The Advanced Numeracy Test Workbook - Mike Bryon [33]
Q9. Answer A.
Q10. Answer C.
Explanation An operating profit or loss is the gross margin and includes the cost of normal business overheads only.
Q11. Answer C.
Explanation Be confident about the difference between net and gross. The value of someone’s assets would have to be the gross worth where any liabilities have to be deducted to establish the net value. A person’s salary after tax and other deductions is the person’s net income.
Q12. Answer C.
Q13. Answer B.
Q14. Answer A.
Q15. Answer D.
Explanation Force majeure is something that causes an unavoidable delay.
Q16. Answer B.
Explanation Disbursements service debts while distributions share profits or earnings. A debt is only discharged when it is fully paid.
Q17. Answer A.
Q18. Answer C.
Explanation Suggested answer B would involve writing the balance off.
Q19. Answer D.
Q20. Answer D.
Q21. Answer D.
Q22. Answer C.
Q23. Answer B.
Q24. Answer C.
Q25. Answer C.
Explanation A fixed cost does not change with the level of production.
Q26. Answer C.
Explanation Equity is assets minus liabilities so it is also net worth.
Q27. Answer D.
Explanation Earned income is from services provided by the person.
Q28. Answer B.
Q29. Answer A.
Explanation A debit is a debt that occurs on the left-hand side of the account.
Q30. Answer B.
Explanation A credit is on the right-hand side of the account.
Q31. Answer D.
Explanation After direct cost of sales, all other costs are deducted to produce net profit or profit before tax.
Q32. Answer A.
Explanation A cost in this sense is an asset because the item acquired retains a value.
Q33. Answer D.
Test 3: Business comprehension
Q1. Answer D.
Explanation A liability without limit or fault could result with or without negligence or an intentional act. It may be shared or fall solely to one person, so D is correct.
Q2. Answer A.
Explanation These are increases in costs that do not lead to an increase in the charge of a service or product, so they are absorbed by the business.
Q3. Answer C.
Explanation In accounting terms the actual cost is the amount paid irrespective of costs incurred in the purchase or its subsequent value.
Q4. Answer D.
Q5. Answer D.
Explanation A conglomerate is the product of agglomeration, the bringing together of diverse commercial entities into a single organization. Suggested answer C sometimes results if the holding company’s management are not familiar with all the group’s areas of business.
Q6. Answer A.
Explanation Total output is a key concept in macroeconomics, which is concerned with whole economies. Suggested answer D is the corresponding concept, total demand.
Q7. Answer B.
Explanation To amortize a loan is to pay it off, at least in part, by a series of payments.
Q8. Answer D.
Explanation These products are normally purchased by people on their retirement with the funds from their pension fund.
Q9. Answer A.
Explanation Suggested answer C could be an example of appropriated expenditure, but its definition is a sum set aside for a particular expenditure or purpose.
Q10. Answer C.
Explanation An asset may bring a return or be used to secure a loan but it is simply something owned with a value.
Q11. Answer A.
Q12. Answer D.
Explanation A bond may or may not pay interest and some may provide tax-free income but they imply an obligation to pay.
Q13. Answer A.
Explanation A yield can be produced by an investment other than one that is a business deal, for example the yield to government from a new tax. A yield can be expressed as a rate or a percentage, but neither mean yield.
Q14. Answer B.
Q15. Answer A.
Explanation A hierarchically structured organization may be bureaucratic but it is not always the case.
Q16. Answer C.
Q17. Answer D.
Q18. Answer D.
Q19. Answer A.
Explanation The system is widely used in