In marketing research, a firm might consider using
secondary data over primary data because
secondary data usually cost less
In organizational decision making, managers are
able to exercise the greatest degree of discretion in
enforcement of internal policies
The term “net working capital” refers to
current assets less short-term liabilities
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.

Answer: D

Which of the following statements about a systems
flowchart is true?
It documents the sequence of processing
steps that take place in an information
On May 31, Company O’s general ledger shows a
cash balance of $5,123. The May 31 bank
statement shows a balance of $4,905. Other
information is available as follows:
1. A May 31 deposit of $300 does not
appear on the bank statement; but a
$3 service charge does.
2. A customer’s $40 insufficient funds
check has been returned with the bank
3. Outstanding checks of $10, $15, and
$100 are identified on May

What is the correct cash balance on May 31?

(A) $4,905
(B) $5,080
(C) $5,166
(D) $5,204

Answer: B

Within the context of the capital asset pricing
model (CAPM), the risk measure known as beta is
often computed by regressing the return of the
company’s stock against the
return on the market portfolio
A project consists of 150 jobs. The expected
completion time for each job is given in days. The
project has three critical paths with two jobs in
common, J and K. In order to finish the project one
day early, the completion time should be reduced
one day for
(A) each of the 150 jobs
(B) each of the jobs on the three critical paths
(C) either Job J or Job K
(D) both Job J and Job K

Answer : C

. The Organization of the Petroleum Exporting
Countries (OPEC) reduces production by
10 percent, and the growth rate of the world
economy begins to escalate. How will the
simultaneous occurrence of these events affect the
equilibrium price and quantity in the world
petroleum market?
Price will increase, but quantity is
Which of the following would most likely occur as a
result of the United States government’s imposing
tariffs on foreign steel imports?
(A) The price of steel produced in the United
States would decrease.
(B) The price of imported steel in the United
States would decrease.
(C) Employment in the United States steel
industry would increase.
(D) Government tax revenue would fall.

Answer: C

In a period of rising prices, which inventory
valuation method would generally yield both the
lowest ending inventory value and the lowest net
income figure?
A) First in, first out (FIFO)
(B) Last in, first out (LIFO)
(C) Weighted average
(D) Standard cost

Answer: B

FIFO stands for first-in, first-out, meaning that the oldest inventory items are recorded as sold first but do not necessarily mean that the exact oldest physical object has been tracked and sold. In other words, the cost associated with the inventory that was purchased first is the cost expensed first
‘Last In, First Out – LIFO’ An asset-management and valuation method that assumes that assets produced or acquired last are the ones that are used, sold or disposed of first.
Net Cash Flow
refers to the difference between a company’s cash inflows and outflows in a given period. In the strictest sense, net cash flow refers to the change in a company’s cash balance as detailed on its cash flow statement.
CAPM (Capital Asset Pricing Model)
A model that describes the relationship between risk and expected return and that is used in the pricing of risky securities. The general idea behind CAPM is that investors need to be compensated in two ways: time value of money and risk.
(Accounting; General Accepted Accounting Principles)
The common set of accounting principles, standards and procedures that companies use to compile their financial statements.
Income Statement
Statement of Change in Equity
Balance Sheet
Statement of Cash Flows
When combined they tell you all about the company
Each provide unique financial information and no one statement will tell you everything about a company’s finances
Balance Sheet
Assets= Liabilities + Equity
Income Statement
Revenue – Expenses

* Short run measurement for a fixed time period, all it tells you is whether or not the company was profitable

Revenue > Expenses
Revenue < Exenses
Statement of Change in Equity
Measures the change in owners’ investment in the company from the beginning of the accounting period to the end of the accounting period
Describes an unincorporated business, the owners investment
Describes a corporation, or the owners investment
Capital and Equity mean the same thing
In the statement of cash flows, the section for cash
flows from operating activities will include which of
the following?
(A) Dividends paid
(B) Issuance of common stock
(C) A decrease in accounts payable
(D) Purchase of a building financed entirely by a

Answer: C

0. All of the following are true regarding a seller’s
rights to reduce legal liability in the sale of non-consumer
goods EXCEPT:
(A) The seller can disclaim consequential
damages if it is done clearly and
(B) The seller can limit the remedy available to
the buyer if he or she does so clearly and
(C) The seller can place reasonable conditions on
the warranty coverage and a shorter time
limit of warranty coverage.
(D) The seller can disclaim all implied warranties
by simply stating that there are no implied

Answer: D

Green desires to form a new company to
manufacture lawn mowers. Green is concerned
about having his personal assets exposed to liability
for the new company’s contracts and torts.
Furthermore, he wants to retain control over the
company’s operations and growth for the next few
years. He will need an infusion of equity capital to
begin operations. He hopes to take the company
public in about five years if it is advantageous to do
so at the time. Which of the following types of
business associations would be best for Green’s
new company?
(A) Corporation
(B) General partnership
(C) Limited partnership
(D) Member-managed limited-liability company

Answer: A

A small number of people with complementary
skills who are committed to a common purpose, a set
of performance goals, and an approach for which
they hold themselves mutually accountable is
referred to as a
(A) committee
(B) task force
(C) group
(D) team

Answer: D

A department manager telephoned two managers
in other departments to discuss a cost savings idea
that would benefit their departments as well as her
own. Which of the following most accurately
defines the communication channel that the
manager was using?
(A) Upward
(B) Lateral
(C) Downward
(D) Hierarchical

Answer: B

Based on his scientific management theory,
Frederick Taylor developed what pay principle?
(A) Hourly pay
(B) Incentive pay
(C) Profit sharing
(D) Monthly salary with bonus

Answer: B

When a domestic firm permits a foreign company to
manufacture and sell its product in exchange for a
fee or royalty, the process is termed

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