Multiple Choice Questions:

Instructions: Choose the best answer and write the letter of your choice on the answer sheet attached

1. Bob: Do you ....... if I use your phone to call my wife?

(a) value (b) worry (c) mind (d) allow
2. Bill: Sure. Would you ....... use my cell phone or the one in my office?
(a) rather (b) prefer (c) like (d) assume
3. Bob: The one in your office is fine. Do I need to ....... anything special to get out of the
building?
(a) tighten (b) press c) compress (d) dial
4. Bill: Yes. You ....... dial 9 and then your number.
(a) should (b) could (c) would (d) shall
5. Bob: If another call comes in while I'm on the phone, should I put my wife on ....... and take
it?
(a) wait (b) hold (c) hope (d) the side
6. Bill: No, that's alright. If you don't answer it will just go through to my ....... and I can call
them back later.
(a) answering machine (b) voicemail (c) voice-recoder (d) e-mail
7. Bob picked up the ....... and dialed 9 then his home number.
(a) handle (b) cord (c) thing-a-ma-jig-er (d) receiver
8. Bill straightened up the office, pretending not to listen to Bob's ....... of the conversation with
his wife.
(a) end (b) part (c) words (d) half
9. Finally Bob ........
(a) hanged up (b) hang over (c) hung up (d) hung over
10. Bill: I couldn't help but ....... you're having chicken for dinner tonight. Can I come over?
(a) overhear (b) eavesdrop (c) listen (d) comprehend
11. I would be very interested in ....... for that job.
(a) entering (b) working (c) applying (d) writing
12. Do you want to ....... as a candidate in the local elections?
(a) stand (b) sit (c) go (d) try
13. They are completely ....... up with all the noise in the centre of town.
(a) tired (b) fed (c) sick (d) ill
14. The reason there are no buses is because the drivers are on ........
(a) hit (b) stop (c) strike (d) leave
15. The government has changed its policy and had a complete change of ........
(a) view (b) opinion (c) mind (d) heart
16. This supermarket is trying to ....... young shoppers by offering fashionable clothes.
(a) target (b) persuade (c) encourage (d) trap
17. You should have ....... those shares when they were cheap.
(a) taken out (b) sold off (c) bought up (d) taken over
18. You must try and hurry up because my patience is ....... out.

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 (a) running (b) racing (c) pacing (d) turning
19. Have you ever tried your ....... at running a business?
(a) arm (b) finger (c) hand (d) leg
20. Once you are earning money and you want to keep it safe, you can always ....... an account
with a bank.
(a) open (b) start (c) begin (d) commence
Read the following messages and notices. For questions 31–35, circle your answer by
choosing one letter A, B or C.
21. STORE CONTENTS IN A COOL PLACE OUT OF DIRECT SUN LIGHT

(a) The contents should be kept at a constant temperature.

(b) The contents are sensitive to heat and light.
(c) The contents must be kept frozen.

Management Writing Competition

22.
For excellence in management writing
There are six prizes to be won in two sections:
Best Management Book and Best Management Article.

Participants in the competition

(a) may enter in different categories of management writing.
(b) will receive top quality publications on management if they win.
(c) must have published several books or articles on management

To: All Research Staff

From: J Swann, Human Resources
23.
Subject: Job evaluation sessions
This is just a reminder of the job evaluation sessions which take place next
month. You should spare some time to be present at these sessions, as it is
very much in your interest to attend.

(a) You can only attend the sessions in your free time.
(b) You must tell HR if you are interested in the sessions.
(c) You will benefit from attending the sessions.

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 OFFICE RENOVATION PROGRAMME
The Commercial Department, currently located next to the Main Reception, will transfer
24. to the Accounts Department's offices on the first floor by 19th June. The HR Department
will then transfer to the Commercial Department's old office.

Which department will be located next to the Main Reception after the 19th June?
(a) the Accounts Department
(b) the HR Department
(c) the
Co
mm
erci
al
Dep
artm
ent

25.

