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A type of bond issued jointly by two or more corporations. A. Joint bond B. Debenture bond

D. Collateral trust bond Ans. B An amount of money invested at 12% interest per annum will double in approximately

C. Registered bond

A. 4 years

D. Collateral trust bond

B. 5 years

Ans. A

C. 6 years

A type of bond whose guaranty is in lien on railroads equipments. A. Equipment obligation bond B. Debenture bond C. Registered bond D. Insfrastructure bond Ans. A If the security of the bond is a mortgage on certain specified asset of a corporation, this bond is classified as A. Registered bond B. Mortgage bond C. Coupon bond D. Joint bond Ans. B A type of bond where the corporation’s owners name are recorded and the interest is paid periodically to the owners with their asking for it.

D. 7 years Ans. C The 72 rule is used to determine A. How many years money will triple B. How many years money will double C. How many years to amass 1 million D. How many years to quadruple the money Ans. B To triple the principal one must use A. Integration B. Derivatives C. Logarithms D. Implicit functions Ans. C A currency traded in a foreign exchange market to which the demand is consistently high in relation to its supply.

A. Registered bond

A. Money market

B. Preferred bond

B. Hard currency

C. Incorporators bond

C. Treasury bill

D. All of these

D. Certificated of deposit

Ans. A

Ans. B

Bond to which are attached coupons indicating the interest due and the date when such interest is to be paid.

Everything a company owns to which has a money value is classified as an asset. Which of the following is classified as an asset?

A. Registered bond

A. Intangible asset

B. Coupon bond

B. Fixed asset

C. Mortgage bond

C. Trade investments D. All of these

Ans. D Which of the example of an intangible asset? A. Cash B. Investment in subsidiary companies

D. Certificate of deposit Ans. D Any particular raw materials or primary product (e.g. cloth, wool, flour, coffee..) is called

C. Furnitures

A. Utility

D. Patents

B. Necessity

Ans. D

C. Commodity

Land buildings, plants and machinery are examples of

D. Stock

A. Current assets B. Trade investments C. Fixed assets D. Intangible assets Ans. C

Ans. C If denotes the fall in the exchange rate of one currency in terms of others. The term usually applies to floating exchange rates. A. Currency appreciation B. Currency devaluation C. Currency float D. Currency depreciation

An increase in the value of a capital asset is called A. Profit B. Capital gain C. Capital expenditure D. Capital stock Ans. B The reduction in the money value of a capital asset is called A. Capital expenditure B. Capital loss C. Loss D. Deficit Ans. B It is negotiable claim issued by bank in lieu of a team deposit. A. Time deposit B. Bond C. Capital gain

Ans. D The deliberate lowering of the price of a nation’s currency in terms of the accepted standard (Gold, American dollar or the British pound). A. Currency appreciation B. Currency float C. Currency devaluation D. Currency depreciation Ans. C The residual value of a company’s assets after all outside liabilities (shareholders excluded)m have been allowed for. A. Divided B. Equity C. Return D. Par value Ans. B A saving which takes place because good are not available for consumption rather than the consumer really want to save.

A. Compulsory saving B. Consumer saving

The quantity of a certain commodity that is bought at a certain price at a given time and place.

C. Forced saving

A. Demand

D. All of these

B. supply

Ans. C

C. market

A document that shows proof of legal ownership of a financial security.

D. Utility

A. Bond B. Bank note C. Coupon D. Check Ans. C Defined as the capacity of commodity to satisfy human want. A. Discount B. Necessity C. Luxuries D. Utility Ans. B It is the profit obtained by selling stocks at a higher price than its original purchase price.

Ans. A “When free competition exists, the price of a product will be that value where supply is equal to the demand A. Law of diminishing return B. Law of supply C. Law of demand D. Law of supply and demand Ans. D “When one of the factors of production is fixed in quantity or is difficult to increase, increasing the others factors of production will result in a less than proportionate increase in output.” A. Law of diminishing return B. Law of supply C. Law of demand

A. Debenture

D. Law of supply and demand

B. Goodwill

Ans. A

C. Capital gain D. Internal rate of return Ans. C The quantity of a certain commodity that is offered for sale at a certain price at a given time and place. A. Demand B. Supply C. Utility D. Market Ans. B

An accounting term that represents an inventory account adjustments. A. Cost of goods sold B. Variance C. Overhead D. Payback Ans. A The simplest economic order quantity (EOQ) model is based on which of the following assumptions. A. Shortages are not allowed. B. Demand is constant with respect to time.

