A type of bond issued jointly by two or more A.

How many years money will triple

corporations. B. How many years money will double
C. How many years to amass 1 million
A. Joint bond D. How many years to quadruple the money
B. Debenture bond
C. Registered bond Ans. B
D. Collateral trust bond
To triple the principal one must use
Ans. A
A. Integration
A type of bond whose guaranty is in lien on B. Derivatives
railroads equipments. C. Logarithms
D. Implicit functions
A. Equipment obligation bond
B. Debenture bond Ans. C
C. Registered bond
D. Insfrastructure bond A currency traded in a foreign exchange market
to which the demand is consistently high in
Ans. A relation to its supply.

If the security of the bond is a mortgage on A. Money market

certain specified asset of a corporation, this B. Hard currency
bond is classified as C. Treasury bill
D. Certificated of deposit
A. Registered bond
B. Mortgage bond Ans. B
C. Coupon bond
D. Joint bond Everything a company owns to which has a money
value is classified as an asset. Which of the
Ans. B following is classified as an asset?

A type of bond where the corporations owners A. Intangible asset

name are recorded and the interest is paid B. Fixed asset
periodically to the owners with their asking C. Trade investments
D. All of these
for it.
Ans. D
A. Registered bond
B. Preferred bond
C. Incorporators bond Which of the example of an intangible asset?
D. All of these
A. Cash
Ans. A B. Investment in subsidiary companies
C. Furnitures
D. Patents
Bond to which are attached coupons indicating
the interest due and the date when such
Ans. D
interest is to be paid.
Land buildings, plants and machinery are
A. Registered bond
examples of
B. Coupon bond
C. Mortgage bond
D. Collateral trust bond A. Current assets
B. Trade investments
C. Fixed assets
Ans. B
D. Intangible assets
An amount of money invested at 12% interest
Ans. C
per annum will double in approximately

A. 4 years
B. 5 years
C. 6 years
D. 7 years
An increase in the value of a capital asset is
Ans. C called

The 72 rule is used to determine A. Profit

B. Capital gain
C. Capital expenditure
 D. Capital stock Ans. B

Ans. B A saving which takes place because good are

not available for consumption rather than the
The reduction in the money value of a capital consumer really want to save.
asset is called
A. Compulsory saving
A. Capital expenditure B. Consumer saving
B. Capital loss C. Forced saving
C. Loss D. All of these
D. Deficit
Ans. C
Ans. B
A document that shows proof of legal ownership
It is negotiable claim issued by bank in lieu of a financial security.
of a team deposit.
A. Bond
A. Time deposit B. Bank note
B. Bond C. Coupon
C. Capital gain D. Check
D. Certificate of deposit
Ans. C
Ans. D
Defined as the capacity of commodity to
Any particular raw materials or primary satisfy human want.
product (e.g. cloth, wool, flour, coffee..)
is called A. Discount
B. Necessity
A. Utility C. Luxuries
B. Necessity D. Utility
C. Commodity
D. Stock Ans. B

Ans. C It is the profit obtained by selling stocks at

a higher price than its original purchase
If denotes the fall in the exchange rate of price.
one currency in terms of others. The term
usually applies to floating exchange rates. A. Debenture
B. Goodwill
A. Currency appreciation C. Capital gain
B. Currency devaluation D. Internal rate of return
C. Currency float
D. Currency depreciation Ans. C

Ans. D The quantity of a certain commodity that is

offered for sale at a certain price at a given
The deliberate lowering of the price of a time and place.
nations currency in terms of the accepted
standard (Gold, American dollar or the British A. Demand
pound). B. Supply
C. Utility
A. Currency appreciation D. Market
B. Currency float
C. Currency devaluation Ans. B
D. Currency depreciation
The quantity of a certain commodity that is
Ans. C bought at a certain price at a given time and
place.
The residual value of a companys assets after
all outside liabilities (shareholders A. Demand
excluded)m have been allowed for. B. supply
C. market
A. Divided D. Utility
B. Equity
C. Return Ans. A
D. Par value
When free competition exists, the price of a C. Sunk costs
product will be that value where supply is D. Firsts costs
equal to the demand
Ans. C
A. Law of diminishing return
B. Law of supply An imaginary cost representing what will not
C. Law of demand be received if a particular strategy is
D. Law of supply and demand rejected.

