A type of bond issued jointly by two or more

corporations.
A. Joint bond
B. Debenture bond
C. Registered bond
D. Collateral trust bond
Ans. A
A type of bond whose guaranty is in lien on
railroads equipments.
A. Equipment obligation bond
B. Debenture bond
C. Registered bond
D. nsfrastructure bond
Ans. A
f the security of the bond is a mortgage on
certain specified asset of a corporation! this
bond is classified as
A. Registered bond
B. "ortgage 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 as$ing
for it.
A. Registered bond
B. %referred bond
C. ncorporators bond
D. All of these
Ans. A
Bond to which are attached coupons indicating
the interest due and the date when such
interest is to be paid.
A. Registered bond
B. Coupon bond
C. "ortgage bond
D. Collateral trust bond
Ans. B
An amount of money in&ested at '() interest
per annum will double in appro*imately
A. + years
B. , years
C. - years
D. . years
Ans. C
/he .( rule is used to determine
A. 0ow many years money will triple
B. 0ow many years money will double
C. 0ow many years to amass ' million
D. 0ow many years to quadruple the money
Ans. B
/o triple the principal one must use
A. ntegration
B. Deri&ati&es
C. 1ogarithms
D. mplicit functions
Ans. C
A currency traded in a foreign e*change mar$et
to which the demand is consistently high in
relation to its supply.
A. "oney mar$et
B. 0ard currency
C. /reasury bill
D. Certificated of deposit
Ans. B
E&erything a company owns to which has a money
&alue is classified as an asset. 2hich of the
following is classified as an asset3
A. ntangible asset
B. 4i*ed asset
C. /rade in&estments
D. All of these
Ans. D
2hich of the e*ample of an intangible asset3
A. Cash
B. n&estment in subsidiary companies
C. 4urnitures
D. %atents
Ans. D
1and buildings! plants and machinery are
e*amples of
A. Current assets
B. /rade in&estments
C. 4i*ed assets
D. ntangible assets
Ans. C
An increase in the &alue of a capital asset is
called
A. %rofit
B. Capital gain
C. Capital e*penditure
D. Capital stoc$
Ans. B
/he reduction in the money &alue of a capital
asset is called
A. Capital e*penditure
B. Capital loss
C. 1oss
D. Deficit
Ans. B
t is negotiable claim issued by ban$ in lieu
of a team deposit.
A. /ime deposit
B. Bond
C. Capital gain
D. Certificate of deposit
Ans. D
Any particular raw materials or primary
product 5e.g. cloth! wool! flour! coffee..6
is called
A. 7tility
B. 8ecessity
C. Commodity
D. 9toc$
Ans. C
f denotes the fall in the e*change rate of
one currency in terms of others. /he term
usually applies to floating e*change rates.
A. Currency appreciation
B. Currency de&aluation
C. Currency float
D. Currency depreciation
Ans. D
/he deliberate lowering of the price of a
nation#s currency in terms of the accepted
standard 5:old! American dollar or the British
pound6.
A. Currency appreciation
B. Currency float
C. Currency de&aluation
D. Currency depreciation
Ans. C
/he residual &alue of a company#s assets after
all outside liabilities 5shareholders
e*cluded6m ha&e been allowed for.
A. Di&ided
B. Equity
C. Return
D. %ar &alue
Ans. B
A sa&ing which ta$es place because good are
not a&ailable for consumption rather than the
consumer really want to sa&e.
A. Compulsory sa&ing
B. Consumer sa&ing
C. 4orced sa&ing
D. All of these
Ans. C
A document that shows proof of legal ownership
of a financial security.
A. Bond
B. Ban$ note
C. Coupon
D. Chec$
Ans. C
Defined as the capacity of commodity to
satisfy human want.
A. Discount
B. 8ecessity
C. 1u*uries
D. 7tility
Ans. B
t is the profit obtained by selling stoc$s at
a higher price than its original purchase
price.
A. Debenture
B. :oodwill
C. Capital gain
D. nternal rate of return
Ans. C
/he quantity of a certain commodity that is
offered for sale at a certain price at a gi&en
time and place.
A. Demand
B. 9upply
C. 7tility
D. "ar$et
Ans. B
/he quantity of a certain commodity that is
bought at a certain price at a gi&en time and
place.
A. Demand
B. supply
C. mar$et
D. 7tility
Ans. A
;2hen free competition e*ists! the price of a
product will be that &alue where supply is
equal to the demand
A. 1aw of diminishing return
B. 1aw of supply
C. 1aw of demand
D. 1aw of supply and demand
Ans. D
;2hen one of the factors of production is
fi*ed in quantity or is difficult to increase!
increasing the others factors of production
will result in a less than proportionate
increase in output.<
A. 1aw of diminishing return
B. 1aw of supply
C. 1aw of demand
D. 1aw of supply and demand
Ans. A
An accounting term that represents an
in&entory account adjustments.
