ICET Business and Commerce Fundamentals 2

Question 1

Which inventory costing method assumes the oldest inventory items are sold first?

Accepted Answer

FIFO

Answer

FIFO (First In, First Out) assumes the oldest inventory items are used or sold first.

Question 2

What is the primary goal of financial management in a business?

Accepted Answer

Maximizing shareholder wealth

Answer

The primary goal of financial management is to maximize shareholder wealth through sound financial decisions.

Question 3

Which of the following is a direct tax?

Accepted Answer

Income tax

Answer

Income tax is a direct tax levied directly on individuals or organizations based on their earnings.

Question 4

What does 'depreciation' mean in accounting?

Accepted Answer

Systematic allocation of asset cost over its useful life

Answer

Depreciation is the systematic allocation of a fixed asset's cost over its useful life.

Question 5

A company's current ratio is 2.5:1. What does this indicate?

Accepted Answer

$2.50 in current assets for every $1 of current liabilities

Answer

A current ratio of 2.5:1 means the company has $2.50 in current assets per $1 of current liabilities, indicating strong short-term liquidity.

ICET - Integrated Common Entrance Test Practice Test