Economics

A type of bond issued jointly by two or more corporations.

A. Joint bond

B. Debenture bond

C. Registered bond

D. Collateral trust bond

A type of bond whose guaranty is in lien on railroads
equipments.
A. Equipment obligation bond
B. Debenture bond
C. Registered bond
D. Insfrastructure bond
If the security of the bond is a mortgage on certain specified
asset of a corporation, this bond is classified as
A. Registered bond
B. Mortgage bond
C. Coupon bond
D. Joint bond
A type of bond where the corporation’s owners name are
recorded and the interest is paid periodically to the owners
with their asking for it.
A. Registered bond
B. Preferred bond
C. Incorporators bond
D. All of these
Bond to which are attached coupons indicating the interest
due and the date when such interest is to be paid.
A. Registered bond
B. Coupon bond
C. Mortgage bond
D. Collateral trust bond
An amount of money invested at 12% interest per annum will
double in approximately
A. 4 years
B. 5 years
C. 6 years
D. 7 years
An increase in the value of a capital asset is called
A. profit
B. capital gain
C. capital expenditure
D. capital stock
The reduction in the money value of a capital asset is called
A. Capital expenditure
B. Capital loss
C. loss
D. deficit
It is negotiable claim issued by bank in lieu of a team deposit.
A. Time deposit
B. Bond
C. Capital gain
D. Certificate of deposit
Any particular raw materials or primary product (e.g. cloth,
wool, flour, coffee..) is called
A. Utility
B. Necessity
C. Commodity
D. Stock
The simplest economic order quantity (EOQ) model is based
on which of the following assumptions.

A. Shortages are not allowed

B. Demand is constant with respect to time
C. Reordering is instantaneous. The time between order
placement and receipt is zero.
D. All of the choices
It denotes the fall in the exchange rate of one currency in terms
of others. The term usually applies to floating exchange rates.
A. Currency appreciation
B. Currency devaluation
C. Currency float
D. Currency depreciation
The deliberate lowering of the price of a nation’s currency in
terms of the accepted standard (Gold, American dollar or the
British pound).
A. Currency appreciation
B. Currency float
C. Currency devaluation
D. Currency depreciation
The quantity of a certain commodity that is bought at a
certain price at a given time and place.
A. Demand
B. supply
C. market
D. Utility
“When free competition exists, the price of a product will be
that value where supply is equal to the demand
A. Law of diminishing return
B. Law of supply
C. Law of demand
D. Law of supply and demand
“When one of the factors of production is fixed in quantity or
is difficult to increase, increasing the others factors of
production will result in a less than proportionate increase in
output.”
A. Law of diminishing return
B. Law of supply
C. Law of demand
D. Law of supply and demand
An accounting term that represents an inventory account
adjustments.
A. Cost of goods sold
B. Variance
C. Overhead
D. Payback
Indicate the CORRECT statement about depreciation.
A. The depreciation is not the same each year in straight
line method.
B. The declining balance method can be used even if the
salvage calue is zero.
C. The sum-of-years’ digit method (SYD), the digits 1 to
(n + 1) is summed.
D. Double declining balance depreciation is independent
of the salvage value.
An artificial deductible operating expense designated to
compensate mining organizations for decreasing mineral
reserves.
A. Deflation
B. Reflation
C. Depletion
D. Inflation
The change in cost per unit variable change is known as
A. Sunk cost
B. Incremental cost
C. Fixed cost
D. Semi-variable cost
What type of cost increases step-wise?

A. Supervision cost
B. Direct labor cost
C. Semi-variable cost
D. Operating and maintenance cost
Which of the following is NOT a variable cost?
A. Cost of miscellaneous supplies
B. Income taxes
C. Payroll benefit costs
D. Insurance costs
Which of the following is Not a fixed cost?
A. Rent
B. Janitorial service expenses
C. Supervision costs
D. Depreciation expenses
All are administrative expenses EXCEPT:
A. Marketing
B. Accounting
C. Data processing
D. Office supplies
One of the following is NOT a selling or marketing expense.
Which one?
A. Advertising
B. Commission
C. Insurance
D. Transportation
Research and development expenses includes all EXCEPT
one. Which one?
A. Testing
B. Drafting
C. Prototype
D. Laboratory
Which is not a factory overhead expense?

