ETS Business Exam Study Guide Questions With
Correct Answers
Accounting: |What |costs |should |be |considered |when |making |non-routine |decisions? |(3) |- |
CORRECT |ANSWER✔✔-The |price |of |material, |Factory |overhead |costs, |and |the |price |of |labor
Accounting: |Total |product/ |units |produced |and |sold |equals?? |- |CORRECT |ANSWER✔✔-Product
|Cost |per |Unit
Accounting: |What |is |a |general |explanation |of |what |the |contribution |margin |is? |- |CORRECT |
ANSWER✔✔-The |difference |between |variable |costs |subtracted |from |sales
Accounting: |In |a |continuous |budget |plan |how |many |months |are |generally |planned? |- |CORRECT
|ANSWER✔✔-12 |months
Accounting: |Which |of |the |following |is |not |one |of |the |weaknesses |of |standard |costing |- |
CORRECT |ANSWER✔✔-It |makes |accounting |for |price |increases |more |accurate
Accounting: |What |are |the |potential |ways |to |find |the |price |of |what |a |produced |products |
should |cost? |(3) |- |CORRECT |ANSWER✔✔-Product |cost |concept, |total |cost |concept, |and |
variable |cost |concept
Accounting: |Which |report |is |the |connecting |link |between |the |income |statement |and |the |
balance |sheet? |- |CORRECT |ANSWER✔✔-Cash |flow |statement
The |net |cash |flow |from |operating |activities |normally |differs |from |the |amount |of |net |income |
for |the |period. |- |CORRECT |ANSWER✔✔-True
,Accounting: |Expense |accounts |would |have |a |balance |on |which |side? |- |CORRECT |ANSWER✔✔-
Left |side
Accounting: |A |profit-making |business |operating |as |a |separated |legal |entity |and |in |which |
ownership |is |divided |into |shares |of |stock |is |known |as |a... |- |CORRECT |ANSWER✔✔-Corporation
Accounting: |A |debt |may |slightly |- |CORRECT |ANSWER✔✔-Increase |in |an |asset |account
Accounting: |What |would |be |classified |as |a |current |asset |on |the |balance |sheet |- |CORRECT |
ANSWER✔✔-Accounts |receivable
Accounting: |What |are |the |elements |of |internal |control? |(3) |- |CORRECT |ANSWER✔✔-Control |
environment, |monitoring, |and |control |procedures.
True |or |False: |A |cash |distribution |of |earnings |by |a |corporation |to |its |stockholders |is |called |a |
CASH |DIVIDEND. |The |3 |conditions |that |a |corporation |must |meet |to |pay |a |cash |dividend |are: |
sufficient |retained |earnings, |sufficient |cash, |and |formal |action |by |the |board |of |directors. |- |
CORRECT |ANSWER✔✔-True
Accounting: |Factors |in |computing |depreciation |are? |- |CORRECT |ANSWER✔✔-Initial |cost |+ |
residual |value |= |depreciable
Accounting: |The |statement |of |cash |flows |reports |a |firm's |major |cash |inflows |and |outflows |for |
a |period. |It |provides |useful |information |about |a |company's |ability |to |do |the |following?? |- |
CORRECT |ANSWER✔✔-Meet |its |financial |obligations, |generate |cash |from |operations, |and |
maintain |and |expand |its |operating |capacity
, Accounting: |True |or |False: |Notes |receivables |are |amounts |that |customers |owe |for |which |a |
formal, |written |instrument |of |credit |has |been |issued. |If |longer |than |a |year |it |is |considered |an |
investment. |- |CORRECT |ANSWER✔✔-True
Accounting: |The |excess |of |current |assets |of |a |business |over |its |current |liabilities |is |called? |- |
CORRECT |ANSWER✔✔-Working |capital
Accounting: |What |2 |categories |are |considered |under |period |costs? |- |CORRECT |ANSWER✔✔-
selling |expenses |and |administrative |expenses
Accounting: |The |effect |of |a |difference |in |the |number |of |units |sold, |assuming |no |charge |in |unit |
sales |price |or |unit |cost |is... |- |CORRECT |ANSWER✔✔-Quantity |factor
Accounting: |A |cost |that |will |not |be |affected |by |later |decisions |is |termed |an |- |CORRECT |
ANSWER✔✔-Sunk |Cost
Accounting: |The |unfavorable |volume |variance |may |be |due |to |all |but |the |following |facts... |- |
CORRECT |ANSWER✔✔-Unexpected |increases |in |the |cost |of |utilities
Accounting: |What |budget |allows |for |adjustments |in |activity |levels? |- |CORRECT |ANSWER✔✔-
Flexible |budget
Accounting: |A |budget |that |summarizes |future |plans |for |the |acquisition |of |fixed |assets |is |the... |-
|CORRECT |ANSWER✔✔-Capital |expenditures |budget
Accounting: |What |are |the |standard |framework |of |guidelines |for |financial |accounting |used |in |
any |given |jurisdiction, |also |known |as |accounting |standards?? |- |CORRECT |ANSWER✔✔-GAAP
Economics: |What |occurs |when |the |price |level |rises? |- |CORRECT |ANSWER✔✔-People |need |to |
hold |more |money, |so |interest |rates |rise, |making |firms |borrow |and |invest |less
