ETS BUSINESS FIELD EXAM COMPLETE 230+
PRACTICE QUESTIONS COMPLETE WITH 100%
VERIFIED ANSWERS AND EXPLANATIONS
1. In marketing research, a firm might consider using secondary data over
primary data because
A. secondary data usually cost less
B. secondary data are usually more accurate
C. primary data are usually nonspecific
D. primary data are likely to be outdated
Correct Answer: A
Explanation: Secondary data is already collected and available, making it
significantly less expensive and faster to obtain than primary data, which requires
new collection efforts.
2. In organizational decision making, managers are able to exercise the greatest
degree of discretion in the
A. enforcement of internal policies
B. settlement of legal disputes
C. restructuring of outstanding loans
D. compliance with federal regulations
Correct Answer: A
,Explanation: Internal policies are created and controlled by the organization itself,
giving managers broad discretion. Legal disputes, loans, and federal regulations
are governed by external laws and contracts.
3. The term "net working capital" refers to
A. inventories, receivables, and current notes and investments
B. assets divided by liabilities
C. current assets less short-term liabilities
D. net assets left over after subtracting cost of goods sold
Correct Answer: C
Explanation: Net working capital is a standard financial metric calculated as
current assets minus current liabilities, measuring a company's short-term
liquidity.
Information for Questions 4 and 5:
Dreamland Pillow Company sells the "Old Softy" model
for 20𝑒𝑎𝑐ℎ. 𝑂𝑛𝑒𝑝𝑖𝑙𝑙𝑜𝑤𝑟𝑒𝑞𝑢𝑖𝑟𝑒𝑠𝑡𝑤𝑜𝑝𝑜𝑢𝑛𝑑𝑠𝑜𝑓𝑟𝑎𝑤𝑚𝑎𝑡𝑒𝑟𝑖𝑎𝑙(3 per pound) and
one hour of direct labor (4𝑝𝑒𝑟ℎ𝑜𝑢𝑟). 𝐹𝑖𝑥𝑒𝑑𝑠𝑢𝑝𝑒𝑟𝑣𝑖𝑠𝑜𝑟𝑦𝑐𝑜𝑠𝑡𝑠𝑎𝑟𝑒2,000 per
month, and factory rent is $4,000 per month. All costs are considered production
costs.
4. How many pillows must Dreamland produce and sell each month to earn a
monthly gross profit of $1,000?
A. 300
B. 350
C. 600
D. 700
Correct Answer: D
,Explanation: Variable cost per pillow = (2 lbs × 3) + (1ℎ𝑜𝑢𝑟 ×4) = 6 +4
= 10. 𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛𝑚𝑎𝑟𝑔𝑖𝑛𝑝𝑒𝑟𝑝𝑖𝑙𝑙𝑜𝑤 =20 − 10 =10. Total fixed costs
= 2,000 +4,000 = 6,000. 𝑅𝑒𝑞𝑢𝑖𝑟𝑒𝑑𝑠𝑎𝑙𝑒𝑠 = (𝐹𝑖𝑥𝑒𝑑𝑐𝑜𝑠𝑡𝑠 + 𝐷𝑒𝑠𝑖𝑟𝑒𝑑𝑝𝑟𝑜𝑓𝑖𝑡) ÷
𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛𝑚𝑎𝑟𝑔𝑖𝑛 = (6,000 + 1,000) ÷10 = 700 pillows.
5. Another firm has offered to produce "Old Softy" pillows and sell them to
Dreamland
for
12𝑒𝑎𝑐ℎ. 𝐷𝑟𝑒𝑎𝑚𝑙𝑎𝑛𝑑𝑐𝑎𝑛𝑛𝑜𝑡𝑎𝑣𝑜𝑖𝑑𝑡ℎ𝑒𝑓𝑎𝑐𝑡𝑜𝑟𝑦𝑙𝑒𝑎𝑠𝑒𝑝𝑎𝑦𝑚𝑒𝑛𝑡𝑠, 𝑏𝑢𝑡𝑐𝑎𝑛𝑎𝑣𝑜𝑖𝑑𝑎𝑙𝑙𝑙𝑎𝑏𝑜𝑟𝑐𝑜𝑠𝑡𝑠𝑖𝑓
1,000?
A. 417
B. 500
C. 625
D. 875
Correct Answer: C
Explanation: New cost per pillow
= 12(𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑝𝑟𝑖𝑐𝑒). 𝐹𝑖𝑥𝑒𝑑𝑐𝑜𝑠𝑡𝑠𝑠𝑡𝑖𝑙𝑙𝑖𝑛𝑐𝑙𝑢𝑑𝑒𝑟𝑒𝑛𝑡(4,000) but not supervisory
costs
(2,000𝑖𝑠𝑎𝑣𝑜𝑖𝑑𝑎𝑏𝑙𝑒𝑖𝑓𝑛𝑜𝑡𝑝𝑟𝑜𝑑𝑢𝑐𝑖𝑛𝑔). 𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛𝑚𝑎𝑟𝑔𝑖𝑛𝑝𝑒𝑟𝑝𝑖𝑙𝑙𝑜𝑤 =20
− 12 =8. Required sales = (4,000 +1,000) ÷ $8 = 625 pillows.
