accounting mcq quiz

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Category: Accounting Tags: accounting, accounting, activities, affect, cash, common, cost, entity, expense, expenses, following, goods, income, incurred, inventory, item, operating, order, period, product, profit, quiz, ratio, received, revenue, revenues, sale, service, statement, stock, subtracted, used

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1. The first caption in most income statements in annual reports is:
A. gross sales.
B. net sales.
C. earned revenues.
D. sales, less sales returns and allowances.

2. Gains differ from revenues because gains:
A. are not a result of the entity’s ongoing, central operations.
B. do not have to be realized.
C. are reported as income from operating activities.
D. do not involve any offsetting costs or expenses.

3. Under most circumstances, in order to recognize revenue:
A. cash must have been received.
B. the entity must expect to receive cash in the future.
C. the entity must have paid for all expenses incurred in generating the revenue.
D. the revenue must be realized or realizable, and earned.

4. The concept of matching revenue and expense refers to the fact that:
A. expenses for a period equal the revenues for the period.
B. all costs incurred in the process of earning revenue during a period are recorded as an expense in that period.
C. all cash disbursements during a period are subtracted from all cash receipts during the period.
D. costs incurred in the process of earning revenue during a period are deferred and expensed in a future period.

5. Most entities satisfy the accounting criteria for recognizing revenue when:
A. an order is received from a customer.
B. cash is received from a customer.
C. an unearned revenue account is credited.
D. a product is delivered or a service is provided.

6. Most entities satisfy the accounting criteria for recognizing an expense when:
A. a commitment is made to purchase a product or service.
B. cash is paid to a supplier.
C. a cost is incurred in the revenue generating process.
D. a dividend is paid to stockholders.

7. The gross profit ratio is useful to the manager for each of the following purposes except that:
A. it can be used to determine the selling price to set for an item.
B. it can be used to estimate the amount of inventory lost in a fire.
C. it can be used to determine the amount available from a given amount of revenue to cover operating expenses.
D. it can be used to estimate the amount of operating expenses for a period.

8. Which of the following accounts is not included in the calculation for Gross Profit?
A. Revenue.
B. Cost of goods sold.
C. Net sales.
D. General and selling expenses.

9. When the periodic inventory system is used:
A. operating profit from the sale of an item from inventory is known when the item is sold.
B. gross profit from the sale of an item from inventory is known when the item is sold.
C. cost of goods sold can be calculated by subtracting the ending inventory amount from the sum of beginning inventory and purchases.
D. a physical inventory must be taken in order to estimate the cost of goods sold.

10. Income from operations is:
A. sometimes called the “botXXXXX XXXXXne”.
B. sometimes used in the ROI calculation.
C. usually used in the ROE calculation.
D. usually calculated after income tax expense.

11. The earnings per share of common stock calculation:
A. is made by dividing net income by the number of shares of common stock outstanding at the end of the year.
B. is complicated by the declaration of cash dividends during the year.
C. includes gains or losses from treasury stock transactions.
D. is complicated by the presence of preferred stock in the capital structure.

12. An item that cost $90 is sold for $120. The gross profit ratio for this item is:
A. 20%
B. 25%
C. 33.3%
D. 60%

13. An item that cost $240 is to be sold for a price that will yield a gross profit ratio of 20%. The selling price should be:
A. $192
B. $288
C. $300
D. $1200

14. Recognition of revenue in accrual accounting requires:
A. that cash be received.
B. only that the amount of cash to be received from the sale of a product or service be known.
C. only that a product be delivered or a service be performed.
D. that the revenue be realized or realizable, and earned.

15. The major difference between the indirect and the direct method of a statement of cash flows appears in which the following activities section(s)?
A. The investing activities and financing activities sections.
B. The investing activities section only.
C. The operating activities and financing activities sections.
D. The operating activities section only.

16. Which of the following is an accurate statement regarding a statement of cash flows?
A. Only cash items that affect the income statement are included.
B. Only material cash items that affect the income statement are included.
C. Material non-cash transactions are included.
D. Immaterial financing activities that affect cash do not need to be included.
E. None of the above.

