MTTC Preparation

1. MTTC Preparation

2. MTTC # 98 • Next test date is January 13, 2007 • Regular registration deadline is December 1, 2006 • http://www.mttc.nesinc.com/ • Additional test dates: April 14 & July 7, 2007 • Register by: March 2 and May 25, 2007 respectively

3. 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/matrix.html • Peers, Textbooks, Internet, Spark Charts

4. 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

5. Business

7. Accounting Equation • Assets=Liabilities + Owner’s Equity ______Debit_____________Credit_______

8. T-accounts are your friends • Assets

9. T-accounts are your friends • Liabilities

10. T-accounts are your friends • Owner’s Equity

11. 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

12. Analyze transactions & journalize • Source documents • Invoices • Check register • Bills and more • Journals • Cash receipts, Accounts payable, Accounts receivable, Purchases, etc.

13. Posting • General ledger • Symbolized using T-accounts

15. Financial Statements • Balance Sheet • Income Statement • Statement of Cash Flows

16. Balance Sheet • Assets • Current Assets • Fixed Assets • Other Assets (long-term) • Liabilities • Current Liabilities • Long-term Liabilities • Owner’s, Stockholders’, Partner Equity

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

18. 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)

19. Math to solve business problems • Decimals • Fractions • Percents • Ratios • Proportions • Algebra • See math textbook

20. Statistical calculations • Mean= Average • Median= Middle • Mode= Most often

21. Personal Finance-objectives • Personal finance plan • Debt management • Investment options • Credit • Consumerism

22. Personal finance-objectives • How to manage economic risks • Using a rational decision-making process • Citizens • Workers • Consumers

23. 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

24. U.S. Supreme Court U.S. Court of Appeals (11 Territorial Circuits and DC Circuit) U.S. Court of Appeals (Federal Circuit) Fed. Admin Agencies U.S. District Courts (96 districts) U.S. Tax Court* U.S. Claims Court* U.S. Court Of Internat. Trade* U.S. PTO U.S Bankruptcy Courts*

26. 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

27. 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

28. 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

29. 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.

30. Management

31. 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

32. 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 Management

33. 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

34. Economics

35. 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

36. Production Possibilities Curve (PPC) • Maximum combination of two outputs that an economy can produce given available resources and technology.

37. Law of Increasing Opportunity Costs • Opportunity costs increase as the production of one output expands.

38. Shifting the Production Possibility Curve • Shift in PPC occurs with a change in: • Physical Capital • Human Capital • Natural Resources • Technology

39. Supply, Demand & Equilibrium

40. Change in Quantity Demanded Law of Demand • Inverse relationship between price and quantity buyers are willing to purchase Source: fashiontribes.com

41. Change in Demand • Change in quantity demanded at each possible price Source: fashiontribes.com

42. Change in Quantity Supplied Price of Jeans Quantity of Jeans Law of Supply • Direct relationship between price and quantity Source: www.sparknotes.com

43. Change in Supply • Change in quantity supplied at each possible price Source: www.sparknotes.com

44. SURPLUS SHORTAGE Equilibrium Invisible Hand Theory • Market condition that occurs when quantity demanded = quantity supplied Source: www.sparknotes.com

45. Monetary Policy

46. Federal Reserve System Monetary Policy

47. Key U.S. Economic Measures

48. 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 Approach • GDP = C + I + G + (X-M) • Consumption • Gross Private Domestic Investment • Government Consumption Expenditures and Gross Investment • Net Imports (Exports – Imports)

49. GDP • Income Approach = Compensation of employees + Rents + Profits + Net Interest + Non income adjustments • Income Approach = Expenditure Approach

50. GDP • Nominal GDP = production of goods & services valued at current prices • Real GDP = production of goods & services valued at constant prices