Accounting Exam

$63.00

Description

Plase see my attach ment below.

Reviews

There are no reviews yet.

Be the first to review “Accounting Exam”

Your email address will not be published. Required fields are marked *

Accounting exam

$32.00

Description

Page 1

Question
1. 1.(TCOs A
and B) Fiduciary funds are to use which of the following measurement and
basis of accounting?


Economic resource measurement
focus and accrual basis of accounting.

Current financial resources
measurement focus and accrual basis of accounting.

Economic resources measurement
focus and modified accrual basis of accounting.

None of the above, the fiduciary
funds have no revenues.

Question
2. 2.(TCOs A
and B) Governmental fund statements are prepared using which of the
following?


Economic resources measurement
focus and modified accrual basis of accounting.

Economic resources measurement
focus and accrual basis of accounting.

Current financial resources
measurement focus and modified accrual basis of accounting.

Current financial resources
measurement focus and accrual basis of accounting.

. 3.
(TCOs A and B) Proprietary
funds use which of the following measurement focus and basis of
accounting?


Economic resources measurement
focus and modified accrual basis of accounting.

Current financial resources
measurement focus and modified accrual basis of accounting.

Economic resources measurement
focus and accrual basis of accounting.

Current financial resources
measurement focus and accrual basis of accounting.

4.
(TCOs B and C) Which of the
following items would notbe considered a nonexchange transaction
for a state government?
(Points : 5)


Property taxes

Sales of lottery tickets

Income taxes

Fines and forfeits

5.
(TCOs B and C) Which of the
following is a true statement regarding modified accrual accounting? (Points : 5)


Expenditures for claims and
judgments, compensated absences, and special termination benefits should be
ecognized whether or not the liabilities are to be paid with available
funds.

Expenditures for services used
by the General Fund departments should be recognized when those services
are received, regardless of whether or not funds are available for payment.

Both of the above statements are
true.

Neither of the above statements
are true.

6.(TCOs B and C)) Capital assets that are used by an
enterprise fund should be accounted for in the following fund? (Points : 5)


Enterprise fund but no
depreciation on the capital assets should be recorded.

Enterprise fund and depreciation
on the capital assets should be recorded.

Business-type activities journal
but no depreciation on the capital assets should be recorded.

Governmental activities journal
and depreciation on the capital assets should be recorded.

7.
(TCO E) When a government
acquires general fixed assets under a capital lease agreement, how should
the asset be recorded in the government-wide financial statements? (Points : 5)


As an expense when payments are
made.

At the inception of the lease
agreement at the lesser of the present value of the minimum lease payments
of the fair market value of the property.

As an expenditure when payments
are made.

None of the above

. 8.
(TCO E) Which of the following
projects would usually be accounted for in a capital projects fund? (Points : 5)


(A) Payment of interest on bonds
that are issued to finance the construction of a new city hall.

(B) The construction of a
parking garage that is operated as an enterprise fund.

(C) The construction of a fire
station addition.

Both A and B would be accounted
for in a capital projects fund.

9.
(TCO E) Which of the following
statements is a true statement regarding the reporting of debt service
funds? (Points : 5)


Debt service funds are reported
in a separate column in the governmental fund financial statements.

Debt service funds are reported
in the other governmental funds column in the governmental fund financial
statements.

Debt service funds are reported
in a separate column in the government-wide financial statements.

Debt service funds are reported
in the governmental activities column in the government-wide financial
statements.

. 10.
(TCO D) Under GASB Statement
No. 33, when would a special revenue fund be considered to have satisfied
the eligibility requirement of a reimbursement type federal grant? (Points : 5)


Only as the work is completed
for a project.

When the work has started for
the project.

Only after the work is
completely finished for the project.

When a plan for the use of the
funds has been developed and approved by the appropriate personnel.

1.(TCO E)You are in a staff meeting with the city
controller and one of your colleagues was quoted as follows: “Capital
projects funds are established by a government to account for all plant or
equipment acquired by construction.” Do you agree with this statement? Why or
why not? (Points : 30)

2.(TCOs A and B) Under the following circumstances should a
governmental entity use a Special Revenue Fund? A Capital Projects Fund? A
Debt Service Fund? (Points
: 30)

. 3.(TCO D) The City of Melvin
received a gift of $2,500,000 from a local resident on April 1, 2012 and
signed an agreement that the funds would be invested on a permanent basis and
the income would be used to purchase books for the city library. The
following transactions took place during the fiscal year ended Dec 31, 2012.
a. The gift was recorded on the books on April 1.
b. On April 1, 2012, the PRZ Co. bonds were purchased in the amount of
$2,500,000, at par. The bonds carry an annual interest rate of 5 percent,
payable semiannually on October 1 and April
1.

c. On October 1, the semiannual interest was received.
d. From October 1 through December 1, payments were made totaling $35,000 to
purchase books for the city library.
e. On December 31, an accrual was made for interest.
f. After a review of the bond market on December 31, 2012, the bonds had a
market value of $2,511,000, exclusive of accrued interest.
g. The books were closed on December 31.

Required
a. Record the transactions on the books for Library Book Permanent Fund.
b. Prepare a Statement of Revenues, Expenditures, and Changes in Fund Balance
for the Library Book Permanent Fund for the year ended December 31,
2012.
c. Prepare the Balance Sheet for the Library Book Permanent Fund for the year
ended December 31, 2012.
(Points : 40)

Reviews

There are no reviews yet.

Be the first to review “Accounting exam”

Your email address will not be published. Required fields are marked *

Accounting exam

$37.00

Description

Par value per share is the price at
which a share of stock is bought or sold.

True

False

Authorized stock is the total number of shares outstanding.

True

False

3 If a corporation is authorized to issue 1,000 shares of $50
common stock, it is said to have $50,000 of stock outstanding.

True

False

4 A corporation can issue two kinds of stock – common and
preferred.

True

False

5 Retained earnings generally consist of a company’s
cumulative net income less any net losses and dividends declared since its
inception.

True

False

6 Changes in accounting estimates are accounted for in
current and future periods.

True

False

7 Earnings per share is the amount of income earned per
share of a company’s outstanding (weighted-average) common stock.

True

False

8 The price-earnings ratio reveals information about the
stock market’s expectations for a company’s future growth in earnings.

True

False

9A liability for dividends exists:

When
cumulative preferred stock is sold.

On the date of declaration.

On the date
of record.

On the date
of payment.

For
dividends in arrears on cumulative preferred stock.

10 A stock dividend:

Is not a
liability on the balance sheet.

Does not
reduce a corporation’s assets and stockholders’ equity.

Transfers a
portion of equity from retained earnings to contributed capital.

Does not
affect total equity, but does affect the components of equity.

All of the options are correct.

11 A stock dividend transfers:

Contributed
capital to retained earnings.

Retained earnings to contributed
capital.

Retained
earnings to assets.

Contributed
capital to assets.

Assets to
contributed capital.

12 The legal contract between the issuing corporation and
the bondholders is called the bond indenture.

True

False

13 A bond is a written promise to pay an amount identified
as the par value of the bond along with interest.

True

False

14 Interest payments on bonds are determined by multiplying
the par value of the bond by the stated contract rate.

True

False

The use of debt financing insures an increase in return on
equity.

True

False

16

The issue price of bonds is found by computing the future
value of the bond’s cash payments, discounted at the market rate of interest.

True

False

17.

The effective interest method yields increasing amounts of
bond interest expense and decreasing amounts of premium amortization over the
bond’s life for bonds issued at a premium.

True

False

18.

When convertible bonds are converted to a company’s stock,
the carrying value of the bonds is transferred to equity accounts and no gain
or loss is recorded.

True

False

Bonds can be issued:

At par.

At a
premium.

At a
discount.

Between
interest payment dates.

All of the choices are correct.

20.

A corporation borrowed $125,000 cash by signing a 5-year, 9%
installment note requiring equal annual payments each December 31 of $32,136.
What journal entry would the issuer record for the first payment?

Debit
Interest Expense $7,136; debit Notes Payable $25,000; credit Cash $32,136.

Debit Notes
Payable $32,136; debit Interest Payable $11,250; credit Cash $43,386.

Debit Interest Expense $11,250;
debit Notes Payable $20,886; credit Cash $32,136.

