1) The major reporting standard for management accounts is __________.
A. generally accepted accounting principles B. relevance to decisions C. the Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management
D. the Sarbanes-Oxley Act of 2002
2) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________.
A. have been approved for use by the managements of business firms
B. have been approved by the Internal Revenue Service C. have substantial authoritative support D. are proven theories of accounting
3) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?
4) Managerial accounting __________.
A. is governed by generally accepted accounting principles
B. is concerned with costing products
C. pertains to the entity as a whole and is highly aggregated
D. places emphasis on special-purpose information
5) The conceptual framework developed by the Financial Accounting Standards Board __________.
A. are rules that all accountants must follow
B. was approved by a vote of all accountants
C. is legally binding on all accountants
D. is viewed as providing a constitution for setting accounting standards for financial reporting
6) The income statement and balance sheet columns of Pine Company's worksheet reflects the following totals:
Income Statement Balance Sheet Dr. Cr. Dr. Cr.Totals $58,000 $48,000 $34,000 $44,000 To enter the net income (or loss) for the period into the above worksheet requires an entry to the __________.
A. income statement credit column and the balance sheet debit column
B. income statement debit column and the balance sheet credit column
C. income statement debit column and the income statement credit column
D. balance sheet debit column and the balance sheet credit column
7) In what situations will a static budget be most effective in evaluating a manager's effectiveness?
A. The company has substantial variable costs.
B. The company has substantial fixed costs.
C. The company has no fixed costs.
D. The planned activity levels match actual activity levels.
8) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company's net income increase?
9) If a company reports a net loss, it __________.
A. will not be able to make capital expenditures B. will not be able to get a loan C. may still have a net increase in cash D. will not be able to pay cash dividends
10) The cost of an asset and its fair market value are __________.
A. the same when the asset is sold
B. irrelevant when the asset is used by the business in its operations
C. never the same
D. the same on the date of acquisition
11) The first step in activity-based costing is to __________.
A. compute the activity-based overhead rate per cost driver
B. identify the cost driver that has a strong correlation to the activity cost pool
C. assign manufacturing overhead costs for each activity cost pool to products
D. identify and classify the major activities involved in the manufacture of specific products
12) The cost principle is the basis for preparing financial statements because it is __________.
A. the most accurate measure of purchasing power B. a conservative value C. relevant and objectively measured, and verifiable D. an international accounting standard
13) Multinational corporations __________.
A. are firms that conduct their operations in more than one country through subsidiaries, divisions, or branches in foreign countries
B. are U.S. companies that sell goods and services in other countries C. are required to use international accounting standards D. are U.S. companies that trade their securities on the exchanges in other countries
14) The primary purpose of the statement of cash flows is to __________.
A. provide information about the cash receipts and cash payments during a period
B. facilitate banking relationships C. provide information about the investing and financing activities during a period
D. prove that revenues exceed expenses if there is a net income
15) In order to be successful, a cartel must
a. find a way to encourage members to produce more than they would otherwise produce.
b. agree on the total level of production for the cartel, but they need not agree on the amount produced
by each member.
c. agree on the total level of production and on the amount produced by each member.
d. agree on the prices charged by each member, but they need not agree on amounts produced.
16) Which of the following would be most likely to contribute to the breakdown of a cartel in a natural resource (e.g., bauxite) market?
b.low price elasticity of demand
c.high compatibility of member interests
d.significant barriers to entry
e.unequal member ownership of the natural resources
17) Assume oligopoly firms are profit maximizers, they do not form a cartel, and they take other firms’ production levels as given. Then the output effect
A. must dominate the price effect.
B. must be smaller than the price effect.
C. must balance with the price effect.
D. can be larger or smaller than the price effect
18) A rational decision maker __________.
A. ignores the likely effects of government policies when he or she makes choices
B. ignores marginal changes and focuses instead on “the big picture”
C. takes an action only if the marginal benefit of that action exceeds the marginal cost of that action
D. takes an action only if the combined benefits of that action and previous actions exceed the combined costs of that action and previous actions
19) One characteristic of an oligopoly market structure is:
A. firms in the industry have some degree of market power. B. firms in the industry are typically characterized by very diverse product lines. C. the actions of one seller have no impact on the profitability of other sellers. D. products typically sell at a price that reflects their marginal cost of production.
