Finance is the art and science that describes the management, creation and study of money,

banking, credit, investments, assets and liabilities.

Select one:
The correct answer is 'True'.
Financial management decision function includes areas such as investment, operations
management, marketing, sales and asset management decisions.
Select one:
True
False
The correct answer is 'False'.
Stocks is a debt security in which an investor lends his money to an entity which borrows the
funds for a defined period of time at defined interest rate.
Select one:
True
False
The correct answer is 'False'.
The Chief Financial Officer is responsible of estimating the financial requirement of the
business.
Select one:
True
False
The correct answer is 'True'.
A financial instrument is the written legal obligation of one party to transfer a thing of value,
usually money, to another party at some future date, under certain conditions.
Select one:
True
False
The correct answer is 'True'.
Which is not a duty of the treasurer?
Select one:
a. Managing short-term investments
b. Solving for tax dues
c. Managing cash
d. Projecting cash flow needs
The correct answer is: Solving for tax dues
He is in charge of all the organization's finance and accounting functions and typically reports to
the chief executive officer.
Select one:
a. Controller
b. Chief Financial Officer
c. Operations Manager
d. Treasurer
The correct answer is: Chief Financial Officer
The finance manager has a regular meeting with all the heads of each department. What is
being described in the situation?
Select one:
a. Acquiring Necessary Capital
b. Interrelation with Other Departments
c. Forecasting Financial Requirements
d. Cash Management
The correct answer is: Interrelation with Other Departments
Which does not belong to the group?
Select one:
a. Acquiring the Necessary Capital
b. Ensuring Business Continuity
c. Cash Management
d. Acquiring Necessary Capital
The correct answer is: Ensuring Business Continuity
Which is not a function of a finance manager
Select one:
a. The finance manager contracts with a bank to regularly go to the treasurer's office for
business deposits.
b. The finance manager chooses the investment which has the highest return.
c. The financial manager plans to acquire a loan to be used for business expansion
d. The finance manager is the one who accounts for the expenses incurred in personnel
training.
The correct answer is: The finance manager is the one who accounts for the expenses incurred
in personnel training.
Which of the following statements is wrong?
Select one:
a. After deciding the financial requirement, the finance manager should concentrate on how,
where and when to obtain finances.
b. In forecasting financial requirements, the controller is the one who should estimate how much
resources are required to acquire fixed assets and forecast the amount needed to meet the
working capital requirements in future.
c. The finance manager must carefully select best investment alternatives and consider the
reasonable and stable return from the investment.
d. The financial manager should have sound knowledge not only in finance related area but also
in other areas as well.
The correct answer is: In forecasting financial requirements, the controller is the one who should
estimate how much resources are required to acquire fixed assets and forecast the amount
needed to meet the working capital requirements in future.
Which statement is false?
Select one:
a. The treasurer is the one holding cash accounts of the company
b. The controller reports to the treasurer.
c. The CFO is sometimes termed as the financial manager
d. The controller and his staff is responsible to meet the tax filing requirements
The correct answer is: The controller reports to the treasurer.
Which of the following statements is correct
Select one:
a. The controller must concentrate to principles of safety, liquidity and profitability while investing
capital.
b. The finance manager must carefully select the best investment alternatives and select the
one with reasonable and unstable return from.
c. The finance manager must maintain a good relationship with the head of all functional
departments only if they are in agreement with his business decisions.
d. The controller is the one responsible for the management of financial transaction recording
and not on the investment decision of the company.
The correct answer is: The controller is the one responsible for the management of financial
transaction recording and not on the investment decision of the company.
He is responsible for the safekeeping of cash
Select one:
a. Treasurer
b. Operations Manager
c. Chief Financial Officer
d. Controller
The correct answer is: Treasurer
He is accountable for the accounting operations of the company.
Select one:
a. Chief Financial Officer
b. Controller
c. Operations Manager
d. Treasurer
The correct answer is: Controller

Which of the following institutions has the power to accept drafts and issue letters of credit;
discount and negotiate promissory notes, drafts, bills of exchange, and other evidences of debt;
accept or create demand deposits; receive other types of deposits and deposit substitutes; buy
and sell foreign exchange and gold or silver bullion; and acquire marketable bonds and other
debt securities; and extend credit.
Select one:
a. Palawan Pawnshop
b. PhilHealth
c. Multipurpose Cooperative
d. Metrobank
The correct answer is: Metrobank
Which among the following institutions does not have a full banking license or is not supervised
by a national or international banking regulatory agency?
Select one:
a. None of these
b. Credit Unions
c. Commercial Banks
d. Investment Banks
The correct answer is: Credit Unions
These is being issued by the borrower to signify its indebtedness to the creditor.
Select one:
a. Notes
b. Bonds
c. Stocks
d. None of these
The correct answer is: Notes
Which does not belong to the group?
Select one:
a. Investment banks
b. Savings and Loan Associations
c. Insurance Companies
d. Credit Unions
The correct answer is: Investment banks
Which situation is an example of indirect financing?
Select one:
a. Ben engaged in online buying of fixed income securities.
b. Challa went to Western Union and have her US dollar currencies converted into Philippine
peso.
c. Aimee borrowed money from a bank
d. John bought stocks of Choca Loka Company
The correct answer is: Aimee borrowed money from a bank
This type of institution focuses on assisting entities in raising capital by underwriting or acting as
the client's agent in the issuance of securities
Select one:
a. Credit Unions
b. Investment banks
c. Savings & Loan Association
d. Commercial Banks
The correct answer is: Investment banks
This is where debt securities with an original maturity of one year or less are traded as well as
long-term securities having at least six months left to maturity
Select one:
a. Stock Market I
b. Capital Market
c. Foreign Exchange Market
d. Money Market
The correct answer is: Money Market
These are non-profit financial cooperatives owned by the members and operated for the benefit
of the members.
Select one:
a. Credit Union
b. Commercial Banks
c. Savings and Loans Association
d. Insurance Company
The correct answer is: Credit Union
"Statement 1. Today insurance companies offer most of the services commercial banks do.
Statement 2. Investment banks are member-owned financial cooperatives are democratically
controlled by its members, and operated for the purpose of offering its members economical
financial services."
Select one:
a. Statement 1 is correct while Statement 2 is wrong
b. Statement 1 is wrong while Statement 2 is correct
c. Both Statements are wrong
d. Both statements are correct
The correct answer is: Both Statements are wrong
This is a type of security that signifies ownership in a corporation and represents a claim on part
of the corporation's assets and earnings.
Select one:
a. Stocks
b. Notes
c. Bonds
d. None of these
The correct answer is: Stocks

