BFIN-121 Week 1-9
Q1. Finance defined as the art and science of money management:
Answer: True
Q2. Financial management decision function includes areas like operations, marketing, and sales:
Answer: False
Q3. Stocks are a debt security in which an investor lends money to an entity:
Answer: False
Q4. The Chief Financial Officer is responsible for estimating the financial requirements of the business:
Answer: True
Q5. A financial instrument is the written legal obligation to transfer a thing of value at a future date:
Answer: True
Q6. Not a duty of the treasurer:
Answer: Solving for tax dues
Q7. In charge of all finance and accounting functions, reporting to the CEO:
Answer: Chief Financial Officer
Q8. The finance manager meets with heads of departments:
Answer: Interrelation with Other Departments
Q9. Which does not belong to the group of core finance functions:
Answer: Ensuring Business Continuity
Q10. Not a primary function of a finance manager:
Answer: The finance manager accounts for personnel training expenses.
Q11. Wrong statement about financial roles:
Answer: The controller estimates fixed asset acquisition and working capital requirements.
Q12. False statement about corporate reporting structure:
Answer: The controller reports to the treasurer.
Q13. Correct statement about the controller's role:
Answer: The controller manages financial transaction recording, not investment decisions.
Q14. Responsible for the safekeeping of cash:
Answer: Treasurer
Q15. Accountable for the accounting operations of the company:
Answer: Controller
Q16. Institution with full banking powers (e.g., accepting drafts, issuing letters of credit):
Answer: Metrobank
Q17. Institution that lacks a full banking license:
Answer: Credit Unions
Q18. A borrower’s written acknowledgment of indebtedness:
Answer: Notes
Q19. Which does not belong to the group of depository institutions:
Answer: Investment banks
Q20. Example of indirect financing:
Answer: Aimee borrowed money from a bank
Q21. Institution assisting entities in raising capital via underwriting securities:
Answer: Investment banks
Q22. Market for short-term debt securities:
Answer: Money Market
Q23. Non-profit financial cooperatives owned by members:
Answer: Credit Union
Q24. Evaluate statements about insurance and investment banks:
Answer: Both Statements are wrong
Q25. Security signifying ownership in a corporation:
Answer: Stocks
Q26. Common size analysis: Percentage of current liabilities (Total assets = Php250,000):
Answer: 200%
Q27. Common size analysis: Percentage of non-current assets:
Answer: 60%
Q28. Common size analysis: Gross profit percentage (Sales = Php300,000; COGS = Php100,000):
Answer: 66.67%
Q29. Statement providing a summary of cash receipts and cash disbursements:
Answer: Statement of Cash Flows
Q30. Index analysis percentage for 2007 (Base year 2005 = Php200,000; 2007 = Php400,000):
Answer: 200%
Q31. Financial statement showing total sales, COGS, expenses, and net income:
Answer: Income Statement
Q32. Analysis using the formula (Most recent value - Base period value)/Base period value:
Answer: Horizontal
Q33. What Notes to Financial Statements provide:
Answer: Narrative descriptions and non-quantifiable information.
Q34. Common size analysis: Net income after taxes (Sales = Php300,000; Net income = Php115,500):
Answer: 38.50%
Q35. A SALN (Statement of Assets, Liabilities, and Net Worth) is a form of:
Answer: Statement of Financial Position
Q36. Net profit margin (Sales = Php750,000; Net income = Php364,000):
Answer: 0.49
Q37. Current ratio (Current assets = Php40,000; Current liabilities = Php30,000):
Answer: 1.33
Q38. Payable turnover (Credit purchases = Php250,000; Accounts payable = Php50,000):
Answer: 5.00
Q39. Debt-to-equity ratio (Total assets = Php400,000; Total liabilities = Php175,000):
Answer: 56.25
Q40. Receivables turnover ratio (Sales = Php100,000; Avg. receivables = Php20,000):
Answer: 5.00
Q41. Quick ratio (Current assets = Php40,000; Inventory = Php15,000; Current liabilities = Php30,000):
Answer: 0.66
Q42. Average collection period (Receivables turnover = 5):
Answer: 73.00
Q43. Debt-to-total assets ratio (Total liabilities = Php175,000; Total assets = Php400,000):
Answer: 43.75
Q44. Average payment period (Payable turnover = 5):
Answer: 73.00
Q45. Gross profit margin (Sales = Php750,000; COGS = Php200,000):
Answer: 0.73
Q46. Budget that includes direct materials, labor, and manufacturing overhead:
Answer: Production budget
Q47. Budget that calculates the number of labor hours needed for production:
Answer: Direct labor budget
Q48. Projected financial statements are:
Answer: Future-dated financial statements.
