Page 1 Accounting and Finance Comprehensive Exam Summary: Graduate Level Peregrine Academic Services (PAS) provides assessment services for performing direct assessment of learning outcomes in a range of academic disciplines. The online exams are used to evaluate retained student knowledge in relation to the academic program’s learning outcomes. This document outlines the Accounting and Finance assessment service for the master’s and doctoral degree levels. The assessment service is designed for use by US-based schools and programs. PAS places a high priority on ensuring the validity and reliability of the assessment services. These practices begin at the design stage and continue through beta-testing, and with ongoing regularly scheduled quality reviews. A description of the approach used to ensure ongoing validity and reliability is provided at the end of this document. The exams include 10 questions for each topic and each exam is unique as questions are selected at random from the test bank with 50-200 questions per topic. The academic program manager may choose to include additional topics to complement core topic areas. These may be selected from the supplemental topics summarized below. This document provides information on: Topics and sub-topics where applicable, and the subjects covered within each topic or sub-topic. Supplemental topics and subjects covered in each topic. Example questions. Assessment Service Validity and Reliability. The Topics and Sub-Topics: 1. Accounting 2. Business Communications 3. Business Ethics in Accounting 4. Business Finance 5. Business Policies, Integration, and Strategic Management 6. Economics a. Macroeconomics b. Microeconomics 7. Global Dimensions of Business Accounting 8. Information Systems 9. Leadership in Accounting 10. Legal Environment of Business 11. Management a. Human Resource Management
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Page 1
Accounting and Finance Comprehensive Exam Summary:
Graduate Level
Peregrine Academic Services (PAS) provides assessment services for performing direct assessment of
learning outcomes in a range of academic disciplines. The online exams are used to evaluate retained
student knowledge in relation to the academic program’s learning outcomes.
This document outlines the Accounting and Finance assessment service for the master’s and
doctoral degree levels.
The assessment service is designed for use by US-based schools and programs.
PAS places a high priority on ensuring the validity and reliability of the assessment services. These
practices begin at the design stage and continue through beta-testing, and with ongoing regularly
scheduled quality reviews. A description of the approach used to ensure ongoing validity and reliability
is provided at the end of this document.
The exams include 10 questions for each topic and each exam is unique as questions are selected at
random from the test bank with 50-200 questions per topic.
The academic program manager may choose to include additional topics to complement core topic areas.
These may be selected from the supplemental topics summarized below.
This document provides information on:
Topics and sub-topics where applicable, and the subjects covered within each topic or sub-topic.
Supplemental topics and subjects covered in each topic.
Example questions.
Assessment Service Validity and Reliability.
The Topics and Sub-Topics:
1. Accounting
2. Business Communications
3. Business Ethics in Accounting
4. Business Finance
5. Business Policies, Integration, and Strategic Management
6. Economics
a. Macroeconomics
b. Microeconomics
7. Global Dimensions of Business Accounting
8. Information Systems
9. Leadership in Accounting
10. Legal Environment of Business
11. Management
a. Human Resource Management
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b. Operations Management
c. Organizational Behavior
12. Marketing
13. Quantitative Techniques, Statistics and Research Analysis
Supplemental Topics:
1. Accounting and the Business Environment
2. Activity-Based Costing and Other Cost Management Tools
3. Auditing
4. Capital Budgeting Cash Flows
5. Capital Budgeting Techniques
6. Capital Investment Decisions and the Time Value of Money
7. Cash Flow and Financial Planning
8. Completing the Accounting Cycle
9. Corporations: Effects on Retained Earnings and the Income Statement
10. Corporations: Paid-in Capital and the Balance Sheet
11. Cost Accounting
12. Cost-Volume-Profit Analysis
13. Current Liabilities and Payroll
14. Current Liabilities Management
15. Financial Market Environment
16. Financial Statement Analysis
17. Financial Statements and Ratio Analysis
18. Flexible Budgets and Standard Costs
19. Governmental and Nonprofit Accounting
20. Hybrid and Derivative Securities
21. Interest Rates and Bond Valuation
22. Internal Control and Cash
23. International Managerial Finance
24. Job Order and Process Costing
25. Leverage and Capital Structure
26. Long-Term Liabilities, Bonds Payable, and Classification of Liabilities on the Balance Sheet
27. Merchandising Inventory
28. Merchandising Operations
29. Mergers, LBOs, Divestitures, and Business Failure
30. Overview of Management Accounting
31. Payout Policy
32. Performance Evaluation and the Balanced Scorecard
33. Plant Assets and Intangibles
34. Receivables
35. Recording Business Transactions
36. Risk and Refinements in Capital Budgeting
37. Risk and Return
38. Roles of Managerial Finance
39. Short-Term Business Decisions
40. Stock Valuation
41. Taxation: Corporations
42. Taxation: Individuals
43. The Adjusting Process
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44. The Cost of Capital
45. The Master Budget and Responsibility Accounting
46. The Statement of Cash Flows
47. Time Value of Money
48. Working Capital and Current Assets Management
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Topic: Accounting
Subjects
Assets and Liabilities (Questions related to cost-flow assumptions, bad debt, and income tax
expenses)
Audits, Auditing, and Balance Sheets (Questions related to a fiscal year, accrual accounting,
internal control, GAAP, and profitability)
Capital Investments (Questions related to recover of investment, capital investment proposals, and
net present value)
Credits and Debits (Questions related to how debits and credits are posted to accounts)
Equity (Questions related to owners’ equity, paid-in capital, and net)
Net Present Value (Questions related to calculating and using NPV)
Example Questions
The ability of a business to earn a reasonable amount of income is referred to as the factor of _____.