C. Reordering is instantaneous. The time between order placement and receipt is zero.

In replacement studies, the new process or piece of equipment being considered for purchase is known as.

D. All of the choices

A. Challenger

Ans. D

B. Defender C. Asset D. Liability

In economics, a “short – term” transaction usually has a lifetime of A. 3 months or less B. 1 year or less

Ans. A _______ means that the cost of the asset is divided into equal or unequal parts, and only one of these parts is taken as an expense each year.

C. 5 years or less

A. Capitalizing the asset

D. 10 years or less

B. Expensing the asset

Ans. C

C. Depreciating the asset

In the cash flow, expenses incurred before time = 0 is called A. Receipts B. Disbursements C. Sunk costs D. Firsts costs Ans. C An imaginary cost representing what will not be received if a particular strategy is rejected.

D. Artificial expense Ans. A Indicate the CORRECT statement about depreciation. A. The depreciation is not the same each year in straight line method. B. The declining balance method can be used even if the salvage calue is zero. C. The sum-of-years’ digit method (SYD), the digits 1 to (n + 1) is summed.

A. Sunk cost

D. Double declining balance depreciation is independent of the salvage value.

B. Opportunity cost

Ans. D

C. Replacement cost D. Initial cost Ans. B In replacement studies, the existing process or piece of equipment is known as A. Challenger B. Defender C. Liability D. Asset Ans. B

An artificial deductible operating expense designated to compensate mining organizations for decreasing mineral reserves. A. Deflation B. Reflation C. Depletion D. Inflation Ans. C The change in cost per unit variable change is known as A. Sunk cost

B. Incremental cost

B. Total cost

C. Fixed cost

C. Indirect manufacturing expenses

D. Semi-variable cost

D. Total cost

What type of cost increases step-wise? A. Supervision cost B. Direct labor cost C. Semi-variable cost D. Operating and maintenance cost Ans. C Which of the following is NOT a variable cost? A. Cost of miscellaneous supplies B. Income taxes C. Payroll benefit costs

Ans. A Research and development costs and administrative expenses are added to the factory cost to give the _______ of the product. A. Total cost B. Marketing cost C. Manufacturing cost D. Prime cost Ans. C The sum of the prime cost and the indirect manufacturing cost is known as

D. Insurance costs

A. Factory cost

Ans. D

B. Research and development cost

Which of the following is Not a fixed cost?

C. Manufacturing cost

A. Rent

D. Total cost

B. Janitorial service expenses

Ans. A

C. Supervision costs D. Depreciation expenses Ans. C

The manufacturing cost plus selling expenses equals A. Total cost B. Indirect production cost C. Administrative cost

The annual costs that are incurred due to the functioning of a piece of equipment is known as A. General, selling and administrative expenses B. Prime cost C. Operating and maintenance costs D. Total cost Ans. C The sum of the direct labor cost and the direct material cost is known as A. Prime cost

D. Miscellaneous cost Ans. A Which of the following is NOT a direct labor expense? A. Inspection B. Testing C. Supervision D. Assembly Ans. C All are administrative expenses EXCEPT: A. Marketing

B. Accounting

C. Liability accounts

C. Data processing

D. Owner’s equity accounts

D. Office supplies

Ans. B

Ans. A One of the following is NOT a selling or marketing expense. Which one? A. Advertising

The journal and the ledger together are known simply as _____ of the company.

B. Commission

A. Accounting system

C. Insurance

B. The books

D. Transportation

C. Bookkeeping system

Ans. C

D. Balance sheet

Research and development expenses includes all EXCEPT one. Which one? A. Testing B. Drafting C. Prototype D. Laboratory Ans. D Which is not a factory overhead expense? A. Pension, medical, vacation benefits

Ans. B The basic accounting equation is A. Assets = Liability + Owner’s equity B. Liability = Assets + Owner’s equity C. Owner’s equity = Assets + Liability D. Owner’s equity = Liability – Assets Ans. A The ability to convert assets to cash quickly is known as

B. Expediting

A. Solvency

C. Quality control and inspection

B. Liquidity

D. Testing

C. Leverage

Ans. D

D. Insolvency

Bookkeeping consists of two steps, namely recording the transactions and categorization of transactions. Where are the transactions (receipts and disbursements? Recorded?

