A type of bond issued jointly by two or more The 72 rule is used to determine

corporations.
A. How many years money will triple
A. Joint bond B. How many years money will double
B. Debenture bond C. How many years to amass 1 million
C. Registered bond D. How many years to quadruple the money
D. Collateral trust bond
Ans. B
Ans. A
To triple the principal one must use
A type of bond whose guaranty is in lien on
railroads equipments. A. Integration
B. Derivatives
A. Equipment obligation bond C. Logarithms
B. Debenture bond D. Implicit functions
C. Registered bond
D. Insfrastructure bond Ans. C

Ans. A A currency traded in a foreign exchange market

to which the demand is consistently high in
If the security of the bond is a mortgage on relation to its supply.
certain specified asset of a corporation, this
bond is classified as A. Money market
B. Hard currency
A. Registered bond C. Treasury bill
B. Mortgage bond D. Certificated of deposit
C. Coupon bond
D. Joint bond Ans. B

Ans. B Everything a company owns to which has a money

value is classified as an asset. Which of the
A type of bond where the corporation’s owners following is classified as an asset?
name are recorded and the interest is paid
periodically to the owners with their asking A. Intangible asset
for it. B. Fixed asset
C. Trade investments
A. Registered bond D. All of these
B. Preferred bond
C. Incorporators bond Ans. D
D. All of these
Which of the example of an intangible asset?
Ans. A
A. Cash
Bond to which are attached coupons indicating B. Investment in subsidiary companies
the interest due and the date when such C. Furnitures
interest is to be paid. D. Patents

A. Registered bond Ans. D

B. Coupon bond
C. Mortgage bond Land buildings, plants and machinery are
D. Collateral trust bond examples of

Ans. B A. Current assets

B. Trade investments
An amount of money invested at 12% interest C. Fixed assets
per annum will double in approximately D. Intangible assets

A. 4 years Ans. C
B. 5 years
C. 6 years
D. 7 years

Ans. C
An increase in the value of a capital asset is The residual value of a company’s assets after
called all outside liabilities (shareholders
excluded)m have been allowed for.
A. Profit
B. Capital gain A. Divided
C. Capital expenditure B. Equity
D. Capital stock C. Return
D. Par value
Ans. B
Ans. B
The reduction in the money value of a capital
asset is called A saving which takes place because good are
not available for consumption rather than the
A. Capital expenditure consumer really want to save.
B. Capital loss
C. Loss A. Compulsory saving
D. Deficit B. Consumer saving
C. Forced saving
Ans. B D. All of these

It is negotiable claim issued by bank in lieu Ans. C

of a team deposit.
A document that shows proof of legal ownership
A. Time deposit of a financial security.
B. Bond
C. Capital gain A. Bond
D. Certificate of deposit B. Bank note
C. Coupon
Ans. D D. Check

Any particular raw materials or primary Ans. C

product (e.g. cloth, wool, flour, coffee..)
is called Defined as the capacity of commodity to
satisfy human want.
A. Utility
B. Necessity A. Discount
C. Commodity B. Necessity
D. Stock C. Luxuries
D. Utility
Ans. C
Ans. B
If denotes the fall in the exchange rate of
one currency in terms of others. The term It is the profit obtained by selling stocks at
usually applies to floating exchange rates. a higher price than its original purchase
price.
A. Currency appreciation
B. Currency devaluation A. Debenture
C. Currency float B. Goodwill
D. Currency depreciation C. Capital gain
D. Internal rate of return
Ans. D
Ans. C
The deliberate lowering of the price of a
nation’s currency in terms of the accepted The quantity of a certain commodity that is
standard (Gold, American dollar or the British offered for sale at a certain price at a given
pound). time and place.

A. Currency appreciation A. Demand

B. Currency float B. Supply
C. Currency devaluation C. Utility
D. Currency depreciation D. Market

Ans. C Ans. B
The quantity of a certain commodity that is In economics, a “short – term” transaction
bought at a certain price at a given time and usually has a lifetime of
place.
A. 3 months or less
A. Demand B. 1 year or less
B. supply C. 5 years or less
C. market D. 10 years or less
D. Utility
Ans. C
Ans. A
In the cash flow, expenses incurred before
“When free competition exists, the price of a time = 0 is called
product will be that value where supply is
equal to the demand A. Receipts
B. Disbursements
A. Law of diminishing return C. Sunk costs
B. Law of supply D. Firsts costs
C. Law of demand
D. Law of supply and demand Ans. C

