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FINANCE CLUSTER EXAM

Total questions: 93

Worksheet time: 47mins

Name
Class
Date
1.

Business expenses that do not vary with changes in sales volume are called __________ expenses.

a)

direct

b)

net

c)

fixed

d)

variable

2.

What two elements are necessary for effective two-way communication to take place?

a)

Sharing and understanding

b)

Telling and informing

c)

Words and meaning

d)

Sharing and caring

3.

The most common headings on a stock table include the 52-week high and low, the stock symbol, the estimated dividend per share, the yield percentage/rate of return, the volume/sales for the day, the closing price for the day, the net change, and the

a)

price-earnings ratio.

b)

earnings per share.

c)

stockholder's equity.

d)

net income.

4.

As opposed to financial accountants, managerial accountants primarily

a)

report externally.

b)

hire internally.

c)

hire externally.

d)

report internally.

5.

Which of the following businesses best represents an innovative entrepreneurial endeavor:

a)

Opening a new pizza franchise

b)

Developing and selling a new wood-cutting device

c)

Starting a clothing business online

d)

Buying a small local coffee shop from its founder

6.

A well-prepared new employee orientation program should

a)

outline the employer's specific financial goals.

b)

set aside time to negotiate the employees' salary requirements.

c)

communicate the employer's philosophy and expectations.

d)

verify the new employees' job qualifications.

7.

Tank's Trucking Company is focusing on eliminating waste and creating more value with fewer resources. Which of the following methodologies is Tank's Trucking Company using:

a)

Sustainability

b)

Six sigma

c)

Lean

d)

Activity-based costing

8.

Which of the following best describes the purpose of corporate governance:

a)

To create a favorable image for the company

b)

To make hiring and firing decisions for entry-level employees

c)

To improve relations with company stockholders

d)

To ensure that companies are held to high ethical standards

9.

Tom runs a company that produces pencils. To stay in business, Tom must

a)

have a distribution plan.

b)

make a profit.

c)

employ a sales force.

d)

order more machinery.

10.

Which of the following would help Erica effectively communicate her self-confidence during a job interview:

a)

Speaking in a very low tone of voice

b)

Making appropriate eye contact with the interviewer

c)

Listening to the interviewer without interrupting

d)

Wearing casual clothes to the interview

11.

Which of the following job tasks is most likely to fall within the finance industry:

a)

Advertising products

b)

Growing a business

c)

Investigating fraud

d)

Planning a vacation

12.

Using Customer Relationship Management (CRM) technology and an effective CRM strategy can increase a business's revenues by

a)

raising prices of products.

b)

allowing for a larger sales staff.

c)

lowering prices of products.

d)

providing better customer service.

13.

Even when things are not going well for Mark, he still believes everything will work out all right. Mark has a(n) ______ attitude.

a)

positive

b)

indifferent

c)

superior

d)

negative

14.

The Farside Corporation wants to encourage its workforce to better achieve governance objectives. Which tactic should the company use to motivate its employees and improve the distribution of wealth throughout the corporation?

a)

Cash incentives

b)

Profit-sharing

c)

Flexible scheduling

d)

Team building

15.

A real rate of return on an investment is different from a nominal rate of return in that a real rate of return

a)

less accurately measures investment performance.

b)

does not subtract taxes and inflation.

c)

adjusts profit for the effects of inflation.

d)

is often higher than a nominal rate of return.

16.

Which of the following is a project that might need to be monitored:

a)

Fixing up your car

b)

Developing your professional skills

c)

Becoming a better person

d)

Improving customer service

17.

A person who is a high achiever is often positively viewed by others as a

a)

leader.

b)

risk-taker.

c)

follower.

d)

show-off.

18.

When Gabriela's parents passed away, their assets were transferred to her. Those assets were taxed by the federal government according to their current market value. This is an example of a(n) __________ tax.

a)

A. estate

b)

B. sales

c)

C. income

d)

D. excise

19.

We need creativity in communication because

a)

not everyone communicates the same way.

b)

people get tired of the usual communication methods.

c)

email makes communication very difficult.

d)

most people don't know how to communicate.