(a) The number of temporary staff remained almost unchanged for three years.
(b) The number of full-time staff overtook part-time staff in year 2.
(c) The number of part-time staff declined steadily during the three years.

26. In which level of management are technical skills most needed?

A. Top level

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 B. Middle level
C. First –line level
D. Chief executive officer of the company
27. If a fresh graduate is recruited in Oromia cooperative bank, according Maslow’s hierarchy of
needs, what is the first level need of the new employee?
A. Social
B. Esteem
C. Self actualization
D. Food and shelter

28. Where is the component strength located in a SWOT analysis?

A. The external environment
B. The internal and external environment
C. The internal environment
D. All of the above
29. What is a mission statement?
A. The vision of the organization
B. The short term plan of the organization
C. The statement which explains the reason for the existence of the organizations
30. Which of the following is categorized as Macro environment for business organizations?
A. Suppliers
B. Customers
C. Technology
D. Distributers
Match the following description (6-10) of managers with the 3 role of managers given below
A. Interpersonal B. Informational C. Decisional

31. …………Initiate improvement of projects; identify new ideas; delegate

idea responsibility to others.
32. ………….Take corrective action during disputes or crises; resolve conflicts among
subordinates; adapt to environmental crises.
33. ---------------Seek and receive information; scan periodicals and reports; maintain personal
contacts.
34. ………Perform ceremonial and symbolic duties such as greeting visitors, signing legal
documents.
35. ………..Direct and motivate subordinates; train, counsel, and communicate with
subordinates.
36. The investment regulation in afar region is better in attracting investors than Beneshangul
region, under which category of business environment will you categorize the regulation
A. Economic
B. Social
C. Political and legal

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 D. Technological
37. A sign “don’t smoke” in Oromia cooperative bank is best refers to as
A. Rule
B. Policy
C. Guideline
D. Vision
38. To what time-frame do strategic plans relate?
A. Long-term
B. Medium-term
C. Short-term
D. Unspecified time it takes to achieve an aim
39. What do you call a style of leadership that takes account of others' views, opinions and
ideas?
A. Laissez-faire
B. People-oriented
C. Democratic
D. Autocratic
40. Of what is an investment decision an example?
A. Programmed decision
B. Routine decision
C. Management decision
D. Non-programmed decision
41. What do the four 'P's' of marketing relate to?
A. Product, price, place and promotion
B. Product, price, press and promotion
C. Product, price, publicity and promotion
D. Product, price, post and promotion
42. What tasks does Human resource management involve?
A. Attracting employees to the organization
B. Recruiting employees
C. Retaining employees
D. All of the above
43. A firm sells widgets for $14 each. The variable costs for each unit is $8. The
contribution margin per unit is:
A. $ 6
B. $12
C. $14
D. $ 8

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44. Company A's fixed costs were $42,000, its variable costs were $24,000, and its sales
were $80,000 for the sale of 8,000 units. The company's break-even point in units
is:(Hint: Break even happens when total cost=total revenue)
A. 8,000
B. 5,000
C. 6,000
D. 7,000

45. Janet sells a product for $6.25. The variable costs are $3.75. Janet's break-even units
are 35,000. What is the amount of fixed costs?
A. $ 87,500
B. $ 35,000
C. $131,250
D. $104,750
46. The sum of three consecutive odd numbers is 57. The middle one is:
A. 19
B. 21
C. 23
D. 17
47. What percent of a day is 6 hours?
A. 6.25%
B. 20%
C. 25%
D. 12.5%
48. Which factors affect the productivity of a company:
A. methods
B. quality
C. capital
D. technology
E. all the above
49. Determine the productivity of four workers who installed 640 square yards of carpeting in 8
hours per day (hint: productivity=output / input)..
A. 20 yards per hour
B. 80 yards per hour
C. 16 yards per hour
D. 2 yards per hour
E. None of the above

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50. A wrapping paper Company produced 2000 rolls of paper one day at a standard price of Br. 1
per roll. Labor cost was Br. 160, material cost was Br. 50, and overhead was Br. 320.
Determine the multifactor and total productivity.
A. 40
B. 3.77
C. 3
D. 4
E. 22.77