Debit Notes
Payable $32,136; credit Cash $32,136.

Debit Notes
Payable $11,250; credit Cash $11,250.

21.

All of the following statements regarding accounting
treatments for liabilities under U.S. GAAP and IFRS are true except:

Accounting
for bonds and notes under U.S. GAAP and IFRS is similar.

Both U.S.
GAAP and IFRS require companies to distinguish between operating leases and
capital leases.

The
criteria for identifying a lease as a capital lease are more general under
IFRS.

Both U.S.
GAAP and IFRS require companies to record costs of retirement benefits as
employees work and earn them.

Use of the
fair value option to account for bonds and notes is not acceptable under U.S.
GAAP or IFRS.

22.

Long-term investments are usually held as an investment of
cash for use in current operations.

True

False

Equity securities reflect a creditor relationship such as
investments in notes, bonds, and certificates of deposit.

True

False

24.

Long-term investments include investments in land or other
assets not used in a company’s operations.

True

False

25.

Debt securities are recorded at cost when purchased.

True

False

26.

The equity method with consolidation is used in accounting
for long-term investments in equity securities with controlling influence.

True

False

Return on total assets can be separated into the profit
margin ratio and total asset turnover.

True

False

28.

Trading securities are always reported as current assets.

True

False

29.

Held-to-maturity securities are equity securities a company
intends and is able to hold until maturity.

True

False

30.

Long-term investments include:

Investments in bonds and stocks
that are not readily convertible to cash.

Investments
in marketable stocks that are intended to be converted into cash in the
short-term.

Investments
in marketable bonds that are intended to be converted into cash in the
short-term.

Only
investments readily convertible to cash.

Investments
intended to be converted to cash within one year.

31.

The primary purpose of the statement of cash flows is to
report all major cash receipts (inflows) and cash payments (outflows) during a
period.

True

False

32.

To be classified as a cash equivalent, the only criterion an
item must meet is that it must be readily convertible to a known amount of
cash.

True

False

33.

Business activities that generate or use cash are classified
as operating, investing, or financing activities on the statement of cash
flows.

True

False

34.

Financing activities include (a) the purchase and sale of
long-term assets, (b) the purchase and sale of short-term investments, and (c)
lending and collecting on loans.

True

False

35.

The full disclosure principle requires that noncash
investing and financing activities be disclosed in the financial statements.

True

False

36.

Accounting standards require companies to include a
statement of cash flows in a complete set of financial statements.

True

False

37.

A cash coverage ratio of less than 1 indicates cash
inadequacy to meet asset growth.

True

False

38.

The direct method for preparing and reporting the statement
of cash flows reports net income and then adjusts it for items necessary to
calculate net cash provided or used by operating activities.

True

False

39.

The indirect method separately lists each major item of
operating cash receipts and cash payments.

True

False

40.

Which of the following transactions or events should be
reported as a source of cash from operating activities when using the direct
method?

Credit
sales.

Cash collections from customers.

Depreciation
expense.

Cash received
from the sale of a building.

Cash
received from the sale of treasury stock.

41.

Profitability is the ability to generate future revenues and
meet long-term obligations.

True

False

Liquidity and efficiency are considered to be building
blocks of financial statement analysis.

True

False

43.

The building blocks of financial statement analysis include
(1) liquidity, (2) salability, (3) solvency, and (4) profitability.

True

False

44.

Standards for comparison are necessary when making judgments
about a company’s performance.

True

False

45.

Intra-company analysis is based on comparisons with
competitors.

True

False

46.

Horizontal analysis is the comparison of a company’s
financial condition and performance to a base amount.

True

False

47.

Vertical analysis is used to reveal patterns in data
covering successive periods.

True

False

48.

Trend analysis is a form of horizontal analysis that can
reveal patterns in data across successive periods.

True

False

49.

Vertical analysis is a tool to evaluate individual financial
statement items or groups of items in terms of a specific base amount.

True

False

50.

Horizontal analysis is used to reveal changes in the
relative importance of each financial statement item.

True

False

51.

Managerial accounting provides financial and nonfinancial
information to an organization’s managers and other internal decision makers.

True

False

52.

One of the usual differences between financial and
managerial accounting is the time dimension of the information reported.

True

False

53.

Financial accounting relies on accepted principles that are
enforced through an extensive set of rules and guidelines; on the other hand,
managerial accounting systems are flexible.

True

False

Just-in-time manufacturing is a system where companies
manufacture products only after the orders have been received from customers.

True

False

55.

When the attitude of continuous improvement exists
throughout an organization, every manager and employee seeks to continuously
experiment with new and improved business practices.

True

False

56.

The main goal of the lean business model is the elimination
of waste while satisfying the customer and providing a positive return to the
company.

True

False

57.

Direct materials are not usually easily traced to a product.

True

False

58.

Whether a cost is controllable or not controllable by an
employee is dependent on the employee’s level of responsibility.

True

False

59.

Direct costs are incurred for the benefit of more than one
cost object.

True

False

60.

The model whose goal is to eliminate waste while satisfying
the customer and providing a positive return to the company is:

Total quality management.

Managerial accounting.

Customer orientation.

Continuous improvement.

Lean
business model.

61.

Cost accounting systems accumulate costs and then assign
them to products or services.

True

False

62.

A company that uses a cost accounting system normally has
only two inventory accounts: Finished Goods Inventory and Goods in Process
Inventory.

True

False

63.

Cost accounting information is helpful to management in
controlling costs but has no effect on pricing decisions.

True

False

64.

There are two basic types of cost accounting systems: job
order costing and periodic costing.

True

False

65.

A company that produces a large number of standardized units
would normally use a job order cost accounting system.

True

False

66.

When a job is finished, its job cost sheet is completed and
moved from the file of jobs in process to the file of finished jobs that are
yet to be delivered to customers.

True

False

67.

Service firms, unlike manufacturing firms, should only use
actual costs when determining a selling price for their services.

True

False

68.

Job order costing is applicable to manufacturing firms only
and not service firms.

True

False

69.

Cost accounting systems used by manufacturing companies are
based on the:

Periodic inventory system.

Perpetual inventory system.

Finished goods inventories.

Weighted average inventories.

LIFO inventory system.

70.

Job order costing systems normally use:

Periodic inventory systems.

Perpetual inventory systems.

Real inventory systems.

General inventory systems.

All
of inventory systems normally use job order costing.

71.

Process manufacturing usually reflects a manufacturer that
produces large quantities of identical products.

True

False

72.

To determine unit cost under a process cost accounting
system, equivalent units produced must be calculated if the company has goods
in process inventories.

True

False

73.

Equivalent units of production refer to the number of units
that would be completed if all effort during a period had been applied only to
those units that were started and completed in a period.

True

False

74.

Equivalent units of production are always the same as the
total number of physical units finished during the period.

True

False

75.

The last step in the four-step accounting procedure for
process costing is the calculation of equivalent units of production.

True

False

76.

A process cost summary is an accounting report that
describes the costs charged to a department, the equivalent units of production
by the department, and how the costs were assigned to the output.

True

False

77.

The FIFO method separates prior period costs from costs
incurred during the current period.

True

False

78.

Direct costs in process cost accounting include only those
costs that can be readily identified with individual product units.

True

False

79.

Which of the following characteristics applies to process
cost accounting but not to job order cost accounting?

Use of a predetermined overhead rate.

Identifiable lots of production.

Equivalent
units of production.

Labor time ticket for each employee.

Use of a single Goods in Process Inventory account.

80.

Equivalent units of production are equal to:

The
number of units that could have been completed if all effort had been applied
to units that were started and completed during a period.

The number of finished units actually produced during
a period.

The number of units introduced into the process during
a period.

The number of units still in process at the end of a
period.

Physical units that were started and completed during
a period.

81.

Variable costs per unit increase proportionately with
increases in output activity.

True

False

82.

The relevant range of operations includes extremely high and
low levels of production that are unlikely to occur.

True

False

83.

Cost-volume-profit analysis is frequently based on the
assumption that the production level is the same as the sales level.

True

False

84.

Cost-volume-profit analysis can be used to predict the
effects of reduced selling prices, increased fixed costs, and reduced variable
costs on break-even points.

True

False

85.

