MBA Exit Actual Exam Qns & Ans |Latest Updated
2025/2026 For MBA Exit Test.
Acid-Test Ratio - CORRECT ANS The ratio of current assets And current liabilities also called quick ratio.
The ratio equals the sum of a company's cash, short term investments, and accounts receivable divided by its
current liabilities. This ratio shows how well of business is able to cover it short term obligations.
Q: A quick ratio of one means - CORRECT ANS The most liquid assets of a business or equal to its total
deaths in the business will just manage to repay all his debts by using its cash, marketable securities, and
accounts receivable.
Q: A quick ratio of more than one means - CORRECT ANS Indicates that the most liquid assets of a
business exceed its total debts.
Q: A quick ratio of less than one means - CORRECT ANS Indicates that a business would not be able to
repay all its debts by using its most liquid assets
Q: net income from operations - CORRECT ANS gross profit - operating expenses
Q: change in equity equation - CORRECT ANS Beginning Balance + Additional Investments=Ending
Balance
Q: Retained Earnings Equation - CORRECT ANS Beginning Retained Earnings + Net Income - Dividends =
Ending Retained Earnings
Q: permanent accounts - CORRECT ANS balance sheet accounts whose balances are carried forward to
the next accounting period
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,Q: temporary accounts - CORRECT ANS Revenue, expense, and dividend accounts whose balances a
company transfers to Retained Earnings at the end of an accounting period.
Q: The book value of an asset is equal to the - CORRECT ANS d. asset's cost less accumulated
depreciation.
Q: Which of the following organizations is most likely
to use project financing?
(A) A small start-up
(B) A financial services firm with an extensive client list
(C) A large consumer goods company
(D) A large public utility involved ininfrastructure development - CORRECT ANS (D) A large public utility
involved in infrastructure development
Q: Prosco Ltd. employs a process cost system. Inspection of units occurs at the 50 percent mark. Defective
units are then removed from the process, and their cost ($4.50) is absorbed by the good units. Prosco has
recently been approached by a firm wishing to buy the defective units for a special use. The firm would require
Prosco to modify the defective units at a unit cost of $2.00. If Prosco sells the defective units to the firm for
$5.00 each, how would Prosco's reported income be affected?
(A) It would decrease by $4.50 per unit sold.
(B) It would decrease by $1.50 per unit sold.
(C) It would increase by $3.00 per unit sold.
(D) It would increase by $5.00 per unit sold. - CORRECT ANS (C) It would increase by $3.00 per unit sold.
Q: If you were the holder of a call option (having cost you $2) on some stock with an exercise price of$20, it
would be best for you to exercise your option when the market price is at
(A) $18
(B) $20
(C) $22
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, (D) $24 - CORRECT ANS (D) $24
Q: The sales division of a corporation is considering an internal product transfer because of excess demand.
What is the lowest acceptable transfer price for the product?
(A) The amount that the company would have to pay to acquire a similar product
(B) The variable cost of producing a unit of product
(C) The full absorption cost of producing a unit of product
(D) The difference between the market price and the costs recaptured by transferring internally - CORRECT
ANS (D) The difference between the market price and the costs recaptured by transferring internally
Q: The Mart, a large retail chain, is considering whether or not to close down a division. The division's
projected income statement for the next year follows.
-Sales $20,000,000
-Cost of goods sold 17,000,000
-Gross profit 3,000,000
-Operating costs:
-Building rents $2,500,000
-Store clerk salaries 3,000,000
-Store utilities 1,200,000
-Allocated home office cost 700,000
-Total operating costs 7,400,000
-Anticipated loss ($4,400,000)
The building rents arise from long-term leases that cannot be cancelled. If The Mart closed down this division,
what would be the increase in company profits?
(A) $700,000
(B) $1,200,000
(C) $3,000,000
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2025/2026 For MBA Exit Test.
Acid-Test Ratio - CORRECT ANS The ratio of current assets And current liabilities also called quick ratio.
The ratio equals the sum of a company's cash, short term investments, and accounts receivable divided by its
current liabilities. This ratio shows how well of business is able to cover it short term obligations.
Q: A quick ratio of one means - CORRECT ANS The most liquid assets of a business or equal to its total
deaths in the business will just manage to repay all his debts by using its cash, marketable securities, and
accounts receivable.
Q: A quick ratio of more than one means - CORRECT ANS Indicates that the most liquid assets of a
business exceed its total debts.
Q: A quick ratio of less than one means - CORRECT ANS Indicates that a business would not be able to
repay all its debts by using its most liquid assets
Q: net income from operations - CORRECT ANS gross profit - operating expenses
Q: change in equity equation - CORRECT ANS Beginning Balance + Additional Investments=Ending
Balance
Q: Retained Earnings Equation - CORRECT ANS Beginning Retained Earnings + Net Income - Dividends =
Ending Retained Earnings
Q: permanent accounts - CORRECT ANS balance sheet accounts whose balances are carried forward to
the next accounting period
1|Page
,Q: temporary accounts - CORRECT ANS Revenue, expense, and dividend accounts whose balances a
company transfers to Retained Earnings at the end of an accounting period.
Q: The book value of an asset is equal to the - CORRECT ANS d. asset's cost less accumulated
depreciation.
Q: Which of the following organizations is most likely
to use project financing?
(A) A small start-up
(B) A financial services firm with an extensive client list
(C) A large consumer goods company
(D) A large public utility involved ininfrastructure development - CORRECT ANS (D) A large public utility
involved in infrastructure development
Q: Prosco Ltd. employs a process cost system. Inspection of units occurs at the 50 percent mark. Defective
units are then removed from the process, and their cost ($4.50) is absorbed by the good units. Prosco has
recently been approached by a firm wishing to buy the defective units for a special use. The firm would require
Prosco to modify the defective units at a unit cost of $2.00. If Prosco sells the defective units to the firm for
$5.00 each, how would Prosco's reported income be affected?
(A) It would decrease by $4.50 per unit sold.
(B) It would decrease by $1.50 per unit sold.
(C) It would increase by $3.00 per unit sold.
(D) It would increase by $5.00 per unit sold. - CORRECT ANS (C) It would increase by $3.00 per unit sold.
Q: If you were the holder of a call option (having cost you $2) on some stock with an exercise price of$20, it
would be best for you to exercise your option when the market price is at
(A) $18
(B) $20
(C) $22
2|Page
, (D) $24 - CORRECT ANS (D) $24
Q: The sales division of a corporation is considering an internal product transfer because of excess demand.
What is the lowest acceptable transfer price for the product?
(A) The amount that the company would have to pay to acquire a similar product
(B) The variable cost of producing a unit of product
(C) The full absorption cost of producing a unit of product
(D) The difference between the market price and the costs recaptured by transferring internally - CORRECT
ANS (D) The difference between the market price and the costs recaptured by transferring internally
Q: The Mart, a large retail chain, is considering whether or not to close down a division. The division's
projected income statement for the next year follows.
-Sales $20,000,000
-Cost of goods sold 17,000,000
-Gross profit 3,000,000
-Operating costs:
-Building rents $2,500,000
-Store clerk salaries 3,000,000
-Store utilities 1,200,000
-Allocated home office cost 700,000
-Total operating costs 7,400,000
-Anticipated loss ($4,400,000)
The building rents arise from long-term leases that cannot be cancelled. If The Mart closed down this division,
what would be the increase in company profits?
(A) $700,000
(B) $1,200,000
(C) $3,000,000
3|Page