The business has Php100,000 current assets, Php150,000 non-current assets, Php50,00
current liabilities and Php25,000 non-current liabilities. If you will apply the common size
analysis. What is the percentage of the current liabilities?
Select one:
a. 200%
b. 100%
c. 150%
d. 175%
The correct answer is: 200%
The business has Php100,000 current assets, Php150,000 non-current assets, Php50,00
current liabilities and Php25,000 non-current liabilities. If you will apply the common size
analysis. What is the percentage of the non-current assets?
Select one:
a. 20%
b. 30%
c. 46%
d. 60%
The correct answer is: 60%
A Business has a a total sales of Php300,000 and cost of sales of Php100,000. It also incurred
operating expenses of Php35,000 and tax worth 30%. If you will make a common size analysis,
what will be the percentage of gross profit?
Select one:
a. 11.66%
b. 66.66%
c. 38.50%
d. 55%
The correct answer is: 66.66%
It provides information about cash receipts and cash disbursements of an entity at a given
period of time
Select one:
a. Statement of Financial Position
b. Income Statement
c. Statement of Cash Flows
d. statement of Changes in Equity
The correct answer is: Statement of Cash Flows
In 2005, Total sales were Php200,000; In 2006, Total sales were Php300; and in 2007, Total
sales were Php400,000. If you will apply the index analysis, what is the percentage for the year
2007?
Select one:
a. 150%
b. 100%
c. 175%
d. 200%
The correct answer is: 200%
Ben is the owner of B-Merchandise. He wants to know the total sales the cost of sales,
expenses and net income. What financial statement does he need?
Select one:
a. Statement of Cash Flows
b. Statement of Changes in Equity
c. Income Statement
d. Statement of Financial Position
The correct answer is: Income Statement
A finance professional is using a percent change analysis of financial statements. He used the
formula (Most recent value - Base period value)/Base period value. He is using a _________
type of analysis.
Select one:
a. Horizontal
b. Vertical
c. Diagonal
d. Zigzag
The correct answer is: Horizontal
This statement provides a narrative description or disaggregation of items presented in the
financial statements and information about items that do not qualify for recognition since these
items are non-accountable or not quantifiable.
Select one:
a. Income Statement
b. Statement of Changes in Equity
c. Notes to Financial Statements
d. Statement of Financial Position
The correct answer is: Notes to Financial Statements
A Business has a a total sales of Php300,000 and cost of sales of Php100,000. It also incurred
operating expenses of Php35,000 and tax worth 30%. If you will make a common size analysis,
what will be the percentage of net income after taxes?
Select one:
a. 38.50%
b. 55%
c. 11.66%
d. 66.66%
The correct answer is: 38.50%
The Statement of Assets, Liabilities and Net Worth (SALN) is a form of
Select one:
a. statement of Changes in Equity
b. Statement of Financial Position
c. Income Statement
d. Statement of Cash Flows
The correct answer is: Statement of Financial Position
WXY Store paid Php200,000 on inventory bought for the year. The business was able to sell all
of the inventory for Php750,000. Business expenses were 30,000 and tax rate is 30%. What is
the net profit margin?
Select one:
a. 0.73
b. 5.00
c. 0.49
d. 73.00
The correct answer is: 0.49
ABC Merchandise has inventories worth Php15,000, cash worth Php20,000, Prepaid expenses
worth Php5,000 and equipment worth Php10,000. She has a current liability of Php30,000. How
much is the current ratio?
Select one:
a. 0.66
b. 73.00
c. 5.00
d. 1.33
The correct answer is: 1.33
According to XYZ balance sheet, the accounts payable was Php50,000 and annual credit
purchases amounted to Php250,000. What is the payable turnover?
Select one:
a. 73.00
b. 0.73
c. 5.00
d. 0.49
The correct answer is: 5.00
A business has total assets worth Php400,000 and total liabilities worth Php175,000. Equity can
be computed by deducting liabilities from assets. What is the debt to equity ratio?
Select one:
a. 56.25
b. 0.73
c. 43.75
d. 73.00
The correct answer is: 56.25
At the end of 2016 ABC merchandise balance sheet shows Php30,000 in accounts receivable,
Php100,000 of annual sales. The 2015 year-end balance sheet showed Php10,000 of accounts
