WorldatWork CECP Daily Practice Exam New 2022 Updated 99 Questions
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NEW QUESTION 15
What best describes an effective approach for balancing multiple priorities and perspectives regarding compensation?
- A. Giving priority to perspectives based on the job or influence level of the stakeholders
- B. Representing your view with data and relating it to business results
- C. Being firm and uncompromising in your decision-making
- D. Finding a compromise that may not appease all stakeholders but does not give any one group or person everything they are seeking
Answer: B
NEW QUESTION 16
How do quarterly reports most commonly compare to the annual report?
- A. The quarterly reports are more detailed. The annual report provides similar data in summary form.
- B. The cumulative information on the four quarterly reports adds up to the information on the annual report.
- C. The quarterly reports are not as detailed as annual reports, and might not match due to changing accounting estimates over the year.
- D. The annual report is required and the quarterly reports, while commonly used, are optional.
Answer: C
NEW QUESTION 17
The XYZ Company opened a new manufacturing facility with a capital investment of 10,000,000. The cost to obtain the capital was 8%. In its first year of operations, the facility's net operating profit after taxes was 10,500,000. What was the economic value added (EVA) using the EVA formula?
- A. 840,000
- B. 500,000
- C. 8,000,000
- D. 9,700,000
Answer: D
NEW QUESTION 18
What is the term for the skills, technologies, applications and practices of continuous iterative exploration and investigation of past business performance used to gain insight and drive business planning?
- A. Business forecasting
- B. Business analytics
- C. Predictive modeling
- D. Statistical analysis
Answer: B
NEW QUESTION 19
A fine jewelry chain distinguishes itself from the competition by focusing on carefully selected customers and building bonds to meet or exceed their needs and expectations. What strategy is this company using?
- A. Brand loyalty
- B. Operational excellence
- C. Product/service leadership
- D. Customer intimacy
Answer: D
NEW QUESTION 20
If employees have a significant impact on the bottom line, what type of pay mix is most appropriate?
- A. 100% variable pay to motivate all employees to maximize productivity and sales
- B. A varying mix depending on employee influence on goals to provide the necessary incentive to maximize profits
- 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
Answer: B
NEW QUESTION 21
Regarding cost analysis of compensation expense, which job is most likely to incur fixed costs for the company?
- A. Account executive
- B. IT contractor
- C. Production worker
- D. HR Director
Answer: D
NEW QUESTION 22
What best describes the primary purpose of budgeting?
- A. Complying with local legislation and maintaining accurate records to prepare financial reports and tax documents
- B. Making choices about spending based on expectations of performance
- C. Increasing profitability of the business annually to maximize shareholder/owner value
- D. Limiting spending to a fixed percentage of organizational revenue
Answer: B
NEW QUESTION 23
What type of pay increase is given when an organization finds that its compensation program is behind competitive market rates?
- A. Automatic
- B. Merit
- C. Cost of living
- D. General
Answer: D
NEW QUESTION 24
What is a primary purpose of pay grades or bands?
- A. To meet legal and regulatory requirements for classifying jobs according to market value
- B. To justify paying some employees less than market based on internal administrative limitations
- C. To provide documentation that supports termination decisions
- D. To identify a compensation range in which to group multiple jobs with similar value
Answer: D
NEW QUESTION 25
Why are lump-sum increases generally used?
- A. To make up for benefits not provided by the organization
- B. To control annual fixed costs from base pay adjustments
- C. To elevate employees who are below the midpoint in the range
- D. To reward employees under short-term incentive plans
Answer: B
NEW QUESTION 26
Gross margin is which of the following, as percent of revenue?
- A. Revenue minus cost of goods sold
- B. Cost of goods sold
- C. Gross profit minus expenses
- D. Expenses plus taxes and depreciation
Answer: A
NEW QUESTION 27
Which of the following is the most accurate statement about the business strategy?
- A. It must be written after the company's operating plans are approved by senior management.
- B. It is the company's plan for competitive positioning of its products or services.
- C. It usually is a secondary consideration in compensation design.
- D. It is developed for compensation, benefits and the work-life using the HR strategy as a basis.
Answer: B
NEW QUESTION 28
What information is found on the balance sheet?
- A. The profitability of the company as of a specific date
- B. The revenues and expenses incurred by an entity over a period of time
- C. A list of what is owned, what is owed and the equity of an entity
- D. The change during the reporting period in cash and cash equivalents
Answer: C
NEW QUESTION 29
What best describes a key competency of compensation professionals regarding HR management of the organization's employees?
- A. Ensuring that all regulatory and voluntary payroll deductions are properly administered
- B. Monitoring individual employee career paths and succession planning
- C. Ensuring they are appropriately selected, developed, appraised and rewarded
- D. Communicating regularly with line management on performance management
Answer: C
NEW QUESTION 30
Which of the following best describes present value?
- A. The current value of holdings
- B. The difference between the desired value in the future and the current value as a percentage of the desired value
- C. The current value of holdings and how much it will grow over time at a given rate of return
- D. The desired value in the future and what needs to be invested today to realize that amount
Answer: D
NEW QUESTION 31
Regarding fixed and variable costs, what are Finance's primary concerns?
- A. Fixed costs are not a concern because they cannot be changed, so the focus is primarily on variable costs.
- B. Variable costs often have a heavier focus than fixed costs, which applies to all areas, including compensation.
- C. Fixed costs and variable costs are equally important and both should be kept to a minimum.
- D. Fixed costs must be kept to a minimum, but variable costs can fluctuate since they tend to correlate with revenue.
Answer: B
NEW QUESTION 32
Quarterly financial reports typically include data for a given quarter compared to what?
- A. The budget
- B. The previous quarter
- 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
Answer: C
NEW QUESTION 33
What best describes a use of strategic analysis?
- A. Understanding your business and its competitive strengths and weaknesses
- B. Pricing your products appropriately
- C. Evaluating prior year performance for the narrative portion of annual financial reports
- D. Forecasting profit, growth and investment performance to develop realistic budgets
Answer: A
NEW QUESTION 34
What is the most accurate statement regarding the effect of compensation plans on the organization?
- A. They have very little effect as long as they are managed effectively and efficiently
- B. They affect the organization's overall financial status and impact multiple stakeholders across most, if not all, business units
- C. Their success or failure is closely tied to the success or failure of organizationwide goals and objectives
- D. They typically have the greatest effect on net income and operating results of any organizational expense or program
Answer: B
NEW QUESTION 35
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?
- A. April 5th
- B. April 8th
- C. March 1st
- D. March 31st
Answer: C
NEW QUESTION 36
Internal process metrics are most useful in which of the following situations?
- A. Assessing how well the business is running
- B. Determining employee satisfaction levels
- C. Measuring the financial success of the business
- D. Evaluating customer perceptions of products or services
Answer: A
NEW QUESTION 37
What best describes a benefit of business executive with regard to career development?
- A. It is critical to your career development and a deficiency is very likely to hinder career advancement and success.
- B. The ability to display confidence and decisiveness that will inspire others and make you a better leader
- C. Increased marketability, which will lead to qualification for opportunities outside of human resources
- D. A greater likelihood of promotion, especially when you are competing with individuals with more experience
Answer: B
NEW QUESTION 38
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