Ans. B The ability to meet debts as they become due is known as

A. Journal

A. Solvency

B. Ledger

B. Leverage

C. Columnar

C. Insolvency

D. Statement of account

D. Liquidity

Ans. A

Ans. A

The following are ledger accounts EXCEPT: A. Asset accounts B. Bank accounts

What is considered as an index of short-term paying ability? A. Current ratio

B. Acid test ratio C. Gross margin

The present worth of cost associated with an asset for an infinite period of time is referred to as

D. Return of investment

A. Annual cost

Ans. A

B. Capitalized cost

An acid test ratio is a ratio of

C. Increment cost

A. Gross profit to net sales

D. Operating cost

B. Net income before taxes to net sales

Ans. B

C. Quick assets to current liabilities D. Net income to owner’s liabilities Ans. C

A stock of a product which is held by a trade body or government as a means of regulating the price of that product. A. Stock pile B. Hoard stock C. Buffer stock D. Withheld stock

The ratio of the net income to the owner’s equity is known as A. Price-earning ratio

Ans. C A negotiable claim issued by a bank in lieu of a term deposit is called

B. Profit margin ratio

A. Cheque

C. Return of investment

B. T-bills

D. Gross margin

C. Currency

Ans. C

D. Certificate of deposit

Payback period is the ratio of A. Initial investment to net annual profit B. Cost of goods sold to average Cost of inventory on hand C. gross profit to net sales D. net income before taxes to net sales Ans. A A secondary book of accounts the information of which is obtained from the journal A. Balance sheet B. Ledger C. Worksheet D. Trial balance Ans. B

Ans. D A form of business firm which is owned and run by a group of individuals for their mutual benefit A. Cooperative B. Corporation C. Enterprise D. Partnership Ans. A A document which shows the legal ownership of financial security and entitled to payments thereon. A. Coupon B. Contract C. Bond

D. Consol Ans. A A government bond which have an indefinite life rather than a specific maturity A. Coupon B. T-bill C. Debenture D. Consol Ans. D Refers to the orders quantity that minimizes the inventory cost per unit time. A. Economic order quantity B. Social order quantity C. Public order quantity D. Private order quantity Ans. A What is referred to as an individual who organizes factors of production to undertake a venture with a view to profit? A. Agent B. Entrepreneur C. Salesman D. Commissioners Ans. B The money that is inactive and does not contribute to productive effort in an economy is known as A. Idle money B. Hard money C. Soft currency D. Frozen asset Ans. A In counting the number of days when computing simple interest, A. The first day is included B. The last day is excluded

C. The first day is included and the last day is excluded D. The first day is excluded and the last day is included Ans. D In the so-called “Banker’s Rule”, A. The number of days in 1 year is 360 days B. The number of days in 1 year is 365 days C. The number of days in each month is 30 days D. The number of days in 1 year is 366 days Ans. A To discount an amount F for n conversion periods means A. To find the present value on a day which is n periods after F is due B. To find the present value on a day which is n periods before F is due C. To find the present value on a day which is (n-1) periods before F is due D. To find the present value on a day which is (n+1) periods before F is due Ans. B In the formula for compound interest, F= P (1+i)n, the value (1+i)n is called ____. A. Discount factor B. Interest factor C. Accumulation factor D. Increase factor Ans. C To find the present worth of a future amount in compound interest, we use the formula P=F(1+i)-n. What do you call the factor (1+i)n? A. Discount B. Accumulation factor C. Interest factor D. Reduction factor Ans. A

C. Discharging debt What refers to an equation stating that the sum of the values, on a certain comparison date, of one set of obligations is equal to the sum of the value of another set of this date?

D. Amortization of debt Ans. D

A. Equality of value B. Equation of value C. Equality equation D. Similarity equation Ans. B What is an annuity whose payments extend over a period of time whose length cannot be foretold accurately?

