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WorldatWork Regulatory Environments for Compensation Programs Sample Questions:

1. What is the top line or starting point of an organization's income?

A) Gross profit
B) Revenue
C) Net income
D) Operating profit

2. 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) 8,000,000
B) 840,000
C) 9,700,000
D) 500,000

3. A medical benefits plan provision ensuring that the correct plan is paying expenses when the member is covered under more than one plan is known as what?

A) Out-of-pocket expenses
B) Coinsurance
C) Coordination of benefits
D) Deductible

4. What is the minimum age for an individual to qualify for protection under the Age Discrimination in Employment Act?

A) 45
B) 50
C) 40
D) 55

5. 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) March 31st
B) April 8th
C) March 1st
D) April 5th

Solutions: