Acc-2nd-Exam-with-Answers PDF

ACCBP 100 1St Sem 1st Term Second Exam Instructions. Shade the LETTER on your answer sheets of the corresponding correct answer. 1. Which of the following scenarios best illustrates the law of demand? A. An increase in the price of coffee leads to an increase in the quantity demanded for tea. B. A...

ACCBP 100 1St Sem 1st Term Second Exam Instructions. Shade the LETTER on your answer sheets of the corresponding correct answer. 1. Which of the following scenarios best illustrates the law of demand? A. An increase in the price of coffee leads to an increase in the quantity demanded for tea. B. A rise in the price of gasoline results in a decrease in the quantity demanded for electric cars. C. A drop in the price of cinema tickets results in a decrease in the quantity demanded. D. A decrease in the price of smartphones leads to an increase in the quantity demanded. 2. What can be inferred about the good if the demand curve for a good shift to the left while its price remains constant? A. The good is experiencing a decrease in quantity demanded. B. There has been a change in consumer preferences that reduces the demand for the good. C. The price of the good has increased. D. The price of a substitute good has decreased. 3. Which of the following would most likely cause a movement along the demand curve rather than a shift of the demand curve for a particular good? A. A change in the price of a related good (substitute or complement) B. An increase in the number of sellers of a particular good C. A technological advancement causing production to increase D. A change in consumer tastes 4. In the context of the law of demand, which of the following statements is true? A. The law of demand states that as price increases, demand decreases, holding other factors constant. B. The law of demand implies that as the price of a good rises, the demand for the good also rises. C. The law of demand suggests that a higher price will lead to a lower quantity demanded. D. The law of demand is concerned with changes in supply, not demand. 5. Which of the following scenarios would most likely result in a shift of the demand curve rather than a movement along it? A. The price of the good itself changes. B. The price of the good increases. C. The price of the good decreases. D. The price of a complementary good decreases. 6. If a firm experiences a decrease in the cost of raw materials, what is the likely impact on its product supply, assuming all other factors remain constant? A. The supply of the product will decrease because production becomes less profitable. B. The quantity supplied will increase because the product's price has risen. C. The supply curve will shift to the left because the firm will produce less. D. The supply of the product will increase because production becomes more profitable. 7. Which of the following scenarios would most likely lead to a movement along the supply curve rather than a shift of the supply curve? A. An increase in the price of the good B. An improvement in technology that reduces production costs C. A government subsidy for producers of the good D. A rise in the price of inputs used to produce the good 8. Which of the following statements about the law of supply is correct? A. The law of supply states that as the price of a good decreases, the quantity supplied decreases, assuming other factors remain constant. B. The law of supply implies that as the price of a good decreases, the supply of the good also decreases. C. The law of supply suggests that a lower price will lead to a higher quantity supplied. D. The law of supply suggests that as the price of a good increases, the quantity supplied will increase. 9. Which of the following factors would likely cause a leftward shift in the supply curve for a particular good? A. An increase in the price of the good B. A technological advancement that lowers production costs C. An increase in wages for workers in the industry D. A decrease in the cost of raw materials 10. What impact would an increase in taxes on producers have on the supply of a good, assuming all other factors remain constant? A. The supply of the good will increase because producers have higher costs. B. The quantity supplied will increase as producers seek to cover the tax cost. C. The supply curve will shift to the right because higher taxes make production more profitable. D. The supply of the good will decrease because the tax reduces the profitability of production. 