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Upwork Finance and Accounting

Venture Capital Test 2016

Published by:

1. What level of involvement will a venture capital firm typically have?

Answers:

  1. None; their investment is passive
  2. Very active; a venture capital team member will be on site daily
  3. Somewhat active; weekly visits to the target company
  4. No day to day involvement; involvement through participation in the board of directors only

2. How are the investments in a venture capital firm structured typically?

Answers:

  1. As limited partners
  2. As shareholders
  3. As a limited liability company
  4. No formal structure agreements are needed

3. What is a sweeper clause?

Answers:

  1. It is a clause that requires that the books of the company be kept clean and free of fraud.
  2. It is a clause that requires the attendance of three management personnel at all meetings.
  3. It is a clause that allows the venture capitalist to make requests for financial information from the company from time to time.
  4. It is a clause that allows the venture capitalist not to attend meetings.

4. When investigating the target market of the potential investment, what will the venture capitalists focus on specifically?

Answers:

  1. The pricing of the product
  2. The Intellectual Property and any competitors with similar IP
  3. The customer base, the competition, and the opportunity in the market space
  4. Location of competition

5. What do veto rights allow the venture capitalist to do?

Answers:

  1. Call board meetings at any point
  2. Require liquidation within 30 days
  3. Overturn decisions made by the company directors
  4. Fire the management

6. What are the “conversion rights”, typically stated on a term sheet?

Answers:

  1. They are terms that allow a venture capitalist to sell off their stock at any point.
  2. They are terms that stipulate that the venture capitalists can convert their preferred shares into common shares which will be more easily liquidated.
  3. They are terms that allow the target company to surrender more equity to the venture capitalist if the venture is growing quickly.
  4. They are terms that prevent anyone from selling stock for the first three years.

7. What is meant by the right to “observer rights”?

Answers:

  1. The venture capitalist doesn’t have to come to the board meetings
  2. The venture capitalist can bring in an observer, who can not vote, to the board meeting
  3. The company is only allowed to watch board meetings, and not to participate
  4. The company management is required to be present at all board meetings

8. What purpose do milestones serve in the term sheet?

Answers:

  1. They protect the target company in case they don’t perform well.
  2. They prevent outsiders from investing until specific goals are met.
  3. They force the management to make decisions they would not want to make otherwise.
  4. They stipulate the goals the target company has to meet in order to receive subsequent amounts of funding.

9. What is the main reason why a venture capitalist does its own evaluation of a target company’s projected financials?

Answers:

  1. Due to their lack of trust in the target company
  2. To check that assumptions are reasonable and the model covers all aspects of the company
  3. To see if there’s potential for even more revenue
  4. To spot check for formula errors

10. How often do venture capital firms change the investments within their portfolios, on an average?

Answers:

  1. Often, several times a year
  2. Annually
  3. Every three to five years
  4. Almost never

11. What role do the investors play in a venture capital firm?

Answers:

  1. That of investment screeners
  2. That of managing directors
  3. That of advisors
  4. That of due diligence experts

12. What is the importance of the intellectual property (IP) which venture capitalists focus heavily on?

Answers:

  1. Companies with no IP will never succeed
  2. Companies who have IP may be competing against firms with similar IP
  3. Venture capitalists want to make sure the company is not at risk of being sued over the IP
  4. IP can be a key deciding factor, as the target company’s success or failure may hinge on the IP they own

13. When was the largest burst of activity in the venture capital industry witnessed?

Answers:

  1. In the 1960s
  2. In late 2000s
  3. In mid 2000s
  4. In early 2000s

14. What does an exit effectively do?

Answers:

  1. It allows the investor to put more money into a company to get a better return.
  2. It makes everyone involved rich.
  3. It determines the value of the company at the given point.
  4. It allows the venture capitalist to sell their equity in some fashion, either on the stock market, or to the owners, or to the new owners.

15. What is meant by Post-money valuation?

Answers:

  1. It is the expected value of the company after it has received the venture capital investment.
  2. It is the expected value of the company before it has received the venture capital investment.
  3. It is the expected value of the company after five years.
  4. it is the expected value of the company once the venture capitalist exits the company.

16. When will the venture capitalist show the most active involvement with the company post funding?

Answers:

  1. At the beginning, offering direction and guidance
  2. After a year, when the company begins to grow
  3. Towards the exit point
  4. Throughout the process

17. What does “deal syndication” on the term sheet address?

Answers:

  1. It prevents outsiders from investing at all.
  2. It discusses what happens in the event the company fails to execute.
  3. It allows venture capitalists to merge two or more of their investments into one company.
  4. It discusses the process required for additional investors to invest in the target company.