17. In the statement of cash flows, the amount of depreciation and amortization expense is added back to net income because:
A. these expenses do not affect cash, but were subtracted in the determination of net income.
B. these expenses affect investing activities, not operating activities.
C. the cash disbursements for these accrued expenses will be made in a future period.
D. these expenses are recognized for accounting purposes, but they do not represent economic costs.

18. In the statement of cash flows, an increase in the accounts receivable balance from the beginning of the period to the end of the period would:
A. be added to net income because this represents earned revenues that have not been collected.
B. be subtracted from net income because this represents earned revenue provided by operating earnings.
C. be added to net income because this means that revenues were less than cash collected.
D. be subtracted from net income because this means that revenues were more than cash collected.

19. Revenue may be recognized:
A. from the sale of a company’s own common stock.
B. if a company trades inventory at its usual sale value for newspaper advertising.
C. if management believes the market value of land held for future development rises.
D. in 2010 from the sale of subscriptions of a magazine to be published in 2011.

20. The term, “realization,” in revenue recognition refers to which of the following?
A. The entity has completed, or substantially completed, the activities it must perform to be entitled to the revenue benefits.
B. The product or service has been exchanged for cash, claims to cash, or an asset that is readily convertible to a known amount of cash or claims to cash.
C. The entity has received an irrevocable order for goods or services.
D. Cash has been received with an irrevocable order for goods or services.
E. None of the above.

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Category: Accounting Tags: 0, accounting, accounting, accumulated, acquired, acquisition, aets, balance, busine, cost, debit, december, delivery, depreciation, depreciationplant, equipment, estimated, fair, goodwill, life, method, plant, purchased, quiz, residual, revaluation, statement, statements, true, useful, value, year, years

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Multiple Choice

1. Sentosa has acquired manufacturing equipment and incurred these expenses in doing so.
$
Gross invoice price, net of GST, subject to terms of 2/10, n/30) 9000
Transportation costs to get equipment to factory 1000
Special permit to allow wide load on freeway 300
Speeding ticket incurred by company driver while
delivering equipment to the factory 100
Cost to repair wall damaged during installation 500
The equipment should be recorded in Sentosaâ€™s records at:
a. $10 900
b. $10 300
c. $10 120
d. $10 000

2. On what basis would the costs of several items of property, plant and equipment, acquired for a lump-sum payment, normally be allocated?
a. Net realisable value at acquisition date
b. Replacement cost at acquisition date
c. Independent valuation at acquisition date
d. Fair value at acquisition date

3. Kamp Gravel Co purchased three trucks for $50 000 each plus GST by making a $20 000 down payment and agreeing to pay the balance at the end six months. The journal entry to record the acquisition is:
$ $
a. Trucks 150 000
GST Outlays 15 000
Sundry creditor 165 000
b. Trucks 150 000
GST Outlays 15 000
Cash 20 000
Sundry creditor 145 000
c. Cash 20 000
Sundry creditor 130 000
Trucks 150 000
d. Trucks 20 000
Cash 20 000

4. In the financial statements prepared at the end of the accounting period the item Accumulated Depreciation appears:
a. On the income statement as an expense
b. On the balance sheet as a liability
c. On the balance sheet as a deduction from the related asset
d. On both the balance sheet and the income statement

5. The statement that best describes the nature of accounting depreciation is:
a. A charge representing the change in the assetâ€™s market value
b. A charge representing the decline in the physical efficiency of the asset
c. The amount that can be claimed as a tax deduction
d. An allocation of the cost of the asset over its estimated useful life

6. The statement relating to depreciation that is true is:
a. Accumulated depreciation represents the amount of an asset’s cost that has been transferred to depreciation expense
b. The cash account is affected by charging depreciation
c. Accumulated depreciation is a contra-expense account
d. Depreciation represents cash that can be used to replace assets when they wear out

7. Which factor will affect the amount of depreciation charged on an asset in a particular accounting period?
a. Estimated useful life
b. Historical cost
c. Estimated residual value
d. All of the above

8. On 31 December 2009 a new motor vehicle with a life of five years and an estimated residual value of $3000 was purchased by a business at a cost of $23 000, net of GST. The straight-line depreciation method is employed. What is the carrying value of the motor vehicle at 31 December 2012 (after charging depreciation for that year)?
a. $23 000
b. $11 000
c. $12 000
d. $15 000

9. The Delivery Equipment account in the ledger of A co has a balance of $17 600 which is the cost of two trucks purchased on 1 January 2007. The Accumulated Depreciation Delivery Equipment account has a balance on 31 December 2009 of $8000, before adjusting entries. No additional delivery trucks have been acquired or sold. The residual value of each truck is estimated to be $800 and the straight-line depreciation method is used. The necessary adjusting entry to record annual depreciation on 31 December 2009 is:
Debit Credit
a. Depreciation Exp $8000 Delivery Equipment $8000
b. Accumulated Deprecn $4000 Delivery Equipment $4000
c. Depreciation Exp $8000 Cash at Bank $8000
d. Depreciation Exp $4000 Accumulated Deprecn $4000

10. On 1 January 2009 Dee Ltd acquired electronic equipment for $10 000, net of GST. If depreciation is provided at 10% p.a. on the diminishing-balance basis, the depreciation charge for the year ended 31 December 2011 is:
a. $700
b. $729
c. $810
d. $800

11. The statement concerning the diminishing-balance method of depreciation that is true is:
a. It charges the same amount of depreciation each period
b. It applies a declining percentage factor to the assetâ€™s original cost
c. It is also known as the units-of-production method
d. It is an appropriate method when proportionately more of the assetâ€™s benefits are consumed in the early years of its life

12. NG Ltd purchased a sprinkler system on 1 January of Year 1.
Cost (net of GST) $6500
Residual $1500
Estimated Useful Life 4 years
Under the diminishing-balance method, using a rate of 50%, the depreciation expense for year 2 will be:
a. $3250
b. $1625
c. $1500
d. $1250

13. On 1 July 2006 a retailer purchased a delivery truck for $21 000, net of GST. It has an estimated trade-in-value of $6000 and is expected to last for a total of 60 000 kilometres.
A schedule of distance travelled is set out below:
30/6/07 20 000 km
30/6/08 15 000 km
30/6/09 15 000 km
30/6/10 10 000 km
Using the units-of-production method the amount of depreciation charged for the year ended 30 June 2010 is:
a. $3750
b. $3500
c. $2500
d. $5000

14. A machine was purchased on 3 January 2009 for $48 000, net of GST. The machine had an estimated residual value of $6000 and an estimated useful life of 5 years. Depreciation expense for 2009, using sum-of-the-years’-digits method, is:
a. $8400
b. $14 000
c. $19 200
d. $16 000

15. Which of the following is an advantage of the use of accelerated depreciation methods for tax purposes as opposed to the straight-line method?
a. The total amount of tax paid over the lifetime of the asset is reduced
b. The business has the interest-free use of deferred tax dollars until the later years of the asset’s life
c. Lower tax payments are made during the early years of the asset’s life
d. B. and C.

16. Wong purchased a computer for $15 000, net of GST. Originally it had an estimated useful life of 4 years and a residual value of $3000. The straight-line method is used. At the start of the third year of usage Wong revised the life of the computer to a total life of 6 years. What depreciation expense should be recorded for the computer for year 3?
a. $1000
b. $1500
c. $3000
d. $4000

17. When estimates of useful life and residual value, made for the purposes of calculating depreciation, in later years turn out to be materially incorrect and the asset has not reached the end of its useful life, the procedure to be followed is to:
a. Issue corrected financial statements for all prior years
b. Issue corrected financial statements for only the most recent three years
c. Ignore the problem since estimates are not expected to be exact anyway
d. Spread the remaining depreciable amount over the remaining useful life