Ans. D A. Sunk cost

B. Opportunity cost
When one of the factors of production is C. Replacement cost
fixed in quantity or is difficult to increase, D. Initial cost
increasing the others factors of production
will result in a less than proportionate Ans. B
increase in output.
In replacement studies, the existing process
A. Law of diminishing return or piece of equipment is known as
B. Law of supply
C. Law of demand A. Challenger
D. Law of supply and demand B. Defender
C. Liability
Ans. A D. Asset

An accounting term that represents an Ans. B

inventory account adjustments.
In replacement studies, the new process or
A. Cost of goods sold piece of equipment being considered for
B. Variance purchase is known as.
C. Overhead
D. Payback A. Challenger
B. Defender
Ans. A C. Asset
D. Liability
The simplest economic order quantity (EOQ)
model is based on which of the following Ans. A
assumptions.
_______ means that the cost of the asset is
A. Shortages are not allowed. divided into equal or unequal parts, and only
B. Demand is constant with respect to time. one of these parts is taken as an expense each
C. Reordering is instantaneous. The time year.
between order placement and receipt is
zero. A. Capitalizing the asset
D. All of the choices B. Expensing the asset
C. Depreciating the asset
Ans. D D. Artificial expense

Ans. A

Indicate the CORRECT statement about

depreciation.
In economics, a short term transaction
usually has a lifetime of A. The depreciation is not the same each
year in straight line method.
A. 3 months or less B. The declining balance method can be used
B. 1 year or less even if the salvage calue is zero.
C. 5 years or less C. The sum-of-years digit method (SYD),
D. 10 years or less the digits 1 to (n + 1) is summed.
D. Double declining balance depreciation is
Ans. C independent of the salvage value.

In the cash flow, expenses incurred before Ans. D

time = 0 is called
An artificial deductible operating expense
A. Receipts designated to compensate mining organizations
B. Disbursements for decreasing mineral reserves.
 A. Deflation Research and development costs and
B. Reflation administrative expenses are added to the
C. Depletion factory cost to give the _______ of the
D. Inflation product.
Ans. C A. Total cost
B. Marketing cost
The change in cost per unit variable change is C. Manufacturing cost
known as D. Prime cost

A. Sunk cost Ans. C

B. Incremental cost
C. Fixed cost The sum of the prime cost and the indirect
D. Semi-variable cost manufacturing cost is known as
What type of cost increases step-wise? A. Factory cost
B. Research and development cost
A. Supervision cost C. Manufacturing cost
B. Direct labor cost D. Total cost
C. Semi-variable cost
D. Operating and maintenance cost Ans. A
Ans. C The manufacturing cost plus selling expenses
equals
Which of the following is NOT a variable cost?
A. Total cost
A. Cost of miscellaneous supplies
B. Indirect production cost
B. Income taxes
C. Administrative cost
C. Payroll benefit costs
D. Miscellaneous cost
D. Insurance costs
Ans. A
Ans. D
Which of the following is NOT a direct labor
Which of the following is Not a fixed cost?
expense?
A. Rent
B. Janitorial service expenses A. Inspection
C. Supervision costs B. Testing
D. Depreciation expenses C. Supervision
D. Assembly
Ans. C
Ans. C

All are administrative expenses EXCEPT:

A. Marketing
B. Accounting
The annual costs that are incurred due to the
C. Data processing
functioning of a piece of equipment is known D. Office supplies
as
Ans. A
A. General, selling and administrative
expenses One of the following is NOT a selling or
B. Prime cost marketing expense. Which one?
C. Operating and maintenance costs
D. Total cost A. Advertising
B. Commission
Ans. C C. Insurance
D. Transportation
The sum of the direct labor cost and the
direct material cost is known as Ans. C

A. Prime cost Research and development expenses includes all

B. Total cost EXCEPT one. Which one?
C. Indirect manufacturing expenses
D. Total cost A. Testing
B. Drafting
Ans. A
 C. Prototype The ability to meet debts as they become due
D. Laboratory is known as

