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    Mas Pcparmockexam

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    MAS-PCPARMOCKEXAM

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    Mas Pcparmockexam

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    PAMPANGA CPA REVIEW MANAGEMENT 2F-£ 295 Gloans Annex Bldg Sto. Rosario St. Angeles City, Pampanga | ACCOUNTING @poparview |parpangacpareview gmail com ‘SERVICES ‘he system of bis and credits. {eaten ofthe rodicton datibsion, and cnsumgsin of wea the art and science of maging money ‘the at of merchandising products and services 2 is concerned with the duties ofthe fnncial manager inthe busines Gm. Finacial Services ‘inenil Manager Manage Finance None of the above 3. Manage finance Tavolves tsk such as budgeting, nancial fxcaing, cash management, and funds procurement, invelves the design and delivery of evice and neil product, ecognies funds onan accrual bass (& devon he major ot enon othe cllection and presenaion of fnancial data 44 The iaaacil manager is nteresed inthe cath niows an oulows ofthe fm, ther than the sccouning dt, inorder to ensre 2 profi. 1 the ability to pay dividends, © the billy to nage new ase 4 salveny 5. Thekey role of he financial managers dension mating the presentation of Gaancal semen ‘he preparation f aa for future evaluation the election offisanciel dat 6, They actives of the financial manager inclade al ofthe following EXCEPT 1 making nancing decisions, 1 financial anny ard planning < ¢ mamaging Ganacel accounting. ‘making ivestmentdecsons 7. Making invesment decisions includes ll of he allowing EXCEPT 2 inventory. fined ase. © acgunt resvable 4 notes payable 8. Making Sinaacing decisions includes lof he following EXCEPT At deteining te appropiate mix of shorter and long-term nancing. 1 deciding which individual short-term sources ee best tives point nine © anwlyeing quart badget and prfrmance repens. &deidng wich indian longterm sources ae best ato given point 9 ‘The primary gos! of the Hana manages ming ak ‘maximising profi ‘maximizing wealth ‘eiinzing ur 10 Corporate owner's recive reliable eur through a Teamings por share and cas dividends. 1. feeease esate price and cach dividends. inane in sha rise and eunings per share. 4 proc and earings per she 11, The wealth of the owner af corpocasion is vepreseaed by 2 profits, wa Paget ore PAMPANGA CPA REVIEW: “Excellence in All Wa Do” MAS. bearings pr sare, © are price 4 ashton 12, Wealth maximization athe goal othe frm implies enansing the wealth of the Board of Directo the firm's employees. the federal government, the fms stoclders company's managers are NOT owners of the company, they ae ‘ler sects utd brokers 14 The confi between the goals offen’ owners andthe gous ofits noncamer managers 4 the agency poten. ) incempuiy seo only when profs dene 4 oflitleimportzoein most large US. fms. 18. The primary gol of a pubily-owned firm intrested serving its tocar shoul eto 4 Maximise expected EPS. Minimize the cbmces of losses Maize the ck pric per share 4 Maximize expected netineare 16, The agency problem may rest fom manager's concrns about ay of the fllowing EXCEPT jb sry, etna wealth Compote goals ‘company provided perquisites 17 Which of the fellowing statement mos core? 1 Campensting managers wit soc can reduce the agency problem between sockoldrs nd manager. 1 Resutodons af includ incre agreements to protect bondolders rom the agency problem tht exis ‘erweenRondoldrs and suche Tae theat fs takeover can redice the agency preblem betneen bondholders and stockholders. 4 Sateen a sndb are corect, Which ofthe folowing work to retice agency conics between stocker an bondhader? 