18. What is the purpose of having portfolios?

Answers:

  1. To segregate investments into specific categories with similar criteria
  2. To deal with tax implications
  3. To rule out potential investments
  4. To meet the requirements of the SEC

19. What has been the largest area which venture capitalists have been actively investing in for the last decade?

Answers:

  1. Local government municipalities, such as utilities
  2. Small businesses such as a brick and mortar store, or a coffee shop
  3. Professional services industries, such as lawyers and accountants
  4. Internet based companies, such as an e-commerce site

20. What are the typical returns a venture capital firm expects when exiting from a successful investment?

Answers:

  1. At least 10 times their original investment
  2. The market interest rate, compounded annually
  3. Double their investment
  4. Enough to break even and hold on to some equity

21. What is meant when a venture capitalist talks about the “burn rate”?

Answers:

  1. The interest rate they expect to earn on their investment
  2. How quickly a target company may burn out, or fail
  3. The monthly amount of cash spent on an average by a target company, which can then be used to calculate how far investment dollars will take the company
  4. How quickly the management team members are phased out

22. What role do committees play?

Answers:

  1. They act as specialized arms of the board to address specific topics such as Human Resources or Accounting and Finance Matters.
  2. They are at a higher level than the board, and are called in to make decisions when the board can not agree.
  3. They are the key management personnel in the company.
  4. They are formed to organize things such as employee birthday parties.

23. What would be the attraction of offering a debt round to a target company?

Answers:

  1. It can earn more money than equity when the company performs well.
  2. It is easier to sell off debt.
  3. It limits how well the management has to perform.
  4. It is less risky, gives the right to demand repayment, and earns interest.

24. Which of the following would be a possible portfolio for a venture capital firm?

Answers:

  1. High tech, Entertainment, E-commerce, Food and Beverage
  2. High Risk, Low Risk, Zero Risk
  3. Local, National, Global
  4. Equity, Bonds, Debt, Convertible Debt

25. What protection do investors in a venture capital fund have?

Answers:

  1. They are guaranteed at least a 3% return on the investment.
  2. They are guaranteed to double their money within one year.
  3. There is no protection. They are not guaranteed a return on their investment, and it is made very clear that investing in new ventures is risky.
  4. There is no protection. They are told that they may lose their money, but most likely, they will make a lot of money.

26. What is meant by “exit strategy”?

Answers:

  1. It is how the venture capitalist plans to merge with another venture capitalist.
  2. It is how the target company is planning to liquidate all investors and give them a return for their investment.
  3. It is how the target company plans to fire key personnel.
  4. It is how the target company plans to exit their target markets if they are not successful.

27. What options does a venture capitalist have when holding convertible debt?

Answers:

  1. They can choose immediately if they want debt or equity.
  2. They can convert back and forth between debt and equity depending on which is more beneficial.
  3. They can sell off some of the debt before converting the rest to equity.
  4. They can keep their investment as debt, or convert to equity given some predetermined circumstances have occurred.

28. How much in funding, in general, will an investor want to invest?

Answers:

  1. Enough to allow the company to survive for three years
  2. Enough to cover management salaries
  3. Enough to allow the company to reach traction and prove their business model, regardless of time line
  4. One year’s operating expenses

29. What is a “first round” investment?

Answers:

  1. An investment in a company which is at the idea stage
  2. An investment in a company which is early in its growth, typically one generating some revenue
  3. An investment in a company where the venture capitalist is the very first investor
  4. An investment in a company in its first year

30. What is the term sheet used for once it is agreed upon and signed?

Answers:

  1. It is the legally documented agreement between the venture capitalist and the target company.
  2. It is used as an outline for the legal team to draw up the official legal agreement between the venture capital firm and the target company.
  3. It is a guideline for future operations.
  4. It is similar to a business plan for the upcoming year.

31. Which of the following would be considered an exit strategy?

Answers:

  1. Making a private company public via an initial public offering
  2. Bringing in additional investors
  3. Firing the management to bring in a more experienced management
  4. Converting debt to shares

32. What is the primary source of a venture capital firm’s funding?

Answers:

  1. The venture capital firm invests its own equity in other companies.
  2. The partners of the venture capital firm invest individually.
  3. The money is raised through the stock market for the purpose of investing it in companies.
  4. Other companies invest in the venture capital firm which then invests in new ventures.

33. What is the overall venture capital portfolio expectation?

Answers:

  1. That ten out of ten companies will be huge successes
  2. That all the ten will perform satisfactorily
  3. That five of the ten will succeed, five will fail
  4. That out of every ten companies invested in, at least one will be a tremendous success, at least five will fail completely, and the other four will break even or be marginally successful

34. When is the due diligence process done?

Answers:

  1. After the initial engagement, but before the completion of the deal
  2. Before getting engaged with the potential target investment
  3. As a final step before the deal is completed
  4. The target investment company would do this before approaching the venture capitalist

35. What is the main difference between equity and debt?

Answers:

  1. Equity represents ownership, debt represents a loan to the company.
  2. Debt represents steady earnings, equity represents up and down earnings.
  3. Debt can be secured by assets but equity can not be.
  4. Debt is easier to sell than equity.

