MBA ETS Major Field Test 2025
update|comprehensive questions and
verified answers (complete solutions)
GRADE A+!!
Balance Sheet - CORRECT ANSWERS-a financial statement that reports a company's
assets, liabilities, and shareholder equity at a specific point in time; Assets = Liabilities +
Shareholder's Equity
Income Statement - CORRECT ANSWERS-AKA profit and loss statement; primarily
focuses on the company's revenues and expenses during a particular period;
Net Income = (Total Revenue + Gains) - (Total Expenses + Losses)
Statement of Retained Earnings - CORRECT ANSWERS-AKA Statement of Equity;
outlines the changes in retained earnings for a company over a specified period;
Retained Earnings - CORRECT ANSWERS-profits held by a company in reserve in
order to invest in future projects rather than distribute as dividends to shareholders
Statement of Cash Flows - CORRECT ANSWERS-summarizes the amount of cash and
cash equivalents entering and leaving a company; includes operating, investing, and
financing activities
cash flow - CORRECT ANSWERS-$$$ that goes in/out of a business
profit - CORRECT ANSWERS-$$$ leftover after Revenues - Expenses
cash from operating activities - CORRECT ANSWERS-receipts from sales of
goods/services, interest payments, income tax payments, salaries/wages, rent
ALSO depreciation, inventory, accts receivable, payable
cash from investing activities - CORRECT ANSWERS-changes in equipment, assets, or
investments
, cash from financing activities - CORRECT ANSWERS-cash from investors/banks,
dividends, repayment of debt,
Direct Cash Flow Method - CORRECT ANSWERS-determines changes in cash receipts
and payments, which are reported in the cash flow from the operations section.
Indirect Cash Flow Method - CORRECT ANSWERS-takes the net income generated in
a period and adds or subtracts changes in the asset and liability accounts to determine
the implied cash flow
liquidity - CORRECT ANSWERS-the ease with which an asset, or security, can be
converted into ready cash without affecting its market price; cash is the most liquid of
assets
Accrual Basis Accounting - CORRECT ANSWERS-revenue or expenses are recorded
when a transaction occurs; follows the matching principle, which says that revenues and
expenses should be recognized in the same period
Cash Accounting - CORRECT ANSWERS-recognizes transactions only when payment
is exchanged.
capital stock - CORRECT ANSWERS-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 - CORRECT ANSWERS-resource with economic value that an individual,
corporation or country owns or controls with the expectation that it will provide future
benefit.
current assets - CORRECT ANSWERS-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 - CORRECT ANSWERS-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 - CORRECT ANSWERS-every process/op is a series of activities,
and there is a WEAK LINK (aka bottleneck) that hinders output
Special Order Decisions - CORRECT ANSWERS-focus on whether a specially priced
order should be accepted or rejected; fixed costs excluded from special orders
update|comprehensive questions and
verified answers (complete solutions)
GRADE A+!!
Balance Sheet - CORRECT ANSWERS-a financial statement that reports a company's
assets, liabilities, and shareholder equity at a specific point in time; Assets = Liabilities +
Shareholder's Equity
Income Statement - CORRECT ANSWERS-AKA profit and loss statement; primarily
focuses on the company's revenues and expenses during a particular period;
Net Income = (Total Revenue + Gains) - (Total Expenses + Losses)
Statement of Retained Earnings - CORRECT ANSWERS-AKA Statement of Equity;
outlines the changes in retained earnings for a company over a specified period;
Retained Earnings - CORRECT ANSWERS-profits held by a company in reserve in
order to invest in future projects rather than distribute as dividends to shareholders
Statement of Cash Flows - CORRECT ANSWERS-summarizes the amount of cash and
cash equivalents entering and leaving a company; includes operating, investing, and
financing activities
cash flow - CORRECT ANSWERS-$$$ that goes in/out of a business
profit - CORRECT ANSWERS-$$$ leftover after Revenues - Expenses
cash from operating activities - CORRECT ANSWERS-receipts from sales of
goods/services, interest payments, income tax payments, salaries/wages, rent
ALSO depreciation, inventory, accts receivable, payable
cash from investing activities - CORRECT ANSWERS-changes in equipment, assets, or
investments
, cash from financing activities - CORRECT ANSWERS-cash from investors/banks,
dividends, repayment of debt,
Direct Cash Flow Method - CORRECT ANSWERS-determines changes in cash receipts
and payments, which are reported in the cash flow from the operations section.
Indirect Cash Flow Method - CORRECT ANSWERS-takes the net income generated in
a period and adds or subtracts changes in the asset and liability accounts to determine
the implied cash flow
liquidity - CORRECT ANSWERS-the ease with which an asset, or security, can be
converted into ready cash without affecting its market price; cash is the most liquid of
assets
Accrual Basis Accounting - CORRECT ANSWERS-revenue or expenses are recorded
when a transaction occurs; follows the matching principle, which says that revenues and
expenses should be recognized in the same period
Cash Accounting - CORRECT ANSWERS-recognizes transactions only when payment
is exchanged.
capital stock - CORRECT ANSWERS-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 - CORRECT ANSWERS-resource with economic value that an individual,
corporation or country owns or controls with the expectation that it will provide future
benefit.
current assets - CORRECT ANSWERS-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 - CORRECT ANSWERS-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 - CORRECT ANSWERS-every process/op is a series of activities,
and there is a WEAK LINK (aka bottleneck) that hinders output
Special Order Decisions - CORRECT ANSWERS-focus on whether a specially priced
order should be accepted or rejected; fixed costs excluded from special orders
