MBA ETS Major Field Test 2025
update|comprehensive questions and
verified answers (complete solutions)
GRADE A+!!
Balance Sheet - CORRECT ANSWERS-a financial statement that reports a company's
assets, liabilities, and shareholder equity at a specific point in time; Assets = Liabilities +
Shareholder's Equity
Income Statement - CORRECT ANSWERS-AKA profit and loss statement; primarily
focuses on the company's revenues and expenses during a particular period;
Net Income = (Total Revenue + Gains) - (Total Expenses + Losses)
Statement of Retained Earnings - CORRECT ANSWERS-AKA Statement of Equity;
outlines the changes in retained earnings for a company over a specified period;
Retained Earnings - CORRECT ANSWERS-profits held by a company in reserve in
order to invest in future projects rather than distribute as dividends to shareholders
Statement of Cash Flows - CORRECT ANSWERS-summarizes the amount of cash and
cash equivalents entering and leaving a company; includes operating, investing, and
financing activities
cash flow - CORRECT ANSWERS-$$$ that goes in/out of a business
profit - CORRECT ANSWERS-$$$ leftover after Revenues - Expenses
cash from operating activities - CORRECT ANSWERS-receipts from sales of
goods/services, interest payments, income tax payments, salaries/wages, rent
ALSO depreciation, inventory, accts receivable, payable
cash from investing activities - CORRECT ANSWERS-changes in equipment, assets, or
investments
, cash zfrom zfinancing zactivities z- zCORRECT zANSWERS-cash zfrom zinvestors/banks,
zdividends, zrepayment zof zdebt,
Direct zCash zFlow zMethod z- zCORRECT zANSWERS-determines zchanges zin zcash
zreceipts zand zpayments, zwhich zare zreported zin zthe zcash zflow zfrom zthe zoperations
zsection.
Indirect zCash zFlow zMethod z- zCORRECT zANSWERS-takes zthe znet zincome zgenerated zin
za zperiod zand zadds zor zsubtracts zchanges zin zthe zasset zand zliability zaccounts zto
zdetermine zthe zimplied zcash zflow
liquidity z- zCORRECT zANSWERS-the zease zwith zwhich zan zasset, zor zsecurity, zcan zbe
zconverted zinto zready zcash zwithout zaffecting zits zmarket zprice; zcash zis zthe zmost zliquid zof
zassets
Accrual zBasis zAccounting z- zCORRECT zANSWERS-revenue zor zexpenses zare zrecorded
zwhen za ztransaction zoccurs; zfollows zthe zmatching zprinciple, zwhich zsays zthat zrevenues
zand zexpenses zshould zbe zrecognized zin zthe zsame zperiod
Cash zAccounting z- zCORRECT zANSWERS-recognizes ztransactions zonly zwhen zpayment
zis zexchanged.
capital zstock z- zCORRECT zANSWERS-amount zof zcommon zand zpreferred zshares zthat za
zcompany zis zauthorized zto zissue, zrecorded zon zthe zbalance zsheet zunder zshareholders'
zequity; z
amount zof zcapital zstock zis zthe zmaximum zamount zof zshares zthat za zcompany zcan zever
zhave zoutstanding
asset z- zCORRECT zANSWERS-resource zwith zeconomic zvalue zthat zan zindividual,
zcorporation zor zcountry zowns zor zcontrols zwith zthe zexpectation zthat zit zwill zprovide zfuture
zbenefit.
current zassets z- zCORRECT zANSWERS-all zthe zassets zof za zcompany zthat zare zexpected
zto zbe zsold/used zas za zresult zof zstandard zbiz zops zover zthe znext zyear;
includes zcash/cash zequivalents, zaccts zreceivable, zinventory, zprepaid zexpenses,
zmarketable zsecurities
non zcurrent zassets z- zCORRECT zANSWERS-long-term zinvestments znot zeasily
zconverted zto zcash zor zare znot zexpected zto zbecome zcash zwithin zthe zyear; zincludes
zinvestments, zintellectual zproperty, zreal zestate, zand zequipment
Theory zof zConstraints z- zCORRECT zANSWERS-every zprocess/op zis za zseries zof
zactivities, zand zthere zis za zWEAK zLINK z(aka zbottleneck) zthat zhinders zoutput
Special zOrder zDecisions z- zCORRECT zANSWERS-focus zon zwhether za zspecially zpriced
zorder zshould zbe zaccepted zor zrejected; zfixed zcosts zexcluded zfrom zspecial zorders
update|comprehensive questions and
verified answers (complete solutions)
GRADE A+!!
