PEREGRINE EXAM — 70 QUESTIONS WITH ANSWERS & RATIONALES (SET #2)
1. Which statement best describes managerial planning?
Answer: Setting goals and determining how to achieve them.
Rationale: Planning establishes direction for the organization.
2. The primary purpose of financial accounting is to:
Answer: Provide information to external stakeholders.
Rationale: Investors and creditors rely on GAAP-based reporting.
3. In economics, scarcity refers to:
Answer: Limited resources and unlimited wants.
Rationale: Scarcity forces choices and trade-offs.
4. The marketing concept focuses on:
Answer: Satisfying customer needs while achieving organizational goals.
Rationale: Customer-centered orientation.
5. A leader who uses rewards/punishments to motivate employees practices:
Answer: Transactional leadership.
Rationale: Transactional leaders rely on exchange-based influence.
6. Working capital equals:
Answer: Current assets − current liabilities.
Rationale: Measures short-term liquidity.
7. Depreciation appears on which financial statement?
, Answer: Income statement
Rationale: It is an expense that reduces net income.
8. Price elasticity of demand measures:
Answer: Responsiveness of quantity demanded to price changes.
Rationale: Shows how sensitive consumers are to price.
9. A company’s mission statement describes:
Answer: Its purpose and reason for existence.
Rationale: Mission ≠ vision; mission explains why the org exists.
10. A firm pursuing cost leadership aims to:
Answer: Produce at the lowest cost in the industry.
Rationale: Enables competitive pricing.
11. Which inventory system tracks inventory continuously?
Answer: Perpetual
Rationale: Updates records after every transaction.
12. A monopoly market structure has:
Answer: One firm with significant entry barriers.
Rationale: Single seller controls output and price.
13. A Type II error occurs when:
Answer: You fail to reject a false null hypothesis.
Rationale: A false negative.
14. Corporate governance focuses on:
1. Which statement best describes managerial planning?
Answer: Setting goals and determining how to achieve them.
Rationale: Planning establishes direction for the organization.
2. The primary purpose of financial accounting is to:
Answer: Provide information to external stakeholders.
Rationale: Investors and creditors rely on GAAP-based reporting.
3. In economics, scarcity refers to:
Answer: Limited resources and unlimited wants.
Rationale: Scarcity forces choices and trade-offs.
4. The marketing concept focuses on:
Answer: Satisfying customer needs while achieving organizational goals.
Rationale: Customer-centered orientation.
5. A leader who uses rewards/punishments to motivate employees practices:
Answer: Transactional leadership.
Rationale: Transactional leaders rely on exchange-based influence.
6. Working capital equals:
Answer: Current assets − current liabilities.
Rationale: Measures short-term liquidity.
7. Depreciation appears on which financial statement?
, Answer: Income statement
Rationale: It is an expense that reduces net income.
8. Price elasticity of demand measures:
Answer: Responsiveness of quantity demanded to price changes.
Rationale: Shows how sensitive consumers are to price.
9. A company’s mission statement describes:
Answer: Its purpose and reason for existence.
Rationale: Mission ≠ vision; mission explains why the org exists.
10. A firm pursuing cost leadership aims to:
Answer: Produce at the lowest cost in the industry.
Rationale: Enables competitive pricing.
11. Which inventory system tracks inventory continuously?
Answer: Perpetual
Rationale: Updates records after every transaction.
12. A monopoly market structure has:
Answer: One firm with significant entry barriers.
Rationale: Single seller controls output and price.
13. A Type II error occurs when:
Answer: You fail to reject a false null hypothesis.
Rationale: A false negative.
14. Corporate governance focuses on:
