MESL (YELLOW BOOK 8.0) Flashcards
1
Q
Decrease in the value of a physical property due to the passage of time.
A
Depreciation
2
Q
Work-in process is classified as
An asset
A liability
An expenses
An owner’s equity
A
An asset
3
Q
- Which is NOT a type of business organization?
Sole of proprietor
Corporation
Enterprise
Partnership
A
Enterprise
4
Q
It is defined to be the capacity of a commodity to satisfy human want.
A
Luxury
5
Q
Type of ownership in business where individuals exercise and enjoy the right in their own interest.
A
Private
6
Q
The 72 rule of thumb is used to determine
A
How many years money will be double
7
Q
Worth of the property as shown in the accounting records of an enterprise.
A
Book value
8
Q
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.
A
Deferred annuity
9
Q
Which is true about corporation?
It is the not best form of business organization
The minimum number of incorporations to start a corporation is three
Its life is dependent on the lives of the incorporators
The stockholders of the corporation are only liable to the extent of their investments
A
The stockholders of the corporation are only liable to the extent of their investments
10
Q
The worth of the property equals to the original cost less depreciation.
A
Book value
11
Q
Additional information of prospective bidders on contract documents issued prior to bidding date.
A
Bid bulletin
12
Q
A market situation where there is only one seller with many buyer.
A
Monopoly
13
Q
The place where buyers and sellers come together.
A
Market
14
Q
A type of bond where the corporation pledges securities which it owns( I,e, stocks, bonds of its subsidiaries).
A
Collateral trust bond
15
Q
A type of bond issued jointly by two or more corporations.
A
Joint bond
16
Q
The flow back of profit plus depreciation from a given project is called
A
Cash flow
17
Q
A mathematical expression also known as the present value of an annuity of one called
A
Present worth factor
18
Q
An intangible value which is actually operating concern has due to its operation.
A
Going value
19
Q
There are products or services that are desired by human and will be purchased if money is available after the required necessities have been obtained.
A
Luxuries
20
Q
Parties whose consent or signature in a contract is not considered intelligent.
A
Demented persons
21
Q
Those funds that are required to make the enterprise or project a going concern.
A
Working capital
22
Q
The reduction of the value of an asset due to constant use and passage of time.
A
Depreciation
23
Q
A market situation where there are only two buyers with many sellers.
A
Duopsony
24
Q
As applied to a capitalized asset, the distribution of the initial cost by a periodic change to operation as in depreciation or the reduction of a debt by either periodic or irregular prearranged program is called
A
Amortization
25
A type of bond whose guaranty is in lien on railroad equipments.
Equipments obligations bond
26
Double taxation is a disadvantage of which business organization?
Sole partnership
Partner
Corporation
Enterprise
Corporation
27
Liquid assets such as cash and other assets that can be converted quickly into cash, such as accounts receivable and merchandise are called
Current assets
28
Kind of obligation which has no condition attached.
Gratuitous
29
We may classify an interest rate, which specifies the actual rate of interest on the principal for one year as
Effective rate
30
The true value of interest rate computed by equations for compound interest for a year period is known as.
Effective interest
31
In case of bankruptcy of a partnership,
-The partners are not liable for the liabilities of the partnership
-The partnership assets (excluding the partners personal assets) only will be used to pay the liabilities.
-The partners personal assets are attached to the debt of the partnership
-The partners may sell stock to general additional capital
The partners personal assets are attached to the debt of the partnership
32
Estimated value at the end of the useful life.
Salvage value
33
The ratio of the interest payment to be principal for a given unit of time and usually expressed as a percentage of the principal.
Interest rate
34
The recorded current value of an asset is known as
Book value
35
What is the minimum number of incorporators in order that a corporation be organized?
5
36
An association of two or more individuals for the purpose of operating a business as co-owners for profit.
Partnership
37
Capitalized cost of any property is equal to the
First cost + interest of perpetual maintenance
38
Direct labor cost incurred in the factory and direct materials cost are the costs of all the materials that go into production. The sum of these two direct costs is known as
Prime cost
39
It is the amount 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
Market value
40
Which is TRUE about partnership?
-It has a perpetual life
-It will be dissolved if one of the partners ceases to be connected with the partnership
-It can be handed down from one generation of partners to another
-Its capitalization must be equal for each partner
It will be dissolved if one of the partners ceases to be connected with the partnership
41
Scrap value of an asset is sometimes known as
Salvage value
42
Gross profit, sales less cost of good soled, as a percentage of a sales is called
Gross margin
43
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’s estimated life.
Sinking fund method
44
The present worth of all depreciation over the economic life of the item is called
Depreciation recovery
45
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.
Fair value
46
The provision in the contract that indicates the possible adjustment of material cost and labor cost
Escalatory clause
47
A market situation where there is one seller and one buyer.