Contribution margin is the amount of sales that exceeds
total variable costs.

True

False

86.

Break-even analysis is a special case of cost-volume-profit
analysis.

True

False

87.

The contribution margin per unit is the price at which a
unit must be sold in order for the company to break even.

True

False

88.

A cost that remains the same in total even when volume of
activity varies is a:

Fixed
cost.

Curvilinear cost.

Variable cost.

Step-wise variable cost.

Standard cost.

89.

A cost that changes in proportion to changes in volume of
activity is a(n):

Differential cost.

Fixed cost.

Incremental cost.

Variable
cost.

Product cost.

90.

A budget can be an effective means of communicating
management’s plans to the employees of a business.

True

False

91.

Budgets are normally more effective when all levels of
management are involved in the budgeting process.

True

False

92.

A budget is a formal statement of future plans, usually
expressed in monetary terms.

True

False

93.

Past performance is the best overall basis for evaluating
current performance and assessing the need for corrective action.

True

False

94.

Continuous budgeting is the practice of preparing a new
budget for a selected number of future periods and replacing budgets for
periods that have lapsed.

True

False

95.

The task of preparing a budget should be the sole task of
the most important department in an organization.

True

False

96.

A rolling budget is a specific budget application relevant
only to a merchandising company.

True

False

97.

The budgets within the master budget must be prepared in a
definite sequence as dictated by GAAP.

True

False

98.

For budgets to be effective:

Goals should be attainable.

Employees affected by a budget should be consulted
when it is prepared.

Evaluations should be made carefully with opportunities
to explain any failures.

They should be properly applied to avoid negative
effects.

All
of the options are correct.

99.

Standard material, labor, and overhead costs can be obtained
from standard cost tables published by the Institute of Management Accountants.

True

False

100.

When standard costs are used, factory overhead is assigned
to products with a predetermined standard overhead rate.

True

False

101.

Companies promoting continuous improvement strive to achieve
practical standards rather than ideal standards.

True

False

102.

A cost variance is the difference between actual cost and
standard cost.

True

False

103.

A budget performance report that includes variances can have
variances caused by both price differences and quantity differences.

True

False

104.

When computing a price variance, the price is held constant.

True

False

105.

Another name for a static budget is a variable budget.

True

False

106.

Standard costs are:

Actual costs incurred to produce a specific product or
perform a service.

Preset
costs for delivering a product or service under normal conditions.

Established by the IMA.

Rarely achieved.

Uniform among companies within an industry.

107.

The difference between actual and standard cost caused by
the difference between the actual quantity and the standard quantity is called
the:

Controllable variance.

Standard variance.

Budget variance.

Quantity
variance.

Price variance.

108.

Evaluation of the performance of managers of profit centers
assumes that the managers can control or influence both costs and revenue
generation.

True

False

109.

Investment center is another name for profit center.

True

False

110.

A cost center does not directly generate revenues.

True

False

A department that is responsible for maximizing revenues is
known as a profit center.

True

False

112.

Indirect expenses should be allocated to departments based
upon the benefits received by each department.

True

False

113.

Departmental wage expenses are direct expenses of that
department.

True

False

114.

An example of a service department is the human resources
department.

True

False

115.

A cost center is a unit of a business that incurs costs but
does not directly generate revenues. All of the following are considered cost
centers except:

Accounting department.

Purchasing department.

Research department.

Advertising department.

All
of these could be considered cost centers.

116.

A profit center:

Incurs costs, but does not directly generate revenues.

Incurs
costs and directly generates revenues.

Has a manager who is evaluated solely on efficiency in
controlling costs.

Incurs only indirect costs and directly generates
revenues.

Incurs only indirect costs and generates revenues.

117.

Capital budgeting decisions are risky because the outcome is
uncertain, large amounts are usually involved, the investment involves a
long-term commitment, and the decision could be difficult or impossible to
reverse.

True

False

118.

If the internal rate of return (IRR) of an investment is
below the hurdle rate, the project should be accepted.

True

False

119.

An opportunity cost is the potential benefit that is lost by
taking a specific action when two or more alternative choices are available.

True

False

120.

The concept of incremental cost is the same as the concept
of differential cost.

True

False

121.

In a make or buy decision, management should focus on costs
that are constant under the two alternatives.

True

False

122.

An advantage of the break-even time (BET) method over the
payback period method is that it recognizes the time value of money.

True

False

123.

If the straight-line depreciation method is used, the annual
average investment amount used in calculating rate of return is calculated as
(beginning book value + ending book value)/2.

True

False

124.

Capital budgeting decisions usually involve analysis of:

Cash
outflows only.

Short-term investments.

Long-term investments.

Investments with certain outcomes only.

Operating revenues.

125.

The process of analyzing alternative investments and
deciding which assets to acquire or sell is known as:

Planning and control.

Capital
budgeting.

Variance analysis.

Master budgeting.

Managerial accounting.

Reviews

There are no reviews yet.

Be the first to review “Accounting exam”

Your email address will not be published. Required fields are marked *

Accounting exam

$28.00

Description

1.

Management accounting is primarily
concerned with which of the following?

A) Following GAAP.

B) Producing information for management.

C) Preparing a full set of financial
statements for external users.

D) Preparing tax returns for submission to
the Internal Revenue Service

2.

The management of the flow of materials
from the supplier through production to distribution to the customer is known
as

A) strategic cost management

B) firm value chain

C) industrial value chain

D) supply chain management

3.

When is the cost of manufacturing equipment
recognized as an expense on the income statement?

A) when selling expense is recognized

B) when cost of goods sold is recognized

C) Never since the expense is a non cash
charge

D) when the equipment is depreciated

4.

The certification sponsored by the
Institute of Management Accountants that emphasizes economics, finance, and
management; financial accounting and reporting; management reporting; and
decision analysis is

A) the CPA

B) the CIA

C) none of the above

D) the CMA

5.

Which of the following costs would be
classified as an indirect cost in the manufacturing of custom built dining
tables?

A) the cost of the table base

B) the cost of the person assembling the
table

C) the cost of the table legs

D) the cost of the rent on the
manufacturing facility

6.

The grease used to maintain the production
equipment in working order is an example of which of the following?

A) indirect material

B) indirect labor

C) direct material

D) direct labor

7.

Which of the following is a product cost?

A) insurance on the office buildings

B) depreciation of the production
facilities

C) depreciation of the salesmen’s cars

D) advertising expenditures

8.

The salary of the vice-president of finance
would be classified as which of the following?

A) manufacturing overhead

B) selling and administrative costs

C) direct materials

D) direct labor

9.

Which of the following is a period cost?

A) direct labor

B) property taxes on the office building

C) property taxes on the production
facilities

D) the production supervisor’s salary

10.

An UNEXPECTED increase in sales and
production volume will (most likely) result in:

A) an indeterminate impact on overhead

B) underapplied overhead

C) overapplied overhead

D) have no effect on applied overhead

11.

Figure 2-2

Cost of goods manufactured

$470,000

Beginning work in process

60,000

Beginning finished goods inventory

105,000

Direct materials

75,000

Direct labor

160,000

Manufacturing overhead

215,000

Cost of goods sold

445,000

Refer to Figure 2-2. The cost of ending
work in process would be

A) $45,000

B) $130,000

C) $40,000

D) $105,000

12.

Figure 2-2

Cost of goods manufactured

$470,000

Beginning work in process

60,000

Beginning finished goods inventory

105,000

Direct materials

75,000

Direct labor

160,000

Manufacturing overhead

215,000

Cost of goods sold

445,000

Refer to Figure 2-2. The cost of ending
finished goods inventory would be

A) $40,000

B) $105,000

C) $130,000

D) $45,000

13.

Figure 2-3

Sales

$340,000

Direct materials inventory, 1/1

20,000

Direct materials inventory, 12/31

5,500

Direct materials purchases

95,000

Direct labor

52,500

Manufacturing overhead

49,500

Selling and administrative expenses

55,000

Cost of goods manufactured

?

Cost of goods sold

?

Work in process, 1/1

26,000

Work in process, 12/31

32,500

Finished goods inventory, 1/1

40,000

Finished goods inventory, 12/31

60,000

Income before income taxes

?