Ans. D An imaginary cost representing what will not

be received if a particular strategy is
“When one of the factors of production is rejected.
fixed in quantity or is difficult to increase,
increasing the others factors of production A. Sunk cost
will result in a less than proportionate B. Opportunity cost
increase in output.” C. Replacement cost
D. Initial cost
A. Law of diminishing return
B. Law of supply Ans. B
C. Law of demand
D. Law of supply and demand In replacement studies, the existing process
or piece of equipment is known as
Ans. A
A. Challenger
An accounting term that represents an B. Defender
inventory account adjustments. C. Liability
D. Asset
A. Cost of goods sold
B. Variance Ans. B
C. Overhead
D. Payback In replacement studies, the new process or
piece of equipment being considered for
Ans. A purchase is known as.

The simplest economic order quantity (EOQ) A. Challenger

model is based on which of the following B. Defender
assumptions. C. Asset
D. Liability
A. Shortages are not allowed.
B. Demand is constant with respect to Ans. A
time.
C. Reordering is instantaneous. The time _______ means that the cost of the asset is
between order placement and receipt is divided into equal or unequal parts, and only
zero. one of these parts is taken as an expense each
D. All of the choices year.

Ans. D A. Capitalizing the asset

B. Expensing the asset
C. Depreciating the asset
D. Artificial expense

Ans. A
Indicate the CORRECT statement about The annual costs that are incurred due to the
depreciation. functioning of a piece of equipment is known
as
A. The depreciation is not the same each
year in straight line method. A. General, selling and administrative
B. The declining balance method can be expenses
used even if the salvage calue is zero. B. Prime cost
C. The sum-of-years’ digit method (SYD), C. Operating and maintenance costs
the digits 1 to (n + 1) is summed. D. Total cost
D. Double declining balance depreciation
is independent of the salvage value. Ans. C

Ans. D The sum of the direct labor cost and the

direct material cost is known as
An artificial deductible operating expense
designated to compensate mining organizations A. Prime cost
for decreasing mineral reserves. B. Total cost
C. Indirect manufacturing expenses
A. Deflation D. Total cost
B. Reflation
C. Depletion Ans. A
D. Inflation
Research and development costs and
Ans. C administrative expenses are added to the
factory cost to give the _______ of the
The change in cost per unit variable change is product.
known as
A. Total cost
A. Sunk cost B. Marketing cost
B. Incremental cost C. Manufacturing cost
C. Fixed cost D. Prime cost
D. Semi-variable cost
Ans. C
What type of cost increases step-wise?
The sum of the prime cost and the indirect
A. Supervision cost manufacturing cost is known as
B. Direct labor cost
C. Semi-variable cost A. Factory cost
D. Operating and maintenance cost B. Research and development cost
C. Manufacturing cost
Ans. C D. Total cost

Which of the following is NOT a variable cost? Ans. A

A. Cost of miscellaneous supplies The manufacturing cost plus selling expenses

B. Income taxes equals
C. Payroll benefit costs
D. Insurance costs A. Total cost
B. Indirect production cost
Ans. D C. Administrative cost
D. Miscellaneous cost
Which of the following is Not a fixed cost?
Ans. A
A. Rent
B. Janitorial service expenses Which of the following is NOT a direct labor
C. Supervision costs expense?
D. Depreciation expenses
A. Inspection
Ans. C B. Testing
C. Supervision
D. Assembly

Ans. C
All are administrative expenses EXCEPT: The journal and the ledger together are known
simply as _____ of the company.
A. Marketing
B. Accounting A. Accounting system
C. Data processing B. The books
D. Office supplies C. Bookkeeping system
D. Balance sheet
Ans. A
Ans. B
One of the following is NOT a selling or
marketing expense. Which one? The basic accounting equation is

A. Advertising A. Assets = Liability + Owner’s equity

B. Commission B. Liability = Assets + Owner’s equity
C. Insurance C. Owner’s equity = Assets + Liability
D. Transportation D. Owner’s equity = Liability – Assets

Ans. C Ans. A

Research and development expenses includes all The ability to convert assets to cash quickly
EXCEPT one. Which one? is known as

