E Eco 1 Flashcards
Which one of the following contains only items which are considered fixed charges
A. Interest, taxes, amortization, insurance, rent
An economic study is made of the total amount cost (C) for a series of alternative investment (P) for a given project. If C is plotted as the ordinate versus P, the most desirable occurs when
C. dC/dP = 0
Reduction in the level of national Income and output usually accompanied by the fall in the general price level.
B. deflation
It is a series of equal payments occurring at equal interval of time.
A. Annuity
The place where buyers and sellers come together.
A. Market
A market whereby there is only one buyer of an item for which there are no good substitute.
A. Monopsony
It is a series of equal payments occurring at equal interval of time where the first payment is made after several periods, after the beginning of the payment.
D. Deferred annuity
The total income equals the total operating cost.
D. Break even-no gain no loss
Kind of obligation which has no condition attached.
C. Gratuitous
Direct labor cost incurred in the factory and direct materials cost are the costs of all materials that go into production. The sum of these two direct costs is known as
C. Prime cost
An index of short term paying ability is called
D. acid-test ratio
An artificial expenses that spreads the purchase price of an asset or another property over a number of years.
A. Depreciation
Estimated value at the end of the useful life.
C. Salvage value
Consists of the actual counting or determination of the actual quantity of the materials on hand as of a given date.
A. Physical inventory
Additional information of prospective bidders on contract documents issued prior to bidding date.
D. Bid bulletin
An evil wrong committed by a person damaged another person’s property or reputation is
A. tort
A series of uniform accounts over an infinite period of time.
C. Perpetuity
The quantity of a certain commodity that is offered for sale at a certain price at a given place and time.
B. Supply
Work-in process is classified as
A. an asset
What is the highest position in the corporation?
C. Chairman of the Board
Type of ownership in business where individuals exercise and enjoy
C. Private
Decrease in the value of a physical property due to the passage of time.
D. Depreciation
An association of two or more individuals for the purpose of operating a business as co-owners for profit.
C. Partnership
We may classify an interest rate, which specifies the actual rate of interest on the principal for one year as
D. effective rate
Parties whose consent or signature in a contract is not considered intelligent.
C. Demented persons
It is defined to be the capacity of a commodity to satisfy human want.
B. Luxury
It is the amount which a willing buyer will pay to a willing seller for a property where each has equal advantage and is under no compulsion to buy or sell.
B. Market value
This occurs in a situation where a commodity or service is supplied by a number of vendors entering the market.
A. Perfect competition
These are products or services that are desired by human and will be purchased it money is available after the required necessities have been obtained.
C. Luxuries
These are products or services that are required to support human life and activities, that will be purchased in somewhat the same quantity even though the price varies considerably.
B. Necessities
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
Grand total of the assets and operational capability of a corporation.
A. Authorized Capital
The worth of the property equals to the original cost less depreciation.
D. Book value
Money paid for the use of borrowed capital.
C. Interest
Liquid assets such as cash and other assets that can be converted quickly into cash, such as accounts receivable and merchandise are called
C. current assets
The length of time which the property may be operated at a profit.
B. Economic life
The provision in the contract that indicates the possible adjustment of material cost and labor cost.
B. Escalatory clause
The present worth of all depreciation over the economic life of the item is called
C. depreciation recovery
Gross profit, sales less cost of good sold, as a percentage of a sales is called
B. gross margin
Worth of the property as shown in the accounting records of an enterprise.
D. Book value
Those funds that are required to make the enterprise or project a going concern.
C. Working capital
A market situation where there is only one seller with many buyer.
A. Monopoly
A market situation where there are few sellers and few buyers.
C. Bilateral oligopoly
A market situation where there is one seller and one buyer.
C. Bilateral monopoly
A market situation where there are only two buyers with many sellers.
C. duopsony
The cumulative effect of elapsed time on the money value of an event, based on the earning power of equivalent invested funds capital should or will earn.
C. Time value of money
Defined as the future value minus the present value.
C. discount
The flow back of profit plus depreciation from a given project is called
B. Cash flow
The profit derived from a project or business enterprise without consideration of obligations to financial contributions or claims of other based on profit
A. Economic return
The payment for the use of borrowed money is called
C. interest
The interest rate at which the present work of the cash on a project is zero of the interest earned by an investment.
C. Rate of return
The ratio of the interest payment to be principal for a given unit of time and usually expressed as a percentage of the principal.
B. interest rate
The true value of interest rate computed by equations for compound interest for a 1 year period is known as
D. effective interest
The intangible item of value from the exclusive right of a company in a stated region of the country.
D. Franchise value
The recorded current value of an asset is known as
C. book value
Scrap value of an asset is sometimes known as
B. salvage value
Sometimes called second hand value.
B. Salvage value
An intangible value which is actually operating concern has due to its operation.
D. Going value
The value which has a disinterested third party, different from the buyer and seller, will determine in order to establish a price acceptable to both parties.
C. Fair value
A type of annuity where the payments are made at the end of each payment period staring from the first period.
A. Ordinary annuity
It is a series of equal payments occurring at equal intervals of time where the first payment is made after several periods, after the beginning of the payment.