receivable. This amount became the beginning inventory for the year 2016. What is the
receivables turnover ratio?
Select one:
a. 0.66
b. 73.00
c. 5.00
d. 1.33
The correct answer is: 5.00
ABC Merchandise has inventories worth Php15,000, cash worth Php20,000, Prepaid expenses
worth Php5,000 and equipment worth Php10,000. She has a current liability of Php30,000. How
much is the quick ratio?
Select one:
a. 5.00
b. 1.33
c. 73.00
d. 0.66
The correct answer is: 0.66
At the end of 2016 ABC merchandise balance sheet shows Php30,000 in accounts receivable,
Php150,000 of annual sales. The 2015 year-end balance sheet showed Php10,000 of accounts
receivable. This amount became the beginning inventory for the year 2016. What is the average
collection period? (365 days in a year)
Select one:
a. 5.00
b. 1.33
c. 0.66
d. 73.00
The correct answer is: 73.00
A business has total assets worth Php400,000, total liabilities worth Php175,000. What is the
debt to total assets ratio?
Select one:
a. 0.73
b. 43.75
c. 73.00
d. 56.25
The correct answer is: 43.75
According to XYZ balance sheet, the accounts payable was Php50,000 and annual credit
purchases amounted to Php250,000. Average payment period?
Select one:
a. 0.49
b. 5.00
c. 73.00
d. 0.73
The correct answer is: 73.00
WXY Store paid Php200,000 on inventory bought for the year. The business was able to sell all
of the inventory for Php750,000. Business expenses were 30,000 and tax rate is 30%. What is
the gross profit margin?
Select one:
a. 5.00
b. 73.00
c. 0.73
d. 0.49
The correct answer is: 0.73
This includes budgets for direct material, direct labor and manufacturing overhead.
Select one:
a. Direct materials budget
b. Production budget
c. Selling and administrative expense budget
d. Sales budget
The correct answer is: Production budget
This is used to calculate the number of labor hours that will be needed to produce the units
itemized in the production budget.
Select one:
a. Sales budget
b. Production budget
c. Direct labor budget
d. Direct materials budget
The correct answer is: Direct labor budget
A statement of financial position and income statement stated in future date are examples of
________________.
Select one:
a. Projected financial statements
b. Budgeting
c. Financial planning
d. Cash budget
The correct answer is: Projected financial statements
This is an ongoing process to help you make sensible financial decisions aimed at generating
greater return on assets, growth in market share and solving foreseeable problems.
Select one:
a. Financial planning
b. Projected financial statements
c. Cash budget
d. Budgeting
The correct answer is: Financial planning
This budget calculates the materials that must be purchased, by time period, in order to fulfill the
requirements of the production budget.
Select one:
a. Production budget
b. Sales budget
c. Direct materials budget
d. Selling and administrative expense budget
The correct answer is: Direct materials budget
What type of budget must be made first?
Select one:
a. Sales budget
b. Selling and administrative expense budget
c. Production budget
d. Direct materials budget
The correct answer is: Sales budget
This budget is used to ascertain whether company operations and other activities will provide a
sufficient amount of cash to meet projected cash requirements.
Select one:
a. Financial planning
b. Cash budget
c. Budgeting
d. Projected financial statements
The correct answer is: Cash budget
This is the process of estimating the revenue and expenses over a specified future period of
time.
Select one:
a. Cash budget
b. Financial planning
c. Budgeting
d. Projected financial statements
The correct answer is: Budgeting
This budget contains all manufacturing costs other than the costs of direct materials and direct
labor.
Select one:
a. Manufacturing overhead budget
b. Direct materials budget
c. Sales budget
d. Production budget
The correct answer is: Manufacturing overhead budget
This type of budget usually includes expenses regarding advertising, insurance, rent, salaries,
and utilities.
Select one:
a. Direct materials budget
b. Production budget
c. Selling and administrative expense budget
d. Sales budget
The correct answer is: Selling and administrative expense budget

