DEPARTMENT OF EDUCATION

REGION VIII
DIVISION OF EASTERN SAMAR
TAFT NATIONAL HIGH SCHOOL
TAFT E. SAMAR
6816

BUSINESS FINANCE

NAME: ________________________ DATE:_________________

GRADE &SECTION:_______________ SCORE:________________

TEST I. MULTIPLE CHOICE:

DIRECTION: CHOOSE THE RIGHT &CORRECT ANSWER. WRITE ONLY THE LETTER IN YOUR
ANSWER SHEET.

1. The act of estimating revenue and expenses over a period of time?

a. Budgeting c. finance
b. Sources of fund d. investments
2. It is defined as the science and art of managing money?
a. Budgeting c. finance
b. Sources of fund d. investments
3. A business owned by two or more people and operated for profit?
a. Corporation c. partnership
b. Sole proprietorship d. cooperative
4. They elect the board of directors?
a. CEO c. BOD
b. Shareholders d. VP’s
5. Determining the location and the maximum amount of office space needed by the
company?
a. VP for Administration c. VP for Production
b. VP for Marketing d. VP for Finance
6. Identifying adequate and cheap raw material suppliers?
a. VP for Administration c. VP for Production
b. VP for Marketing d. VP for Finance
7. Overseeing the operation of a company and ensuring that the strategies as approved by the
board are implemented as planned?
a. CEO C. BOD
b. Shareholders d. VP’s
8. It is to determine the appropriate capital structure of the company and to raise fund from
debt and equity?
a. Investing c. operating
b. Dividend policies d. financing
9. Organized forums in which the suppliers and users of various types of funds can make
transactions directly?
a. Private placements c. financial institutions
b. Financial markets d. financial instruments
10. The sale of a new security ta an investor or group of investors?
a. Private placements c. financial institutions
b. Financial markets d. financial instruments
11. Intermediaries that channel the saving of individuals, businesses, and governments into
loans or investments?
a. Private placements c. financial institutions
b. Financial markets d. financial instruments
12. The primary goal of the financial manager?
a. Minimizing risk c. maximizing profit
b. Maximizing wealth d. minimizing return
13. A ______ is one financial intermediary handling individual savings. It receives premium
payments that are placed in loans or investments to accumulate funds to cover future
benefits?
a. life insurance company c. savings bank
b. commercial bank d. credit union
14. Which of the following is not a financial institution?
a. A pension fund c. A commercial bank
b. A newspaper publisher d. An insurance company
15. Procedures used for analyzing, recording, classifying, and summarizing the information to be
presented in accounting reports?
a. Accounting process c. transaction
b. Debit d. credit
16. The process of summarizing transactions by transferring amounts from the journals to the
ledgers?
a. Ledger c. account
b. Journals d. posting
17. A collection of all accounts used by a business that could appear on the financial
statements?
a. Journal entry c. transactions
b. General ledger d. accounting
18. A record used to classify and summarize the effect of transactions?
a. Debit c. credit
b. Account d. journal
19. Refers to the company’s ability to satisfy its short-term obligations as they come due?
a. Leverage c. profitability
b. Efficiency d. liquidity
20. Refers to the company’s ability to generate earnings?
a. Leverage c. profitability
b. Efficiency d. liquidity
21. It defines the company’s capital structure which indicates how much of the total assets are
financed by debt and equity?
a. Leverage c. profitability
b. Efficiency d. liquidity