A. Pension, medical, vacation benefits

B. Expediting
C. Quality control and inspection
D. Testing
Bookkeeping consists of two steps, namely recording the
transactions and categorization of transactions. Where are
the transactions (receipts and disbursements? Recorded?

A. Journal
B. Ledger
C. Columnar
D. Statement of account
The following are ledger accounts EXCEPT:
A. Asset accounts
B. Bank accounts
C. Liability accounts
D. Owner’s equity accounts
The ratio of the net income to the owner’s equity is known
as
A. Price-earning ratio
B. Profit margin ratio
C. Return of investment
D. Gross margin
Payback period is the ratio of
A. Initial investment to net annual profit
B. Cost of goods sold to average
Cost of inventory on hand
C. gross profit to net sales
D. net income before taxes to net sales
A secondary book of accounts the information of which is
obtained from the journal
A. Balance sheet
B. Ledger
C. Worksheet
D. Trial balance
The present worth of cost associated with an asset for an
infinite period of time is referred to as
A. Annual cost
B. Capitalized cost
C. Increment cost
D. Operating cost
A stock of a product which is held by a trade body or
government as a means of regulating the price of that
product.
A. Stock pile
B. Hoard stock
C. Buffer stock
D. Withheld stock
A negotiable claim issued by a bank in lieu of a term
deposit is called
A. Cheque
B. T-bills
C. Currency
D. Certificate of deposit
In counting the number of days when computing simple
interest,

A. The first day is included

B. The last day is excluded
C. The first day is included and the last day is excluded
D. The first day is excluded and the last day is included
In the so-called “Banker’s Rule”,

A. The number of days in 1 year is 360 days

B. The number of days in 1 year is 365 days
C. The number of days in each month is 30 days
D. The number of days in 1 year is 366 days
To discount an amount F for n conversion periods means
A. to find the present value on a day which is n periods
after F is due
B. To find the present value on a day which is n periods
before F is due
C. To find the present value on a day which is (n-1)
periods before F is due
D. To find the present value on a day which is (n+1)
periods before F is due
In the formula for compound interest, F= P (1+i)n, the value
(1+i)n is called ____.

A. Discount factor
B. Interest factor
C. Accumulation factor
D. Increase factor
To find the present worth of a future amount in compound
interest, we use the formula P=F(1+i)-n. What do you call
the factor (1+i)-n?

A. Discount
B. Accumulation factor
C. Interest factor
D. Reduction factor
What do you call a fund, usually by periodic deposits, to
insure the accumulation of money to provide for possible
large payments?
A. Escrow fund
B. Sinking fund
C. Mutual fund
D. Corporate fund
What is the term for the borrowed principal usually
mentioned in a typical bond?
A. Bond rate
B. Face value
C. Coupon rate
D. Coupon value
Any date on which a coupon of a bond becomes due will be
referred to as a _____.
A. Maturity date
B. Term of the bond
C. Coupon date
D. Due date
If P is the price of a bond and V is its redemption value,
what do you call the value P-V?

A. Par value
B. Face value
C. Premium
D. Bond discount
When can we say that the bond is purchased at a discount?

A. When the price of the bond is greater than the

redemption value
B. When the price of the bond is less than the redemption
value.
C. When the price of the bond is equal than the
redemption value.
D. When the price of the bond is either equal to or
greater than the redemption value.
The yield of a bond is obtained by which of the following
formulas:
A. Average investment__
Average annual interest
B. Average annual interest_
Average investment
C. Par value_
Flat value
D. Par value_
Flat value
What is a bond whose face value is redeemable in
installments, with interest payable periodically as due on
outstanding principal?
A. Annuity bond
B. Serial bond
C. Treasury bond
D. Government bond
What is the term for the sum of depreciation charges to
date?
A. Accrued depreciation
B. Applied depreciation
C. Accumulated depreciation
D. All of the above
The difference between the value of an asset and its
salvage or scrap value at the end of the year is called ____.
A. Depreciation
B. Accrued value
C. Book value
D. Wearing value
What is a life annuity?
A. A sequence of payment for a certain person which
stops when person dies.
B. A sequence of payment intended for a life insurance
of a person.
C. A sequence of payment for a certain person which
continues indefinitely.
D. It is the same as perpetuity.
The percentage of each peso of sales that is net income is
called ______.
A. Price-earning ratio
B. Profit margin
C. Profit margin ratio
D. Return of investment ratio
Which one represents that price-earnings ratio?

