PHR Certification Exam terms with Correct
Answers.
Accounts Payable - Correct Answer Money an organization owes its vendors and
suppliers.
Accounts Receivable - Correct Answer Money an organization's customers owe the
organization.
Action Plans - Correct Answer Detailed steps a unit, department, or team will take in order
to achieve short-term objectives.
Amendment - Correct Answer Modification or the Constitution or a law; modification may
be either formal (written) or informal (unwritten).
Assets - Correct Answer Financial, physical, and sometiems intangible properties an
organization owns.
Balance Sheet - Correct Answer Statement of a firm's financial position at a particular
time.
Balanced scorecard - Correct Answer Measurement approach that provides an overall
picture of an organization's performance as measured against goals in finance,
customers, internal business processes, and learning and growth.
Bill - Correct Answer Proposal presented to a legislative body for possible enactment as a
law.
Break-even analysis - Correct Answer Analysis that shows point in time at which total
revenue associated with a program is equal to the total cost of the program.
Business Case - Correct Answer Description of an organizational challenge and possible
alternative solutions, arguing for specific solution.
Capacity - Correct Answer To an operations department, the ability to yield output.
,Cash flow statement - Correct Answer Record of how much cash is flowing into and out of
an organization, including its sources or destinations.
Centralization - Correct Answer Degree to which decision-making authority is restricted to
higher levels of management in an organization.
Code of ethics - Correct Answer Principles of conduct within an organization that guide
decision making and behavior.
Consumer price index - Correct Answer Measure of the average change over time in the
prices paid by consumers for goods and services.
Control - Correct Answer To an operations department, an after-the-fact evaluation of a
company's ability to meet its own specifications and its customers' needs.
Correlation - Correct Answer Measure that indicates the relationship between two
variables.
Cost-benefit analysis - Correct Answer Ratio of value created to cost of creating that
value; allows management to determine the financial impact particular activities and
programs have on an organization's profitability.
Decentralization - Correct Answer Degree to which decision-making authority is given to
lower levels in an organization's hierarchy.
Departmentalization - Correct Answer Way an organization groups jobs to coordinate
work.
Divestiture - Correct Answer Sale by a company of an asset that is not performing well,
that is not core to the company's business, or that is worth more as a separate entity.
Divisional structure - Correct Answer Organizational structure in which segments ae
separated by product, customer or market, or region.
Due diligence - Correct Answer Process of conducting an intensive investigation of an
organization as one of the first steps in a pending merger or acquisition.
,Electronic Communications Privacy Act (ECPA) - Correct Answer Act that makes it
unlawful to intercept messages in transmission, access stored information on electronic
communication services, or disclose this information.
Enterprise management - Correct Answer Integrated processes and tools to allow
information sharing and process management across functions, sometimes even with
external partners, such as suppliers.
Environmental scanning - Correct Answer Process that involves a systematic survey and
interpretation of relevant data to identify external opportunities and threats.
Equity - Correct Answer Amount of owners' or shareholders' portion of a business.
Ethics - Correct Answer System of moral principles and values that establish appropriate
conduct.
Extended organization - Correct Answer Alliance between organizations to create
processes and information channels that allow communication and collaboration.
Financial ratios - Correct Answer Calculations designed to describe an organization's
financial health and performance from various perspectives.
Foreign Corrupt Practices Act (FCPA) - Correct Answer Prohibits American companies
from making corrupt payments to foreign officials for the purpose of obtaining or keeping
business.
Formula budgeting - Correct Answer Form of budgeting in which an average cost is
applied to comparable expenses and general funding is changed by a specific amount.
Functional structure - Correct Answer Organizational structure that defines departments
by what services they contribute to the organization's overall mission.
Gantt chart - Correct Answer Project planning tool that graphically displays activities of a
project in sequential order and plots them against time.
Generation X - Correct Answer Group of people born roughly between the years of 1965 -
1980
, Generation Y - Correct Answer Group of people born after 1980.
Gross domestic product (GDP) - Correct Answer Estimate of the total value of goods and
services produced in a country in a given year.
Gross profit margin - Correct Answer Ratio of gross profit to net sales.
HR audit - Correct Answer Process to measure the effectiveness and efficiency of HR
programs and positions.
Human capital - Correct Answer Combined knowledge, skills, and experience of a
company's employees.
Human resource information system (HRIS) - Correct Answer Systematic tool for
gathering, storing, maintaining, retrieving, and revising HR data.
Human resource management (HRM) - Correct Answer Design of formal systems in an
organization that ensure the effective and efficient use of human capital to accomplish
organizational goals.
Income statement - Correct Answer Statement comparing revenues, expenses, and
profits over a specified period of time, usually a year or a quarter.
Incremental budgeting - Correct Answer Form of budgeting in which the prior budget is the
basis for allocation of funds.
Inventory - Correct Answer To an operations department, an organization's major asset
after physical buildings and equipment.
Key performance indicators (KPIs) - Correct Answer Quantifiable measures of
performances used to gauge progress toward strategic objectives or agreed standards of
performance.
Liabilities - Correct Answer Organization's debts and other financial obligations.
Line units - Correct Answer Work groups that conduct the major business of an
organization.
