1) Of the following companies, which one would not likely employ the specific identification method for inventory costing?
A. Music store specializing in organ sales B. Antique shop C. Farm implement dealership D. Hardware store
2) 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
3) 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
The net income (or loss) for the period is __________.
A. not determinable B. $10,000 loss C. $10,000 income D. $48,000 income
4) 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
5) 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?
B. $750 C. $4,500
6) These are selected account balances on December 31, 2008.
Land (location of the corporation's office building)$100,000
Land (held for future use)150,000
Corporate Office Building600,000
What is the net amount of property, plant, and equipment that will appear on the balance sheet?
B. $950,000 C. $1,300,000
7) Which one of the following items is not generally used in preparing a statement of cash flows?
A. Adjusted trial balance
B. Comparative balance sheets C. Additional information D. Current income statement
8) Balance sheet accounts are considered to be __________.
A. temporary stockholders' accounts
B. permanent accounts
C. capital accounts
D. nominal accounts
9) The standards and rules that are recognized as a general guide for financial reporting are called __________.
A. standards of financial reporting B. operating guidelines C. generally accepted accounting principles D. generally accepted accounting standards
10) A well-designed activity-based costing system starts with __________.
A. analyzing the activities performed to manufacture a product
B. computing the activity-based overhead rate
C. assigning manufacturing overhead costs for each activity cost pool to products
D. identifying the activity-cost pools
12) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A. General corporate liability insurance
B. Factory janitor
C. The western division’s vice president’s salary
D. Cost of landscaping the corporate office
13) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A. 2,133 units B. 4,600 units C. 6,200 units D. $25,600
14) 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
15) Lekeisha's income exceeds her expenditures. Lekeisha is a __________.
A. saver who demands money from the financial system B. borrower who demands money from the financial system
C. borrower who supplies money to the financial system D. saver who supplies money to the financial system
16) Game theory is important for the understanding of __________.
C. competitive markets
D. all market structures
17) The price of a good that prevails in a world market is called the
A. relative price.
B. absolute price.
C. world price.
D. comparative price.
18) Which of the following statements about GDP is correct?
A. GDP increases if the total population increases.
B. Money continuously flows from households to government and then back to households, and GDP measures this flow of money.
C. GDP measures two things at once: the total income of everyone in the economy and the unemployment rate.
D. GDP is to a nation’s economy as household income is to a household.
19) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows his options down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100. Finally he decides on Option B. The opportunity cost of this decision is __________.
A. the value to Maurice of the option he would have chosen had Option B not been available
B. $100 C. $300 D. the value to Maurice of Options A, C and D combined
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) When a firm sells a good or a service, the sale contributes to the nation’s income __________.
A. only if the buyer of the good or service is a household or another firm B. only if the buyer of the good or service is a household C. We have to know whether the item being sold is a good or a service in order to answer the question
D. whether the buyer of the good or a service is a household, another firm, or the government
22) The Federal Reserve will tend to tighten monetary policy when __________.
A. interest rates are rising too rapidly B. the growth rate of real GDP is quite sluggish C. it thinks the unemployment rate is too high D. it thinks inflation is too high today, or will become too high in the future
23) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of their contributions was to argue that if a central bank could convince people to expect zero inflation, then the Fed would be tempted to raise output by increasing inflation. This possibility is known as __________.
A. the sacrifice ratio dilemma B. the monetary policy reaction lag
C. the time inconsistency of policy
D. inflation targeting
24) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two items accounted for when GDP is calculated?
A. Only item (2) is included in GDP and it is included in the investment component.
B. Item (1) is included in the consumption component, while item (2) is included in the investment component.
C. Item (1) is included in the investment component, while item (2) is included in the consumption component.
D. Both item (1) and item (2) are included in the consumption component of GDP.
25) The principal lag for monetary policy __________.
A. is the time it takes for policy to change spending. The principal lag for fiscal policy is the time it takes to implement it
B. is the time it takes to implement policy. The principal lag for fiscal policy is the time it takes for policy to change spending
C. and fiscal policy is the time it takes for policy to change spending D. and fiscal policy is the time it takes to implement policy
26) 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 importing foreign goods and services D. demanded for the purpose of buying U.S. net exports of goods and services
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) A manager's ability to stimulate people to be high performers is referred to as:
29) 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
30) Which of the following statements does NOT support Total Quality Management
A. Use numerical quotas
B. Strive for long-term improvement rather than short-term profit
C. Build long-term relationships instead of awarding business on price tag alone
D. Break down barriers among departments
E. Creating silos between departments
31) __________ is the process of working with people and resources to accomplish organizational goals.