A. Market price per share_

Earnings per share
B. Earnings per share___
Market price per share
C. Net credit sales__
Average net receivables
D. Gross profit_____
Current liabilities
The book value per share of common stock is the ratio of
the common shareholders’ equity to ______.
A. Average shared
B. Number of outstanding shares
C. Total subscribed shared
D. Authorized capital stock
What refers to the price at which the quantity demanded
of a good is exactly equal to the quantity supplied

A. Equilibrium market price

B. Fair market price
C. Real market price
D. Exact market price
A principle that states that consumers will tend to spend an
increasing proportion of any additional income upon luxury
goods and a smaller proportional on staple goods, so that a
rise in income will lower the overall share of consumer
expenditures spent on stable goods (such as basic
foodstuffs)and increase the share of consumer expenditures
on luxury goods (such as motor cars).
A. Placibo effect
B. Luxury effect
C. Engel’s law
D. Staple law
What refers to a market for buying and selling of raw
materials such as tea, coffee, iron ore, etc.?
A. Commodity market
B. Raw market
C. Natural market
D. National market
The paper currency issued by the central bank which forms
the part of the country’s money supply
A. T-bills
B. Bank note
C. Check
D. Coupon
Reduction in the national income and output usually
accompanied by the fall in the general proce level

A. Devaluation
B. Deflation
C. inflation
D. Depreciation
It is a series of equal payment occurring at equal interval of
time

A. Annuity
B. Debt
C. Amortization
D. Deposit
The place and buyers come together

A. Market
B. Business
C. Recreational center
D. Buy and sell of section
A market where by there is only one buyer of an item for
which there are no good substitute
A. Monopsony
B. Oligopoly
C. Monopoly
D. Oligopsony
Estimate value at the end of the useful life.

A. Market value
B. Fair value
C. Salvage value
D. Book value
Consists of the actual counting or determinination of the
actual quantity of the materials on hand as of a given date.

A. Physical inventory
B. Material update
C. Technological assessment
D. Material count
Additional information of prospective bidders on contract
documents issued prior to bidding date.
A. Delict
B. Escalatory
C. Technological assessment
D. Bid bulletin
A series of uniform accounts over an infinite period of time.

A. Depreciation
B. Annuity
C. Perpetuity
D. Setting
The quantity of a certain commodity that is offered for sale
at a certain price at a given place and time
A. Demand
B. Supply
C. Stocks
D. Goods
Work-in process is classified as

A. An assets
B. A liability
C. An expenses
D. An owner’s equity
It is the amount which a willing buyer will pay to a willing
seller or a property where each has equal advantage and is
under no compulsion to buy or sell.
A. Fair value
B. Market value
C. Book value
D. Salvage value
This occurs in a situation where a commodity or service is
supplied by a number of vendors and there is nothing to
prevent additional vendors entering the market.
A. Perfect competition
B. Oligopoly
C. Monopoly
D. Elastic demand
These are product or service that are desired by human
and will be purchased if money is a available after the
required necessities have been obtained
A. Utilities
B. Necessities
C. Luxuries
D. Product goods and service
These are product or services that are required to support
human life ad activities that will be purchased in somewhat
the same quantity even though the price varies
considerably.
A. Utilities
B. Necessities
C. Luxuries
D. Product goods and services
A condition where only few individuals produce a certain
product and that any action of one will lead to almost the
same action of the others.
A. Oligopoly
B. Semi-monopoly
C. Monopoly
D. Perfect competition
The present worth of all depreciation over the economic
life of the item is called
A. Book value
B. Capital recovery
C. Depreciation recovery
D. Sinking fund
Gross profit, sales less cost of goods sold, as a percentage
of sales is called
A. Profit margin
B. Gross margin
C. Net income
D. Rate of return
Worth of the property as shown in the accounting records
of an enterprise.
A. Fair value
B. Market value
C. Salvage value
D. Book value
Those funds that are required to make the enterprise or
project a going concern.
A. Initial investment
B. Current accounts
C. Working capital
D. Subscribed capital
A market situation where there are one seller and many
buyers.
A. Monopoly
B. Monopsony
C. Oligopoly
D. Oligopsony
A market situation where there are few sellers and few
buyers.
A. Oligopoly
B. Oligopsony
C. Bilateral oligopoly
D. Bilateral oligopsony
The payment for the use of borrowed money is called