A. Testing A. Solvency
B. Drafting B. Liquidity
C. Prototype C. Leverage
D. Laboratory D. Insolvency

Ans. D Ans. B

Which is not a factory overhead expense? The ability to meet debts as they become due
is known as
A. Pension, medical, vacation benefits
B. Expediting A. Solvency
C. Quality control and inspection B. Leverage
D. Testing C. Insolvency
D. Liquidity
Ans. D
Ans. A
Bookkeeping consists of two steps, namely
recording the transactions and categorization What is considered as an index of short-term
of transactions. Where are the transactions paying ability?
(receipts and disbursements? Recorded?
A. Current ratio
A. Journal B. Acid test ratio
B. Ledger C. Gross margin
C. Columnar D. Return of investment
D. Statement of account
Ans. A
Ans. A
An acid test ratio is a ratio of
The following are ledger accounts EXCEPT:
A. Gross profit to net sales
A. Asset accounts B. Net income before taxes to net sales
B. Bank accounts C. Quick assets to current liabilities
C. Liability accounts D. Net income to owner’s liabilities
D. Owner’s equity accounts
Ans. C
Ans. B
The ratio of the net income to the owner’s A form of business firm which is owned and run
equity is known as by a group of individuals for their mutual
benefit
A. Price-earning ratio
B. Profit margin ratio A. Cooperative
C. Return of investment B. Corporation
D. Gross margin C. Enterprise
D. Partnership
Ans. C
Ans. A
Payback period is the ratio of
A document which shows the legal ownership of
A. Initial investment to net annual profit financial security and entitled to payments
B. Cost of goods sold to average thereon.
Cost of inventory on hand
C. gross profit to net sales A. Coupon
D. net income before taxes to net sales B. Contract
C. Bond
Ans. A D. Consol

A secondary book of accounts the information Ans. A

of which is obtained from the journal
A government bond which have an indefinite
A. Balance sheet life rather than a specific maturity
B. Ledger
C. Worksheet A. Coupon
D. Trial balance B. T-bill
C. Debenture
Ans. B D. Consol

The present worth of cost associated with an Ans. D

asset for an infinite period of time is
referred to as Refers to the orders quantity that minimizes
the inventory cost per unit time.
A. Annual cost
B. Capitalized cost A. Economic order quantity
C. Increment cost B. Social order quantity
D. Operating cost C. Public order quantity
D. Private order quantity
Ans. B
Ans. A
A stock of a product which is held by a trade
body or government as a means of regulating What is referred to as an individual who
the price of that product. organizes factors of production to undertake a
venture with a view to profit?
A. Stock pile
B. Hoard stock A. Agent
C. Buffer stock B. Entrepreneur
D. Withheld stock C. Salesman
D. Commissioners
Ans. C
Ans. B
A negotiable claim issued by a bank in lieu of
a term deposit is called The money that is inactive and does not
contribute to productive effort in an economy
A. Cheque is known as
B. T-bills
C. Currency A. Idle money
D. Certificate of deposit B. Hard money
C. Soft currency
Ans. D D. Frozen asset

Ans. A
In counting the number of days when computing What refers to an equation stating that the
simple interest, sum of the values, on a certain comparison
date, of one set of obligations is equal to
A. The first day is included the sum of the value of another set of this
B. The last day is excluded date?
C. The first day is included and the last
day is excluded A. Equality of value
D. The first day is excluded and the last B. Equation of value
day is included C. Equality equation
D. Similarity equation
Ans. D
Ans. B
In the so-called “Banker’s Rule”,
What is an annuity whose payments extend over
A. The number of days in 1 year is 360 a period of time whose length cannot be
days foretold accurately?
B. The number of days in 1 year is 365
days A. Annuity certain
C. The number of days in each month is 30 B. Annuity uncertain
days C. Incremental annuity
D. The number of days in 1 year is 366 D. Contingent annuity
days
Ans. D
Ans. A
What do you call the time between successive
To discount an amount F for n conversion payment dates of an annuity?
periods means
A. Period interval
A. To find the present value on a day B. Annuity period
which is n periods after F is due C. Payment interval
B. To find the present value on a day D. Annuity term
which is n periods before F is due
C. To find the present value on a day Ans. C
which is (n-1) periods before F is due
D. To find the present value on a day The time from the beginning of the first
which is (n+1) periods before F is due payment interval to the need of the last one
Ans. B is called the _____ of the annuity.

In the formula for compound interest, F= P A. Period

(1+i)n, the value (1+i)n is called ____. B. Term
C. Nature
A. Discount factor D. Type
B. Interest factor
C. Accumulation factor Ans. B
D. Increase factor
What refers to the extinction of the debt by
Ans. C any satisfactory set of payments?

