INTERNATIONAL SCHOOL OF ASIA AND THE PACIFIC

TUGUEGARAO CITY CAMPUS

Atulayan Sur, Tuguegarao City, Cagayan
Email Add: isaptuguegarocity@gmail.com

FIRST QUARTERLY EXAMINATION

BUSINESS FINANCE GRADE 12
S.Y 2019-2020

Name: ______________________________________________ Score: ____________

Grade and Section: ____________ LRN: _______________ Date: _____________
“A dream is only a dream until you decide to make it real.”
-Harry Styles
Good luck and God bless!!!

I. MULTIPLE CHOICE
Directions: Read and analyze each statement and choose the correct answer from the given
choices. Write the letter of the correct answer on the space provided before the number.

_____ 1. It is responsible for managing the aspect of the operations that deals with money
matters.
A. accounting C. finance
B. management D. marketing
_____ 2. It deals with the study of investments and the management of business resources to maximize
profits and increase the company’s value.
A. finance C. marketing
B. accounting D. management
_____ 3. Ms. Dina Muli does the planning, organizing, leading and controlling of all financial
activities of an organization. What type of management Ms. Muli doing?
A. cost management C. marketing management
B. financial management D. management accounting
_____ 4. Which of the following is NOT a key in financial management decisions?
A. capital structure C. pre-operating management
B. capital management D. working capital management
_____ 5. It is concern on how the company obtains the financing it need to support its long-term
investments.
A. capital structure C. pre-operating management
B. capital management D. working capital management
_____ 6. It ensures the firm has sufficient resources to continue its day-to-day operations.
A. capital structure C. pre-operating management
B. capital management D. working capital management
_____ 7. It is concern with the company’s long-term investments ensuring that the company makes the
right investment decisions.
A. capital structure C. pre-operating management
B. capital management D. working capital management
_____ 8. He/she is primarily responsible for managing the financial risks of the corporation and is also
responsible for financial planning and record-keeping.
A. Vice President Marketing C. Chief Finance Officer (CFO)
B. Vice President Production D. Chief Operations Officer (COO)
_____ 9. Who is responsible for the managing the firm’s cash and credit, its financial planning and its
capital expenditures?
A. treasurer C. vice president finance
B. controller D. vice president marketing
_____ 10. Which of the following is NOT included in controller’s work?
A. tax reporting C. financial accounting
B. financial planning D. financial data processing
_____ 11. The following are the most common types of financial institutions, EXCEPT _________.
A. dealers C. treasury bills
B. brokerage D. credit unions

