Test Information Guide

Field 19: Business
Sample Multiple-Choice Questions

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Business Management

Objective 0002
Understand principles and methods of human resource management.

1. Which of the following is the most important advantage to a business of posting new positions for current employees before recruiting outside the company?

  1. Internal job postings are not required to comply with federal equal opportunity labor laws.
  2. Employees recruited from within are likely to have a wider range of experience and technical skills than externally recruited employees.
  3. Internal recruiting creates healthy competition among current employees for new positions.
  4. Employees recruited from within will already be familiar with the corporate culture, goals, and priorities of the organization.
Correct Response: D.

Correct Response: D.

Objective 0003
Understand business communications.

2. A purchasing manager has finished reviewing five proposals submitted by prospective vendors. She is preparing an analytical report for upper management based on her review. Which of the following should be included in the summary of her report?

  1. a description of the methods she used to collect and analyze the data presented in the report
  2. a copy of the five proposals with attachments describing various pricing methods
  3. a discussion of the available options with an analysis of the strengths and weaknesses of each proposal
  4. a chart with information on the products available from each of the vendors
Correct Response: C.

Correct Response: C.

Accounting and Quantitative Analysis

Objective 0005
Understand basic principles and applications of accounting.

3. The owner of several rental properties has asked Westport Real Estate Company to act as manager of her properties, beginning January 1, for a fee of $500 per month. She paid $3,000 in advance to cover the first six months of the contract. The accountant for Westport Real Estate entered the $3,000 into an account called Unearned Management Fees. Which of the following is the correct adjusting entry for Westport Real Estate Company to make on a monthly basis, beginning January 31, to recognize the revenue earned during the month?

  1. debit: Unearned Management Fees $500
    credit: Management Fees Earned $500
  2. debit: Cash $500
    credit: Management Fees Earned $500
  3. debit: Cash $3,000
    credit: Unearned Management Fees $3,000
  4. debit: Management Fees Earned $3,000
    credit: Unearned Management Fees $3,000
Correct Response: A.

Correct Response: A.

Objective 0007
Understand basic techniques of mathematics and quantitative analysis in business.

4. Use the line graphs below to answer the question that follows.

Based on the graphs above, which of the following statements is accurate?

  1. Total sales increased significantly over the entire period when spending on advertising increased.
  2. SUV sales increased significantly between 2003 and 2005 despite a decrease in spending on advertising.
  3. Sedan sales decreased significantly between 2003 and 2004 despite an increase in spending on advertising.
  4. Spending on advertising increased significantly following a year in which total sales have decreased.
Correct Response: A.

Correct Response: A.


Objective 0008
Understand basic concepts and applications of microeconomics.

5. Use the two demand curve graphs below to answer the question that follows.

The information presented in the graphs above best supports which of the following conclusions?

  1. The demand for product Y is less responsive to price changes than is the demand for product X.
  2. Product X appeals more to consumers from a broader range of income levels than does product Y.
  3. The demand for product X is more responsive to changes in income than is the demand for product Y.
  4. Compared with product X, product Y is more likely to be considered a luxury item by consumers.
Correct Response: A.

Correct Response: A.


Objective 0010
Understand basic principles of marketing and marketing research.

6. A large banking firm would most likely implement an institutional advertising campaign to:

  1. provide information to the public about the importance of financial services to individuals and society.
  2. introduce a new line of financial services to existing customers.
  3. counter reports in the media about corporate wrongdoing in the financial services industry.
  4. announce a change in its name and corporate logo.
Correct Response: C.

Correct Response: C.

Objective 0011
Understand international business, marketing, and trade.

7. A fall in the value of the dollar against other world currencies is likely to lead to:

  1. an increase in U.S. trade barriers to foreign imports.
  2. a decline in the U.S. trade deficit.
  3. an increase in the productivity of U.S. firms.
  4. a decline in U.S. labor costs.
Correct Response: B.

Correct Response: B.

Entrepreneurship and Business Technology

Objective 0012
Understand principles of entrepreneurship and types and characteristics of business ownership.

8. For which of the following reasons might it be advantageous for the owners of a company to organize their business as a partnership rather than a corporation?

  1. When a business operates as a partnership, creditors can only make claims against the assets of the business, not against the personal property of the partners.
  2. Venture capitalists are more likely to lend money to a new business if it is organized as a partnership rather than a corporation.
  3. A partnership is a more stable form of organization than a corporation since it is a separate legal entity that endures despite changes in ownership.
  4. Members of a partnership have greater flexibility and freedom from government regulation than owners of a corporation.
Correct Response: D.

Correct Response: D.

Objective 0013
Understand methods and systems of information processing and their applications to business.

9. A small business would like to take advantage of new technology to improve the efficiency of its business operations. Which of the following steps should the business take first when attempting to identify what types of technology would be most effective?

  1. Map the current work flow within the office.
  2. Inventory the current technology equipment.
  3. Identify the types of technology that employees would most like to use.
  4. Identify the office tasks that take the longest time to complete.
Correct Response: A.

Correct Response: A.

Career Development and Personal Finance

Objective 0015
Understand basic principles of consumer economics and personal finance.

10. Which of the following is the most effective strategy for preventing identity theft?

  1. signing the back of a credit card immediately after receiving it from a credit card provider
  2. destroying unwanted documents containing personal information rather than throwing them away
  3. using bank debit cards rather than credit cards for purchases at stores and online
  4. making copies of documents that contain personal information and storing the copies in a safe place
Correct Response: B.

Correct Response: B.