Final Exam

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Question #1

Mr. Caruana’s teaching skills can best be described as:

A amazing, exciting, gifted

B amateurish, boorish, pontifical

C mundane, tired, dull

D humdrum, unremarkable, repetitive

Question #2

Fixed costs, such as rent, insurance and utilities must be paid regardless of the the number of units produced and sold.

A FALSE

B TRUE

Question #3

A subsidy is a government payment to help a domestic business compete with foreign firms.

A FALSE

B TRUE

Question #4

The law of supply states that producers will offer more of a product as its price ______ and less of a product as its price ________.

A rises, drops

B rises, rises

C rises, remains constant

D drops, rises

Question #5

The 4 P’s of marketing include all of following, except:

A production

B price

C promotion

D product

Question #6

Antonio is paid $55,000 per year as a research analyst. This type of compensation is called a(n) _____.

A commission

B bonus

C wage

D salary

Question #7

Saleem, an electrician for FCG Electricals, is paid $40 for each hour he works during the day. After 5 p.m. and on weekends, he is paid the overtime rate of one and one-half times the regular hourly rate. In this scenario, Saleem is paid a _____.

A commission

B wage

C bonus

D salary

Question #8

Which of the following is the first step in the recruitment process?

A reviewing applications and resumes

B interviewing candidates

C conducting employment tests

D identifying job requirements

Question #9

Which of the following management functions is most likely to be responsible for planning for staffing needs, recruiting and hiring workers, providing for training and evaluating performance, determining compensation and benefits, and overseeing employee separation?

A human asset accounting

B research and development (R & D)

C human resource management

D change management

Question #10

Which of the following statements is true of management?

A Management happens only at the top management levels.

B Management principles do not apply to not-for profit organizations.

C Management is solely the process of reporting organizational successes and failures to investors and others.

D Management is the process of achieving organizational objective through people and other resources.

Question #11

Gross Revenue $60,000
Cost of Goods Sold $30,000
Gross Profit:
Indirect Expenses $10,000
Net Profit:

The Gross Profit is ____________ and the Net Profit is ______________.

A $30,000, $40,000

B $20,000, $30,000

C $90,000, $100,000

D $30,000, $20,000

Question #12

In most businesses a General Manager is required by law.

A FALSE

B TRUE

Question #13

All of the following are advantages of a partnership, except:

A Avoidance of double taxation

B Combination of resources

C No personal liability for the partners

D Ease of set up

Question #14

A limited liability corporation provides the least protection of the owner’s personal assets.

A TRUE

B FALSE

Question #15

The money used to finance the day to day operations of the business can come from:

A both a and b

B a but not b

C lines of credit

D net sales

Question #16

The two main considerations when deciding a business’ legal structure are: liability and tax implications

A FALSE

B TRUE

Question #17

Profit is generated when total income is greater than total expenses.

A TRUE

B FALSE

Question #18

Expenses generated by the actual production of the product or service are called indirect expenses.

A FALSE

B TRUE

Question #19

Expenses generated by maintaining the office are called indirect expenses.

A FALSE

B TRUE

Question #20

Accounts Receivable(s) is money owed to our business.

A TRUE

B FALSE

Question #21

All of the following could be considered “start-up” costs, except_____________?

A utility deposits

B insurance

C direct expenses

D phone system

Question #22

Manufacturers have a duty to warn against a ______________________ of their products.

A occasional misuse

B both b and c

C foreseeable misuse

D possible hazard

Question #23

A contract may be expressed or ___________________.

A implied by relationship

B instructed by action

C innate by action

D implied by action

Question #24

In order for a contractual offer to be valid, it must contain ___________________________.

A “language of potential”

B “language of promise”

C “language of provision”

D “language of protection”

Question #25

The gain or loss that results from an investment over a specified period of time is known as _____.

A value

B risk

C probability

D return

Question #26

The three elements of a legal contract are ___________________________.

A offer, acceptance, and convenience

B offer, acceptance, and consciences

C offer, acceptance, and consideration

D offer, activities, and consideration

Question #27

The ____ is a collection of financial markets in which previously issued securities are traded among investors.

A primary market

B secondary market

C super market

D government market

Question #28

Two types of municipal bonds exist. What are they?