What do you call a fund, usually by periodic deposits, to insure the accumulation of money to provide for possible large payments? A. Escrow fund B. Sinking fund

A. Annuity certain

C. Mutual fund

B. Annuity uncertain

D. Corporate fund

C. Incremental annuity

Ans. B

D. Contingent annuity Ans. D What do you call the time between successive payment dates of an annuity?

What is the term for the borrowed principal usually mentioned in a typical bond? A. Bond rate B. Face value

A. Period interval

C. Coupon rate

B. Annuity period

D. Coupon value

C. Payment interval

Ans. B

D. Annuity term Ans. C The time from the beginning of the first payment interval to the need of the last one is called the _____ of the annuity. A. Period B. Term C. Nature D. Type Ans. B What refers to the extinction of the debt by any satisfactory set of payments?

Any date on which a coupon of a bond becomes due will be referred to as a _____. A. Maturity date B. Term of the bond C. Coupon date D. Due date Ans. C If P is the price of a bond and V is its redemption value, what do you call the value P-V? A. Par value B. Face value

A. Liquidation

C. Premium

B. Liability discharge

D. Bond discount

Ans. C

When can we say that the bond is purchased at a discount? A. When the price of the bond is greater than the redemption value.

In the sale of a bond, the actual purchase price on any day is called ____. A. Face value B. Quoted price C. Accrued price D. Flat price

B. When the price of the bond is less than the redemption value.

Ans. D

C. When the price of the bond is equal than the redemption value.

What do you call the difference between the flat price of the bond and the quoted price of the bond?

D. When the price of the bond is either equal to or greater than the redemption value.

A. Par value

Ans. B

B. Accrued interest C. Bond rate D. And-interest price

When can we say that the bond is purchased at a premium? A. When the price of the bond is greater than the redemption value. B. When the price of the bond is less than the redemption value. C. When the price of the bond is equal than the redemption value. D. When the price of the bond is either equal to or greater than the redemption value.

The quoted price of a bond is sometimes called _______. A. Par value B. Face value C. An-interest price D. Coupon price Ans. C The yield of a bond is obtained by which of the following formulas: A.

Ans. A

Average investment__ Average annual interest

Which of the following will happen if bond is bought at a discount? A. Each coupon payment is too small to pay all interest due on the investor’s principal. B. Each coupon payment is greater than the interest due on the investor’s principal.

B.

Average annual interest_ Average investment

C.

Par value_ Flat value

C. The unpaid interest on each coupon date will not be considered as a new investment in the bond. D. The difference between the coupon payment and the interest due is a partial repayment of principal. Ans. A

D. Par value_ Flat value

Ans. B

What is a bond whose face value is redeemable in installments, with interest payable periodically as due on outstanding principal? A. Annuity bond B. Serial bond

D. Net rate Ans. A The acid test ratio is also known as quick ratio. Which one represents the quick ratio? A.

C. Treasury bond

Quick assets_____ Current liabilities

D. Government bond Ans. B

B.

What is the term for the sum of depreciation charges to date?

Net credit sales___ Average net receivables

A. Accrued depreciation B. Applied depreciation

C.

Gross profit____ Current liabilities

C. Accumulated depreciation D. All of the above Ans. A The difference between the value of an asset and its salvage or scrap value at the end of the year is called ____. A. Depreciation B. Accrued value

D.

Gross profit__ Net sales

Ans. A Which of the following represents the gross margin? A.

C. Book value

Net income__ Owner’s equity

D. Wearing value Ans. D

B.

What is a life annuity?

Net credit sales___ Average net receivables

A. A sequence of payment for a certain person which stops when person dies. B. A sequence of payment intended for a life insurance of a person.

C.

Gross profit__ Current liabilities

C. A sequence of payment for a certain person which continues indefinitely. D. It is the same as perpetuity.

D.

Net sales

Ans. A What term is usually used by the banks to represent the effective interest rate per period? A. Yield B. Nominal rate C. Fixed rate

Gross profit__

Ans. D A receivable turnover is calculated using which of the following formulas? A.

Net income__ Owner’s equity

B.

Net credit sales___ Average net receivables

C.