Q49. The process of making financial decisions for growth and problem-solving:
Answer: Financial planning
Q50. The first budget to be created in the master budget process:
Answer: Sales budget
Q51. Budget that ensures sufficient cash is available for operations:
Answer: Cash budget
Q52. The process of estimating future revenue and expenses:
Answer: Budgeting
Q53. Budget specifically for manufacturing overhead costs:
Answer: Manufacturing overhead budget
Q54. Budget for expenses like advertising, rent, and salaries:
Answer: Selling and administrative expense budget
Q55. Economic order quantity (EOQ) determines the optimal inventory order size:
Answer: True
Q56. Receivable management involves decisions about purchasing:
Answer: False
Q57. Aging of receivables is a method to classify unpaid customer balances:
Answer: True
Q58. The transaction motive is a reason for holding inventory:
Answer: False
Q59. The formula for Net working capital is Current assets - Current liabilities:
Answer: True
Q60. Negative working capital occurs when current liabilities exceed current assets:
Answer: Negative
Q61. The process of ordering, storing, using, and selling a company's inventory:
Answer: Inventory management
Q62. The second component in the net working capital calculation (Current Assets - X):
Answer: Current liabilities
Q63. Inventory management method that prioritizes more expensive items:
Answer: ABC
Q64. Strategy ensuring a company has sufficient cash flow for daily operations:
Answer: Working capital management
Q65. The amount owed by customers for credit purchases:
Answer: Accounts receivable
Q66. Motive for holding cash to meet ordinary payments:
Answer: Transaction
Q67. Positive working capital occurs when current assets exceed current liabilities:
Answer: Positive
Q68. Management strategy to maximize the return on investment in accounts receivable:
Answer: Receivable management
Q69. Strategy ensuring liquidity and generating income on idle funds:
Answer: Cash management
Q70. Small firms often rely on trade credit due to limited funding access:
Answer: True
Q71. Working capital funds are used for day-to-day operations:
Answer: True
Q72. Fixed capital includes funds for salaries and wages:
Answer: False
Q73. Preference shares are a type of unsecured promissory note:
Answer: False
Q74. Factoring is the process of selling accounts receivable at a discount:
Answer: True
Q75. Selling accounts receivable to a third party at a discount:
Answer: Factoring
Q76. Inviting savings directly from the general public:
Answer: Public deposits
Q77. Company profits reserved for growth and expansion:
Answer: Retained earnings
Q78. Credit extended between traders for the purchase of goods and services:
Answer: Trade credit
Q79. A common external source of borrowed funds:
Answer: Loan from banks and financing institutions
Q80. Unsecured debt instruments backed only by the company's creditworthiness:
Answer: Debentures
Q81. A contract allowing the use of an asset for periodic payments:
Answer: Lease financing
Q82. Shares that represent ownership and typically have unstable earnings:
Answer: Equity shares
Q83. Common shares are also called:
Answer: Equity shares
Q84. A short-term, unsecured promissory note issued by corporations:
Answer: Commercial paper
Q85. External funds are sourced from outside the organization:
Answer: True
Q86. Short-term finances are for periods of one year or less:
Answer: True
Q87. Owner’s funds come from proprietors or shareholders:
Answer: True
Q88. Long-term finances are for periods greater than one year:
Answer: True
Q89. Borrowed funds are also known as debt financing:
Answer: True
Q90. In a classification by period, which source does not belong:
Answer: Lease financing
Q91. An internal source of finance:
Answer: Retained earnings
Q92. Percentage of non-current assets (Total assets = Php140,000,000):
Answer: 71.43%
Q93. Inventory strategy to increase efficiency and decrease waste by receiving goods only as needed:
Answer: Just-in-time inventory management
Q94. A step in financial planning involving putting the plan into action:
Answer: Creation and implementation of financial action plan
Q95. Analysis using the percent change formula over time:
Answer: Horizontal
Q96. A step in financial planning involving brainstorming different options:
Answer: Identification of Alternative Courses of Action
Q97. The true value of a business based on its ability to generate long-term cash flow:
Answer: Wealth
Q98. A liquidity ratio that measures ability to meet short-term liabilities:
Answer: Current ratio
Q99. The financial planning step that involves risk assessment of different options:
Answer: Evaluation of Alternatives
Q100. In vertical analysis, which of the following is not typically used as a base:
Answer: Net Income