Refer to Figure 2-3. Income before taxes
would be

A) $155,000

B) $340,000

C) $100,000

D) $128,500

14.

The past year’s sales were $540,000 for the
Max Company. The gross margin for the same year was $155,000 and cost of goods
manufactured was $350,000. If beginning finished goods inventory was $50,000,
ending finished goods inventory must have been

A) $385,000

B) $35,000

C) $15,000

D) $50,000

15.

Fixed costs,

A) in total, decrease as activity decreases

B) in total, remain constant within a
relevant range

C) in total, increase as activity increases

D) on a per unit basis, are constant as
activity increases or decreases

16.

Which of the following best describes the
term “relevant range.”

A) The relevant range pertains to a single
unit of product.

B) The relevant range is the range of
output over which cost assumptions are valid.

C) The relevant range refers to the range
of fixed costs present in an organization.

D) The relevant range is the same for all
products a company may produce.

17.

As the level of activity increases, what
happens to fixed cost?

A) increases per unit

B) increases in total

C) decrease in total

D) decreases per unit

18.

In January, 5,000 units were manufactured
at a unit cost of $5. At this level of activity, variable costs are 40 percent
of total unit costs. The following month, the company planned to manufacture
4,500 units. If cost behavior patterns remain unchanged in February,

A) total fixed costs will decrease

B) total cost per unit will increase

C) variable cost per unit will decrease

D) total variable cost will remain
unchanged

19.

The following information was available
about supplies cost for the first three months of the year:

Month

Production Volume

Supplies Cost

January

12,000

$ 80,000

February

23,000

140,000

March

27,000

164,000

Using the high-low method, an estimate of
supplies cost at 20,000 units of production would beA) $112,000

B) $130,400

C) $124,800

D) $96,000

20.

Figure 3-4

The following information is available for electricity
costs for the first six months of the year:

Month

Production Volume

Electricity Cost

January

2,800

$2,925

February

5,600

5,526

March

6,200

5,980

April

3,500

3,620

May

2,300

2,470

June

4,500

4,450

Refer to Figure 3-4. Using the high-low
method, an estimate of the fixed cost for electricity would be

A) $3,510

B) $4,225

C) $3,900

D) $400

21.

Based on regression results, ABC Company
has a constant of $10,000 and an X coefficient of $4. At what level of the
activity cost drivers will total cost be $22,000?

A) 5,500 units

B) 3,000 units

C) 10,000 units

D) 3,250 units

22.

Ritchie Company adjusts cost of goods sold
when overhead is over- or underapplied. The predetermined overhead rate for the
year is $2 per direct labor hour. Estimated direct labor hours were 20,000.
Actual direct labor hours were 25,000 and actual overhead cost was $55,000.
What is the adjustment to cost of goods sold?

A) Overhead is overapplied by $15,000, therefore
subtract this amount from cost of goods sold.

B) Overhead is overapplied by $5,000,
therefore subtract this amount from cost of goods sold.

C) Overhead is underapplied by $15,000,
therefore add this amount to cost of goods sold.

D) Overhead is underapplied by $5,000,
therefore add this amount to cost of goods sold.

23.

An activity-based costing system uses which
of the following procedures?

A) Overhead costs are traced to activities,
then costs are traced to products.

B) Overhead costs are traced directly to
products.

C) All overhead costs are expensed as
incurred.

D) Overhead costs are traced to
departments, then costs are traced to products.

24.

Which of the following would be more likely
to use job-order costing rather than process costing?

A) steel mill

B) soap manufacturer

C) professional painter/artist

D) check processing department in a bank

25.

The following information pertains to Job
No. 15:

Job No. 15

Direct materials

$1,000

Direct labor

$2,000

Manufacturing overhead is applied at 60
percent of direct labor cost.

If 100 units were produced in Job No. 15,
the unit cost of Job No. 15 would beA) $48

B) none of the above

C) $12

D) $30

E) $42

26.

The job-order cost sheets of incomplete
jobs are the subsidiary ledger of which account?

A) finished goods inventory

B) work in process

C) accounts receivable

D) raw materials inventory

27.

In a job-order cost system, the amount of
overhead cost applied to a job that remains incomplete at the end of a period
is part of which of the following at the end of the period?

A) finished goods inventory

B) work in process

C) overhead control

D) raw materials inventory

28.

For the accounting period just ended, Abway
Company’s actual overhead costs equaled estimated overhead. Actual direct labor
hours exceeded estimated direct labor hours used to calculate the predetermined
overhead rate. If overhead is applied using the predetermined overhead rate,
then overhead would be

A) Overhead cannot be determined from the
information given.

B) overapplied

C) underapplied

D) $-0-

29.

As goods are completed, the cost of the
goods is transferred from

A) overhead to finished goods inventory

B) finished goods inventory to cost of
goods sold

C) work in process to finished goods
inventory

D) work in process to cost of goods sold

30.

Figure 6-10

Alana Company had the following three jobs
in process at the end of September.

Job
No. 4

Job
No. 5

Job No. 6

Direct materials

$ 64,000

$ 36,000

$50,000

Direct labor

$128,000

$106,000

$80,000

Machine hours

2,400

1,600

2,000

Alana uses a predetermined overhead rate of
$20 per machine hour to apply overhead.

All three jobs were started during
September. Job No. 5 and Job No. 6 were completed during the month, and Job No.
6 was sold on September 20.

There were no beginning inventory balances.

Refer to Figure 6-10. Alana’s cost of goods
sold for September would be

A) $170,000

B) $130,000

C) $-0-

D) $344,000

31.

The following information pertains to
Raymond Company:

Selling price per unit

$1,000

Variable cost per unit

$700

Fixed costs

$900,000

If the firm wants to earn $400,000 in
before-tax profit, contribution margin must equalA) $1,300,000

B) $1,440,000

C) $900,000

D) $1,340,000

32.

The following information pertains to Barth
Company:

Sales price per unit

$80

Variable cost per unit

$55

Total fixed costs

$200,000

Before-tax income

$80,000

Unit sales for the company must have beenA)
11,200

B) 8,000

C) 5,091

D) 3,500

33.

Last year Luchen Company had a net loss of
$8,000 (before tax). The company sells one product with a selling price of $80
and a variable cost per unit of $60. This year the company would like to earn a
before-tax profit of $40,000. How many additional units must the company sell
this year than it sold last year? Assume that the tax rate is 40 percent.

A) 5,400 units

B) 2,400 units

C) 2,000 units

D) 400 units

34.

Figure 11-2

Selling price per unit

$400

Variable manufacturing costs per unit

$100

Fixed manufacturing costs per unit

$80

Variable selling costs per unit

$60

Fixed selling costs per unit

$40

Expected production and sales

1,800 units

Refer to Figure 11-2. The contribution
margin ratio is

A) 60%

B) 30%

C) 70%

D) 40%

35.

Figure 11-4

The following information was extracted
from the accounting records of MVA Corporation:

Selling price per unit

$60

Variable cost per unit

$20

Total fixed costs

$480,000

Refer to Figure 11-4. If MVA’s tax rate is
40 percent, how many units must be sold to earn an after-tax profit of $96,000?

A) 14,400

B) 16,000

C) 32,000

D) 28,800

36.

Figure 11-5

Sales

$540,000

Variable costs

$378,000

Fixed costs

$120,000

Expected production and sales in units

40,000 units

Refer to Figure 11-5. The break-even point
in sales dollars is

A) $112,500

B) $498,000

C) $171,429

D) $400,000

37.

Inktomi sells software over the internet.
The CEO has been quoted, “Next to the federal government, we’re one of the few
companies allowed to print money. We have no marginal costs. Wahoo.” Inktomi’s
cost structure (probably) results in a relatively:

A) Low contribution margin ratio and high
degree of operating leverage.

B) High contribution margin ratio and high
degree of operating leverage.

C) Low contribution margin ratio and low
degree of operating leverage.

D) High contribution margin ratio and low
degree of operating leverage.

38.

As you are probably aware, 2008 was an
unexpectedly bad year for business. For many firms this (probably) resulted in
factory overhead being:

A) overapplied

B) impossible to calculate

C) was 2008 a bad business year? I had no
idea.

D) underapplied

39.

Which of the following does not pertain to
job order costing?