36. What does a venture capitalist look like to its investors, based on the way it operates?

Answers:

  1. A stock broker
  2. A mutual fund
  3. An investment bank
  4. An options trader

37. What role does “valuation” play in selecting the most appropriate investment areas?

Answers:

  1. Valuation gives the venture capitalist a definite value of the target in five years.
  2. Valuation doesn’t matter as much as the management team.
  3. Valuation is the target company’s expected value at some point in the future, typically five years, and helps the venture capitalist see the potential.
  4. Valuation helps the venture capitalist decide which portfolio to place the target company in.

38. What is the typical process overview?

Answers:

  1. Submission of Business Plan, Term Sheet, Due Diligence, Legal Closing
  2. Term Sheet, Submission of Business Plan, Legal Closing
  3. Evaluation, Due Diligence, Legal Closing, Business Plan Review
  4. Screening, Kick off Meeting, Evaluation, Initial Due Diligence, Negotiation of Terms, Due Diligence, Legal Closing

39. What is meant by the “anti-dilution rights”, often found on a term sheet?

Answers:

  1. Terms that guarantee a specific return on investment
  2. Terms that restrict the target company to no more than three founders owning stock
  3. Terms that protect the venture capitalist from dilution of their investment by the target company by offering subsequent investments at lower valuations to other investors
  4. Terms that prevent original owners from having more stock than the venture capitalist

40. What is the first step in the process between the target company and the venture capitalist?

Answers:

  1. The venture capital firm will look online for companies who are looking for capital.
  2. The venture capital firm holds monthly open casting calls for potential companies.
  3. The target company contacts the venture capitalist to introduce the opportunity.
  4. The target company mails the venture capital firm a full business plan and due diligence package.

41. How long does the initial due diligence process last?

Answers:

  1. 4 to 6 weeks
  2. 1 to 2 weeks
  3. 10 to 12 weeks
  4. Any duration from 1 week to a year

42. When does the target company actually receive the investment?

Answers:

  1. Mid way through the process
  2. Usually within two weeks from the start of the process
  3. After the legal closing, on a stipulated closing date
  4. They never receive the full amount and have to request disbursements weekly

43. What is the minimum that a venture capitalist would expect at the monthly board meeting?

Answers:

  1. Detailed financial statements, explaining the expenses line by line
  2. That the company invested in is meeting the goals stipulated in the negotiation process, and if not, has an action plan to rectify
  3. An exciting presentation by the CEO
  4. Meeting with individual employees

44. Does a venture capital exit have any negative impact on the original founders of the company?

Answers:

  1. Yes; it will definitely drive down the value of the company.
  2. Typically no; the exit just means the end of a successful relationship.
  3. Yes; the employees will question why the venture capitalist is now exiting.
  4. No; it will usually bolster the stock price.

45. What is meant by “screening” in the investment process?

Answers:

  1. Online submission of the business plan by the target company
  2. Initial examination of the potential investment by the venture capitalist to see whether it fits in their portfolio
  3. The meet and greet meeting held after the venture capitalist has expressed interest in the target company
  4. Examination of the target company by the legal team

46. What is the attraction of convertible debt to a venture capitalist?

Answers:

  1. It allows them to gain more control over the firm.
  2. It gives them the potential to hold debt or equity, depending on how the firm grows and what will be most profitable.
  3. It allows them to liquidate more easily.
  4. It limits any risk.

47. What is the average size of a venture capitalist’s investment in a target company?

Answers:

  1. From 1 million to 50 million dollars
  2. From 100 thousand to 1 million dollars
  3. At least 50 million dollars
  4. There is no limit

48. What is a Term Sheet?

Answers:

  1. It is a document which stipulates the term of the investment.
  2. It is a document which the company receiving funding prepares, stating what their expected revenues for the upcoming years are.
  3. It is another term for “executive summary”.
  4. It is a document which stipulates the venture capital firm’s terms for the investment, such as the amount they will invest, the percentage of equity they require in exchange for the investment, and their expectations of the company they are investing in.

49. Which of the following would be a red flag for a venture capitalist?

Answers:

  1. No one else has entered the market space.
  2. All the members of the management team come from different backgrounds.
  3. Several competitors have entered and left the market due to low traction.
  4. The company hasn’t yet talked to other venture capitalists.

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Upwork Finance and Accounting

Statistics Test 2016

Published by:

1. Prior experience and situational analysis are important in making decisions when a person does not have enough information to calculate the probability of occurrence of an event.

Answers:

  1. True
  2. False

2. The following are data collection methods except:

Answers:

  1. Surveys
  2. Observation
  3. Sampling
  4. Designed experiments

3. Population parameters include the following except:

Answers:

  1. population mean
  2. population variance
  3. population standard deviation
  4. population hypothesis

4. ______ is one way to understand the relationship between two variables that occur at the same time.

Answers:

  1. Regression analysis
  2. Correlation
  3. Variance
  4. Sampling

5. ______ is the most frequent value that is present in your data.

Answers:

  1. Standard deviation
  2. Mean
  3. Mode
  4. None of the above

6. A study finds that children who spend more hours in TV viewing score lower class grades in school. This correlation is an example of:

Answers:

  1. Positive correlation
  2. Negative correlation
  3. No correlation

7. Arranging your target population in an ordered scheme from which participants or items are chosen at regular intervals is an example of:

Answers:

  1. Simple random sampling
  2. Systematic sampling
  3. Stratified sampling

8. When a researcher doesn’t know much about a certain problem and wants to gain more information about it, which research design will he use?