A. Cost of goods sold
B. =ariance
C. >&erhead
D. %aybac$
Ans. A
/he simplest economic order quantity 5E>?6
model is based on which of the following
assumptions.
A. 9hortages are not allowed.
B. Demand is constant with respect to time.
C. Reordering is instantaneous. /he time
between order placement and receipt is
@ero.
D. All of the choices
Ans. D
n economics! a ;short A term< transaction
usually has a lifetime of
A. B months or less
B. ' year or less
C. , years or less
D. 'C years or less
Ans. C
n the cash flow! e*penses incurred before
time D C is called
A. Receipts
B. Disbursements
C. 9un$ costs
D. 4irsts costs
Ans. C
An imaginary cost representing what will not
be recei&ed if a particular strategy is
rejected.
A. 9un$ cost
B. >pportunity cost
C. Replacement cost
D. nitial cost
Ans. B
n replacement studies! the e*isting process
or piece of equipment is $nown as
A. Challenger
B. Defender
C. 1iability
D. Asset
Ans. B
n replacement studies! the new process or
piece of equipment being considered for
purchase is $nown as.
A. Challenger
B. Defender
C. Asset
D. 1iability
Ans. A
EEEEEEE means that the cost of the asset is
di&ided into equal or unequal parts! and only
one of these parts is ta$en as an e*pense each
year.
A. Capitali@ing the asset
B. E*pensing the asset
C. Depreciating the asset
D. Artificial e*pense
Ans. A
ndicate the C>RREC/ statement about
depreciation.
A. /he depreciation is not the same each
year in straight line method.
B. /he declining balance method can be
used e&en if the sal&age calue is @ero.
C. /he sumFofFyears# digit method 59GD6!
the digits ' to 5n H '6 is summed.
D. Double declining balance depreciation
is independent of the sal&age &alue.
Ans. D
An artificial deductible operating e*pense
designated to compensate mining organi@ations
for decreasing mineral reser&es.
A. Deflation
B. Reflation
C. Depletion
D. nflation
Ans. C
/he change in cost per unit &ariable change is
$nown as
A. 9un$ cost
B. ncremental cost
C. 4i*ed cost
D. 9emiF&ariable cost
2hat type of cost increases stepFwise3
A. 9uper&ision cost
B. Direct labor cost
C. 9emiF&ariable cost
D. >perating and maintenance cost
Ans. C
2hich of the following is 8>/ a &ariable cost3
A. Cost of miscellaneous supplies
B. ncome ta*es
C. %ayroll benefit costs
D. nsurance costs
Ans. D
2hich of the following is 8ot a fi*ed cost3
A. Rent
B. Janitorial ser&ice e*penses
C. 9uper&ision costs
D. Depreciation e*penses
Ans. C
/he annual costs that are incurred due to the
functioning of a piece of equipment is $nown
as
A. :eneral! selling and administrati&e
e*penses
B. %rime cost
C. >perating and maintenance costs
D. /otal cost
Ans. C
/he sum of the direct labor cost and the
direct material cost is $nown as
A. %rime cost
B. /otal cost
C. ndirect manufacturing e*penses
D. /otal cost
Ans. A
Research and de&elopment costs and
administrati&e e*penses are added to the
factory cost to gi&e the EEEEEEE of the
product.
A. /otal cost
B. "ar$eting cost
C. "anufacturing cost
D. %rime cost
Ans. C
/he sum of the prime cost and the indirect
manufacturing cost is $nown as
A. 4actory cost
B. Research and de&elopment cost
C. "anufacturing cost
D. /otal cost
Ans. A
/he manufacturing cost plus selling e*penses
equals
A. /otal cost
B. ndirect production cost
C. Administrati&e cost
D. "iscellaneous cost
Ans. A
2hich of the following is 8>/ a direct labor
e*pense3
A. nspection
B. /esting
C. 9uper&ision
D. Assembly
Ans. C
All are administrati&e e*penses EICE%/J
A. "ar$eting
B. Accounting
C. Data processing
D. >ffice supplies
Ans. A
>ne of the following is 8>/ a selling or
mar$eting e*pense. 2hich one3
A. Ad&ertising
B. Commission
C. nsurance
D. /ransportation
Ans. C
Research and de&elopment e*penses includes all
EICE%/ one. 2hich one3
A. /esting
B. Drafting
C. %rototype
D. 1aboratory
Ans. D
2hich is not a factory o&erhead e*pense3
A. %ension! medical! &acation benefits
B. E*pediting
C. ?uality control and inspection
D. /esting
Ans. D
Boo$$eeping consists of two steps! namely
recording the transactions and categori@ation
of transactions. 2here are the transactions
5receipts and disbursements3 Recorded3
A. Journal
B. 1edger
C. Columnar
D. 9tatement of account
Ans. A
/he following are ledger accounts EICE%/J
A. Asset accounts
B. Ban$ accounts
C. 1iability accounts
D. >wner#s equity accounts
Ans. B
/he journal and the ledger together are $nown
simply as EEEEE of the company.
