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ECON8

This document contains 20 multiple choice questions testing various concepts in business and finance. The questions cover topics such as types of assets, costs, interest calculations, depreciation, investments, business entities, and financial instruments. For each question, the correct answer is identified as choice A, B, C or D.

Uploaded by

DayLe Ferrer Abapo
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
126 views

ECON8

This document contains 20 multiple choice questions testing various concepts in business and finance. The questions cover topics such as types of assets, costs, interest calculations, depreciation, investments, business entities, and financial instruments. For each question, the correct answer is identified as choice A, B, C or D.

Uploaded by

DayLe Ferrer Abapo
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

These are Liquid assets such as cash and other assets that can be converted quickly into cash, such as
accounts receivable, and merchandise. How do you call this?
a) Total assets
b) Fixed assets
c) Current assets
d) Land and
buildings
C
2. Direct costs incurred in the factory and direct material costs are the costs of all materials that go into
production. What do you call the sum of these two direct costs?
a) Gross sales and account expenses
b) Operation and maintenance cost
c) Prime cost
c) Overhead and maintenance costs
C
3. What can you say about the total income equals the total operating cost?
a) Balance sheet
b) In-place value
c) Check and balance d) Break-even-no-gainno-loss
D
4. What is the estimated value at the end of the useful life of a machine?
a) Salvage value
b) Compounded annually
c) Economic life
d) Balance
sheet
A
5. What do you think is an artificial expense that spreads the purchase price of an asset or another
property over a number of years?
a) Depreciation
b) Sinking fund
c) Amnesty
d) Bond
A
6. This Consists of the actual counting or determination of the actual quantity of the materials on hands
as of a given date. What is this?
a) Physical inventory
b) Material update
c) Technological assessment
d)
Material
count
A
7. It is a series of equal payments accounting at equal interval of time where the first payment is made
several periods, after the beginning of the payment. How do you call this?
a) Deferred annuity b) Delayed annuity
c) Progressive annuity
d) Simple annuity
A
8. What can you say a market condition whereby there is only one buyer of an item for which there are
no good substitute?
a) Monopsony
b) Oligopoly
c) Monopoly
d) Oligopsony
A
9. Vicente made a loan from a bank. The bank charges him 12 % simple interest on a P300.00 loan. How
much will be repaid if the loan is paid in one lump sum after three years?
a) P408.00
b) P425.00
c) P551.00
d) 450.00
A
Solution:

F P1 i n 3001 .0.12 3 P 408.00

10. My P5,000.00 shall accumulate for 10 years at 8 % compounded quarterly. What is the compounded
interest of my money at the end of 10 years?
a) P6,005.30
b) P6,000.00
c) P6,040.20
d) P6,010.20
C

Solution:

i
F P 1 n
m

mn

0.08

5,000.00 1

4 10

P11,040.20

Interest 11,040.02 5,000.00 P6.040.20


11. The JRF Corporation manufactures bookcases that it sells for P65.00 each. It costs JRF corporation
P35,000.00 per year to operate its plant. The sum includes rentals, depreciation charges on equipment,
and salary payments. If the cost to produce one bookcase is P50.00, how many bookcases must be
sold each year for the corporation to avoid taking a loss?
a) 2 334 Bookcases
b) 539 Bookcases
c) 750 Bookcases
d)
2
333
Bookcases
A
Solution: Let, Nc = number of cases

65 N c 50 N c 35,000.00
Nc

35,000.00
2 234 cases
65 50

12. A machine is purchased for P500,000.00. The salvage value in 25 years is P100,000.00. What is the
depreciation in the first three years using straight line method?
a) P48,000.00
b) P24,000.00
c) P32,000.00
d) P16,000.00
A

d
Solution:

C o C L 500,000.00 100,000.00

P16,000.00
L
25

C n d n 16,000.00 3 P 48,000.00
13. How much must be deposited at 6 % each year beginning on January 1, yar 1, in order to accumulate
P5,000.00 on the date of the last deposit, January 1, year 6?
a) P766.24
b) P676.24
c) P667.2
d) P626.24
B

1
Solution:

1 1 i 1 i
1 n

5,000.00
P676.24
5

1 1.06
6
1
1.06
0.06

14. This is a distinct legal entity that can practically transact any business transaction
could do. What do you think is this entity?
a) Sole proprietorship
b) Partnership
c) Enterprise
D
15. This is an increase in the value of capital asset. What is this?
a) Profit
b) Capital gain
c) Capital expenditure
B
16. What is the reduction in the money value of a capital asset?
a) Capital expenditure
b) Capital loss
c) Capital gain
B
17. What do you think is the difference between sales revenue and the cost of goods?

that a real person


d) Corporation
d) Capital stock
d) Deficit

a) Net income
product

b) Rate of return

c) Gross profit

d)

Gross

national

C
18. This is a currency traded in a foreign exchange market for which the demand is consistently high in
relation to its supply. How do you call this?
a) Money market
b) Hard currency
c) Treasury bill
d) Certificate of deposit
B
19. It is defined as the certificate of indebtedness of a corporation usually for a period of not less than 10
years and guaranteed by a mortgage on certain assets of a corporation. Guess, what is this?
a) Bond
b) Stock
c) T-bill
d) Treasury bill
A
20. What is a negotiable claim issued by a bank in lieu of a term deposit?
a) Time deposit
b) Capital gain
c) Bond
d) Certificate of deposit
D

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