Answers:

  1. Exploratory
  2. Descriptive
  3. Casual

9. The _____ is a useful tool for assessing whether the means of two groups of variable are statistically different from each other.

Answers:

  1. sample mean
  2. T-test
  3. null hypothesis
  4. alternative hypothesis

10. There are two ways to present categorical data. One is by way of graphs, the other is by way of _________.

Answers:

  1. charts
  2. pie diagram
  3. histograms
  4. tables

11. Describe the relationship between the two variables in the above given scatter plot.

Answers:

  1. Positive
  2. Negative
  3. No correlation
  4. Weak negative

12. When a person conducts analysis using data he or she has not collected, the source of such data is called:

Answers:

  1. Primary source
  2. Secondary source
  3. Firsthand source
  4. Basic data source

13. The Causal Research design is used when the ______ factor about some phenomenon or issue is being researched.

Answers:

  1. Why
  2. How
  3. What
  4. When

14. Which of the following form(s) part of descriptive analysis?

Answers:

  1. Collecting raw data
  2. Summarizing raw data
  3. Analyzing raw data
  4. All of the above

15. While following the Scientific Research steps, a researcher has to construct a hypothesis soon after defining the problem.

Answers:

  1. True
  2. False

16. A sample of a population is:

Answers:

  1. a subset of the population you are studying.
  2. a set of entities concerning which statistical inferences are to be drawn.
  3. a set of potential measurements or values.
  4. a subset of potential future subjects.

17. The formula given above is that of:

Answers:

  1. Population variance
  2. Population mean
  3. Population standard deviation
  4. Z-score

18. The relationship between two variables is of two types. One is Linear, the other is:

Answers:

  1. Positive
  2. Curvilinear
  3. Negative

19. Which type of sampling method solicits the opinions of pre-selected experts?

Answers:

  1. Convenience sampling
  2. Judgment sampling
  3. Stratified sampling

20. According to probability concepts, the chance that an event will never happen is:

Answers:

  1. between 0 to 1
  2. 0
  3. 1
  4. a and c

21. Which of these can be used as source(s) of data collection?

Answers:

  1. Magazines and Newspapers
  2. Census Bureau
  3. Television
  4. a & b

22. Probability can be determined by:

Answers:

  1. Subjective Evidence
  2. Prior Knowledge
  3. Future Knowledge
  4. a and b
  5. a and c

23. If a company’s production is consistently going down due to some reasons, which technique or method would you employ to analyze those reasons/causes?

Answers:

  1. Simple linear regression
  2. Multiple linear regression
  3. Critical analysis
  4. Correlation analysis

24. Statistics is a branch of __________.

Answers:

  1. psychology
  2. geography
  3. mathematics
  4. social science

25. Which important information does the correlation analysis of variables give about the relationship between the variables?

Answers:

  1. Type of relationship
  2. Interdependency of relations
  3. Strength of relationship
  4. a & b
  5. a & c
  6. b & c

26. What is the probability of occurrence of a Type I error referred to as?

Answers:

  1. Level of significance
  2. Level of error
  3. Level of probability
  4. Level of acceptance

27. The population you are interested in studying is called:

Answers:

  1. Sample population
  2. Item population
  3. Target population

28. Standard deviation is the most common measure of __________.

Answers:

  1. dispersion
  2. central tendency
  3. clustering

29. The components of Simple Linear Regression model include the following except:

Answers:

  1. The slope
  2. The random error term
  3. The intercept
  4. The dependent variable

30. Stem and leaf display is an example of:

Answers:

  1. Frequency distribution
  2. Ordered array
  3. Pareto diagram
  4. None of the above

31. When you are figuring out How to collect, process and analyze data, you are:

Answers:

  1. Designing your research
  2. Analyzing your data
  3. Reporting new findings
  4. Constructing a hypothesis

32. The following statements regarding a Hypothesis are true except:

Answers:

  1. A hypothesis is an educated guess.
  2. It is an assumption based on relationship between two or more variables.
  3. It helps to design your research.
  4. It can be true or false.

33. Statistics can be divided into 2 broad sections. One is Descriptive Statistics, the other is:

Answers:

  1. Inferential Statistics
  2. Cumulative Statistics
  3. Differential Statistics
  4. Analytical Statistics

34. In statistical analysis, central tendency points to the clustering of the data around a _____________.

Answers:

  1. median
  2. central value
  3. mode
  4. point

35. Which data category uses numbers to indicate a classification?

Answers:

  1. Cardinal
  2. Ordinal
  3. Nominal
  4. Parametric

36. Numerical data can be presented by way of which of the following:

Answers:

  1. Ordered array
  2. Pareto diagram
  3. Frequency distribution
  4. a&b
  5. a&c
  6. b&c

37. Trying to learn more about a larger population from a small sample, is an example of:

Answers:

  1. descriptive analysis
  2. inferential analysis
  3. exploratory analysis
  4. none of the above

38. Of the three Measures of central tendency, which one is the most sensitive to outliers?

Answers:

  1. Mean (Arithmetic)
  2. Median
  3. Mode

39. _________ is one of the basic methods of inferential statistics that helps a researcher determine the difference between a real and a random pattern in a data set.