A. Accounting system
B. /he boo$s
C. Boo$$eeping system
D. Balance sheet
Ans. B
/he basic accounting equation is
A. Assets D 1iability H >wner#s equity
B. 1iability D Assets H >wner#s equity
C. >wner#s equity D Assets H 1iability
D. >wner#s equity D 1iability A Assets
Ans. A
/he ability to con&ert assets to cash quic$ly
is $nown as
A. 9ol&ency
B. 1iquidity
C. 1e&erage
D. nsol&ency
Ans. B
/he ability to meet debts as they become due
is $nown as
A. 9ol&ency
B. 1e&erage
C. nsol&ency
D. 1iquidity
Ans. A
2hat is considered as an inde* of shortFterm
paying ability3
A. Current ratio
B. Acid test ratio
C. :ross margin
D. Return of in&estment
Ans. A
An acid test ratio is a ratio of
A. :ross profit to net sales
B. 8et income before ta*es to net sales
C. ?uic$ assets to current liabilities
D. 8et income to owner#s liabilities
Ans. C
/he ratio of the net income to the owner#s
equity is $nown as
A. %riceFearning ratio
B. %rofit margin ratio
C. Return of in&estment
D. :ross margin
Ans. C
%aybac$ period is the ratio of
A. nitial in&estment to net annual profit
B. Cost of goods sold to a&erage
Cost of in&entory on hand
C. gross profit to net sales
D. net income before ta*es to net sales
Ans. A
A secondary boo$ of accounts the information
of which is obtained from the journal
A. Balance sheet
B. 1edger
C. 2or$sheet
D. /rial balance
Ans. B
/he present worth of cost associated with an
asset for an infinite period of time is
referred to as
A. Annual cost
B. Capitali@ed cost
C. ncrement cost
D. >perating cost
Ans. B
A stoc$ of a product which is held by a trade
body or go&ernment as a means of regulating
the price of that product.
A. 9toc$ pile
B. 0oard stoc$
C. Buffer stoc$
D. 2ithheld stoc$
Ans. C
A negotiable claim issued by a ban$ in lieu of
a term deposit is called
A. Cheque
B. /Fbills
C. Currency
D. Certificate of deposit
Ans. D
A form of business firm which is owned and run
by a group of indi&iduals for their mutual
benefit
A. Cooperati&e
B. Corporation
C. Enterprise
D. %artnership
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 go&ernment bond which ha&e an indefinite
life rather than a specific maturity
A. Coupon
B. /Fbill
C. Debenture
D. Consol
Ans. D
Refers to the orders quantity that minimi@es
the in&entory cost per unit time.
A. Economic order quantity
B. 9ocial order quantity
C. %ublic order quantity
D. %ri&ate order quantity
Ans. A
2hat is referred to as an indi&idual who
organi@es factors of production to underta$e a
&enture with a &iew to profit3
A. Agent
B. Entrepreneur
C. 9alesman
D. Commissioners
Ans. B
/he money that is inacti&e and does not
contribute to producti&e effort in an economy
is $nown as
A. dle money
B. 0ard money
C. 9oft currency
D. 4ro@en asset
Ans. A
n counting the number of days when computing
simple interest!
A. /he first day is included
B. /he last day is e*cluded
C. /he first day is included and the last
day is e*cluded
D. /he first day is e*cluded and the last
day is included
Ans. D
n the soFcalled ;Ban$er#s Rule<!
A. /he number of days in ' year is B-C days
B. /he number of days in ' year is B-, days
C. /he number of days in each month is BC
days
D. /he number of days in ' year is B-- days
Ans. A
/o discount an amount 4 for n con&ersion
periods means
A. /o find the present &alue on a day
which is n periods after 4 is due
B. /o find the present &alue on a day
which is n periods before 4 is due
C. /o find the present &alue on a day
which is 5nF'6 periods before 4 is due
D. /o find the present &alue on a day
which is 5nH'6 periods before 4 is due
Ans. B
n the formula for compound interest! 4D %
5'Hi6n! the &alue 5'Hi6n is called EEEE.
A. Discount factor
B. nterest factor
C. Accumulation factor
D. ncrease factor
Ans. C
/o find the present worth of a future amount
in compound interest! we use the formula
%D45'Hi6Fn. 2hat do you call the factor 5'Hi6F
n3
A. Discount
B. Accumulation factor
C. nterest factor
D. Reduction factor
Ans. A
2hat refers to an equation stating that the
sum of the &alues! on a certain comparison
date! of one set of obligations is equal to
the sum of the &alue of another set of this
date3
A. Equality of &alue
B. Equation of &alue
C. Equality equation
D. 9imilarity equation
Ans. B
2hat is an annuity whose payments e*tend o&er
a period of time whose length cannot be
foretold accurately3
A. Annuity certain
B. Annuity uncertain
C. ncremental annuity
D. Contingent annuity
Ans. D
2hat do you call the time between successi&e
payment dates of an annuity3
A. %eriod inter&al
B. Annuity period
C. %ayment inter&al
D. Annuity term
Ans. C
/he time from the beginning of the first
payment inter&al to the need of the last one
is called the EEEEE of the annuity.
