Worksheets1ST QUARTER EXAM BUSINESS FINANCE 12
Total questions: 100
Worksheet time: 1hrs 6mins
The consumer price index (CPI) was approximately 239.5 in beginning of 2017 when Chuck Taylor All Star shoes were $55. The CPI at the beginning of 1950 was approximately 24. Based on this information, find the price of the Chuck Taylor All Star shoe in 1950.
$5.51
$10
$7.38
$3.87
What is the business term:
An organization—usually a group of people or a company—authorized by the state to act as a single entity and recognized as such in law for certain purposes.
Corporation
Bonds
Venture capitalist
Partnership
What is the business term:
This refers to the amount an employee takes home, not the amount it costs to employ them.
Net pay
Gross pay
Payroll
Credit
What is the business term:
The total amount of money an employee receives before taxes and deductions.
Gross pay
Net pay
Payroll
Credit
What is the business term:
All of the shares into which ownership of the corporation is divided.
Stock
Bonds
Capital
Corporate
It is a way of how financial systems work in activities that involves acquiring, spending, and managing finances.
Finance
Financial Management
Financial Manager
These are organizations that intermediates consumers and the
capital of the debt markets and provides services in managing money such as banking,
investment services, insurance, and loans.
Financial Market
Financial Institution
Financial Securities
It aims in deciding to increase the value of the stakeholders
by planning and asset management.
Financial Market
Financial Management
Financial Investment
It refers to any place where traders buy and sell assets.
Financial Institution
Investment
Financial Market
These are an asset acquired to generate income
or appreciation in the future.
Money
Investment
Financial Instrument
Which of the following financial institution offer insurance policies to the public by direct selling to an individual or through another source?
Banks
Insurance Companies
Lending Institutions
It is an establishment for deposit, custody, and issue of money that is used for making loans and for conducting an easier way of exchange of funds.
Banks
Insurance Companies
Lending Institution
These institutions are similar to non-banks with quasi-banking functions in which they are able to offer loans to individuals and businesses.
Banks
Insurance Companies
Lending Institutions
What type of bank represents the largest single group, in terms of resources, of financial institutions here in the Philippines?
Savings banks
Thrift banks
Universal and Commercial banks
These types of banks often accumulate savings of depositors and invest them. It also provides short-term
working capital and medium, long-term in financing to businesses.
Universal and commercial banks
Savings bank
Thrift banks
What function of financial manager refers to determining how to finance working capital accounts such
as accounts receivable and inventories?
Financing
Investing
Operating
Which of the following is not a financial institution?
A pension fund
A newspaper publisher
An insurance company
A _____is set up so that employees of corporations or governments can receive
income after retirement.
Life insurance company
Pension fund
Credit union
Which of the following is not a service provided by financial institutions?
Buying the businesses of customers
Investing customers’ savings in stocks and bonds
Paying savers’ interest on deposited funds
TRUE or FALSE.
Firms that require funds from external sources can obtain them from financial
markets, private placement and financial institutions.
True
False
Interest rate = 2.5% p.a. simple interest
TIme = 3 years.
How much interest is earned?
A person who is not necessarily the owner of the business but has a stake on how the business is performing is called __________.
stakeholder
stockholder
partners
manager
They are considered owners of the business and have voting rights, entitled to dividends which depend on their share and earnings of the corporation. They are called _________.
stockholder
stakeholder
employees
investors
One of the internal stakeholders wherein the financial reports are necessary for them for decision making purposes. They are called ________.