A) Applying the applied sales expense to
job order cost sheets.

B) Applying the applied overhead to the job
order cost sheets.

C) Calculating the cost of goods
manufactured when the job is compete.

D) Applying direct material cost to the job
order cost sheets.

40.

Assuming all other things are the same,
variable costs per unit would_______if there is a decrease in the break-even
point.

A) remain the same

B) increase

C) party wildly

D) decrease

41.

When goods are completed on the factory
floor, typically there is an increase in which of the following accounts:

A) Work in Process

B) Cost of Goods Sold

C) Finished Goods

D) Sales Revenue

42.

The Tristan Corporation whose contribution
margin ratio is 30%, broke even at a sales level of $120,000. What level of
sales would yield an after-tax profit of $72,000? Assume a tax rate of 40%.

A) $360,000

B) $560,000

C) $520,000

D) $36,000

43.

Anish Company produces pins for business
fraternities. The company is considering
decreasing its print and radio advertising on college campuses by $20,000 next
year. The company is also considering
lowering the selling price to stimulate demand, and expects sales to double
next year. What will be the result of
these actions taken together?

A) Decrease the unit contribution margin,
decrease the contribution margin ratio, decrease the fixed costs

B) Decrease the unit variable costs,
increase the fixed costs, no change in contribution margin ratio

C) Increase the unit contribution margin,
decrease the contribution margin ratio, decrease the breakeven point

D) Decrease the unit contribution margin,
decrease the fixed costs, increase the contribution margin ratio

44.

A company offers tours of spectacular
tourist destinations such as Nebraska and Kansas. The tours usually have between 5 and 50
people on them. For each person who
goes on the trip, the company incurs $10 per day in food cost, $50 per day in
lodging, and $25 per day in entrance admissions and fees. Also, the company incurs a certain total cost
per day for transportation, regardless of whether the tour is full or not. On the last tour, the total cost to the
company per person per day was $100.
There were 30 people on the tour.
If the next tour has 20 people, what will be the cost per person per
day?

A) $107.50

B) $66.66

C) $150.00

D) $110.00

45.

I.M. Greedy and Company have collected the
following information:

Cost to buy on unit $24

Production costs per unit:

Direct Materials $11

Direct Labor $8

Variable Manufacturing Overhead $1

Total Fixed Manufacturing Overhead $180,000

What level of production is needed for
Strait to be indifferent between making or buying the part, assuming it can
eliminate $130,000 of fixed costs if it buys the unit?

A) 0 units

B) 45,000 units

C) 12,500 units

D) 32,500 units

46.

In 2008 Joe’s Oyster house broke even at
50,000 oysters a year and sold 80,000 oysters for the year. Joe sold some
equipment which caused fixed costs to decrease and unit variable costs to
increase. Sales remained at 80,000 oysters for the year and the break-even
sales level remained unchanged at 50,000 units. All other variables remain
unchanged. In that case, in 2009:

A) Profit would decrease

B) Profit would increase.

C) Fixed costs per unit would remain
unchanged

D) Profit would remain unchanged

47.

Provided a single cost allocation base is
used within a factory, jobs are typically overcosted if:

A) jobs require more employees

B) jobs consume relatively more of the base

C) jobs consume proportionately less of the
base

D) Jobs require more travel between the two
parties

48.

Assuming all other things are the same,
which cost is mostly likely to increase if a firm decides to increase
automation and decrease direct labor?

A) Fixed cost per unit

B) Variable cost per unit

C) Direct material cost per unit

D) Total variable cost

Reviews

There are no reviews yet.

Be the first to review “Accounting exam”

Your email address will not be published. Required fields are marked *

Accounting exam

$28.00

Description

1.

Management accounting is primarily
concerned with which of the following?

A) Following GAAP.

B) Producing information for management.

C) Preparing a full set of financial
statements for external users.

D) Preparing tax returns for submission to
the Internal Revenue Service

2.

The management of the flow of materials
from the supplier through production to distribution to the customer is known
as

A) strategic cost management

B) firm value chain

C) industrial value chain

D) supply chain management

3.

When is the cost of manufacturing equipment
recognized as an expense on the income statement?

A) when selling expense is recognized

B) when cost of goods sold is recognized

C) Never since the expense is a non cash
charge

D) when the equipment is depreciated

4.

The certification sponsored by the
Institute of Management Accountants that emphasizes economics, finance, and
management; financial accounting and reporting; management reporting; and
decision analysis is

A) the CPA

B) the CIA

C) none of the above

D) the CMA

5.

Which of the following costs would be
classified as an indirect cost in the manufacturing of custom built dining
tables?

A) the cost of the table base

B) the cost of the person assembling the
table

C) the cost of the table legs

D) the cost of the rent on the
manufacturing facility

6.

The grease used to maintain the production
equipment in working order is an example of which of the following?

A) indirect material

B) indirect labor

C) direct material

D) direct labor

7.

Which of the following is a product cost?

A) insurance on the office buildings

B) depreciation of the production
facilities

C) depreciation of the salesmen’s cars

D) advertising expenditures

8.

The salary of the vice-president of finance
would be classified as which of the following?

A) manufacturing overhead

B) selling and administrative costs

C) direct materials

D) direct labor

9.

Which of the following is a period cost?

A) direct labor

B) property taxes on the office building

C) property taxes on the production
facilities

D) the production supervisor’s salary

10.

An UNEXPECTED increase in sales and
production volume will (most likely) result in:

A) an indeterminate impact on overhead

B) underapplied overhead

C) overapplied overhead

D) have no effect on applied overhead

11.

Figure 2-2

Cost of goods manufactured

$470,000

Beginning work in process

60,000

Beginning finished goods inventory

105,000

Direct materials

75,000

Direct labor

160,000

Manufacturing overhead

215,000

Cost of goods sold

445,000

Refer to Figure 2-2. The cost of ending
work in process would be

A) $45,000

B) $130,000

C) $40,000

D) $105,000

12.

Figure 2-2

Cost of goods manufactured

$470,000

Beginning work in process

60,000

Beginning finished goods inventory

105,000

Direct materials

75,000

Direct labor

160,000

Manufacturing overhead

215,000

Cost of goods sold

445,000

Refer to Figure 2-2. The cost of ending
finished goods inventory would be

A) $40,000

B) $105,000

C) $130,000

D) $45,000

13.

Figure 2-3

Sales

$340,000

Direct materials inventory, 1/1

20,000

Direct materials inventory, 12/31

5,500

Direct materials purchases

95,000

Direct labor

52,500

Manufacturing overhead

49,500

Selling and administrative expenses

55,000

Cost of goods manufactured

?

Cost of goods sold

?

Work in process, 1/1

26,000

Work in process, 12/31

32,500

Finished goods inventory, 1/1

40,000

Finished goods inventory, 12/31

60,000

Income before income taxes

?

Refer to Figure 2-3. Income before taxes
would be

A) $155,000

B) $340,000

C) $100,000

D) $128,500

14.

The past year’s sales were $540,000 for the
Max Company. The gross margin for the same year was $155,000 and cost of goods
manufactured was $350,000. If beginning finished goods inventory was $50,000,
ending finished goods inventory must have been

A) $385,000

B) $35,000

C) $15,000

D) $50,000

15.

Fixed costs,

A) in total, decrease as activity decreases

B) in total, remain constant within a
relevant range

C) in total, increase as activity increases

D) on a per unit basis, are constant as
activity increases or decreases

16.

Which of the following best describes the
term “relevant range.”

A) The relevant range pertains to a single
unit of product.

B) The relevant range is the range of
output over which cost assumptions are valid.

C) The relevant range refers to the range
of fixed costs present in an organization.

D) The relevant range is the same for all
products a company may produce.

17.

As the level of activity increases, what
happens to fixed cost?

A) increases per unit

B) increases in total

C) decrease in total

D) decreases per unit

18.

In January, 5,000 units were manufactured
at a unit cost of $5. At this level of activity, variable costs are 40 percent
of total unit costs. The following month, the company planned to manufacture
4,500 units. If cost behavior patterns remain unchanged in February,

A) total fixed costs will decrease

B) total cost per unit will increase

C) variable cost per unit will decrease

D) total variable cost will remain
unchanged

19.