A. %eriod
B. /erm
C. 8ature
D. /ype
Ans. B
2hat refers to the e*tinction of the debt by
any satisfactory set of payments3
A. 1iquidation
B. 1iability discharge
C. Discharging debt
D. Amorti@ation of debt
Ans. D
2hat do you call a fund! usually by periodic
deposits! to insure the accumulation of money
to pro&ide for possible large payments3
A. Escrow fund
B. 9in$ing fund
C. "utual fund
D. Corporate fund
Ans. B
2hat is the term for the borrowed principal
usually mentioned in a typical bond3
A. Bond rate
B. 4ace &alue
C. Coupon rate
D. Coupon &alue
Ans. B
Any date on which a coupon of a bond becomes
due will be referred to as a EEEEE.
A. "aturity date
B. /erm of the bond
C. Coupon date
D. Due date
Ans. C
f % is the price of a bond and = is its
redemption &alue! what do you call the &alue
%F=3
A. %ar &alue
B. 4ace &alue
C. %remium
D. Bond discount
Ans. C
2hen can we say that the bond is purchased at
a discount3
A. 2hen the price of the bond is greater
than the redemption &alue.
B. 2hen the price of the bond is less than
the redemption &alue.
C. 2hen the price of the bond is equal
than the redemption &alue.
D. 2hen the price of the bond is either
equal to or greater than the redemption
&alue.
Ans. B
2hen can we say that the bond is purchased at
a premium3
A. 2hen the price of the bond is greater
than the redemption &alue.
B. 2hen the price of the bond is less than
the redemption &alue.
C. 2hen the price of the bond is equal
than the redemption &alue.
D. 2hen the price of the bond is either
equal to or greater than the redemption
&alue.
Ans. A
2hich of the following will happen if bond is
bought at a discount3
A. Each coupon payment is too small to pay
all interest due on the in&estor#s
principal.
B. Each coupon payment is greater than the
interest due on the in&estor#s
principal.
C. /he unpaid interest on each coupon date
will not be considered as a new
in&estment in the bond.
D. /he difference between the coupon
payment and the interest due is a
partial repayment of principal.
Ans. A
n the sale of a bond! the actual purchase
price on any day is called EEEE.
A. 4ace &alue
B. ?uoted price
C. Accrued price
D. 4lat price
Ans. D
2hat do you call the difference between the
flat price of the bond and the quoted price
of the bond3
A. %ar &alue
B. Accrued interest
C. Bond rate
D. AndFinterest price
/he quoted price of a bond is sometimes called
EEEEEEE.
A. %ar &alue
B. 4ace &alue
C. AnFinterest price
D. Coupon price
Ans. C
/he yield of a bond is obtained by which of
the following formulasJ
A. A&erage in&estmentEE
A&erage annual interest
B. A&erage annual interestE
A&erage in&estment
C. %ar &alueE
4lat &alue
D. %ar &alueE
4lat &alue
Ans. B
2hat is a bond whose face &alue is redeemable
in installments! with interest payable
periodically as due on outstanding principal3
A. Annuity bond
B. 9erial bond
C. /reasury bond
D. :o&ernment bond
Ans. B
2hat is the term for the sum of depreciation
charges to date3
A. Accrued depreciation
B. Applied depreciation
C. Accumulated depreciation
D. All of the abo&e
Ans. A
/he difference between the &alue of an asset
and its sal&age or scrap &alue at the end of
the year is called EEEE.
A. Depreciation
B. Accrued &alue
C. Boo$ &alue
D. 2earing &alue
Ans. D
2hat is a life annuity3
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. A sequence of payment for a certain
person which continues indefinitely.
D. t is the same as perpetuity.
Ans. A
2hat term is usually used by the ban$s to
represent the effecti&e interest rate per
period3
A. Gield
B. 8ominal rate
C. 4i*ed rate
D. 8et rate
Ans. A
/he acid test ratio is also $nown as quic$
ratio. 2hich one represents the quic$ ratio3
A. ?uic$ assetsEEEEE
Current liabilities
B. 8et credit salesEEE
A&erage net recei&ables
C. :ross profitEEEE
Current liabilities
D. :ross profitEE
8et sales
Ans. A
2hich of the following represents the gross
margin3
A. 8et incomeEE
>wner#s equity
B. 8et credit salesEEE
A&erage net recei&ables
C. :ross profitEE
Current liabilities
D. :ross profitEE
8et sales
Ans. D
A recei&able turno&er is calculated using
which of the following formulas3
A. 8et incomeEE
>wner#s equity
B. 8et credit salesEEE
A&erage net recei&ables
C. :ross profitEE
Current liabilities
D. :ross profitEE
8et sales
Ans. B
/he percentage of each peso of sales that is
net income is called EEEEEE.