A. Loan
B. Maturity value
C. Interest
D. Principal
The interest rate at which the present work of the cash
flow on a project is zero of the interest earned by an
investment.
A. Effective rate
B. Nominal rate
C. Rate of return
D. Yield
The ratio of the interest payment to the principal for a
given unit of time and usually expressed as a percentage of
the principal.
A. Interest
B. Interest rate
C. Investment
D. All of the above
The true value of interest rate computed by equations for
compound interest for a 1 year period is known as

A. Expected return
B. Interest
C. Nominal interest
D. Effective interest
The intangible item of value from the exclusive right of a
company to provide a specific product or service in a stated
region of the country.
A. Market value
B. Book value
C. Goodwill value
D. Franchise value
The recorded current value of an asset is known as
A. Scrap value
B. Salvage value
C. Book value
D. Present worth
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
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
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
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
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
The function of interest rate and time determines the
cumulative amount of a sinking fund resulting from specific
deposits.
A. Sinking fund factor
B. Present worth factor
C. Capacity
D. Demand factor
The first cost of any property includes
A. The original purchase price and freight and
transportation charges
B. Installation expenses
C. Initial taxes and permits fee
D. All of the above
In SYD method, the sum of years digit is calculated using
which formua with n= number of useful years of the
equipment.
A. n(n-1)/2
B. n(n+1)/2
C. n(n+1)
D. n(n-1)
capitalized cost of any property is equal to the
A. annual cost
B. first cost + cost of perpetual cost
C. first cost + cost of perpetual maintenance
D. first cost + salvage value
the lessening of the value of an asset due to the decrease
in the quantity available ( referring to the natural
resources, coal, oil, etc)
A. depreciation
B. depletion
C. inflation
D. incremental cost
is the simplest form of business organization

A. sole propeitorship

B. partnership

C. partnership

D. corporation
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.
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.
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.
Represent ownership, and enjoys certain preference than
ordinary stock.

A. Authorized capital stock

B. Preferred stock
C. Common stock
D. Incorporator’s stock
Represent the ownership of stockholders who have a
residual claim on the assets of the corporation after all
other claims have been settled.
A. Authorized capital
B. Preferred stock
C. Incorporators stock
D. Common stock
The 72 rule is used to determine

A. How many years money will triple

B. How many years money will double
C. How many years to amass 1 million
D. How many years to quadruple the money
To triple the principal one must use

A. Integration
B. Derivatives
C. Logarithms
D. Implicit functions
A currency traded in a foreign exchange market to which
the demand is consistently high in relation to its supply.

A. Money market
B. Hard currency
C. Treasury bill
D. Certificated of deposit
Everything a company owns to which has a money value is
classified as an asset. Which of the following is classified as
an asset?
A. Intangible asset
B. Fixed asset
C. Trade investments
D. All of these
Which of the example of an intangible asset?
A. Cash
B. Investment in subsidiary companies
C. Furnitures
D. Patents
Land buildings, plants and machinery are examples of
A. Current assets
B. Trade investments
C. Fixed assets
D. Intangible assets
The residual value of a company’s assets after all outside
liabilities (shareholders excluded)m have been allowed for.
A. Divided
B. Equity
C. Return
D. Par value
A saving which takes place because good are not available
for consumption rather than the consumer really want to
save.
A. Compulsory saving
B. Consumer saving
C. Forced saving
D. All of these
A document that shows proof of legal ownership of a
financial security.
A. Bond
B. Bank note
C. Coupon
D. Check
Defined as the capacity of commodity to satisfy human
want.

A. Discount
B. Necessity
C. Luxuries
D. Utility
It is the profit obtained by selling stocks at a higher price
than its original purchase price.

