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ETS Business Exam Study Guide
1. Accounting: What costs should be considered when making non-routine de- cisions? (3): The price of material, Factory
overhead costs, and the price of labor
2. Accounting: Total product/ units produced and sold equals??: Product Cost per Unit
3. Accounting: What is a general explanation of what the contribution margin is?: The ditterence between variable costs
subtracted from sales
4. Accounting: In a continuous budget plan how many months are generally planned?: 12 months
5. Accounting: Which of the following is not one of the weaknesses of standard costing: It makes accounting for price
increases more accurate
6. Accounting: What are the potential ways to find the price of what a produced products should cost? (3): Product cost
concept, total cost concept, and variable cost concept
7. Accounting: Which report is the connecting link between the income state- ment and the balance sheet?: Cash
flow statement
8. The net cash flow from operating activities normally differs from the amount of net income for the period.:
True
9. Accounting: Expense accounts would have a balance on which side?: Left side
10. 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...: Corporation
11. Accounting: A debt may slightly: Increase in an asset account
12. Accounting: What would be classified as a current asset on the balance sheet: Accounts receivable
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13. Accounting: What are the elements of internal control? (3): Control environment, monitoring, and control procedures.
14. True or False: A cash distribution of earnings by a corporation to its stock- holders 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.: True
15. Accounting: Factors in computing depreciation are?: Initial cost + residual value = depreciable
16. 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??: Meet its financial obligations, generate cash from operations, and maintain and expand its operating capacity
17. 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.: True
18. Accounting: The excess of current assets of a business over its current liabilities is called?:
Working capital
19. Accounting: What 2 categories are considered under period costs?: selling expenses and administrative expenses
20. Accounting: The effect of a difference in the number of units sold, assuming no charge in unit sales price
or unit cost is...: Quantity factor
21. Accounting: A cost that will not be affected by later decisions is termed an: Sunk Cost
22. Accounting: The unfavorable volume variance may be due to all but the following facts...: Unexpected
increases in the cost of utilities
23. Accounting: What budget allows for adjustments in activity levels?: Flexible budget
24. Accounting: A budget that summarizes future plans for the acquisition of fixed assets is the...: Capital
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36. Economics: Suppose the price of fish increases, so households now buy less fish and more chicken. This will
cause the...: CPI to measure more inflation than there really is
37. Economics: The unemployment that results because it takes time for workers to search for the jobs that
best suit their tastes and skills is called?: Frictional unemployment
38. Economics: What occurs when the Fed reduces the reserve requirement?: The money multiplier gets bigger
39. Economics: In a housing bust what would an economist expect the price of homes to do?: Make prices go
down because of excess supply
40. Economics: What does balance of payment (BOP) mean?: The method countries use to monitor all international monetary
transactions at a specific period of time.
41. Economics: What is an example events would decrease the supply of mon- ey?: The banks increasing their amount
of excess reserve
42. Economics: What is money?: A store of value and a medium of exchange
43. Economics: What market types describes most modern economics?: Mixed economy
44. Economics: Rational people make decisions on the margins. Which state- ment would NOT result
in a purchase of the product being analyzed: MC > MB
45. Economics: How does the federal reserve control the money supply?: Prints more as needed
46. Economics: Tariffs generate tax revenue for the firms that hold an import license: False
47. Economics: What 2 terms are used to describe the aggregate supply curve and how it is shaped?: Long
run and short run
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48. Economics: If the price of a good is artificially set below the equilibrium price, what does this create?:
Shortage of goods.
