ETS Business Exam Study Guide Questions and
Answers Rated A+
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
Accounting: A budget that summarizes future plans for the acquisition of fixed assets is the... - Capital
expenditures budget
Accounting: A cost that will not be affected by later decisions is termed an - Sunk Cost
Accounting: A debt may slightly - Increase in an asset account
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
Accounting: Expense accounts would have a balance on which side? - Left side
Accounting: Factors in computing depreciation are? - Initial cost + residual value = depreciable
Accounting: In a continuous budget plan how many months are generally planned? - 12 months
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
Accounting: The excess of current assets of a business over its current liabilities is called? - Working
capital
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
,Accounting: The unfavorable volume variance may be due to all but the following facts... - Unexpected
increases in the cost of utilities
Accounting: Total product/ units produced and sold equals?? - Product Cost per Unit
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
Accounting: What 2 categories are considered under period costs? - selling expenses and administrative
expenses
Accounting: What are the elements of internal control? (3) - Control environment, monitoring, and
control procedures.
Accounting: What are the potential ways to find the price of what a produced product should cost? (3) -
Product cost concept, total cost concept, and variable cost concept
Accounting: What is the standard framework of guidelines for financial accounting used in any given
jurisdiction, also known as accounting standards?? - GAAP
Accounting: What budget allows for adjustments in activity levels? - Flexible budget
Accounting: What costs should be considered when making non-routine decisions? (3) - The price of
material, Factory overhead costs, and the price of labor
Accounting: What is a general explanation of what the contribution margin is? - The difference between
variable costs subtracted from sales
Accounting: What would be classified as a current asset on the balance sheet - Accounts receivable
Accounting: Which of the following is not one of the weaknesses of standard costing - It makes
accounting for price increases more accurate
, Accounting: Which report is the connecting link between the income statement and the balance sheet? -
Cash flow statement
As a result of the US government imposing tariffs own foreign steel imports - employment in the: US
steel industry would increase
Economics: A given tax will cause a bigger deadweight loss if demand and supply are... - Elastic
Economics: How does the federal reserve control the money supply? - Prints more as needed
Economics: If a tax imposed on a good and the incidence of the tax ends up falling more heavily on the
buyers than on the sellers, this will be because... - Demand is less elastic than supply for that good
Economics: If the price in a market happens to be above equilibrium, there will be a _____ in the
market, and the price will tend to _____. - Surplus, drop
Economics: If the price of a good is artificially set below the equilibrium price, what does this create? -
Shortage of goods.
Economics: If the quantity traded in a market is less than the equilibrium quantity... - The value to
consumers for additional units is greater than the cost to sellers of producing those units.
Economics: In a housing bust what would an economist expect the price of homes to do? - Make prices
go down because of excess supply
Economics: Rational people make decisions on the margins. Which statement would NOT result in a
purchase of the product being analyzed - MC > MB
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
Answers Rated A+
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
Accounting: A budget that summarizes future plans for the acquisition of fixed assets is the... - Capital
expenditures budget
Accounting: A cost that will not be affected by later decisions is termed an - Sunk Cost
Accounting: A debt may slightly - Increase in an asset account
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
Accounting: Expense accounts would have a balance on which side? - Left side
Accounting: Factors in computing depreciation are? - Initial cost + residual value = depreciable
Accounting: In a continuous budget plan how many months are generally planned? - 12 months
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
Accounting: The excess of current assets of a business over its current liabilities is called? - Working
capital
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
,Accounting: The unfavorable volume variance may be due to all but the following facts... - Unexpected
increases in the cost of utilities
Accounting: Total product/ units produced and sold equals?? - Product Cost per Unit
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
Accounting: What 2 categories are considered under period costs? - selling expenses and administrative
expenses
Accounting: What are the elements of internal control? (3) - Control environment, monitoring, and
control procedures.
Accounting: What are the potential ways to find the price of what a produced product should cost? (3) -
Product cost concept, total cost concept, and variable cost concept
Accounting: What is the standard framework of guidelines for financial accounting used in any given
jurisdiction, also known as accounting standards?? - GAAP
Accounting: What budget allows for adjustments in activity levels? - Flexible budget
Accounting: What costs should be considered when making non-routine decisions? (3) - The price of
material, Factory overhead costs, and the price of labor
Accounting: What is a general explanation of what the contribution margin is? - The difference between
variable costs subtracted from sales
Accounting: What would be classified as a current asset on the balance sheet - Accounts receivable
Accounting: Which of the following is not one of the weaknesses of standard costing - It makes
accounting for price increases more accurate
, Accounting: Which report is the connecting link between the income statement and the balance sheet? -
Cash flow statement
As a result of the US government imposing tariffs own foreign steel imports - employment in the: US
steel industry would increase
Economics: A given tax will cause a bigger deadweight loss if demand and supply are... - Elastic
Economics: How does the federal reserve control the money supply? - Prints more as needed
Economics: If a tax imposed on a good and the incidence of the tax ends up falling more heavily on the
buyers than on the sellers, this will be because... - Demand is less elastic than supply for that good
Economics: If the price in a market happens to be above equilibrium, there will be a _____ in the
market, and the price will tend to _____. - Surplus, drop
Economics: If the price of a good is artificially set below the equilibrium price, what does this create? -
Shortage of goods.
Economics: If the quantity traded in a market is less than the equilibrium quantity... - The value to
consumers for additional units is greater than the cost to sellers of producing those units.
Economics: In a housing bust what would an economist expect the price of homes to do? - Make prices
go down because of excess supply
Economics: Rational people make decisions on the margins. Which statement would NOT result in a
purchase of the product being analyzed - MC > MB
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
