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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

The Alpha company ships an order to a customer on March 1st and invoices the customer for the product with the shipment, with payment terms of net 30 days. The customer’s payment is received on April 5th. The payment clears the bank and shows on Alpha’s account on April 8th. If Alpha is using accrual accounting, when does it record the revenue for this sale?

Options:

A.

March 1st

B.

March 31st

C.

April 5th

D.

April 8th

Question 2

The “Value Store” retail company offers its customers low prices and ease of purchase by minimizing waste and striving for high efficiency. What strategy is the “Value Store” using?

Options:

A.

Operational excellence

B.

Product/service leadership

C.

Customer intimacy

D.

Brand loyalty

Question 3

Which of the following best describes present value?

Options:

A.

The current value of holdings

B.

The current value of holdings and how much it will grow over time at a given rate of return

C.

The desired value in the future and what needs to be invested today to realize that amount

D.

The difference between the desired value in the future and the current value as a percentage of the desired value

Question 4

In what stage of the business lifecycle do companies typically begin standardizing procedures through policy creation?

Options:

A.

Start-up

B.

Growth

C.

Mature

D.

Decline

Question 5

Which of the following best describes the guiding principles and/or beliefs shared by stakeholders in an organization?

Options:

A.

Mission

B.

Vision

C.

Values

D.

Strategy

Question 6

How do quarterly reports most commonly compare to the annual report?

Options:

A.

The cumulative information on the four quarterly reports adds up to the information on the annual report.

B.

The quarterly reports are more detailed. The annual report provides similar data in summary form.

C.

The annual report is required and the quarterly reports, while commonly used, are optional.

D.

The quarterly reports are not as detailed as annual reports, and might not match due to changing accounting estimates over the year.

Question 7

As a general rule, what are individual contributors most likely to ask about their compensation?

Options:

A.

What the take-home pay will be

B.

How their pay compares to co-workers

C.

How the company sets compensation budgets

D.

How the company makes pay decisions that affect them

Question 8

Your company has had a strong fiscal year with a 15% increase in net income over the prior fiscal year. Share prices are at an all time high. Working with Finance, you have arrived at a 2.5% merit increase budget for the next fiscal year, a smaller increase than the last fiscal year. Finance has indicated that some large capital expenditures will be needed next year, so the company needs to conserve resources. Additionally, Legal is in final negotiations on a lawsuit that may be very costly to the company. Word of the smaller increases has line management concerned that they will lose their best performers. Given all of these factors, what is your best course of action?

Options:

A.

Implement the merit increase budget as is because the anticipated financial obligations have made it necessary

B.

Meet with Finance and make a case for a larger merit increase budget because the loss of key talent will cost more over the long term than the savings from the smaller merit increases

C.

Gather the perspectives of all stakeholders, analyze their individual concerns and meet to determine whether a compromise solution is possible

D.

Recommend a reduction in force to eliminate poor performers, which will increase the merit budget by reducing headcount

Question 9

What question is answered by the organization’s mission statement?

Options:

A.

What direction will we take?

B.

How do we work?

C.

Why are we in business?

D.

How will we achieve our objectives?

Question 10

What best describes an effective core technique for communicating with executives?

Options:

A.

Focus on negative issues first, such as compensation costs exceeding budget, to get their attention

B.

Provide a wide range of facts and figures. With their high level of responsibility, executives must have all the data before they can make informed decisions.

C.

Assume they have little knowledge of the issue and make a detailed presentation leading up to the purpose of the meeting.

D.

Recommend a solution that will solve the issue and explain why it is the best solution available.

Question 11

Information on the annual report shows results for what time period?

Options:

A.

The calendar year from January 1 to December 31

B.

The fiscal year, which matches the calendar year from January 1 to December 31

C.

The fiscal year, which shows results from July 1 to June 30

D.

The fiscal year, which may match the calendar year or may be a different 12-month period, depending on the company

Demo: 11 questions
Total 78 questions