20.

Employees who serve customers efficiently help control expenses by

a)

decreasing volume.

b)

reducing complaints.

c)

improving morale.

d)

increasing returns.

21.

Why is it important for a person pursuing any type of business career to develop self-confidence?

a)

The business field is very competitive.

b)

Managing others requires leadership skills.

c)

It helps a person become trustworthy.

d)

Complex financial concepts are challenging to learn.

22.

Which of the following is a type of credit card that can be used to make purchases from a variety of participating businesses:

a)

Retail store

b)

Bank

c)

Hotel

d)

Petroleum

23.

What should you do if a financial client reports a problem with their portfolio?

a)

Waive the client's fees for their next five transactions.

b)

Apologize and resolve the problem immediately.

c)

Call the client back later after they have calmed down.

d)

Ask the manager to return the client's call.

24.

Which of the following is a loss prevention technique that a hotel might use to protect itself against theft:

a)

Crisis management plans

b)

Fire sprinklers

c)

Security cameras

d)

Carbon monoxide detectors

25.

Which of the following is a common challenge for financial-information management:

a)

Managerial accountants prepare financial information for use by external stakeholders.

b)

Many financial data are stored in custom, task-specific software and are not easily accessible.

c)

Financial-information management's focus is on protection of customer financial data.

d)

Financial managers typically use Microsoft Office applications for financial recordkeeping.

26.

Lower premiums and the ability to control the claims process are advantages of

a)

traditional liability insurance policies.

b)

standard insurance companies.

c)

reinsurance carriers.

d)

captive insurance companies.

27.

Which of the following is an example of an internal control mechanism impacting an organization's governance:

a)

Compliance laws

b)

Regulatory guidelines

c)

Union contracts

d)

Segregation of duties

28.

A company does not emphasize the importance of fairness and respect. Which of the following risks is most likely to occur?

a)

Employees will be at risk of injury.

b)

Unhappy employees might leave the company.

c)

The company might go bankrupt.

d)

Important details might slip through the cracks.

29.

Why do stock prices tend to fall during a recession?

a)

Sponsorships become more common.

b)

Unemployment decreases.

c)

Profits are expected to drop.

d)

Bonds are a less stable investment.

30.

When a customer complains about a product, the employee should

a)

ask the manager to answer the complaint.

b)

ask another employee to handle the situation.

c)

handle the complaint according to company policy.

d)

defend themselves.

31.

Which of the following is categorized as owner's equity on a company's balance sheet:

a)

Capital equipment

b)

Accounts receivable

c)

Inventory

d)

Retained earnings

32.

When a business uses its budget to monitor and avoid excessive spending, it is using the budget as a(n)

a)

financial control tool.

b)

business plan.

c)

operating plan.

d)

performance evaluation.

33.

An insurance company is different from a bank in that an insurance company

a)

accepts short-term deposits and makes long-term loans.

b)

is not considered a financial institution.

c)

is part of a centralized clearing and payment system.

d)

insures its customers against certain risks.

34.

By installing firewalls on its computer networks, a business can protect its online customers' credit card information from

a)

investment scams.

b)

tax evasion.

c)

trade barriers.

d)

identity theft.

35.

Which of the following is an example of an uninsurable risk:

a)

Fire

b)

Business interruption

c)

Customer buying habits

d)

Personal injury

36.

By using a central data repository for financial information, companies receive

a)

up-to-date data.

b)

slower responses to queries.

c)

less predictability.

d)

inconsistent data.

37.

Zoe is looking to save some money so that she can purchase a $600 camera in 2 years. With her current account, she earns 3% quarterly interest. How much should Zoe invest so she can buy the camera in 2 years?

a)

$565

b)

$637

c)

$574

d)

$715

38.

What type of variance analysis involves determining the difference between the standard costs and the actual costs of raw materials used for production?

a)

Purchase price

b)

Material yield

c)

Selling price

d)

Fixed overhead

39.

Peyton asks Ann to write a letter of recommendation to a potential employer. Which of the following networking techniques is Peyton using:

a)

Opportunistic

b)

Organizational

c)

Grapevine

d)

Referral

40.