To find the present worth of a future amount A. Liquidation

in compound interest, we use the formula B. Liability discharge
P=F(1+i)-n. What do you call the factor (1+i)- C. Discharging debt
n? D. Amortization of debt

A. Discount Ans. D
B. Accumulation factor
C. Interest factor
D. Reduction factor

Ans. A
What do you call a fund, usually by periodic When can we say that the bond is purchased at
deposits, to insure the accumulation of money a premium?
to provide for possible large payments?
A. When the price of the bond is greater
A. Escrow fund than the redemption value.
B. Sinking fund B. When the price of the bond is less than
C. Mutual fund the redemption value.
D. Corporate fund C. When the price of the bond is equal
than the redemption value.
Ans. B D. When the price of the bond is either
equal to or greater than the redemption
What is the term for the borrowed principal value.
usually mentioned in a typical bond?
Ans. A
A. Bond rate
B. Face value Which of the following will happen if bond is
C. Coupon rate bought at a discount?
D. Coupon value
A. Each coupon payment is too small to pay
Ans. B all interest due on the investor’s
principal.
Any date on which a coupon of a bond becomes B. Each coupon payment is greater than the
due will be referred to as a _____. interest due on the investor’s
principal.
A. Maturity date
C. The unpaid interest on each coupon date
B. Term of the bond
will not be considered as a new
C. Coupon date
investment in the bond.
D. Due date
D. The difference between the coupon
payment and the interest due is a
Ans. C
partial repayment of principal.
If P is the price of a bond and V is its
Ans. A
redemption value, what do you call the value
P-V?
In the sale of a bond, the actual purchase
price on any day is called ____.
A. Par value
B. Face value
A. Face value
C. Premium
B. Quoted price
D. Bond discount
C. Accrued price
D. Flat price
Ans. C
Ans. D

What do you call the difference between the

When can we say that the bond is purchased at
flat price of the bond and the quoted price
a discount?
of the bond?
A. When the price of the bond is greater
A. Par value
than the redemption value.
B. Accrued interest
B. When the price of the bond is less than
C. Bond rate
the redemption value.
D. And-interest price
C. When the price of the bond is equal
than the redemption value.
The quoted price of a bond is sometimes called
D. When the price of the bond is either
_______.
equal to or greater than the redemption
value. A. Par value
B. Face value
Ans. B
C. An-interest price
D. Coupon price

Ans. C
The yield of a bond is obtained by which of What term is usually used by the banks to
the following formulas: represent the effective interest rate per
period?
A. Average investment__
Average annual interest A. Yield
B. Nominal rate
B. Average annual interest_ C. Fixed rate
Average investment D. Net rate

C. Par value_ Ans. A

Flat value
The acid test ratio is also known as quick
D. Par value_ ratio. Which one represents the quick ratio?
Flat value
A. Quick assets_____
Current liabilities
Ans. B

What is a bond whose face value is redeemable B. Net credit sales___

in installments, with interest payable Average net receivables
periodically as due on outstanding principal?
C. Gross profit____
A. Annuity bond Current liabilities
B. Serial bond
C. Treasury bond D. Gross profit__
D. Government bond Net sales

Ans. B Ans. A

What is the term for the sum of depreciation Which of the following represents the gross
charges to date? margin?

A. Accrued depreciation A. Net income__

B. Applied depreciation Owner’s equity
C. Accumulated depreciation
D. All of the above B. Net credit sales___
Average net receivables
Ans. A
C. Gross profit__
The difference between the value of an asset Current liabilities
and its salvage or scrap value at the end of
the year is called ____. D. Gross profit__
Net sales
A. Depreciation
B. Accrued value Ans. D
C. Book value
D. Wearing value A receivable turnover is calculated using
which of the following formulas?
Ans. D
A. Net income__
What is a life annuity? Owner’s equity

