MCQ in Engineering Economics Part 4 | ECE Board Exam

(Last Updated On: March 28, 2021)

MCQ in Engineering Economics Part 4 | ECE Board Exam

This is the Multiples Choice Questions Part 4 of the Series in Engineering Economics as one of the General Engineering and Applied Sciences (GEAS) topic. In Preparation for the ECE Board Exam make sure to expose yourself and familiarize in each and every questions compiled here taken from various sources including past Board Questions in General Engineering and Applied Sciences (GEAS), Engineering Economy Books, Journals and other Engineering Economy References.

Continue Practice Exam Test Questions Part 4 of the Series

MCQ in Engineering Economics Part 3 | ECE Board Exam

Choose the letter of the best answer in each questions.

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.

View Answer:

Answer: Option D

Explanation:

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

View Answer:

Answer: Option C

Explanation:

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

View Answer:

Answer: Option B

Explanation:

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

View Answer:

Answer: Option D

Explanation:

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

View Answer:

Answer: Option B

Explanation:

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

View Answer:

Answer: Option A

Explanation:

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

View Answer:

Answer: Option B

Explanation:

158. What refers to the claim of anyone to ownership?

A. Proprietorship

B. Assets

C. Equity

D. Liability

View Answer:

Answer: Option C

Explanation:

159. Cash money and credit necessary to establish and operate an enterprise are generally called ______.

A. Capital

B. Funds

C. Assets

D. Liabilities

View Answer:

Answer: Option A

Explanation:

160. What represents the share of participation in business organizations?

A. Franchise

B. Partnership

C. Stock

D. Corporation

View Answer:

Answer: Option C

Explanation:

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

View Answer:

Answer: Option B

Explanation:

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

View Answer:

Answer: Option D

Explanation:

163. Which of the following is an example of intangible asset?

A. Cash

B. Investment in subsidiary companies

C. Furniture

D. Patents

View Answer:

Answer: Option D

Explanation:

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

View Answer:

Answer: Option C

Explanation:

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

View Answer:

Answer: Option C

Explanation:

166. What is another term for “current assets”?

A. Fixed assets

B. Non-liquid assets

C. Liquid assets

D. Ccash

View Answer:

Answer: Option C

Explanation:

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

View Answer:

Answer: Option A

Explanation:

168. What is the change in cost per unit variable change called?

A. Variable cost

B. Incremental cost

C. Fixed cost

D. Supplemental cost

View Answer:

Answer: Option B

Explanation:

169. What is used to record historical financial transactions?

A. Bookkeeping system

B. Ledger system

C. Balance check

D. General journal system

View Answer:

Answer: Option A

Explanation:

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

View Answer:

Answer: Option B

Explanation:

171. The original record of a business transaction is recorded in this book.

A. Work book

B. Journal

C. Ledger

D. Account book

View Answer:

Answer: Option B

Explanation:

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

View Answer:

Answer: Option B

Explanation:

173. All are classified under direct labor expenses EXCEPT one. Which one?

A. Inspection cost

B. Testing cost

C. Assembly cost

D. Supervision cost

View Answer:

Answer: Option D

Explanation:

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

View Answer:

Answer: Option D

Explanation:

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

View Answer:

Answer: Option C

Explanation:

176. What do you call a one-time credit against taxes?

A. Due credit

B. Tax credit

C. Credible credit

D. Revenue credit

View Answer:

Answer: Option B

Explanation:

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

View Answer:

Answer: Option D

Explanation:

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

View Answer:

Answer: Option B

Explanation:

179. What is the reduction in the money value of capital asset is called?

A. Capital expenditure

B. Capital loss

C. Loss

D. Deficit

View Answer:

Answer: Option B

Explanation:

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

View Answer:

Answer: Option D

Explanation:

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

View Answer:

Answer: Option B

Explanation:

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

View Answer:

Answer: Option C

Explanation:

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 these

View Answer:

Answer: Option C

Explanation:

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

View Answer:

Answer: Option B

Explanation:

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

View Answer:

Answer: Option B

Explanation:

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

View Answer:

Answer: Option C

Explanation:

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

View Answer:

Answer: Option C

Explanation:

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

View Answer:

Answer: Option A

Explanation:

189. Gross margin is the ratio of the gross profit to ______.

A. Net sale

B. Owner’s equity

C. Inventory turnover

D. Quick assets

View Answer:

Answer: Option A

Explanation:

190. What is another term for “acid-test ratio”?

A. Current ratio

B. Quick ratio

C. Profit margin ratio

D. Price-earnings ratio

View Answer:

Answer: Option B

Explanation:

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

View Answer:

Answer: Option D

Explanation:

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

View Answer:

Answer: Option A

Explanation:

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

View Answer:

Answer: Option C

Explanation:

194. The ability to meet debts as they become due is known as ______.

A. Solvency

B. Leverage

C. Insolvency

D. Liquidity

View Answer:

Answer: Option A

Explanation:

195. The ability to convert assets to cash quickly is known as ______.

A. Solvency

B. Liquidity

C. Leverage

D. Insolvency

View Answer:

Answer: Option B

Explanation:

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

View Answer:

Answer: Option A

Explanation:

197. The financial health of the company is measured in terms of:

A. Liquidity

B. Solvency

C. Relative risk

D. All of these

View Answer:

Answer: Option D

Explanation:

198. What is an index of short-term paying ability?

A. Price-earnings ratio

B. Current ratio

C. Profit margin ratio

D. Gross margin

View Answer:

Answer: Option B

Explanation:

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

View Answer:

Answer: Option B

Explanation:

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

View Answer:

Answer: Option D

Explanation:

Online Questions and Answers in Engineering Economics Series

Following is the list of practice exam test questions in this brand new series:

Engineering Economics MCQs
PART 1: MCQ from Number 1 – 50                        Answer key: PART 1
PART 2: MCQ from Number 51 – 100                   Answer key: PART 2
PART 3: MCQ from Number 101 – 150                 Answer key: PART 3
PART 4: MCQ from Number 151 – 200                 Answer key: PART 4
PART 5: MCQ from Number 201 – 250                 Answer key: PART 5
PART 6: MCQ from Number 251 – 300                 Answer key: PART 6
PART 7: MCQ from Number 301 – 350                 Answer key: PART 7
PART 8: MCQ from Number 351 – 400                 Answer key: PART 8
PART 9: MCQ from Number 401 – 450                 Answer key: PART 9
PART 10: MCQ from Number 451 – 500                 Answer key: PART 10/a>

Complete List of MCQs in General Engineering and Applied Sciences per topic

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