18. An advantage of maintaining a subsidiary ledger for depreciable assets is:
a. It provides information for the preparation of income tax returns
b. It provides information to support insurance claims in the event of loss from theft or accident
c. It provides information concerning servicing of the assets
d. All are advantages

19. The information to be disclosed about property, plant and equipment in the financial statements prepared for external reporting includes:
a. Cost
b. Accumulated Depreciation
c. Details of useful lives
d. All of the above

Chapter 15
Multiple Choice

1. The balance sheet of Brown Ltd at 31 December 2009 shows the following:
$
Plant 50 000
Accumulated Depreciation-Plant 30 000
20 000
On 1 January 2010, based on a valuerâ€™s estimate of fair value, it was decided to revalue the plant to $35 000.
The journal entry to record the revaluation is:
a. Accumulated Depreciation-Plant 30 000
Plant 15 000
Revaluation reserve 15 000
b. Plant 15 000
Revaluation reserve 15 000
c. Expense on Revaluation of Plant 15 000
Plant 15 000
d. Plant 15 000
Expense on Revaluation of Plant 15 000
Accumulated Depreciation-Plant 30 000

2. The balance sheet of Brown Ltd at 31 December 2009 shows the following:
$
Plant 50 000
Accumulated Depreciation-Plant 30 000
20 000
On 1 January 2010, based on a valuerâ€™s estimate of fair value, it was decided to revalue the plant to $35 000. The plant was then assessed to have a further useful life of 3 years and an expected residual amount of $5000. The journal entry in the books of Brown Ltd to record depreciation on plant on a straight-line basis for the half-year ending 30 June 2010 (balance date) is:
a. Depreciation Expense-Plant 10 000
Accumulated Depreciation-Plant 10 000
b. Depreciation Expense-Plant 5 000
Accumulated Depreciation-Plant 5 000
c. Accumulated Depreciation-Plant 5 000
Depreciation Expense-Plant 5 000
d. Depreciation Expense-Plant 7 500
Accumulated Depreciation-Plant 7 500

3. The statement relating to revaluations of non-current assets that is not true is:
a. Before assets are revalued any existing accumulated depreciation must be written off against the asset account
b. A revaluation increment should be credited directly to a revaluation reserve
c. A revaluation increment is regarded as income to be added to the firm’s profit for the year
d. Future depreciation charges will be based on the revalued carrying amount

4. The true statement is:
a. A revaluation decrement occurs if a non-current asset’s carrying amount is less than its fair value
b. An initial revaluation decrement should be treated as a debit to the revaluation reserve
c. An initial revaluation decrement should be treated as a debit against the current periodâ€™s profit or loss
d. None of the statements is true.

5. When a non-current asset is sold the gain or loss on disposal is the difference between:
a. Fair market value and accumulated depreciation
b. Selling price and accumulated depreciation
c. Fair value and selling price
d. Selling price and carrying amount

6. Assume that a machine with a cost of $3000 has accumulated depreciation of $1400 on the date of its disposal. If it was traded-in for $2000 on a new machine and the balance of $1500 was paid in cash what is the profit or loss on disposal of the old machine? (Ignore GST).
a. $1000 loss
b. $600 gain
c. $400 gain
d. $1200 loss

7. The basic accounting entry for a revaluation decrement is:
a. Debit expense on revaluation of asset; credit asset
b. Debit asset; credit expense on the revaluation of asset
c. Debit revaluation reserve; credit asset
d. Debit asset; credit revaluation reserve

8. Under IAS 36/AASB 136 â€˜Impairment of Assetsâ€™ it is true that:
a. When an assetâ€™s carrying amount exceeds its recoverable amount the asset is said to suffer impairment
b. Impairment losses are accounted for as decrements under the revaluation model
c. Accumulated depreciation is written off against the asset before the write down to recoverable amount
d. All are true statements