A. A sequence of payment for a certain B. Net credit sales___

person which stops when person dies. Average net receivables
B. A sequence of payment intended for a
life insurance of a person. C. Gross profit__
C. A sequence of payment for a certain Current liabilities
person which continues indefinitely.
D. It is the same as perpetuity. D. Gross profit__
Net sales
Ans. A
Ans. B
The percentage of each peso of sales that is What is the disciple within economics that
net income is called ______. attempts to measure and estimate statistically
the relationship between two or more economic
A. Price-earning ratio variables?
B. Profit margin
C. Profit margin ratio A. Theory of values
D. Return of investment ratio B. Econometrics
C. Economatics
Which one represents that price-earnings D. Econoscience
ratio?
Ans. B
A. Market price per share_
Earnings per share What refers to the fall in the general price
level, frequently accompanied by a reduction
B. Earnings per share___ in the level of national income?
Market price per share
A. Inflationary gap
C. Net credit sales__ B. Dissavings
Average net receivables C. Disinflation
D. Inflation
D. Gross profit_____
Current liabilities Ans. C

Ans. A A price for a product just covers its

production and distribution costs with no
The book value per share of common stock is profit margin added.
the ratio of the common shareholders’
equity to ______. A. Cost price
B. Actual price
A. Average shared C. Real price
B. Number of outstanding shares D. Original price
C. Total subscribed shared
D. Authorized capital stock Ans. A

Ans. B A market where new entrants face cost similar

to those of established firms and where, on
What refers to the price at which the quantity leaving, firms are able to recoup their
demanded of a good is exactly equal to the capital costs, less depreciation.
quantity supplied?
A. Free market
A. Equilibrium market price B. Competitive market
B. Fair market price C. Limited market
C. Real market price D. Contestable market
D. Exact market price
Ans. D
Ans. A
What refers to a temporary grouping of
A principle that states that consumers will independent firms, organization and
tend to spend an increasing proportion of any governments, brought together to pool their
additional income upon luxury goods and a resources and skills in order to undertake a
smaller proportional on staple goods, so that particular project?
a rise in income will lower the overall share
of consumer expenditures spent on stable goods A. Consortium
(such as basic foodstuffs)and increase the B. Cartel
share of consumer expenditures on luxury goods C. Cooperative
(such as motor cars). D. Union

A. Placibo effect Ans. A

B. Luxury effect
C. Engel’s law
D. Staple law

Ans. C
What refers to a market for buying and selling It is a series of equal payment occurring at
of raw materials such as tea, coffee, iron equal interval of time where the first
ore, etc.? paymenyt is made after several periods,
after the beginning of the payment
A. Commodity market a. Perpetuity
B. Raw market b. Ordinary Annuity
C. Natural market c. Annuity due
D. National market d. Deferred annuity

Ans. A ans.D

The total income equals the total operating

cost.
The paper currency issued by the central a. Balance sheet
bank which forms the part of the country’s b. In-place value
money supply c. Check and balance
a. T-bills d. Break even-no gain no loss
b. Bank note
c. Check Ans. D
d. Coupon
Kind of obligation which has no condition
Answer B attached.
a. Analytic
Reduction in the national income and output b. Pure
usually accompanied by the fall in the c. Gratuitous
general proce level d. Private
a. Devaluatio
b. Deflation Ans. C
c. inflation
d. Depreciation Direct labor costs incurred in the factory
and direct material costs are the costs of
Ans. B all materials that go into production. The
sum of these two direct costs is known as
It is a series of equal payment occurring at a. GS and A expenses
equal interval of time b. Operating and maintenance costs
a. Annuity c. Prime cost
b. Debt d. O and M costs
c. Amortization
d. Deposit Ans. C

Ans. A An index of short term paying ability is

called
The place and buyers come together a. Receivable turn-over
a. Market b. Profit margin ratio
b. Business c. Current ratio
c. Recreational center d. Acid-test ratio
d. Buy and sell of section
Ans. D
Ans A
An artificial expenses that spreads the
A market where by there is only one buyer of purchase price of an assets or another
an item for which there are no good property over a number of years.
substitute a. Depreciation
a. Monopsony b. Sinking Fund
b. Oligopoly c. Amnesty
c. Monopoly d. Bond
d. Oligopsony
Ans. A
Ans A
Estimate value at the end of the useful What is the highest position in the
life. corporation?
a. Market value a. President
b. Fair value b. Board of directors
c. Salvage value c. Chairman of the board
d. Book value d. Stockholders

Ans. C Ans. C

Consists of the actual counting or Type of ownership in business where

determinination of the actual quantity of individuals exercise and enjoy the right in
the materials on hand as of a given date. their own interest.
a. Physical inventory a. Equitable
b. Material update b. Public
c. Technological assessment c. Private
d. Material count d. Pure

