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PRAXIS Praxis Business Education: Content Knowledge (5101)Exam Sample Questions (Q85-Q90):

NEW QUESTION # 85
Which of the following best describes the relationship between a firm's assets, liabilities, and owners' equity?

A. An annual report
B. The accounting equation
C. Net worth
D. The statement of cash flows

Answer: B

Explanation:
The accounting equation, Assets = Liabilities + Owners' Equity, defines the relationship between a firm's resources (assets), obligations (liabilities), and owners' residual claims (equity). Option A (net worth) is a derived value, not the equation itself. Option B (statement of cash flows) tracks cash movements, not this relationship. Option C (annual report) is a comprehensive document, not a specific equation. This is a core concept in the Accounting and Finance category.
Reference:ETS Praxis Business Education: Content Knowledge (5101) Study Companion, Section on Accounting and Finance; Accounting Principles, Chapter 1.

NEW QUESTION # 86
If $500 were placed in a savings account that pays 2.5% simple interest each year, how much interest would be earned in five years?

A. $625
B. $6,250
C. $62.50
D. $12.50

Answer: C

Explanation:
Simple interest is calculated as I = P × R × T, where P = principal ($500), R = annual interest rate (2.5% =
0.025), and T = time (5 years). I = $500 × 0.025 × 5 = $62.50. Option A ($12.50) is the interest for one year.
Option C ($625) and Option D ($6,250) are incorrect, likely from misapplying the rate or time. This question tests interest calculations in the Accounting and Finance category.
Reference:ETS Praxis Business Education: Content Knowledge (5101) Study Companion, Section on Accounting and Finance; Principles of Finance, Chapter 5.

NEW QUESTION # 87
Which of the following sentences is free of any gender, nationality, age, or race bias?

A. His conservative views will benefit the company's bottom line.
B. We need someone young and energetic to man the stockroom.
C. Firemen are the bravest and most courageous people in the world.
D. Cho Yung is a hardworking exchange student who excels in science.

Answer: D

Explanation:
Option D is free of bias, as it describes an individual's attributes (hardworking, excels in science) without stereotyping based on gender, nationality, age, or race. Option A uses "firemen," a gender-specific term, implying exclusion of women. Option B uses "his," assuming a male subject, introducing gender bias. Option C specifies "young," indicating age bias, and "man," suggesting gender bias. This question tests workplace communication ethics under the Communication and Career Development category.
Reference:ETS Praxis Business Education: Content Knowledge (5101) Study Companion, Section on Communication and Career Development; Business Communication, Chapter 3.

NEW QUESTION # 88
What do parentheses around a numeric entry on a spreadsheet, such as (5543.32), indicate?

A. A numeric value intended to be treated as an alphabetic entry
B. A calculation of net profit
C. A negative number
D. A conditional statement in the spreadsheet

Answer: C

Explanation:
In spreadsheets like Microsoft Excel, parentheses around a numeric entry, such as (5543.32), indicate a negative number, a standard accounting convention for displaying losses or debits. Option A (net profit) is unrelated to formatting. Option C (conditional statement) pertains to formulas, not display. Option D (alphabetic entry) is incorrect, as the value remains numeric. This question aligns with the Information Technology category, emphasizing spreadsheet conventions.
Reference:ETS Praxis Business Education: Content Knowledge (5101) Study Companion, Section on Information Technology; Microsoft Excel Documentation, Number Formatting.

NEW QUESTION # 89
Which of the following statements most accurately describes the partnership form of a business organization?

A. Owners' liability is limited to the amount of their investment in the partnership.
B. Each partner is fully liable for all debts incurred by the partnership.
C. A partnership is more difficult and expensive to start up than a corporation.
D. Owners do not have control of daily decisions unless they are officers of the partnership.

Answer: B

Explanation:
In a general partnership, each partner has unlimited liability, meaning they are fully responsible for all partnership debts, regardless of their investment. Option A describes limited liability, applicable to corporations or limited partnerships. Option C is incorrect, as partnerships are simpler and less costly to start than corporations. Option D is incorrect, as partners typically have control over daily decisions. This question falls under the Entrepreneurship category, focusing on business structures.
Reference:ETS Praxis Business Education: Content Knowledge (5101) Study Companion, Section on Entrepreneurship; Business Law, Chapter 14.

NEW QUESTION # 90
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