1 Inclong reactive covenesin company’s bond conc Providing manages wih age umber of tock opdons. Toe pasge flew at make tease for compaaies 1 resist ose takeovers & Alt the stamens sbove wre care. 19, Profit maximization des NOT tke ato consideration ak end sh ow. 1 Sath flow and stock price © i and EPS 4 EPS and stock price, 20, Profit maxiizaton a the goal ofthe fem is NOT idea because pris ar only accountng measures, 1 Stiftowe are moe represeiave of nancial srength profitmaximization dos oot consider ik 41 Peat today we lee desirble than profis eared in frre yeas 21, Which able would you use to determine how mich you would ead Lo have deposited es yeas ago at 10% ‘mpounded annually nerd wo have $1,000 toy? 2 Faure sal of or eset vale of Future value of wn anuiy due of 1 utr vale ofan oda any of 44 Preseat valve of an ordinary ana of 1 was Page 20f8 PAMPANGA CPA REVIEW: “Excslience in All We Do” mas. 22. A sie of eects of ine whe ach es ied tte Desaing ot ‘each period is called an. oa eure = order my 2 tay ares, © sy don Enema near 25, Present value ie fe value now ofa fare amount 1 he amoun that must be invested nto produces know fre value, _slweys smaller than he fire vale. 4 settee 24, Which ofthe following saterens is tue? Ya Theigher the dacoun rt, the higher the present value, 1) The process of accumiliting interest on interes refered to as acounting © money worth 10 compounded analy, 1,100 due one year fro toy i equivalent to $1,000 today 4 fusing som sd on Desember 31, 2010, he resent value ofthat sm decreases athe ate draws close to December 31,2010 28, Which ofthe following i te? Rents cca tthe begining ofeach prod ofan ordinary any. Rents oscar tthe end of each period of on enmity ue ‘Rents ocur atthe bepnning ofeach prod ofan sntity doe None of these 26, Ca Co. asa machine that ox $200 00. histo eed for 20 yrs ihren recived a the beginning of ‘cach year Ca wants return of 10%. Calculate te amount fhe anual reat. Preset Value of Pesiod 1 $3402 281356 21k 6t868 2 s21386 % S390 © fers a sar 27 Find the presen val of en avesmentin plan and equipment iis expected to provide anual ‘ovngs of $21,000 for IS years and thave eae value of $40,000 ate end ofthat period. sume SNoverae end euings at year end. The present vale of 1a 10% for 1S periods. 23939. ‘The presit ‘ele fen ery ennity at 10% fr 18 periodsis 7 S060. The fue value of | at 10% fr 15, erodes 417728 159728 & steam e s185276 6 S757 28. On January 22007, enn Corporson wisest issu 200,00 (pa vals) fits 8%, 10-ye- ‘bonds The bonds py intern snmully on Jaguary |. The cuet yet on ich bonds is 10% Using tie interest factors telow, compe the amount tht Yer will raze om the sale (Gssuace) af the bonds Present al of 1a 8% for 10 perieds 04632 Pree ale of 1a 105 fer 10 peiods 03855 revert al fan ordinary wany a 8% for 10 periods 6.7101 Present ale fen ory sauity at 1036 fer IO percds 6.1446 $2,000,000 S1754136 szooo012 32212052 29. What emoust shouldbe recorded asthe cot of machine purchased Decenbe 31, 2006, which so te financed by making 6 annul payments of $6,000 ech begining December 31,2007? The plicable interest tes 4 $42,000, & savant © ss3s20 2 ssaas0 mas eas Pa PAMPANGA CPA REVIEW: “Excellence in AlWe Do" AS. 430. tfbonds arsed initally ata premium andthe etfeciveinterest cod ofamorizainisused, interest ‘expense the ear years wl be rater han if the soughline medod were wed ©) restr tha the amount of the eres peyment. ©) thesome aif the sight method were sed 4. less than ifthe sigh line method were wed etre is know athe 21, Timers te writen in te terms ofthe ond i 1 capone ‘Soma rte sated rte coupon te, nina rato sed ate 32, Under the eectveinterest method of bond isount or preium amcrtzatin, he