The following information was available
about supplies cost for the first three months of the year:

Month

Production Volume

Supplies Cost

January

12,000

$ 80,000

February

23,000

140,000

March

27,000

164,000

Using the high-low method, an estimate of
supplies cost at 20,000 units of production would beA) $112,000

B) $130,400

C) $124,800

D) $96,000

20.

Figure 3-4

The following information is available for electricity
costs for the first six months of the year:

Month

Production Volume

Electricity Cost

January

2,800

$2,925

February

5,600

5,526

March

6,200

5,980

April

3,500

3,620

May

2,300

2,470

June

4,500

4,450

Refer to Figure 3-4. Using the high-low
method, an estimate of the fixed cost for electricity would be

A) $3,510

B) $4,225

C) $3,900

D) $400

21.

Based on regression results, ABC Company
has a constant of $10,000 and an X coefficient of $4. At what level of the
activity cost drivers will total cost be $22,000?

A) 5,500 units

B) 3,000 units

C) 10,000 units

D) 3,250 units

22.

Ritchie Company adjusts cost of goods sold
when overhead is over- or underapplied. The predetermined overhead rate for the
year is $2 per direct labor hour. Estimated direct labor hours were 20,000.
Actual direct labor hours were 25,000 and actual overhead cost was $55,000.
What is the adjustment to cost of goods sold?

A) Overhead is overapplied by $15,000, therefore
subtract this amount from cost of goods sold.

B) Overhead is overapplied by $5,000,
therefore subtract this amount from cost of goods sold.

C) Overhead is underapplied by $15,000,
therefore add this amount to cost of goods sold.

D) Overhead is underapplied by $5,000,
therefore add this amount to cost of goods sold.

23.

An activity-based costing system uses which
of the following procedures?

A) Overhead costs are traced to activities,
then costs are traced to products.

B) Overhead costs are traced directly to
products.

C) All overhead costs are expensed as
incurred.

D) Overhead costs are traced to
departments, then costs are traced to products.

24.

Which of the following would be more likely
to use job-order costing rather than process costing?

A) steel mill

B) soap manufacturer

C) professional painter/artist

D) check processing department in a bank

25.

The following information pertains to Job
No. 15:

Job No. 15

Direct materials

$1,000

Direct labor

$2,000

Manufacturing overhead is applied at 60
percent of direct labor cost.

If 100 units were produced in Job No. 15,
the unit cost of Job No. 15 would beA) $48

B) none of the above

C) $12

D) $30

E) $42

26.

The job-order cost sheets of incomplete
jobs are the subsidiary ledger of which account?

A) finished goods inventory

B) work in process

C) accounts receivable

D) raw materials inventory

27.

In a job-order cost system, the amount of
overhead cost applied to a job that remains incomplete at the end of a period
is part of which of the following at the end of the period?

A) finished goods inventory

B) work in process

C) overhead control

D) raw materials inventory

28.

For the accounting period just ended, Abway
Company’s actual overhead costs equaled estimated overhead. Actual direct labor
hours exceeded estimated direct labor hours used to calculate the predetermined
overhead rate. If overhead is applied using the predetermined overhead rate,
then overhead would be

A) Overhead cannot be determined from the
information given.

B) overapplied

C) underapplied

D) $-0-

29.

As goods are completed, the cost of the
goods is transferred from

A) overhead to finished goods inventory

B) finished goods inventory to cost of
goods sold

C) work in process to finished goods
inventory

D) work in process to cost of goods sold

30.

Figure 6-10

Alana Company had the following three jobs
in process at the end of September.

Job
No. 4

Job
No. 5

Job No. 6

Direct materials

$ 64,000

$ 36,000

$50,000

Direct labor

$128,000

$106,000

$80,000

Machine hours

2,400

1,600

2,000

Alana uses a predetermined overhead rate of
$20 per machine hour to apply overhead.

All three jobs were started during
September. Job No. 5 and Job No. 6 were completed during the month, and Job No.
6 was sold on September 20.

There were no beginning inventory balances.

Refer to Figure 6-10. Alana’s cost of goods
sold for September would be

A) $170,000

B) $130,000

C) $-0-

D) $344,000

31.

The following information pertains to
Raymond Company:

Selling price per unit

$1,000

Variable cost per unit

$700

Fixed costs

$900,000

If the firm wants to earn $400,000 in
before-tax profit, contribution margin must equalA) $1,300,000

B) $1,440,000

C) $900,000

D) $1,340,000

32.

The following information pertains to Barth
Company:

Sales price per unit

$80

Variable cost per unit

$55

Total fixed costs

$200,000

Before-tax income

$80,000

Unit sales for the company must have beenA)
11,200

B) 8,000

C) 5,091

D) 3,500

33.

Last year Luchen Company had a net loss of
$8,000 (before tax). The company sells one product with a selling price of $80
and a variable cost per unit of $60. This year the company would like to earn a
before-tax profit of $40,000. How many additional units must the company sell
this year than it sold last year? Assume that the tax rate is 40 percent.

A) 5,400 units

B) 2,400 units

C) 2,000 units

D) 400 units

34.

Figure 11-2

Selling price per unit

$400

Variable manufacturing costs per unit

$100

Fixed manufacturing costs per unit

$80

Variable selling costs per unit

$60

Fixed selling costs per unit

$40

Expected production and sales

1,800 units

Refer to Figure 11-2. The contribution
margin ratio is

A) 60%

B) 30%

C) 70%

D) 40%

35.

Figure 11-4

The following information was extracted
from the accounting records of MVA Corporation:

Selling price per unit

$60

Variable cost per unit

$20

Total fixed costs

$480,000

Refer to Figure 11-4. If MVA’s tax rate is
40 percent, how many units must be sold to earn an after-tax profit of $96,000?

A) 14,400

B) 16,000

C) 32,000

D) 28,800

36.

Figure 11-5

Sales

$540,000

Variable costs

$378,000

Fixed costs

$120,000

Expected production and sales in units

40,000 units

Refer to Figure 11-5. The break-even point
in sales dollars is

A) $112,500

B) $498,000

C) $171,429

D) $400,000

37.

Inktomi sells software over the internet.
The CEO has been quoted, “Next to the federal government, we’re one of the few
companies allowed to print money. We have no marginal costs. Wahoo.” Inktomi’s
cost structure (probably) results in a relatively:

A) Low contribution margin ratio and high
degree of operating leverage.

B) High contribution margin ratio and high
degree of operating leverage.

C) Low contribution margin ratio and low
degree of operating leverage.

D) High contribution margin ratio and low
degree of operating leverage.

38.

As you are probably aware, 2008 was an
unexpectedly bad year for business. For many firms this (probably) resulted in
factory overhead being:

A) overapplied

B) impossible to calculate

C) was 2008 a bad business year? I had no
idea.

D) underapplied

39.

Which of the following does not pertain to
job order costing?

A) Applying the applied sales expense to
job order cost sheets.

B) Applying the applied overhead to the job
order cost sheets.

C) Calculating the cost of goods
manufactured when the job is compete.

D) Applying direct material cost to the job
order cost sheets.

40.

Assuming all other things are the same,
variable costs per unit would_______if there is a decrease in the break-even
point.

A) remain the same

B) increase

C) party wildly

D) decrease

41.

When goods are completed on the factory
floor, typically there is an increase in which of the following accounts:

A) Work in Process

B) Cost of Goods Sold

C) Finished Goods

D) Sales Revenue

42.

The Tristan Corporation whose contribution
margin ratio is 30%, broke even at a sales level of $120,000. What level of
sales would yield an after-tax profit of $72,000? Assume a tax rate of 40%.

A) $360,000

B) $560,000

C) $520,000

D) $36,000

43.

Anish Company produces pins for business
fraternities. The company is considering
decreasing its print and radio advertising on college campuses by $20,000 next
year. The company is also considering
lowering the selling price to stimulate demand, and expects sales to double
next year. What will be the result of
these actions taken together?

A) Decrease the unit contribution margin,
decrease the contribution margin ratio, decrease the fixed costs

B) Decrease the unit variable costs,
increase the fixed costs, no change in contribution margin ratio

C) Increase the unit contribution margin,
decrease the contribution margin ratio, decrease the breakeven point

D) Decrease the unit contribution margin,
decrease the fixed costs, increase the contribution margin ratio

44.