6. Which of the following statements about the tort of negligence is true?
A. It cannot be used as a basis for liability for defective products.
B. It is a strict liability tort with no defenses.
C. It requires proof of some intentional conduct.
D. It requires proof of breach of a statutory or common-law duty.
Correct Answer: D
, Explanation: Negligence requires showing that the defendant breached a duty of
care owed to the plaintiff, whether that duty arises from statute or common law.
7. Which of the following statements about a systems flowchart is true?
A. It is used in systems design to define and describe each piece of data.
B. It is a method of writing programs using only three basic constructs: sequence,
selection, and repetition.
C. It documents the sequence of processing steps that take place in an
information system.
D. It documents the logical design of an information system.
Correct Answer: C
Explanation: A systems flowchart visually represents the sequence of processing
steps, inputs, outputs, and data flows within an information system.
8. On May 31, Company O's general ledger shows a cash balance
of 5,123. 𝑇ℎ𝑒𝑀𝑎𝑦31𝑏𝑎𝑛𝑘𝑠𝑡𝑎𝑡𝑒𝑚𝑒𝑛𝑡𝑠ℎ𝑜𝑤𝑠𝑎𝑏𝑎𝑙𝑎𝑛𝑐𝑒𝑜𝑓4,905. Other
information is available as follows:
1. A May 31 deposit of 300𝑑𝑜𝑒𝑠𝑛𝑜𝑡𝑎𝑝𝑝𝑒𝑎𝑟𝑜𝑛𝑡ℎ𝑒𝑏𝑎𝑛𝑘𝑠𝑡𝑎𝑡𝑒𝑚𝑒𝑛𝑡; 𝑏𝑢𝑡𝑎3
service charge does.
2. A customer's $40 insufficient funds check has been returned with the bank
statement.
3. Outstanding checks of 10,15, and $100 are identified on May 31.
What is the correct cash balance on May 31?
A. 4,905𝐵.5,080
C. 5,166𝐷.5,204
Correct Answer: B
PRACTICE QUESTIONS COMPLETE WITH 100%
VERIFIED ANSWERS AND EXPLANATIONS
1. In marketing research, a firm might consider using secondary data over
primary data because
A. secondary data usually cost less
B. secondary data are usually more accurate
C. primary data are usually nonspecific
D. primary data are likely to be outdated
Correct Answer: A
Explanation: Secondary data is already collected and available, making it
significantly less expensive and faster to obtain than primary data, which requires
new collection efforts.
2. In organizational decision making, managers are able to exercise the greatest
degree of discretion in the
A. enforcement of internal policies
B. settlement of legal disputes
C. restructuring of outstanding loans
D. compliance with federal regulations
Correct Answer: A
,Explanation: Internal policies are created and controlled by the organization itself,
giving managers broad discretion. Legal disputes, loans, and federal regulations
are governed by external laws and contracts.
3. The term "net working capital" refers to
A. inventories, receivables, and current notes and investments
B. assets divided by liabilities
C. current assets less short-term liabilities
D. net assets left over after subtracting cost of goods sold
Correct Answer: C
Explanation: Net working capital is a standard financial metric calculated as
current assets minus current liabilities, measuring a company's short-term
liquidity.
Information for Questions 4 and 5:
Dreamland Pillow Company sells the "Old Softy" model
for 20𝑒𝑎𝑐ℎ. 𝑂𝑛𝑒𝑝𝑖𝑙𝑙𝑜𝑤𝑟𝑒𝑞𝑢𝑖𝑟𝑒𝑠𝑡𝑤𝑜𝑝𝑜𝑢𝑛𝑑𝑠𝑜𝑓𝑟𝑎𝑤𝑚𝑎𝑡𝑒𝑟𝑖𝑎𝑙(3 per pound) and
one hour of direct labor (4𝑝𝑒𝑟ℎ𝑜𝑢𝑟). 𝐹𝑖𝑥𝑒𝑑𝑠𝑢𝑝𝑒𝑟𝑣𝑖𝑠𝑜𝑟𝑦𝑐𝑜𝑠𝑡𝑠𝑎𝑟𝑒2,000 per
month, and factory rent is $4,000 per month. All costs are considered production
costs.
4. How many pillows must Dreamland produce and sell each month to earn a
monthly gross profit of $1,000?