A. leverage
B. profitability
C. wealth
D. solvency
Correct Response: B
Which of the following provisions of the Internal Revenue Code can be used to reduce the amount of the
income tax expense arising from capital investment projects?
A. Interest deduction
B. Depreciation deduction
C. Minimum tax provision
D. Charitable contributions
Correct Response: B
Page 5
Topic: Business Communications
Subjects
The Communication Process (Questions related to barriers to communications, feedback, fidelity,
and filtering)
Nonverbal Communications (Questions related to body language)
Oral and Written Communications (Questions related emotion and forms of communication)
Organizational Communications (Questions related to methods of communicating and information
overload)
Cross-Cultural Communications (Questions related to coordination and international
communication)
Example Questions
International communication problems include all of the following sources except ____.
A. colors
B. body language
C. new forms of communication technology
D. exchange rates
E. language
Correct Response: D
The real increases in organizational productivity due to information technology come from ____.
A. the increased speed of message transfer
B. the increased volume of messages
C. the heightened awareness of cultural diversity
D. the ability to communicate in new and different ways
E. the reduction in paperwork
Correct Response: D
Page 6
Topic: Business Ethics in Accounting
Subjects
Business Ethical Principles (Questions related to moral conduct, unethical behaviors, Kant’s
categorical imperative, and accounting bias)
Ethical Decision-Making and Judgment (Questions related to cheating, making ethical judgments,
communications, an ethics screen, and principal of rights)
Ethical Models (Questions related to teleological theories, population hypothesis, ethical
management model, and descriptive ethics)
Ethics Management and Leadership (Questions related to moral management, compromise, ethical
scandals, and ethics audits)
Example Questions
An ethical concept or rule that helps the decision maker take an ethical course is called a(n) ____.
A. ethical principle
B. moral challenge
C. moral dilemma
D. ethical rubric
Correct Response: A
Which of the following is not an element of making ethical judgments?
A. observation of the decision or action
B. comparison of the decision or action to prevailing norms of acceptability
C. recognition that value judgments are made regarding the decision or action and the prevailing
norms of acceptability
D. awareness of the moral implications of a situation
Correct Response: D
Page 7
Topic: Business Finance
Subjects
Balance Sheets and Financial Statements (Questions related to income statements, use of the balance
sheet, analyzing financial statements)
Cash Flows and Budgets (Questions related to cash budgets, asset characterization, noncash
charges, and corporate cash)
Corporate Earnings, Stocks, and Bonds (Questions related to equity, bonds, net working capital,
investment, and market-to-book ratio)
Corporate Financial Structures (Questions related to partnerships, corporations, bylaws, public
companies, Sarbanes Oxley Act)
Debt, Equity, and Depreciation (Questions related to fixed assets, operating costs, the mix of debt
and equity, and depreciation)
Financial Ratios (Questions related to debt-to-equity ratios, earnings per share, turnover ratio,
return on equity, earnings before interest, net present value, quick ratio, and use of financial ratios)
Financing, Forecasting, and Planning (Questions related to leverage, financing assets, the role of
financial planning and forecasting)
Example Questions
Earnings per share (EPS) is calculated by _____.
A. dividing pretax income by the number of shares of common stock outstanding
B. dividing the dividends paid by the number of shares of common stock outstanding
C. dividing earnings available for common stockholders by the number of shares of common stock
outstanding
D. dividing net profits after tax by the total number of preferred and common stock shares
outstanding
Correct Response: C
Noncash charges, such as __________, are expenses that appear on the income statement but do not
involve an actual outlay of cash.
A. investment flows, operating flows, financing flows
B. NOPAT
C. free cash flows
D. depreciation, amortization, and depletion allowance
E. all of the above
Correct Response: D
Page 8
Topic: Business Policies, Integration, and Strategic Management
Subjects
Business and Corporate-level Strategies (Questions related to transitional companies, the fit model
of strategy formulation and implementation, emergent strategies, and manufacturing)
Continuous Improvement (Questions related to economies of scale, six sigma, research and
development, and metrics to measure quality)
Corporate Structure and Governance (Questions related to strategic leadership, emotional
intelligence, establishing measures of quality, and executive decision making)
Managers and Management Structure (Questions related to control systems, learning effects,
efficiency-based cost advantages, and the skills of managers)
Market Strategy and Market Positioning (Questions related to credible commitments, value creation,
international licensing, and entry into foreign markets)
Mission and Vision (Questions related to organizational values and cultures, the use of missions and
vision, and the layout of the vision)
Shareholder Value and Return (Questions related to profit growth, cost reductions, stock prices, and
the principal drivers of shareholder value)
Strategic Analysis Tools (Questions related to the experience curve, the feedback loop, SWOT
analysis, learning effects, and profit growth)
Strategic Planning and Decision Making (Questions related to the strategic management process,