A. %riceFearning ratio
B. %rofit margin
C. %rofit margin ratio
D. Return of in&estment ratio
2hich one represents that priceFearnings
ratio3
A. "ar$et price per shareE
Earnings per share
B. Earnings per shareEEE
"ar$et price per share
C. 8et credit salesEE
A&erage net recei&ables
D. :ross profitEEEEE
Current liabilities
Ans. A
/he boo$ &alue per share of common stoc$ is
the ratio of the common shareholders#
equity to EEEEEE.
A. A&erage shared
B. 8umber of outstanding shares
C. /otal subscribed shared
D. Authori@ed capital stoc$
Ans. B
2hat refers to the price at which the quantity
demanded of a good is e*actly equal to the
quantity supplied3
A. Equilibrium mar$et price
B. 4air mar$et price
C. Real mar$et price
D. E*act mar$et price
Ans. A
A principle that states that consumers will
tend to spend an increasing proportion of any
additional income upon lu*ury goods and a
smaller proportional on staple goods! so that
a rise in income will lower the o&erall share
of consumer e*penditures spent on stable goods
5such as basic foodstuffs6and increase the
share of consumer e*penditures on lu*ury goods
5such as motor cars6.
A. %lacibo effect
B. 1u*ury effect
C. Engel#s law
D. 9taple law
Ans. C
2hat is the disciple within economics that
attempts to measure and estimate statistically
the relationship between two or more economic
&ariables3
A. /heory of &alues
B. Econometrics
C. Economatics
D. Econoscience
Ans. B
2hat refers to the fall in the general price
le&el! frequently accompanied by a reduction
in the le&el of national income3
A. nflationary gap
B. Dissa&ings
C. Disinflation
D. nflation
Ans. C
A price for a product just co&ers its
production and distribution costs with no
profit margin added.
A. Cost price
B. Actual price
C. Real price
D. >riginal price
Ans. A
A mar$et where new entrants face cost similar
to those of established firms and where! on
lea&ing! firms are able to recoup their
capital costs! less depreciation.
A. 4ree mar$et
B. Competiti&e mar$et
C. 1imited mar$et
D. Contestable mar$et
Ans. D
2hat refers to a temporary grouping of
independent firms! organi@ation and
go&ernments! brought together to pool their
resources and s$ills in order to underta$e a
particular project3
A. Consortium
B. Cartel
C. Cooperati&e
D. 7nion
Ans. A
2hat refers to a mar$et for buying and selling
of raw materials such as tea! coffee! iron
ore! etc.3
A. Commodity mar$et
B. Raw mar$et
C. 8atural mar$et
D. 8ational mar$et
Ans. A
/he paper currency issued by the central
ban$ which forms the part of the country#s
money supply
a. /Fbills
b. Ban$ note
c. Chec$
d. Coupon
Answer B
Reduction in the national income and output
usually accompanied by the fall in the
general proce le&el
a. De&aluatio
b. Deflation
c. inflation
d. Depreciation
Ans. B
t is a series of equal payment occurring at
equal inter&al of time
a. Annuity
b. Debt
c. Amorti@ation
d. Deposit
Ans. A
/he place and buyers come together
a. "ar$et
b. Business
c. Recreational center
d. Buy and sell of section
Ans A
A mar$et where by there is only one buyer of
an item for which there are no good
substitute
a. "onopsony
b. >ligopoly
c. "onopoly
d. >ligopsony
Ans A
t is a series of equal payment occurring at
equal inter&al of time where the first
paymenyt is made after se&eral periods!
after the beginning of the payment
a. %erpetuity
b. >rdinary Annuity
c. Annuity due
d. Deferred annuity
ans.D
/he total income equals the total operating
cost.
a. Balance sheet
b. nFplace &alue
c. Chec$ and balance
d. Brea$ e&enFno gain no loss
Ans. D
Kind of obligation which has no condition
attached.
a. Analytic
b. %ure
c. :ratuitous
d. %ri&ate
Ans. C
Direct labor costs incurred in the factory
and direct material costs are the costs of
all materials that go into production. /he
sum of these two direct costs is $nown as
a. :9 and A e*penses
b. >perating and maintenance costs
c. %rime cost
d. > and " costs
Ans. C
An inde* of short term paying ability is
called
a. Recei&able turnFo&er
b. %rofit margin ratio
c. Current ratio
d. AcidFtest ratio
Ans. D
An artificial e*penses that spreads the
purchase price of an assets or another
property o&er a number of years.
a. Depreciation
b. 9in$ing 4und
c. Amnesty
d. Bond
Ans. A
Estimate &alue at the end of the useful life.
a. "ar$et &alue
b. 4air &alue
c. 9al&age &alue
d. Boo$ &alue
Ans. C
Consists of the actual counting or
determinination of the actual quantity of
the materials on hand as of a gi&en date.
a. %hysical in&entory
b. "aterial update
c. /echnological assessment
d. "aterial count
Ans. A
Additional information of prospecti&e
bidders on contract documents issued prior
to bidding date.