A. Deferred annuity
A type of annuity where the payments are made at the start of each period, beginning from the first period.
B. Annuity due
Which is NOT an essential element of an ordinary annuity?
C. The first payment is made at the beginning of each period
A is a periodic payment and I is the interest rate, then present worth of a perpetuity
D. A/i
A mathematical expression also known as the present value of a n annuity of one called
D. present worth factor
As applied to a capitalized asset, the distribution of the initial cost by periodic changes to operation as in depreciation or the reduction of s debt by either periodic or irregular prearranged program is called
D. amortization
The reduction of the value of an asset due to constant use and passage of time.
C. Depreciation
A method of computing depreciation in which the annual charge is a fixed percentage of the depreciation book value at the beginning of the year to which the depreciation applies.
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.
C. Declining balance method
Which of the following depreciation methods cannot have a salvage
C. Declining balance 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.
B. Sinking fund method
The function of interest rate and time that determines the cumulative amount of a sinking fund resulting from specific periodic deposits.
A. Sinking fund 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
All of the Above
In SYD method, the sum of years digit is calculated using the formula
with n = number of useful years of the equipment.
B. n(n+1) / 2
Capitalized cost of any property is equal to the
C. first cost + interest of perpetual maintenance
The lessening of the value of an asset due to the decrease in the quantity available (referring to the natural resources, coal, oil, etc.)
B. depletion
Is the simplest form a business organization.
A. Sole proprietorship
An association of two or more persons for a purpose of engaging in a profitable business,
C. Partnership
A distinct legal entity which can practically transact any business transaction which a real person could do.
D. Corporation
Double taxation is a disadvantage of which business organization?
C. Corporation
Which is NOT a type of business organization?
C. Enterprise
What is the minimum number of incorporators in order that a corporation be organized?
B. 5
In case of bankruptcy of a partnership,
C. the partners personal assets are attached to the debt of the partnership
Which is TRUE about partnership?
B. It will be dissolved if one of the partners ceases to be connected with the partnership.
Which is TRUE about corporation
D. The stockholders of the corporation are only liable to the extent of their investments
Represent ownership, and enjoys certain preferences than ordinary stock.
B. Preferred stock
Represent the ownership of stockholders who have a residual claim on the assets of the corporation after all other claims have been settled.
D. Common stock
The amount of company’s profit that the board of directors of the corporation decides to distribute to ordinary shareholders.
A. Dividend
A certificate 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
A form of fixed-interest security issued by central or local government, companies, banks or other institutions. They are usually a form of long-term security, buy may be irredeemable, secured or unsecured.
А. Bond
A type of bond where the corporation pledges securities which it owns (le, stocks, bonds of its subsidiaries).
D. Collateral trust bond
A type of bond which does not have security except a promise to pay by the issuing corporation.
D. Debenture bond
A type of bond issued jointly by two or more corporations.
A. Joint bond
A type of bond whose guaranty is in lien on railroad equipment’s.
A. Equipment’s obligations bond`
If the security of the bond is a mortgage on certain specified asset of a corporation, this bond is classified as
B. Mortgage 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
A. Registered bond
Bond to which are attached coupons indicating the interest due and the date when such interest is to be paid.
B. Coupon bond
An amount of money invested at 12% interest per annum will double in approximately
C. 6 years
The 72 rule of thumb is used to determine
B. how many years money will be double
To triple the principal, one must use
C. logarithms
A currency traded in a foreign exchange market for which the demand is consistently high in relation to its supply.
B. Hard currency
Everything a company owns and which has a money value is classified as an asset. Which of the following is classified as an asset
A. Intangible assets
B. Fixed assets
C. Trade investments
All of the Above
Which an example of an intangible asset?
D. Patents
Land, buildings, plant and machinery are examples of
C. fixed assets
An increase in the value of a capital asset is called
B. capital gain
The reduction in the money value of a capital asset is called
B. capital loss
It is a negotiable claim issued by a bank in lieu of a term deposit.
D. Certificate of deposit
Any particular raw material or primary product (e.g. cloth, wool, four, coffee..) is called
C. commodity
It denotes the fall in the exchange rate of one currency in terms of others. The term usually applies to floating exchange rates.
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)
B. currency devaluation
The residual value of a company’s assets after all outside liabilities (shareholders excluded) has been allowed for.
B. Equity
A saving which takes place because goods are not available for consumption rather than the consumer really want to save.
C. forced saving
A document that shows proof of legal ownership of a financial security.
C. coupon
Defined as the capacity of commodity to satisfy human want.
C. Luxuries
It is the profit obtained by selling stocks at a higher price than its original purchase price.
C. Capital gain
The quantity of a certain commodity that is offered for sale at a certain price at a given time and place.
B. Supply
The quantity of a certain commodity that is bought at a certain price at u given time and place.
A. Demand
“When free competition exists, the price of a product will be that value where supply is equal to the demand”.
D. Law of supply and demand
“When one of the factors or production is fixed in quantity or is difficult to increase, increasing the other factors of production will result in a less than proportionate increase in output”.
A. Law of diminishing return
The place where sellers and buyers come together.
B. Market
GATT stands for
A. General Agreement of Tariff and Trade
The letter D in the Roman numerals is
C. 500
