Pre-employment Screening Test/ Version A

15 Questions | Total Attempts: 34

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Pre-employment Screening Test/ Version A

As part of EGE's recruitment process you are required to pass the pre-screening test. Candidates who do, will receive a call back for an in person interview.


Questions and Answers
  • 1. 
    Which of the following statements is most correct? A market is likely to exhibit perfect competition when:
    • A. 

      Sellers have market-pricing power.

    • B. 

      Each firm is perceived to produce goods or services with unique characteristics.

    • C. 

       the share of each firm’s minimum efficient scale is small relative to market demand.

  • 2. 
    Which of the following statements is least correct?
    • A. 

      Gross domestic product (GDP) excludes goods produced by citizens outside of the country..

    • B. 

      Gross national product (GNP) includes services produced by foreigners within the country

    • C. 

      Gross domestic product (GDP) is generally preferred by analysts over gross national product (GNP).

  • 3. 
    Which of the following statements is least correct? A limitation of the Consumer Price Index (CPI) as a measure of inflation is:
    • A. 

      Its failure to adequately account for changes in product quality

    • B. 

      Its bias toward newer products, which are likely to be more expensive.

    • C. 

      That it tends to overestimate inflation where substitutes exist for goods experiencing price rises.

  • 4. 
    Victory Construction LLC leases a crane that would likely be in use for another 15 years. Under which of the following circumstances might the lease most likely be classified as an operating lease under US GAAP?Which one do you like?
    • A. 

      The lease term is 5 years

    • B. 

      A bargain purchase option exists

    • C. 

      The lessor gains ownership of the asset at the end of the lease.

  • 5. 
    Carrywell LLC, a luggage producer based in Dayton, Ohio, is preparing its annual financial reports under US GAAP. There is concern that an older assembly line might need to be repaired and the following information is produced: • Cost = $1,400,000 • Accumulated depreciation = $ 920,000 • Estimated net sale value = $ 460,000 • Expected future net cash flow = $ 55,000 p.a. • Life of equipment = 9 years •Salvage value = $ 0 Based on this information, the impairment loss to be recognized by Carrywell is closest to:
    • A. 

      $0

    • B. 

      $20,000

    • C. 

      . $30,000

  • 6. 
    Which of the following strategies might be used if a company wanted to reduce the level of revenues it recognizes in the current period?
    • A. 

      Increasing its allowance for sales returns

    • B. 

      Reclassifying inventory as “sold but held”

    • C. 

      . Setting shipping terms as “FOB destination”

  • 7. 
    In regard to nonrecurring items, which of the following statements is most accurate? Income and expense items that are unusual in nature, but that are likely to reoccur:
    • A. 

      Should be ignored when considering forecasts.

    • B. 

      Should be recorded as a separate line item under IFRS.

    • C. 

      Should be recorded as a separate line item under US GAAP.

  • 8. 
    In the most recent year, Becker Superstores LLC produced net income of $356,000 and earnings before interest and tax (EBIT) of $582,000. It had an EBIT margin of 12.7%, an asset turnover of 0.94 times, and leverage of 3.20. Based on this information, Becker Superstores’ return on assets is closest to:
    • A. 

      7.3%

    • B. 

      19.5%

    • C. 

      23.4%

  • 9. 
    Company D sells only one product and in the most recent quarter made sales of 15,000 units at $260 each. The total variable costs for the quarter were $2,625,000 and total fixed costs were $560,000. Furthermore, total financial costs for the quarter were $317,000 and the corporate tax rate was 40%. Based on this information, Company D’s degree of operating leverage is closest to:
    • A. 

      1.78

    • B. 

      1.80

    • C. 

      3.20

  • 10. 
    Which of the following is least likely to be a benefit of conservatism in regard to applying accounting standards?
    • A. 

      Protection for regulators.

    • B. 

      Reduction in potential litigation.

    • C. 

      Reduction in total income tax expense over time.

  • 11. 
    Which of the following stakeholder groups is least likely to have operational influence of a company?
    • A. 

      Creditors

    • B. 

      Managers

    • C. 

      Regulators

  • 12. 
    Bell Engines, a UK-based manufacturer has recently concluded the following transactions: • Issued GBP 30 million in new bonds • Purchased new factory for GBP 20 million These transactions might best be described as:
    • A. 

       financing activities only.

    • B. 

      Operating and investing activities, respectively.

    • C. 

      Financing and investing activities, respectively

  • 13. 
    Company Y sells one product and has the following expected sales and costs information for the following year: Sale price                       $1.80 per unit Contribution margin     $0.36 per unit Fixed sales costs          $42,000 Fixed nonsales costs   $66,000 Based on this information, the breakeven level of revenues is closest to:
    • A. 

      $300,000

    • B. 

      $432,000

    • C. 

      $540,000

  • 14. 
    Pure Health Diagnostics (PHD) has recently acquired a new MRI machine from a similar business by exchanging with them two X-ray systems that are no longer in use. It costs PHD EUR 2,000 to ship and install the secondhand MRI machine to make it ready for use. The cost of the X-ray systems was EUR 120,000 each and one has accumulated depreciation of EUR 20,000 and the other has accumulated depreciation of EUR 15,000. If the fair value of the secondhand MRI machine is EUR 204,000, which of the following statements is most correct?
    • A. 

      PHD’s net assets will decrease.

    • B. 

      PHD will recognize a gain on the income statement.

    • C. 

      PHD will not recognize any gain or loss on the income statement

  • 15. 
    Which of the following statements is most correct? Sovereign bonds:
    • A. 

      Are backed by the sovereign’s banking industry

    • B. 

      Can be issued only in the sovereign’s domestic currency.

    • C. 

      Are issued in different forms including floating-rate and inflation-linked.

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