Which of the following tasks falls under the scope of compliance:

a)

Meeting clients' financial needs

b)

Creating financial legislation

c)

Advertising new financial products

d)

Designing organizational controls

41.

A student group suggests that a university raise money for a new recreational facility by holding a concert featuring a controversial band that has been banned from some venues. What form of risk management should the university undertake in this situation?

a)

Transfer liability through a contract holding the band liable

b)

Cover the risk in the event budget

c)

Purchase insurance that transfers the risk to the insurance company

d)

Avoid the risk by contracting with another band

42.

Corporate governance is primarily concerned with __________ desires.

a)

CEO

b)

competitor

c)

vendor

d)

stakeholder

43.

An employee accidentally learns that several coworkers will be fired in the near future. What should the employee do with that information?

a)

Report it to managers

b)

Tell the coworkers

c)

Verify the information

d)

Keep it confidential

44.

Which of the following is an example of an indirect cost:

a)

A. Insurance

b)

B. Wages

c)

C. Commission

d)

D. Materials

45.

The main objective of using marginal analysis in decision-making is to determine whether a business activity will result in a

a)

net revenue smaller than marginal revenue.

b)

net revenue larger than marginal revenue.

c)

marginal revenue equal to or greater than marginal cost.

d)

marginal expense that is greater than marginal cost.

46.

Which of the following is an ethical issue resulting from internal risks:

a)

Selecting an insurance company that considers paying fines a cost of doing business

b)

Boycotting the use of an insurance company that has a reputation for not correcting its mistakes

c)

Providing incomplete data for audits

d)

Revealing discounted expenses

47.

Which of the following statements about a board of directors is true:

a)

Internal board members are not usually paid extra for their work with the board.

b)

A board of directors is nominated by shareholders.

c)

A board member won't be removed for breaking foundational or corporate rules.

d)

Every private company must have a board of directors.

48.

Which of the following is a true statement about stock information resources:

a)

It is very difficult to find stock information.

b)

There are very few stock information sources.

c)

Only wealthy investors have access to stock information.

d)

It has never been easier to find stock information.

49.

Timothy is taking a personal finance class at school. For homework one day, he is instructed to set a short-term financial goal for himself. Which of the following would be most relevant as a short-term goal for a high school student like Timothy:

a)

Put $10,000 into a college savings account

b)

Save $50 for Christmas presents for his family

c)

Plan to become a senior-level executive by age 30

d)

Set $5,000 aside per year for retirement

50.

Dmitri is building a new website. Which of the following does he need to register to obtain a web address for his new site:

a)

Site builder

b)

Domain name

c)

Street address

d)

Web host

51.

Accepting blame for failure and credit for success is an indication of a person's

a)

interpersonal skills.

b)

consideration.

c)

responsibility.

d)

initiative.

52.

Employees from different departments participate in a group to solve problems related to the company's production processes. This is an example of a

a)

standing committee.

b)

product team.

c)

quality circle.

d)

short-term committee.

53.

What must a business be organized to do to be able to contribute to society?

a)

Preserve the environment

b)

Sell an idea

c)

Hire an advisor

d)

Earn a profit

54.

Objective setting, risk assessment, and risk response are all components of

a)

enterprise risk management.

b)

channel-management plans.

c)

asset allocation strategies.

d)

conflict resolution policies.

55.

Which of the following is a technique that a business could use to analyze its customer financial information:

a)

Determining who exceeded sales quotas

b)

Discovering which products sold the most

c)

Comparing profit ratios by region

d)

Tracking average product shipping delays

56.

Which of the following most accurately describes the overall purpose of accounting:

a)

To estimate and pay taxes

b)

To keep track of expenses

c)

To maintain financial information

d)

To keep track of income

57.

Which of the following is a true statement about carrying out scanning activities:

a)

Information obtained from TV is unreliable.

b)

You must focus only on relevant information.

c)

You should avoid using surveys and focus groups.

d)

All information should be obtained in a formal manner.

58.