_____ 12. It performs the function of channelling funds from those who have a surplus of fund to those
who are in need of funds.
A. financial market C. financial instruments
B. financial institutions D. financial intermediaries
_____ 13. It is an organization that handles financial transactions for individuals, groups, and other
organizations – profit, nonprofit, private, or government-owned.
A. financial market C. financial institutions
B. financial product D. financial instruments
_____ 14. These are legal agreements between the holder and the issuer that gives the holder the right
to receive payment with interest or a right to share in company earning or dividends from the
issuer.
A. securities C. commercial paper
B. treasury bills D. financial instruments
_____ 15. Which of the following is NOT a job of financial intermediaries?
A. match sellers and buyers indirectly
B. offers service to help an individual/firm to borrow money
C. helps facilitate the different needs of lenders and borrowers
D. gives benefits to those who were left behind by the deceased policyholder
_____ 16. It is a financial institution that specializes in large and complex financial transactions such as
underwriting, acting as an intermediary between a securities issuer and the investing public,
facilitating mergers and other corporate reorganizations.
A. brokerage C. investment banks
B. credit unions D. savings and loans
_____ 17. Mr. Lee firm facilitates the buying and selling of securities and earns money through
commissions. What type of financial institutions does Mr. Lee’s firm have?
A. brokerage C. investment banks
B. commercial banks D. insurance companies
_____ 18. Which of the following are all examples of how corporate finance is practiced in organizations?
A. Logistics requested a new vehicle that will be used for delivery.
B. The person that is in charge in budget allocation for the construction of roads in a municipality
will give to the finance manager the cost.
C. The human resources manager shows the other members of the management team how the
hiring of additional manpower will help with productivity.
D. The accounting supervisor is tasked to prepare a cost and benefit analysis on whether it is
more costly to purchase or rent a piece of equipment.
_____ 19. Your parents budgeting for the needs of your household while at the same time saving for
your college is an example of ________________.
A. public finance C. personal finance
B. private finance D. corporate finance
_____ 20. It is a field of finance which deals with the collection of taxes and budget allocation for
programs.
A. corporate finance C. private finance
B. personal finance D. public finance
_____ 21. It is primarily concerned with the management of all the financial activities of an enterprise or
a business organization.
A. public finance C. personal finance
B. private finance D. corporate finance
_____ 22. In the study of corporate finance, which of the following provides professional guidance on
decisions pertaining to how money should be managed in order to achieve goals?
A. investments C. managerial finance
B. financial services D. financial markets and institutions
_____ 23. Which of the following is NOT example of money market securities?
A. premiums C. commercial paper
B. treasury bills D. negotiable certificates
_____ 24. The following are functions of managerial accounting, EXCEPT __________________.
A. it relies heavily on the use of historical data
B. it keeps track of all the historical transactions of a business
C. it provides financial data about the future of the organization
D. it involves the preparation of reports which are intended to aid internal users in decision-
making
_____ 25. They provide individuals and organizations a way to manage risk and use statistics as a
predictive tool to make financial projection.
A. credit unions C. commercial banks
B. investment banks D. insurance companies
_____ 26. These are financial instruments that exchange money for future interest payments and
repayment of principal.
A. bonds C. promissory notes
B. treasury bills D. commercial papers
_____ 27. It is an asset, like a piece of paper of real estate property or a vehicle that is attached to a
loan.
A. bond C. commercial paper
B. collateral D. treasury bills
_____ 28.These are the markets where transactions involving long-term debt or those maturing in more
than one year take place.
A. financial markets C. money markets
B. capital markets D. mutual markets
_____ 29. These are markets where transactions involving short-term debt securities take place.
A. mutual markets C. financial markets
B. capital markets D. money markets