20) The general term for market structures that fall somewhere in-between monopoly and perfect competition is __________.
A. monopolistically competitive markets
B. imperfectly competitive markets
C. incomplete markets
D. oligopoly markets
21) A production possibilities frontier will be a straight line if __________.
A. the economy is producing efficiently B. the economy is engaged in trade with at least one other economy C. increasing the production of one good by x units entails no opportunity cost in terms of the other good
D. increasing the production of one good by x units entails a constant opportunity cost in terms of the other good
22) Real GDP __________.
A. evaluates current production at the prices that prevailed in some specific year in the past.
B. is not a valid measure of the economy's performance, since prices change from year to year.
C. is a measure of the value of goods only; it excludes the value of services.
D. evaluates current production at current prices.
23) The Federal Open Market Committee __________.
A. is required to keep the interest rate within a range set by Congress
B. operates with almost complete discretion over monetary policy
C. is required to increase the money supply by a given growth rate each year
D. is required by its charter to change the money supply using a complex formula that concerns the tradeoff between inflation and unemployment
24) In the market for foreign-currency exchange in the open economy macroeconomic model, the amount of net capital outflow represents the quantity of dollars __________.
A. supplied for the purpose of buying assets abroad
B. supplied for the purpose of selling assets domestically
C. demanded for the purpose of buying U.S. net exports of goods and services
D. demanded for the purpose of importing foreign goods and services
25) In general, the longest lag for __________.
A. both fiscal and monetary policy is the time it takes for policy to affect aggregate demand
B. monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is the time it takes for policy to affect aggregate demand
C. fiscal policy is the time it takes to change policy, while for monetary policy the longest lag is the time it takes for policy to affect aggregate demand
D. both fiscal and monetary policy is the time it takes to change policy
26) Most economists use the aggregate demand and aggregate supply model primarily to analyze __________.
A. the effects of macroeconomic policy on the prices of individual goods B. short-run fluctuations in the economy C. productivity and economic growth D. the long-run effects of international trade policies
27) The political business cycle refers to __________.
A. the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-elected
B. changes in output created by the monetary rule the Fed must follow
C. the fact that about every four years some politician advocates greater government control of the Fed
D. the part of the business cycle caused by the reluctance of politicians to smooth the business cycle
28) The basic components of an effective sexual harassment policy include the following EXCEPT:
A. To establish a formal complaint procedure B. To develop an organization wide policy on sexual harassment C. To establish a means for ongoing training D. To establish a performance appraisal system E. To act immediately when employees complain of sexual harassment
29) ABC International carefully watches the actions of its most innovative competitor and learns from them. ABC can establish a low-cost position by:
A. Mass-producing products that have an established market niche
B. Producing an imitation of the new technology that utilizes lower-quality and lower-cost materials
C. Making subtle changes to the product, thereby avoiding patent restrictions
D. Learning from the leader thereby avoiding the costs and risks of technology leadership
E. Technology followers are not successful at low-cost strategies
30) The Aquatic Center, Inc. periodically reviews the goals of the company. During the process, The Aquatic Center managers analyze their current strategies as compared to their competitors, determine goals that they will pursue and decide upon specific actions for each area of the company to take in pursuit of these goals. The Aquatic Center managers have been engaged in the management function of:
A. Staffing B. Planning C. Organizing D. Controlling E. Goal Coordination
31) The most dominant areas in the global economy include:
A. North America, South America and Western Europe
B. North America, Western Europe and Asia
C. Western Europe, Asia and Africa
D. North America, Asia and Africa
E. North America, Mexico and Asia
32) The best way for an employer to find out if a potential employee can do a job is by __________.
A. administering an IQ test B. using the interview process C. using a performance simulation test D. using a written test E. having them spend a day in the office
33) Which of the following has proven to be a particularly good predictor for jobs that require cognitive complexity?