Top Management
Department managers
Board of directors
employees
It accepts deposits from individuals and organizations that have excess funds and provide loans to those who are in need. This financial institution is called _______.
investment banks
commercial banks
credit unions
insurance companies
One of the financial institutions that operates by collecting premiums from clients is called ____________ .
brokerage
credit union
investment banks
insurance companies
This is are markets where transactions involving long-term debt or those maturing in more than a year is called _________.
capital markets
money markets
public market
product marketing
It is a collection of financial products owned by a single investor, either an individual or organization is called ______.
product marketing
investment portfolio
stock contribution
product investment
It is a document which the borrower gives to the lending institution in exchange for the money he borrowed is called _______.
gift certificate
check
collateral
promissory note
If you hear the word "finance", what comes into your mind?
bank
treasurer
money
ATM
_____________ is tasked to prepare a cost and benefit analysis on which is more costly or cheaper, to purchase or rent on plant, property and equipment.
logistics
accounting Supervisor
accountant
bookkeeper
A financial report showing the result of operation at a given period of time is ____________.
Statement of Cash Flow
Statement of Financial Position
statement of Comprehensive Income
Statement of Equity
It is the allocation of scarce resources according to an economist's perspective is called ________.
Division of profits and losses
Arbitrary ratio
Finance
asset allocation
_______________ is responsible in presenting or requesting budget for advertisement and promotion of products.
advertising manager
marketing officer
finance officer
accounting supervisor
He is one of the people involved in financial management wherein he is tasked to show how the hiring of additional manpower will help with productivity is called ________.
Personnel officer
human resource manager
general manager
accounting supervisor
The department that is responsible in requesting acquisitions and delivery of assets needed by the company is called __________ .
Cashier
finance officer
logistics
budget officer
This is the cash that is generated by the business when it operates successfully
Retained profits
Share capital
Angel investor
Owner savings
Which of the statements about retained profits is false?
You have unlimited amounts of money available
Shareholders and employees could be frustrated because there is less profit to be 'shared out'
You do not have to pay interest
You are free to use it for any purpose
Which of the following is NOT usually considered a personal source of finance.
Savings
Redundancy payments
Crowdfunding
Credit card
Which of the following statements about personal sources of finance is false?
Often cheaper in the long-term
Less 'red tape' or delay in getting the cash
Less personal financial risk for the entrepreneur
May be harder to raise large amounts
An amount of money that is paid back within an agreed amount of time, with interest
Bank loan
Angel investment
Overdraft
Retained profit
Which of the following statements about bank loans is not true?
Usually used for large amounts of money that need to be paid back over a longer time-frame
Interest rates make the loan more expensive
Easy to get
Usually cheaper than consistently using a bank overdraft
A short-term source of finance from a bank that usually is only used in an emergency/when needed
Overdraft
Loan
Share capital
Credit card
Which of the following statements about overdrafts is not true?
Short term source of finance
It's really a small, short term loan
It's flexible, in that it can be used whenever it is needed
Cheap - the interest rate is usually lower than that of a long-term bank loan
Wealthy individuals who invest in high-potential businesses are...
Banks
Angel Investors
Shareholders
Crowdfunders
What do Angel Investors and Crowdfunders have in common?
They require something in return for their investment
They charge interest on money invested in the buisness
They become part-owners of the business
They are incredibly wealthy
Case study: the Business Incubator team 'TradeTools' - an online platform connecting neighbors who want to rent tools with neighbours that own them. They will pitch their business concept in May - what would be the most appropriate source of finance for this new, untested idea?
Angel Investor
Bank loan
Personal savings
Credit cards
Case study: after years of success and growth, Shark Tank success story Lumibowl (a clip-on light that illuminates your toilet bowl so you 'hit your target' in dark of night!) is ready to grow extensively into other countries. It needs huge amounts of money in order to do so. Which source of finance would be a good fit?