proc interest | expenses eq 0 the ate (noma ae of inert uid by the face vale ofthe bons. 1 the market ate ofintre mulled by he ice vale of he bonds. the sed rate mle by the begining period crying amount of te bonds, (4 the market rate lied bythe bepnning-f pid carving amount ofthe bonds, 33. When he effetiveierst method i ud to amortize bod premium or discount the period amortization wil 2 increase if the bonds weve sued at a coun. 1 decrease ifthe bonds were sued at prem increase if the bonds were ied al premium. “&inceseif the bods were sue tether count or premium, 24. The erm uted for bonds hat are unsere 2 fo principal is a jk bonds. 1 aber bods indore boas 4, salable bonds | 35. Bonds for which the one names re not eitered with helsing corparation ae called ‘bearer bonds } 5 tem bonds. | 2 deere bods. cual bonds 36. Bonds ht pay no interest ules he smng company is rofable are led ‘calmer! ust bonds. 1, debenture bods 2 reverse bonds ‘ a income boads 1 Beton Company issues $10,000 000 of 10-year, 9% bons on March 1, 2007 «97 pus aerod interest. Foc bond a ed Jauy 1, 2007, and pay interes on June 0 and December 31. Whats the toe cash reorved ol te sve de? $9,700,000 % sioz25,000 $9,850,000 4 89550000 37. A company tse 520 0,00, 7% 20-year bonds oy 3% on Fam 1, 2007, Interests pad ‘on ene ed Desenber 3, The proseeds fam the Bonde re 319,04,145. Using effsivessirest ‘Shorraion how uch interest expose ol berecgniza in 2007? a $780,000 8 $1350.00 © 51508. a S150 24, A eotpany issues $20,000, 7.8%, 20-year bonds oye 8% 0 amar 1, 2007, Tees pid ‘on une 30 end December 31 The prosnds rom th bonds are $19,604,145 Usig efesiveiatees Shorten, what wl be canying vale of te bonds be cote December 31, 2007 bance see? 2 19612883 »AMPANGA CPA REVIEW: "Excallence in All We Do” mas, 38. Fin tt oguie fnds ro external sources an ohn them in one of the flowing ways EXCEPT ‘aod issn, Gaul marke, soverament rive placement. 40.A___accapis both demand and ime deposits and primary makes Lone deat both india nd busines boroner of ough the inne makes, ‘savings bank ‘redinion tl fond ‘commer bank 8 athe rete by e umber fetnsions and arangement that llow te spies and deninies ofTog-c funds take wansacons. ‘0 nancial martes capt marker ‘money market, credit msher 42. Firms hare und frm extemal sorces can obtain them ron 1 pete placement neil insittons © Snail markets 4 Allofthesbore 45. The troy Boanil markets we 1 primary musket nd secondary market 1 primary mask and money market © taney market ad cape marke. cata market and soon market 44, Fixed income markt relate othe fllning xcept ‘Boots Less ©) Nowe 4 Markaable equity secures 45. The price of «bond wheats scout ate neease. a dezeses inner © rensis de same . (1 ier increases or eereases 146, Wis te yeti n a er0-cupon bond. “£1 Ths ined value iil bonds by sig pices ayo comple sees having he sme or Starr ie ccpon end mushy a ping Spec ping © Yadormantypciog “Prim pocing «8 Shrtonn anatomist ales awed ylang Gms are bnown a 4 Commercial paper fe Basker accepances 1 Agency scabs 44 Repurchase egeemenis 4. Geerly, the mos expensive sure of rani for fm is Debt Retiod earnings b Pretend stock ‘4 New commen sock 50, Which ofthe flowing is NOT component sed in calling the cos of capital? 