A company offers tours of spectacular
tourist destinations such as Nebraska and Kansas. The tours usually have between 5 and 50
people on them. For each person who
goes on the trip, the company incurs $10 per day in food cost, $50 per day in
lodging, and $25 per day in entrance admissions and fees. Also, the company incurs a certain total cost
per day for transportation, regardless of whether the tour is full or not. On the last tour, the total cost to the
company per person per day was $100.
There were 30 people on the tour.
If the next tour has 20 people, what will be the cost per person per
day?

A) $107.50

B) $66.66

C) $150.00

D) $110.00

45.

I.M. Greedy and Company have collected the
following information:

Cost to buy on unit $24

Production costs per unit:

Direct Materials $11

Direct Labor $8

Variable Manufacturing Overhead $1

Total Fixed Manufacturing Overhead $180,000

What level of production is needed for
Strait to be indifferent between making or buying the part, assuming it can
eliminate $130,000 of fixed costs if it buys the unit?

A) 0 units

B) 45,000 units

C) 12,500 units

D) 32,500 units

46.

In 2008 Joe’s Oyster house broke even at
50,000 oysters a year and sold 80,000 oysters for the year. Joe sold some
equipment which caused fixed costs to decrease and unit variable costs to
increase. Sales remained at 80,000 oysters for the year and the break-even
sales level remained unchanged at 50,000 units. All other variables remain
unchanged. In that case, in 2009:

A) Profit would decrease

B) Profit would increase.

C) Fixed costs per unit would remain
unchanged

D) Profit would remain unchanged

47.

Provided a single cost allocation base is
used within a factory, jobs are typically overcosted if:

A) jobs require more employees

B) jobs consume relatively more of the base

C) jobs consume proportionately less of the
base

D) Jobs require more travel between the two
parties

48.

Assuming all other things are the same,
which cost is mostly likely to increase if a firm decides to increase
automation and decrease direct labor?

A) Fixed cost per unit

B) Variable cost per unit

C) Direct material cost per unit

D) Total variable cost

Reviews

There are no reviews yet.

Be the first to review “Accounting exam”

Your email address will not be published. Required fields are marked *

accounting exam

$21.00

Description

Question 1

A debit balance in the manufacturing overhead account at the end of the period indicates that:

manufacturing overhead is overapplied.

manufacturing overhead is underapplied.

manufacturing overhead has been accurately applied.

None of the above.

Question 2

The three sections of a statement of cost of goods manufactured include:

raw material, direct labor, manufacturing overhead.

variable expenses, contribution margin, fixed expenses.

sales revenue, gross profit, selling and administrative expenses.

direct costs, indirect costs, operating profit.

Question 3

The predetermined overhead application rate based on direct labor hours is computed as:

actual total overhead costs divided by actual direct labor hours.

estimated total overhead costs divided by estimated direct labor hours.

actual total overhead costs divided by estimated direct labor hours.

estimated total overhead costs divided by actual direct labor hours.

Question 4

Direct costing may be used for:

internal reporting purposes.

external financial reporting purposes.

income tax reporting purposes.

all of the above.

Question 5

Which of the following items would not be reported on the statement of cost of goods manufactured?

Cost of goods sold.

Purchases.

Total manufacturing costs.

Contribution margin.

Question 6

The production cost of a single unit of a manufactured product is determined by:

dividing total direct materials and direct labor for a production run by the number of units made.

dividing total direct materials, direct labor, and manufacturing overhead for a production run by the number of units made.

dividing total direct materials, direct labor, manufacturing overhead and selling expenses for a production run by the number of units made.

dividing the selling price by the gross profit ratio.

Question 7

The three components of product costs are:

direct material, supervisor salaries, selling expenses.

direct labor, manufacturing overhead, indirect material.

direct material, direct labor, manufacturing overhead.

manufacturing overhead, indirect material, indirect labor.

Question 8

Cost accounting is a subset of:

financial accounting.

process cost accounting.

job order cost accounting.

managerial accounting.

Question 9

Common costs pertain to costs that:

are directly traceable to a cost object.

are not directly traceable to a cost object.

are commonly incurred.

are direct costs.

Question 10

The term “cost” means:

the price paid for a raw material.

the wage paid to a worker.

the price charged by an entity for its services.

all of the above.

Question 11

An excess of cost of goods manufactured over cost of goods sold for the period represents:

an increase in gross profit.

a decrease in work in process inventory.

overapplied manufacturing overhead.

an increase in finished goods inventory.

Question 12

An example of a product cost is:

advertising expense for the product.

a portion of the president’s travel expenses.

interest expense on a loan to finance inventory.

production line maintenance costs.

Question 13

Costs may be allocated to a product or activity for many purposes, but care must be exercised when using allocated costs because:

direct costs identified with the product or activity may not be accurately assigned.

fixed costs will change in total if the volume of activity changes.

all costs may not have been allocated to the product or activity.

arbitrarily allocated costs may not behave in the way assumed in the allocation method.

Question 14

Which of the following is more relevant to management accounting than to cost accounting?

Accumulation and determination of product or service cost.

Income measurement and inventory valuation.

Generally accepted accounting principles.

Providing managers information for planning and control purposes.

Question 15

Which of the following is NOT an inventory account for a manufacturing company?

Cost of goods sold.

Work-in-process.

Raw materials.

Finished goods.

.

Finance.

Customer service.

Research and development.

Question 17

The overhead component of product cost is:

the sum of the actual overhead costs incurred in the manufacture of the product.

likely to be the same amount for every product made by the company.

an estimated amount based on labor hours, machine hours, or some other activity.

determined at the end of the year when actual costs and actual production are known.

Question 18

A predetermined overhead rate is used to:

keep track of actual overhead costs as they are incurred.

assign indirect costs to cost objects.

establish prices for manufactured products.

allocate selling and administrative expenses to manufactured products.

Question 19

For the partial value chain functions given below, which sequence is correct?

Design, production, marketing

Marketing, production, distribution

Research and development, production, distribution

Customer service, marketing, distribution

Question 20

Cost accounting is primarily concerned with:

accumulation and determination of product or service cost.

income measurement and inventory valuation.

generally accepted accounting principles.

all of the above.

Reviews

There are no reviews yet.

Be the first to review “accounting exam”

Your email address will not be published. Required fields are marked *

accounting exam

$19.00

Description

1. The return on which one of the following is used as the risk-free rate of return?

a. long-term corporate bonds

b. long-term government bonds

c. short-term corporate bonds

d. U.S. Treasury bills

e. the Consumer Price Index

2. The CEO of Jericho Industries just announced that the firm has received a patent for a product that will convert household garbage into usable fuel without creating any hazardous waste. This news is totally a surprise and seen as a major technological advancement. Which one of the following reactions to this development best indicates an efficient market?

a. The price of Jericho stock remains unchanged.

b. The price of Jericho stock increases rapidly and then settles back to its original value.

c. The price of Jericho stock increases rapidly and then levels off at the higher value.

d. All stocks quickly increase in value and then all but Jericho stock fall back to their original values.

e. The value of all stocks suddenly increase and then level off at their higher values.

3. The stock of Webster’s Foods is priced at $31 a share and has a dividend yield of 2.8 percent. The firm pays constant annual dividends. What is the amount of the next dividend per share?

a. $.740

b. $.868

c. $.927

d. $1.03

e. $1.07

4. Truman Florists pays a constant annual dividend of $2.20 per share on its stock. Last year at this time, the market rate of return on this stock was 12.6 percent. Today, the market rate has fallen to 9.7 percent. What would your capital gains yield have been if you had purchased this stock one year ago and then sold the stock today?

a. 2.90 percent

b. 9.70 percent

c. 14.57 percent

d. 23.02 percent

e. 29.90 percent

5. Over the past 6 years, a stock produced returns of 11 percent, 20 percent, -7 percent, 18 percent, 12 percent, and 3 percent. Based on these six years, what range of returns would you expect to see 95 percent of the time?

a.

10.61 percent to 15.47 percent

b.

10.61 percent to 24.30 percent

c.

10.61 percent to 29.61 percent

d.

11.40 percent to 15.47 percent

e.