A. Debenture
B. Goodwill
C. Capital gain
D. Internal rate of return
The quantity of a certain commodity that is offered for sale
at a certain price at a given time and place.
A. Demand
B. Supply
C. Utility
D. Market
In economics, a “short – term” transaction usually has a
lifetime of
A. 3 months or less
B. 1 year or less
C. 5 years or less
D. 10 years or less
In the cash flow, expenses incurred before time = 0 is called

A. Receipts
B. Disbursement
C. Sunk costs
D. Firsts costs
An imaginary cost representing what will not be received if
a particular strategy is rejected.

A. Sunk cost
B. Opportunity cost
C. Replacement cost
D. Initial cost
In replacement studies, the existing process or piece of
equipment is known as
A. Challenger
B. Defender
C. Liability
D. Asset
In replacement studies, the new process or piece of
equipment being considered for purchase is known as.

A. Challenger
B. Defender
C. Asset
D. Liability
_______ means that the cost of the asset is divided into
equal or unequal parts, and only one of these parts is taken
as an expense each year.

A. Capitalizing the asset

B. Expensing the asset
C. Depreciating the asset
D. Artificial expenses
The annual costs that are incurred due to the functioning
of a piece of equipment is known as
A. General, selling and administrative expenses
B. Prime cost
C. Operating and maintenance costs
D. Total cost
The sum of the direct labor cost and the direct material
cost is known as
A. Prime cost
B. Total cost
C. Indirect manufacturing expenses
D. Total cost
Research and development costs and administrative
expenses are added to the factory cost to give the _______
of the product.
A. Total cost
B. Marketing cost
C. Manufacturing cost
D. Prime cost
The sum of the prime cost and the indirect manufacturing
cost is known as
A. Factory cost
B. Research and development cost
C. Manufacturing cost
D. Total cost
The manufacturing cost plus selling expenses equals
A. Total cost
B. Indirect production cost
C. Administrative cost
D. Miscellaneous cost
Which of the following is NOT a direct labor expense?

A. Inspection
B. Testing
C. Supervision
D. Assembly
The journal and the ledger together are known simply as
_____ of the company.

A. Accounting system
B. The books
C. Bookkeeping system
D. Balance sheet
The basic accounting equation is

A. Assets = Liability + Owner’s equity

B. Liability = Assets + Owner’s equity
C. Owner’s equity = Assets + Liability
D. Owner’s equity = Liability – Assets
The ability to convert assets to cash quickly is known as

A. Solvency
B. Liquidity
C. Leverage
D. Insolvency
The ability to meet debts as they become due is known as
A. Solvency
B. Leverage
C. Insolvency
D. Liquidity
What is considered as an index of short-term paying
ability?
A. Current ratio
B. Acid test ratio
C. Gross margin
D. Return of investment
An acid test ratio is a ratio of
A. Gross profit to net salesrant
B. Net income before taxes to net sales
C. Quick assets to current liabilities
D. Net income to owner’s liabilities
A form of business firm which is owned and run by a group
of individuals for their mutual benefit
A. Cooperative
B. Corporation
C. Enterprise
D. Partnership
A document which shows the legal ownership of financial
security and entitled to payments thereon.
A. Coupon
B. Contract
C. Bond
D. Consol
A government bond which have an indefinite life rather
than a specific maturity
A. Coupon
B. T-bill
C. Debenture
D. Consol
Refers to the orders quantity that minimizes the inventory
cost per unit time.
A. Economic order quantity
B. Social order quantity
C. Public order quantity
D. Private order quantity
What is referred to as an individual who organizes factors
of production to undertake a venture with a view to profit?
A. Agent
B. Entrepreneur
C. Salesman
D. Commissioners
The money that is inactive and does not contribute to
productive effort in an economy is known as
A. Idle money
B. Hard money
C. Soft currency
D. Frozen asset
What refers to an equation stating that the sum of the
values, on a certain comparison date, of one set of
obligations is equal to the sum of the value of another set
of this date?
A. Equality of value
B. Equation of value
C. Equality equation
D. Similarity equation
What is an annuity whose payments extend over a period
of time whose length cannot be foretold accurately?
A. Annuity certain
B. Annuity uncertain
C. Incremental annuity
D. Contingent annuity
What do you call the time between successive payment
dates of an annuity?
A. Period interval
B. Annuity period
C. Payment interval
D. Annuity term
The time from the beginning of the first payment interval
to the need of the last one is called the _____ of the
annuity.
A. Period
B. Term
C. Nature
D. Type
What refers to the extinction of the debt by any
satisfactory set of payments?

