MTTC Preparation

MTTC # 98

Next test date is January 13, 2007Regular registration deadline is December 1, 2006http://www.mttc.nesinc.com/

Additional test dates: April 14 & July 7, 2007Register by: March 2 and May 25, 2007 respectively

Preparation Resources

MTTC study guides http://www.mttc.nesinc.com/MI_viewSG_opener.asp

Mail order through MTTC registration bulletin

EMU Business Content Guidelines / Standards Matrix http://www.emich.edu/coe/program_update/bus_ed/m

atrix.html

Peers, Textbooks, Internet, Spark Charts

Test Organization

Areas include: Business 25% Management 25% Marketing 25% Technology 25%

Test is not organized by area

October was the first time the test was offered 100 questions – but not all are counted for your score

Business

Accounting Cycle

1. Analyze Transactions

2. Journalize

3. Post

4. Prepare Work Sheet5. Prepare Financial Statements

6. Journalize Adjusting & Closing Entries

7. Post Adjusting & Closing Entries

8. Prepare Post-Closing Trial Balance

Accounting Equation

Assets=Liabilities + Owner’s Equity

______Debit_____________Credit_______

T-accounts are your friends

Assets

T-accounts are your friends

Liabilities

T-accounts are your friends

Owner’s Equity

Cash vs. Accrual

Cash – Income is recognized as cash is received and expenses are recognized as cash is paid

Accrual – Income is recognized as it is earned and expenses are recognized as they are incurred.

Matching concept – Income and expenses are recognized in the same period

Analyze transactions & journalize

Source documents InvoicesCheck registerBills and more

JournalsCash receipts, Accounts payable, Accounts

receivable, Purchases, etc.

Posting

General ledger Symbolized using T-accounts

Judy's Car Wash  

Worksheet  

August 31, 2006      1 2 3 4 5 6 7 8  

    TRIAL BALANCE ADJUSTMENTS INCOME STATEMENT BALANCE SHEET  

  ACCOUNT TITLE DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT DEBIT CREDIT  

1 Cash 8600.00           8600.00   1

2 Accounts Receivable 500.00           500.00   2

3 Supplies 1100.00     (a) 500.00     600.00   3

4 Prepaid Insurance 340.00     (b) 220.00     120.00   4

5 Accounts Payable   1040.00           1040.00 5

6 Judy Spreen, Capital   7860.00           7860.00 6

7 Judy Spreen, Drawing 1600.00           1600.00   7

8 Income Summary                 8

9 Sales   5600.00       5600.00     9

10 Advertising Expense 500.00       500.00       10

11 Insurance Expense     (b) 220.00   220.00       11

12 Miscellaneous Expense 260.00       260.00       12

13 Supplies Expense     (a) 500.00   500.00       13

14 Utilities Expense 1600.00       1600.00       14

15   14500.00 14500.00 720.00 720 3,080.00 5,600.00 11,420.00 8,900.00 15

16           2,520.00     2,520.00 16

17           5,600.00 5,600.00 11,420.00 11,420.00 17

18                   18

19                   19

Financial Statements

Balance Sheet Income Statement Statement of Cash Flows

Balance Sheet

Assets Current Assets Fixed Assets Other Assets (long-term)

Liabilities Current Liabilities Long-term Liabilities

Owner’s, Stockholders’, Partner Equity

Income Statement

Revenue Cost of Goods Sold Gross Profit Expenses Net Operating Income Non-operating income expense Net income/loss

Adjusting & Closing entries

Adjusting entries Prepared from Worksheet To accomplish matching principle

Closing entries Close temporary accounts

Revenue (and other income stmt accts w/credit Expenses (and other income stmt debits Income summary Drawing account (sole proprietors and partners)

Math to solve business problems

Decimals Fractions Percents Ratios Proportions Algebra

See math textbook

Statistical calculations

Mean= Average

Median= Middle

Mode= Most often

Personal Finance-objectives

Personal finance planDebt management Investment optionsCreditConsumerism

Personal finance-objectives

How to manage economic risks Using a rational decision-making process

CitizensWorkersConsumers

C. Apply principles of law to business situations Understanding the role of government in

regulating business The structure of the court system Classifications of procedural law Classifications of substantive law

U.S. Supreme Court

U.S. Court of Appeals (11 Territorial Circuits

and DC Circuit)

U.S. Court of Appeals (Federal Circuit)

Fed. AdminAgencies

U.S. DistrictCourts

(96 districts)

U.S. TaxCourt*

U.S. PTO

U.S. CourtOf

Internat.Trade*

U.S. ClaimsCourt*

U.SBankruptcy

Courts*

Substantive vs. Procedural Law

Substantive (Policy) Procedural (Method of Enforcement)

Administrative LawAgencyBailmentsCommercial PaperConstitutional LawContractsCorporation LawCriminal LawInsurancePartnershipsPersonal PropertyReal PropertySalesTaxationTortsTrusts and Wills