D. Decision making
32) Teams that work on long-term projects but disband once the work is completed are known as
A. Project and development teams
B. Traditional work groups
C. Transnational teams
D. Management teams
33) The most dominant areas in the global economy include:
A. North America, Mexico and Asia
B. Western Europe, Asia and Africa
C. North America, Western Europe and Asia
D. North America, Asia and Africa
E. North America, South America and Western Europe
34) Building a dynamic organization is another way of describing which function of management?
35) 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
36) Your roommate is interested in starting a business and everybody has been giving him different information about being an entrepreneur. Since you have been studying about entrepreneurship and new ventures, which of these would you tell him is true?
A. Successful entrepreneurs take very careful, calculated risks B. Anyone can start a business C. All entrepreneurs need venture capital in order to get started D. Entrepreneurs are their own bosses and completely independent
E. Money should not be considered a start-up ingredient
37) A manager's ability to stimulate people to be high performers is referred to as:
38) Which of these refers to the practices aimed at discovering and harnessing an organization's intellectual resources?
B. Knowledge management
39) A leader is:
A. Someone with authority over others B. Someone who influences others to attain goals C. The top level manager in a firm or business
D. Someone well-respected by others E. A strategic level manager
40) An organization that is managed aggressively and has growth and high profits as primary objectives may be considered a(n):
A. Large corporation
B. Online Business
C. Multinational corporation
D. Entrepreneurship venture
E. Small business
41) Which of these describes a vision, as it pertains to leadership
A. Likely to land you in a padded room
B. A short-term goal of an organization
C. The method through which leaders achieve goals
D. A long-term goal of an organization
E. A mental image of a future state of an organization
42) Independent events A and B would be consistent with which of the following statements
A. P (A) = .5, P (B) = .4, P (A B) = .3
B. P (A) = .4, P (B) = .5, P (A B) = .2
C. P (A) = .3, P (B) = .5, P (A B) = .4
D. P (A) = .4, P (B) = .3, P (A B) = .5
43) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.
Which outcomes would be likely in a bivariate regression on 45 randomly chosen U.S. cities in 2005 with
Y = number of robberies in each city (thousands of robberies) and
X = size of police force in each city (thousands of police)?
A. No correlation.
C. Positive slope (due to city size).
D. High R2 (due to city size).
44) William used a sample of 68 U.S. cities to estimate the relationship between Crime (annual property crimes per 100,000 persons) and Income (median income per capita). His estimated regression equation was Crime = 428 + .050 Income.
Assuming b1 is significant, if Income decreases by 1000 we would predict that Crime will __________.
A. increase by 428
B. decrease by 50 C. increase by 500 D. increase by 50
45) Use the following table to answer question:
P(S | W) is approximately _____.
46) Use the following table to answer question:
Are Service provider and county independent events?
A. Insufficient information to determine B. Yes C. No
47) To estimate the average annual expenses of students on books and class materials a sample of size 36 is taken. The mean is $850 and the standard deviation is $54. A 99% confidence interval for the population mean is
A. $823.72 to $876.28
B. $825.48 to $874.52
C. $826.82 to $873.18
D. $832.36 to $867.64
48) In an activity-on-node [AON] network, the nodes represent ____________, whereas the arcs represent ____________.
A. precedence relationships; time B. events; activities C. activities; time D. activities; precedence relationships
49) Which is not a tool of statistical quality control?
A. Attribute control chart
B. Fishbone diagram
C. Pareto chart
D. Deming chart
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. Production and staffing plans specify production rates, workforce levels, and inventory holdings, but do not account for capacity limitations because they are aggregated.
C. Production and staffing plans attempt to achieve several objectives, all of which must be consistent with one another.
D. The impact of production and staffing plans cuts across several functional areas of the firm.
51) 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.
52) You are faced with a linear programming objective function of:
Max P = $20X + $30Y
and constraints of:
3X + 4Y = 24 (Constraint A)
5X – Y = 18 (Constraint B)
You discover that the shadow price for Constraint A is 7.5 and the shadow price for Constraint B is 0. Which of these statements is TRUE?
A. The most you would want to pay for an additional unit of A would be $7.50.
B. You can change quantities of X and Y at no cost for Constraint B. C. For every additional unit of the objective function you create, the price of A rises by $7.50.
D. For every additional unit of the objective function you create, you lose 0 units of B.
53) Search engines and metasearch engines are examples of which network application
A. Local Area Network
B. Web services
54) It is very difficult to manage data for which of the following reasons?
A. data security is easy to maintain B. amount of data stays about the same over time C. data are scattered throughout organizations D. decreasing amount of external data needs to be considered E. data are stored in the same format throughout organizations
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) The costs of delivering products in the _____ channel are much higher than delivering products in the _____ channel.