The economic order quantity involves determining the optimal order size for an inventory item
given its expected usage, carrying costs, and ordering costs.
Select one:
True
False
The correct answer is 'True'.
Receivable management considers things such as what to purchase, how to purchase, how
much to purchase, from where to purchase, where to store and when to use for production.
Select one:
True
False
The correct answer is 'False'.
Aging of receivables is a schedule of customer balances classified by the length of time they
have been unpaid.
Select one:
True
False
The correct answer is 'True'.
One of the motives of holding inventory is to meet payments arising in the ordinary course of
business.
Select one:
True
False
The correct answer is 'False'.
To compute net working capital, you must deduct the current assets to the current liabilities.
Select one:
True
False
The correct answer is 'False'.
WEEK 6 SHORT QUIZ 6
If a business entity has a larger current liabilities than current its assets, the entity has _______
working capital.
Select one:
a. Positive
b. Current liabilities
c. Inventory management
d. Negative
The correct answer is: Negative
This involves proper purchasing of raw material, handling, storing and recording.
Select one:
a. Negative
b. Current liabilities
c. Positive
d. Inventory management
The correct answer is: Inventory management
What must be deducted from the current assets in order to get the net working capital?
Select one:
a. Current liabilities
b. Negative
c. Positive
d. Inventory management
The correct answer is: Current liabilities
The _____ method of inventory control is a method which controls expensive inventory items
more closely than less expensive items.
Select one:
a. ABC
b. Accounts receivable
c. Working capital management
d. Cash management
The correct answer is: ABC
________ is needed in the proper cash controlling in purchase of raw materials or goods,
payment of salaries and wages, coping with daily expenses and providing credit obligations.
Select one:
a. Accounts receivable
b. Cash management
c. ABC
d. Working capital management
The correct answer is: Working capital management
This is the amount of money owed to a firm by customers who have bought goods or services
on credit.
Select one:
a. Accounts receivable
b. ABC
c. Cash management
d. Working capital management
The correct answer is: Accounts receivable
The ________ motive of holding cash is to meet payments arising in the ordinary course of
business.
Select one:
a. Accounts receivable
b. Receivable management
c. Working capital management
d. Transaction
The correct answer is: Transaction
If a business entity has a larger current assets than its current liabilities, the entity has _______
working capital.
Select one:
a. Negative
b. Positive
c. Current liabilities
d. Inventory management
The correct answer is: Positive
This is defined as the process of making decision resulting to the investment of funds in these
assets which will result in maximizing the overall return on the investment of the firm.
Select one:
a. Working capital management
b. Receivable management
c. Transaction
d. Accounts receivable
The correct answer is: Receivable management
This is the maintenance of appropriate level of cash to meet the firm's cash requirements and to
maximize income on idle funds.
Select one:
a. ABC
b. Accounts receivable
c. Working capital management
d. Cash management
The correct answer is: Cash management
Small and new firms are usually more dependent on trade credit, as they find it relatively difficult
to obtain funds from other sources.
Select one:
True
False
The correct answer is 'True'.
Working capital requirement are funds needed the day-to-day operations of the business.
Select one:
True
False
The correct answer is 'True'.
Fixed capital requirement includes resources for paying salaries and wages.
Select one:
True
False
The correct answer is 'False'.
Preference shares are unsecured promissory note issued by a firm to raise funds to meet short-
term debt obligations.
Select one:
True
False
The correct answer is 'False'.
Factoring is a financing method in which a business owner sells accounts receivable at a
discount to a third-party funding source to raise capital.
Select one:
True
False
The correct answer is 'True'.
This is financing method in which a business owner sells accounts receivable at a discount to a
third-party funding source to raise capital
Select one:
a. Public deposits
b. Factoring
c. Debentures
d. Lease financing
The correct answer is: Factoring
A company can raise funds by inviting the public to deposit their savings with their company.
Select one:
a. Public deposits
b. Factoring
c. Lease financing
d. Debentures
The correct answer is: Public deposits
The company has already achieved its net income. He then distributed 20% of it as dividends.
The amount remaining is being reserved by the company for its growth and development. This
is called as ___________.
Select one:
a. Equity shares
b. Trade credit
c. Retained earnings
d. Loan from banks and financing institutions
The correct answer is: Retained earnings
This is the credit extended by one trader to another for purchasing goods or services
Select one:
a. Loan from banks and financing institutions
b. Equity shares
c. Trade credit
d. Retained earnings
The correct answer is: Trade credit
Mr. A borrowed funds from ABC Bank and HIJ Financing company. His sources of finance is
termed as
Select one:
a. Retained earnings
b. Loan from banks and financing institutions
c. Equity shares
d. Trade credit
The correct answer is: Loan from banks and financing institutions
These are a debt instruments which are backed only by the general creditworthiness and
reputation of the issuer.
Select one:
a. Lease financing
b. Factoring
c. Debentures
d. Public deposits
The correct answer is: Debentures
This may be defined as a contractual arrangement in which a party owning an asset provides
the asset for use to another, the right to use the assets to the user over a certain period of time,
for consideration in form of periodic payment, with or without a further payment.
Select one:
a. Debentures
b. Factoring
c. Lease financing
d. Public deposits
The correct answer is: Lease financing
Companies offer these shares initially at the stok exhange. This specific type of shares has
unstable earnings.
Select one:
a. Commercial paper
b. Public deposits
c. Equity shares
d. Factoring
The correct answer is: Equity shares
This is also termed as common shares
Select one:
a. Loan from banks and financing institutions
b. Retained earnings
c. Equity shares
d. Trade credit
The correct answer is: Equity shares
It is an unsecured promissory note issued by a firm to raise funds to meet short-term debt
obligations
Select one:
a. Factoring
b. Equity shares
c. Commercial paper
d. Public deposits
The correct answer is: Commercial paper