51. If total assets increased $20,000 during a period and total liabilities increased $12,000 during
the same period, the amount and direction (increase or decrease) of the change in owner’s
equity for that period is a(n):
A. $32,000 increase.
B. $32,000 decrease
C. $8,000 increase.
D. $8,000 decrease
E. Some other amount decrease
52. If revenue was $45,000, expenses were $37,500, and the owner’s withdrawals were $10,000,
the amount of net income or net loss would be:
A. $45,000 net income.
B. $7,500 net income.
C. $37,500 net loss.
D. $2,500 net loss.
53. A listing of a business entity’s assets, liabilities, and owner’s equity as of a specific date is
a(n):
A. Balance sheet.
B. Income statement.
C. Statement of owner’s equity.
D. Statement of cash flows.
54. The receipt of cash from customers in payment of their accounts would be recorded by:
A. A debit to Cash and a credit to Accounts Receivable.
B. A debit to Accounts Receivable and a credit to Cash.
C. A debit to Cash and a credit to Accounts Payable.
D. A debit to Accounts Payable and a credit to Cash.
55. A debit balance in which of the following accounts would indicate a likely error?
A. Accounts Receivable
B. Cash
C. Fees Earned
D. Miscellaneous Expense

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56. If the supplies account, before adjustment on May 31, indicated a balance of $2,250, and
supplies on hand at May 31 totaled $950, the adjusting entry would be:
A. Debit Supplies, $950; credit Supplies Expense, $950.
B. Debit Supplies, $1,300; credit Supplies Expense, $1,300.
C. Debit Supplies Expense, $1,300; credit Supplies, $1,300.
D. Debit Supplies Expense, $950; credit Supplies, $950.
57. If the estimated amount of depreciation on equipment for a period is $2,000, the adjusting
entry to record depreciation would be:
A. Debit Depreciation Expense $2,000; credit Equipment, $2,000.
B. Debit Equipment, $2,000; credit Depreciation Expense, $2,000.
C. Debit Depreciation Expense, $2,000; credit Accumulated Depreciation, $2,000.
D. Debit Accumulated Depreciation, $2,000; credit Depreciation Expense, $2,000.
58. If the equipment account has a balance of $22,500 and its accumulated depreciation account
has a balance of $14,000, the book value of the equipment would be:
A. $36,500.
B. $22,500.
C. $14,000.
D. $8,500.
59. Which of the following is not an element of internal control?
A. Control environment
B. Monitoring
C. Compliance with laws and regulations
D. Control procedures
60. The bank erroneously charged Tropical Services’ account for $450.50 for a check that was
correctly written and recorded by Tropical Services as $540.50. To reconcile the bank
account of Tropical Services at the end of the month, you would:
A. Add $90 to the cash balance according to the bank statement.
B. Add $90 to the cash balance according to Tropical Services’ records.
C. Deduct $90 from the cash balance according to the bank statement.
D. Deduct $90 from the cash balance according to Tropical Services’ records.
61. In preparing a bank reconciliation, the amount of checks outstanding would be:
A. Added to the cash balance according to the bank statement.
B. Deducted from the cash balance according to the bank statement.
C. Added to the cash balance according to the company’s records.
D. Deducted from the cash balance according to the company’s records.
62. Journal entries based on the bank reconciliation are required for:
A. Additions to the cash balance according to the company’s records.
B. Deductions from the cash balance according to the company’s records.
C. Both A and B.
D. Neither A nor B.