Administrative ProcedureAppellate ProcedureCivil ProcedureCriminal ProcedureEvidence

C. Apply principles of law to business situations Relationships: contract, sales, consumer, employment,

and agency laws Understanding laws related to commercial paper,

insurance, secured transactions, and bankruptcy Understanding laws regarding personal property, real

property, and intellectual property Analyzing the relationship between ethics and the law Applying U.S. and other law to national and international

markets

E. Apply principles of business communication Communicate effectively on both personal

and professional levels Identifying the concepts, strategies, and

systems needed to interact effectively with others

E. Apply principles of business communication Applying appropriate social

communication skills in personal and professional situations, including cover letters and resumes in a global environment

Using appropriate technology to enhance the effectiveness of communications

E. Apply principles of business communication Demonstrating appropriate leadership,

supervisory, customer service, and ethical standards to communicate effectively with business constituents

Demonstrating communication strategies necessary for effective international business relations.

Management

Management

A. Understand types, structures & functions of business management Includes demonstrating leadership,

communication, planning, controlling, organizing, problem-solving, and self management skills

Demonstrating an understanding of professional ethics and social responsibility in business

Management

B. Understand HRM, labor relations, and the role of corporate, group, and interpersonal behavior in business mgmt.

Applying human resource principles, systems, and contingency approaches to actual management scenarios

Recognizing human resource practices to legally and effectively manage a diverse workforce

B. Understand HRM, labor relations, and the role of corporate, group, and interpersonal behavior in business mgmt.

Apply social theory (e.g. group dynamics, work groups, roles within teams, conflict resolution methods) to the workplace

Economics

Opportunity Cost

Whatever must be given up to obtain some item

“There’s no such thing as a free lunch”Links scarcity, choice, and cost

Production Possibilities Curve (PPC)

Maximum combination of two outputs that an economy can produce given available resources and technology.

Law of Increasing Opportunity Costs

Opportunity costs increase as the production of one output expands.

Shifting the Production Possibility Curve

Shift in PPC occurs with a change in:Physical CapitalHuman CapitalNatural ResourcesTechnology

Supply, Demand & Equilibrium

Law of Demand

Inverse relationship between price and quantity buyers are willing to purchase

Change in Quantity Demanded

Source: fashiontribes.com

Change in Demand

Change in quantity demanded at each possible price

Source: fashiontribes.com

Law of Supply

Direct relationship between price and quantity

Change in Quantity Supplied

Source: www.sparknotes.com

Quantity of Jeans

Pric

e of

Je

ans

Change in Supply

Source: www.sparknotes.com

Change in quantity supplied at each possible price

Equilibrium

Source: www.sparknotes.com

Market condition that occurs when quantity demanded = quantity supplied

SURPLUS

SHORTAGE

Invisible Hand Theory

Monetary Policy

Federal Reserve SystemMonetary Policy

Key U.S. Economic Measures

Gross Domestic Product (GDP) The market value of all final goods and services

produced in a nation during a given period of time, usually a year.

Expenditure ApproachGDP = C + I + G + (X-M)

Consumption Gross Private Domestic Investment Government Consumption Expenditures and Gross

Investment Net Imports (Exports – Imports)

GDP

Income Approach = Compensation of employees + Rents + Profits + Net Interest + Non income adjustments

Income Approach = Expenditure Approach

GDP Nominal GDP = production of goods &

services valued at current prices

Real GDP = production of goods & services valued at constant prices

Types of Unemployment Seasonal Frictional

Structural Cyclical

Unemployment

Rate = (# of unemployed / labor force) x 100

Labor force = total number of workers including both the employed and unemployed

Not in the labor force Retirees Homemakers Full-time student

Employment

Full employment does NOT mean 0%

GDP Gap = Cost of Cyclical Unemployment Potential real GDP – Actual real GDP

Inflation Based on % change of Consumer Price Index

Inflation = increase in average price level of goods and services Demand-Pull = increase due to excess of total spending Cost Push = increase due to cost of production.

Deflation = decrease in average price level of goods and services

Nominal & Real Interest Rates

Rational Expectations

Theory= people use all information they have when forecasting future, including government policies

Applicable for inflation and unemployment tradeoff

Economic Systems, Competition & Risk

Economic Systems

Capitalism – private ownership of resources and markets and decentralized decision making

Socialism – government ownership of resources and centralized decision-making

Communism – all factors of production owned by workers and people share in production according to their needs

Competition

Competitive Market = many buyers and sellers with little impact on market price

Other types of Markets:Monopoly Oligopoly Monopolistically Competitive

Risk

Most people are risk adverse Insurance

Diversification Idiosyncratic risk is eliminatedAggregate risk is not

International Trade & Global Economy

International Strategy

Increased Market Size

ROI

Economies of Scale

Advantage in Location

Multidomestic

Global

Transnational

Exporting

Licensing

Strategic Alliance

Acquisition

New Subsidiary

Opportunity Strategy Entry

Risks

PoliticalGovernment regulation, legal authorities

EconomicCurrency fluctuations, trade barriers, trade

agreements (i.e. NAFTA)

Marketing

Fundamental Concepts

The marketing concept is the idea that companies should determine the needs of their customers and meet them better than the competition.