Ans. D A. Solvency
B. Leverage
Which is not a factory overhead expense? C. Insolvency
D. Liquidity
A. Pension, medical, vacation benefits
B. Expediting Ans. A
C. Quality control and inspection
D. Testing What is considered as an index of short-term
paying ability?
Ans. D
A. Current ratio
Bookkeeping consists of two steps, namely B. Acid test ratio
recording the transactions and categorization C. Gross margin
of transactions. Where are the transactions D. Return of investment
(receipts and disbursements? Recorded?
Ans. A
A. Journal
B. Ledger An acid test ratio is a ratio of
C. Columnar
D. Statement of account A. Gross profit to net sales
B. Net income before taxes to net sales
Ans. A C. Quick assets to current liabilities
D. Net income to owners liabilities
The following are ledger accounts EXCEPT:
Ans. C
A. Asset accounts
B. Bank accounts
C. Liability accounts
D. Owners equity accounts

Ans. B

The ratio of the net income to the owners

equity is known as

A. Price-earning ratio
The journal and the ledger together are known B. Profit margin ratio
simply as _____ of the company. C. Return of investment
D. Gross margin
A. Accounting system
B. The books Ans. C
C. Bookkeeping system
D. Balance sheet Payback period is the ratio of

Ans. B A. Initial investment to net annual profit

B. Cost of goods sold to average
The basic accounting equation is Cost of inventory on hand
C. gross profit to net sales
A. Assets = Liability + Owners equity D. net income before taxes to net sales
B. Liability = Assets + Owners equity
C. Owners equity = Assets + Liability Ans. A
D. Owners equity = Liability Assets
A secondary book of accounts the information
Ans. A of which is obtained from the journal

The ability to convert assets to cash quickly A. Balance sheet

is known as B. Ledger
C. Worksheet
A. Solvency D. Trial balance
B. Liquidity
C. Leverage Ans. B
D. Insolvency

Ans. B
The present worth of cost associated with an A. Economic order quantity
asset for an infinite period of time is B. Social order quantity
referred to as C. Public order quantity
D. Private order quantity
A. Annual cost
B. Capitalized cost Ans. A
C. Increment cost
D. Operating cost What is referred to as an individual who
organizes factors of production to undertake a
Ans. B venture with a view to profit?

A stock of a product which is held by a trade A. Agent

body or government as a means of regulating B. Entrepreneur
the price of that product. C. Salesman
D. Commissioners
A. Stock pile
B. Hoard stock Ans. B
C. Buffer stock
D. Withheld stock The money that is inactive and does not
contribute to productive effort in an economy
Ans. C is known as

A negotiable claim issued by a bank in lieu of A. Idle money

a term deposit is called B. Hard money
C. Soft currency
A. Cheque D. Frozen asset
B. T-bills
C. Currency Ans. A
D. Certificate of deposit
In counting the number of days when computing
Ans. D simple interest,

A form of business firm which is owned and run A. The first day is included
by a group of individuals for their mutual B. The last day is excluded
benefit C. The first day is included and the last
day is excluded
A. Cooperative D. The first day is excluded and the last
B. Corporation day is included
C. Enterprise
D. Partnership Ans. D

Ans. A In the so-called Bankers Rule,

A document which shows the legal ownership of A. The number of days in 1 year is 360 days
financial security and entitled to payments B. The number of days in 1 year is 365 days
thereon. C. The number of days in each month is 30
days
A. Coupon D. The number of days in 1 year is 366 days
B. Contract
C. Bond Ans. A
D. Consol
To discount an amount F for n conversion
Ans. A periods means

A government bond which have an indefinite A. To find the present value on a day which
life rather than a specific maturity is n periods after F is due
B. To find the present value on a day which
A. Coupon is n periods before F is due
B. T-bill C. To find the present value on a day which
C. Debenture is (n-1) periods before F is due
D. Consol D. To find the present value on a day which
is (n+1) periods before F is due
Ans. D Ans. B

Refers to the orders quantity that minimizes In the formula for compound interest, F= P
the inventory cost per unit time. (1+i)n, the value (1+i)n is called ____.
 A. Discount factor What refers to the extinction of the debt by
B. Interest factor any satisfactory set of payments?
C. Accumulation factor
D. Increase factor A. Liquidation
B. Liability discharge
Ans. C C. Discharging debt
D. Amortization of debt
To find the present worth of a future amount
in compound interest, we use the formula Ans. D
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
What do you call a fund, usually by periodic
deposits, to insure the accumulation of money
to provide for possible large payments?
What refers to an equation stating that the
sum of the values, on a certain comparison A. Escrow fund
date, of one set of obligations is equal to B. Sinking fund
the sum of the value of another set of this C. Mutual fund
date? D. Corporate fund

A. Equality of value Ans. B

B. Equation of value
C. Equality equation What is the term for the borrowed principal
D. Similarity equation usually mentioned in a typical bond?