Answers:

  1. Hypothesis testing
  2. Population parameters
  3. Regression analysis
  4. Sample testing

40. Cluster sampling and Stratified sampling form part of Probability Sampling Methods.

Answers:

  1. True
  2. False

41. Probability proves useful:

Answers:

  1. in understanding the probability of occurrence of an event or a phenomenon.
  2. in deducing larger implications from a given data.
  3. Both a and b
  4. Neither a nor b

42. Cross tabulation of data is possible through the following:

Answers:

  1. Contingency tables
  2. Scatter plot
  3. Side-by-side bar chart
  4. All of the above

43. The correlation co-efficient quantifies the strength of the relationship between two variables and the value of this co-efficient falls between:

Answers:

  1. -1.0 and +1.0
  2. +1.0 and +0.81
  3. -1.0 and -0.81
  4. -0.21 and +0.40

44. Examples of Measures of central tendency include:

Answers:

  1. Mean
  2. Range
  3. Variance
  4. None of the above

45. While accepting or rejecting a null hypothesis , ________ are the regions that help to arrive at a decision.

Answers:

  1. special regions
  2. borderline regions
  3. critical regions

46. A good research plan should include the following except:

Answers:

  1. Research Questions
  2. Research Designs
  3. Prior Knowledge
  4. Participants

47. What will be the potential sampling frame(s) for a survey whose target population is infant children?

Answers:

  1. medical facilities (such as hospitals and clinics) recording births within the past 12 months.
  2. households whose occupants include infants under 12 months old.
  3. Official school directories
  4. Both a and b

48. The advantage(s) of Scientific Research Method is/are:

Answers:

  1. It investigates the problem exhaustively
  2. It is a systematic, controlled and empirical investigation of hypothesis.
  3. a and b
  4. None of the above

49. Which graphical tool is used to arrive at decisions by presenting and comparing a number of competing alternatives?

Answers:

  1. Contingency table
  2. Bar graph
  3. Decision tree

50. The process in which data about the variables is collected and then predictions are made about future outcome is called:

Answers:

  1. Regression analysis
  2. Future analysis
  3. Correlation analysis
  4. None of the above

51. Which of the following is not an example of hypothesis?

Answers:

  1. What percentage of people pass their driving test in the first attempt?
  2. The average age of cell phone users city-wide is 40 years.
  3. The average salary of teachers in the entire school district is $50,000.
  4. A public health official believes that 60% of all elderly people have received flu examination in the previous year.

52. Commonly employed qualitative research methods include:

Answers:

  1. Focus groups
  2. Case studies
  3. Surveys
  4. a and c
  5. a and b

53. In the above image it is stated that:

Answers:

  1. the average of the given data is not 40.
  2. the alternative hypothesis is that the mean of the given data is 40.
  3. the null hypothesis is that the mean value of the given data is 40.

54. How is a Type II error symbolized as?

Answers:

  1. ß
  2. α
  3. Δ

55. When the data values are tightly clustered around the mean, the bell shaped curve is:

Answers:

  1. skewed
  2. flat
  3. steep
  4. None of the above

56. In the Sampling Process, soon after identifying the sampling method comes the process of:

Answers:

  1. determining your sample size
  2. sampling and data collection
  3. reviewing your sampling process

57. How many types of major sampling methods are there?

Answers:

  1. 3
  2. 2
  3. 4
  4. 5

58. The above-given image is an example of:

Answers:

  1. Bar graph
  2. Pie chart
  3. Line chart
  4. Pareto diagram

59. In correlation analysis, we designate one variable as an independent variable and the other as a dependent variable.

Answers:

  1. True
  2. False

60. In a set of 40 General Knowledge questions 5 are based on International Relations. In a computer generated test only 30 of these 40 questions will be picked up. What is the probability of at least one of these 5 questions (on International Relations) being picked up randomly out of the selected 30?

Answers:

  1. 0.16
  2. 0.26
  3. 1
  4. 0.01

61. Ordinal numbers or data are primarily concerned with:

Answers:

  1. comparisons
  2. rankings
  3. classifications
  4. predictions

62. The idea behind reviewing existing knowledge is:

Answers:

  1. to select the right research study tools.
  2. to be guided by previous research studies.
  3. to be careful of not repeating the errors of previous studies.
  4. All of the above

63. It is important to categorize your data and data can be categorized into the following categories:

Answers:

  1. ordinal
  2. interval
  3. classical
  4. ratio
  5. a,b and d

64. Find out the median of the following data set:

8126m; 8611m; 7817m; 8172m; 8076m; 8848m; 8598m

Answers:

  1. 7817m
  2. 8598m
  3. 8172m
  4. 8126m

65. The following are the test scores in history for ten students:

61,10,88,37,61,72,55,61,46,22.