External sources of funds include those sources that lie within an organization.
Select one:
True
False
The correct answer is 'False'.
Short term source of finances are those which are required for a period not exceeding one year.
Select one:
True
False
The correct answer is 'True'.
Owner's funds are those that are provided by the proprietors, partners or shareholders of an
entity.
Select one:
True
False
The correct answer is 'True'.
Long-term source of finances are those which are required for a period of more than one year.
Select one:
True
False
The correct answer is 'False'.
Borrowed funds are also called as debt financing.
Select one:
True
False
The correct answer is 'True'.

When classified on the basis of period, which does not belong to the group?
Select one:
a. Debentures
b. Equity shares
c. Preference shares
d. Lease financing
The correct answer is: Lease financing
When classified on the basis of source of generation, which does not belong to the group?
Select one:
a. Preference shares
b. Retained earnings
c. Debentures
d. Loan from banks
The correct answer is: Retained earnings
Which is a short term source of financing?
Select one:
a. The amount of net earnings not paid out as dividends.
b. A debt instrument used by large companies to borrow money, at a fixed rate of interest.
c. Selling of accounts receivable.
d. Loan from a bank
The correct answer is: Selling of accounts receivable.
When classified on the basis of period, which does not belong to the group?
Select one:
a. Trade credit
b. Common shares
c. Commercial papers
d. Factoring
The correct answer is: Common shares
When classified on the basis of period, which does not belong to the group?
Select one:
a. Funding obtained from a commercial bank loan
b. Funding obtained from common stocks being offered to the general public
c. Funding obtained from a financing company loan
d. An asset financing where there is a contractual arrangement to use an equipment over a
certain period of time, for consideration in form of monthly payments.
The correct answer is: Funding obtained from common stocks being offered to the general
public
When classified on the basis of period, which does not belong to the group?
Select one:
a. Public deposits
b. Loan from banks
c. Lease financing
d. Factoring
The correct answer is: Factoring
When classified on the basis of source of generation, which does not belong to the group?
Select one:
a. Trade credit
b. Commercial papers
c. Factoring
d. Common shares
The correct answer is: Common shares
When classified on the basis of ownership, which does not belong to the group?
Select one:
a. Loan from banks
b. Commercial papers
c. Debentures
d. Equity shares
The correct answer is: Equity shares
Which is a internal source of finance?
Select one:
a. Accounts payable to a supplier of goods.
b. A debt instrument used by large companies to borrow money, at a fixed rate of interest.
c. Selling of accounts receivable.
d. The amount of net earnings not paid out as dividends.
The correct answer is: The amount of net earnings not paid out as dividends.
When classified on the basis of ownership, which does not belong to the group?
Select one:
a. Retained earnings
b. Preference shares
c. Common shares
d. Equity shares
The correct answer is: Preference shares

In FPL's Balance sheet, Cash is Php5,000,000, Total Current Assets is worth Php 40,000,000
and Total Liabilities is 40,000,000 and Total Equity is Php100,000,000. If you will make a
common size balance sheet, what is the percentage of Total non-current Assets?