Answers.
Accounts Payable - Correct Answer Money an organization owes its vendors and
suppliers.
Accounts Receivable - Correct Answer Money an organization's customers owe the
organization.
Action Plans - Correct Answer Detailed steps a unit, department, or team will take in order
to achieve short-term objectives.
Amendment - Correct Answer Modification or the Constitution or a law; modification may
be either formal (written) or informal (unwritten).
Assets - Correct Answer Financial, physical, and sometiems intangible properties an
organization owns.
Balance Sheet - Correct Answer Statement of a firm's financial position at a particular
time.
Balanced scorecard - Correct Answer Measurement approach that provides an overall
picture of an organization's performance as measured against goals in finance,
customers, internal business processes, and learning and growth.
Bill - Correct Answer Proposal presented to a legislative body for possible enactment as a
law.
Break-even analysis - Correct Answer Analysis that shows point in time at which total
revenue associated with a program is equal to the total cost of the program.
Business Case - Correct Answer Description of an organizational challenge and possible
alternative solutions, arguing for specific solution.
Capacity - Correct Answer To an operations department, the ability to yield output.
,Cash flow statement - Correct Answer Record of how much cash is flowing into and out of
an organization, including its sources or destinations.
Centralization - Correct Answer Degree to which decision-making authority is restricted to
higher levels of management in an organization.
Code of ethics - Correct Answer Principles of conduct within an organization that guide
decision making and behavior.
Consumer price index - Correct Answer Measure of the average change over time in the
prices paid by consumers for goods and services.
Control - Correct Answer To an operations department, an after-the-fact evaluation of a
company's ability to meet its own specifications and its customers' needs.
Correlation - Correct Answer Measure that indicates the relationship between two
variables.
Cost-benefit analysis - Correct Answer Ratio of value created to cost of creating that
value; allows management to determine the financial impact particular activities and
programs have on an organization's profitability.
Decentralization - Correct Answer Degree to which decision-making authority is given to
lower levels in an organization's hierarchy.
Departmentalization - Correct Answer Way an organization groups jobs to coordinate
work.
Divestiture - Correct Answer Sale by a company of an asset that is not performing well,
that is not core to the company's business, or that is worth more as a separate entity.
Divisional structure - Correct Answer Organizational structure in which segments ae
separated by product, customer or market, or region.
Due diligence - Correct Answer Process of conducting an intensive investigation of an
organization as one of the first steps in a pending merger or acquisition.
,Electronic Communications Privacy Act (ECPA) - Correct Answer Act that makes it
unlawful to intercept messages in transmission, access stored information on electronic
communication services, or disclose this information.
Enterprise management - Correct Answer Integrated processes and tools to allow
information sharing and process management across functions, sometimes even with
external partners, such as suppliers.
Environmental scanning - Correct Answer Process that involves a systematic survey and
interpretation of relevant data to identify external opportunities and threats.
Equity - Correct Answer Amount of owners' or shareholders' portion of a business.
Ethics - Correct Answer System of moral principles and values that establish appropriate
conduct.
Extended organization - Correct Answer Alliance between organizations to create
processes and information channels that allow communication and collaboration.
Financial ratios - Correct Answer Calculations designed to describe an organization's
financial health and performance from various perspectives.
Foreign Corrupt Practices Act (FCPA) - Correct Answer Prohibits American companies
from making corrupt payments to foreign officials for the purpose of obtaining or keeping
business.
Formula budgeting - Correct Answer Form of budgeting in which an average cost is
applied to comparable expenses and general funding is changed by a specific amount.
Functional structure - Correct Answer Organizational structure that defines departments
by what services they contribute to the organization's overall mission.
Gantt chart - Correct Answer Project planning tool that graphically displays activities of a
project in sequential order and plots them against time.
Generation X - Correct Answer Group of people born roughly between the years of 1965 -
1980
, Generation Y - Correct Answer Group of people born after 1980.
Gross domestic product (GDP) - Correct Answer Estimate of the total value of goods and
services produced in a country in a given year.
Gross profit margin - Correct Answer Ratio of gross profit to net sales.
HR audit - Correct Answer Process to measure the effectiveness and efficiency of HR
programs and positions.
Human capital - Correct Answer Combined knowledge, skills, and experience of a
company's employees.
Human resource information system (HRIS) - Correct Answer Systematic tool for
gathering, storing, maintaining, retrieving, and revising HR data.
Human resource management (HRM) - Correct Answer Design of formal systems in an
organization that ensure the effective and efficient use of human capital to accomplish
organizational goals.
Income statement - Correct Answer Statement comparing revenues, expenses, and
profits over a specified period of time, usually a year or a quarter.
Incremental budgeting - Correct Answer Form of budgeting in which the prior budget is the
basis for allocation of funds.
Inventory - Correct Answer To an operations department, an organization's major asset
after physical buildings and equipment.
Key performance indicators (KPIs) - Correct Answer Quantifiable measures of
performances used to gauge progress toward strategic objectives or agreed standards of
performance.
Liabilities - Correct Answer Organization's debts and other financial obligations.
Line units - Correct Answer Work groups that conduct the major business of an
organization.
