ETS BUSINESS EXAM STUDY GUIDE QUESTIONS AND ANSWERS 2025
Accounting: What costs should be considered when making non-routine decisions? (3) - (ANSWER)The
price of material, Factory overhead costs, and the price of labor
Accounting: Total product/ units produced and sold equals?? - (ANSWER)Product Cost per Unit
Accounting: What is a general explanation of what the contribution margin is? - (ANSWER)The
difference between variable costs subtracted from sales
Accounting: In a continuous budget plan how many months are generally planned? - (ANSWER)12
months
Accounting: Which of the following is not one of the weaknesses of standard costing - (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) -
(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? -
(ANSWER)Cash flow statement
The net cash flow from operating activities normally differs from the amount of net income for the
period. - (ANSWER)True
Accounting: Expense accounts would have a balance on which side? - (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... - (ANSWER)Corporation
Accounting: A debt may slightly - (ANSWER)Increase in an asset account
,ETS BUSINESS EXAM STUDY GUIDE QUESTIONS AND ANSWERS 2025
Accounting: What would be classified as a current asset on the balance sheet - (ANSWER)Accounts
receivable
Accounting: What are the elements of internal control? (3) - (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. - (ANSWER)True
Accounting: Factors in computing depreciation are? - (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?? - (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. -
(ANSWER)True
Accounting: The excess of current assets of a business over its current liabilities is called? -
(ANSWER)Working capital
Accounting: What 2 categories are considered under period costs? - (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... - (ANSWER)Quantity factor
Accounting: A cost that will not be affected by later decisions is termed an - (ANSWER)Sunk Cost
, ETS BUSINESS EXAM STUDY GUIDE QUESTIONS AND ANSWERS 2025
Accounting: The unfavorable volume variance may be due to all but the following facts... -
(ANSWER)Unexpected increases in the cost of utilities
Accounting: What budget allows for adjustments in activity levels? - (ANSWER)Flexible budget
Accounting: A budget that summarizes future plans for the acquisition of fixed assets is the... -
(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?? - (ANSWER)GAAP
Economics: What occurs when the price level rises? - (ANSWER)People need to hold more money, so
interest rates rise, making firms borrow and invest less
Economics: The federal government enacted regulation in the 1960's requiring people to wear seatbelt
in their cars. All of the following resulted from this regulation, EXCEPT: - (ANSWER)Fewer pedestrians
were killed in car accidents.
Economics: Which of the following is true regarding the production possibilities frontier model of the
economy? - (ANSWER)Any point along the PPF represents an efficient level of production.
Economics: If the price in a market happens to be above equilibrium, there will be a _____ in the
market, and the price will tend to _____. - (ANSWER)Surplus, drop
Economics: The price elasticity of demand tends to be more elastic... - (ANSWER)At points further up
and to the left along the demand curve
Economics: If a tax imposed on a good and the incidence of the tax ends up falling more heavily on the
buyers than on the sellers, this will be because... - (ANSWER)Demand is less elastic than supply for that
good
Accounting: What costs should be considered when making non-routine decisions? (3) - (ANSWER)The
price of material, Factory overhead costs, and the price of labor
Accounting: Total product/ units produced and sold equals?? - (ANSWER)Product Cost per Unit
Accounting: What is a general explanation of what the contribution margin is? - (ANSWER)The
difference between variable costs subtracted from sales
Accounting: In a continuous budget plan how many months are generally planned? - (ANSWER)12
months
Accounting: Which of the following is not one of the weaknesses of standard costing - (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) -
(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? -
(ANSWER)Cash flow statement
The net cash flow from operating activities normally differs from the amount of net income for the
period. - (ANSWER)True
Accounting: Expense accounts would have a balance on which side? - (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... - (ANSWER)Corporation
Accounting: A debt may slightly - (ANSWER)Increase in an asset account
,ETS BUSINESS EXAM STUDY GUIDE QUESTIONS AND ANSWERS 2025
Accounting: What would be classified as a current asset on the balance sheet - (ANSWER)Accounts
receivable
Accounting: What are the elements of internal control? (3) - (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. - (ANSWER)True
Accounting: Factors in computing depreciation are? - (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?? - (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. -
(ANSWER)True
Accounting: The excess of current assets of a business over its current liabilities is called? -
(ANSWER)Working capital
Accounting: What 2 categories are considered under period costs? - (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... - (ANSWER)Quantity factor
Accounting: A cost that will not be affected by later decisions is termed an - (ANSWER)Sunk Cost
, ETS BUSINESS EXAM STUDY GUIDE QUESTIONS AND ANSWERS 2025
Accounting: The unfavorable volume variance may be due to all but the following facts... -
(ANSWER)Unexpected increases in the cost of utilities
Accounting: What budget allows for adjustments in activity levels? - (ANSWER)Flexible budget
Accounting: A budget that summarizes future plans for the acquisition of fixed assets is the... -
(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?? - (ANSWER)GAAP
Economics: What occurs when the price level rises? - (ANSWER)People need to hold more money, so
interest rates rise, making firms borrow and invest less
Economics: The federal government enacted regulation in the 1960's requiring people to wear seatbelt
in their cars. All of the following resulted from this regulation, EXCEPT: - (ANSWER)Fewer pedestrians
were killed in car accidents.
Economics: Which of the following is true regarding the production possibilities frontier model of the
economy? - (ANSWER)Any point along the PPF represents an efficient level of production.
Economics: If the price in a market happens to be above equilibrium, there will be a _____ in the
market, and the price will tend to _____. - (ANSWER)Surplus, drop
Economics: The price elasticity of demand tends to be more elastic... - (ANSWER)At points further up
and to the left along the demand curve
Economics: If a tax imposed on a good and the incidence of the tax ends up falling more heavily on the
buyers than on the sellers, this will be because... - (ANSWER)Demand is less elastic than supply for that
good