Ans. B A. Bond rate

B. Face value
What is an annuity whose payments extend over C. Coupon rate
a period of time whose length cannot be D. Coupon value
foretold accurately?
Ans. B
A. Annuity certain
B. Annuity uncertain Any date on which a coupon of a bond becomes
C. Incremental annuity due will be referred to as a _____.
D. Contingent annuity
A. Maturity date
Ans. D B. Term of the bond
C. Coupon date
What do you call the time between successive D. Due date
payment dates of an annuity?
Ans. C
A. Period interval
B. Annuity period If P is the price of a bond and V is its
C. Payment interval redemption value, what do you call the value
D. Annuity term P-V?

Ans. C A. Par value

B. Face value
The time from the beginning of the first C. Premium
payment interval to the need of the last one D. Bond discount
is called the _____ of the annuity.
Ans. C
A. Period
B. Term
C. Nature
D. Type When can we say that the bond is purchased at
a discount?
Ans. B
 A. When the price of the bond is greater C. Bond rate
than the redemption value. D. And-interest price
B. When the price of the bond is less than
the redemption value. The quoted price of a bond is sometimes called
C. When the price of the bond is equal than _______.
the redemption value.
D. When the price of the bond is either A. Par value
equal to or greater than the redemption B. Face value
value. C. An-interest price
D. Coupon price
Ans. B
Ans. C

The yield of a bond is obtained by which of

the following formulas:

When can we say that the bond is purchased at A. Average investment__

Average annual interest
a premium?
B. Average annual interest_
A. When the price of the bond is greater Average investment
than the redemption value.
B. When the price of the bond is less than C. Par value_
the redemption value. Flat value
C. When the price of the bond is equal than
the redemption value. D. Par value_
D. When the price of the bond is either Flat value
equal to or greater than the redemption
value. Ans. B

Ans. A What is a bond whose face value is redeemable

in installments, with interest payable
Which of the following will happen if bond is periodically as due on outstanding principal?
bought at a discount?
A. Annuity bond
A. Each coupon payment is too small to pay B. Serial bond
C. Treasury bond
all interest due on the investors
D. Government bond
principal.
B. Each coupon payment is greater than the
Ans. B
interest due on the investors
principal. What is the term for the sum of depreciation
C. The unpaid interest on each coupon date
charges to date?
will not be considered as a new
investment in the bond. A. Accrued depreciation
D. The difference between the coupon B. Applied depreciation
payment and the interest due is a C. Accumulated depreciation
partial repayment of principal. D. All of the above

Ans. A Ans. A

In the sale of a bond, the actual purchase The difference between the value of an asset
price on any day is called ____. and its salvage or scrap value at the end of
the year is called ____.
A. Face value
B. Quoted price A. Depreciation
C. Accrued price B. Accrued value
D. Flat price C. Book value
D. Wearing value
Ans. D
Ans. D
What do you call the difference between the
flat price of the bond and the quoted price What is a life annuity?
of the bond?
A. A sequence of payment for a certain
A. Par value person which stops when person dies.
B. Accrued interest
 B. A sequence of payment intended for a Ans. B
life insurance of a person.
C. A sequence of payment for a certain The percentage of each peso of sales that is
person which continues indefinitely. net income is called ______.
D. It is the same as perpetuity.
A. Price-earning ratio
Ans. A B. Profit margin
C. Profit margin ratio
What term is usually used by the banks to D. Return of investment ratio
represent the effective interest rate per
period? Which one represents that price-earnings
ratio?
A. Yield
B. Nominal rate A. Market price per share_
C. Fixed rate Earnings per share
D. Net rate
B. Earnings per share___
Ans. A Market price per share

The acid test ratio is also known as quick C. Net credit sales__
Average net receivables
ratio. Which one represents the quick ratio?
D. Gross profit_____
A. Quick assets_____ Current liabilities
Current liabilities
Ans. A
B. Net credit sales___
Average net receivables
The book value per share of common stock is
C. Gross profit____ the ratio of the common shareholders
Current liabilities equity to ______.