A revenue bonds and junk bonds

B revenue bonds and general obligation bonds

C government bonds and mortgage pass-through security bonds

D corporate bonds and general obligation bonds

Question #29

Written communication in business should be:

A kept short

B possibly sent later

C read before sending

D all of the above

Question #30

___ are short-term securities issued by the U.S. Treasury and backed by the full faith and credit of the U.S. government

A Treasury bills

B Corporate Bonds

C CDs

D Commercial paper

Question #31

All of the following are types of securities EXCEPT _____.

A bonds

B mutual funds

C cash

D stock

Question #32

The difference between what you own and what you owe is your _____.

A asset ratio

B gross worth

C net worth

D debt factor

Question #33

A firm’s balance sheet shows its financial position over a period of time.

A FALSE

B TRUE

Question #34

If your costs are $10 per unit, what would be your selling price with a 40% markup?

A $4

B $11

C $14

D $24

Question #35

Frank, chief financial officer for a company, wants to take a look at the summary of expenses, revenues, and profits of the firm for the most recent quarter. He can best find this information by consulting the _____.

A Balance Sheet

B Statement of Owners’ Equity

C Income Statement

D Cash Flow Statement

Question #36

Which of the following financial statements shows a firm’s financial position on a particular date?

A Income Statement

B Statement of Changes in Retained Earnings

C Statement of Cash Flows

D Balance Sheet

Question #37

Jayce Products buys a $500,000 machine by taking out a bank loan. The company’s assets will _____ by $500,000 while its liabilities will _¬____¬¬ by $500,000.

A decrease; decrease

B increase; decrease

C decrease; increase

D increase; increase

Question #38

Milwaukee Fabrication has $80 million in assets and $50 million in owners’ equity. How much does the firm have in liabilities?

A $80 million

B $20 million

C $50 million

D $30 million

Question #39

All of the following are liabilities EXCEPT _____.

A profits

B bank loans

C wages payable

D accounts payable

Question #40

In a high-priced environment, a manufacturer would expect to sell _______ units, but have _______ revenue per unit.

A less, more

B less, less

C more, more

D more, less

Question #41

Revenue can be defined as:

A selling price multiplied by the number of units sold

B the amount of owner’s equity

C the total percentage of cost of goods sold to the amount of sales

D assets minus liabilities

Question #42

To provide reliable, consistent, and unbiased information to decision makers, accountants follow guidelines, or standards, known as _____.

A the accounting process

B generally accepted accounting principles (GAAP)

C the accounting system

D Financial Accounting Standards Board (FASB)

Question #43

All of the following are assets EXCEPT _____.

A bank loans

B inventory

C patents

D cash

Question #44

Variable costs are costs that:

A don’t change with the number of units produced.

B change with the number of units produced.

C are the same as fixed costs.

D none of the above

Question #45

Market segmentation may include:

A Geographic – region, population density, zip code.

B Psychographic – people with similar lifestyles, attitudes, opinions.

C Demographic – age, gender, income, education, family size, occupation.

D All of the above

Question #46

Walker is a loan officer for a bank and is reviewing the financial statements of a prospective borrower. As a user of accounting information, Walker is most interested in using this information _____.

A in contract negotiations

B to make an investment decision and estimate its future returns

C to evaluate financial soundness of potential clients

D to plan and control daily operations

Question #47

Ann owns a business and is reviewing her company’s current financial statements. As a user of accounting information, Ann is most interested in using this information to _____.

A evaluate The Federal Reserve’s monetary policy

B evaluate credit risk

C plan and control activities

D approve new issues of stocks and bonds

Question #48

The “price” element of marketing means the product or service must be available to consumers when they want it.

A TRUE

B FALSE

Question #49

Businesses selling to the consumer market is also known as:

A B2C

B B2B2

C B2B

D C2B

Question #50

The four goals of advertising are:

A observation, interest, desire and action

B attention, interest, desire and action

C attention, interest, desire and alternative

D attention, interest, desire and advantage

Question #51

There is a new emphasis in human resources for which of the following reason(s):

A Increased productivity

B Increased costs

C Increased legal complexities

D All of the above

Question #52

Autocratic leaders make decisions______________.

A by including subordinates in the decision-making process

B win loyalty of employees through friendship

C on his or her own without consulting employees

D offer little input

Question #53

The person who directs a firm’s management information systems and related computer operations is often called the ________.

A financial advisor

B executive information manager

C chief executive officer

D chief information officer

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