a. Delict
b. Escalatory
c. /echnological assessment
d. Bid bulletin
Ans. D
A series of uniform accounts o&er an
infinite period of time.
a. Depreciation
b. Annuity
c. %erpetuity
d. nflation
Ans. C
/he quantity of a certain commodity that is
offered for sale at a certain price at a
gi&en place and time.
a. Demand
b. 9upply
c. 9toc$s
d. :oods
Ans. B
2or$Fin process is classified as
a. An assets
b. A liability
c. An e*penses
d. An owner#s equity
Ans. A
2hat is the highest position in the
corporation3
a. %resident
b. Board of directors
c. Chairman of the board
d. 9toc$holders
Ans. C
/ype of ownership in business where
indi&iduals e*ercise and enjoy the right in
their own interest.
a. Equitable
b. %ublic
c. %ri&ate
d. %ure
Ans. C
Decrease in the &alue of a physical property
due to the passage of time.
a. nflation
b. Depletion
c. Recession
d. Depreciation
Ans. D
An association of two or more indi&iduals
for the purpose of operating a business as
coFowners for profit.
a. 9ole proprietorship
b. Company
c. %artnership
d. Corporation
Ans. C
2e may classify an interest rate! which
specifies the actual rate of interest on the
principal for one year as
a. 8ominal rate
b. Rate of return
c. E*act interest rate
d. Effecti&e rate
Ans. D
t is defined to be the capacity of a
commodity to satisfy human want.
a. Discount
b. 1u*ury
c. 8ecessity
d. 7tility
Ans. B
t is the amount which a willing buyer will
pay to a willing seller or a property where
each has equal ad&antage and is under no
compulsion to buy or sell.
a. 4air &alue
b. "ar$et &alue
c. Boo$ &alue
d. 9al&age &alue
Ans. B
/his occurs in a situation where a commodity
or ser&ice is supplied by a number of
&endors and there is nothing to pre&ent
additional &endors entering the mar$et.
a. %erfect competition
b. >ligopoly
c. "onopoly
d. Elastic demand
Ans. A
/hese are product or ser&ice that are
desired by human and will be purchased if
money is a a&ailable after the required
necessities ha&e been obtained.
a. 7tilities
b. 8ecessities
c. 1u*uries
d. %roduct goods and ser&ice
Ans. C
/hese are product or ser&ices that are
required to support human life ad acti&ities
that will be purchased in somewhat the same
quantity e&en though the price &aries
considerably.
a. 7tilities
b. 8ecessities
c. 1u*uries
d. %roduct goods and ser&ices
Ans. B
A condition where only few indi&iduals
produce a certain product and that any
action of one will lead to almost the same
action of the others.
a. >ligopoly
b. 9emiFmonopoly
c. "onopoly
d. %erfect competition
Ans. A
:rant total of the assets and operational
capability of a corporation.
a. Authori@ed capital
b. n&estment
c. 9ubscribed capital
d. "oney mar$et
Ans. A
/he worth of the property equals to the
original cost less depreciation.
a. 9crap &alue
b. 4ace &alue
c. "ar$et &alue
d. Boo$ &alue
Ans. D
"oney paid for the use of borrowed capital.
a. Discount
b. Credit
c. nterest
d. %rofit
Ans. C
1iquid assets such as cash and other assets
that can be con&erted quic$ly into cast such
as accounts recei&able and merchandise are
called
a. /otal assets
b. 4i*ed assets
c. Current assets
d. 8one of the abo&e
Ans. C
/he length of time which the property may be
operated at a profit.
a. physical life
b. Economic life
c. >perating life
d. All of the abo&e
Ans. B
/he pro&ision in the contract that indicates
the possible adjustment of material cost and
labor cost.
a. 9econdary clause
b. Esclatory clause
c. Contingency clause
d. "ain clause
Ans. B
/he present worth of all depreciation o&er
the economic life of the item is called
a. Boo$ &alue
b. Capital reco&ery
c. Depreciation reco&ery
d. 9in$ing fund
Ans. C
:ross profit! sales less cost of goods sold!
as a percentage of sales is called
a. %rofit margin
b. :ross margin
c. 8et income
d. Rate of return
Ans. B
2orth of the property as shown in the
accounting records of an enterprise.
a. 4air &alue
b. "ar$et &alue
c. 9al&age &alue
d. Boo$ &alue
Ans. D
/hose funds that are required to ma$e the
enterprise or project a going concern.
a. nitial in&estment
b. Current accounts
c. 2or$ing capital
d. 9ubscribed capital
Ans. C
A mar$et situation where there are one
seller and many buyers.
a. "onopoly
b. "onopsony
c. >ligopoly
d. >ligopsony
Ans. A
A mar$et situation where there are few
sellers and few buyers.
a. >ligopoly
b. >ligopsony
c. Bilateral oligopoly
d. Bilateral oligopsony
Ans. C
A mar$et situation where there is one seller
and one buyer.