Bilateral monopoly
48
Grand total of the assets and operational capability of a corporation
Authorized capital
49
The length of the time which the property may e operated at a profit
Economical life
50
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.
Time value of money
51
A method of computing depreciation in which the annual charge is fixed percentage of the depreciation book value at the beginning of the year to which the depreciation applies.
Declining balance method
52
It is a series of equal of payments occurring at equal interval of time.
Annuity
53
The lessening of the value of an asset due to the decrease in the quantity available(referring to the natural resources, coal, oil, etc)
Depletion
54
Is the simplest form of a business organization
Sole proprietorship
55
A type of annuity where the payments are made at the start of each period, beginning from the first period.
Annuity due
56
An association of two or more persons for a purpose of engaging in a profitable business
Partnership
57
An artificial expense that spreads the purchase price of an asset or another property over a number of years
Depreciation
58
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.
Registered bond
59
If the security of the bond is mortgage on certain specified asset of a corporation, this bond is classified as
Mortgage bond
60
Sometime called second hand value
Salvage value
61
The interest rate at which the present work of the cash on a project is zero of the interest earned by an investment.
Rate of return
62
Bond to which are attached coupons indicating the interest due and the date when such interest is to be paid
Coupon bond
63
Defined as the future value minus the present value
Discount
64
What is the highest position in the corporation?
Chairman of the Board
65
Which is NOT an essential element of an ordinary annuity?
The amounts of all payments are equal
The payments are made are equal interval of time
The first payment is made at the beginning of each period
Compound interest is paid on all amounts in the annuity
The first payment is made at the beginning of each period
66
An amount of money invested at 12% interest per annum will double in approximately
6 years
67
The total income equals the total operating cost.
Break even-no gain no loss
68
A type of annuity where the payments are made at the end of each payment period starting from the first period.
Ordinary annuity
Ordinary annuity
69
The first cost of any property includes
The original purchase price and freight and transportation charges
Installation expenses
Initial taxes and permits fee
All of the above
All of the above
70
To triple the principal, one must use
Logarithms
71
Money paid for the use of borrowed capital
Interest
72
This occurs in a situation where a commodity or service is supplied by a number of vendors entering the market
Perfect competition
73
A series of uniform accounts over an infinite period of time
Perpetuity
74
A method of depreciation whereby the amount to recovery is spread uniformly over the estimated life of the asset in terms of the periods or units of output.
Declining balance method
75
An index of short-term paying ability is called.
Acid-test ratio
76
Represent ownership, and enjoys certain preferences than ordinary stock.
Preferred stock
77
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.
Deferred annuity
78
The amount of company’s profit that the board of directors of the corporation decides to distribute to ordinary shareholders.
Dividend
79
Which one of the following contains only items which are considered fixed charges?
Interest, taxes, amortization, insurance, rent
Amortization, insurance, steam cost, painting, cleaning
Interest, taxes, replacements, labor for repairs
Interest, taxes, rent , power cost, oil cost
Interest, taxes, amortization, insurance, rent
80
A distinct legal entity which can practically transact any business transaction which a real person could do.
Corporation
81
The payment for the use of borrowed money is called
Interest
82
Consists of the actual counting or determination of the actual quantity of the materials on hand as of a given date.
Physical inventory
83
A type of bond which does not have security except a promise to pay by the issuing corporation.
Debenture bond
84
The quantity of a certain commodity that is offered for sale at certain price at a given place and time.
Supply
85
Represent the ownership stockholders who have a residual claim on the assets of the corporation after all the claims have been settled.
Common stock
86
Reduction in the level of national income and output usually accompanied by the fall in the general price level
Deflation
87
In SYD method, the sum of years digit is calculated using the formula with n= number of years of the equipment.
(n(n+1))/2
88
The profit derived from a project or business enterprise without consideration of obligations to financial contributions or claims of other based on profit.
Economic return
89
The intangible item of value from the exclusive right of a company in a stated region of the country.
Franchise value
90
A market whereby there is only one buyer of an item for which there are no good substitute.
Monopsony
91
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.
Bond
92
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.
Bond
93
A market situation where there are few sellers and few buyers
Bilateral oligopoly
94
An evil wrong committed by a person damaged another person’s property or reputation is
Tort
95
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.
Necessities
96
An economic study is made of the total amount of cost (C) for a series of alternative investment (P) for a given project. If C is plottled as the ordinate versus P, the most desirable occurs when
dC/dP =0
97
A is aperiodic payment and I is the interest rate, then present worth of a perpetuity =
A/i
98
Which of the following depreciation methods cannot have a salvage value of zero?
Straight line method
Sinking fund method
Declining balance method
SYD method
Declining balance method
99
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
Oligopoly
100
The function of interest rate and time that determines the cumulative amount of a sinking fund resulting from specific periodic deposits.
Sinking fund factor
