ETS BUSINESS EXAM STUDY GUIDE
What,costs,should,be,considered,when,making,non-routine,decisions?,-,ans-
✔✔The,price,of,material,,Factory,overhead,costs,,and,the,price,of,labor
Total,product,divided,by,units,produced,and,sold,equals,what?,-,ans-
✔✔Product,Cost,per,Unit
How,do,you,calculate,contribution,margin?,-,ans-✔✔Subtract,variable,costs,from,sales
In,a,continuous,budget,plan,how,many,months,are,generally,planned?,-,ans-
✔✔12,months
Which,of,the,following,is,not,one,of,the,weaknesses,of,standard,costing?,-,ans-
✔✔It,makes,accounting,for,price,increases,more,accurate
What,are,the,potential,ways,to,find,the,price,of,what,produced,products,should,cost?,-,ans-
✔✔Product,cost,concept,,total,cost,concept,,and,variable,cost,concept
Which,report,is,the,connecting,link,between,the,income,statement,and,the,balance,sheet?,
-,ans-✔✔Cash,flow,statement
True,or,False:,The,net,cash,flow,from,operating,activities,normally,differs,from,the,amount,
of,net,income,for,the,period.,-,ans-✔✔True
Expense,accounts,would,have,a,balance,on,which,side?,-,ans-✔✔Left,side
A,profit-
making,business,operating,as,a,separated,legal,entity,and,in,which,ownership,is,divided,in
to,shares,of,stock,is,known,as,a,what?,-,ans-✔✔Corporation
A,debt,may,slightly,-,ans-✔✔Increase,in,an,asset,account
What,would,be,classified,as,a,current,asset,on,the,balance,sheet?,-,ans-
✔✔Accounts,receivable
What,are,the,elements,of,internal,control?,-,ans-
✔✔Control,environment,,monitoring,,and,control,procedures
, True,or,False:,A,cash,distribution,of,earnings,by,a,corporation,to,its,stockholders,is,called,a
,CASH,DIVIDEND.,The,3,conditions,that,a,corporation,must,meet,to,pay,a,cash,dividend,ar
e:,sufficient,retained,earnings,,sufficient,cash,,and,formal,action,by,the,board,of,directors.,-
,ans-✔✔True
Factors,in,computing,depreciation,are?,-,ans-✔✔Initial,cost,+,residual,value,=,depreciable
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?,-,ans-
✔✔Meet,its,financial,obligations,,generate,cash,from,operations,,and,maintain,and,expan
d,its,operating,capacity
True,or,False:,Notes,receivables,are,amounts,that,customers,owe,for,which,a,formal,,writt
en,instrument,of,credit,has,been,issued.,If,longer,than,a,year,it,is,considered,an,investment
.,-,ans-✔✔True
The,excess,of,current,assets,of,a,business,over,its,current,liabilities,is,called,what?,-,ans-
✔✔Working,capital
What,2,categories,are,considered,under,period,costs?,-,ans-
✔✔Selling,expenses,and,administrative,expenses
The,effect,of,a,difference,in,the,number,of,units,sold,,assuming,no,charge,in,unit,sales,pric
e,or,unit,cost,is...,-,ans-✔✔Quantity,factor
A,cost,that,will,not,be,affected,by,later,decisions,is,termed,a,what?,-,ans-✔✔Sunk,Cost
The,unfavorable,volume,variance,may,be,due,to,all,but,the,following,facts:,-,ans-
✔✔Unexpected,increases,in,the,cost,of,utilities
What,budget,allows,for,adjustments,in,activity,levels?,-,ans-✔✔Flexible,budget
A,budget,that,summarizes,future,plans,for,the,acquisition,of,fixed,assets,is,called,the...,-,an
s-✔✔Capital,expenditures,budget
What,are,the,standard,framework,of,guidelines,for,financial,accounting,used,in,any,given,j
urisdiction,,also,known,as,accounting,standards?,-,ans-✔✔GAAP
What,occurs,when,the,price,level,rises?,-,ans-
✔✔People,need,to,hold,more,money,,so,interest,rates,rise,,making,firms,borrow,and,inves
t,less
The,federal,government,enacted,regulation,in,the,1960's,requiring,people,to,wear,seatbelt,
in,their,cars.,All,of,the,following,resulted,from,this,regulation,,EXCEPT:,-,ans-
✔✔Fewer,pedestrians,were,killed,in,car,accidents.