a. "onopoly
b. "onopsony
c. Bilateral monopoly
d. Bilateral monopsony
Ans. C
A mar$et situation where there are only two
buyers with many sellers.
a. Duopoly
b. >ligopoly
c. Duopsony
d. >ligopsony
Ans. C
/he cumulati&e effect of elapsed time on the
money &alue of an e&ent! based on the
earning power of equi&alent in&estment funds
capital should or will earn.
a. %resent worth factor
b. nterest rate
c. /ime &alue of money
d. Gield
Ans. C
Defined as the future &alue minus the
present &alue.
a. nterest
b. Rate of return
c. Discount
d. Capital
Ans. C
/he flow bac$ of profit plus depreciation
from a gi&en project is called.
a. Capital reco&ery
b. Cash flow
c. Economic flow
d. Earning &alue
Ans. B
/he profit deri&ed from a project or
business enterprise whithout consideration
of obligations to financial contribution or
claims of other based on profit.
a. Economic life
b. Gield
c. Earning &alue
d. E*pected yield
Ans. A
/he payment for the use of borrowed money is
called
a. 1oan
b. "aturity &alue
c. nterest
d. %rincipal
Ans. C
/he interest rate at which the present wor$
of the cash flow on a project is @ero of the
interest earned by an in&estment.
a. Effecti&e rate
b. 8ominal rate
c. Rate of return
d. Gield
Ans. C
/he ratio of the interest payment to the
principal for a gi&en unit of time and
usually e*pressed as a percentage of the
principal.
a. nterest
b. nterest rate
c. n&estment
d. All of the abo&e
Ans. B
/he true &alue of interest rate computed by
equations for compound interest for a ' year
period is $nown as
a. E*pected return
b. nterest
c. 8ominal interest
d. Effecti&e interest
Ans. D
/he intangible item of &alue from the
e*clusi&e right of a company to pro&ide a
specific product or ser&ice in a stated
region of the country.
a. "ar$et &alue
b. Boo$ &alue
c. :oodwill &alue
d. 4ranchise &alue
Ans. D
/he recorded current &alue of an asset is
$nown as
a. 9crap &alue
b. 9al&age &alue
c. Boo$ &alue
d. %resent wort
Ans. C
9crap &alue of an asset is sometimes $nown
as.
a. Boo$ &alue
b. 9al&age &alue
c. Replacement &alue
d. 4uture &alue
Ans. B
2hat is sometimes called second hand &alue3
a. 9crap &alue
b. 9al&age &alue
c. Boo$ &alue
d. :oing &alue
Ans. B
An intangible &alue which is actually
operating concern has due to its operation.
a. Boo$ &alue
b. 4air &alue
c. :oodwill &alue
d. :oing &alue
Ans. D
/he &alue which a disinterested third party!
different from the buyer and seller! will
determine in order to establish a price
acceptable to both parties.
a. "ar$et &alue
b. :ood &alue
c. 4air &alue
d. 4ranchise &alue
Ans. C
A type annuity where the payments are made
at the end of each payment period starting
from the first period.
a. >rdinary annuity
b. Annuity due
c. Deferred annuity
d. %erpetuity
Ans. A
t is a series of time where the first
payment is made after se&eral periods! after
the beginning of the payment.
a. Deferred annuity
b. Delayed annuity
c. %rogressi&e annuity
d. 9imple annuity
Ans. A
A type of annuity where the payments are
made at the start of each period from the
first period.
a. >rdinary annuity
b. Annuity due
c. Deferred annuity
d. %erpetuity
Ans. B
2hich is not an essential element of an
ordinary annuity3
a. /he amounts of all payments are
equal.
b. /he payments are made at equal
inter&al of time
c. /he first payment is made at the
beginning of each period
d. Compound interest is paid on all
amounts in the annuity
Ans. C
A is a periodic payment and is the
interest rate! then present worth of a
perpetuity D
a. Ai
b. AiLn
c. ALnM i
d. AMi
Ans. D
A mathematical e*pression also $nown as the
present &alue of one is called
a. 1oad factor
b. Demand facetor
c. 9in$ing fund factor
d. %resent worth factor
Ans. D
As applied to a capitali@ed 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. Annuity
b. Capital reco&ery
c. Annuity factor
d. Amorti@ation
Ans. D
/he reduction of the &alue of an asset due
to constant use and passage of time.
a. 9crap &alue
b. Depletion
c. Depreciation
d. Boo$ &alue
Ans. C
A method of computing depreciation in which
the annual charge is a fi*ed percentage of
the depreciated boo$ &alue at the beginning
of the year to which the depreciation
applies.
a. 9traight line method
b. 9in$ing fund method
c. 9GD method
d. Declining balance method
Ans. D
A method of depreciation whereby the amount
to reco&er is spread uniformly o&er the
estimated life of the asset in terms of the
periods or units of output.
