Engineering Economics Questions & Answer Part-4

Engineering Economics Questions & Answer

Question:151. Which is true about corporation?
A. It is worse type of business organization.
B. The minimum number of incorporators to start a corporation is three.
C. Its life is dependent on the lives of the incorporators.
D. The stock holders of the corporation are only liable to the extent of their investments.
Question:152. Aggregation of individuals formed for the purpose of conducting a business and recognized by law as a fictitious person is called ______.
A. Partnership
B. Investors
C. Corporation
D. Stockholders
Question:153. An association of two or more persons for the purpose of engaging into a business for profit is called ______.
A. Entrepreneurship
B. Partnership
C. Proprietorship
D. Corporation
Question:154. What represents the ownership of stockholders who have a residual claim on the assets of the corporation after all other claims have been settled?
A. Authorized capital stock
B. Preferred stock
C. Incorporator stock
D. Common stock
Question:155. What stock represents ownership and enjoys certain preferences than ordinary stock?
A. Authorized stock
B. Preferred stock
C. Incorporator’s stock
D. Presidential stock
Question:156. The amount of company’s profit that the board of directors of the corporation decides to distribute to ordinary shareholders is called ______.
A. Dividend
B. Return
C. Share of stock
D. Equity
Question:157. What refers to the residual value of a company’s assets after all outside liabilities (shareholders excluded) have been allowed for?
A. Dividend
B. Equity
C. Return
D. Par value
Question:158. What refers to the claim of anyone to ownership?
A. Proprietorship
B. Assets
C. Equity
D. Liability
Question:159. Cash money and credit necessary to establish and operate an enterprise are generally called ______.
A. Capital
B. Funds
C. Assets
D. Liabilities
Question:160. What represents the share of participation in business organizations?
A. Franchise
B. Partnership
C. Stock
D. Corporation
Question:161. 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 ______.
A. Yield
B. Economic return
C. Earning value
D. Gain
Question:162. ______ 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.
A. Status company
B. Big income
C. Known owners
D. Goodwill
Question:163. Which of the following is an example of intangible asset?
A. Cash
B. Investment in subsidiary companies
C. Furnitures
D. Patents
Question:164. Lands, buildings, plants and machineries are example of what type of asset?
A. Current asset
B. Trade investment asset
C. Fixed asset
D. Intangible asset
Question:165. 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?
A. Economic return
B. Yield
C. Rate of return
D. Return of investment
Question:166. What is another term for “current assets”?
A. Fixed assets
B. Non-liquid assets
C. Liquid assets
D. Ccash
Question:167. What is an accounting term that represents an inventory account adjustment?
A. Cost of goods sold
B. Cost accounting
C. Standard cost
D. Overhead cost
Question:168. What is the change in cost per unit variable change called?
A. Variable cost
B. Incremental cost
C. Fixed cost
D. Supplemental cost
Question:169. What is used to record historical financial transactions?
A. Bookkeeping system
B. Ledger system
C. Balance check
D. General journal system
Question:170. What is a secondary book of accounts, the information of which is obtained from the journal is called?
A. Balanced sheet
B. Ledger
C. Worksheet
D. Trial balance
Question:171. The original record of a business transaction is recorded in this book.
A. Work book
B. Journal
C. Ledger
D. Account book
Question:172. All the proceeds which are received by the business as a result of the sale of goods is called ______.
A. Net income
B. Gross income
C. Net revenue
D. Total sales
Question:173. All are classified under direct labor expenses EXCEPT one. Which one?
A. Inspection cost
B. Testing cost
C. Assembly cost
D. Supervision cost
Question:174. What is a measure of the average speed with which accounts receivable are collected?
A. Current ratio
B. Quick ratio
C. Acid test ratio
D. Receivable turnover
Question:175. The ratio of the net income before taxes to net sales is called ______.
A. Current ratio
B. Inventory turnover
C. Profit margin ratio
D. Price-earnings ratio
