ICET Business and Commerce Fundamentals 3

Question 1

Which market structure is characterized by a few large firms that dominate an industry?

Accepted Answer

Oligopoly

Answer

An oligopoly is characterized by a small number of large firms that have significant market power.

Question 2

What is the fundamental accounting equation?

Accepted Answer

Assets = Liabilities + Equity

Answer

The fundamental accounting equation is Assets = Liabilities + Equity, forming the basis of double-entry bookkeeping.

Question 3

What does 'price elasticity of demand' measure?

Accepted Answer

The responsiveness of quantity demanded to a change in price

Answer

Price elasticity of demand measures how responsive the quantity demanded is to a change in price.

Question 4

Which of the following is NOT a current asset?

Accepted Answer

Machinery

Answer

Machinery is a fixed (non-current) asset, while cash, receivables, and inventory are all current assets.

Question 5

What is the primary purpose of a cash flow statement?

Accepted Answer

Track inflows and outflows of cash

Answer

The cash flow statement tracks cash inflows and outflows from operating, investing, and financing activities.

ICET - Integrated Common Entrance Test Practice Test