22. It is equal to the sales over the accounts receivables?

 a. Average collection per day c. accounts receivables turnover
b. Inventory turnover d. average payment period
23. Refers to the company’s ability to be efficient in its operations?
a. Leverage c. profitability
b. Efficiency d. liquidity
24. The technique for evaluating the data of financial statements that can express each item
within a financial statements in terms of a percent of a base amount?
a. Horizontal analysis c. vertical analysis
b. Inventory turnover d. debt ratio
25. The average number of days to sell its inventory?
a. Inventory turnover c. cost of goods sold
b. Ending inventory d. days of inventory
26. The minimum level of current assets requires by a firm to carry on business operations given
its production capacity or relevant sales range?
a. Permanent working capital c. temporary working capital
b. Managing working capital d. working capital management
27. Any contract that evidences a residual interest in the assets of an entity after deducing all
liabilities?
a. Financial liability c. equity instrument
b. Financial assets d. financial system
28. Generally have fixed returns due to fixed interest rates?
a. Equity instruments c. financial markets
b. Debt instruments d. preferred stock
29. Individuals purchase insurance protection with insurance premiums?
a. Commercial banks c. money markets
b. Capital markets d. insurance companies
30. The venue wherein securities with short-term maturities are sold?
a. Capital markets c. money markets
b. Commercial banks d. secondary markets
31. The sale of new securities to one investor or a group of investors?
a. Private placement c. initial public offering
b. Public offering d. primary market
32. Firms that require funds from external sources can obtain from?
a. Financial markets c. private placements
b. Financial institutions d. all of the above
33. The major securities traded in the capital markets?
a. Stocks and bonds c. commercial paper and treasury bills
b. Bonds and commercial paper d. treasury bills and certificates of deposits
34. The goal of profit maximization would result in priority for?
a. Cash flows available to stockholders c. earnings per share
b. Risk of the investment d. the firm’s stockholders
35. The wealth of a corporation is represented by?
a. Profits c. share value
b. Earnings per share d. cash flow
36. Financial managers evaluating decision alternatives or potential actions must consider?
a. Only risk c. both risk and return
b. Only return d. risk, return, and the impact on share price
37. By definition, the money market involves the buying and selling of?
a. Funds that mature in more than one year c. flows of funds
 b. Stocks and bonds d. short term funds

38. Long-term debt instruments used by both government and business?

a. Bonds c. stocks
b. Equities d. bills

39. An accounting record used to list a particular type of frequently recurring transaction?
a. General journal c. journal entry
b. Special journal d. journal

40. Procedures and methods used, including data processing equipment, to collect and report
accounting data?
a. Accounting system c, ledger
b. Journal d. balance sheet

41. Reflect the accumulation of potential additions to retained earnings during the current
accounting period?
a. Expenses account c. nominal accounts
b. Normal balances d. revenue accounts

42. It measures the amount of net income earned in relation to stockholders’ equity?
a. Return on equity c. return on assets
b. Gross profit margin d. operating profit margin
43. It measures the ability of a company to generate income out of its resources/assets?
a. Return on equity c. return on assets
b. Gross profit margin d. operating profit margin
44. It shows how many pesos of gross profit is earned for every peso of sale?
a. Return on equity c. return on assets
b. Gross profit margin d. operating profit margin
45. It shows how many pesos of operating profit is earned for every peso of sale?
a. Return on equity c. return on assets
b. Gross profit margin d. operating profit margin
46. This ratio measures the proportion of total assets finance by total liabilities or money
provided by creditors?
a. Debt-ratio c. debt-to-equity ratio
b. Interest coverage ratio d. times interest earned
47. It is an important aspect of the firm’s operations because it provides road maps for guiding,
coordinating, and controlling the firm’s actions to achieve its objectives?
a. Marketing c. operating
b. Planning d. production
48. These are a set of goals that lay out the overall direction of the company?
a. Short-term financial plans c. long-term financial plans
b. Event planning d. strategic planning

49. The recording of a transaction in which debits equal credits. It usually includes a date and an
explanation of the transaction?
a. Subsidiary ledgers c. general ledger
b. General journal d. journal entry
 50. A system of recording transactions in a way that maintains the equality of the accounting
equation?
a. Subsidiary ledgers c. general ledger
b. Double-entry accounting d. journal entry

Prepared by: Checked by:

Lope M. Pecayo Jr Melvin A. Dante

SHS Teacher SHS Coordinator

Noted by:

Emil E. Adena
School Principal I