D. Gross profit__ A. Average shared

Net sales B. Number of outstanding shares
C. Total subscribed shared
Ans. A D. Authorized capital stock

Which of the following represents the gross Ans. B

margin?
What refers to the price at which the quantity
A. Net income__ demanded of a good is exactly equal to the
Owners equity quantity supplied?
B. Net credit sales___
A. Equilibrium market price
Average net receivables
B. Fair market price
C. Real market price
C. Gross profit__
D. Exact market price
Current liabilities

D. Gross profit__ Ans. A

Net sales
A principle that states that consumers will
Ans. D tend to spend an increasing proportion of any
additional income upon luxury goods and a
A receivable turnover is calculated using smaller proportional on staple goods, so that
which of the following formulas? a rise in income will lower the overall share
of consumer expenditures spent on stable goods
A. Net income__ (such as basic foodstuffs)and increase the
Owners equity share of consumer expenditures on luxury goods
(such as motor cars).
B. Net credit sales___
Average net receivables
A. Placibo effect
B. Luxury effect
C. Gross profit__
C. Engels law
Current liabilities
D. Staple law
D. Gross profit__
Net sales Ans. C
What is the disciple within economics that B. Raw market
attempts to measure and estimate statistically C. Natural market
the relationship between two or more economic D. National market
variables?
Ans. A
A. Theory of values
B. Econometrics
C. Economatics
D. Econoscience The paper currency issued by the central bank
which forms the part of the countrys money
Ans. B supply
a. T-bills
What refers to the fall in the general price b. Bank note
level, frequently accompanied by a reduction c. Check
d. Coupon
in the level of national income?
Answer B
A. Inflationary gap
B. Dissavings
C. Disinflation Reduction in the national income and output
D. Inflation usually accompanied by the fall in the
general proce level
Ans. C a. Devaluatio
b. Deflation
A price for a product just covers its c. inflation
production and distribution costs with no d. Depreciation
profit margin added.
Ans. B
A. Cost price
It is a series of equal payment occurring at
B. Actual price
C. Real price equal interval of time
D. Original price a. Annuity
b. Debt
Ans. A c. Amortization
d. Deposit
A market where new entrants face cost similar
Ans. A
to those of established firms and where, on
leaving, firms are able to recoup their The place and buyers come together
capital costs, less depreciation. a. Market
b. Business
A. Free market c. Recreational center
B. Competitive market d. Buy and sell of section
C. Limited market
D. Contestable market Ans A

Ans. D A market where by there is only one buyer of

an item for which there are no good
What refers to a temporary grouping of substitute
independent firms, organization and a. Monopsony
governments, brought together to pool their b. Oligopoly
resources and skills in order to undertake a c. Monopoly
particular project? d. Oligopsony

Ans A
A. Consortium
B. Cartel
C. Cooperative
D. Union
It is a series of equal payment occurring at
equal interval of time where the first
Ans. A
paymenyt is made after several periods, after
the beginning of the payment
a. Perpetuity
b. Ordinary Annuity
What refers to a market for buying and selling
c. Annuity due
of raw materials such as tea, coffee, iron d. Deferred annuity
ore, etc.?
ans.D
A. Commodity market
 The total income equals the total operating Additional information of prospective bidders
cost. on contract documents issued prior to bidding
a. Balance sheet date.
b. In-place value a. Delict
c. Check and balance b. Escalatory
d. Break even-no gain no loss c. Technological assessment
d. Bid bulletin
Ans. D
Ans. D
Kind of obligation which has no condition
attached. A series of uniform accounts over an infinite
a. Analytic period of time.
b. Pure a. Depreciation
c. Gratuitous b. Annuity
d. Private c. Perpetuity
d. Inflation
Ans. C
Ans. C
Direct labor costs incurred in the factory
The quantity of a certain commodity that is
and direct material costs are the costs of
offered for sale at a certain price at a
all materials that go into production. The
given place and time.
sum of these two direct costs is known as
a. Demand
a. GS and A expenses
b. Supply
b. Operating and maintenance costs
c. Stocks
c. Prime cost
d. Goods
d. O and M costs
Ans. B
Ans. C
Work-in process is classified as
An index of short term paying ability is a. An assets
called b. A liability
a. Receivable turn-over c. An expenses
b. Profit margin ratio d. An owners equity
c. Current ratio
d. Acid-test ratio Ans. A