11. If the price of a good decreases from P50 to P40 and the quantity demanded increases from 100 units to 130 units, what is the price elasticity of demand? A. -1.5 B. -1.0 C. +1.0 D. +1.5 12. In the previous question, what is the type of elasticity? A. Inelastic B. Uni Elastic C. Perfect Elastic D. Elastic 13. Compare the revenues generated by the old a new prices, which statement is True? A. Quantity demanded pushed the company to increase prices B. Quantity supplied increased because of the expensive raw materials C. Quantity supplied increased due to technological benefits for the company D. Quantity supplied increased the revenue due to several factors 14. Which of the following goods is likely to have the most elastic demand? A. Salt B. Luxury cars C. Bread D. Gasoline 15. If the price elasticity of demand for a good is -0.8, what can be inferred about the good’ s demand? A. The demand is inelastic. C. The demand is unitary elastic. B. The demand is elastic. D. The demand is perfectly elastic. 16. Which of the following factors would most likely make the demand for a product more elastic? A. The product has few substitutes. B. The product is a necessity. C. The product takes up a small portion of the consumer's budget. D. The product is a luxury item. 17. Assume the demand for a good is perfectly inelastic. What would be the effect of a price increase on the total revenue from this good? A. Total revenue would increase. B. Total revenue would decrease. C. Total revenue would remain unchanged. D. Total revenue would first increase, then decrease. 18. Which of the following is not a primary responsibility of the financial staff in an organization? A. Forecasting and planning B. Investment and financing decisions C. Developing marketing strategies D. Managing risk 19. A corporation faces an increase in production costs. Which of the following is most likely to be an immediate effect on the company's financial management? A. Increased dividend payouts B. Increased capital budgeting expenditures C. Decreased profitability and stock price D. Increased executive compensation 20. If a company’ s financial goals are focused on maximizing stock price, which of the following actions might conflict with this goal? A. Investing in high-return projects B. Cutting research and development expenses C. Expanding into new markets D. Increasing shareholder dividends 21. Which of the following business forms offers the advantage of limited liability but also has the disadvantage of double taxation? A. Sole proprietorship C. Corporation B. Partnership D. Limited Liability Company (LLC) 22. In an agency relationship between shareholders and managers, which factor is most likely to reduce the agency problem? A. Increasing managerial compensation based on stock performance B. Decreasing managerial control over corporate policies C. Increasing the number of shareholders D. Reducing the level of financial disclosures 23. Which of the following is not typically a component of a firm’ s capital budgeting process? A. Evaluating the profitability of investment projects B. Assessing the firm's short-term liquidity C. Forecasting future cash flows from projects D. Determining the appropriate discount rate for projects 24. A firm with a high degree of leverage is most likely to experience which of the following effects in a period of economic downturn? A. Increased profitability B. Lower financial risk C. Greater volatility in earnings D. Decreased stock price volatility 25. Which financial metric would be most useful in assessing the impact of a company’ s new investment on its overall value? A. Earnings Per Share (EPS) B. Price-to-Earnings (P/E) Ratio C. Net Present Value (NPV) D. Current Ratio 26. If a firm’ s stock price is maximized, which of the following is not necessarily true? A. The firm is maximizing its current cash flows B. The firm has high future growth prospects C. The firm’ s financial management practices are optimal D. The firm has high levels of risk 27. Which of the following factors would most likely increase the riskiness of a company’ s cash flows? A. Diversification of the company's product lines B. Increasing reliance on debt financing C. Investing in stable, low-risk projects D. Reducing operational costs 28. Which of the following is not a typical factor that affects a company's stock price? A. Timing of cash flow streams B. Projected cash flows to shareholders C. The company's marketing strategy D. Riskiness of the cash flows 29. How does globalization typically affect a corporation's financial management? A. It reduces the need for international financial reporting standards B. It increases the complexity of managing foreign currency risks C. It decreases the importance of understanding foreign markets D. It simplifies investment decisions due to fewer international opportunities 30. In a corporation, who typically acts as the primary liaison between the financial department and the board of directors? A. Treasurer C. Chief Financial Officer (CFO) B. Controller D. Capital Budgeting Director 31. What is the primary disadvantage of a sole proprietorship compared to a corporation? A. Easier to raise capital