AS Associate Of Science In Business Administration 5 — Questions and Answers
Question 1: Which ratio measures a company's ability to pay short-term obligations using only its most liquid assets?
- Current ratio
- Quick ratio (Correct answer)
- Debt ratio
- Return on equity
Correct answer: Quick ratio
The quick ratio (acid-test ratio) measures liquidity by comparing cash, marketable securities, and receivables to current liabilities, excluding inventory.
Question 2: In project management, a 'Gantt chart' is primarily used to:
- Track financial budgets
- Display project tasks and their timelines visually (Correct answer)
- Map organizational hierarchies
- Calculate cost-benefit ratios
Correct answer: Display project tasks and their timelines visually
A Gantt chart is a bar chart that shows project tasks, their durations, and scheduling across a timeline.
Question 3: Which term describes the process of a company buying back its own shares from the open market?
- Initial public offering (IPO)
- Stock split
- Share repurchase (buyback) (Correct answer)
- Dividend issuance
Correct answer: Share repurchase (buyback)
A share repurchase occurs when a company buys its own outstanding shares, reducing the number of shares in circulation.
Question 4: In marketing research, a 'focus group' is an example of:
- Secondary research
- Quantitative research
- Qualitative primary research (Correct answer)
- Experimental research
Correct answer: Qualitative primary research
Focus groups are a qualitative primary research method where small groups discuss topics to provide in-depth insights.
Question 5: What does the term 'economies of scale' mean in business?
- Costs rise proportionally as output increases
- Per-unit costs decrease as production volume increases (Correct answer)
- Revenue increases faster than expenses
- Small firms are more efficient than large ones
Correct answer: Per-unit costs decrease as production volume increases
Economies of scale occur when increasing production volume leads to lower average costs per unit due to spreading fixed costs.
Question 6: Which federal law prohibits unfair methods of competition and deceptive acts in commerce in the United States?
- Sherman Antitrust Act
- Clayton Act
- Federal Trade Commission Act (Correct answer)
- Robinson-Patman Act
Correct answer: Federal Trade Commission Act
The Federal Trade Commission Act (1914) created the FTC and broadly prohibits unfair or deceptive acts or practices in commerce.
Question 7: In operations management, 'quality control' differs from 'quality assurance' in that quality control focuses on:
- Preventing defects before production begins
- Detecting defects in finished or in-process products (Correct answer)
- Training employees on procedures
- Designing processes to avoid errors
Correct answer: Detecting defects in finished or in-process products
Quality control involves inspecting and testing products to identify defects, while quality assurance is a proactive process-oriented approach.
AS Associate Of Science In Business Administration 5
Which ratio measures a company's ability to pay short-term obligations using only its most liquid assets?