS B
An individual pays $500 to purchase a laptop. When money is accepted in exchange for
goods such as a
laptop, it is being used as a medium of exchange. When one denomination of cash is
exchanged for
,another, it has not been exchanged for goods. Money placed into a savings account is
being used as a
store of value for future use. A loan represents deferred payments, not a medium of
exchange.
Which of the following is a cost of credit?
A. annual fees
B. lower prices
C. budget credit
D. credit unions CORRECT ANSWERS A
Annual fees. Some credit card providers require users to pay an annual fee for the
privilege of using their cards. These fees vary from card to card, depending on the
services supplied by the credit card company. Higher prices are a cost of credit. Budget
credit is a type of credit. Credit unions are sources of credit.
When developing a personal budget and determining net cash flow, it is important to
keep a detailed record of all
A. income and spending
B. set monthly expenses
C. income sources
D. charitable contributions CORRECT ANSWERS A
Income and spending. To determine your net cash flow and develop an accurate
personal budget, you
must account for all income and spending. Set monthly expenses, income, and
charitable contributions
impact a personal budget and net cash flow, but any one of these alone is not sufficient
to create the
budget and determine cash flow.
When filling out a check, which of the following is written in the "pay to the order of"
area:
A. Name of bank or institution cashing the check
B. Name of person or business receiving the funds
C. the total check amount spelled out in words
D. name of bank institution holding the funds CORRECT ANSWERS B
Name of person or business receiving the funds. The name of the person or business to
be paid is listed
in the "pay to the order of" area of a check, rather than the bank being used to cash it.
The check amount
is spelled out in words on the line below the "pay to the order of" area. The name of the
bank institution
holding the funds is already printed on the check.
Which of the following has traditionally offered the largest range of banking services:
A. online banks
B. credit unions
,C. thrifts
D. commercial banks CORRECT ANSWERS D
Commercial banks. Commercial banks have long offered a broad range of banking
services to serve the
needs of individuals and businesses. These services usually include accepting deposits,
issuing loans,
and offering investment products. Credit unions, thrifts, and online banks have
traditionally offered fewer
services than commercial banks.
If an investor wants to receive a guaranteed rate of return that is higher than rates
offered by savings accounts and does not need access to the funds for an extended
period, which of the following investments would be the best choice
A. money market account
B. government bonds
C. certificate of deposit
D. online savings accounts CORRECT ANSWERS B
Government bonds. Since bonds offer a guaranteed rate of return if they are kept for a
set period of time,
they are a good choice for an investor who does not need access to the funds. Money
market accounts,
certificates of deposit, and online savings accounts do not offer rates of return much
higher than a
traditional savings account.
Which of the following types of businesses is most likely to have high liability insurance
costs
A. a landscaping service
B. an ice cream parlot
C. a clothing boutique
D. a skydiving operation CORRECT ANSWERS D
A skydiving operation. The cost of liability insurance is based on how likely the
purchaser is to be sued
for harm or injuries. A skydiving operation's liability insurance costs are likely to be high
because it is a
dangerous activity. An ice cream parlor, clothing boutique, and landscaping service are
less likely to be
sued than a skydiving service because they are not dangerous operations.
A business may review its accounting information to learn
A. what its sales revenues are
B. the size of its competitors' debts
C. how its products are being shipped
D. what industry trends to expect for next year CORRECT ANSWERS A
What its sales revenues are. A business may review its accounting information to learn
what its sales
, revenues are. Internal accounting records will not reveal the size of competitors' debts
or provide insights
into industry trends. Accounting records do not typically include information about
shipping.
Wan recently started a bicycle courier service. He has places $400 of his own money
into the business and purchased a new bike on credit for $800. When he creates a
balance sheet for his business, under which category will he list the $800 owned on the
bike?
A. liabilities
B. assets
C. owner's equity
D. stockholder's equity CORRECT ANSWERS A
Liabilities. Debts are listed as liabilities on a balance sheet. Assets are things of value
that the business
owns. The $400 that Wan invested in the business would be listed as owner's equity.
Stockholders'
equity refers to value held by investors.
Which of the following is most likely to increase a company's capital assets:
A. reducing operational expenses
B. obtaining a loan to make payroll
C. purchasing land for future expansion
D. collecting accounts recieveables CORRECT ANSWERS C
Purchasing land for future expansion. Capital assets are property that the company
permanently owns,
such as land, equipment, etc. Purchasing land increases a company's capital assets.
Obtaining a loan to
make payroll, reducing operational expenses, and collecting accounts receivables can
increase a
business's cash flow, but do not directly increase its capital assets.
Which of the following is a true statement regarding budgets
A. they are required by law
B. to be successful, they must stay the same from year to year
C. they are set for specific time periods
D. some businesses don't need them CORRECT ANSWERS C
They are set for specific time periods. Budgets are estimates of income and expenses
for specific time
periods. They are estimates and should be flexible—they don't need to stay the same
from year to year
to be successful. Budgets aren't required by law, but every business needs one to
operate!
Which of the following employees orientation activities is most likely to help a new hire
gain knowledge to perform his/her job:
