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9. The ability to convert assets to cash quickly is known as ______.
Answer
Correct Answer:
Liquidity
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10. The ability to meet debts as they become due is known as ______.
Answer
Correct Answer:
Solvency
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11. What is a stock of a product which is held by a trade body or government as a means of regulating the price of that product?
Answer
Correct Answer:
Buffer stock
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12. A form of business firm which is owned and run by a group of individuals for their mutual benefit is called ______.
Answer
Correct Answer:
Cooperative
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13. What is a government bond which has an indefinite life rather than a specific maturity?
Answer
Correct Answer:
Consol
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14. What is another term for “acid-test ratio”?
Answer
Correct Answer:
Quick ratio
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15. Gross margin is the ratio of the gross profit to ______.
Answer
Correct Answer:
Net sale
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16. Return on investment ratio is the ratio of the:
Answer
Correct Answer:
Net income to owner’s equity
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17. The true value of interest rate computed by equations for compound interest for a 1 year period is known as ______.
Answer
Correct Answer:
Effective interest
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18. Capitalized cost of any structure or property is computed by which formula?
Answer
Correct Answer:
First cost + cost of perpetual maintenance
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19. As applied to capitalized asset, the distribution of the initial cost by a periodic changes to operation as in depreciation or the reduction of a debt by either periodic or irregular prearranged programs is called ______.
Answer
Correct Answer:
Amortization
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20. The flow back of profit plus depreciation form a given project is called ______.
Answer
Correct Answer:
Cash flow
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21. What refers to the saving which takes place because goods are not available for consumption rather than consumer really want to save?
Answer
Correct Answer:
Forced saving
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22. The deliberate lowering of the price of a nation’s currency in terms of the accepted standard (Gold, American dollar or the British pound) is known as ______.
Answer
Correct Answer:
Currency devaluation
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23. What refers to the negotiable claim issued by a bank in lien of a term deposit?
Answer
Correct Answer:
Certificate of deposit
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24. What is the reduction in the money value of capital asset is called?
Answer
Correct Answer:
Capital loss
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25. What is the increase in the money value of a capital asset is called?
Answer
Correct Answer:
Capital gain
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26. What is used when a quick estimate of the doubling time for the invested money is needed?
Answer
Correct Answer:
Rule of 72
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27. What do you call a one-time credit against taxes?
Answer
Correct Answer:
Tax credit
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28. The ratio of the net income before taxes to net sales is called ______.
Answer
Correct Answer:
Profit margin ratio
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29. What is a measure of the average speed with which accounts receivable are collected?
Answer
Correct Answer:
Receivable turnover
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30. All are classified under direct labor expenses EXCEPT one. Which one?
Answer
Correct Answer:
Supervision cost
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31. All the proceeds which are received by the business as a result of the sale of goods is called ______.
Answer
Correct Answer:
Gross income
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32. The original record of a business transaction is recorded in this book.
Answer
Correct Answer:
Journal
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33. What is a secondary book of accounts, the information of which is obtained from the journal is called?
Answer
Correct Answer:
Ledger
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34. What is used to record historical financial transactions?
Answer
Correct Answer:
Bookkeeping system
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35. What is the change in cost per unit variable change called?
Answer
Correct Answer:
Incremental cost
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36. What is an accounting term that represents an inventory account adjustment?
Answer
Correct Answer:
Cost of goods sold
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37. What is another term for “current assets”?
Answer
Correct Answer:
Liquid assets
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38. What refers to the interest rate at which the present work of the cash flow on a project is zero of the interest earned by an investment?
Answer
Correct Answer:
Rate of return
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39. Lands, buildings, plants and machineries are example of what type of asset?
Answer
Correct Answer:
Fixed asset
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40. Which of the following is an example of intangible asset?
Answer
Correct Answer:
Patents
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41. ______ is the element of value which a business has earned through the favorable consideration and patronage of its costumers arising from its well known and well conducted policies and operations.