Gross profit__ Current liabilities

D. Authorized capital stock Ans. B What refers to the price at which the quantity demanded of a good is exactly equal to the quantity supplied? A. Equilibrium market price B. Fair market price

D.

Gross profit__

C. Real market price

Net sales

D. Exact market price

Ans. B

Ans. A

The percentage of each peso of sales that is net income is called ______. A. Price-earning ratio B. Profit margin C. Profit margin ratio D. Return of investment ratio Which one represents that price-earnings ratio? A.

Market price per share_ Earnings per share

A principle that states that consumers will tend to spend an increasing proportion of any additional income upon luxury goods and a smaller proportional on staple goods, so that a rise in income will lower the overall share of consumer expenditures spent on stable goods (such as basic foodstuffs)and increase the share of consumer expenditures on luxury goods (such as motor cars). A. Placibo effect B. Luxury effect C. Engel’s law D. Staple law Ans. C

B.

Earnings per share___ Market price per share

C.

Net credit sales__ Average net receivables

What is the disciple within economics that attempts to measure and estimate statistically the relationship between two or more economic variables? A. Theory of values B. Econometrics C. Economatics

D.

Gross profit_____ Current liabilities

Ans. A The book value per share of common stock is the ratio of the common shareholders’ equity to ______.

D. Econoscience Ans. B What refers to the fall in the general price level, frequently accompanied by a reduction in the level of national income? A. Inflationary gap

A. Average shared

B. Dissavings

B. Number of outstanding shares

C. Disinflation

C. Total subscribed shared

D. Inflation

Ans. C A price for a product just covers its production and distribution costs with no profit margin added.

The paper currency issued by the central bank which forms the part of the country’s money supply a. T-bills

A. Cost price

b. Bank note

B. Actual price

c. Check

C. Real price

d. Coupon

D. Original price Ans. A A market where new entrants face cost similar to those of established firms and where, on leaving, firms are able to recoup their capital costs, less depreciation.

Answer B Reduction in the national income and output usually accompanied by the fall in the general proce level a. Devaluatio b. Deflation

A. Free market

c. inflation

B. Competitive market C. Limited market D. Contestable market Ans. D

d. Depreciation Ans. B It is a series of equal payment occurring at equal interval of time

What refers to a temporary grouping of independent firms, organization and governments, brought together to pool their resources and skills in order to undertake a particular project?

a. Annuity b. Debt c. Amortization d. Deposit

A. Consortium B. Cartel C. Cooperative

Ans. A The place and buyers come together

D. Union

a. Market

Ans. A

b. Business c. Recreational center

What refers to a market for buying and selling of raw materials such as tea, coffee, iron ore, etc.? A. Commodity market

d. Buy and sell of section

Ans A

B. Raw market C. Natural market D. National market Ans. A

A market where by there is only one buyer of an item for which there are no good substitute a. Monopsony b. Oligopoly

c. Monopoly d. Oligopsony

Ans A

d. O and M costs Ans. C An index of short called

term paying ability is

a. Receivable turn-over b. Profit margin ratio c. Current ratio It is a series of equal payment occurring at equal interval of time where the first paymenyt is made after several periods, after the beginning of the payment

d. Acid-test ratio

Ans. D

a. Perpetuity b. Ordinary Annuity c. Annuity due d. Deferred annuity ans.D

An artificial expenses that spreads the purchase price of an assets or another property over a number of years. a. Depreciation b. Sinking Fund

The total income equals the total operating cost.

c. Amnesty d. Bond

a. Balance sheet b. In-place value

Ans. A

c. Check and balance d. Break even-no gain no loss Ans. D Kind of obligation which has no condition attached.