9. The statement relating to the composite-rate depreciation approach that is not true is:
a. It is often used in practice by business entities with many similar assets in the one class
b. A single average depreciation rate is applied to the cost of a functional group of assets
c. It is only used for items valued at less than $500 each
d. None of the above, i.e. all are true statements

10. Under IAS 38/AASB 138 the statement concerning internally generated intangible assets that is not true is:
a. They can only be recognised if their cost can be measured reliably
b. It is likely that the cost of internally generated brand names, mastheads and customer lists can be measured reliably
c. The tests for recognising internally generated intangibles are more stringent than for recognising internally generated property, plant and equipment
d. None of the above, i.e. all are true statements

11. The excess of the purchase price of a business over the fair values of the identifiable net assets acquired is a measure of:
a. Fair value
b. Revaluation reserve
c. Purchased goodwill
d. Improvements

12. The statement about goodwill that is true is:
a. Goodwill can be purchased or sold as a separate item
b. Goodwill arises from many factors, such as customer confidence, superior management and a favourable location
c. Under IFRS 3/AASB 3 goodwill must be amortised
d. Goodwill is classified as a current asset

13. On 1 June 2009 S Company acquired for $145,000 cash the business of G Ltd. The carrying amount of G Ltd’s net assets at the time of the transaction was $110 000 while independent valuers calculated their fair value at $130 000. S Company should debit â€˜Goodwillâ€™ for the amount of:
a. $0
b. $15 000
c. $20 000
d. $35 000

14. In rare cases the cost of purchasing a business combination may be genuinely less than the sum of the fair values of the identifiable assets and liabilities acquired (bargain purchase). If so IFRS 3/AASB 3 requires:
a. The acquirer to initially review the measurement of the cost and the fair values of the assets and liabilities acquired
b. Refer to the difference between the cost and the sum of the fair values as an â€˜excessâ€™
c. Recognise the excess immediately as income
d. All of the above

15. Which pairing of non-current assets and acquisition value does not match?
A. Mineral resources – cost
b. Biological assets and agricultural produce – cost
c. Identifiable intangible assets – cost
d. Goodwill – cost of the business combination less the sum of the fair values of the net assets acquired

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Category: Accounting Tags: accounting, accounting, based, breakeven, change, company, companys, contribution, costs, data, fixed, following, income, increase, information, level, margin, point, price, product, profit, question, quiz, reported, sales, selling, sells, single, total, unit, units, variable, volume

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18. Sanderson sells a single product for $50 that has a variable cost of $30. Fixed costs amount to $5 per unit when anticipated sales targets are met. If the company sells one unit in excess of its break-even volume, profit will be:
A. $15.
B. $20.
C. $50.
D. an amount that cannot be derived based on the information presented.
E. an amount other than those in choices “A,” “B,” and “C”, but one that can be derived based on the information presented.
Question:
19. At a volume of 20,000 units, Dries reported sales revenues of $1,000,000, variable costs of $300,000, and fixed costs of $260,000. The company’s contribution margin per unit is:
A. $22.
B. $28.
C. $35.
D. $37.
E. an amount other than those above.
Question:

20. At a volume of 20,000 units, Dries reported sales revenues of $1,000,000, variable costs of $300,000, and fixed costs of $260,000. The company’s break-even point in units is:
A. 7,027 (rounded).
B. 8,667 (rounded).
C. 9,286 (rounded).
D. 7,429 (rounded).
E. an amount other than those above.

Question:

21. A recent income statement of Black Corporation reported the following data:

If these data are based on the sale of 20,000 units, the contribution margin per unit would be:
A. $40.
B. $150.
C. $290.
D. $360.
E. an amount other than those above.

Question:

22. A recent income statement of Black Corporation reported the following data:

If these data are based on the sale of 20,000 units, the break-even point would be:
A. 9,565 units (rounded).
B. 11,000 units (rounded).
C. 7,586 units (rounded).
D. 14,667 units (rounded).
E. an amount other than those above.

Question:

23. A recent income statement of Suni Corporation reported the following data:

If these data are based on the sale of 20,000 units, the break-even point would be:
A. 7,500 units.
B. 11,628 units.
C. 12,500 units.
D. 33,333 units.
E. an amount other than those above.