Answer
Correct Answer:
Goodwill
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42. The profit derived from a project or business enterprise without consideration of obligations to financial contributors and claims of others based on profit is known as ______.
Answer
Correct Answer:
Economic return
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43. What represents the share of participation in business organizations?
Answer
Correct Answer:
Stock
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44. Cash money and credit necessary to establish and operate an enterprise are generally called ______.
Answer
Correct Answer:
Capital
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45. What refers to the claim of anyone to ownership?
Answer
Correct Answer:
Equity
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46. What refers to the residual value of a company’s assets after all outside liabilities (shareholders excluded) have been allowed for?
Answer
Correct Answer:
Equity
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47. The amount of company’s profit that the board of directors of the corporation decides to distribute to ordinary shareholders is called ______.
Answer
Correct Answer:
Dividend
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48. What stock represents ownership and enjoys certain preferences than ordinary stock?
Answer
Correct Answer:
Preferred stock
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49. What represents the ownership of stockholders who have a residual claim on the assets of the corporation after all other claims have been settled?
Answer
Correct Answer:
Common stock
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50. An association of two or more persons for the purpose of engaging into a business for profit is called ______.
Answer
Correct Answer:
Partnership
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51. Aggregation of individuals formed for the purpose of conducting a business and recognized by law as a fictitious person is called ______.
Answer
Correct Answer:
Corporation
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52. Which is true about corporation?
Answer
Correct Answer:
The stock holders of the corporation are only liable to the extent of their investments.
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53. Which is true about partnership?
Answer
Correct Answer:
It can be handed down from one generation of partners to another.
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54. In case of bankruptcy of a partnership,
Answer
Correct Answer:
The partnership assets (excluding the partners personal assets) only will be used to pay the liabilities
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55. Double taxation is a disadvantage of which business organization?
Answer
Correct Answer:
Corporation
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56. What is the simplest form of business organization?
Answer
Correct Answer:
Sole proprietorship
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57. Is an artificial being created by operation of law, having the right of succession and the process, attributes and properties expressly authorized by the law or incident to its existence.
Answer
Correct Answer:
Corporation
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58. A form of business organization in which a person conducts his business alone and entirely for his own profit, being solely responsible for all its activities and liabilities.
Answer
Correct Answer:
Sole proprietorship
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59. What is the factor name of the formula [i(1+i)^n]/[((1+i)^n)-1]?
Answer
Correct Answer:
Capital recovery
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60. What is the factor name of the formula (1+i)^-n?
Answer
Correct Answer:
Single payment present worth
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61. What is the main reason why the sinking fund method of computing depreciation is seldom used in the industry?
Answer
Correct Answer:
The initial depreciation is low
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62. What refers to an imaginary cost representing what will not be received if a particular strategy is rejected?
Answer
Correct Answer:
Opportunity cost
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63. What method is often used in municipal project evaluations where benefits and costs accrue to different segments of the community?
Answer
Correct Answer:
Benefit-cost ratio
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64. What is normally used to compare alternatives that accomplish the same purpose but have unequal lives?
Answer
Correct Answer:
Annual cost method
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65. Capitalized cost of a project is also known as ______.
Answer
Correct Answer:
Life cycle cost
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66. What refers to the present worth of cost associated with an asset for an infinite period of time?
Answer
Correct Answer:
Capitalized cost
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67. The unrecovered depreciation which results due to poor estimates as to the life of the equipment is called ______.
Answer
Correct Answer:
Sunk cost
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68. The process of determining the value or worth of a physical property for specific reason is called ______.
Answer
Correct Answer:
Valuation
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69. In computing depreciation of an equipment, which of the following represents the first cost?
Answer
Correct Answer:
All of the above
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70. The first cost to be incurred if the piece of equipment now in place had been bought for a second hand dealer or some other business is called ______.
Answer
Correct Answer:
In-place value
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71. What refers to the value of an intangible item which arises from the exclusive right of a company to provide a specified product and service in a certain region of the country?
Answer
Correct Answer:
Franchise value
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72. What refers to the value of an asset which a disinterested third party, different from the buyer and seller, will determine in order to establish a price acceptable to both parties?
Answer
Correct Answer:
Fair value
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73. Salvage value is sometimes known as ______.
Answer
Correct Answer:
Second-hand value
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74. The amount of property in which a willing buyer to a willing seller for the property when neither one is under the compulsion to buy nor to sell is called ______.
Answer
Correct Answer:
Market value
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75. A mathematical expression also known as the present value of annuity of one is called ______.
Answer
Correct Answer:
Present worth factor
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76. What do you call the after-tax present worth of all depreciation effects over the depreciation period of the asset?
Answer
Correct Answer:
Depreciation recovery
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77. Using factor method, the depletion at any given year is equal to:
Answer
Correct Answer:
Initial cost of property times number of unit sold during the year divided by the total units in property
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78. What is another term for “unit method” for computing depletion?
Answer
Correct Answer:
Factor method
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79. The depletion allowance method of computing depletion is commonly known as ______.
Answer
Correct Answer:
Percentage method
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80. Under the depletion allowance method in computing depreciation, the depletion charge is equal to either ______ whichever is smaller.
Answer
Correct Answer:
Fixed percentage of gross income or 50% of the net taxable income
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81. What are the common methods of computing depletion charge?
Answer
Correct Answer:
Unit method and percentage method
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82. What is defined as the reduction of the value of certain natural resources such as mines, oil, timber, quarries, etdue to the gradual extraction of its contents?
Answer
Correct Answer:
Depletion
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83. The functional depreciation is sometimes called ______.
Answer
Correct Answer:
Adolescence
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84. What type of depreciation is due to the reduction of the physical ability of an equipment or asset to produce results?
Answer
Correct Answer:
Physical depreciation
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85. What type of depreciation is due to the reduction in the demand for the function that the equipment or asset was designed to render?
Answer
Correct Answer:
Functional depreciation
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86. The declining balance method is also known as ______.
Answer
Correct Answer:
Constant percentage method
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87. In what method of computing depreciation where it assumes that the annual cost of depreciation is a fixed percentage of the book value at the beginning of the year?
Answer
Correct Answer:
Declining balance method
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88. In what method of computing depreciation where it assumes that a sinking fund is established in which funds will accumulate for replacement purposes?
Answer
Correct Answer:
Sinking fund method
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89. In what method of computing depreciation where it assumes that the loss in value is directly proportional to the age of the equipment or asset?
Answer
Correct Answer:
Straight line method
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90. What is defined as the reduction or fall of the value of an asset due to constant use and passage of time?
Answer
Correct Answer:
Depreciation
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91. The price at which the callable bond will be redeemed from the bondholder is called ______.
Answer
Correct Answer:
Call value
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92. What is the feature of some bonds whereby the issuer can redeem it before it matures?
Answer
Correct Answer:
Callability
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93. What type of bond which can be redeemed before maturity date?
Answer
Correct Answer:
Callable bond
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94. What type of bond where the corporation’s owner name are recorded and the interest is paid periodically to the owners with their asking for it?
Answer
Correct Answer:
Registered bond
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95. A type of bond where the corporation pledges securities which it owns such as the stock or bonds of one of its subsidiaries.
Answer
Correct Answer:
Collateral trust bond
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96. A bond without any security behind them except a promise to pay by the issuing corporation is called ______.
Answer
Correct Answer:
Debenture bond
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97. What bond whose security is a mortgage on certain specified assets of the corporation?
Answer
Correct Answer:
Mortgage bond
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98. A type of bond to which are attached coupons indicating the interest due and the date when such interest is to be paid is called ______.
Answer
Correct Answer:
Coupon bond
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99. What type of bond whose guaranty is in lien on railroad equipment, such as freight and passenger cars, locomotives, etc.?
Answer
Correct Answer:
Equipment obligation bond
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100. What type of bond is issued jointly by two or more corporations?
Answer
Correct Answer:
Joint bond
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