Calculate the mode of these test scores.

Answers:

  1. 88
  2. 61
  3. 10
  4. 55

66. In marketing research, which measure of central tendency is often used in a set of ordinal data?

Answers:

  1. Mean
  2. Variance
  3. Mode
  4. Median

67. Which of the following is not a research ethic?

Answers:

  1. Transparency
  2. Anonymity
  3. Risk of harm
  4. Informed consent

68. A ________ is a graphic representation of data based on paired observations.

Answers:

  1. scatter plot
  2. pie chart
  3. bar chart
  4. pareto diagram

69. Compute the Range for the given hourly wages (in $) of janitors:

8, 10,12, 14, 16, 18

Answers:

  1. $12
  2. $10
  3. $14
  4. $6

70. Once a sample is drawn from the population, how close the sample is to the larger population is to be determined. This is known as:

Answers:

  1. Sampling error
  2. Variance error
  3. Statistical error

71. Statistics helps in making inferences and drawing conclusions. These conclusions in turn help in:

Answers:

  1. decision-making
  2. hypothesis testing
  3. data collection
  4. a and b

72. In which chart is the data organized in a descending order and includes a trend line as well?

Answers:

  1. Pareto chart
  2. Area chart
  3. Side-by-side bar chart
  4. Scatter plot

73. ______takes into account the distance of every point in the scatter plot from the trend line.

Answers:

  1. Random error term
  2. Slope
  3. Intercept
  4. Dependent variable

74. The middle point of a data set arranged in an array from the smallest to the largest value is called:

Answers:

  1. mean
  2. median
  3. mode

75. In which of the following fields is ANOVA used to make comparisons amongst groups?

Answers:

  1. In product research and development.
  2. In education and training.
  3. In human factor analysis.
  4. All of the above

76. The reasons for choosing a sample out of a population are:

Answers:

  1. Cost limits
  2. Time limits
  3. Easy availability
  4. High reliability
  5. c and d
  6. a and b

77. The following are the steps in the process of Cluster sampling. Put them in the right order:

1)Randomly select the needed number of clusters for the sample.
2)Assign the population to different clusters.
3)Include all the population members of the selected cluster in the sample. Alternatively, select only a certain number of population members from each cluster (through simple or systematic random sampling) for the sample.

Answers:

  1. 2,1,3
  2. 2,3,1
  3. 1,2,3
  4. 1,3,2

78. The events that are not affected by other outcomes are called:

Answers:

  1. Probable events
  2. Improbable events
  3. Independent events
  4. None of the above

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Upwork Finance and Accounting

General Financial Accounting Test 2016

Published by:

1. Which of the following is NOT an example of a period expense?

Answers:

  1. Administrative costs
  2. Inventory costs
  3. Accounting costs
  4. Selling costs

2. Which of the journal entries below is incorrectly recorded?

Answers:

  1. Dr: Cash, Cr: Investment in ABC Co. – Sale of an investment for cash
  2. Dr: Prepaid Insurance, Dr: Cash – Paid in advance for a 1-year insurance policy
  3. Dr: Accounts Receivable, Cr: Merchandise Inventory – Returned defective merchandise for credit
  4. Dr: Machinery, Cr: Notes Payable – Gave a 1-year note to acquire machinery

3. Which of the following accounts would NOT appear on a corporation’s Balance Sheet?

Answers:

  1. Owner Investment
  2. Retained Earnings
  3. Investment in ABC Stock
  4. Premium on Common Stock

4. Which of the following transactions would NOT result in revenue being reported?

Answers:

  1. Sale of merchandise for cash
  2. Sale of merchandise on account
  3. Collection of an account receivable
  4. All of the above

5. ________________ is the financial obligation of a company in regards to a loan that accrues with the passage of time.

Answers:

  1. Interest Payable
  2. Income Tax Payable
  3. Income Tax Expense
  4. Accounts Payable

6. XYZ Company failed to record the purchase of inventory on account at the end of 2008. In which of the following ways is the Balance Sheet misstated?

Answers:

  1. Assets and liabilities are both understated.
  2. Assets are understated and liabilities are overstated.
  3. Assets and shareholders’ equity are both understated.
  4. Assets, liabilities, and shareholders’ equity are all correctly stated.

7. Which of the following is recorded only when another business enterprise is acquired?

Answers:

  1. Cash
  2. Equity
  3. Accounts Payable
  4. Goodwill

8. ______________ refers to shares originally issued and outstanding that have been reacquired from the owners.

