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100% Free CECP Daily Practice Exam With 99 Questions
NEW QUESTION 30
Which of the following is a type of variable pay?
- A. Piece rate
- B. Pay for time not worked
- C. Hourly pay
- D. Bonuses
Answer: D
NEW QUESTION 31
When connecting with other business units, what best describes a reason why is it important to keep up to date on organizational challenges?
- A. Because you can demonstrate your understanding of issues from multiple perspectives
- B. Because stakeholders with diverse opinions tend to compromise when they are aware that others know their weaknesses
- C. Because you will be able to explain the negative consequences of opposing your position
- D. Because you will be more informed when differences of opinion occur, lending more credibility to your position
Answer: A
NEW QUESTION 32
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 33
Who are you most likely to hear from if there are questions about an employee's compensation?
- A. The employee
- B. A concerned co-worker
- C. The employee's department head
- D. The employee's manager
Answer: D
NEW QUESTION 34
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 35
Using efficient and cost-effective approaches to integrate technology into the workplace is most likely to do what?
- A. Improve program efficacy
- B. Reduce compensation expense
- C. Select the best vendors
- D. Compensate employees competitively
Answer: A
NEW QUESTION 36
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 37
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 38
Understanding basic organization design principles is an example of what key competency for compensation professionals?
- A. Resource Management
- B. HR Management
- C. Policy Management
- D. Financial Management
Answer: B
NEW QUESTION 39
What is a primary objective of profit-sharing and performance-sharing variable pay plans?
- A. To increase employee identification with the organization's success
- B. To achieve organizational cost savings through base pay reductions
- C. To reward individual employees for some significant contribution
- D. To defer compensation expenses to future reporting periods
Answer: A
NEW QUESTION 40
Which financial statement or combination of statements provide(s) the most comprehensive view of the company's financial situation?
- A. The cash flow statement, along with the balance sheet and income statement
- B. The income statement
- C. The cash flow statement and the income statement
- D. The balance sheet
Answer: A
NEW QUESTION 41
The XYZ Company produces innovative products and brings them to market in advance of their competitors. What strategy is XYZ using?
- A. Customer intimacy
- B. Brand loyalty
- C. Operational excellence
- D. Product/service leadership
Answer: D
NEW QUESTION 42
What challenge is most likely faced by a business with low market share and high growth potential?
- A. It is unclear how to best utilize the high cash flow to sustain growth.
- B. Its excess resources are often used to develop other businesses that may not be mission-critical.
- C. Its ability to generate profits is unknown.
- D. It is in the worst market position and has insufficient resources to continue operations.
Answer: C
NEW QUESTION 43
What metric should compensation professionals pay closest attention to for ensuring alignment between the compensation strategy and the HR and business strategies?
- A. Reward costs as a percent of total operating costs
- B. The organization's market compa-ratio
- C. Total compensation expense for the business, including base pay and variable pay
- D. Variable pay costs as a percent of total compensation
Answer: A
NEW QUESTION 44
Administering budgets is an example of what key competency for compensation professionals?
- A. Resource Management
- B. Financial Management
- C. Policy Management
- D. HR Management
Answer: B
NEW QUESTION 45
What question is answered by the organization's mission statement?
- A. How will we achieve our objectives?
- B. What direction will we take?
- C. Why are we in business?
- D. How do we work?
Answer: C
NEW QUESTION 46
What do profits, equity and debt all have in common?
- A. Nothing. Each of these is a different financial metric.
- B. They all incur the same costs to the business.
- C. They are all reported on the balance sheet.
- D. They are all sources of capital.
Answer: D
NEW QUESTION 47
To ensure appropriate funding levels, the compensation professional must generally do which of the following?
- A. Partner with multiple departments and external consultants and vendors
- B. Possess a high level of education and competency in accounting principles
- C. Determine which programs are crucial to the enterprise and which programs are expendable
- D. Demonstrate broad understanding of principles of financial management and business expertise
Answer: D
NEW QUESTION 48
What is a "profit model?"
- A. The intention or purpose of the business
- B. The financial objectives of the organization
- C. The plan for how the organization generates revenue and makes money
- D. A descriptor for how the company works
Answer: C
NEW QUESTION 49
What statement is most accurate regarding compensation communications with employees at varying levels?
- A. They should be kept to a minimum for employees at all levels to maximize efficiency and efforts can be focused only on those who have questions.
- B. They tend to be fairly consistent because the elements of pay may differ, but the concerns are universal.
- C. They usually require more detail for senior employees regarding plan details and performance and the needs from one employee group to another can vary greatly.
- D. They generally require a greater degree of detail for lower level employees who have less of an understanding of pay plan design.
Answer: C
NEW QUESTION 50
What do working capital metrics evaluate?
- A. The change in working capital over a specific period of time, typically one year
- B. The amount of cash needed to meet the company's short-term obligations
- C. A company's mean capital expenditure per employee
- D. A company's efficiency in converting short-term capital into cash
Answer: D
NEW QUESTION 51
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