A. 300
B. 350
C. 600
D. 700
Correct Answer: D
,Explanation: Variable cost per pillow = (2 lbs × 3) + (1ℎ𝑜𝑢𝑟 ×4) = 6 +4
= 10. 𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛𝑚𝑎𝑟𝑔𝑖𝑛𝑝𝑒𝑟𝑝𝑖𝑙𝑙𝑜𝑤 =20 − 10 =10. Total fixed costs
= 2,000 +4,000 = 6,000. 𝑅𝑒𝑞𝑢𝑖𝑟𝑒𝑑𝑠𝑎𝑙𝑒𝑠 = (𝐹𝑖𝑥𝑒𝑑𝑐𝑜𝑠𝑡𝑠 + 𝐷𝑒𝑠𝑖𝑟𝑒𝑑𝑝𝑟𝑜𝑓𝑖𝑡) ÷
𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛𝑚𝑎𝑟𝑔𝑖𝑛 = (6,000 + 1,000) ÷10 = 700 pillows.
5. Another firm has offered to produce "Old Softy" pillows and sell them to
Dreamland
for
12𝑒𝑎𝑐ℎ. 𝐷𝑟𝑒𝑎𝑚𝑙𝑎𝑛𝑑𝑐𝑎𝑛𝑛𝑜𝑡𝑎𝑣𝑜𝑖𝑑𝑡ℎ𝑒𝑓𝑎𝑐𝑡𝑜𝑟𝑦𝑙𝑒𝑎𝑠𝑒𝑝𝑎𝑦𝑚𝑒𝑛𝑡𝑠, 𝑏𝑢𝑡𝑐𝑎𝑛𝑎𝑣𝑜𝑖𝑑𝑎𝑙𝑙𝑙𝑎𝑏𝑜𝑟𝑐𝑜𝑠𝑡𝑠𝑖𝑓
1,000?
A. 417
B. 500
C. 625
D. 875
Correct Answer: C
Explanation: New cost per pillow
= 12(𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑝𝑟𝑖𝑐𝑒). 𝐹𝑖𝑥𝑒𝑑𝑐𝑜𝑠𝑡𝑠𝑠𝑡𝑖𝑙𝑙𝑖𝑛𝑐𝑙𝑢𝑑𝑒𝑟𝑒𝑛𝑡(4,000) but not supervisory
costs
(2,000𝑖𝑠𝑎𝑣𝑜𝑖𝑑𝑎𝑏𝑙𝑒𝑖𝑓𝑛𝑜𝑡𝑝𝑟𝑜𝑑𝑢𝑐𝑖𝑛𝑔). 𝐶𝑜𝑛𝑡𝑟𝑖𝑏𝑢𝑡𝑖𝑜𝑛𝑚𝑎𝑟𝑔𝑖𝑛𝑝𝑒𝑟𝑝𝑖𝑙𝑙𝑜𝑤 =20
− 12 =8. Required sales = (4,000 +1,000) ÷ $8 = 625 pillows.
6. Which of the following statements about the tort of negligence is true?
A. It cannot be used as a basis for liability for defective products.
B. It is a strict liability tort with no defenses.
C. It requires proof of some intentional conduct.
D. It requires proof of breach of a statutory or common-law duty.
Correct Answer: D
, Explanation: Negligence requires showing that the defendant breached a duty of
care owed to the plaintiff, whether that duty arises from statute or common law.
7. Which of the following statements about a systems flowchart is true?
A. It is used in systems design to define and describe each piece of data.
B. It is a method of writing programs using only three basic constructs: sequence,
selection, and repetition.
C. It documents the sequence of processing steps that take place in an
information system.
D. It documents the logical design of an information system.
Correct Answer: C
Explanation: A systems flowchart visually represents the sequence of processing
steps, inputs, outputs, and data flows within an information system.
8. On May 31, Company O's general ledger shows a cash balance
of 5,123. 𝑇ℎ𝑒𝑀𝑎𝑦31𝑏𝑎𝑛𝑘𝑠𝑡𝑎𝑡𝑒𝑚𝑒𝑛𝑡𝑠ℎ𝑜𝑤𝑠𝑎𝑏𝑎𝑙𝑎𝑛𝑐𝑒𝑜𝑓4,905. Other
information is available as follows:
1. A May 31 deposit of 300𝑑𝑜𝑒𝑠𝑛𝑜𝑡𝑎𝑝𝑝𝑒𝑎𝑟𝑜𝑛𝑡ℎ𝑒𝑏𝑎𝑛𝑘𝑠𝑡𝑎𝑡𝑒𝑚𝑒𝑛𝑡; 𝑏𝑢𝑡𝑎3
service charge does.
2. A customer's $40 insufficient funds check has been returned with the bank
statement.
3. Outstanding checks of 10,15, and $100 are identified on May 31.
What is the correct cash balance on May 31?
A. 4,905𝐵.5,080
C. 5,166𝐷.5,204
Correct Answer: B