49. Economics: What is the name of unwanted side effects of the production of goods?: Negative externality
50. Economics: The gains from specialization and trade are based on compara- tive advantage: True
51. Finance: The more frequent the compounding, the higher the future value, other things being equal:
True
52. Finance: For a given amount, the lower the discount rate, the less the present value: False
53. Finance: Under which of the following conditions will a future value calcu- lated with simple
interest exceed a future value calculated with compound interest at the same rate?: This is not possible with positive interest rates
54. Finance: A level stream of cash payments that continues indefinitely is known as a perpetuity; one that
continues for a limited number of years is called an annuity. What type of statement is this?: Regarding present and future values of streams of cash payments
55. Finance: The decision rule for net present value is to: Accept all projects with positive net present values
56. Finance: One comes reason for issuing 2 distinct classes of common stock is to: restrict voting privileges from
some shareholders
57. Finance: Treasury bills have a beta of zero?: True
58. Finance: As the coupon rate of a bond increases, the bonds': interest payments increase
59. Finance: If a stock's P/E ratio is 13.5 at a time when earning $3 per year, what is the stock's current price?:
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73. Law: The Sherman act protect consumers from?: Trade and commerce against unlawful restraints and monopolies
74. Law: Violations of OSHA can result in (3): criminal penalties, fines, and termination
75. Law: Fair debt collection practices protect consumers from: being harassed
76. Law: Violations of the clean water act can result in (3): Criminal charges, cleaning up the polluted area, and fines
77. Law: What are the requirements of all contracts (4): Consideration, legality, capacity, and agreement
78. Law: What is the type of damage that would be used to recognize wrong doing when no monetary
loss is shown?: Punitive
79. Law: A partner in an LLC can be held liable for the debts of the LLC?: False
80. Law: A plaintiff in a lawsuit is not responsible for minimizing the damages they suffer as a result of
the defendant's actions: False
81. Law: An example of intangible personal property?: Copyrights
82. Law: A stock certificate issued by a corporation that evidences ownership of a specified number of
shares in the corporation: True
83. Law: A corporation is a legal entity created and recognized by state law. It can consist of only one
natural person identified under a common name.: False
84. Law: What are the legal defenses of a criminal culpability (3): Mistake of fact, statue of limitations, and duress
85. Law: Civil law deals with the rights and duties exiting between individual persons, and persons and the
government, and the relief available when rights are violated.: True
86. Law: In an agency relationship, the principal owes a duty to the agent.: True
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87. Law: Our fundamental rights include (4): Marriage and procreation, interstate travel, all first amendment rights, and privacy and
voting
88. Law: If a person who is sufficiently intoxicated to lack mental capacity enters into a contract, voiding
the contract is an option to that person.: True
89. Law: All contracts must be in writing even those contracts to be performed within one year: False
90. Law: What is one of the defenses to product liability: Comparative negligence and liability
91. Law: Punitive damages are awarded to punish the breaching party: True
92. Law: Negligence per se if an example of an intentional tort against a person-
: False
93. Management: Surface level diversity (3): Race/ ethnicity, age, and physical disabilities
94. Management: Disadvantages of teams (3): Disadvantages of group decision making, social loafing, and initially high employee
turnover
95. Management: Pay variability includes (3): Stock options, commission, and piecework
96. Management: The stages of team development includes (3): forming, performing, and norming
97. Management: Job redesign techniques include (3): Combining tasks, redesigning jobs, and forming natural work units
98. Management: The 4 management functions are planning, organizing, lead- ing, and controlling: True
99. Management: Scientific management is throughly studying and testing dif- ferent work methods to
identify the best, most efficient way to complete a job: True
100. Management: Companies cannot be prosecuted or punished if manage- ment did not know about
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112. Management: Total quality management is an approach that seeks to im- prove quality and
performance which will meet or exceed customer expecta- tions: True
113. Management: What are the steps in the strategy planning process (3): Situa- tional analysis, choosing strategic alternative,
and assessing need for change
114. Management: Strategic dissonance: Discrepancy between a company's intent and managerial actions
115. Management: Strategic reference points are used to measure whether a firm has: developed sustainable
competitive advantages
116. Management: There are 3 types of res to consider when choosing strategic alternatives; risk avoiding,
risk seeking and risk taking: False
117. Marketing: Marketing penetration is marketing strategy that tries to in- crease market share
amoung existing customer: True
118. Marketing: The 4 categories of portfolio matrix are stars, problem, child or questions mark, cash cows,
and dog: True
119. Marketing: Purchasing power is a comparison of income verses the relative cost of a set standard of
goods and services in difference geographic areas: True
120. Marketing: Dumping is the sale of an exported product at a price higher than that charged for the
same or a like product in the home market of the exporter: False
121. Marketing: A straight re-buy is a situation in which the purchaser reorders the same goods or service
without looking for new information or investigation other suppliers: True
122. Marketing: Inelastic demand is demand without regard to price. An increase or decrease in the product
prices ill not significantly affect the demand for the product: True
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123. Marketing: The business market has were customer than the consumer market:: True
124. Marketing: The 4 criteria of market segmentations are substantiality, iden- tifiability, accessibility, and
responsiveness: True
125. Marketing: The 3 levels of distribution intensity are intensive distribution, selective distribution and
distribution exclusive: True
126. Marketing: The Robinson-Patman act of 1936 was enacted in response to price discrimination: True
127. Marketing: The questionnaire design has 3 basic designs; open ended ques- tions, close ended
questions, and scaled response questions: True
128. Marketing: Organizations that exists to achieve goals rather than profits called: non profit organizations
129. Marketing: If Starbucks were to offer free coffee to first time customers it would be practicing which
strategic alternative: Market development
130. Marketing: A firm that engages in environmental management attempts to change: Legal regulations
131. Marketing: A marketing campaign
aimed at should emphasize speed and convenience: Generation Y
132. Marketing: On a recent vacation, Doug enjoyed shampoo that the hotel provided so much that he wants
to buy it for his hime. This is an example of: An internal information search
133. Marketing: The extent to which an individual conducts an external search depends on perceived risk,
knowledge, level of interest in the godson service and: Prior experience
134. Marketing: Cecilia, a recent emigre from Argentina, decides to open a sav- ings account at a certain
bank because they have a bilingual teller. This is an example of which influence on consumer buying decisions: Cultural
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137. Marketing: Toyota promotes its Sienna minivan as a safe and practical vehicle for families. This is
an example of: Family life cycle segmentations
138. Marketing: In Starbucks will occur if its new VIA line of
instant coffee leads to reduced sales of its coffee beans: Cannibalization
139. Marketing: In market research, a is a necessary
because it is difficult to impossible to take a census of or interview all possible users of a certain product: Sample