Correct Answers
Accounting: |What |costs |should |be |considered |when |making |non-routine |decisions? |(3) |- |
CORRECT |ANSWER✔✔-The |price |of |material, |Factory |overhead |costs, |and |the |price |of |labor
Accounting: |Total |product/ |units |produced |and |sold |equals?? |- |CORRECT |ANSWER✔✔-Product
|Cost |per |Unit
Accounting: |What |is |a |general |explanation |of |what |the |contribution |margin |is? |- |CORRECT |
ANSWER✔✔-The |difference |between |variable |costs |subtracted |from |sales
Accounting: |In |a |continuous |budget |plan |how |many |months |are |generally |planned? |- |CORRECT
|ANSWER✔✔-12 |months
Accounting: |Which |of |the |following |is |not |one |of |the |weaknesses |of |standard |costing |- |
CORRECT |ANSWER✔✔-It |makes |accounting |for |price |increases |more |accurate
Accounting: |What |are |the |potential |ways |to |find |the |price |of |what |a |produced |products |
should |cost? |(3) |- |CORRECT |ANSWER✔✔-Product |cost |concept, |total |cost |concept, |and |
variable |cost |concept
Accounting: |Which |report |is |the |connecting |link |between |the |income |statement |and |the |
balance |sheet? |- |CORRECT |ANSWER✔✔-Cash |flow |statement
The |net |cash |flow |from |operating |activities |normally |differs |from |the |amount |of |net |income |
for |the |period. |- |CORRECT |ANSWER✔✔-True
,Accounting: |Expense |accounts |would |have |a |balance |on |which |side? |- |CORRECT |ANSWER✔✔-
Left |side
Accounting: |A |profit-making |business |operating |as |a |separated |legal |entity |and |in |which |
ownership |is |divided |into |shares |of |stock |is |known |as |a... |- |CORRECT |ANSWER✔✔-Corporation
Accounting: |A |debt |may |slightly |- |CORRECT |ANSWER✔✔-Increase |in |an |asset |account
Accounting: |What |would |be |classified |as |a |current |asset |on |the |balance |sheet |- |CORRECT |
ANSWER✔✔-Accounts |receivable
Accounting: |What |are |the |elements |of |internal |control? |(3) |- |CORRECT |ANSWER✔✔-Control |
environment, |monitoring, |and |control |procedures.
True |or |False: |A |cash |distribution |of |earnings |by |a |corporation |to |its |stockholders |is |called |a |
CASH |DIVIDEND. |The |3 |conditions |that |a |corporation |must |meet |to |pay |a |cash |dividend |are: |
sufficient |retained |earnings, |sufficient |cash, |and |formal |action |by |the |board |of |directors. |- |
CORRECT |ANSWER✔✔-True
Accounting: |Factors |in |computing |depreciation |are? |- |CORRECT |ANSWER✔✔-Initial |cost |+ |
residual |value |= |depreciable
Accounting: |The |statement |of |cash |flows |reports |a |firm's |major |cash |inflows |and |outflows |for |
a |period. |It |provides |useful |information |about |a |company's |ability |to |do |the |following?? |- |
CORRECT |ANSWER✔✔-Meet |its |financial |obligations, |generate |cash |from |operations, |and |
maintain |and |expand |its |operating |capacity
, Accounting: |True |or |False: |Notes |receivables |are |amounts |that |customers |owe |for |which |a |
formal, |written |instrument |of |credit |has |been |issued. |If |longer |than |a |year |it |is |considered |an |
investment. |- |CORRECT |ANSWER✔✔-True
Accounting: |The |excess |of |current |assets |of |a |business |over |its |current |liabilities |is |called? |- |
CORRECT |ANSWER✔✔-Working |capital
Accounting: |What |2 |categories |are |considered |under |period |costs? |- |CORRECT |ANSWER✔✔-
selling |expenses |and |administrative |expenses
Accounting: |The |effect |of |a |difference |in |the |number |of |units |sold, |assuming |no |charge |in |unit |
sales |price |or |unit |cost |is... |- |CORRECT |ANSWER✔✔-Quantity |factor
Accounting: |A |cost |that |will |not |be |affected |by |later |decisions |is |termed |an |- |CORRECT |
ANSWER✔✔-Sunk |Cost
Accounting: |The |unfavorable |volume |variance |may |be |due |to |all |but |the |following |facts... |- |
CORRECT |ANSWER✔✔-Unexpected |increases |in |the |cost |of |utilities
Accounting: |What |budget |allows |for |adjustments |in |activity |levels? |- |CORRECT |ANSWER✔✔-
Flexible |budget
Accounting: |A |budget |that |summarizes |future |plans |for |the |acquisition |of |fixed |assets |is |the... |-
|CORRECT |ANSWER✔✔-Capital |expenditures |budget
Accounting: |What |are |the |standard |framework |of |guidelines |for |financial |accounting |used |in |
any |given |jurisdiction, |also |known |as |accounting |standards?? |- |CORRECT |ANSWER✔✔-GAAP
Economics: |What |occurs |when |the |price |level |rises? |- |CORRECT |ANSWER✔✔-People |need |to |
hold |more |money, |so |interest |rates |rise, |making |firms |borrow |and |invest |less