A. Liquidation
B. Liability discharge
C. Discharging debt
D. Amortization of debt
When can we say that the bond is purchased at a
premium?
A. When the price of the bond is greater than the
redemption value.
B. When the price of the bond is less than the
redemption value.
C. When the price of the bond is equal than the redemption
value.
D. When the price of the bond is either equal to or greater
than the redemption value.
Which of the following will happen if bond is bought at a
discount?

A. Each coupon payment is too small to pay all interest

due on the investor’s principal.
B. Each coupon payment is greater than the interest due
on the investor’s principal.
C. The unpaid interest on each coupon date will not be
considered as a new investment in the bond.
D. The difference between the coupon payment and the
interest due is a partial repayment of principal.
In the sale of a bond, the actual purchase price on any day
is called ____.

A. Face value
B. Quoted price
C. Accrued price
D. Flat price
What do you call the difference between the flat price of
the bond and the quoted price of the bond?
A. Par value
B. Accrued interest
C. Bond rate
D. And-interest price
The quoted price of a bond is sometimes called _______.
A. Par value
B. Face value
C. An-interest price
D. Coupon price
What term is usually used by the banks to represent the
effective interest rate per period?
A. Yield
B. Nominal rate
C. Fixed rate
D. Net rate
The acid test ratio is also known as quick ratio. Which one
represents the quick ratio?
A. Quick assets_____
Current liabilities
B. Net credit sales___
Average net receivables
C. Gross profit____
Current liabilities
D. Gross profit__
Net sales
Which of the following represents the gross margin?

A. Net income__
Owner’s equity
B. Net credit sales___
Average net receivables
C. Gross profit____
Current liabilities
D. Gross profit__
Net sales
A receivable turnover is calculated using which of the
following formulas?

A. Net income__
Owner’s equity
B. Net credit sales___
Average net receivables
C. Gross profit____
Current liabilities
D. Gross profit__
Net sales
What is the disciple within economics that attempts to
measure and estimate statistically the relationship
between two or more economic variables?
A. Theory of values
B. Econometrics
C. Economatics
D. Econoscience
What refers to the fall in the general price level, frequently
accompanied by a reduction in the level of national
income?
A. Inflationary gap
B. Dissavings
C. Disinflation
D. Inflation
A price for a product just covers its production and
distribution costs with no profit margin added.
A. Cost price
B. Actual price
C. Real price
D. Original price
A market where new entrants face cost similar to those of
established firms and where, on leaving, firms are able to
recoup their capital costs, less depreciation.
A. Free market
B. Competitive market
C. Limited market
D. Contestable market
What refers to a temporary grouping of independent firms,
organization and governments, brought together to pool
their resources and skills in order to undertake a particular
project?

A. Consortium
B. Cartel
C. Cooperative
D. Union
It is a series of equal payment occurring at equal interval of
time where the first paymenyt is made after several
periods, after the beginning of the payment
A. Perpetuity
B. Ordinary Annuity
C. Annuity due
D. Deferred annuity
The total income equals the total operating cost.
A. Balance sheet
B. In-place valuelly
C. Check and balance
D. Break even-no gain no loss
Kind of obligation which has no condition attached.
A. Analytic
B. Pure
C. Gratuitous
D. Private
Direct labor costs incurred in the factory and direct
material costs are the costs of all materials that go into
production. The sum of these two direct costs is known as
A. GS and A expenses
B. Operating and maintenance costs
C. Prime cost
D. O and M costs
An index of short term paying ability is called
A. Receivable turn-over
B. Profit margin ratio
C. Current ratio
D. Acid-test ratio
An artificial expenses that spreads the purchase price of an
assets or another property over a number of years.
A. Depreciation
B. Sinking Fund
C. Amnesty
D. Bond
What is the highest position in the corporation?

