1. One role of Human Resources should be to:
A. ensure that the right employees are available to do the work that upper management
B. improve the processes that seem to be causing productivity delays.
C. participate as an equal partner in the strategic planning process.
D. direct the organization in the way that it should go for the benefit of the employees.
2. An organization director proposes to deliver an employee attitude survey. What is he trying to accomplish?
A. Improve team effectiveness
B. Unfreeze management and employees by revealing problems
C. Implement structural change
D. Establish a sense of urgency
3. You are an Employee Relations Manager. Another manager turns in several performance appraisals he recently completed. You notice that he often uses the more neutral ratings – 3s, 4s, and 5s, on a 7 point scale. He may be guilty of:
A. the halo effect.
B. trying to get his employees to like him.
C. central tendency.
D. trying to get a raise.
4. In demonstrating an employment test’s validity, which of the following would you use?
A. Criterion validity
B. Content validity
D. Both A and B ensure validity in employment testing.
5. If you are a “home-country national,” you are:
A. a noncitizen of the country in which you are working.
B. a local.
C. a citizen of the country in which the multinational company has headquarters.
D. an expatriate.
6. An indicator of earnings management is the:
A. inventory costs on the first-in, first-out basis, regardless of the physical flow of the goods.
B. use of the straight-line method of depreciation for all fixed assets.
C. continued overestimation of the useful lives and residual values of fixed assets.
D. front-end loading of expenses.
7. Company X does not capitalize an asset leased from Company Y because it is not required to do so under GAAP. In analyzing Company X, one would capitalize the leased asset when:
A. GAAP permits the option of doing so.
B. the benefits of leasing an asset outweigh those of purchasing it.
C. Company Y does not want to capitalize the leased asset.
D. Company X assumes the risks and rewards associated with the leased asset.
8. An analyst uses analytical judgment primarily to understand:
A. pro forma financial statements.
B. generally accepted accounting principles.
C. the economic reality that underlies the financial disclosures.
D. the nominal dollar concept of capital maintenance.
9. Which of the following situations would cause analysts to be alarmed?
A. An increase in the cash collected as a percentage of revenues.
B. A decrease in cash collected from customers compared to that paid to suppliers.
C. An increase in cash collected from customers compared to that paid to suppliers.
D. A decrease in the cash paid as a percentage of cost of goods sold
10. A financially distressed entity’s balance sheet would most likely consist of:
A. immaterial amounts of current assets and a substantial amount of long-term assets.
B. substantial amounts of long-term debt and a relatively small and non-productive long-
term asset base.
C. large amounts of both current assets and current liabilities.
D. sufficient revenues but insufficient earnings.
11. Tort liability is based on which of the following?
A. In a civilized society, people do not intentionally injure other people or their property.
B. All people will exercise absolute care in their actions.
C. Deterring potential violators
D. Proof beyond a reasonable doubt
12. That the federal and state governments share power is based on:
B. the establishment clause.
D. the supremacy clause.
13. When a patent expires, the invention is said to be _______ and others may use it without limitation.
A. conditionally restricted
B. in the public domain
C. in the fair use category
D. usable for a license fee
14. Insiders are prohibited from trading for profit in order to prevent:
A. over-activity in trading in the market.
B. use of the information not available to the public.
C. a shortage of available stock.
D. unfriendly takeovers.
15. When an administrative agency is investigating wrongdoing, it may:
A. not obtain any document from other government offices.
B. use subpoena power to obtain reports and documents.
C. not examine any individual under oath.
D. completely freeze operations before a conclusion is reached.
16. In analyzing the feasibility of a business concept, the ability to identify the primary customer is based on:
A. A competitive reaction.
B. Government regulation.
C. Recognizing a need in the market place.
D. Board procedure.
17. Having more money to start a business than an entrepreneur needs does not seem like a problem; however, this situation often results in poor decisions made quickly and:
A. lots of interest by venture capitalists.
B. early success.
C. plenty of money to allow for mistakes.
D. more publicity.
18. To forecast cash flow in an effort to determine how much start-up capital is needed, the business must have a good estimate of its:
A. cost of goods sold.
B. operation expenses.
C. retained earnings.
D. potential sales.
19. When setting up your new venture, the three (3) key factors for determining value in real estate are:
A. location, location, and location.
B. economic base, financial incentives, and demographics.
C. trade area, competition, and location character.
D. accessibility, cost of labor, and technology availability.
20. When juggling the demands of stakeholders, it is important for the entrepreneur to hold to his or her code of ethics and not succumb to:
A. lessons learned from others’ mistakes.
B. making a deal in the best interests of the company.
C. doing what is legal.
D. peer pressure.