Ans. D

An artificial expenses that spreads the

purchase price of an assets or another
property over a number of years. What is the highest position in the
a. Depreciation corporation?
b. Sinking Fund a. President
c. Amnesty b. Board of directors
d. Bond c. Chairman of the board
d. Stockholders
Ans. A
Ans. C

Type of ownership in business where

Estimate value at the end of the useful life. individuals exercise and enjoy the right in
a. Market value their own interest.
b. Fair value a. Equitable
c. Salvage value b. Public
d. Book value c. Private
d. Pure
Ans. C
Ans. C
Consists of the actual counting or
determinination of the actual quantity of the Decrease in the value of a physical property
materials on hand as of a given date. due to the passage of time.
a. Physical inventory a. Inflation
b. Material update b. Depletion
c. Technological assessment c. Recession
d. Material count d. Depreciation

Ans. A Ans. D
An association of two or more individuals for quantity even though the price varies
the purpose of operating a business as co- considerably.
owners for profit. a. Utilities
a. Sole proprietorship b. Necessities
b. Company c. Luxuries
c. Partnership d. Product goods and services
d. Corporation
Ans. B
Ans. C
A condition where only few individuals
We may classify an interest rate, which produce a certain product and that any action
specifies the actual rate of interest on the of one will lead to almost the same action of
principal for one year as the others.
a. Nominal rate a. Oligopoly
b. Rate of return b. Semi-monopoly
c. Exact interest rate c. Monopoly
d. Effective rate d. Perfect competition

Ans. D Ans. A

It is defined to be the capacity of a

commodity to satisfy human want.
a. Discount
b. Luxury
c. Necessity Grant total of the assets and operational
d. Utility capability of a corporation.
a. Authorized capital
Ans. B b. Investment
c. Subscribed capital
d. Money market

Ans. A
It is the amount which a willing buyer will
pay to a willing seller or a property where The worth of the property equals to the
each has equal advantage and is under no original cost less depreciation.
compulsion to buy or sell. a. Scrap value
a. Fair value b. Face value
b. Market value c. Market value
c. Book value d. Book value
d. Salvage value
Ans. D
Ans. B
Money paid for the use of borrowed capital.
This occurs in a situation where a commodity a. Discount
b. Credit
or service is supplied by a number of vendors
c. Interest
and there is nothing to prevent additional d. Profit
vendors entering the market.
a. Perfect competition Ans. C
b. Oligopoly
c. Monopoly Liquid assets such as cash and other assets
d. Elastic demand that can be converted quickly into cast such
as accounts receivable and merchandise are
Ans. A
called
These are product or service that are desired a. Total assets
b. Fixed assets
by human and will be purchased if money is a
c. Current assets
available after the required necessities have d. None of the above
been obtained.
a. Utilities Ans. C
b. Necessities
c. Luxuries The length of time which the property may be
d. Product goods and service operated at a profit.
a. physical life
Ans. C b. Economic life
c. Operating life
These are product or services that are d. All of the above
required to support human life ad activities
that will be purchased in somewhat the same Ans. B
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 A market situation where there is one seller
d. Main clause and one buyer.
a. Monopoly
Ans. B b. Monopsony
c. Bilateral monopoly
d. Bilateral monopsony

Ans. C

The present worth of all depreciation over A market situation where there are only two
the economic life of the item is called buyers with many sellers.
a. Book value a. Duopoly
b. Capital recovery b. Oligopoly
c. Depreciation recovery c. Duopsony
d. Sinking fund d. Oligopsony

Ans. C Ans. C

Gross profit, sales less cost of goods sold, The cumulative effect of elapsed time on the
as a percentage of sales is called money value of an event, based on the earning
a. Profit margin power of equivalent investment funds capital
b. Gross margin should or will earn.
c. Net income a. Present worth factor
d. Rate of return b. Interest rate
c. Time value of money
Ans. B d. Yield