What do customers want? Can we develop it while they still want it? How can we keep customers satisfied?

Effective Interaction with Others

Focus on positive interaction with clients

Positive interaction with other employees also important

TWO HEADS ARE BETTER THAN ONE!

Economics and Marketing

Supply and demand affects production Market Equilibrium

S

Price

QuantityD

Career Exploration and Development Types of Careers in Marketing

SalesMarket ResearchAdvertising & PRRetailingProduct Management

www.careers-in-marketing.com

Finances and Decision Making

How are decisions made based on finances?Do we have enough money?Do we have extra money?What can we cut?What can we add?What price should we charge for our

product/service?

Marketing Research

WHY HAVE MARKETING RESEARCH (benefits, etc.)?

WHAT CAN WE LEARN FROM MARKETING RESEARCH (consumer, competitor, etc.)?

Pricing and Maximizing Return

Price and ROI

Company Profit

Don’t Overcharge Customers

Product Mix and Market Opportunities

Target Market

Marketing Research

SWOT Analysis

New Product?

New Model?

Concepts and Strategies Needed to Communicate Information Business Letters, E-mail, Memos, etc. Marketing/Introduction Letters Advertising Grammar, Spelling, Structure,

Professionalism Face-to-face: Don’t forget to listen!

Technology and Marketing

Internet E-mail Web page banners Customer service Web page Travel/Laptops

Organization One-Note, etc.

Data Input Tablet PC Voice Input

Movie Maker

The owner of a hat shop pays $22.75 for a hat that sold for a retail price of $32.50. What approximate percent of the retail price is the markup on this hat

a. 43%

b. 33%

c. 30%

d. 10%

A consumer electronic company is redesigning the controls on its handheld radios. The company has built several prototypes and would like to obtain consumer feedback before proceeding. Which of the following market research activities would best meet the company’s needs

A. test marketing the prototypes in selected areasB. convening focus groups to critique the

prototypesC. conducting direct-mail surveys using pictures

of the prototypesD. analyzing consumer-response data to previous

design changes

Compared with other print media advertising, magazine advertising is generally characterized by:

A. high geographic specificity

B. short lead times

C. low audience

D. high pass-along rates

A razor blade manufacturer has decided to enter the market for pocket calculators. Which of the following will most likely be a result of the company’s decision

A. a deeper product mix with higher inventory costs

B. a wider product mix and high capital investment requirements

C. a narrower product mix and less competitionD. a shallower product mix and greater

vulnerability to environmental changes

In retail sales situation, it is most effective for a salesperson to offer to demonstrate a product:

A. immediately after attracting the customer’s attention to the product.

B. when the customer’s interest appears to be waning.

C. as soon as the customer has indicated an interest in it.

D. when the customer declines the salesperson’s offer to be of service.

Which of the following should be the first consideration of managers seeking to develop an employee training program

A. Securing a training facility

B. Establishing behavioral objectives

C. Hiring experienced instructors

D. Identifying training needs

An increase in the price of a particular product generally results in:

A. a decrease in producer profit

B. an increase in consumer demand

C. a decrease in productions costs

D. an increase in product supply

Technology

Networking

Hubs Routers Cables

Different cables for different networks

Types of networks

Ring Topology

Star Topology

Bus Topology

Hybrid Networks

Star bus

Hybrid Networks

OSI 7 Layer Model

Open Systems Interconnection Different layers of the network and what is required of each

Physical (Layer 1) Data Link Network Transport Session Presentation Application (Layer 7)

Found on wikipedia.orgsearch for OSI 7 Layer Model

Local Area Network (LAN)

Local Area Network (LAN)

Covers local areasHome, office, group of buildings

Uses switched IEEE 802.3 Ethernet running at 10, 100 or 1,000 Mbit/s or on Wi-Fi technology

Wide Area Networks (WAN)

Covers broad geographical area Connect LANs together so users and

computers in one location can communicate to users and computers in another location

Metropolitan Area Network (MAN)

Large computer networks spanning a city Use wireless infrastructure or optical fiber

connections

Ethernet

Large and diverse family of frame-based computer networking technologies for local area networks (lan)

Standard IEEE 802.3Star topology, twisted pair wiring

Ethernet Network Interface Card

Supports coaxial based 10Base2

Supports twisted pair-based 10Based-T

Twisted Pair 10Base-T Cable

BPA Updates

Save the Date

December 4th (Monday)Student Teacher PortfoliosSill Hall - Time: 3 – 4:30 pm, Room: 138 or 141

December 13th (Wednesday)Student Teacher Panel: Next BPA meetingSill Hall – Time: 7:30 pm, Room 138