Pre-Finals Set B

Question 1

are operating costs that are not associated with production.

Answer 1

Selling and administrative expenses

Question 2

contains operating costs incurred in selling and in managing the business.

Answer 2

Selling and administrative expenses budget

Question 3

Formula for Total Budgeted Selling and Administrative Expenses :

Answer 3

Expected Sales in Unit
x Variable selling and Administrative Expense per Unit
Total Budgeted Variable Selling and Administrative Expenses
+ Fixed Selling and administrative expenses
- Advertising
- Insurance
- Salaries (Admin)
- Rent
- Taxes
Total Fixed Selling and administrative expenses
Total Budgeted Selling and administrative Expenses

Question 4

means to provide funding for a particular need

Answer 4

Financing

Question 5

Types of Financing According to Purpose

Answer 5

• Short-term Financing
• Long-term Financing

Question 6

is revolving and is used for purposes like inventory or material costs.

Answer 6

Short-term Financing

Question 7

is considered an installment, and
typically finances machinery, equipment, or start-up costs.

Answer 7

Long-term Financing

Question 8

What assets are in the short-term financing?

Answer 8

Current Assets such as Inventory and Material costs

Question 9

What are assets in long-term financing?

Answer 9

Non-current assets like machinery and equipment

Question 10

Types of Financing according to Source

Answer 10

• Debt Financing
• Equity Financing

Question 11

means borrowing money from an outside source and promising to
pay it back with interest by a set
date in the future.

Answer 11

Debt Financing

Question 12

means someone is putting money or assets into the business in exchange for some percentage of ownership.

Answer 12

Equity Financing

Question 13

provides several loan products catering to different types of needs

Answer 13

Banks

Question 14

can be short-term or long-term sources
of funds, depending on the nature of the need

Answer 14

Banks and Lending Companies

Question 15

usually charge higher interest than
banks

Answer 15

Lending Companies

Question 16

Their credit requirements are more lenient compared to banks

Answer 16

Lending Companies

Question 17

personal funds advanced by stockholder to a company that usually requires interest.

Answer 17

Advances from Stockhkolders or other owners

Question 18

short-term sources of funds

Answer 18

Advances from Stockhkolders or other owners

Question 19

A source of funds that is debt financing

Answer 19

Advances from Stockhkolders or other owners

Question 20

these are the individuals / corporations which are issued common stock preferred stock

Answer 20

Equity Investors

Question 21

long-term sources of funds

Answer 21

Equity Investors

Question 22

A source of fund that is equity financing

Answer 22

Equity Investors

Question 23

What are the sources of funds: business owner?

Answer 23

• Advances from Stockhkolders or other owners
• equity Investors

Question 24

Other short-term sources of funds

Answer 24

• Suppliers Credit
• Credit Cooperatives
• Credit Cards
• Pawnshop
• Informal Lending

Question 25

refers to the extension of payment due date by suppliers.

Answer 25

Suppliers Credit

Question 26

provided lending services to its members. Members usually pay contributions to the cooperative.

Answer 26

Credit Cooperatives

Question 27

option for business owners who may not be able to obtain a traditional loan.

Answer 27

Credit Cards

Question 28

provides funds in exchange of collateral, usually jewelry or other items which are of value.

Answer 28

Pawnshop

Question 29

is an illegal lending sources.

Answer 29

Informal Lending

Question 30

Other long-term sources of funds:

Answer 30

Internally generated funds / Retained earnings

Question 31

not all profits are distributed to stockholders.

Undistributed profits can be used by the company for their funding requirements.

Answer 31

Internally generated funds/Retained earnings