Question:

24. A recent income statement of Yang Corporation reported the following data:

If these data are based on the sale of 5,000 units, the break-even sales would be:
A. $2,000,000.
B. $2,206,000.
C. $2,500,000.
D. $10,000,000.
E. an amount other than those above.

Question:
25. Lawson, Inc. sells a single product for $12. Variable costs are $8 per unit and fixed costs total $360,000 at a volume level of 60,000 units. Assuming that fixed costs do not change, Lawson’s break-even point would be:
A. 30,000 units.
B. 45,000 units.
C. 90,000 units.
D. negative because the company loses $2 on every unit sold.
E. a positive amount other than those given above.
Question:
26. Grey, Inc. sells a single product for $20. Variable costs are $8 per unit and fixed costs total $120,000 at a volume level of 5,000 units. Assuming that fixed costs do not change, Green’s break-even sales would be:
A. $160,000.
B. $200,000.
C. $300,000.
D. $480,000.
E. an amount other than those above.
Question:
27. Orion recently reported sales revenues of $800,000, a total contribution margin of $300,000, and fixed costs of $180,000. If sales volume amounted to 10,000 units, the company’s variable cost per unit must have been:
A. $12.
B. $32.
C. $50.
D. $92.
E. an amount other than those above.

Question:
28. Strayer has a break-even point of 120,000 units. If the firm’s sole product sells for $40 and fixed costs total $480,000, the variable cost per unit must be:
A. $4.
B. $36.
C. $44.
D. an amount that cannot be derived based on the information presented.
E. an amount other than those in choices “A,” “B,” and “C”, but one that can be derived based on the information presented.
Question:

29. Ribco Co. makes and sells only one product. The unit contribution margin is $6 and the break-even point in unit sales is 24,000. The company’s fixed costs are:
A. $4,000.
B. $14,400.
C. $40,000.
D. $144,000.
E. an amount other than those above.

Question:
31. At a volume level of 500,000 units, Sullivan reported the following information:

The company’s contribution-margin ratio is closest to:
A. 0.33.
B. 0.40.
C. 0.60.
D. 0.67.
E. an amount other than those above.

Question:
44. A recent income statement of Dragonwood Corporation reported the following data:

If the company desired to earn a target profit of $1,270,000, it would have to sell:
A. 5,778 units.
B. 8,600 units.
C. 10,160 units.
D. 11,908 units.
E. an amount other than those above.
Question:
45. Yellow Dot, Inc. sells a single product for $10. Variable costs are $4 per unit and fixed costs total $120,000 at a volume level of 10,000 units. What dollar sales level would Yellow Dot have to achieve to earn a target profit of $240,000?
A. $400,000.
B. $500,000.
C. $600,000.
D. $750,000.
E. $900,000.

Question:
Narchie sells a single product for $50. Variable costs are 60% of the selling price, and the company has fixed costs that amount to $400,000. Current sales total 16,000 units.

46. Narchie:
A. will break-even by selling 8,000 units.
B. will break-even by selling 13,333 units.
C. will break-even by selling 20,000 units.
D. will break-even by selling 1,000,000 units.
E. cannot break-even because it loses money on every unit sold.

Question:
47. Each unit that Narchie sells will:
A. increase profit by $20.
B. increase profit by $30.
C. increase profit by $50.
D. increase profit by some other amount.
E. decrease profit by $5.

Question:

48. In order to produce a target profit of $22,000, Narchie’s dollar sales must total:
A. $8,440.
B. $21,100.
C. $1,000,000.
D. $1,055,000.
E. an amount other than those above.

Question:

49. If Narchie sells 24,000 units, its safety margin will be:
A. $200,000.
B. $400,000.
C. $1,000,000.
D. $1,200,000.
E. an amount other than those above.

Question:
50. The difference between budgeted sales revenue and break-even sales revenue is the:
A. contribution margin.
B. contribution-margin ratio.
C. safety margin.
D. target net profit.
E. operating leverage.

