PHR Certification Exam Questions and
Answers
1. Accounts Payable: Money an organization owes its vendors and suppliers.
2. Accounts Receivable: Money an organization's customers owe the organization.
3. Action Plans: Detailed steps a unit, department, or team will take in order to achieve short-term
objectives.
4. Amendment: Modification or the Constitution or a law; modification may be either formal (written)
or informal (unwritten).
5. Assets: Financial, physical, and sometiems intangible properties an organization owns.
6. Balance Sheet: Statement of a firm's financial position at a particular time.
7. Balanced scorecard: Measurement approach that provides an overall picture of an
organization's perfor- mance as measured against goals in finance, customers, internal business
processes, and learning and growth.
8. Bill: Proposal presented to a legislative body for possible enactment as a law.
,9. Break-even analysis: Analysis that shows point in time at which total revenue associated
with a program is equal to the total cost of the program.
10. Business Case: Description of an organizational challenge and possible alternative
solutions, arguing for specific solution.
11. Capacity: To an operations department, the ability to yield output.
12. Cash flow statement: Record of how much cash is flowing into and out of an
organization, including its sources or destinations.
13. Centralization: Degree to which decision-making authority is restricted to higher
levels of management in an organization.
14. Code of ethics: Principles of conduct within an organization that guide decision making
and behavior.
15. Consumer price index: Measure of the average change over time in the prices paid
by consumers for goods and services.
16. Control: To an operations department, an after-the-fact evaluation of a company's
ability to meet its own specifications and its customers' needs.
17. Correlation: Measure that indicates the relationship between two variables.
,18. Cost-benefit analysis: Ratio of value created to cost of creating that value; allows
management to determine the financial impact particular activities and programs have on an
organization's profitability.
19. Decentralization: Degree to which decision-making authority is given to lower levels
in an organization's hierarchy.
20. Departmentalization: Way an organization groups jobs to coordinate work.
21. Divestiture: Sale by a company of an asset that is not performing well, that is not core to
the company's business, or that is worth more as a separate entity.
22. Divisional structure: Organizational structure in which segments ae separated by
product, customer or market, or region.
23. Due diligence: Process of conducting an intensive investigation of an organization as
one of the first steps in a pending merger or acquisition.
24. Electronic Communications Privacy Act (ECPA): Act that makes it
unlawful to intercept messages in transmission, access stored information on electronic
communication services, or disclose this information.
25. Enterprise management: Integrated processes and tools to allow information
sharing and process management across functions, sometimes even with external partners, such
as suppliers.
, 26. Environmental scanning: Process that involves a systematic survey and interpretation
of relevant data to identify external opportunities and threats.
27. Equity: Amount of owners' or shareholders' portion of a business.
28. Ethics: System of moral principles and values that establish appropriate conduct.
29. Extended organization: Alliance between organizations to create processes and
information channels that allow communication and collaboration.
30. Financial ratios: Calculations designed to describe an organization's financial health
and performance from various perspectives.
31. Foreign Corrupt Practices Act (FCPA): Prohibits American companies from
making corrupt pay- ments to foreign oflcials for the purpose of obtaining or keeping business.
32. Formula budgeting: Form of budgeting in which an average cost is applied to
comparable expenses and general funding is changed by a specific amount.
33. Functional structure: Organizational structure that defines departments by what
services they contribute to the organization's overall mission.
34. Gantt chart: Project planning tool that graphically displays activities of a project in
sequential order and plots them against time.
35. Generation X: Group of people born roughly between the years of 1965 - 1980
36. Generation Y: Group of people born after 1980.
37. Gross domestic product (GDP): Estimate of the total value of goods and
services produced in a country in a given year.
38. Gross profit margin: Ratio of gross profit to net sales.
39. HR audit: Process to measure the ettectiveness and eflciency of HR programs and
positions.
40. Human capital: Combined knowledge, skills, and experience of a company's
employees.