Raising share capital by transforming from a partnership to a public corporation
Taking advantage of the agreed overdraft with the bank
Retained profits of $80,000
Crowdfunding
True or false - crowdfunding is usually only used for new business start-ups/concepts and is therefore inappropriate for existing large, profitable businesses
True
False
In order to make a __________, a business must have more income than expenses.
loss
profit
retail cost
asset
This occurs when a business spends more money than they make.
profit
loss
capital
asset
The point at which a business is making the same amount of money it is spending.
capital
asset
profit
break-even
Property or money that has value that is owned by a company.
assets
liabilities
startup costs
operating costs
Expenses that a business is obligated to pay.
capital
liabilities
assets
retail price
Buying or renting a facility and paying for business license fees are examples of...
retail costs
assets
operating costs
startup costs
Paying rent, purchasing supplies, and paying employees are examples of...
capital
retail costs
operating costs
startup costs
A business often needs capital to operate. One way to get capital is to...
Borrow money in the form of a loan.
Partner with someone who will invest money.
Both choices
Neither choices
A t-shirt company spend $2.50 for every shirt they produce. They charge customers $15.95 on Amazon.com. What is the retail cost?
$2.50
$15.95
$13.45
$20.45
A t-shirt company spend $2.50 for every shirt they produce. They charge customers $15.95 on Amazon.com. What is the retail cost?
$2.50
$15.95
$13.45
$20.45
A t-shirt company spend $2.50 for every shirt they produce. They charge customers $15.95 on Amazon.com. What is the cost per unit?
$2.50
$15.95
$13.45
$20.45
A t-shirt company spend $2.50 for every shirt they produce. They charge customers $15.95 on Amazon.com. What is the profit?
$2.50
$15.95
$13.45
$20.45
A company has $50,000 in retail sales, and their expenses total $45,000. Do they have a profit or loss?
profit
loss
A business has to pay $10,000 this month to its employees. Is this a liability or asset?
liability
asset
1. Large Australian company stocks such as BHP and Telstra:
can only trade on the ASX.
can trade on the stock exchange of their choosing as long as they qualify for listing.
trade only in dealer markets.
are sold to investors as private placement and are held to maturity.
The most important function of a financial market is:
to facilitate the flow of funds between lenders and borrowers
to provide a market for shares.
to provide information about an issuing company's financial situation.
to secure profits for brokers and agents.
Secondary markets:
allow borrowers to raise long-term funds.
facilitate capital-raising in the primary market.
allow borrowers to raise short-term funds.
facilitate all of the given answers.
The top financial officer in a firm is commonly referred to as the:
chief financial officer
president of finance.
controller.
finance manager.
The amount of debt and equity used by a firm to finance its operations is called the firm's:
debt ratio.
working capital ratio.
capital structure.
financial position.
Short-term assets and short-term liabilities are referred to as the firm's:
cash flow.
capital budget.
capital structure
working capital.
A business organisation that is similar to a sole proprietorship but has two or more owners is called a:
limited liability company.
corporation.
dual company.
partnership.
The method of calculating interest once during the entire life of the loan, on the original sum borrowed, is known as:
simple interest.
interest on interest.
compounding.
rule of 72.
If you invest $5000 now, and your investment pays 12% per annum, how much will you have in three years if compounded annually (to the nearest dollar)?
$7025
$14 821
$6852
$8014
Suppose you need to pay your air-ticket of $2400 for a European trip next year. If you deposit money now, you can earn 7% per annum. How much do you need to invest today?
$1759
$1968
$2000
$2243
You have been offered an investment that promises to double your money every nine years. Considering the rule of 72, what is your approximate rate of return on the investment?
8%
9%
14%
10%
You have $50 000 now to invest. If you can earn 10% per annum on your deposit, and can invest for five years, what will be the future value of your deposit (to the nearest dollar) at the end of the investment period?
$150 493
$80 526
$99 456
$85 025
The value of an investment after one or more periods of time is called the:
simple value.
present value
discounted value.
future value.
The process of accumulating interest in an investment over time to earn more interest is called:
discounting.
compounding.
complexing.
indexing.
The interest rate used to calculate the present value of future cash flows is called the:
compound interest rate.
present value factor.
future value factor.
discount rate.
Finance is considered as science because it's governed by facts and truths .
True
False
Finance is an art because financial statement is supported of reliable basis.
True
False