A. work sampling
B. intelligence tests
C. behavioral assessment
D. aptitude tests
E. integrity evaluations
34) Sebastian Stabilio just joined a team of people from throughout his organization whose primary task is to recommend valuable uses for the scrap generated in the manufacturing process. The team meets twice per week; otherwise members work within the usual organizational structure. The team, not permanent, which Sebastian has joined, would be considered a:
A. Project group
B. Parallel team
C. Project team
D. Work team
E. Working group
35) The pursuit of lucrative opportunities by enterprising individuals is called:
A. Business incubating
C. Social experimentation
36) Building a dynamic organization is another way of describing which function of management?
37) Which of these refers to the practices aimed at discovering and harnessing an organization's intellectual resources?
B. Knowledge management
38) A series of quality standards developed by a committee working under the International Organization for Standardization to improve total quality in all businesses for the benefit of both producers and consumers is:
A. Total quality management B. Customer-based integration C. Computer-integrated manufacturing (CIM)
D. Just-in-time control (JIT)
E. ISO 9000
39) To be competitive in a global economy, Europeans must increase their level of:
A. Espionage activity
B. Financial subsidy
C. Philanthropic contributions
D. Population density
40) Having individuals actually do the job they are applying for as a test to see if they can do it is __________.
A. an informal means of screening candidates
B. a formal means of screening candidates
C. an approach with high reliability
D. an approach with low reliability
E. an approach with high face validity
41) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18. For this sample, the median is _____.
42) Twelve randomly-chosen students were asked how many times they had missed class during a certain semester, with this result: 2, 1, 5, 1, 1, 3, 4, 3, 1, 1, 5, 18. For this sample, the standard deviation is approximately _____.
A. 3.75 B. 4.55 C. 4.75 D. 3.03
43) A financial institution wishes to estimate the mean balances owed by its credit card customers? A financial institution wishes to estimate the mean balances owed by its credit card customers. The population standard deviation is estimated to be $300. If a 98 percent confidence interval is used and an interval of ±$75 is desired, how many cardholders should be sampled?
44) In a right-tail test, a statistician came up with a z test statistic of 1.469. What is the p-value?
45) Use the following table to answer question:
P(S | W) is approximately _____.
46) Dullco Manufacturing claims that its alkaline batteries last forty hours on average in a certain type of portable CD player. Tests on a random sample of 18 batteries showed a mean battery life of 37.8 hours with a standard deviation of 5.4 hours.
In a left-tailed test at = .05 we would __________.
A. comfortably accept the claim B. switch to alpha of 0.01 for a more powerful test C. comfortably reject the claim D. feel uncomfortable with either decision (too close)
47) Suppose the estimated quadratic model Yt = 500 + 20 t - t2 is the best-fitting trend of sales of XYZ Inc. using data for the past twenty years (t = 1, 2,.., 20).
Which statement is incorrect?
A. Sales are increasing by about 20 units per year. B. The turning point would be in period 10. C. The trend was higher in year 10 than in year 20. D. Latest year sales are no better than in year zero.
48) Which one of the following statements concerning production and staffing plans is best?
A. Production plans are based primarily on information from the master production plan.
B. A master production schedule is a projected statement of income, costs, and profits.
C. Aggregation can be performed along three dimensions: product families, labor, and time.
D. A staffing plan is the intermediate link between the business plan and the master production schedule
49) In lean systems, if a defective product is found, which of the following is generally NOT done?
A. The defective unit is returned to the worker responsible for creating the defect.
B. The production line is stopped. C. The defective unit is passed on to the next workstation. D. The production line is made aware of the problem without stopping the line.
50) Which one of the following statements concerning production and staffing plans is best?
A. When production and staffing plans are made, aggregation can be performed only along two dimensions: products and time.
B. The impact of production and staffing plans cuts across several functional areas of the firm.
C. Production and staffing plans specify production rates, workforce levels, and inventory holdings, but do not account for capacity limitations because they are aggregated.
D. Production and staffing plans attempt to achieve several objectives, all of which must be consistent with one another.