Answers:

  1. Treasury Stock
  2. Common Stock
  3. Preferred Stock
  4. Retained Earnings

9. Amounts paid for various fees incurred in organizing a corporation are called ____________.

Answers:

  1. Organization Costs
  2. Current Assets
  3. Deferred Taxes
  4. Current Liabilities

10. A manufacturing firm’s cost of producing its product is called ______________.

Answers:

  1. direct labor
  2. product costs
  3. indirect labor
  4. overhead

11. XYZ Company publishes a monthly sports magazine. The company has fiscal year of Jan-Dec. On July 1 of Year 1, the company sold 1000 two-year subscriptions for $200 each. On December 31 of Year 1, the amount reported as a liability on the Balance Sheet and the amount reported as revenue on the Income Statement are, respectively:

Answers:

  1. $0 and $200,000
  2. $50,000 and $150,000
  3. $100,000 and $100,000
  4. $150,000 and $50,000<>

12. Which of the following accounts accumulate amounts for only a single accounting period?

Answers:

  1. Permanent Accounts
  2. Temporary Accounts
  3. Assets
  4. Liabilities

13. Which of the following would cause the accounting equation to be out of balance?

Answers:

  1. Recording a purchase on account at the wrong amount
  2. Recording a 2007 purchase in 2008
  3. Posting the credit for a cash purchase at the wrong amount
  4. All of the above

14. From the following list of accounts and account balances, determine the amount that would be properly classified as Property, Plant, & Equipment.

$100,000 – Land Used in Business
$60,000 – Machinery Leased from Others
($80,000) – Accumulated Depreciation
$140,000 – Inventories
$40,000 – Land Held for Future Plant Site
$200,000 – Building
$50,000 – Investment in Stock of Construction Company

Answers:

  1. $220,000
  2. $360,000
  3. $260,000
  4. $280,000

15. At the beginning of the year, XYZ Company reported Accounts Receivable of $39,000. During the year, the company had credit sales totaling $288,000. At year end, the Accounts Receivable balance was $8,000 higher than the beginning balance. How much cash was collected on the accounts during the year?

Answers:

  1. $296,000
  2. $288,000
  3. $280,000
  4. $272,000

16. XYZ Company has just completed its first year of operations in Year 1. The company distributed dividends of $50,000. If the ending balance of Retained Earnings on December 31 of Year 1 is $70,000, and the company had revenues of $400,000 from Year 1 sales, then what is the total of the company’s Year 1 expenses?

Answers:

  1. $350,000
  2. $330,000
  3. $280,000
  4. None of the above

17. A ____________ is the right to use property owned by someone else.

Answers:

  1. purchase
  2. lease
  3. prepaid asset
  4. deferred revenue

18. A trial balance prepared at the end of the accounting period after adjusting entries are made is called a/an _________________.

Answers:

  1. Pre-Adjustment Trial Balance
  2. Prior Year Trial Balance
  3. Adjusted Trial Balance
  4. Balance Sheet

19. XYZ Company has assets and liabilities of $15,000 and $12,000, respectively. If the company issues an additional $1,500 of stock for cash, what will be the balance in shareholders’ equity following the transaction?

Answers:

  1. $15,000
  2. $25,500
  3. $4,500
  4. $16,500

20. XYZ Company purchased a 1-year insurance policy for $3,000 on April 1 of Year 1. The amount of prepaid insurance reported on the Balance Sheet and the amount of insurance expense reported on the Income Statement on December 31 of Year 1 are, respectively:

Answers:

  1. $750 and $2,250
  2. $2,250 and $750
  3. $1,000 and $2,000
  4. $2,000 and $1,000

21. Unused materials for manufacturing products are called ______________.

Answers:

  1. COGS
  2. Accounts Receivable
  3. depreciation
  4. inventory

22. XYZ Company is interested in disposing of one of its subsidiaries and is trying to decide on the maximum price it might be able to charge. Which valuation method below would the company be most likely to use?

Answers:

  1. Acquisition Cost
  2. Net Realizable Value
  3. Present Value
  4. Replacement Cost

23. Which of the following assets is a monetary asset?

Answers:

  1. Patent
  2. Land
  3. Inventory
  4. Accounts Receivable

24. A debit balance is normal for all of the following accounts except _______________.

Answers:

  1. Preferred Stock
  2. Treasury Shares
  3. Investment in Stock
  4. All of the above

25. At the beginning of the year, XYZ Company owed $14,500 to its creditors for inventory purchases. At year end, the company owed $9,150. During the year, the company made payments totaling $48,500 to its creditors for inventory purchases. What was the cost of the additional inventory that was purchased during the year?

Answers:

  1. $7,650
  2. $43,150
  3. $53,650
  4. $39,350

26. Payments made in advance for goods or services a firm will receive at a later date are called ______________.

Answers:

  1. Deferred Income
  2. Deferred Tax liability
  3. Advances to Suppliers
  4. Unearned Revenue

27. Amounts due from customers, for which the claim is in the form of a written promise to pay, are called ________________.

Answers:

  1. Trade Payables
  2. Accounts Receivable
  3. Equity
  4. Notes Receivable

28. A residual claim of owners having certain preferences relative to other owners’ claims is called __________________.

Answers:

  1. Treasury Stock
  2. Retained Earnings
  3. Preferred Stock
  4. Common Stock

29. Which of the following operations is NOT considered part of the accounting process leading to financial statement preparation?

Answers:

  1. Journalizing transactions
  2. Posting to the general ledger
  3. Adjusting accounts
  4. Auditing statements

30. Amounts borrowed by a business for a relatively long period of time under a formal written contract or indenture are called _________________.

Answers:

  1. Unsecured Loans
  2. Current Liabilities
  3. Bonds Payable
  4. Cash

31. Amounts owed for goods or services acquired under an informal credit agreement are called ___________________.

Answers:

  1. Accounts Payable
  2. Notes Payable
  3. Money Market Funds
  4. Common Stock

32. The process of transferring entries in the general journal to the accounts in the general ledger is called ________________.

Answers:

  1. posting
  2. journalizing
  3. financial reporting
  4. taxation

33. The balance in all asset accounts combined is $100,000 on December 1. During December, the following transactions took place:

– Purchase of $10,000 of inventory for cash
– Purchase of $15,000 of machinery on account
– Retirement of $20,000 in bonds with cash

Given this information, what is the combined balance in the asset accounts on December 31?

Answers:

  1. $80,000
  2. $115,000
  3. $105,000
  4. $95,000

34. XYZ Company completed its second year of operations in Year 2. On January 1 of Year 2, the balance in Retained Earnings was $84,000. During the year, the company declared and paid a dividend of $65,000 to shareholders. The company reported net earnings of $105,000 in its Year 2 Income Statement. What was the balance in Retained Earnings on December 31 of Year 2?

Answers:

  1. $189,000
  2. $170,000
  3. $149,000
  4. $124,000

35. Temporary revenue and expense accounts may be closed _________________.

Answers:

  1. individually by separate entries to Retained Earnings
  2. in a single entry to Retained Earnings
  3. to a temporary “Income Summary” account
  4. Any of the above methods is acceptable.

36. Amounts received for the par value of a firm’s voting stock are called ___________.

Answers:

  1. Common Stock
  2. Accounts Receivable
  3. Preferred Stock
  4. Retained Earnings

37. ________________ is/are a measure of the inflow of net assets from selling goods and providing services.

Answers:

  1. Revenues
  2. Liabilities
  3. Assets
  4. Equity

38. The Accumulated Depreciation account reflects _____________________.

Answers:

  1. depreciation for the current accounting period only
  2. cumulative depreciation on the asset since acquisition
  3. the amount of depreciation that can be taken in future periods
  4. None of the above

39. Which of the following accounts represents distributions of earnings to shareholders of the firm?

Answers:

  1. Dividends
  2. Retained Earnings
  3. Rent Expense
  4. Payroll Expense

40. XYZ Company reported a balance in Accounts Receivable of $40,500 on January 1 of year 2. During Year 2, the company collected $127,500 from its customers who had purchased on account. On December 31 of Year 2, the company reported a balance in Accounts Receivable of $21,250. How much were XYZ Company’s credit sales for Year 2?

Answers:

  1. $108,250
  2. $129,500
  3. $146,750
  4. $148,750

41. Which of the following accounts is NOT an expense?

Answers:

  1. Depreciation
  2. Sales Salaries
  3. Dividends Declared
  4. Delivery Expense

42. At the beginning of the year, XYZ Company reported a $7,200 balance in its Prepaid Insurance account. At year end, the company reported Insurance Expense of $9,000 in its Income Statement and a balance of $3,800 in the Prepaid Insurance account. What was the cost of the additional insurance that was purchased during the year?

Answers:

  1. $9,000
  2. $12,400
  3. $5,600
  4. $12,800

43. During the year, XYZ Company’s inventory account balance increased from $26,000 to $31,500. During the year, the company made payments totaling $152,500 to creditors for inventory purchases and reported Cost of Goods Sold of $159,500 on its Income Statement. How much inventory was purchased during the year?

Answers:

  1. $165,000
  2. $158,000
  3. $152,500
  4. $159,500

44. Which of the following accounts is not closed during the closing process?

Answers:

  1. Wage Expense
  2. Interest Expense
  3. Utility Expense
  4. Accumulated Depreciation

45. XYZ Company purchased some equipment for $120,000 on July 1 of Year 1. The equipment has an estimated useful life of 10 years and an estimated salvage value of $7,500. XYZ Company computes depreciation on a straight-line basis. How much depreciation should be recorded for Year 1?

Answers:

  1. $12,000
  2. $11,250
  3. $6,000
  4. $5,625

46. A right granted to an individual or company that excludes others from manufacturing, using, or selling a certain process or device is called a _____________.

Answers:

  1. liability
  2. trademark
  3. tax liability
  4. patent

47. Which of the following accounts is NOT a temporary account that should be closed during the closing process?

Answers:

  1. Prepaid Insurance
  2. Cost of Goods Sold
  3. Sales Revenue
  4. Depreciation

48. A trial balance that shows revenue and expense accounts with zero balances and balance sheet accounts at the end of the period is called a __________________.

Answers:

  1. Balance Sheet
  2. Pre-Closing Trial Balance
  3. Post-Closing Trial Balance
  4. Income Statement

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