Q1. In arriving at a markup on merchandise for sale, most __________ use the selling price
as the base because the keep their records in terms of selling price.
a. retailers
b. wholesalers
c. consumers
d. manufacturers
e. all of the above
Q2. The Tough ‘n Tender Beef Restaurant marks up all dinners 32% on selling price. If the
markup on barbecue ribs is $3.48, how much is the menu price?
a. $10.88
b. $9.88
c. $20.42
d. $3.20
e. none of the above
Q3. Markup is:
a. the selling price times (1 plus the cost)
b. the selling price minus the cost
c. the selling price divided by the cost
d. the selling price plus the cost
Q4. The costs associated with running a business are called:
a. operating expenses
b. gross margin
c. net loss
d. net costs
Q5. In arriving at a markup on merchandise for sale, most __________ use the selling price
as the base because the keep their records in terms of selling price.
a. retailers
b. wholesalers
c. consumers
d. manufacturers
Q6. Brian sells a power saw for $184.95 that cost him $98.65. Brian’s percent of markup,
based on the selling price, is:
a. 46.66%
b. 38.44%
c. 56.66%
d. 65.0%
Q7. The Tough and Tender Beef Restaurant marks up all dinners 32% on selling price. If the
markup on barbecue ribs is $3.48, how much is the menu price?
a. $10.88
b. $9.88
c. $20.42
d. $3.20
Q8. Janice sells silk flower arrangements for $69.50 that cost her $40.00. Janice’s percent
of markup, based on the selling price, is:
a. 57.6%
b. 49%
c. 42.45%
d. 45%
Q9. A bottle of vitamins cost $2.25 and is marked up 90% of the selling price. What is the
selling price?
a. $22.50
b. $18.60
c. $20.25
d. $25.00
e. none of the above
Q10. When calculating a markup on cost, __________ is always equal to 100%.
a. selling price
b. margin
c. markup
d. cost
e. none of the above
Q11. If employees are paid weekly, they will receive:
a. 12 paychecks a year
b. the number of paychecks vary each year
c. 26 paychecks a year
d. 52 paychecks a year
Q12. FUTA tax must be deposited____, if the amount exceeds $100:
a. at least once a year
b. six times per year
c. semiannually
d. quarterly
e. none of the above
Q13. The Federal Insurance Contribution Act resulted in what tax?
a. withholding
b. SUTA
c. FUTA
d. social security
e. none of the above
Q14. Greg earns $850.00 per week plus 4% of net sales over $15,000.00. Greg’s sales were
$19,950.00 and his returns were $875.00. How much did Greg earn?
a. $1,518.33
b. $1,048.00
c. $850.00
d. $1,013.00
e. none of the above
Q15. A stated amount of money paid each year to an employee for services performed is
called a:
a. wage
b. commission
c. piecework
d. salary
Q16. Jennifer receives a commission of 9% of sales. If her gross pay this month was
$6,714.00 her sales were:
a. $67,140.00
b. $47,600.00
c. $76,400.00
d. $74,600.00
Q17. A withholding allowance is also known as a(n):
a. exemption
b. withholding tax
c. FUTA tax
d. deduction
Q18. The amount earned before deductions is called:
a. withholdings
b. take-home pay
c. net earnings
d. gross earnings
Q19. People whose entire salary is based on a percent of sales are said to be working on:
a. differential scale
b. piecework
c. straight commission
d. salary plus commission
Q20. If you receive paychecks 12 times a year at fixed intervals, you are probably being
paid:
a. biweekly
b. weekly
c. bimonthly
d. monthly
Q21. The amount of money borrowed is called:
a. principal
b. proceeds
c. discount amount
d. maturity value
Q22. __________ __________ is used when a loan is repaid in a lump sum.
a. Simple discount
b. Maturity discount
c. Compound interest
d. Simple interest
Q23. __________ is the percent of interest charged on a loan.
a. Ordinary
b. Time
c. Rate
d. Principal
Q24. The price paid for using money is called:
a. interest
b. maturity value
c. proceeds
d. discount
Q25. Exact interest using exact time requires the following formula:
a. interest rate per year divided by 365
b. 30 divided by 360
c. 30 divided by 365
d. exact days divided by 360
e. exact amount divided by exact days
Q26. In a leap year, February has __________ days.
a. 30
b. 29
c. 28
d. 31
Q27. Douglas Industries purchases supplies costing $3,500.00 with credit terms of 2/10,
N/45. Douglas does not have the funds to pay within 10 days and explores the possibility of
borrowing the necessary amount to take advantage of the discount. The local bank is
willing to lend Douglas the money at 9% for 45 days at ordinary interest. The savings or
loss if Douglas borrows the money to take advantage of the discount is:
a. $31.16 loss
b. $18.22 savings
c. $18.22 loss
d. $31.16 savings
Q28. The formula for ordinary interest using exact time is:
a. exact days divided by 365
b. 30 divided by 365
c. interest rate per year divided by 360
d. 30 divided by 360
e. interest amount divided by 12
Q29. Douglas Industries purchases supplies costing $3,500.00 with credit terms of 2/10,
N/45. Douglas does not have the funds to pay within 10 days and explores the possibility of
borrowing the necessary amount to take advantage of the discount. The local bank is
willing to lend Douglas the money at 9% for 45 days at ordinary interest. The savings or
loss if Douglas borrows the money to take advantage of the discount is:
a. $31.16 loss
b. $18.22 savings
c. $18.22 loss
d. $31.16 savings
e. none of the above
Q30. The simple interest rate on a 90-day, 8% loan can be restated as __________.
a. 0.02
b. 0.002
c. 0.2
d. 2.0
Q31. The installment price minus the down payment equals the:
a. carrying charge
b. total of installment payments
c. cash price
d. net price
e. none of the above
Q32. An 18 month loan with an interest charge of $782.00 is paid off with 5 months
remaining. The finance charge refund is:
a. $68.60
b. $182.00
c. $81.27
d. $72.40
Q33. John purchased a new boat for $24,600.00. He put a $5,400.00 down payment on it.
The bank’s loan was for 60 months. Finance charges totaled $6,400.00. His monthly
payment was:
a. $250.00
b. $410.00
c. $106.67
d. $426.67
Q34. The total amount that must be paid when the purchase is paid for over a given period
of time is the:
a. cash price
b. installment price
c. financed price
d. amount financed
Q35. Which of the following statements is not correct?
a. There is more than one formula to approximate a loan’s APR.
b. APR is the true effective annual interest rate charged by lenders.
c. The Truth in Lending Act regulates interest rates.
d. The Truth in Lending Act was passed in 1969.
e. None of the above
Q36. The finance charge on a loan is equal to the total of the monthly payments:
a. plus the amount financed
b. multiplied by the amount financed
c. divided by the amount financed
d. less the amount financed
Q37. The cost of an item if the full amount had been paid at the time of sale is called the:
a. total price
b. installment price
c. down payment price
d. cash price
Q38. The __________ __________ is the sum of the number of months remaining on a loan
divided by the sum of the total number of months of the loan.
a. refund fraction
b. Rule of 78
c. constant ratio
d. finance charge
Q39. The installment price minus the down payment equals the:
a. carrying charge
b. total of installment payments
c. cash price
d. net price
Q40. The true rate of interest that you pay on a loan is called the:
a. Rule of 78
b. APR
c. constant ratio
d. refund fraction
