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PRAXIS Praxis Business Education: Content Knowledge (5101)Exam Sample Questions (Q21-Q26):

NEW QUESTION # 21
Which of the following do shareholders receive either quarterly or annually, when the board of directors authorizes a distribution of company earnings?

• A. Long-term capital gains
• B. Dividends
• C. Short-term capital gains
• D. Royalties

Answer: B

Explanation:
Dividends are payments made to shareholders from a company's earnings, typically authorized by the board of directors and distributed quarterly or annually. Option A (short-term capital gains) and Option B (long-term capital gains) refer to profits from selling stocks, not distributions of earnings. Option D (royalties) pertains to payments for the use of intellectual property, not company earnings. Dividends are a fundamental concept in the Accounting and Finance category, as they relate to shareholder returns.
Reference:ETS Praxis Business Education: Content Knowledge (5101) Study Companion, Section on Accounting and Finance; Corporate Finance, Chapter 14.

NEW QUESTION # 22
Which of the following file extensions indicates that the data are compressed?

• A. .epub
• B. .exe
• C. .xml
• D. .zip

Answer: D

Explanation:
The .zip file extension indicates a compressed file, reducing file size for storage or transfer using formats like ZIP. Option A (.exe) denotes executable programs. Option B (.epub) is for e-books. Option D (.xml) is for structured data, not compression. This question falls under the Information Technology category, focusing on file formats.
Reference:ETS Praxis Business Education: Content Knowledge (5101) Study Companion, Section on Information Technology; Introduction to Business Information Systems, Chapter 6.

NEW QUESTION # 23
Which of the following best describes the purpose of tabs in word-processing software?

• A. To position text within a line
• B. To single-space lines of text
• C. To create graphics
• D. To wrap text around a graphic

Answer: A

Explanation:
Tabs in word-processing software are used to position text at specific points within a line, creating aligned columns or indentations. Option A (create graphics) is unrelated to tabs. Option C (single-space lines) pertains to line spacing settings. Option D (wrap text around graphics) involves text-wrapping features, not tabs. This question falls under the Information Technology category, focusing on software functionality.
Reference:ETS Praxis Business Education: Content Knowledge (5101) Study Companion, Section on Information Technology; Introduction to Business Information Systems, Chapter 4.

NEW QUESTION # 24
Which of the following best illustrates a progressive tax system?

• A. Taxpayers pay a flat percentage tax based on the total value of their real estate holdings.
• B. Taxpayers pay taxes based on income brackets, with the percentage of taxes paid on income increasing as the taxpayer moves to a higher bracket.
• C. All taxpayers pay the same percentage of their income in taxes, with those who have higher incomes paying more in taxes.
• D. Taxpayers pay a flat percentage tax on sales, so that those who spend more pay more in taxes.

Answer: B

Explanation:
A progressive tax system imposes higher tax rates on higher income brackets, increasing the percentage of income paid as income rises, as seen in the U.S. federal income tax. Option A describes a proportional (flat) tax, not progressive. Option C (real estate tax) is typically proportional or regressive. Option D (sales tax) is regressive, as it impacts lower incomes more. This question falls under the Economics category, focusing on taxation.
Reference:ETS Praxis Business Education: Content Knowledge (5101) Study Companion, Section on Economics; Public Finance, Chapter 14.

NEW QUESTION # 25
Which of the following components of a business plan primarily illustrates industry knowledge as well as any industry research findings and conclusions?

• A. Service or product line
• B. Market analysis
• C. Executive summary
• D. Organization and management

Answer: B

Explanation:
The market analysis section of a business plan details industry knowledge, including market size, trends, competitors, and research findings, to demonstrate an understanding of the business environment. Option A (service or product line) describes offerings, not industry analysis. Option C (executive summary) provides an overview, not detailed research. Option D (organization and management) focuses on structure and leadership. This question falls under the Management and Marketing category, focusing on business planning.
Reference:ETS Praxis Business Education: Content Knowledge (5101) Study Companion, Section on Management and Marketing; Entrepreneurship: Starting and Operating a Small Business, Chapter 7.

NEW QUESTION # 26
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