Balance Sheet - CORRECT ANSWERS-a financial statement that reports a company's
assets, liabilities, and shareholder equity at a specific point in time; Assets = Liabilities +
Shareholder's Equity
Income Statement - CORRECT ANSWERS-AKA profit and loss statement; primarily
focuses on the company's revenues and expenses during a particular period;
Net Income = (Total Revenue + Gains) - (Total Expenses + Losses)
Statement of Retained Earnings - CORRECT ANSWERS-AKA Statement of Equity;
outlines the changes in retained earnings for a company over a specified period;
Retained Earnings - CORRECT ANSWERS-profits held by a company in reserve in
order to invest in future projects rather than distribute as dividends to shareholders
Statement of Cash Flows - CORRECT ANSWERS-summarizes the amount of cash and
cash equivalents entering and leaving a company; includes operating, investing, and
financing activities
cash flow - CORRECT ANSWERS-$$$ that goes in/out of a business
profit - CORRECT ANSWERS-$$$ leftover after Revenues - Expenses
cash from operating activities - CORRECT ANSWERS-receipts from sales of
goods/services, interest payments, income tax payments, salaries/wages, rent
ALSO depreciation, inventory, accts receivable, payable
cash from investing activities - CORRECT ANSWERS-changes in equipment, assets, or
investments
, cash zfrom zfinancing zactivities z- zCORRECT zANSWERS-cash zfrom zinvestors/banks,
zdividends, zrepayment zof zdebt,
Direct zCash zFlow zMethod z- zCORRECT zANSWERS-determines zchanges zin zcash
zreceipts zand zpayments, zwhich zare zreported zin zthe zcash zflow zfrom zthe zoperations
zsection.
Indirect zCash zFlow zMethod z- zCORRECT zANSWERS-takes zthe znet zincome zgenerated zin
za zperiod zand zadds zor zsubtracts zchanges zin zthe zasset zand zliability zaccounts zto
zdetermine zthe zimplied zcash zflow
liquidity z- zCORRECT zANSWERS-the zease zwith zwhich zan zasset, zor zsecurity, zcan zbe
zconverted zinto zready zcash zwithout zaffecting zits zmarket zprice; zcash zis zthe zmost zliquid zof
zassets
Accrual zBasis zAccounting z- zCORRECT zANSWERS-revenue zor zexpenses zare zrecorded
zwhen za ztransaction zoccurs; zfollows zthe zmatching zprinciple, zwhich zsays zthat zrevenues
zand zexpenses zshould zbe zrecognized zin zthe zsame zperiod
Cash zAccounting z- zCORRECT zANSWERS-recognizes ztransactions zonly zwhen zpayment
zis zexchanged.
capital zstock z- zCORRECT zANSWERS-amount zof zcommon zand zpreferred zshares zthat za
zcompany zis zauthorized zto zissue, zrecorded zon zthe zbalance zsheet zunder zshareholders'
zequity; z
amount zof zcapital zstock zis zthe zmaximum zamount zof zshares zthat za zcompany zcan zever
zhave zoutstanding
asset z- zCORRECT zANSWERS-resource zwith zeconomic zvalue zthat zan zindividual,
zcorporation zor zcountry zowns zor zcontrols zwith zthe zexpectation zthat zit zwill zprovide zfuture
zbenefit.
current zassets z- zCORRECT zANSWERS-all zthe zassets zof za zcompany zthat zare zexpected
zto zbe zsold/used zas za zresult zof zstandard zbiz zops zover zthe znext zyear;
includes zcash/cash zequivalents, zaccts zreceivable, zinventory, zprepaid zexpenses,
zmarketable zsecurities
non zcurrent zassets z- zCORRECT zANSWERS-long-term zinvestments znot zeasily
zconverted zto zcash zor zare znot zexpected zto zbecome zcash zwithin zthe zyear; zincludes
zinvestments, zintellectual zproperty, zreal zestate, zand zequipment
Theory zof zConstraints z- zCORRECT zANSWERS-every zprocess/op zis za zseries zof
zactivities, zand zthere zis za zWEAK zLINK z(aka zbottleneck) zthat zhinders zoutput
Special zOrder zDecisions z- zCORRECT zANSWERS-focus zon zwhether za zspecially zpriced
zorder zshould zbe zaccepted zor zrejected; zfixed zcosts zexcluded zfrom zspecial zorders