1 Cost of longer debt Cost of common sock 1 Costof snot debt 1 Cost reainod earings WSC ee = ner PAMPANGA CPA REVIEW: “Excellence in All We Do” mas. S51. The va fhe sock nreses the Mt Valu f the debt decrees © Required ate of eum increases 1. Diidend growth rte decreases 8 Reed at of return decroses ‘52 The adionalretum one must expt receive for asin risk” 2 Risk discount, (Riles tae of eur 1 Risk prea 4 Bpected at of eta 43. Thetype frit i not iverable nd ae te value of a paris "Defuse Nonna isk 1 Market isk Liga ‘54. When purchasing temporary nvesents, wich one of the following bet describes the isk asociated withthe “ily to sel he avesment ne hort pen fine without sigiicnt price concesions? otrestte ik Fea isk 1 Parehsng power ek 4 Ligue 455, Allof the following accurately describe prefered sock except in prefered snc dividends wre pi efor commen stock dividends, prefered sock dividends pid ave based on extigs prefered tack ypcly bas 20 neu ae pected tock ses may have sae eal pice ‘6, Moctgomery Corps current alc shee repr the flowing stockholders ui ‘cumulative prefered sok, par vale SE pr shar; 2,900 shares sual end uttanding 1246500 ‘Common ck, at valve $5 75 per share; 9,00 shares ‘eset and oteanting 517500 Adsion!pidsn-apita in excess of par value of eammon stock $67,500, ‘Reine earings 480,00 Dividends in rez nthe referred sock amount $34,510. 1 Monigamey weet beligidted, the Pete sockbelders would recive pe vale pls pemim of $6020, The bok vale er share of ‘Sanaa stocks 1035 bso enn 6107 57 Brady Corporation has 6000 shares of 5%, cumulative, $100 pr value prefered tock outstanding ‘ed 200,000 shares of commen sock ottanding Bays Baud of Der ast dard Gividends forthe yar eed May 31, Yea, ad thre were no dividends in rears. Fr the yar ded May 31, Year) Brady had netncom of $1,790.00. The Boar f Dire delaring 8 ‘Evidend for carson streolders equivalent 0 20% of nt income. The etl amount of vidends tobe pai by Brady at May 3, Year3, eco si0c00 3x0000 530.000 ‘58. Why i prefered stock vreimes wes ikea debt secu? Legally, preter sock sa etsy b Prete iden payment ae sia food interest payment and ae fixed in tre regardless ofthe ims eamings «Prefered dividends tre deduce ram axsble income jus ik interest payments on bonds, 4 pected sock bodes receive a esa alu and no a sated vale 9, Wich ofthe ellowing the expecta, required rata te of retum othe firm's sok tha if eared will leave the market vale f te stock unchanged? > Cesta apt 1) Coat or peered sock fe) Coster debt © Cont oFeommen equity 60, Alo the following are characteris of refered sock exept a ividends are tax deductible to he ser »ANGA CPA REVIEW: “Excellence in All We Do” mas. PAMPANGA CPA REVIEW: “Excellence in AllWe Do" MAS . a. 6. 6, on. bitsy be conve it common stock, 12 itmay be callable at he option ofthe corporation. 2 italy has no vecng nih. “The prtcpting feature ora prefened soc means tha prefered sckholder ve the oportaity to: ‘sll all opr ofthe shares bck othe ser at prospec cal pice, 1) ineease ter dividends when ommon Hoctholdes dividends reach certain aunt convert prefered stock ito specified ameut of common stock 44 besgamed spel ving privileges the corporation i unable wo pay the fixed dividend Which ofthe flowing satemensis notre about common stock? {tCommon-sck older hve the right vere onthe election of the board frets of ht company {> Common sock is considered o have po fixed maiy Owners of common sook re guarantee dividend payments by the firm 44 Common stock bolder ave limite biiy toma the obligations ofthe coporsion When a company sis common sock with wo par value which acount increase compared to ‘Snmon toc eed with par vale? cash account Pano capital acount ‘Treasry ook account ‘Common stock account ‘Whatis the difrence bene common tock and prefered tock? 1 Comme skis an equ intrest corportcn while peered stocks the residual equity of & ‘eportion ‘Common ockisthe resid ety of «corporation while prefered stock i an equity interest ot fevperaon «Comm sok receives vend in rear bt refered stack must be designed as cumulative to recive

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