Engineering Economics

1. ENGINEERING
ECONOMICS
Sample Elements
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2.  1. It is a sharp sudden increase in
money or credit or both without
corresponding increase in business
transactions. (ME Board October
2000).
 a. Deflation
 b. Subrogation
 c. Inflation
 d. Resultant
2

3.  2. Each period, two type of financial
statements are typically generated.
These are: (ME Board October 2000).
 a. Common size financial statement
 b. Cost of sales statements
 c. Statement of changes in financial
position
 d. Balance sheet and the profit and
loss statements
3

4.  3. The length of time, usually in years,
for the cumulative net annual profit to
equal the initial investment. (ME Board
October 2000). (ME Board 2000).
 a. Pay-back period
 b. Break-even point
 c. Return on investment
 d. Receivable turn-over
4

5.  4. The decrease in value of a certain
property due to the gradual extraction
of the contents: (ME Board October
2001).
 a. Depreciation
 b. Diminishing returns
 c. Depletion
 d. Depression
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6.  5. Which of the following is not
considered? (ME Board October
2001).
 a. Manufacturing cost
 b. Profit and loss statement
 c. Schedule expenses
 d. Balance sheet

6

7.  6. _____ is simply a measure of how
much a product costs to make. (ME
Board October 2001).
 a. Net expense
 b. Sales
 c. Gross margin
 d. Gross sales
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8.  7. Type of organization where the
assistant of the executive are
appointed to attend to function as a
staff. (ME October 2002).
 a. Corporation
 b. Cartel
 c. Line organization
 d. Line and staff
8

9.  8. The decrease in the value of a
property due to the gradual extraction
of its contents. (ECE Board November
2001).
 a. Diminishing return
 b. Depletion
 c. Depreciation
 d. Depression
9

10.  9. Reduction in the level of national
income and output usually
accompanied by a fall in the general
price level. (ECE Board November
2001).
 a. Deflation
 b. Inflation
 c. Devaluation
 d. Depreciation
10

11.  10. A formal organization of
producers within an industry forming a
perfect collusion purposely formed to
increase profit and block new comers
from the industry. (ECE Board April
2001).
 a. Cartel
 b. Monopoly
 c. Corporation
 d. Competitors
11

12.  11. The paper currency issued by
the Central Bank which forms part of
the country’s money supply. (ECE
Board April 2001).
 a. T-bills
 b. Bank note
 c. Check
 d. Coupon
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13.  12. Worth of property as shown
on the accounting records of an
enterprise:
 a. Use value
 b. Fair value
 c. Market value
 d. Book value
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14.  13. A series of equal payments
occurring at equal periods of time:
 a. Installments
 b. Perpetuity
 c. Amortization
 d. Annuity
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15.  14. Decrease in value of a
physical with passage of time:
 a. Valuation
 b. Depreciation
 c. Depletion
 d. Interest
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16.  15. Association of two or more
individuals for the purpose of
operating a business as co-owners of
a profit:
 a. Organization
 b. Company
 c. Partnership
 d. Corporation
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17.  16. The balance sheet is a
statement showing the financial status
of the company at any given time.
Which of the statements is not a part
of the balance sheet?
 a. Liabilities
 b. Cost of goods sold
 c. Asset
 d. Net worth
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18.  17. Cash money credit necessary
to establish and operate an enterprise:
 a. Funds
 b. Assets
 c. Capital
 d. Liabilities
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19.  18. This form of business
ownership is a legal entity possessing
many of the legal powers of
individuals. It can hold titie to property,
sue and be used in its own name. It is
called:
 a. Corporation
 b. General partnership
 c. Company
 d. Individual proprietorship
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20.  19. Refers to cost of merchandise
which excludes freight and insurance
costs:
 a. Freight-on-board
 b. Debentures
 c. Sunk cost
 d. Book value
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21.  20. What is the acid test ratio?
 a. The ratio of owner’s equity to total
current liabilities
 b. The ratio of all assets to total
liabilities
 c. The ratio of gross margin to
operating sales and administrative
expenses
 d. The ratio of current assets
(exclusive of inventory) to total current
liabilities 21

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