What,costs,should,be,considered,when,making,non-routine,decisions?,-,ans-
✔✔The,price,of,material,,Factory,overhead,costs,,and,the,price,of,labor
Total,product,divided,by,units,produced,and,sold,equals,what?,-,ans-
✔✔Product,Cost,per,Unit
How,do,you,calculate,contribution,margin?,-,ans-✔✔Subtract,variable,costs,from,sales
In,a,continuous,budget,plan,how,many,months,are,generally,planned?,-,ans-
✔✔12,months
Which,of,the,following,is,not,one,of,the,weaknesses,of,standard,costing?,-,ans-
✔✔It,makes,accounting,for,price,increases,more,accurate
What,are,the,potential,ways,to,find,the,price,of,what,produced,products,should,cost?,-,ans-
✔✔Product,cost,concept,,total,cost,concept,,and,variable,cost,concept
Which,report,is,the,connecting,link,between,the,income,statement,and,the,balance,sheet?,
-,ans-✔✔Cash,flow,statement
True,or,False:,The,net,cash,flow,from,operating,activities,normally,differs,from,the,amount,
of,net,income,for,the,period.,-,ans-✔✔True
Expense,accounts,would,have,a,balance,on,which,side?,-,ans-✔✔Left,side
A,profit-
making,business,operating,as,a,separated,legal,entity,and,in,which,ownership,is,divided,in
to,shares,of,stock,is,known,as,a,what?,-,ans-✔✔Corporation
A,debt,may,slightly,-,ans-✔✔Increase,in,an,asset,account
What,would,be,classified,as,a,current,asset,on,the,balance,sheet?,-,ans-
✔✔Accounts,receivable
What,are,the,elements,of,internal,control?,-,ans-
✔✔Control,environment,,monitoring,,and,control,procedures
, True,or,False:,A,cash,distribution,of,earnings,by,a,corporation,to,its,stockholders,is,called,a
,CASH,DIVIDEND.,The,3,conditions,that,a,corporation,must,meet,to,pay,a,cash,dividend,ar
e:,sufficient,retained,earnings,,sufficient,cash,,and,formal,action,by,the,board,of,directors.,-
,ans-✔✔True
Factors,in,computing,depreciation,are?,-,ans-✔✔Initial,cost,+,residual,value,=,depreciable
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?,-,ans-
✔✔Meet,its,financial,obligations,,generate,cash,from,operations,,and,maintain,and,expan
d,its,operating,capacity
True,or,False:,Notes,receivables,are,amounts,that,customers,owe,for,which,a,formal,,writt
en,instrument,of,credit,has,been,issued.,If,longer,than,a,year,it,is,considered,an,investment
.,-,ans-✔✔True
The,excess,of,current,assets,of,a,business,over,its,current,liabilities,is,called,what?,-,ans-
✔✔Working,capital
What,2,categories,are,considered,under,period,costs?,-,ans-
✔✔Selling,expenses,and,administrative,expenses
The,effect,of,a,difference,in,the,number,of,units,sold,,assuming,no,charge,in,unit,sales,pric
e,or,unit,cost,is...,-,ans-✔✔Quantity,factor
A,cost,that,will,not,be,affected,by,later,decisions,is,termed,a,what?,-,ans-✔✔Sunk,Cost
The,unfavorable,volume,variance,may,be,due,to,all,but,the,following,facts:,-,ans-
✔✔Unexpected,increases,in,the,cost,of,utilities
What,budget,allows,for,adjustments,in,activity,levels?,-,ans-✔✔Flexible,budget
A,budget,that,summarizes,future,plans,for,the,acquisition,of,fixed,assets,is,called,the...,-,an
s-✔✔Capital,expenditures,budget
What,are,the,standard,framework,of,guidelines,for,financial,accounting,used,in,any,given,j
urisdiction,,also,known,as,accounting,standards?,-,ans-✔✔GAAP
What,occurs,when,the,price,level,rises?,-,ans-
✔✔People,need,to,hold,more,money,,so,interest,rates,rise,,making,firms,borrow,and,inves
t,less
The,federal,government,enacted,regulation,in,the,1960's,requiring,people,to,wear,seatbelt,
in,their,cars.,All,of,the,following,resulted,from,this,regulation,,EXCEPT:,-,ans-
✔✔Fewer,pedestrians,were,killed,in,car,accidents.
