Business Degree Business Administration 3

Question 1

Which inventory valuation method assumes that the most recently purchased items are sold first?

Accepted Answer

LIFO

Answer

LIFO (Last-In, First-Out) assumes the most recently acquired inventory is sold first, which can affect cost of goods sold and taxable income.

Question 2

In project management, the critical path is best defined as:

Accepted Answer

The sequence of tasks that determines the minimum project duration

Answer

The critical path is the longest sequence of dependent tasks that determines the earliest possible project completion date.

Question 3

A sole proprietorship differs from a corporation primarily because:

Accepted Answer

The owner has unlimited personal liability for business debts

Answer

In a sole proprietorship, there is no legal separation between owner and business, meaning the owner is personally liable for all business debts and obligations.

Question 4

Which pricing strategy involves setting a high initial price and gradually lowering it over time?

Accepted Answer

Price skimming

Answer

Price skimming captures maximum revenue from early adopters willing to pay a premium before lowering the price to attract more price-sensitive customers.

Question 5

Which document summarizes a company's revenues and expenses over a specific period?

Accepted Answer

Income statement

Answer

The income statement (also called profit and loss statement) reports revenues, costs, and net profit or loss over a defined accounting period.

Business Degree Practice Test

Business Degree Practice Test

Business Degree Business Administration 3