Troy is a finance manager for a small firm in town. Last night, he attended a cookout at his neighbor’s house and met Melissa, who is the owner of a large financial-planning company. Troy and Melissa exchanged business cards, and they set up an appointment for the following week to discuss business opportunities. In what type of situation did Troy and Melissa form a professional business relationship?

a)

Formal event

b)

Social gathering

c)

Corporate environment

d)

Educational setting

59.

XRT Corporation uses a computer software application to measure how efficiently its management is using accounts receivable, inventory, and capital goods to generate sales. What type of financial ratio is the software calculating?

a)

Profitability

b)

Asset utilization

c)

Market value

d)

Liquidity

60.

Which of the following is an important step to take to ensure a protest is peaceful and effective:

a)

Argue against any opponents to your protest.

b)

Demonstrate your importance by using harsh, insulting language.

c)

Obtain your senator’s permission before assembling the protest.

d)

Avoid violence and vandalism during the protest.

61.

Patents, trademarks, and copyrights are all used to protect an individual or a company's

a)

intellectual property.

b)

business equipment.

c)

tangible assets.

d)

financial assets.

62.

When determining if it will approve a customer's loan application, a financial institution evaluates the customer's

a)

employment opportunities.

b)

payment plan.

c)

credit score.

d)

personal goals.

63.

Managerial accounting is different from financial accounting because managerial accounting

a)

is a requirement for all companies.

b)

prepares reports for external users.

c)

takes a future approach.

d)

provides more general results.

64.

Which of the following is a specific goal:

a)

Increasing sales

b)

Reducing costs by 5%

c)

Improving customer satisfaction

d)

Finding more customers

65.

Molly has money to invest, but she wants to be sure she doesn't lose her hard-earned money in a scam. Which of the following opportunities should Molly avoid:

a)

The stock market

b)

Ponzi scheme

c)

Roth IRA

d)

401k

66.

Jonas is a data scientist at a research firm. Part of his responsibilities include looking through his firm's databases and eliminating redundant data. Jonas is performing

a)

data filtering.

b)

information scanning.

c)

data normalization.

d)

digital analysis.

67.

Why should an independent business consultant avoid using email to share a negative evaluation of an IT company with a client?

a)

Using email can create reputational risk for them if it is shared with others.

b)

It is illegal to share negative information about other businesses via email.

c)

The email would legally be considered intentional slander or defamation.

d)

The email would make them appear negative and judgmental.

68.

Self-control can help you develop a positive attitude by helping you

a)

dwell on the fact that life is full of difficulties.

b)

substitute positive thoughts with negative ones.

c)

think before you make a response.

d)

eliminate negative ways of thinking.

69.

Publicly traded companies are required by law to provide

a)

stock research.

b)

yearly newsletters.

c)

company report cards.

d)

financial statements.

70.

Which of the following represents a primary business activity:

a)

Supervising

b)

Marketing

c)

Scheduling

d)

Designing

71.

If a leader takes ownership of a problem, makes sure it is fixed, and takes steps to prevent it from happening again, they are demonstrating

a)

flexibility.

b)

responsibility.

c)

social awareness.

d)

adaptability.

72.

What does “equity” refer to in a statement of changes in equity?

a)

Property

b)

Earnings

c)

Debt

d)

Expenses

73.

What usually decreases when the economy is experiencing a period of contraction?

a)

Interest rates

b)

Consumer spending

c)

Cost of living

d)

Unemployment

74.

Shireen is reviewing an article to determine if the data contained in it is accurate and current. In other words, Shireen is evaluating the

a)

research procedure.

b)

hardware application.

c)

quality of information.

d)

type of statistics.

75.

Which of the following statements regarding convergence and consolidation in the finance industry is true:

a)

Financial companies often enjoy higher earnings as a result of convergence and consolidation.

b)

When multiple financial firms merge, they often end up with less capital to invest.

c)

A desire for lower costs has slowed the pace of convergence and consolidation.

d)

Technological advancements have increased the costs of offering new and different products.

76.

Which of the following technologies is frequently used to provide a source for master data management in the finance industry:

a)

ERP (Enterprise Resource Planning)

b)

SuitExpense Application

c)

Accounting systems

d)

Databases

77.