a. 9traight line method
b. 9in$ing fund method
c. Declining balance method
d. 9GD method
Ans. A
2hich of the following depreciation methods
cannot ha&e a sal&age &alue of @ero3
a. Declining balance method
b. 9in$ing fund method
c. 9traight line method
d. 9GD method
Ans. A
A method of depreciation where a fi*ed sum
of money is regularly deposited at compound
interest in a real or imaginary fund in
order to accumulate an amount equal to the
total depreciation of an asset at the end of
the asset#s estimated life.
a. 9traight line method
b. 9in$ing fund method
c. Declining balance method
d. 9GD method
Ans. B
/he function of interest rate and time
determines the cumulati&e amount of a
sin$ing fund resulting from specific
deposits.
a. 9in$ing fund factor
b. %resent worth factor
c. Capacity
d. Demand factor
Ans. A
/he first cost of any property includes
a. /he original purchase price and
freight and transportation
charges
b. nstallation e*penses
c. nitial ta*es and permits fee
d. All of the abo&e
Ans. A
n 9GD method! the sum of years digit is
calculated using which formua with nD number
of useful years of the equipment.
a. n5nF'6M(
b. n5nH'6M(
c. n5nH'6
d. n5nF'6
ans. B
capitali@ed cost of any property is equal to
the
a. annual cost
b. first cost H cost of perpetual
cost
c. first cost H cost of perpetual
maintenance
d. first cost H sal&age &alue
ans. C
the lessening of the &alue of an asset due
to the decrease in the quantity a&ailable
5 referring to the natural resources! coal!
oil! etc6
a. depreciation
b. depletion
c. inflation
d. incremental cost
ans. B
is the simplest form of business organi@ation
a. sole propeitorship
b. partnership
c. enterprise
d. corporation
ans. A
an association of two or more person for a
purpose of engaging in a profitable business
a. sole proprietorship
b. enterprise
c. partnership
d. corporation
Ans. C
a distinct legal entity which can
practically transact any business
transaction which a real person could do.
a. 9ole proprietorship
b. Enterprise
c. %artnership
d. Corporation
Ans. D
Double ta*ation is disad&atange of which
business organi@ation
a. 9ole proprietorship
b. %artnership
c. Corporation
d. Enterprise
Ans. C
2hich is 8>/ a type of business organi@ation3
a. 9ole proprietorship
b. Corporation
c. Enterprise
d. %artnership
Ans. C
2hat is the minimum number of incorporators
in order that a corporation be organi@ed3
a. B
b. ,
c. 'C
d. .
Ans. B
n case of ban$ruptcy of a partnership
a. /he partners are not liable for
the liabilities of the
partnership.
b. /he partnership assets 5e*cluding
the partner personal assets6 only
will be used to pay the
liabilities.
c. /he partners personal assets are
attached to the debt of the
partnership
d. /he partners may sell stoc$ to
generate additional capital.
Ans. C
2hich is /R7E about partnership3
a. t has a perpetual life.
b. t will be desol&ed if one of the
partners ceases to be connected
with the partnership
c. t can be handed down from one
generation of partners to
another.
d. ts capitali@ation must be equal
for each partner.
Ans. D
2hich is /R7E about corporation3
a. t is the not best form of
business organi@ation.
b. /he minimum number of
incorporators to start a
corporation is there.
c. ts life is dependent on the
li&es of the incorporators.
d. /he stoc$holders of the
corporation are only liable to
the e*tent of their in&estments.
Ans. D
Represent ownership! and enjoys certain
preference than ordinary stoc$.
a. Authori@ed capital stoc$
b. %referred stoc$
c. Common stoc$
d. ncorporator#s stoc$
Ans. B
Represent the ownership of stoc$holders who
ha&e a residual claim on the assets of the
corporation after all other claims ha&e been
settled.
a. Authori@ed capital
b. %referred stoc$
c. ncorporators stoc$
d. Common stoc$
Ans. D
/he amount of company#s profits that the
board of directors of the corporation
decides to distribute to ordinary
shareholders.
a. Di&idend
b. Return
c. 9hare stoc$
d. %ar &alue
Ans. A
A certified of indebtness of a corporation
usually for a period not less than 'C years
and guaranteed by a mortgage on certain
assets of the corporation.
a. Bond
b. /Fbill
c. %referred stoc$
d. Common stoc$
Ans. A
A form of fi*edF interest security issued by
central or local go&ernments! companies!
ban$s or other institutions. /hey are
usually a form of longFterm security! buy
may be irredeemable! secured or unsecured.
a. Bonds
b. /Fbills
c. Certificate of deposit
d. All of these
Ans. A
A type of bond where the corporation
pledges securities which it owns 5i.e.
stoc$! bonds of its subsidiaries6
a. "ortgage bond
b. Register bond
c. Coupon Bond
d. Collateral trust bond
Ans. D
A type of bond which does not ha&e security
e*cept a promise to pay by the issuing
corporation.
a. "ortgage bond
b. Register bond
c. Collateral trust bond
d. Debenture bond
Ans. C
EC>8>"C#9
48A1 C>AC08:
By /iger#s Re&iew Center