_____ 30. An individual would like to borrow from a bank and requires ₱5 000 000, and the whole
amount may not necessarily come from a single saver. The whole amount may come from
several savers - ₱1 500 000 from one, ₱500 000 from another, ₱1 000 000 from another, and so
on until the ₱5 000 000 is completed. In the situation, what role of the financial intermediaries
perform in the financial markets?
A. reduce costs C. pooling of funds
B. diversification D. financial flexibility
_____ 31. Intermediaries help savers of funds lower they risks by helping them choose the types of
financial products that they will include in their portfolio. This process is called ______.
A. reducing cost C. pooling of funds
B. diversification D. financing flexibility
_____ 32. What role do financial intermediaries perform in the financial markets if it offers a variety of
financial products to both savers and borrowers of funds?
A. reduce costs C. pooling of funds
B. diversification D. financial flexibility
_____ 33. Which of the following is NOT a use of financial instruments?
A. to transfer risk from one person to another
B. as a depository institution and nondepository institution
C. as means of payment to purchase goods and/or services
D. as a store of value to transfer purchasing power into the future
_____ 34. Which of the following instruments derives their value from the value and characteristics of
one or more underlying entities?
A. loans C. cash instruments
B. securities D. derivative instruments
_____ 35. Which of the following is NOT a cash instrument?
A. Loans C. Deposits
B. Securities D. Over-the-counter derivatives
_____ 36. Which of the following is the purpose of financial statements?
A. to explain the changes in cash and cash equivalents
B. to make distinction between non-operating income and operating income
C. to provides the amounts for the various assets, liabilities, and owner’s capital accounts
D. to report a variety of seemingly complex information such that the end-users will be able to
make sense of the given information
_____ 37. This contains information as of the date of its preparation about the firm’s assets, liabilities,
and shareholders’ equity.
A. balance sheet C. cash flow statement
B. income statement D. statement of financial position
_____ 38.This is a report of the cash received and cash spent by the firm over a specified period of time.
A. balance sheet C. cash flow statement
B. income statement D. statement of financial position
_____ 39. Which of the following type of financial statement includes the revenue the firm has earned
over a specific period of time, usually a quarter of a year or a full year; the expenses it has
incurred during the same period; and the profit the firm has earned?
A. balance sheet C. cash flow statement
B. income statement D. statement of financial position
_____ 40. They are used as funding for daily operations and to pay short-term obligations.
A. current assets C. current liabilities
B. fixed assets D. noncurrent liabilities
_____ 41. Which of the following is NOT a fixed asset?
A. buildings C. trademarks
B. machinery D. marketable securities
_____ 42. It is a payment system that works well when a firm collects repetitive or routine payments
from customers.
A. prepayment C. accounts receivable
B. accounts payable D. preauthorized debit
_____ 43. These include trademarks, brand names, copyright, and patents which help company generate
more income.
A. fixed assets C. tangible assets
B. current assets D. intangible assets
_____ 44. It is a financial obligation of a firm that is due more than one year into the future.
A. current liability C. long-term liability
B. owner’s equity D. short-term liability
_____ 45. Which of the following equations is the fundamental balance sheet equation?
A. Assets + Liabilities = Owner’s Equity C. Assets = Liabilities + Owner’s Equity
B. Assets + Owner’s Equity = Liabilities D. Assets = Liabilities – Owner’s Equity
_____ 46. It is the portion of the net income that was retained after payment of dividends to
shareholders.
A. capital C. owner’s equity
B. income D. retained earnings
_____ 47. Which of the following is the CORRECT formula for computing earnings before interest, tax,
depreciation and amortization (EBITDA)?
A. EBITDA = Sales – Operating Expenses
B. EBITDA = Sales – Operating Expenses – Depreciation & Amortization
C. EBITDA = Sales – Operating Expenses – Depreciation & Amortization – Taxes
D. EBITDA = Sales – Operating Expenses – Depreciation & Amortization – Interest
_____ 48. It refers to the money generated from the regular activities of the firm such as production,
selling of goods, or provision or services to customers.