Answers
1. Accounts Payable: Money an organization owes its vendors and suppliers.
2. Accounts Receivable: Money an organization's customers owe the organization.
3. Action Plans: Detailed steps a unit, department, or team will take in order to achieve short-term
objectives.
4. Amendment: Modification or the Constitution or a law; modification may be either formal (written)
or informal (unwritten).
5. Assets: Financial, physical, and sometiems intangible properties an organization owns.
6. Balance Sheet: Statement of a firm's financial position at a particular time.
7. Balanced scorecard: Measurement approach that provides an overall picture of an
organization's perfor- mance as measured against goals in finance, customers, internal business
processes, and learning and growth.
8. Bill: Proposal presented to a legislative body for possible enactment as a law.
,9. Break-even analysis: Analysis that shows point in time at which total revenue associated
with a program is equal to the total cost of the program.
10. Business Case: Description of an organizational challenge and possible alternative
solutions, arguing for specific solution.
11. Capacity: To an operations department, the ability to yield output.
12. Cash flow statement: Record of how much cash is flowing into and out of an
organization, including its sources or destinations.
13. Centralization: Degree to which decision-making authority is restricted to higher
levels of management in an organization.
14. Code of ethics: Principles of conduct within an organization that guide decision making
and behavior.
15. Consumer price index: Measure of the average change over time in the prices paid
by consumers for goods and services.
16. Control: To an operations department, an after-the-fact evaluation of a company's
ability to meet its own specifications and its customers' needs.
17. Correlation: Measure that indicates the relationship between two variables.
,18. Cost-benefit analysis: Ratio of value created to cost of creating that value; allows
management to determine the financial impact particular activities and programs have on an
organization's profitability.
19. Decentralization: Degree to which decision-making authority is given to lower levels
in an organization's hierarchy.
20. Departmentalization: Way an organization groups jobs to coordinate work.
21. Divestiture: Sale by a company of an asset that is not performing well, that is not core to
the company's business, or that is worth more as a separate entity.
22. Divisional structure: Organizational structure in which segments ae separated by
product, customer or market, or region.
23. Due diligence: Process of conducting an intensive investigation of an organization as
one of the first steps in a pending merger or acquisition.
24. Electronic Communications Privacy Act (ECPA): Act that makes it
unlawful to intercept messages in transmission, access stored information on electronic
communication services, or disclose this information.
25. Enterprise management: Integrated processes and tools to allow information
sharing and process management across functions, sometimes even with external partners, such
as suppliers.
, 26. Environmental scanning: Process that involves a systematic survey and interpretation
of relevant data to identify external opportunities and threats.
27. Equity: Amount of owners' or shareholders' portion of a business.
28. Ethics: System of moral principles and values that establish appropriate conduct.
29. Extended organization: Alliance between organizations to create processes and
information channels that allow communication and collaboration.
30. Financial ratios: Calculations designed to describe an organization's financial health
and performance from various perspectives.
31. Foreign Corrupt Practices Act (FCPA): Prohibits American companies from
making corrupt pay- ments to foreign oflcials for the purpose of obtaining or keeping business.
32. Formula budgeting: Form of budgeting in which an average cost is applied to
comparable expenses and general funding is changed by a specific amount.
33. Functional structure: Organizational structure that defines departments by what
services they contribute to the organization's overall mission.
34. Gantt chart: Project planning tool that graphically displays activities of a project in
sequential order and plots them against time.
35. Generation X: Group of people born roughly between the years of 1965 - 1980
36. Generation Y: Group of people born after 1980.
37. Gross domestic product (GDP): Estimate of the total value of goods and
services produced in a country in a given year.
38. Gross profit margin: Ratio of gross profit to net sales.
39. HR audit: Process to measure the ettectiveness and eflciency of HR programs and
positions.
40. Human capital: Combined knowledge, skills, and experience of a company's
employees.
