ACCBP 100 - FINALS - 1stT - 1stS - 2019-2020

UM TAGUM COLLEGE
Arellano Street, Tagum City, 8100 Philippines

DEPARTMENT OF ACCOUNTING EDUCATION
ACCBP 100-ACCOUNTING PLUS– 3rd EXAMINATION
1st Term, 2nd Semester, S.Y. 2018-2019
December 21, 2018
General Instructions:
1. Read instructions carefully per section of the exam. NOT FOLLOWING INSTRUCTION is considered incorrect.
2. Use only blue or black ball point pen in answering the examination.
3. For Multiple Choice Questions. Choose the letter of the correct answer. Strictly NO Erasure.
4. For Computation Questions. Show your solution. No solution, no points.
MULTIPLE CHOICE QUESTIONS
Management
Remembering (4)
Understanding (3)
Analysis (3)
Marketing
Remembering (4)
Understanding (3)
Analysis (3)
Finance
21. May be defined as the study of the acquisition and investment of cash for the purpose of enhancing value and
wealth.
a. Business finance
b. Finance
c. Private Finance
d. Public Finance
22. The Goals of business finance are variously expressed as follows: (except)
a. Maximing profit
b. Maximizing future worth
c. Maximizing profit subject to cash constraint.
d. Maximizing profitability
23. Money markets are markets for

a. Foreign stocks.
b. Consumer automobile loans.
c. Short-term debt securities.
d. Long-term bonds.
24. A 30-year bond issued by Gary's Plaid Pants Warehouse, Inc., in 1997 would now trade in the
a. primary money market.
b. secondary money market.
c. primary capital market.
d. secondary capital market.
25. Jose now has $500. How much would he have after 6 years if he leaves it invested at 5.5% with annual
compounding?
a. $591.09
b. $622.20
c. $654.95
d. $689.42
26. Assume a new law is passed that restricts investors to holding only one asset. A risk-averse investor is considering
two possible assets as the asset to be held in isolation. The assets related probabilities (that is, the probability
distributions) and possible returns are as follows:
ACCBP 100 – ACCOUNTING PLUS. (THIRD EXAMINATION) Page 1|4

Asset X Asset Y
P k P k
0.10 -3% 0.05 -3%

0.10 2% 0.10 2%
0.25 5% 0.30 5%
0.25 8% 0.30 8%
0.30 10% 0.25 10%
Which asset should be preferred?

a. Asset X, since its expected return is higher.
b. Either one, since the expected returns are the same.
c. Asset X, since its standard deviation is lower.
d. Asset Y, since its expected return is higher.
Economics
27. Economics may best be defined as the:
A) interaction between macro and micro considerations.
B) social science concerned with the efficient use of scarce resources to achieve maximum satisfaction of economic wants.
C) empirical testing of value judgments through the use of logic.
D) use of policy to refute facts and hypotheses.
28. The study of economics is primarily concerned with:

A) keeping private businesses from losing money.
B) demonstrating that capitalistic economies are superior to socialistic economies.
C) choices that are made in seeking to use scarce resources efficiently.
D) determining the most equitable distribution of society's output.
29. The term "ceteris paribus" means:

A) that if event A precedes event B, A has caused B.
B) that economics deals with facts, not values.
C) other things equal.
D) prosperity inevitably follows recession.
30. The law of demand states that:

A) price and quantity demanded are inversely related.
B) the larger the number of buyers in a market, the lower will be product price.
C) price and quantity demanded are directly related.
D) consumers will buy more of a product at high prices than at low prices.
31. Economists use the term demand to refer to:

A) a particular price-quantity combination on a stable demand curve.
B) the total amount spent on a particular commodity over a stipulated time period.
C) an upsloping line on a graph that relates consumer purchases and product price.
D) a schedule of various combinations of market prices and amounts demanded.
32. The study of economics

A) is a very narrow endeavor.
B) is a way of analyzing decision-making processes caused by scarcity.
C) is concerned with proving that capitalism is better than socialism.
D) focuses on how a business should function.
33. In presenting the idea of a demand curve economists presume that the most important variable in determining the
quantity demanded is:
A) the price of the product itself.
B) the prices of related goods.
C) consumer income.
D) consumer tastes.
34. A demand curve:

A) shows the relationship between price and quantity supplied.
B) indicates the quantity demanded at each price in a series of prices.
C) graphs as an upsloping line.
D) shows the relationship between income and spending.