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63. A petty cash fund is:
A. Used to pay relatively small amounts.
B. Established by estimating the amount of cash needed for disbursements of relatively
small amounts during a specified period.
C. Reimbursed when the amount of money in the fund is reduced to a predetermined
minimum amount.
D. All of the above.
64. At the end of the fiscal year, before the accounts are adjusted, Accounts Receivable has a
balance of $200,000 and Allowance for Doubtful Accounts has a credit balance of $2,500. If
the estimate of uncollectible accounts determined by aging the receivables is $8,500, the
amount of bad debt expense is:
A. $2,500.
B. $6,000.
C. $8,500.
D. $11,000.
65. At the end of the fiscal year, Accounts Receivable has a balance of $100,000 and Allowance
for Doubtful Accounts has a balance of $7,000. The expected net realizable value of the
accounts receivable is:
A. $7,000.
B. $93,000.
C. $100,000.
D. $107,000.
66. What is the maturity value of a 90-day, 12% note for $10,000?
A. $8,800
B. $10,000
C. $10,300
D. $11,200
67. What is the due date of a $12,000, 90-day, 8% note receivable dated August 5?
A. October 31
B. November 2
C. November 3
D. November 4
68. When a note receivable is dishonored, Accounts Receivable is debited for what amount?
A. The face value of the note
B. The maturity value of the note
C. The maturity value of the note less accrued interest
D. The maturity value of the note plus accrued interest
69. Which of the following expenditures incurred in connection with acquiring machinery is a
proper charge to the asset account?
A. Freight

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 B. Installation costs
C. Both A and B
D. Neither A nor B
70. What is the amount of depreciation, using the double declining-balance method for the
second year of use for equipment costing $9,000, with an estimated residual value of $600
and an estimated life of three years?
A. $6,000
B. $3,000
C. $2,000
D. $400
71. An example of an accelerated depreciation method is:
A. Straight-line.
B. Double-declining-balance.
C. Units-of-production.
D. Depletion
72. A fixed asset priced at $100,000 is acquired by trading in a similar asset that has a book
value of $25,000. Assuming that the trade-in allowance is $30,000 and that n$70,000 cash is
paid for the new asset, what is the cost of the new asset for financial reporting purposes?
A. $100,000
B. $95,000
C. $70,000
D. $30,000
73. Which of the following is an example of an intangible asset?
A. Patents
B. Goodwill
C. Copyrights
D. All of the above
74. A corporation has issued 25,000 shares of $100 par common stock and holds 3,000 of these
shares as treasury stock. If the corporation declares a $2 per share cash dividend, what
amount will be recorded as cash dividends?
A. $22,000
B. $25,000
C. $44,000
D. $50,000
75. When a building is purchased for cash.
A. Total assets are increased
B. Capital is decreased
C. Total assets are decreased
D. Capital is increased
E. None
76. If the double declining depreciation rate of a plant asset is 50% then it’s estimated life will
be:

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 A. 50 years
B. 10 years
C. 4 years
D. None
77. One of the following is not among the main characteristics of plant assets
a. Long lived
b. Used in the normal operations of a business
c. Tangibility
d. Held for sale in the normal course of a business
78. Off-the balance sheet activities of banks includes all except:
A. Loan commitments
B. When-issued securities
C. Mortgage loans
D. Repurchase agreements
E. Trading of derivatives
79. Which one is the most liquid than others?
A. Term deposit
B. Passbook deposit
C. Demand deposit
D. Savings deposit
E. E. Certificates of deposits
80. The process of financial intermediation occurs when funds are transferred from:
A. People who have surplus funds to people who have shortage of funds.
B. Financial institutions that have an excess of available funds to people or firms that
have a shortage.
C. People who have a shortage of available funds to people who have an excess.
D. Never transferred.
E. People who have an excess of available funds to people who also have an excess of
available funds.
81. Microeconomics theory deals with
a) The prices of factors of productions
b) The prices of goods
c) The prices of services
d) All of the above
e) None of the above
82. The basic economic question “ how to produce” refers to
a) Choice of technology
b) Choice among enterprises
c) Choice among different buyers
d) all of the above
e) None of the above
83. Which is true about the Production Possibility Curve (PPC)
a) Is downward slopped

