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SENIOR HIGH SCHOOL DEPARTMENT

FIRST SEMESTER, A.Y.2021-2022 EXAMINATION PAPER GRADE 12
FIRST QUARTER EXAMINATION
SUBJECT: BUSINESS FINANCE
SCORE

NAME: ____________Khea R. Tundag___________________ GRADE & SECTION: _____12 ABM 3___________________

GENERAL INSTRUCTIONS:

a.) ONLY THIS/THESE EXAMINATION PAPER/S IS/ARE ALLOWED TO BE RETURNED TO THE ADVISER.
b.) Write your answer/s neatly and legibly.
c.) Read specific instructions carefully before answering.
d.) Do not submit extra paper if possible.
e.) CHEATING IS STRICTLY PROHIBITED. It is subject to punishment. (SHS Student Handbook, 12.3, p.26)
For clarifications and concerns, please contact your subject teacher.

Directions: Choose the letter corresponding to the correct answer for each
of the questions provided below.

A 1.Which of the following is NOT a benefit of budgeting?

a. It is a source of motivation.
b. It is a means of coordinating business activities?
c. It prevents company to incur net losses.
d. It promotes study, research, and focus on the future.
C 2.What is a sales budget?
a. A plan of items to be sold.
b. A plan of how much an item will cost.
c. A plan for how much money should be made in a given period.
d. A plan for tracking an inventory and how much they sell.
D 3.Why many small businesses do not use budget?
a. Budgeting is for large firms only.
b. Budgeting can be time consuming.
c. Small businesses do not record variances.
d. All of the above.
B 4.Which of the following statements about budgeting is incorrect?
a. Budgets provide direction and coordination.
b. Budgets motivate staff.
c. A budget is a financial plan.
d. A budget looks back and review performance.
A 5.Which of the following is normally prepared first?
a. Cash Budget
b. Production Budget
c. Sales Budget
d. None of the above
A 6.This financial statement reports a operations sales, expenses, profits or losses
for a period of time.
A. Income statement
B. BalanceSheet
C. Cash Flow
D. Equity Statement
D 7.An integral part of the planning process that makes future predictions regarding
sales trends
A. Sales Analysis

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B. Sales Trend Report
C. Sales Budget
D. Sales Forecast
A 8.It calculates the number of units of products that must be produced.
A. ProductionBudget
B. Production Report
C. Production Analysis
D. Production Forecast
A 9.Why are budgets useful in the planning activity of an organization?
a. Budgets help communicate goals and provide a basis for evaluation.
b. Budgets provide management with information about the company’s
past performance.
c. Budgets enable the budget committee to earn paycheck.
d. Budgets guarantee the company to be profitable if it meets the
objectives.
C 10.By definition, the money market involves the buying and selling of
______.
A. funds that mature in more than one year.
B. flows of funds.
C. stocks and bonds.
D. short-term funds
D 11.Government usually_______________________.
A. borrows funds directly from financial institutions.
B. maintains permanent deposits with financial institutions.
C. is a net supplier of funds.
D. is a net demander of funds.
B 12.Who is the highest policy making body in a corporation?
A. President C. CEO
B. Board of Directors D. Treasurer
C 13.Who elects the Board of Directors (BOD).
A. Stakaholders C. Stockholders
B. Employees D. President
C 14.Who oversee the operations of a company and ensure that the strategies as
approved by the board are implemented as planned?
A. President C. CEO
B. Board of Directors D. Treasurer
D 15.What are included in making decisions on how to fund long term investments
(such as company expansions) and working capital which deals with the day to day
operations of the company?
a. Sources of funds b. Short term investment decisions
c. Issuance of new shares d. Financing decisions
A 16.It refers to how much of your total assets is financed by debt and how much is
financed by equity.
a. Capital structure b. Dividend Policies
c. Retained earnings for investment d. Long term investment decisions
D 17.Who determines the appropriate capital structure of the company?
A. Finance Manager C. VP for Marketing
B. VP for Finance D. Both A andB
A 18.What is the tool to assess whether the investment will be profitable in the long
run?
a. Capital budgeting analysis b. Budgeting
c. Shareholders d. Dividend policies
A 19.If we used the money from our own capital, the asset bought is financed by
________________________.
a. Equity b. Raw material suppliers
c. Debt d. Cash dividends

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 D 20.What includes making decisions on how to fund long term investments (such
as company expansions) and working capital which deals with the day to day
operations of the company?
a. Sources of funds b. Long term investment decisions
c. Operating decisions d. Financing decisions
C 21.What financial institution responsible for the oversight and management of all
other bank?
a. Central Bank c. Bangko Sentral ng Pilipinas
b. Commercial Banks d. Credit Cooperatives
D 22.What security means that the borrower is under a legal obligation to pay the
lender?
a. Mutual funds c. Bonds
b. Annuities D. Notes Payable
A 23.What is a pool of money from a group of investors entrusted to a financial
institution for investment purposes?
a. Mutual funds c. Bonds
b. Annuities d. Notes Payable
B 24.What is a source of steady income stream upon retirement?
a. Mutual funds c. Bonds
b. Annuities d. Notes Payable
C 25.The primary goal of the financial manager is ________________________
A. minimizing risk. B. maximizing profit
C. maximizing wealth. D. minimizing return
II. True/False Before each statement on the space provided, write TRUE if the
statement is correct or FALSE if the statement is incorrect.
______ TRUE ________26. The wealth of corporate owners is measured by the earnings per
share of the stock.
______ FALSE ________27. Financial markets are secondary intermediaries that channel the
savings of individuals, businesses, and government into loans or investments.
_______ TRUE _______28. An increase in firm risk tends to result in a lower share price
since the stockholder must be compensated for the higher risk.
_____ TRUE _________29. Stockholders expect to earn lower rates of return on investments
of lower risk and higher rates of return on investments of higher risk.
_____ TRUE ________30. To achieve the goal of profit maximization for each alternative
being considered, the financial manager would select the one that is expected to result in
the highest monetary return and with the highest expected risk.
III. 31-40 Sales Budget Forecast
Directions: Complete the table below. Each answer is at two points each.
Lovely Company
Sales Budget
For the Year Ending December 31, 2020

SALES BUDGET
Formula Quarter 1 Quarter Quarter 3 Quarter 4 Total
2
Forecasted 2,500 32? 3,000 15,000 29,500
unit sales
X Price per 5 5 33? 10
unit
Total gross 31? 45,000 15,000 34? 35?
sales

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