Estimate value at the end of the useful life.

a. Analytic

a. Market value

b. Pure

b. Fair value

c. Gratuitous

c. Salvage value

d. Private

d. Book value

Ans. C Direct labor costs incurred in the factory and direct material costs are the costs of all materials that go into production. The sum of these two direct costs is known as a. GS and A expenses b. Operating and maintenance costs c. Prime cost

Ans. C

Consists of the actual counting or determinination of the actual quantity of the materials on hand as of a given date. a. Physical inventory b. Material update

c. Technological assessment

b. A liability

d. Material count

c. An expenses d. An owner’s equity

Ans. A Ans. A Additional information of prospective bidders on contract documents issued prior to bidding date. a. Delict b. Escalatory c. Technological assessment d. Bid bulletin

What is the highest position in the corporation? a. President

Ans. D

b. Board of directors c. Chairman of the board

A series of uniform accounts over an infinite period of time.

d. Stockholders

a. Depreciation b. Annuity

Ans. C

c. Perpetuity d. Inflation

Ans. C

Type of ownership in business where individuals exercise and enjoy the right in their own interest. a. Equitable b. Public

The quantity of a certain commodity that is offered for sale at a certain price at a given place and time.

c. Private d. Pure

a. Demand b. Supply

Ans. C

c. Stocks d. Goods

Decrease in the value of a physical property due to the passage of time. a. Inflation

Ans. B

b. Depletion c. Recession

Work-in process is classified as a. An assets

d. Depreciation

Ans. D

An association of two or more individuals for the purpose of operating a business as co-owners for profit. a. Sole proprietorship b. Company

It is the amount which a willing buyer will pay to a willing seller or a property where each has equal advantage and is under no compulsion to buy or sell. a. Fair value b. Market value c. Book value d. Salvage value

c. Partnership d. Corporation

Ans. C

We may classify an interest rate, which specifies the actual rate of interest on the principal for one year as

Ans. B

This occurs in a situation where a commodity or service is supplied by a number of vendors and there is nothing to prevent additional vendors entering the market. a. Perfect competition b. Oligopoly

a. Nominal rate

c. Monopoly

b. Rate of return

d. Elastic demand

c. Exact interest rate d. Effective rate

Ans. D

It is defined to be the capacity of a commodity to satisfy human want.

Ans. A

These are product or service that are desired by human and will be purchased if money is a available after the required necessities have been obtained. a. Utilities

a. Discount

b. Necessities

b. Luxury

c. Luxuries

c. Necessity

d. Product goods and service

d. Utility Ans. C Ans. B These are product or services that are required to support human life ad activities that will be purchased in somewhat the same quantity even though the price varies considerably. a. Utilities

b. Necessities c. Luxuries

Ans. D

d. Product goods and services Money paid for the use of borrowed capital. Ans. B

a. Discount b. Credit

A condition where only few individuals produce a certain product and that any action of one will lead to almost the same action of the others. a. Oligopoly

c. Interest d. Profit

Ans. C

b. Semi-monopoly c. Monopoly d. Perfect competition

Ans. A

Liquid assets such as cash and other assets that can be converted quickly into cast such as accounts receivable and merchandise are called a. Total assets b. Fixed assets c. Current assets d. None of the above

Ans. C Grant total of the assets and operational capability of a corporation. a. Authorized capital

The length of time which the property may be operated at a profit.

b. Investment

a. physical life

c. Subscribed capital

b. Economic life

d. Money market

c. Operating life d. All of the above

Ans. A Ans. B The worth of the property equals to the original cost less depreciation. a. Scrap value b. Face value c.

Market value

d. Book value

The provision in the contract that indicates the possible adjustment of material cost and labor cost. a. Secondary clause b. Esclatory clause

c. Contingency clause d. Main clause

Ans. B

Those funds that are required to make the enterprise or project a going concern. a. Initial investment b. Current accounts c. Working capital d. Subscribed capital

Ans. C The present worth of all depreciation over the economic life of the item is called a. Book value b. Capital recovery c. Depreciation recovery d. Sinking fund

A market situation where there are one seller and many buyers. a. Monopoly b. Monopsony c. Oligopoly d. Oligopsony

Ans. C Ans. A Gross profit, sales less cost of goods sold, as a percentage of sales is called a. Profit margin b. Gross margin c. Net income d. Rate of return

A market situation where there are few sellers and few buyers. a. Oligopoly b. Oligopsony c. Bilateral oligopoly d. Bilateral oligopsony

Ans. B Ans. C Worth of the property as shown in the accounting records of an enterprise. a. Fair value b. Market value c. Salvage value d. Book value

Ans. D

A market situation where there is one seller and one buyer. a. Monopoly b. Monopsony

Ans. C

The flow back of profit plus depreciation from a given project is called.

c. Bilateral monopoly

a. Capital recovery

d. Bilateral monopsony

b. Cash flow c. Economic flow

Ans. C

A market situation where there are only two buyers with many sellers. a. Duopoly b. Oligopoly c. Duopsony d. Oligopsony

d. Earning value

Ans. B

The profit derived from a project or business enterprise whithout consideration of obligations to financial contribution or claims of other based on profit. a. Economic life b. Yield

Ans. C

c. Earning value d. Expected yield

The cumulative effect of elapsed time on the money value of an event, based on the earning power of equivalent investment funds capital should or will earn.