Worth of the property as shown in the Ans. C

accounting records of an enterprise.
a. Fair value Defined as the future value minus the present
b. Market value value.
c. Salvage value a. Interest
d. Book value b. Rate of return
c. Discount
Ans. D d. Capital

Those funds that are required to make the Ans. C

enterprise or project a going concern.
a. Initial investment The flow back of profit plus depreciation
b. Current accounts from a given project is called.
c. Working capital a. Capital recovery
d. Subscribed capital b. Cash flow
c. Economic flow
Ans. C d. Earning value

A market situation where there are one seller Ans. B

and many buyers.
a. Monopoly The profit derived from a project or business
b. Monopsony enterprise whithout consideration of
c. Oligopoly obligations to financial contribution or
d. Oligopsony claims of other based on profit.
a. Economic life
Ans. A b. Yield
c. Earning value
A market situation where there are few d. Expected yield
sellers and few buyers.
a. Oligopoly Ans. A
b. Oligopsony
c. Bilateral oligopoly
d. Bilateral oligopsony
The payment for the use of borrowed money is
Ans. C called
 a. Loan a. Scrap value
b. Maturity value b. Salvage value
c. Interest c. Book value
d. Principal d. Going value

Ans. C Ans. B

The interest rate at which the present work An intangible value which is actually
of the cash flow on a project is zero of the operating concern has due to its operation.
interest earned by an investment. a. Book value
a. Effective rate b. Fair value
b. Nominal rate c. Goodwill value
c. Rate of return d. Going value
d. Yield
Ans. D
Ans. C
The value which a disinterested third party,
The ratio of the interest payment to the different from the buyer and seller, will
principal for a given unit of time and determine in order to establish a price
usually expressed as a percentage of the acceptable to both parties.
principal. a. Market value
a. Interest b. Good value
b. Interest rate c. Fair value
c. Investment d. Franchise value
d. All of the above
Ans. C
Ans. B
A type annuity where the payments are made at
The true value of interest rate computed by the end of each payment period starting from
equations for compound interest for a 1 year the first period.
period is known as a. Ordinary annuity
a. Expected return b. Annuity due
b. Interest c. Deferred annuity
c. Nominal interest d. Perpetuity
d. Effective interest
Ans. A
Ans. D
It is a series of time where the first
The intangible item of value from the payment is made after several periods, after
exclusive right of a company to provide a the beginning of the payment.
specific product or service in a stated a. Deferred annuity
region of the country. b. Delayed annuity
a. Market value c. Progressive annuity
b. Book value d. Simple annuity
c. Goodwill value
d. Franchise value Ans. A

Ans. D

The recorded current value of an asset is A type of annuity where the payments are made
known as at the start of each period from the first
a. Scrap value period.
b. Salvage value a. Ordinary annuity
c. Book value b. Annuity due
d. Present wort c. Deferred annuity
d. Perpetuity
Ans. C
Ans. B
Scrap value of an asset is sometimes known
as. Which is not an essential element of an
a. Book value ordinary annuity?
b. Salvage value a. The amounts of all payments are
c. Replacement value equal.
d. Future value b. The payments are made at equal
interval of time
Ans. B c. The first payment is made at the
beginning of each period
What is sometimes called second hand value?
 d. Compound interest is paid on all c. Declining balance method
amounts in the annuity d. SYD method

Ans. C Ans. A

A is a periodic payment and I is the interest Which of the following depreciation methods
rate, then present worth of a perpetuity = cannot have a salvage value of zero?
a. Ai a. Declining balance method
b. Ai^n b. Sinking fund method
c. A^n/ i c. Straight line method
d. A/i d. SYD method

Ans. D Ans. A

A mathematical expression also known as the A method of depreciation where a fixed sum of
present value of one is called money is regularly deposited at compound
a. Load factor interest in a real or imaginary fund in order
b. Demand facetor to accumulate an amount equal to the total
c. Sinking fund factor depreciation of an asset at the end of the
d. Present worth factor assets estimated life.
a. Straight line method
Ans. D b. Sinking fund method
c. Declining balance method
As applied to a capitalized asset, the d. SYD method
distribution of the initial cost by a
periodic changes to operation as in Ans. B
depreciation or reduction of a debt by either
periodic or irregular prearranged program is
called
a. Annuity
b. Capital recovery
c. Annuity factor
d. Amortization
The function of interest rate and time
Ans. D determines the cumulative amount of a sinking
fund resulting from specific deposits.
a. Sinking fund factor
b. Present worth factor
c. Capacity
d. Demand factor