A. President
B. Board of directors
C. Chairman of the board
D. Stockholders
Type of ownership in business where individuals exercise
and enjoy the right in their own interest.

A. Equitable
B. Public
C. Private
D. Pure
Decrease in the value of a physical property due to the
passage of time.
A. Inflation
B. Depletion
C. Recession
D. Depreciation
An association of two or more individuals for the purpose
of operating a business as co-owners for profit.

A. Sole proprietorship
B. Company
C. Partnership
D. Corporation
We may classify an interest rate, which specifies the actual
rate of interest on the principal for one year as

A. Nominal rate
B. Rate of return
C. Exact interest rate
D. Effective rate
It is defined to be the capacity of a commodity to satisfy
human want.
A. Discount
B. Luxury
C. Necessity
D. Utility
Grant total of the assets and operational capability of a
corporation.

A. Authorized capital
B. Investment
C. Subscribed capital
D. Money market
The worth of the property equals to the original cost less
depreciation.
A. Scrap value
B. Face value
C. Market value
D. Book value
Money paid for the use of borrowed capital.

A. Discount
B. Credit
C. Interest
D. Profit
Liquid assets such as cash and other assets that can be
converted quickly into cast such as accounts receivable and
merchandise are called
A. Total assets

B. Fixed assets
C. Current assets

D. none of these
The length of time which the property may be operated at a
profit.
A. physical life
B. Economic life
C. Operating life
D. All of the above
The provision in the contract that indicates the possible
adjustment of material cost and labor cost.
A. Secondary clause
B. Esclatory clause
C. Contingency clause
D. Main clause
A market situation where there is one seller and one buyer.

A. Monopoly
B. Monopsony
C. Bilateral monopoly
D. Bilateral monopsony
A market situation where there are only two buyers with
many sellers.

A. Duopoly
B. Oligopoly
C. Duopsony
D. Oligopsony
The cumulative effect of elapsed time on the money value of
an event, based on the earning power of equivalent
investment funds capital should or will earn.
A. Present worth factor
B. Interest rate
C. Time value of money
D. Yield
Defined as the future value minus the present value.

A. Interest
B. Rate of return
C. Discount
D. Capital
The flow back of profit plus depreciation from a given project
is called.

A. Capital recovery
B. Cash flow
C. Economic flow
D. Earning value
The profit derived from a project or business enterprise
whithout consideration of obligations to financial
contribution or claims of other based on profit.
A. Economic life
B. Yield
C. Earning value
D Expected yield
Scrap value of an asset is sometimes known as.

A. Book value
B. Salvage value
C. Replacement value
D. Future value
What is sometimes called second hand value?
A. Scrap value
B. Salvage value
C. Book value
D. Going value
An intangible value which is actually operating concern has
due to its operation.
A. Book value
B. Fair value
C. Goodwill value
D. Going value
The value which a disinterested third party, different from
the buyer and seller, will determine in order to establish a
price acceptable to both parties.
A. Market value
B. Good value
C. Fair value
D. Franchise value
A type annuity where the payments are made at the end of
each payment period starting from the first period.
A. Ordinary annuity
B. Annuity due
C. Deferred annuity
D. Perpetuity
It is a series of time where the first payment is made after
several periods, after the beginning of the payment.
A. Deferred annuity
B. Delayed annuity
C. Progressive annuity
D. Simple annuity
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
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
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
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
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
an association of two or more person for a purpose of
engaging in a profitable business

A. sole proprietorship
B. enterprise
C. partnership
D. corporation
a distinct legal entity which can practically transact any
business transaction which a real person could do.

A. Sole proprietorship
B. Enterprise
C. Partnership
D. Corporation
Double taxation is disadvatange of which business
organization

A. Sole proprietorship
B. Partnership
C. Corporation
D. Enterprise
Which is NOT a type of business organization?
A. Sole proprietorship
B. Corporation
C. Enterprise
D. Partnership
What is the minimum number of incorporators in order that
a corporation be organized?
A. 3
B. 5
C.10
D. 7
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
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
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
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
A type of bond which does not have security except a
promise to pay by the issuing corporation.

A. Mortgage bond
B. Register bond
C. Collateral trust bond
D. Debenture bond