Question:176. What do you call a one-time credit against taxes?
A. Due credit
B. Tax credit
C. Credible credit
D. Revenue credit
Question:177. What is used when a quick estimate of the doubling time for the invested money is needed?
A. Rule of 48
B. Rule of 36
C. Rule of 24
D. Rule of 72
Question:178. What is the increase in the money value of a capital asset is called?
A. Profit
B. Capital gain
C. Capital expenditure
D. Capital stock
Question:179. What is the reduction in the money value of capital asset is called?
A. Capital expenditure
B. Capital loss
C. Loss
D. Deficit
Question:180. What refers to the negotiable claim issued by a bank in lien of a term deposit?
A. Time deposit
B. Bond
C. Capital gain certificate
D. Certificate of deposit
Question:181. What denotes in the fall in the exchange rate of one currency in terms of the others? This term is usually applies to the floating exchange rate.
A. Currency appreciation
B. Currency depreciation
C. Currency devaluation
D. Currency float
Question:182. 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 ______.
A. Currency appreciation
B. Currency depreciation
C. Currency devaluation
D. Currency float
Question:183. What refers to the saving which takes place because goods are not available for consumption rather than consumer really want to save?
A. Compulsory saving
B. Consumer saving
C. Forced saving
D. All of the above
Question:184. The flow back of profit plus depreciation form a given project is called ______.
A. Capital recovery
B. Cash flow
C. Economic return
D. Earning value
Question:185. 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 ______.
A. Annuity
B. Amortization
C. Capital recovery
D. Annuity factor
Question:186. Capitalized cost of any structure or property is computed by which formula?
A. First cost + interest of first cost
B. Annual cost – interest of first cost
C. First cost + cost of perpetual maintenance
D. First cost + salvage value
Question:187. The true value of interest rate computed by equations for compound interest for a 1 year period is known as ______.
A. Expected return
B. Nominal interest
C. Effective interest
D. Economic return
Question:188. Return on investment ratio is the ratio of the:
A. Net income to owner’s equity
B. Market price per share to earnings per share
C. Cost of goods sold to average cost of inventory at hand
D. Net credit sales to average net receivable
Question:189. Gross margin is the ratio of the gross profit to ______.
A. Net sale
B. Owner’s equity
C. Inventory turnover
D. Quick assets
Question:190. What is another term for “acid-test ratio”?
A. Current ratio
B. Quick ratio
C. Profit margin ratio
D. Price-earnings ratio
Question:191. What is a government bond which has an indefinite life rather than a specific maturity?
A. Coupon
B. T-bill
C. Debenture
D. Consol
Question:192. A form of business firm which is owned and run by a group of individuals for their mutual benefit is called ______.
A. Cooperative
B. Corporation
C. Enterprise
D. Partnership
Question:193. 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?
A. Stock pile
B. Hoard stock
C. Buffer stock
D. Withheld stock
Question:194. The ability to meet debts as they become due is known as ______.
A. Solvency
B. Leverage
C. Insolvency
D. Liquidity
Question:195. The ability to convert assets to cash quickly is known as ______.
A. Solvency
B. Liquidity
C. Leverage
D. Insolvency
Question:196. What is the basic accounting equation?
A. Assets = liability + owner’s equity
B. Liability = assets + owners’ equity
C. Owner’s equity = assets + liability
D. Owner’s equity = liability – assets
Question:197. The financial health of the company is measured in terms of:
A. Liquidity
B. Solvency
C. Relative risk
D. All of the above
Question:198. What is an index of short-term paying ability?
A. Price-earnings ratio
B. Current ratio
C. Profit margin ratio
D. Gross margin
Question:199. The common ratio is the ratio of:
A. Net credit sales to average net receivable
B. Current assets to current liabilities
C. Gross profit to net sales
D. Net income to owner’s equity
Question:200. What is defined as the current assets minus inventories and prepaid expenses?
A. Profit margin ratio
B. Price-earnings ratio
C. Return of investment ratio
D. Quick ratio

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