140. Marketing: What is an example of a non profit organization: The university of Chicago
141. Marketing: A janitor finds a vacuum that is much more powerful and effi- cient than his current model.
This is an example of.: How consumers recognize unfulfilled wants
142. MIS: The amount of data that can be transferred from one point to another in a certain time period
usually one second is: Bandwidth
143. MIS: What are the benefits that an extranet offers an organization (3): Coor- dination, feedback, and cost reduction
144. MIS: Companies sell directly to consumers: Business to consumer
145. MIS: Structure manages highly centralized information systems: Global
146. MIS: The series of well defined phases performed in sequence that serves as a framework for developing a
system or project is: System development life cycle (SDLC)
147. MIS: Data and information that is volatile and can be lost when power is turned off: Main memory
148. MIS: Unauthorized use of computer data for personal gain is: Computer fraud
149. MIS: GIS stands for: Global information system
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150. MIS: Allows for small business to reach customers across the globe: e-business
151. MIS: Commonly accepted types of global organizations: Multinational, international, and transnational
152. MIS: Term used when fraudulent emails seem to come from a legitimate source: Phishing
153. MIS: A network interface card allows: Computers to connect to a network
154. MIS: RAM stands for: random access memory
155. MIS: Software is classified broadly as: System software and application software
156. MIS: Software for creating storing, maintaining, and accessing database files is a: Database management
system
157. MIS: What components are a part of data hierarchy: Field, record, and file
158. MIS: Waterfall, Agile, Iterative, and release are all different types of: Software development lifecycles
159. MIS: First step in standard SDLC: Planning
160. MIS: Global information system is defined in terms of two dimensions: control and coordination
161. MIS: Windows XP is an application not an operating system: False
162. MIS: An ERP solution, such as PeoplSoft is something that is used across a company: True
163. MIS: Supply chain management is the process of working with suppliers and other partners in the
supply chain to improve procedures for delivery products and services.: True
164. MIS: The supply chain is an integrated network organized with suppliers, transportation companies,
and brokers. They also are used to deliver goods and services to consumers: True
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178. Stats: A sample selected so that each item or person in the population has the same chance of being
included is: a simple random sample
179. Stats: A estimate that is a single value derived from a sample and used to estimate a
population value: point estimate
180. Stats: As you get further away from the mean, in a normal curve distribution, your probability gets:
Lower
181. Stats: A is a value used to determine whether to reject the null hypoth- esis: Test statistic
182. Stats: A normal distribution is bell shaped, symmetrical, and asymptotic (t/f): True
183. Stats: A null hypothesis is a statement developed to prove numerical evi- dence (t/f): False
184. Stats: A statistical process control is utilized to ensure that a process is operating at its full
potential (t/f): True
185. Stats: In a permutation, the order of arrangement does not matter (t/f): False
186. Stats: A population is the entire set of individuals or objects of interest or the measurements obtained
from all individuals (t/f): True
187. Stats: A standard deviation is a constant interval throughout a normal curve distribution (t/f): True
188. Stats: When controlling a six sigma process, statistical process control (SPC) is an extremely effective
methodology (t/f): False
189. Stats: Mutually exclusive is defined as the occurrence of one event and that none of the other events can
occur at the same time (t/f): True
190. Stats: A hypothesis is a statement about a sample subject to test (t/f): False
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191. Net working capital: current assets less short term liabilities
192. Within the context of the capital asset pricing model, the risk measure known as beta is often computed
by regressing the return of the company stock against the: return on the market portfolio
193. When the OPEC reduces production by 10% and the growth rate of the
world economy begins to escalate. How will the simultaneous occurrence of these events affect the equilibrium price and quantity in the world petroleum market: Price will increase, but the quantity is indeterminate
194. As a result of the US government imposing tariffs own foreign steel imports-
: employment in the :US steel industry would increase
195. In an economy the unemployment rate is 10% and the inflation rate is 2%. An appropriate fiscal
policy in this phrase of the business cycle would be to: increase government spending
196. What is an appropriate federal reserve avian to stimulate the US economy-
: reduce the reserve requirement
197. A firm that would like to know whether it has enough cash to meet its bills would be most likely to use
which category of financial ratio: liquidity
198. In a period of rising prices, which inventory valuation method would gen- erally yield both the
lowest ending inventory valve and the lowest net income figure: LIFO
199. In the statement of cash flows, the section for cash flows from operating
activities will include: a decrease in accounts payable
200. Frederick Taylor developed what pay principle: incentive pay
201. When a domestic firm permits a foreign company to manufacture and sell its product in exchange for a
fee or royalty, the process is termed: licensing