Ans. A Ans. C

Additional information of prospective Decrease in the value of a physical property

bidders on contract documents issued prior due to the passage of time.
to bidding date. a. Inflation
a. Delict b. Depletion
b. Escalatory c. Recession
c. Technological assessment d. Depreciation
d. Bid bulletin
Ans. D
Ans. D
An association of two or more individuals
A series of uniform accounts over an for the purpose of operating a business as
infinite period of time. co-owners for profit.
a. Depreciation a. Sole proprietorship
b. Annuity b. Company
c. Perpetuity c. Partnership
d. Inflation d. Corporation

Ans. C Ans. C

The quantity of a certain commodity that is We may classify an interest rate, which
offered for sale at a certain price at a specifies the actual rate of interest on the
given place and time. principal for one year as
a. Demand a. Nominal rate
b. Supply b. Rate of return
c. Stocks c. Exact interest rate
d. Goods d. Effective rate

Ans. B Ans. D

Work-in process is classified as It is defined to be the capacity of a

a. An assets commodity to satisfy human want.
b. A liability a. Discount
c. An expenses b. Luxury
d. An owner’s equity c. Necessity
d. Utility
Ans. A
Ans. B
It is the amount which a willing buyer will Grant total of the assets and operational
pay to a willing seller or a property where capability of a corporation.
each has equal advantage and is under no a. Authorized capital
compulsion to buy or sell. b. Investment
a. Fair value c. Subscribed capital
b. Market value d. Money market
c. Book value
d. Salvage value Ans. A

Ans. B The worth of the property equals to the

original cost less depreciation.
This occurs in a situation where a commodity a. Scrap value
or service is supplied by a number of b. Face value
vendors and there is nothing to prevent c. Market value
additional vendors entering the market. d. Book value
a. Perfect competition
b. Oligopoly Ans. D
c. Monopoly
d. Elastic demand Money paid for the use of borrowed capital.
a. Discount
Ans. A b. Credit
c. Interest
These are product or service that are d. Profit
desired by human and will be purchased if
money is a available after the required Ans. C
necessities have been obtained.
a. Utilities Liquid assets such as cash and other assets
b. Necessities that can be converted quickly into cast such
c. Luxuries as accounts receivable and merchandise are
d. Product goods and service called
a. Total assets
Ans. C b. Fixed assets
c. Current assets
These are product or services that are d. None of the above
required to support human life ad activities
that will be purchased in somewhat the same Ans. C
quantity even though the price varies
considerably. The length of time which the property may be
a. Utilities operated at a profit.
b. Necessities a. physical life
c. Luxuries b. Economic life
d. Product goods and services c. Operating life
d. All of the above
Ans. B
Ans. B
A condition where only few individuals
produce a certain product and that any The provision in the contract that indicates
action of one will lead to almost the same the possible adjustment of material cost and
action of the others. labor cost.
a. Oligopoly a. Secondary clause
b. Semi-monopoly b. Esclatory clause
c. Monopoly c. Contingency clause
d. Perfect competition d. Main clause

Ans. A Ans. B
The present worth of all depreciation over A market situation where there is one seller
the economic life of the item is called and one buyer.
a. Book value a. Monopoly
b. Capital recovery b. Monopsony
c. Depreciation recovery c. Bilateral monopoly
d. Sinking fund d. Bilateral monopsony

Ans. C Ans. C

Gross profit, sales less cost of goods sold, A market situation where there are only two
as a percentage of sales is called buyers with many sellers.
a. Profit margin a. Duopoly
b. Gross margin b. Oligopoly
c. Net income c. Duopsony
d. Rate of return d. Oligopsony

Ans. B Ans. C

Worth of the property as shown in the The cumulative effect of elapsed time on the
accounting records of an enterprise. money value of an event, based on the
a. Fair value earning power of equivalent investment funds
b. Market value capital should or will earn.
c. Salvage value a. Present worth factor
d. Book value b. Interest rate
c. Time value of money
Ans. D d. Yield

Those funds that are required to make the Ans. C

enterprise or project a going concern.
a. Initial investment Defined as the future value minus the
b. Current accounts present value.
c. Working capital a. Interest
d. Subscribed capital b. Rate of return
c. Discount
Ans. C d. Capital

A market situation where there are one Ans. C

seller and many buyers.
a. Monopoly The flow back of profit plus depreciation
b. Monopsony from a given project is called.
c. Oligopoly a. Capital recovery
d. Oligopsony b. Cash flow
c. Economic flow
Ans. A d. Earning value

