AICPA CPA Business Environment and Concepts - BEC Exam Practice Test

Which of the following transactions does not change the current ratio and does not change the total
current assets?

Absent a specific provision in its articles of incorporation, a corporation's board of directors has the
unilateral power to do all of the following, except:

Economic theory identifies two basic types of goods: inferior goods and superior goods. As consumer
income rises, a lower percentage of earnings are expended on inferior goods while a higher percentage of
earnings are spent on superior goods. Overall strategies for achieving organizational missions would
most likely match with types of goods as follows:

Lawson Inc. is expanding its manufacturing plant, which requires an investment of $4 million in new
equipment and plant modifications. Lawson's sales are expected to increase by $3 million per year as a
result of the expansion. Cash investment in current assets averages 30 percent of sales; accounts
payable and other current liabilities are 10 percent of sales. What is the estimated total investment for this
expansion?

When markets are perfectly competitive, consumers:

The segment margin of an investment center after deducting the imputed interest on the assets used by
the investment center is known as:

In the pharmaceutical industry where a diabetic must have insulin no matter what the cost and where
there is no substitute, the diabetic's demand curve is best described as:

Which of the following is not necessary to create an express partnership?

Managers that anticipate greater return for greater risk are referred to as having what attitude toward risk?

The CPI jumps from 131 in year 1 to 136.5 in year 2. What is annual inflation rate?