A. physical, digital B. e-commerce, digital
C. physical, financial D. digital, e-commerce
E. digital, physical
57) A set of programs that enable the hardware to process data is _____.
A. procedures B. database C. software D. network E. hardware
58) _____ 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
59) International Game Technology’s new ERP system produced all of the following benefits except:
A. The company gained flexibility in manufacturing products B. Integrated the company’s business functions C. Company was able to maintain its original business processes D. ERP system connected the company’s global operations E. Operations employees were able to access manufacturing process details at their workstations
60) The management cockpit best exemplifies which type of system?
A. Decision support system B. Functional area information system
C. Expert system D. Digital dashboard E. Group decision support system
61) Competitive advantage for an organization manifests as all of the following except
A. increased speed
B. lower costs
C. increased time to market
D. increased profits
E. higher quality
62) __________ integrate the planning, management, and use of all of an organization’s resources, and are designed to tightly integrate the functional areas of the organization.
A. Corporate extranets
B. Transaction processing systems
C. Functional area information systems
D. Enterprise resource planning systems
E. Supply chain management systems
63) 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
64) You hold a portfolio with the following securities:
SecurityPercent of PortfolioBetaReturn
Compute the expected return and beta for the portfolio.
A. 10.67%, 1.02 B. 34.4%, .94 C. 9.9%, .94 D. 9.9%, 1.02
65) Mortgage bonds:
A. are a type of debenture.
B. usually pay little or no interest.
C. are secured by a lien on real property.
D. can only be issued by financial institutions
66) 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
67) 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%
68) A stock with a beta greater than 1.0 has returns that are _____ volatile than the market, and a stock with a beta of less than 1.0 exhibits returns which are _____ volatile than those of the market portfolio.
A. less, more B. more, more
C. less, less D. more, less
69) Bell Weather, Inc. has a beta of 1.25. The return on the market portfolio is 12.5%, and the risk-free rate is 5%. According to CAPM, what is the required return on this stock?
A. 15.62% B. 20.62% C. 14.37% D. 9.37%
70) Which of the following best represents operating income?
A. Income from discontinued operations
B. Earnings before interest and taxes C. Income from capital gains D. Income after financing activities
71) The common stockholders are most concerned with:
A. the spread between the return generated on new investments and the investor’s required rate of return.
B. the percentage of profits retained. C. the size of the firm’s beginning earnings per share. D. the risk of the investment.
72) 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.
73) Disadvantages of using current liabilities as opposed to long-term debt include:
A. higher cash flow exposure B. greater risk of illiquidity, and uncertainty of interest costs
C. decreased risk of liquidity D. certainty of interest costs E. uncertainty of future liabilities
74) 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%
75) 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.
76) Comparing GDP for foreign countries can help a marketing manager evaluate potential markets if the manager remembers that:
A. GDP measures show people's tendency to buy particular products. B. income tends to be evenly distributed among consumers in most countries. C. GDP estimates may not be very accurate for very different cultures and economies.
D. Other countries most likely don’t use the US Dollar as their primary currency.
E. GDP measures show the degree of competition in a market.
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) In comparison to the buying of final consumers, the purchasing of organizational buyers:
A. leans basically toward economy, quality, and dependability.
B. is even less predictable. C. is always based on competitive bids from multiple suppliers.
D. is strictly economic and not at all emotional. E. is always emotional.
79) 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
80) The statement, "Of course people will buy our product--each of its features is better than the competition," most closely reflects which consumer behavior concept?
A. the economic-buyer theory B. reference groups C. psychographics D. needs E. competitive advantage
81) 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.
82) The basic objective of the U.S. market-directed economic system is to:
A. achieve an annual growth rate of at least 10 percent. B. provide each person with an equal share of the economic output.
C. make the most efficient use of the country's resources. D. minimize inflation. E. satisfy consumer needs as they--the consumers--see them.
83) The three basic tasks of ALL managers, according to the text, are:
A. planning, staffing, and evaluating. B. marketing, production, and finance. C. execution, feedback, and control. D. planning, implementation, and control.
E. hiring, training, and compensating.
84) A cluster analysis of the "toothpaste market" would probably show that:
A. most consumers are concerned about cost. B. most consumers are mainly concerned about brightness of teeth. C. the broad product-market can be served effectively with one marketing mix. D. factors such as taste, price, and "sex appeal" are not important. E. different market segments seek different product benefits.
85) 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
86) The economists' view of buyers:
A. None of these are true B. assumes that they always buy the lowest-price alternative. C. is based on the idea that consumers value time and select the first alternative they learn about.