Ans. A

a. Present worth factor b. Interest rate c. Time value of money d. Yield

The payment for the use of borrowed money is called a. Loan

Ans. C

b. Maturity value c. Interest

Defined as the future value minus the present value. a. Interest

d. Principal

Ans. C

b. Rate of return c. Discount d. Capital

The interest rate at which the present work of the cash flow on a project is zero of the interest earned by an investment.

a. Effective rate

Ans. D

b. Nominal rate c. Rate of return d. Yield

The recorded current value of an asset is known as a. Scrap value

Ans. C

b. Salvage value c. Book value

The ratio of the interest payment to the principal for a given unit of time and usually expressed as a percentage of the principal.

d. Present wort

Ans. C

a. Interest b. Interest rate c. Investment d. All of the above

Scrap value of an asset is sometimes known as. a. Book value b. Salvage value c. Replacement value

Ans. B

The true value of interest rate computed by equations for compound interest for a 1 year period is known as a. Expected return b. Interest c. Nominal interest d. Effective interest

d. Future value

Ans. B

What is sometimes called second hand value? a. Scrap value b. Salvage value c. Book value d. Going value

Ans. D Ans. B The intangible item of value from the exclusive right of a company to provide a specific product or service in a stated region of the country. a. Market value b. Book value c. Goodwill value d. Franchise value

An intangible value which is actually operating concern has due to its operation. a. Book value b. Fair value c. Goodwill value d. Going value

Ans. D

The value which a disinterested third party, different from the buyer and seller, will determine in order to establish a price acceptable to both parties. a. Market value

A type of annuity where the payments are made at the start of each period from the first period. a. Ordinary annuity b. Annuity due c. Deferred annuity d. Perpetuity

b. Good value c. Fair value

Ans. B

d. Franchise value

Ans. C

A type annuity where the payments are made at the end of each payment period starting from the first period. a. Ordinary annuity b. Annuity due c. Deferred annuity

Which is not an essential element of an ordinary annuity? a. The amounts of all payments are equal. b. The payments are made at equal interval of time c. The first payment is made at the beginning of each period d. Compound interest is paid on all amounts in the annuity

d. Perpetuity Ans. C Ans. A

It is a series of time where the first payment is made after several periods, after the beginning of the payment.

A is a periodic payment and I is the interest rate, then present worth of a perpetuity = a. Ai

a. Deferred annuity

b. Ai^n

b. Delayed annuity

c. A^n/ i

c. Progressive annuity

d. A/i

d. Simple annuity Ans. D Ans. A A mathematical expression also known as the present value of one is called a. Load factor b. Demand facetor c. Sinking fund factor

d. Present worth factor

c. SYD method d. Declining balance method

Ans. D Ans. D As applied to a capitalized asset, the distribution of the initial cost by a periodic changes to operation as in depreciation or reduction of a debt by either periodic or irregular prearranged program is called

A method of depreciation whereby the amount to recover is spread uniformly over the estimated life of the asset in terms of the periods or units of output.

a. Annuity

a. Straight line method

b. Capital recovery

b. Sinking fund method

c. Annuity factor

c. Declining balance method

d. Amortization

d. SYD method

Ans. D

Ans. A

Which of the following depreciation methods cannot have a salvage value of zero? a. Declining balance method b. Sinking fund method c. Straight line method d. SYD method The reduction of the value of an asset due to constant use and passage of time. a. Scrap value

Ans. A

b. Depletion c. Depreciation d. Book value

Ans. C

A method of depreciation where a fixed sum of money is regularly deposited at compound interest in a real or imaginary fund in order to accumulate an amount equal to the total depreciation of an asset at the end of the asset’s estimated life. a. Straight line method