A. cash flow from investing activities B. cash flow from financing activities
C. cash flow from operating activities D. cash flow from transaction activities
_____ 49. Which of the following cash flow activities refers to the change in a firm’s cash position
resulting from money spent on plant and equipment?
A. cash flow from investing activities C. cash flow from operating activities
B. cash flow from financing activities D. cash flow from transaction activities
_____ 50. It refers to changes in the company’s cash position due to the activities of the firm such as
raising capital or repayment of debt – adding loans, debt restructuring, deferment of payments,
and issuance of new stocks in the financial market.
A. cash flow from investing activities C. cash flow from operating activities
B. cash flow from financing activities D. cash flow from transaction activities
_____ 51. It is the organization’s core purpose and provides direction to the whole organization.
A. vision statement C. corporate objectives
B. mission statement D. corporate strategies
_____ 52. If the accounts receivable in 2018 and 2019 are ₱46 000 and ₱50 000 respectively, how will it
affect the net cash flow from operating activities?
A. Addtion of ₱50 000 C. Deduction of ₱4 000
B. Addition of ₱4 000 D. Deduction of ₱50 000
_____ 53. In 2018 and 2019, the property, plant, and equipment are ₱215 000 and ₱ 278 000
respectively. How will it affect the net cash flow from investing activities?
A. Addition of ₱63 000 C. Deduction of ₱63 000
B. Addition of ₱215 000 D. Deduction of ₱215 000
_____ 54. If the depreciation and amortization decreased by ₱3 000, how wil it affect the cash flow from
financing activities?
A. Addition of ₱3 000 C. Increased by ₱3 000
B. Deduction of ₱3 000 D. No effect
_____ 55. It is the grand plan of any organization wherein the overall objectives are set and specific
programs are created in support of the objectives.
A. strategic plan C. vision statement
B. departmental plan D. mission statement
_____ 55. Which of the following elements of strategic plan gives description of what organization aspires
to be in the long term? 
A. vision statement C. corporate objectives
B. mission statement D. corporate strategies
_____ 56. These are specific in terms of activities, the people responsible for carrying out those activities,
the time-lines, the targets, and the budget per activity.
A. financial forecasts C. corporate objectives
B. departmental plans D. corporate strategies
_____ 57. It is a limitation which affects a firm’s position relative to its competitors. For example, if a
hotel has limited financial capacity, it will not be able to make improvements in its facilities for
the convenience of clients.
A. strengths C. opportunities
B. weaknesses D. threats
_____ 58. A hospital may suffer from a decrease in the number of admissions and outpatient visits once
a new nearby hospital with more modern facilities and equipment opens. What situation does the
hospital face?
A. threats C. weaknesses
B. strengths D. opportunities
_____ 59. It is a resource that is owned or controlled by or is available to a firm.
A. threats C. weaknesses
B. strengths D. opportunities
_____ 60. It is a projection of sales of a product or services expressed either in units or absolute
monetary value.
A. sales forecast C. financial projection
B. financial budgets D. projected financial statements
_____ 61. It is a financial projection that presents an entity’s expected financial positions, results of
operations, and cash flows.
A. projected balance sheet C. projected financial statements
B. projected income statements D. projected cash flow statements
_____ 62. Which of the following is NOT a factor of forecasting?
A. inflation rate C. investment climate
B. employment rate D. trends in the market
_____ 63. This includes inflation, competitiveness of specific industries, growth, global markets,
consumer demand and spending patterns of specific market segments.
A. SWOT C. market condition
B. economy D. investment climate
_____ 64. What will happen to the number of investors when there is a bull market?
A. increasing C. slows down
B. decreasing D. remain constant
_____ 65. These are operating costs that are not associated with production.
A. cost of goods sold C. budgeted variable expenses
B. budgeted fixed expenses D. selling and administrative expenses
_____ 66.
A. When
low market
trading slows down and indicates that there isC.a bear
low level
market
of investor confidence, what
B.
situation
bull market
does the market experience? D. global market