C. Unlimited personal liability B. Limited liability for the owner D. Easier to transfer ownership 32. Which of the following factors would be most likely to cause a leftward shift in the supply curve of a firm’ s product? A. Technological advancements B. Decreased production costs C. Increased taxes on production D. Increased market demand 33. Which financial decision is most likely to affect the riskiness of a firm’ s cash flows? A. Dividend policy B. Investment decisions C. Capital budgeting D. Financing decisions (use of debt financing) 34. If a company's revenue from overseas operations is high, what might be a significant risk factor to consider? A. Domestic market saturation B. Exchange rate fluctuations C. Tax incentives D. Local labor costs 35. What factor does not typically affect the level and riskiness of cash flows in financial management? A. Investment decisions B. Financing decisions C. Dividend policy decisions D. Personal income tax rates of shareholders 36. Which of the following costs would most likely be classified as a variable cost? A. Depreciation on factory equipment B. Monthly insurance premiums C. Direct materials used in production D. Salaries of administrative staff 37. Which of the following statements about fixed costs is true? A. Fixed costs vary with the level of output. B. Fixed costs remain constant within a relevant range of activity. C. Fixed costs are variable on a per-unit basis. D. Fixed costs change with each unit of production. 38. In cost-volume-profit (CVP) analysis, what does the relevant range refer to? A. The maximum and minimum volumes of production where cost behavior patterns are consistent. B. The range of interest rates applicable to business loans. C. The difference between total variable costs and total fixed costs. D. The range of unit sales where a company earns the maximum profit. 39. Which method is commonly used to separate the variable and fixed components of a mixed cost? A. Linear regression B. High-low method C. Contribution margin analysis D. Breakeven analysis 40. What does the contribution margin represent in CVP analysis? A. Total sales revenue minus total variable costs B. Total sales revenue minus total fixed costs C. Total fixed costs divided by total variable costs D. Total revenue divided by total variable costs 41. What is the primary purpose of breakeven analysis? A. To determine the maximum profit achievable B. To calculate the point at which total revenue equals total costs C. To assess the risk of financial leverage D. To forecast future sales and revenues 42. Which of the following is not an assumption of cost-volume-profit (CVP) analysis? A. Costs and revenues are linear within the relevant range. B. The sales mix remains constant. C. Fixed costs vary with changes in production volume. D. Production and sales volumes are approximately equal. 43. In a CVP analysis, how would an increase in fixed costs affect the breakeven point? A. The breakeven point would decrease. B. The breakeven point would remain unchanged. C. The breakeven point would increase. D. The breakeven point would become indeterminate. 44. Which cost behavior pattern is characterized by a cost that changes in a nonlinear fashion with changes in activity level? A. Fixed cost C. Mixed cost B. Variable cost D. Nonlinear variable cost 45. Which of the following is not included in the cost-volume-profit analysis formula? A. Total sales revenue C. Total fixed costs B. Total variable costs D. Total equity 46. How is the breakeven point expressed in dollars calculated? A. Fixed Costs / Contribution Margin per Unit B. Fixed Costs / Contribution Margin Ratio C. Contribution Margin per Unit / Fixed Costs D. Contribution Margin Ratio / Sales Revenue 47. Which of the following would not be considered when calculating the breakeven point? A. Selling price per unit B. Total fixed costs C. Variable cost per unit D. Historical interest rates 48. Which of the following best describes the "relevant range" in cost-volume-profit analysis? A. The range over which total costs and revenues are expected to fluctuate. B. The range of output over which total fixed costs vary. C. The range of activity where fixed costs and variable costs are linear. D. The maximum capacity of production facilities. 49. If a company experiences a decrease in the selling price per unit while its fixed costs and variable costs per unit remain unchanged, which of the following is likely to occur? A. The breakeven point in units will decrease. B. The breakeven point in peso will increase. C. The contribution margin ratio will increase. D. The margin of safety will increase. 50. Which cost behavior pattern would be most appropriate for a cost that includes both fixed and variable components? A. Purely fixed cost B. Purely variable cost C. Mixed cost D. Step cost END OF QUESTIONS