35. The relationship between quantity supplied and price is _____ and the relationship between quantity demanded and
price is _____.
A) direct, inverse
B) inverse, direct
C) inverse, inverse
D) direct, direct
36. If we say that two variables are directly related, this means that:
A) the relationship between the two is purely random.
B) an increase in one variable is associated with a decrease in the other variable.
C) an increase in one variable is associated with an increase in the other variable.
D) the two graph as a downsloping line.
37. If we say that two variables are inversely related, this means that:
A) the two graph as an upsloping line.
B) an increase in one variable is associated with a decrease in the other.
C) an increase in one variable is associated with an increase in the other.
D) the resulting relationship can be portrayed by a straight line parallel to the horizontal axis.
38. If a positive relationship exists between x and y:

A) an increase in x will cause y to decrease.
B) the relationship will graph as an upsloping line.
C) a decrease in x will cause y to increase.
D) the vertical intercept must be positive.
39. If two variables are inversely related, then as the value of one variable:
A) increases, the value of the other may either increase or decrease.
B) decreases, the value of the other decreases.
C) increases, the value of the other decreases.
D) increases, the value of the other increases.
40. According to Emerson: "Want is a growing giant whom the coat of Have was never large enough to cover." According
to economists, "Want" exceeds "Have" because:
A) people are greedy.
B) human beings are inherently insecure.
C) productive resources are limited.
D) people are irrational.
41. You should decide to go to a movie:

A) if the marginal cost of the movie exceeds its marginal benefit.
B) if the marginal benefit of the movie exceeds its marginal cost.
C) if your income will allow you to buy a ticket.
D) because movies are enjoyable.
42. Refer to the graph below. Which of the following statements is correct?
A) Quantity demanded and quantity supplied are independent of price.

B) Price and quantity demanded are directly related.
C) Price and quantity supplied are directly related.
D) Price and quantity supplied are inversely related.
43. An increase in the price of a product will reduce the amount of it purchased because:
A) supply curves are upsloping.
B) the higher price means that real incomes have risen.
C) consumers will substitute other products for the one whose price has risen.
D) consumers substitute relatively high-priced for relatively low-priced products

44. In the past few years, the demand for donuts has greatly increased. This increase in demand might best be explained
by:.
A) an increase in consumer income.
B) a change in consumer expectations.
C) an increase in the price of a substitute good.
D) a change in buyer tastes.
45. An increase in consumer incomes will:

A) increase the demand for an inferior good.
B) increase the demand for a normal good.
C) increase the supply of an inferior good.
D) decrease the supply of a normal good.
46. Which of the following is NOT listed in the book as a reason to study economics?
A) to learn a way of thinking
B) to understand society and global affairs
C) to examine the debate about the role of government
D) to learn how to make lots of money
47. Which of the following statements is NOT correct?

A) Economics is a behavioral science.
B) In large measure, economics is the study of how people make choices.
C) If poverty was eliminated there would be no reason to study economics.
D) Economic analysis can be used to explain how both individuals and societies make decisions.
48. Refer to the diagram below. The equilibrium price and quantity in this market will be: (3 points)
A) $1.00 and 200.

B) $1.60 and 130.
C) $.50 and 130.
D) $1.60 and 290.
For the next two items: Show your solution.

Consider the following as the demand and supply function of calculator per day:
Qd = 950 – 1.25P
Qs = 1.25P
Questions:
49. Compute for the market equilibrium price: (3 points)
a. 1.25 b. 380 c. 300 d. 950
50. Compute for the market equilibrium quantity: (3 points)
a. 950 b. 450 c. 475 d. 0

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UM TAGUM COLLEGE

Arellano Street, Tagum City, 8100 Philippines

MULTIPLE CHOICE QUESTIONS

23. Money markets are markets for

ACCBP 100 – ACCOUNTING PLUS. (THIRD EXAMINATION) Page 1|4

0.10 -3% 0.05 -3%

0.30 10% 0.25 10%

Which asset should be preferred?

28. The study of economics is primarily concerned with:

29. The term "ceteris paribus" means:

30. The law of demand states that:

31. Economists use the term demand to refer to:

32. The study of economics

34. A demand curve:

ACCBP 100 – ACCOUNTING PLUS. (THIRD EXAMINATION) Page 2|4

38. If a positive relationship exists between x and y:

41. You should decide to go to a movie:

A) Quantity demanded and quantity supplied are independent of price.

ACCBP 100 – ACCOUNTING PLUS. (THIRD EXAMINATION) Page 3|4

45. An increase in consumer incomes will:

47. Which of the following statements is NOT correct?

A) $1.00 and 200.

For the next two items: Show your solution.

ACCBP 100 – ACCOUNTING PLUS. (THIRD EXAMINATION) Page 4|4

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