Which of the following has accelerated the globalization of financial markets:

a)

An expansion of protectionism practices

b)

The movement toward fixed exchange rates

c)

The reduction of government regulations

d)

A decrease in foreign access to domestic markets

78.

What do bond yields typically do during an economic expansion?

a)

Remain unchanged

b)

Gradually decrease

c)

Drop to near zero

d)

Increase

79.

Lynnette works at Main Street Bank. Her primary job responsibility is to determine if the bank should lend funds to the bank’s customers. Lynnette is working as a

a)

bank agent.

b)

collections officer.

c)

chartered financial consultant.

d)

credit analyst.

80.

Andreas is listening to his coworker Calliope present her idea for a marketing campaign to their manager. What could Andreas do to encourage and support Calliope during her presentation?

a)

Avoid eye contact and act preoccupied

b)

Laugh and smile at everything Calliope says

c)

Nod, smile, and maintain eye contact

d)

Look down at the papers in front of him

81.

In 1970, the average college-educated worker in the United States made about 7,000peryear.Thissalarywasconsideredenoughtobuildacomfortablelifeforafamily.Today,however,thepovertylineinmoststatesandprovincesiswellabove7,000 per year. This salary was considered enough to build a comfortable life for a family. Today, however, the poverty line in most states and provinces is well above 7,000—meaning that the average person would be practically homeless if the only income they had was $7,000 a year! What can account for this massive change in buying power over time?

a)

Interest rates

b)

Deflation

c)

Compound interest

d)

Inflation

82.

Which of the following is a cost driver that could affect the cost of internet service in a coffee shop:

a)

Number of direct labor hours

b)

Number of ingredients per product

c)

Number of customers

d)

Number of products sold

83.

Which of the following technologies has proven very successful in creating "what-if" scenarios in the finance industry:

a)

Account reconciliation

b)

Digital dashboards

c)

Financial reporting and consolidation

d)

Time value of money calculators

84.

Mapping, analyzing, redesigning, acquiring resources, and implementing are the steps companies follow when attempting to

a)

start an advertising campaign.

b)

educate the public on their work.

c)

attract more talented workers.

d)

streamline work processes.

85.

One activity of professional organizations and trade associations is to

a)

develop wage regulations.

b)

test products.

c)

influence legislation.

d)

establish customer trends.

86.

At the annual staff meeting, the company's sales manager announces that the bonus system is being suspended due to poor performance and profits. What communication style is the manager using?

a)

Indirect

b)

Casual

c)

Formal

d)

Grapevine

87.

Your boss asks you to prepare a report about current market trends. Which of the following is the most efficient way to obtain the needed information:

a)

Customer interviews

b)

Online research

c)

A customer survey

d)

Library research

88.

A main goal of customer experience management is creating

a)

higher employee salaries.

b)

word-of-mouth promotion.

c)

new products.

d)

innovative technology.

89.

Which of the following statements contains the most relevant information to include in a business report about the specific market share of computer manufacturers during a particular time frame:

a)

Pear Computers held the fifth highest share of the computer market in 2024.

b)

The CPU Company, Best Desktop, Pear, and Bell sold more computers in 2024 than other computer manufacturers.

c)

In 2024, The CPU Company held 27.6% of the market share, followed by Best Desktop, which held 24.3%.

d)

In 2024, The CPU Company shipped more computers than Best Desktop or Pear.

90.

Whenever Nasra has to make a difficult decision, she considers how her actions might affect other people and their feelings. As a result, she has developed higher

a)

ethics.

b)

wages.

c)

productivity.

d)

profit margins.

91.

Which of the following is an example of information that a manufacturing company keeps about its customers:

a)

Expense reports

b)

Invoices

c)

Tax returns

d)

Payroll reports

92.

How can you make it easier to start the budgeting process by arranging and making sense of financial data?

a)

Use budgeting software.

b)

Track transactions on paper.

c)

Refrain from involving others.

d)

Focus on the big picture.

93.

One method a business can use to prevent theft by employees and customers is to

a)

establish a floor limit.

b)

hire security guards.

c)

purchase liability insurance.

d)

take frequent inventories.