A market situation where there are few Ans. B

sellers and few buyers.
a. Oligopoly The profit derived from a project or
b. Oligopsony business enterprise whithout consideration
c. Bilateral oligopoly of obligations to financial contribution or
d. Bilateral oligopsony claims of other based on profit.
a. Economic life
Ans. C b. Yield
c. Earning value
d. Expected yield

Ans. A
The payment for the use of borrowed money is Scrap value of an asset is sometimes known
called as.
a. Loan a. Book value
b. Maturity value b. Salvage value
c. Interest c. Replacement value
d. Principal d. Future value

Ans. C Ans. B

The interest rate at which the present work What is sometimes called second hand value?
of the cash flow on a project is zero of the a. Scrap value
interest earned by an investment. b. Salvage value
a. Effective rate c. Book value
b. Nominal rate d. Going value
c. Rate of return
d. Yield Ans. B

Ans. C An intangible value which is actually

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

Ans. C
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
Ans. B
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
Ans. C
A is a periodic payment and I is the
interest rate, then present worth of a
perpetuity =
a. Ai
b. Ai^n
c. A^n/ i
d. A/i
Ans. D
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
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. Annuity
b. Capital recovery
c. Annuity factor
d. Amortization
Ans. D
The reduction of the value of an asset due
to constant use and passage of time.
a. Scrap value
b. Depletion
c. Depreciation
d. Book value
Ans. C
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
c. SYD method
d. Declining balance method
Ans. D
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. Straight line method
b. Sinking fund method
c. Declining balance method
d. SYD method
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
Ans. A
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
b. Sinking fund method
c. Declining balance method
d. SYD method
Ans. B
The function of interest rate and time
determines the cumulative amount of a an association of two or more person for a
sinking fund resulting from specific purpose of engaging in a profitable business
deposits. a. sole proprietorship
a. Sinking fund factor b. enterprise
b. Present worth factor c. partnership
c. Capacity d. corporation
d. Demand factor
Ans. C
Ans. A
a distinct legal entity which can
The first cost of any property includes practically transact any business
a. The original purchase price and transaction which a real person could do.
freight and transportation a. Sole proprietorship
charges b. Enterprise
b. Installation expenses c. Partnership
c. Initial taxes and permits fee d. Corporation
d. All of the above
Ans. D
Ans. A
Double taxation is disadvatange of which
In SYD method, the sum of years digit is business organization
calculated using which formua with n= number a. Sole proprietorship
of useful years of the equipment. b. Partnership
a. n(n-1)/2 c. Corporation
b. n(n+1)/2 d. Enterprise
c. n(n+1)
d. n(n-1) Ans. C

ans. B Which is NOT a type of business

organization?
capitalized cost of any property is equal to a. Sole proprietorship
the b. Corporation
a. annual cost c. Enterprise
b. first cost + cost of perpetual d. Partnership
cost
c. first cost + cost of perpetual Ans. C
maintenance
d. first cost + salvage value What is the minimum number of incorporators
in order that a corporation be organized?
ans. C a. 3
b. 5
the lessening of the value of an asset due c. 10
to the decrease in the quantity available ( d. 7
referring to the natural resources, coal,
oil, etc) Ans. B
a. depreciation
b. depletion
c. inflation
d. incremental cost

ans. B

is the simplest form of business

organization
a. sole propeitorship
b. partnership
c. enterprise
d. corporation

ans. A
In case of bankruptcy of a partnership
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.
b. It will be desolved if one of the
partners ceases to be connected
with the partnership
c. It can be handed down from one
generation of partners to
another.
d. Its capitalization must be equal
for each partner.
Ans. D
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.
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
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
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
c. Certificate of deposit
d. All of these
Ans. A
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. Coupon Bond
d. Collateral trust bond

Represent ownership, and enjoys certain Ans. D

preference than ordinary stock.
a. Authorized capital stock
b. Preferred stock A type of bond which does not have security
c. Common stock except a promise to pay by the issuing
d. Incorporator’s stock corporation.
a. Mortgage bond
Ans. B b. Register bond
Represent the ownership of stockholders who c. Collateral trust bond
have a residual claim on the assets of the d. Debenture bond
corporation after all other claims have been
settled. Ans. C
a. Authorized capital
b. Preferred stock
c. Incorporators stock
d. Common stock

Ans. D
 ECONOMIC’S
FINAL COACHING

By Tiger’s Review Center