MFT MBA FINAL EXAM PREP 2025/2026 ACCURATE QUESTIONS WITH CORRECT DETAILED ANSWERS || 100% GUARANTEED PASS <RECENT VERSION>

MFT MBA FINAL EXAM PREP 2025/2026 ACCURATE QUESTIONS WITH CORRECT DETAILED ANSWERS || 100% GUARANTEED PASS &lt;RECENT VERSION&gt; 1. What is the product cost? - ANSWER Assets on the balance sheet until the product is sold 2. What is the period cost? - ANSWER Expense on the income statement when it occurs 3. What is variable cost? - ANSWER Total changes when we do more work 4. What is fixed cost? - ANSWER Costs that do not change no matter how much work we do. 5. What is the purpose of a bank reconciliation? - ANSWER To find out the reasons for disagreement between the bank statement balance and the cash book balance of the bank, and to test whether the apparently conflicting balance do really agree. 6. What are the two methods of formatting a Bank Reconciliation Statement? - ANSWER 1. Starting with the cash book balance 2. Starting with the bank statement balance - ANSWER 7. Using the First Method (Cash Book Balance) What do you do if the cash balance is a debit? - ANSWER Deduct from it all cheques, drafts etc., paid into the bank but not collected and credited by the bank and added to it all cheques drawn on the bank but not yet presented for payment. The new balance will agree with bank statement. 8. What happens when something is sold on credit? - ANSWER 1. It Increases sales or sales revenues, which are reported on the income statement, and 9. 2. It Increases the amount due from customers, which is reported as accounts receivable—an asset reported on the balance sheet. - ANSWER 10. What happens when the items sold on credit are not paid for? - ANSWER 1. Report a credit loss or bad debts expense on its income statement, and 11. 2. Report a reduction of accounts receivable on its balance sheet. - ANSWER 12. What is a sale on account? - ANSWER A sale for which cash will be received at a later date 13. What is a collect account? - ANSWER Delinquent or past-due account transferred from routine account to the collection department (or a collection agency). 14. What is an estimate for bad debts? - ANSWER A valuation account used to estimate the portion of a bank's loan portfolio that will ultimately be uncollectible. When a loan goes bad, the asset is removed from the books and the allowance for bad debt is charged for the book value of the loan. 15. Where is the estimate for bad debts recorded? - ANSWER Balance Sheet 16. What is a "written - ANSWER off" bad debt? - An amount that is written off by the business as a loss to the business and classified as an expense because the debt owed to the business is unable to be collected, and all reasonable efforts have been exhausted to collect the amount owed. 17. What are the three methods of inventory flows? - ANSWER 1. FIFO 2. LIFO 3. Weighted average 18. What are the advantages and reasons for using FIFO? - ANSWER 1. Simple to understand and easy to operate 2. It is a logical method because it takes into consideration the normal procedure of utilizing first those materials which are used first 3. useful when prices are falling 4. Closing stock of materials will be valued at market price since the last ones to be used would have been the most recent purchases. 5. Useful when transactions are not too many and prices are relatively steady. 19. What are the advantages and reasons for using LIFO? - ANSWER 1. Materials consumed are priced in a systematic and realistic manner 20. 2. Unrealized inventory gains and losses are minimized, and reported operating profits are stabilized in industries subject to sharp materials price fluctuations. - ANSWER 21. 3. Inflationary prices of recent purchases are charged to operations in periods of rising prices, Thus reducing profits, resulting in a tax saving, and therewith providing a cash advantage through deferral of income tax payments. The tax deferral creates additional working capital as long as the economy continues to experience an annual inflation rate increase 22. partnership - ANSWER business owned by two or more people, called partners, who are subject to unlimited liability; no special legal requirements must be met; only requirement is an oral or written agreement between the partners which usually outlines how profits and losses are to be shared; not subject to an income tax, but owners are responsible for personal income tax on their individual share of the net income of the entity 23. corporation - ANSWER business that is a separate legal entity whose owners are called shareholders or stockholders; owners have limited liability because the business is legally responsible for its own actions and debts; entity is responsible for a business income tax and the owners are responsible for personal income tax on profits that are distributed to them in the form of dividends 24. Sarbanes-Oxley (SOX) - ANSWER an act which requires documentation and verification of internal controls; goal is to provide more transparency, accountability, and truthfulness in reporting transactions 25. assets - ANSWER resources a company owns or controls 26. liabilities - ANSWER creditors' claims on assets 27. equity - ANSWER owner's claim on assets 28. contributed capital/common stock - ANSWER refers to the amount that stockholders invest in the company 29. retained earnings - ANSWER refer to income (revenues less expenses) that is not distributed to stockholders 30. dividends - ANSWER distribution of assets to stockholders 31. external transactions - ANSWER exchanges of value between two entities, which yield changes in the accounting equation 32. internal transactions - ANSWER exchanges within an entity; can also affect the accounting equation 33. investment by owner - ANSWER + assets (cash) = + equity (common stock); cash (asset) and stockholders' equity equal the amount invested 34. purchase supplies for cash - ANSWER + assets (supplies) = - assets (cash) 35. purchase equipment for cash - ANSWER + assets (equipment) = - assets (cash) 36. purchase supplies on credit - ANSWER + assets (supplies) = + liability (account payable); supplies are acquired in exchange for a promise to pay for them later 37. provide services for cash - ANSWER + assets (cash) = + equity (revenues) 38. payment of expenses in cash - ANSWER - assets (cash) = - equity (expenses) 39. provide services and facilities for credit - ANSWER + assets (accounts receivable) = + equity (revenues) 40. receipt of cash from accounts receivable - ANSWER + assets (cash) = - assets (accounts receivable) 41. payment of accounts payable - ANSWER -assets (cash) = - liability (accounts payable) 42. payment of cash dividend - ANSWER - assets (cash) = - equity (dividends) 43. income statement - ANSWER reports on operating revenue and expense activities over a period of time 44. statement of retained earnings - ANSWER reports changes in retained earnings of the business period over a period of time; net income increases retained earnings while net loss and dividends decrease earnings 45. balance sheet - ANSWER reports a listing of amounts for assets, liabilities, and equity at a point in time 46. statement of cash flows - ANSWER reports on cash flows for operating, investing, and financing activities over a period of time 47. return on assets (ROA or ROI) - ANSWER profitability measure; useful in evaluating management, analyzing and forecasting profits, and planning activities 48. ROA = - ANSWER NY/TA 49. financing activities - ANSWER provide the means organizations use to pay for resources such as land, buildings, and equipment to carry out plans 50. investing activities - ANSWER the acquiring and disposing of resources (assets) that an organization uses to acquire and sell its products or services 51. operating activities - ANSWER involve using resources to research, develop, purchase, produce, distribute, and market products and services 52. opportunity costs - ANSWER Receipts for the next most valuable forgone alternative when making a decision or choice among many options. 53. economic darwinism - ANSWER -don't fix something unless it's broken -if firms stay with an operating procedure for a long time, then it is likely that it the benefits are excess to the cost - successful firms will be imitated - helps identify the cost and benefits of alternative internal accounting systems 54. internal accounting system - ANSWER Budgets, data on cost of each product and current inventory, and periodic financial reports. 55. historical costs - ANSWER Actual costs incurred to acquire resources. Accounting systems measure these, not opportunity costs. 56. sunk costs - ANSWER Expenditures incurred in the past that are unrecoverable. They are irrelevant for decision making unless you are the one who sunk them. NOT irrelevant as a control device. 57. fixed costs - ANSWER Cost incurred when there is no production. When the plant is idle, costs such as property taxes, insurance, plant management, security. 58. average costs - ANSWER total costs divided by number of units produced 59. mixed costs (semivariable costs) - ANSWER Cost that are cannot be classified as being purely fixed or purely variable 60. cost driver - ANSWER measure of physical activity most highly associated with variations in cost. 61. direct cost - ANSWER costs of a product or service that are easily traced to the product or service. 62. indirect cost (overhead cost) - ANSWER indirect labor and indirect material costs as well as other types of general manufacturing costs that cannot be directly traced, or are not worth tracing, to units being produced. 63. agency costs - ANSWER The decline in firm value that results from agents pursuing their own interests to the determent of the principal's interest. 64. decision control - ANSWER Those aspects of the decision making process whereby managers either ratify of monitor decision. 65. decision management - ANSWER Those aspects of the decision process in which the manager either initiates of implements a decision. 66. segmentation - ANSWER -cornerstone of marketing -helps deliver value by focusing efforts on segments or smaller groupings or clusters of consumers -it can be identifiable, sizeable, stable or growing, accessible, and congruent with objectives and resources 67. market segmentation - ANSWER -the process of dividing a market into subsets of consumers with common needs or characteristics 68. market targeting - ANSWER -the selection of one or more of the segments identified for the company to pursue 69. cognitive dissonance - ANSWER The feeling of post purchase psychological tension or anxiety this call cognitive dissonance 70. joint venture - ANSWER Global market entry strategy in which a foreign company and local firm invest together. Creates a local business in order to share ownership, control, and profits of the new company. 71. licensing - ANSWER A company offers the right to trademark, patent, trade secret, or other similarly valued items of intellectual property in return for a royalty or fee 72. marketing mix - ANSWER Combination of product, price, place, and promotion (often called the four Ps) used to market products. 73. marketing research - ANSWER Process of collecting and analyzing data that's relevant to a specific marketing situation. 74. secondary data - ANSWER Information used in marketing decisions that has already been collected for other purposes. 75. primary data - ANSWER Newly collected marketing information that addresses specific questions about the target market. 76. focus group - ANSWER Group of individuals brought together for the purpose of asking them questions about a product or marketing strategy. 77. brand - ANSWER Word, letter, sound, or symbol that differentiates a product from similar products on the market. 78. trademark - ANSWER Word, symbol, or other mark used to identify and legally protect a product from being copied. 79. private branding - ANSWER Product made by a manufacturer and sold to a retailer who in turn resells it under its own name. 80. generic branding - ANSWER Product with no branding information attached to it except a description of its contents.