The reduction of the value of an asset due to Ans. A

constant use and passage of time.
a. Scrap value The first cost of any property includes
b. Depletion a. The original purchase price and
c. Depreciation freight and transportation
d. Book value charges
b. Installation expenses
Ans. C c. Initial taxes and permits fee
d. All of the above
A method of computing depreciation in which
the annual charge is a fixed percentage of Ans. A
the depreciated book value at the beginning
of the year to which the depreciation In SYD method, the sum of years digit is
applies. calculated using which formua with n= number
a. Straight line method of useful years of the equipment.
b. Sinking fund method a. n(n-1)/2
c. SYD method b. n(n+1)/2
d. Declining balance method c. n(n+1)
d. n(n-1)
Ans. D
ans. B
A method of depreciation whereby the amount
to recover is spread uniformly over the capitalized cost of any property is equal to
estimated life of the asset in terms of the the
a. annual cost
periods or units of output.
b. first cost + cost of perpetual
a. Straight line method
b. Sinking fund method cost
 c. first cost + cost of perpetual
maintenance
d. first cost + salvage value

ans. C

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
c. inflation
d. incremental cost
In case of bankruptcy of a partnership
ans. B a. The partners are not liable for
the liabilities of the
is the simplest form of business organization
a. sole propeitorship partnership.
b. partnership b. The partnership assets (excluding
c. enterprise the partner personal assets) only
d. corporation will be used to pay the
liabilities.
ans. A c. The partners personal assets are
attached to the debt of the
an association of two or more person for a partnership
purpose of engaging in a profitable business d. The partners may sell stock to
a. sole proprietorship generate additional capital.
b. enterprise
c. partnership Ans. C
d. corporation
Which is TRUE about partnership?
Ans. C a. It has a perpetual life.
b. It will be desolved if one of the
a distinct legal entity which can practically
partners ceases to be connected
transact any business transaction which a
with the partnership
real person could do. c. It can be handed down from one
a. Sole proprietorship
b. Enterprise generation of partners to
c. Partnership another.
d. Corporation d. Its capitalization must be equal
for each partner.
Ans. D
Ans. D
Double taxation is disadvatange of which
business organization Which is TRUE about corporation?
a. Sole proprietorship a. It is the not best form of
b. Partnership business organization.
c. Corporation b. The minimum number of
d. Enterprise incorporators to start a
corporation is there.
Ans. C c. Its life is dependent on the
lives of the incorporators.
Which is NOT a type of business organization? d. The stockholders of the
a. Sole proprietorship
corporation are only liable to
b. Corporation
c. Enterprise the extent of their investments.
d. Partnership
Ans. D
Ans. C
Represent ownership, and enjoys certain
What is the minimum number of incorporators preference than ordinary stock.
in order that a corporation be organized? a. Authorized capital stock
a. 3 b. Preferred stock
b. 5 c. Common stock
c. 10 d. Incorporators stock
d. 7
Ans. B
Ans. B
Represent the ownership of stockholders who c. Certificate of deposit
have a residual claim on the assets of the d. All of these
corporation after all other claims have been
Ans. A
settled.
a. Authorized capital
A type of bond where the corporation pledges
b. Preferred stock
c. Incorporators stock securities which it owns (i.e. stock, bonds
d. Common stock of its subsidiaries)
a. Mortgage bond
Ans. D b. Register bond
c. Coupon Bond
The amount of companys profits that the d. Collateral trust bond
board of directors of the corporation decides
Ans. D
to distribute to ordinary shareholders.
a. Dividend
b. Return
A type of bond which does not have security
c. Share stock
d. Par value except a promise to pay by the issuing
corporation.
Ans. A a. Mortgage bond
b. Register bond
A certified of indebtness of a corporation c. Collateral trust bond
usually for a period not less than 10 years d. Debenture bond
and guaranteed by a mortgage on certain
Ans. C
assets of the corporation.
a. Bond
b. T-bill
c. Preferred stock
d. Common stock

Ans. A

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

ECONOMICS
FINAL COACHING
By Tigers Review Center