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 b) Is a graphical representation of trade offs among alternative choices
c) All points on the PPC represent efficient allocation of resources
d) If a country is on The PPC , it can increase the production of one good without
decreasing the production of other good
e) All except d
84. Which of the following costs equal to each other?
a) Implicit costs and explicit costs
b) Accounting cost and implicit costs
c) Explicit costs and accounting costs
d) Implicit costs and economic costs
e) None of the above
85. Which of the following is true about the total product (TP) ?
a) Total product is at maximum when marginal product has fallen to zero.
b) Total product is at maximum when marginal product is falling
c) Total product is at minimum when marginal product is zero
d) Total product increases when marginal product is zero
e) All of the above
86. In the long-run:
a. Variable costs tend to be greater than the fixed costs
b. Fixed costs tend to be greater than variable costs
c. All costs are variable costs
d. All costs are fixed costs
e. All are correct
87. The rate of substitution between two inputs is measured by
a) The slope of the isocost line
b) The ratio of the marginal productivity of inputs involved in the production
function
c) The slope of the isoquant
d) b and c
e) none
88. Which of the following statement is false about cartel
a) They are perfect form of collusion
b) Cartels are formed on voluntary basis
c) Cartel will try to protect the interest of member firms
d) All are answers
89. Point of tangency between Isocost line and Isoquant curve represents
a) utility maximization point or consumers’ optimization level of consumption
b) least cost way of producing two products
c) point of consumer’s profit maximization
d) b and c
e) None
90. Product differentiation,
a) is a technique designed to make a firm’s product unique from other firms product

12
 b) gives firms some sort of discretionary power over their product and hence make
them to be a price maker
c) it changes the shape of the demand curve from that of horizontal to down ward
sloping
d) a and b
e) All are answers
91. In Cournot’s model, if there are four firms producing identical product with zero marginal
cost of production, what is the amount supplied by each firm?
a) 1/3 of the market demand and charges similar price
b) ¼ of the market demand and charge the same price
c) 1/5 of the market demand and charge the same price
d) ¼ of the market demand and sell it at different price
e) b and d
92. Firms would like to enter into a collusive agreement because,
a) Collusive avid barrier to entry of new firms
b) Collusive increases degree of uncertainty surrounding the market
c) Collusive reduces degree of competition among firms
d) a and b
e) None of the above
93. Cartel aiming at joint profit maximization,
a) is a kind of loose cartel
b) its analysis is identical to that of multi-plant monopoly
c) member firms can sale any quantity at the agreed price
d) a and b
e) b and c
94. Which one is true about game theory
a) It a theory that examine the choice of suboptimal strategy in conflict situation
b) It is concerned with the general analysis of strategic interaction among monopoly
firm
c) It is a theory that examine the choice of optimal strategy in a conflict situation
d) a and b
e) b and c
95. When the product and resources markets are perfectly competitive.
a) The supply of labor facing a firm is perfectly elastic
b) The Marginal cost of labor is equals to wage rate
c) At equilibrium the factor is paid its wage equal to its value of marginal product
of labor
d) b and c
e) All
96. The study of the procedure for measuring the aggregate output and income of the nation is
called
a) National Income

13
 b) Gross Domestic Product
c) Gross National Product
d) National Income Accounting
e) b and c

97. According to Keynesians school of thought the level of output and hence employment in
closed economy is determined by, (2Pts)
a) the aggregate spending on domestic goods and services
b) the amount of factors of production used in the production process
c) the amount of factors of production used in the production process and how they
are used
d) the amount of money in the economy
e) All except d
98. Which one is correct about the gross domestic product?
A) It is the study of the procedure for measuring the aggregate output and income of
the nation
B) It include all income generated by the economic agents within the country for two
quarters.
C) It is determined by adding up all the money values of goods and services
produced by the citizens of the country during a given year.
D) All of the above
E) None of the above
99. Which one of the following government action is not an example of the operation of fiscal
policy?
a) Decreasing corporate tax rate
b) Decreasing interest rate
c) Increasing income tax rate
d) Increasing government expenditure on foreign aid
e) None
100. Identify the correct statement about the marginal propensity to consume when it is 0.75
A) The 75% of consumption will be induced by income change
B) The marginal propensity to saving is 0.35
C) When income increases by 100 birr saving increases by 25 birr
D) a and c
E) all are true

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