51) A project has three paths. A–B–C has a length of 25 days. A–D–C has a length of 15 days. Finally, A–E–C has a length of 20 days. Which one of the following statements is TRUE?
A. The expected duration of this project is 25 days.
B. The expected duration of this project is 25 + 15 + 20 = 60 days.
C. A–D–C is the critical path.
D. A–B–C has the most slack.
52) The Global, Web-Based Platform enables individuals to do which of the following?
A. all of these are true B. produce and sell goods and services C. exchange knowledge D. access information, services, and entertainment E. connect, compute, communicate, collaborate, and compete everywhere and all the time
53) Search engines and metasearch engines are examples of which network application?
A. Web services
D. Local Area Network
54) In the _____ phase of the decision making process, managers test potential solutions “on paper.”
A. consideration B. design C. choice D. intelligence E. implementation
55) Which of the following is NOT an advantage of the buy option for acquiring IS applications?
A. saves time B. saves money C. software can be tried out D. company will know what it is getting E. few types of off-the-shelf software are available, thus limiting confusion
56) When customers access a Web site and make purchases, they generate __________.
A. Web data
B. Tracking cookies
D. Clickstream data
E. Hyperlink data
57) Which of the following is NOT a function of functional area information systems?
A. provides analysis capabilities to middle level managers and staff
B. provides information mainly in the form of reports
C. supports the managerial tasks of planning, organizing, and controlling operations
D. provides information to managers in the functional areas
E. provides data from business events to the corporate database
58) Information-based industries are most susceptible to which one of Porter’s five forces?
A. threat of substitute products B. rivalry among existing firms in an industry
C. bargaining power of customers D. bargaining power of suppliers
59) Computer support is greatest for which of the following problems?
A. Semistructured and management control
B. Unstructured and operational control
C. Semistructured and strategic planning
D. Structured and operational control
E. Structured and management control
60) _____ is a process that helps organizations identify, select, organize, disseminate, transfer, and apply expertise that are part of the organization’s memory and typically reside inside the organization in an unstructured manner.
A. Decision support B. Data mining C. Knowledge management D. Online analytical processing
61) Credit card companies would most likely use which of the following to check for fraudulent credit card use?
A. Data mining
B. Expert systems
C. Neural networks
D. Multidimensional data analysis
E. Structured query languag
62) Given the following annual net cash flows, determine the IRR to the nearest whole percent of a project with an initial outlay of $1,520.
YearNet Cash Flow
A. 48% B. 32% C. 28% D. 40%
63) If the quote for a forward exchange contract is greater than the computed price, the forward contract is:
A. at equilibrium.
B. undervalued. C. a good buy. D. overvalued.
64) The common stockholders are most concerned with:
A. the risk of the investment.
B. the size of the firm’s beginning earnings per share.
C. the percentage of profits retained.
D. the spread between the return generated on new investments and the investor’s required rate of return.
66) At what rate must $400 be compounded annually for it to grow to $716.40 in 10 years?
67) Petrified Forest Skin Care, Inc. pays an annual perpetual dividend of $1.70 per share. If the stock is currently selling for $21.25 per share, what is the expected rate of return on this stock?
A. 12.5% B. 36.13%
C. 8.0% D. 13.6%
68) Dublin International Corporation’s marginal tax rate is 40%. It can issue three-year bonds with a coupon rate of 8.5% and par value of $1,000. The bonds can be sold now at a price of $938.90 each. The underwriters will charge $23 per bond in flotation costs. Determine the approximate after-tax cost of debt for Dublin International to use in a capital budgeting analysis.
A. 9.2% B. 5.1% C. 8.5% D. 6.0%
69) Which of the following best represents the stream of income that is available to common stockholders?
A. Gross profit B. Net profit after tax and after preferred dividend payments C. Earnings before interest and taxes D. Operating profit
70) A machine costs $1,000, has a three-year life, and has an estimated salvage value of $100. It will generate after-tax annual cash flows (ACF) of $600 a year, starting next year. If your required rate of return for the project is 10%, what is the NPV of this investment? (Round your answerwer to the nearest $10.)