Ans. 71.43%

This is an approach to inventory management and control in which inventories are acquired and
inserted in production at the exact times they are needed.

Ans. Just-in-time inventory management

This part requires choosing ways to achieve your goals. As you achieve your immediate or
short-term goals, the goals next in priority will come into focus.

Ans. Creation and implementation of financial action plan

He is responsible for the safekeeping of cash

Ans. Treasurer

"Statement I. Financial statements are records that outline the financial activities of a business,
an individual or any other entity. These are meant to present the economic information of the
entity in question as clearly and concisely as possible for both the entity and for readers.

Statement II. The elements of financial statement include the financial position and financial
performance. Financial performance is the status of the assets, liabilities, and owners' equity
while the financial position is a subjective measure of how well a firm can use assets from its
primary mode of business and generate revenues."

Ans. Both Statements are False

A finance professional is using a percent change analysis of financial statements. He used the
formula (Most recent value - Base period value)/Base period value. He is using a _________
type of analysis.

Ans. Horizontal

"In this part, the financial manager may continue the same course of action, expand the current
situation, change the current situation or take a new course of action."

Ans. Identification of Alternative Courses of Action

It is the true value or net worth of business

Ans. Wealth

This is a liquidity ratio that measures a firm's ability to pay off its short-term liabilities with its
current assets

Ans. Current ratio

This step in financial planning involves the assessment of risks.

Ans. Evaluation of Alternatives

In conducting a vertical analysis, which of the following accounts are not used as a base?

Ans. Net Income

In this step in financial planning, one should periodically analyze your financial values and
goals.

Ans. Development of financial goals

In FPL's Income statement, Total sales is Php32,000,000 Cost of sales is Php20,000,000 and
Operating expenses is Php5,000,000. If you will be making a vertical analysis what is the
percentage of net income?
Ans. 22%

These are records that outline the financial activities of a business, an individual or any other
entity

Ans. Financial statements

When classified on the basis of ownership, which does not belong to the group?

Ans. Equity shares

He is responsible for the accounting operations of the company.

Ans. Controller

He is in charge of all the organization's finance and accounting functions and typically reports to
the chief executive officer.

Ans. Chief Financial Officer

Which is not a classification of funds based on the period

Ans. Continuous term

In 2014 and 2015, FPL Company's total sales was Php10,000,000 and Php15,000,000
respectively. What is the percent change in Sales?

Ans. 50%

When classified on the basis of period, which does not belong to the group?

Ans. Common shares

This is the inventory stock held in reserve as a cushion against uncertain demand (or usage)
and replenishment lead time.

Ans. Safety stock

An index analysis is an analysis of percentage financial statements where all balance sheet or
income statement figures for a base year equal to 100 percent and subsequent financial
statement items are expressed as percentages of their values in the base year. This is a type of

Ans. Horizontal Analysis

"Statement I. Financial Analysis is the selection, evaluation and interpretation of financial data
along with other pertinent information to assist in investment and financial decision-making.

Statement II. Financial Analysis may be used externally to evaluate issues such as employee
performance, efficiency of operations and credit policies."
Ans. Statement I is true; Statement II is false

If Debt to Equity ratio is 1:2 or 0.50 and Total Equity is Php500,000, what is the amount of Total
Debt?

Ans, Php 250,000

These are ratios that relate profits to sales and investment.

Ans. Profitability Ratios

Which of the following statements is correct

Ans. The controller is the one responsible for the management of financial transaction recording
and not on the investment decision of the company.

It is the difference between income and expenses

Ans. Profit

Which of the following measures the firm's ability to pay its short-term debts from its most liquid
assets without having to rely on inventories

Ans. Quick Ratio

If current assets is Php100,000 and current liabilities is Php50,000. What is the Net working
capital?

Ans. Php 50,000

Which of the following statements is wrong?

Ans. In forecasting financial requirements, the controller is the one who should estimate how
much resources are required to acquire fixed assets and forecast the amount needed to meet
the working capital requirements in future.