D. puts a great deal of emphasis on differences in buying behavior related to individual differences among consumers.
E. emphasizes psychological variables rather than social influences.
87) __________ is a marketing management aid which refers to how customers think about proposed and/or present brands in a market.
A. Customer relationship management (CRM)
B. Market scanning C. Positioning D. Brand familiarity E. Market segmentation
88) Which of the following is true about the Sherman Act?
A. A business can be liable under either Section 1 or Section 2 without any agreement with another party.
B. Liability under Section 1 for restraint of trade requires agreement with another party, but liability under Section 2 for monopolization does not.
C. Liability under Section 2 for monopolization requires agreement with another party, but liability under Section 1 for restraint of trade does not.
D. Liability under either Section 1 or Section 2 requires agreement with another party.
89) Which of the following statements is generally not true about state intermediate appellate courts?
A. The appellate court allows the parties to make oral arguments outlining their position.
B. The appellate court allows the parties to introduce new evidence so long as it was not previously introduced at the original trial.
C. The appellate court usually allows the parties to file briefs outlining support for their positions.
D. The appellate court reviews the record of the trial court. E. Appellate court decisions are final and further appeal is not possible.
90) What type of commercial speech did the U.S. Supreme Court say was protected in the Greater New Orleans Broadcasting Association, Inc. v. United States case?
A. Information on gambling and lotteries.
B. Information about child pornography.
C. Obscene speech.
D. Information on how to build a bomb.
91) Which article of the United States Constitution deals with the judicial power of the federal government?
A. Article IV. B. Article II. C. Article III. D. Article I. E. Article V.
92) Mary arrived at work one day, and her boss said to her, “That’s the ugliest dress I have ever seen. Because you wore that to work today, you are fired.” Assuming that Mary is an at-will employee, which of the following is true?
A. Mary can be fired only if it is in the best interest of the employer. B. If none of the exceptions to the at-will rule apply, Mary can be fired. C. If Mary has the will to work, she cannot be fired without cause. D. Mary can be fired for any reason.
93) What was the holding of the U.S. Supreme Court in its 2000 decision regarding a Massachusetts law affecting firms doing business with the nation of Myanmar (formerly Burma)?
A. The state of Massachusetts was prohibited from conducting business with firms based in Myanmar
B. The Massachusetts law prohibiting the state government from purchasing goods or services from firms doing business with Myanmar violated the Supremacy Clause
C. Massachusetts was acting properly within its power in limited sales only within Massachusetts of firms conducting business with
D. The state of Massachusetts was ordered to not discriminate against firms from Myanmar
94) Which of the following is correct about the states’ powers regarding foreign affairs
A. The states can pass laws and enter into treaties with foreign nations so long as they do not unduly burden foreign commerce.
B. The states can pass laws so long as they do not unduly burden foreign commerce, but the states have no authority to enter into treaties with foreign nations.
C. The states have no power over foreign affairs because the U.S. Constitution grants that power exclusively to the federal governme
D. The states can pass laws affecting foreign commerce and enter into treaties with foreign nations so long as they first obtain the con
E. Because of the sharing of powers between the federal government and the states, states have powers over foreign affairs equal to the powers of the federal government.
95) Which of the following is not one of the Caux Round Table Principles for International Business?
A. Promotion of Multiculturalism. B. Respect for the Environment. C. Support for Multilateral Trade. D. Avoidance of Illicit Operations. E. Responsibility of Business Beyond Shareholders Toward Stakeholders.
96) Information which comes to the knowledge of an agent is:
A. Will result in termination of the agency arrangement if it is not communicated to the principal.
B. Required to be communicated to the principal in all circumstances. C. Is imputed to the principal. D. Can be disclosed to the principal only with the third party’s consent.
97) Generally speaking, the contract of a minor:
A. Is void. B. Is not enforceable by the minor. C. Is voidable at the minor’s option. D. Must be in writing.
98) Which country does the text describe as becoming the largest producer and consumer of many of the world's goods?
A. Mexico B. China C. Ecuador D. Canada E. Japan
99) One study found that manufacturing labor costs about _____ an hour in China, compared to _____ dollars in the United States.
A. $2; about 25
B. About $2; about 15
C. Less than $1; about 15
D. Less than $1; about 25
E. Less than $1; about 40
100) Although the U.S. has had a longstanding agreement with _____ after the passage of NAFTA, _____ became the United States' second largest trading partner.
A. Mexico, Canada B. Mexico, Venezuela C. Great Britain, Paraguay D. Canada, Mexico E. Canada, Venezuela
Although the U.S. has had a longstanding agreement wi