A. $570 B. $900 C. -$150 D. $490
71) Which of the following represents an attempt to measure the earnings of the firm’s operations over a given time period?
A. Income statement
B. Cash flow statement
C. Balance sheet
D. Quarterly statement
72) Bondholders have a priority claim on assets ahead of:
B. common and preferred stockholders.
73) Your company is considering an investment in a project which would require an initial outlay of $300,000 and produce expected cash flows in Years 1 through 5 of $87,385 per year. You have determined that the current after-tax cost of the firm’s capital (required rate of return) for each source of financing is as follows:
Cost of debt8%
Cost of preferred stock12%
Cost of common stock16%
Long-term debt currently makes up 20% of the capital structure, preferred stock 10%, and common stock 70%. What is the net present value of this project?
A. $1,568 B. $463 C. $1,241 D. $871
74) Which of the following best represents operating income?
A. Income from discontinued operations
B. Income from capital gains
C. Income after financing activities
D. Earnings before interest and taxes
75) Suppose you determine that the NPV of a project is $1,525,855. What does that mean?
A. The project’s IRR would have to be less that the firm’s discount rate. B. The project would add value to the firm. C. Under all conditions, the project’s payback would be less than the profitability index.
D. In all cases, investing in this project would be better than investing in a project that has an NPV of $850,000.
76) Analysis of demographic dimensions:
A. is the most important step to successful segmentation.
B. can be used along with analysis of other dimensions to identify attractive target markets.
C. considers income and sex, but not age.
D. only considers age.
E. is the most effective way to identify unmet consumer needs.
77) When one considers the strategy decisions organized by the four Ps, branding is related to packaging as:
A. store location is to sales force selection.
B. personal selling is to mass selling. C. production is to marketing. D. branding is to pricing. E. pricing is to promotion.
78) The clustering techniques that can be used in segmenting:
A. looks for differences between groups of people. B. group people together based on age. C. eliminate the need for management intuition and judgment. D. group people together into heterogeneous product-market segments.
E. try to find similar patterns within sets of data.
79) When evaluating macro-marketing:
A. one must determine how efficiently the society's resources are used.
B. the evaluation is necessarily subjective.
C. one must consider each individual firm's role in the marketing system.
D. one must consider the society’s role in the marketing system.
E. the best approach is to consider the profit generated by individual firms within the overall system.
80) Clustering techniques applied to segmenting markets __________.
A. doesn’t apply to demographic data B. eliminate the need for marketing managers to specify in advance what dimensions might be relevant for grouping consumers
C. remove the need for managerial judgment D. usually require computers to group people based on data from market research
E. is time consuming and expensive
81) The managerial process of developing and maintaining a match between the resources of an organization and its market opportunities is called:
A. market planning.
B. strategic (management) planning.
C. marketing strategy planning.
D. management by objective.
E. marketing programming.
A. eliminates the need for judgment in strategy planning.
B. applies to new products--but not existing products.
C. is concerned with obtaining the best shelf space in retail outlets.
D. helps strategy planners see how customers view competitors' offerings.
E. is useful for combining but not for segmenting.
83) In an effort to increase its total sales, Champion has started exporting its spark plugs for use by several German auto producers. Champion is pursuing a _____ opportunity.
A. mass marketing
C. market penetration
D. market development
E. product development
84) Which of the following is a business or organizational customer?
A. All of these are business and organizational customers.
B. a wholesaler.
C. a government agency.
D. a retailer.
E. producers of goods or services.
85) An Australian wine producer, facing declining sales at home, set up a new channel of distribution to sell wine in the United States. This seems to be an effort at:
B. product development.
C. market penetration.
D. market development.
86) Economists' economic-buyer theory assumes that __________.