For items 67 – 90 use the following information below.

The CEO of BTS Inc. would like to see a three-year (2017-2019) projection of net income. Consider the
following information from 2016 as basis.
Income Statement of Year Ending 31 December 2016
Sales ₱ 15 000 000
Operating Costs 7 800 000
EBITDA 7 200 000
Depreciation and Amortization 1 250 000
EBIT 5 950 000
Interest 750 000
EBT 5 200 000
Taxes (40%) 2 080 000
Net Income ₱ 3 120 000
Assumptions:
a. Sales increased by 6% in 2017, 7% in 2018, and 8% in 2019.
b. Operating cost decreased by 5% each year.
c. In 2017, 2018, and 2019, depreciation and amortization and interest expense will increase by
10%, 12%, and 14% respectively.
d. The tax rate will remain the same at 40%

_____ 67. What is the computed new sale in 2017?

A. ₱15 000 000 C. ₱ 16 050 000
B. ₱16 200 000 D. ₱15 900 000
_____ 68. In 2018, what is the projected sale?
A. ₱15 000 000 C. ₱16 050 000
B. ₱16 200 000 D. ₱15 900 000
_____ 69. What is the projected sale in 2019?
A. ₱15 000 000 C. ₱16 050 000
B. ₱16 200 000 D. ₱15 900 000
_____70. In 2019, what is the projected operating expense?
A. ₱7 410 000 C. ₱6 687 525
B. ₱7 039 500 D. ₱7 800 000
_____ 71. In 2018, what is the projected operating expense?
A. ₱7 410 000 C. ₱6 687 525
B. ₱7 039 500 D. ₱7 800 000
_____ 72. In 2017, what is the projected operating expense?
A. ₱7 410 000 C. ₱6 687 525
B. ₱7 039 500 D. ₱7 800 000
_____ 73. What is the computed EBITDA in 2017?
A. ₱9 010 500 C. ₱9 512 475
B. ₱7 200 000 D. ₱8 490 000
_____ 74. What is the computed EBITDA in 2019?
A. ₱9 010 500 C. ₱9 512 475
B. ₱7 200 000 D. ₱8 490 000
_____ 75. What is the computed EBITDA in 2018?
A. ₱9 010 500 C. ₱9 512 475
B. ₱7 200 000 D. ₱8 490 000
_____ 76. What is the new computed depreciation and amortization in 2018?
A. ₱1 400 000 C. ₱1 425 000
B. ₱1 375 000 D. ₱1 250 000
_____ 77. What is the new computed depreciation and amortization in 2017?
A. ₱1 400 000 C. ₱1 425 000
B. ₱1 375 000 D. ₱1 250 000
_____ 78. What is the new computed depreciation and amortization in 2019?
A. ₱1 400 000 C. ₱1 425 000
B. ₱1 375 000 D. ₱1 250 000
_____ 79. In 2017, what is the new EBIT?
A. ₱5 950 000 C. ₱7 115 000
B. ₱7 610 500 D. ₱8 087 475
_____ 80. In 2019, what is the new EBIT?
A. ₱5 950 000 C. ₱7 115 000
B. ₱7 610 500 D. ₱8 087 475
_____ 81. In 2018, what is the new EBIT?
A. ₱5 950 000 C. ₱7 115 000
B. ₱7 610 500 D. ₱8 087 475
_____ 82. What is the projected interest in 2017?
A. ₱855 000 C. ₱750 000
B. ₱825 000 D. ₱840 000
_____ 83. What is the projected interest in 2018?
A. ₱750 000 C. ₱825 000
B. ₱840 000 D. ₱855 000
_____ 84. What is the projected interest in 2019?
A. ₱855 000 C. ₱825 000
B. ₱840 000 D. ₱750 000
_____ 85. What is the new earning before tax in 2019?
A. ₱7 232 475 C. ₱6 290 000
B. ₱6 510 000 D. ₱6 400 000
_____ 86. What is the new earning before tax in 2017?
A. ₱7 232 475 C. ₱6 290 000
B. ₱6 705 500 D. ₱6 510 000
_____ 87. What is the new earnings before tax in 2018?
A. ₱6 770 500 C. ₱6 290 000
B. ₱6 400 000 D. ₱6 510 000
_____ 88. What is the projected net income in 2019?
A. ₱4 339 485 C. ₱4 062 300
B. ₱3 906 000 D. ₱3 840 000
_____ 89. What is the projected net income in 2018?
A. ₱3 906 000 C. ₱4 062 300
B. ₱3 774 000 D. ₱3 840 000
_____ 90. What is the projected net income in 2017?
A. ₱4 339 485 C. ₱3 906 000
B. ₱3 774 000 D. ₱4 062 300
_____ 91. It shows the impact of the planned operations and capital investments on firm’s assets,
liabilities, and owner’s equity.
A. financial budget C. production budget
B. operating budget D. direct labor budget
_____ 92. If you have 500 units planned sales, 250 desired ending inventory, and 90 beginning
inventory, how will you compute the expected production volume?
Desired Ending Beginning
A. Expected Production Volume = Planned sales – X
inventory inventory
Desired Ending Beginning
B. Expected Production Volume = Planned sales + X
inventory inventory
Desired Ending Beginning
C. Expected Production Volume = Planned sales + –
inventory inventory
Desired Ending Beginning
D. Expected Production Volume = Planned sales – –
inventory inventory
_____ 93. Based on the question #91, what is the expected production volume?
A. 22, 500 units B. 67, 500 units
 C. 660 units D. 160 units
_____ 94. It is the determinant of all other budgets included in the master budget.
A. sales budget C. direct labor budget
B. production budget D. factory overhead budget
_____95. Once the production budget is created, what would be the next step?
A. determine the direct labor budget
B. determine the ending inventory budget
C. determine the factory overhead budget
D. determine the direct materials requirement
_____ 96. It is a detailed projection of all income and expenses for a given period of time, which is
usually one year.
A. financial budget C. production budget
B. operating budget D. direct labor budget
_____ 97. Which of the following is NOT used in computing the direct labor cost?
A. units to be produced C. direct labor cost per hour
B. materials to be purchased D. direct labor hours per unit
_____ 98. It is necessary for constructing the budgeted income statement and the budgeted balance
sheet.
A. direct labor budget C. factory overhead budget
B. ending inventory budget D. beginning inventory budget
_____ 99. It is a statement of projected sales, expenses, income, and other financial transactions for the
coming period.
A. budget C. sales budget
B. cash budget D. balance sheet
_____ 100. Which of the following is the correct arrangement of the steps in budget preparation?
I. Estimating cash flow
II. Preparation of a sales forecast
III. Preparation of financial statements
IV. Estimating manufacturing costs and operating expenses
V. Determining production volume in support of the sales forecast
A. II, V, III, IV, I C. II, IV, V, III, I
B. II, V, IV, I, III D. II, IV, V, I, III

Prepared by: Checked and reviewed by:

RAQUEL S. RODRIGUEZ, LPT MA. ARMIDA A. SACRAMENTO, LPT

Subject Instructor Academic Coordinator

Recommending Approval:

ERICSON R. MALLARI, LPT

OIC Principal

Approved by:

PRESENITA C. AGUON, Ph. D.

Vice President for Academic Affairs