11.40 percent to 24.30 percent

6. A stock has an average return of 13.6 percent and a standard deviation of 8.4 percent. In any one given year, you have a 95 percent chance that you will not lose more than _____ percent nor earn more than ____ percent if you invest in this security.

a.

5.2 percent to 22.0 percent

b.

3.2 percent to 30.4 percent

c. 3.2 percent to 30.4 percent

d. 5.2 percent to 22.0 percent

e. 13.6 percent to 38.8 percent

7. Over the last four years, the stock of Wagner’s Paints has had an arithmetic average return of 6.5 percent. Three of those four years produced returns of 9 percent, 3 percent, and

1 percent. What is the geometric average return for this 4-year period?

a. 3.00 percent

b. 4.48 percent

c. 6.33 percent

d. 7.07 percent

e. 8.69 percent

8. The expected return on a security is currently based on a 75 percent chance of a 14 percent return given an economic boom and a 25 percent chance of a 6 percent return given a normal economy. Which of the following changes will increase the expected return on this security?

I. an increase in the probability of an economic boom

II. a decrease in the rate of return given a normal economy

III. an increase in the probability of a normal economy

IV. an increase in the rate of return given an economic boom

a. I and II only

b. I and IV only

c. II and III only

d. I, III, and IV only

e. I, II, III, and IV

9. Which one of the following portfolios has the least amount of systematic risk?

a. a portfolio that duplicates the overall market

b. a portfolio comprised of 50 percent cash and 50 percent large-company stocks

c. a portfolio consisting of various U.S. Treasury bills

d. a stock portfolio with a portfolio beta of 1.8

e. a diversified portfolio with a portfolio beta of 0.7

10. The beta of a portfolio cannot be less than _____ nor greater than _____.

a. 0; 1

b. 1; 2

c. the lowest individual beta in the portfolio; 1

d. 1; the highest individual beta in the portfolio

e. the lowest individual beta in the portfolio; the highest individual beta in the portfolio

11. You own a portfolio of two stocks, A and B. Stock A is valued at $3,240 and has an expected return of 10.5 percent. Stock B has an expected return of 14.7 percent. What is the expected return on the portfolio if the portfolio value is $5,860?

a. 11.20 percent

b. 12.38 percent

c. 12.46 percent

d. 14.03 percent

e. 14.29 percent

12. You want to create a $25,000 portfolio that consists of three stocks and has an expected return of 13 percent. Currently, you own $15,500 of stock A and $6,000 of stock B. The expected return for stock A is 14.5 percent, and for stock B it is 9.2 percent. What is the expected rate of return for stock C?

a. 11.21 percent

b. 11.58 percent

c. 12.62 percent

d. 12.87 percent

e. 13.20 percent

13. You own a $90,000 portfolio that is invested in stock A and B. The portfolio beta is equal to the market beta. Stock A has an expected return of 14.1 percent and a beta of 1.2. Stock B has a beta of .76. What is the value of your investment in stock A?

a. $39,333

b. $40,909

c. $49,091

d. $50,545

e. $50,667

14. Given the following information, what is the variance of a portfolio that is invested 25 percent in both stocks A and C, and 50 percent in stock B?

a. .000025

b. .000106

c. .000232

d. .001414

e. .005285

15. You would like to create a portfolio that is equally invested in a risk-free asset and two stocks. The one stock has a beta of .80. What does the beta of the second stock have to be if you want the portfolio risk to equal that of the overall market?

a. 1.4

b. 1.6

c. 1.8

d. 2.0

e. 2.2

16. The risk-free rate is 3.5 percent and the expected return on the market is 11 percent. Stock A has a beta of 1.1 and an expected return of 12 percent. Stock B has a beta of .92 and an expected return of 10.25 percent. Are these stocks correctly priced? Why or why not?

a. No; Stock A is underpriced and stock B is overpriced.

b. No; Stock A is overpriced and stock B is underpriced.

c. No; Stock A is overpriced but stock B is correctly priced.

d. No; Stock A is underpriced but stock B is correctly priced.

e. Yes; Both stocks are correctly priced.

17. Unsystematic risk:

I. is also called unique risk.

II. is also called asset-specific risk.

III. affects a limited number of assets.

IV. affects a large number of assets.

a. I and III only

b. II and IV only

c. I and IV only

d. I, II, and III only

e. I, II, and IV only

18. The common stock of Bywater, Inc. has 16 percent less systematic risk than the overall market. Currently, the market risk premium is 8.6 percent while the U.S. Treasury bill is yielding 5.2 percent. What is Bywater, Inc.’s cost of equity?

a. 8.06 percent

b. 9.38 percent

c. 10.78 percent

d. 12.42 percent

e. 13.80 percent

19. A U.S. Treasury bill has a beta of _____ while the overall market has a beta of _____.

a. 0; 0

b. 0; 1

c. 1; 0

d. 1; 1

e. infinity; 1

20. The beta of a portfolio cannot be less than _____ nor greater than _____.

a. 0; 1

b. 1; 2

c. the lowest individual beta in the portfolio; 1

d. 1; the highest individual beta in the portfolio

e. the lowest individual beta in the portfolio; the highest individual beta in the portfolio

21. If a security plots below the security market line, then the security:

a. is under-priced.

b. is overpriced.

c. is correctly priced.

d. has a beta greater than 1.0.

e. has a beta less than 1.0.

22. The stock of Uptown Men’s Wear is expected to produce the following returns given the various states of the economy. What is the expected return on this stock?

a. 9.6 percent

b. 10.4 percent

c. 12.8 percent

d. 13.6 percent

e. 15.3 percent

23. Given the following information, what is the variance for this stock?

a. .004638

b. .006667

c. .012121

d. .017406

e. .019949

24. You own a portfolio that consists of $8,000 in stock A, $4,600 in stock B, $13,000 in stock C, and $5,500 in stock D. What is the portfolio weight of stock D?

a. 17.68 percent

b. 17.91 percent

c. 18.42 percent

d. 19.07 percent

e. 19.46 percent

25. You own a portfolio of two stocks, A and B. Stock A is valued at $3,240 and has an expected return of 10.5 percent. Stock B has an expected return of 14.7 percent. What is the expected return on the portfolio if the portfolio value is $5,860?

a. 11.20 percent

b. 12.38 percent

c. 12.46 percent

d. 14.03 percent

e. 14.29 percent

26. You want to create a $25,000 portfolio that consists of three stocks and has an expected return of 13 percent. Currently, you own $15,500 of stock A and $6,000 of stock B. The expected return for stock A is 14.5 percent, and for stock B it is 9.2 percent. What is the expected rate of return for stock C?

a. 11.21 percent

b. 11.58 percent

c. 12.62 percent

d. 12.87 percent

e. 13.20 percent

27. A $16,000 portfolio is invested in a risk-free security and two stocks. The beta of stock A is .74 while the beta of stock B is 1.9. One-half of the portfolio is invested in the risk-free security. How much is invested in stock A if the beta of the portfolio is .60?

a. $3,411.16

b. $4,141.41

c. $4,827.59

d. $5,258.25

e. $5,434.09

28. You have a portfolio comprised of the following. If the portfolio beta is 1.25, what is the beta of stock C?

a. .987

b. 1.006

c. 1.145

d. 1.212

e. 1.309

29. Stock A has an expected return of 14 percent and a beta of 1.3. Stock B has an expected return of 10 percent and a beta of .9. Both stocks have the same reward-to-risk ratio. What is the risk-free rate?

a. 1.0 percent

b. 1.8 percent

c. 2.3 percent

d. 2.5 percent

e. 3.1 percent

30. A stock has a beta of 1.26 and an expected return of 14.8 percent. The risk-free rate is 3.6 percent. What is the slope of the security market line?

a. 8.89 percent

b. 9.23 percent

c. 9.47 percent

d. 9.62 percent

e. 9.92 percent

31. The stock of Ernst Electric has a beta of .87. The market risk premium is 8.6 percent and the risk-free rate is 3.7 percent. What is the expected return on Ernst Electric stock?

a. 7.96 percent

b. 10.58 percent

c. 11.18 percent

d. 12.20 percent

e. 12.30 percent

Reviews

There are no reviews yet.

Be the first to review “accounting exam”

Your email address will not be published. Required fields are marked *