A. consumers only want the cheapest price
B. consumers should purchase only low-priced products
C. consumers always make rational decisions
D. buyers logically compare choices in order to maximize their satisfaction
E. demographic data are very useful for predicting consumer behavior
87) The "four Ps" of a marketing mix are:
A. Production, Personnel, Price, and Physical Distribution
B. Promotion, Production, Price, and People C. Potential customers, Product, Price, and Personal Selling
D. Product, Price, Promotion, and Profit E. Product, Place, Promotion, and Price
88) Bob, an employee of Risky Manufacturing, Inc. is accidentally injured by a fellow worker while working his shift. Under workers’ compensation, Bob can:
A. Recover from workers’ compensation only if Risky was negligent in allowing the injury to occur.
B. Sue Risky or seek workers’ compensation recovery, but not both.
C. Seek workers’ compensation only.
D. Sue Risky or seek workers’ compensation recovery.
89) Justin was hired in February of 2004 as a salesperson. There is no written employment contract, and Justin is paid on a commission basis. Justin’s manager has said to Justin on several occasions that if Justin continues to meet his sales quotas, that the company “will keep him around for a long time.” Justin has always met his sales quotas, but is told one day that they have decided to replace him because he does not project the image that the company wants. If Justin is an at-will employee, which of the following is true?
A. The employer would not be able to fire Justin on the basis of public policy.
B. The statements by the manager could likely give Justin contract rights that could amount to an exception to the at-will doctrine.
C. The employer can terminate Justin only if the employer would suffer a loss by not terminating him.
D. As an at will employee, there are no restrictions on the employer terminating Justin.
E. Because there is no written employment contract, the employer can terminate Justin.
90) Which of the following statements is not true under the Fair Labor Standards Act?
A. Children ages 16 and 17 may work unlimited hours in nonhazardous jobs.
B. Persons age 18 or over may work unlimited hours in nonhazardous jobs.
C. Children ages 14 and 15 may work limited hours in nonhazardous jobs.
D. Children under 14 cannot work at all, except on farms. E. Persons age 18 or over may work unlimited hours in hazardous jobs.
91) In which of the following are these steps of a criminal case listed in the correct order?
A. Arrest, indictment, trial, arraignment
B. Arrest, arraignment, indictment, trial
C. Indictment, arraignment, arrest, trial
D. Arraignment, arrest, trial, indictment
E. Arrest, indictment, arraignment, trial
92) Which of the following is correct about interpretive rules?
A. Interpretive rules are not subject to judicial review. B. All federal administrative agencies have implied power to make interpretive rules.
C. They must be accompanied by substantive rules.
D. They do not establish new law.
E. They require public notice and participation to create.
93) Which of the following is correct with regard to the relationship between law and ethics?
A. Although much of law is based on ethical standards, not all ethical standards have been enacted as law.
B. The rule of law and the golden rule of ethics demand the same response.
C. The law may not permit something that would be ethically wrong.
D. Lawful conduct is always ethical conduct.
94) Which of the following statements is true regarding the relationship of law and ethics?
A. The legal requirements will almost always be the same as the ethical requirement because the law is based on ethical standards.
B. Depending on the circumstances, the law can require a higher, lower, or the same standard of conduct as ethics demands.
C. In some cases, the law will require a high standard of conduct than ethics, but never vice versa.
D. In some cases, ethics will require a higher standard of conduct than the law, but never vice versa.
95) For which of the following kinds of intellectual property is a filing or registration required in order to receive protection
B. Copyright and Service marks
C. Service marks
E. Patents and Trademarks
96) An agent’s obligation to perform in accordance with the terms of the agency arrangement is the agent’s duty of:
B. Obedience. C. Loyalty. D. Performance. E. Nonbreach.
97) Although the U.S. has had a longstanding agreement with _____ after the passage of NAFTA, _____ became the United States' second largest trading partner.
A. Canada, Venezuela
B. Mexico, Venezuela
C. Canada, Mexico
D. Mexico, Canada
E. Great Britain, Paraguay
99) Which country does the text describe as becoming the largest producer and consumer of many of the world's goods?
100) One study found that manufacturing labor costs about _____ an hour in China, compared to _____ dollars in the United States.
A. Less than $1; about 15
B. $2; about 25
C. About $2; about 15
D. Less than $1; about 25
E. Less than $1; about 40
One study found that manufacturing labor costs about _____ an hour