A method of computing depreciation in which the annual charge is a fixed percentage of the depreciated book value at the beginning of the year to which the depreciation applies. a. Straight line method b. Sinking fund method

b. Sinking fund method c. Declining balance method d. SYD method

Ans. B

ans. B

capitalized cost of any property is equal to the a. annual cost b. first cost + cost of perpetual cost

The function of interest rate and time determines the cumulative amount of a sinking fund resulting from specific deposits. a. Sinking fund factor

c. first cost + cost of perpetual maintenance d. first cost + salvage value

ans. C

b. Present worth factor c. Capacity d. Demand factor

Ans. A

the lessening of the value of an asset due to the decrease in the quantity available ( referring to the natural resources, coal, oil, etc) a. depreciation b. depletion

The first cost of any property includes a. The original purchase price and freight and transportation charges b. Installation expenses

c. inflation d. incremental cost

ans. B

c. Initial taxes and permits fee d. All of the above

is the simplest form of business organization a. sole propeitorship

Ans. A

b. partnership c. enterprise

In SYD method, the sum of years digit is calculated using which formua with n= number of useful years of the equipment.

d. corporation

ans. A

a. n(n-1)/2 b. n(n+1)/2 c. n(n+1) d. n(n-1)

an association of two or more person for a purpose of engaging in a profitable business a. sole proprietorship b. enterprise

c. partnership

b. 5

d. corporation

c. 10 d. 7

Ans. C Ans. B a distinct legal entity which can practically transact any business transaction which a real person could do. a. Sole proprietorship b. Enterprise c. Partnership d. Corporation

Ans. D

Double taxation is disadvatange of which business organization a. Sole proprietorship b. Partnership c. Corporation d. Enterprise In case of bankruptcy of a partnership Ans. C

Which is NOT a type of business organization? a. Sole proprietorship b. Corporation c. Enterprise d. Partnership

Ans. C

What is the minimum number of incorporators in order that a corporation be organized? a. 3

a. The partners are not liable for the liabilities of the partnership. b. The partnership assets (excluding the partner personal assets) only will be used to pay the liabilities. c. The partners personal assets are attached to the debt of the partnership d. The partners may sell stock to generate additional capital.

Ans. C

Which is TRUE about partnership?

a. It has a perpetual life.

c. Incorporators stock

b. It will be desolved if one of the partners ceases to be connected with the partnership

d. Common stock

c. It can be handed down from one generation of partners to another. d. Its capitalization must be equal for each partner.

Ans. D

Ans. D

The amount of company’s profits that the board of directors of the corporation decides to distribute to ordinary shareholders. a. Dividend b. Return

Which is TRUE about corporation? a. It is the not best form of business organization. b. The minimum number of incorporators to start a corporation is there. c. Its life is dependent on the lives of the incorporators. d. The stockholders of the corporation are only liable to the extent of their investments.

c. Share stock d. Par value

Ans. A

A certified of indebtness of a corporation usually for a period not less than 10 years and guaranteed by a mortgage on certain assets of the corporation. a. Bond b. T-bill

Ans. D

c. Preferred stock d. Common stock

Represent ownership, and enjoys certain preference than ordinary stock. a. Authorized capital stock

Ans. A

b. Preferred stock c. Common stock d. Incorporator’s stock

Ans. B Represent the ownership of stockholders who have a residual claim on the assets of the corporation after all other claims have been settled.

A form of fixed- interest security issued by central or local governments, companies, banks or other institutions. They are usually a form of long-term security, buy may be irredeemable, secured or unsecured. a. Bonds b. T-bills c. Certificate of deposit d. All of these

a. Authorized capital b. Preferred stock

Ans. A

a. Mortgage bond A type of bond where the corporation pledges securities which it owns (i.e. stock, bonds of its subsidiaries) a. Mortgage bond

b. Register bond c. Collateral trust bond d. Debenture bond

b. Register bond c. Coupon Bond

Ans. C

d. Collateral trust bond

Ans. D

A type of bond which does not have security except a promise to pay by the issuing corporation.

ECONOMIC’S FINAL COACHING By Tiger’s Review Center