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WorldatWork C8 Business Acumen for Compensation Professional Exam Practice Test

Demo: 11 questions
Total 78 questions

Business Acumen for Compensation Professional Questions and Answers

Question 1

If a company has a higher percentage of employees with fixed compensation than variable compensation, what happens as revenues increase?

Options:

A.

Compensation costs eventually stabilize and become a consistent percent of revenue.

B.

Compensation costs and revenue increase at approximately the same rate.

C.

Compensation costs eventually decrease as a percent of revenue, increasing profit growth.

D.

Compensation costs remain the same as a percent of revenue until variable compensation costs exceed fixed compensation costs.

Question 2

If employees have a significant impact on the bottom line, what type of pay mix is most appropriate?

Options:

A.

A varying mix depending on employee influence on goals to provide the necessary incentive to maximize profits

B.

100% variable pay to motivate all employees to maximize productivity and sales

C.

90/10 for the majority of employees (base/variable) to share in the company’s success with increased variable pay for management/executives to motivate employees to seek higher positions

D.

High base pay and low variable pay to ensure predictability of total compensation expense

Question 3

What is the most accurate definition of organizational vision?

Options:

A.

A description of who the organization is, where it is headed and what it wants for the future

B.

A written explanation of the intention or purpose of the organization and why it is in business

C.

A statement of what kind of organization it wants to be and the guiding principles and/or beliefs shared by stakeholders

D.

A detailed account of the organization’s goals, directions to achieve them and how it will compete

Question 4

Which of the following is the earnings available to equity owners after paying debt and taxes?

Options:

A.

EBIT

B.

EPS

C.

Net income

D.

Operating profit

Question 5

Who are you most likely to hear from if there are questions about an employee’s compensation?

Options:

A.

The employee

B.

A concerned co-worker

C.

The employee’s manager

D.

The employee’s department head

Question 6

What best describes a necessary skill and/or behavior in relation to business acumen?

Options:

A.

An understanding of the culture and subcultures of your organization

B.

The capacity to manage multiple projects and priorities and meet deadlines

C.

A willingness to take on additional duties and responsibilities when resources are limited

D.

A thorough understanding of the products and/or services your organization provides

Question 7

What best describes an effective approach for balancing multiple priorities and perspectives regarding compensation?

Options:

A.

Being firm and uncompromising in your decision-making

B.

Representing your view with data and relating it to business results

C.

Finding a compromise that may not appease all stakeholders but does not give any one group or person everything they are seeking

D.

Giving priority to perspectives based on the job or influence level of the stakeholders

Question 8

Quarterly financial reports typically include data for a given quarter compared to what?

Options:

A.

The previous quarter

B.

The budget

C.

The same quarter in the previous year, plus the current six-month or nine-month cumulative comparables

D.

The aggregate performance of the same quarter in the previous three years

Question 9

What information is found on the balance sheet?

Options:

A.

A list of what is owned, what is owed and the equity of an entity

B.

The revenues and expenses incurred by an entity over a period of time

C.

The change during the reporting period in cash and cash equivalents

D.

The profitability of the company as of a specific date

Question 10

What is the most accurate statement regarding the effect of compensation plans on the organization?

Options:

A.

They typically have the greatest effect on net income and operating results of any organizational expense or program

B.

Their success or failure is closely tied to the success or failure of organizationwide goals and objectives

C.

They have very little effect as long as they are managed effectively and efficiently

D.

They affect the organization’s overall financial status and impact multiple stakeholders across most, if not all, business units

Question 11

Gross margin is which of the following, as percent of revenue?

Options:

A.

Revenue minus cost of goods sold

B.

Expenses plus taxes and depreciation

C.

Gross profit minus expenses

D.

Cost of goods sold

Demo: 11 questions
Total 78 questions