Question:
51. Maxine’s budget for the upcoming year revealed the following figures:

If the company’s break-even sales total $750,000, Maxine’s safety margin would be:
A. $(90,000).
B. $90,000.
C. $246,000.
D. $336,000.
E. $696,000.
Question:

52. Brooklyn sells a single product to wholesalers. The company’s budget for the upcoming year revealed anticipated unit sales of 31,600, a selling price of $20, variable cost per unit of $8, and total fixed costs of $360,000. Brooklyn’s safety margin in units is:
A. (13,400).
B. 0.
C. 1,600.
D. 13,600.
E. an amount other than those above.

Question:
53. Brooklyn sells a single product to wholesalers. The company’s budget for the upcoming year revealed anticipated unit sales of 31,600, a selling price of $20, variable cost per unit of $8, and total fixed costs of $360,000. If Brooklyn’s unit sales are 200 units less than anticipated, its breakeven point will:
A. increase by $12 per unit sold.
B. decrease by $12 per unit sold.
C. increase by $8 per unit sold.
D. decrease by $8 per unit sold.
E. not change.

Question:
54. Brooklyn sells a single product to wholesalers. The company’s budget for the upcoming year revealed anticipated unit sales of 31,600, a selling price of $20, variable cost per unit of $8, and total fixed costs of $360,000. If Brooklyn’s unit sales are 300 units more than anticipated, its break-even point will:
A. increase by $12 per unit sold.
B. decrease by $12 per unit sold.
C. increase by $8 per unit sold.
D. decrease by $8 per unit sold.
E. not change.

?
Question:

56. Danielle sells a single product at $20 per unit. The firm’s most recent income statement revealed unit sales of 100,000, variable costs of $800,000, and fixed costs of $400,000. If a $4 drop in selling price will boost unit sales volume by 20%, the company will experience:
A. no change in profit because a 20% drop in sales price is balanced by a 20% increase in volume.
B. an $80,000 drop in profit.
C. a $240,000 drop in profit.
D. a $400,000 drop in profit.
E. a change in profit other than those above.

Question:

60. O’Dale sells three products: R, S, and T. Budgeted information for the upcoming accounting period follows.

The company’s weighted-average unit contribution margin is:
A. $3.00.
B. $3.55.
C. $4.00.
D. $19.35.
E. an amount other than those above.

Question:
Jamal & Co. makes and sells two types of shoes, Plain and Fancy. Data concerning these products are as follows:

Sixty percent of the unit sales are Plain, and annual fixed expenses are $45,000.
62. The weighted-average unit contribution margin is:
A. $4.80.
B. $9.00.
C. $9.25.
D. $17.00.
E. an amount other than those above.

Question:

63. Assuming that the sales mix remains constant, the total number of units that Jamal must sell to break even is:
A. 2,432.
B. 2,647.
C. 4,737.
D. 5,000.
E. an amount other than those above.
Question:
64. Assuming that the sales mix remains constant, the number of units of Plain that Jamal must sell to break even is:
A. 2,000.
B. 3,000.
C. 3,375.
D. 5,000.
E. 5,625.
Question:
65. Assuming that the sales mix remains constant, the number of units of Fancy that Jamal must sell to break even is:
A. 2,000.
B. 3,000.
C. 3,375.
D. 5,000.
E. 5,625.

Question:
77. The following information relates to Dazie Company:

Dazie’s operating leverage factor is closest to:
A. 0.067.
B. 0.167.
C. 0.400.
D. 2.500.
E. 6.000.

Question:

78. The following information relates to Paternus Company:

If a manager at Paternus desired to determine the percentage impact on income of a given percentage change in sales, the manager would multiply the percentage increase/decrease in sales revenue by:
A. 0.25.
B. 0.40.
C. 2.50.
D. 4.00.
E. 10.00.

Question:
Edmonco Company produced and sold 45,000 units of a single product last year, with the following results:

Answer:
79. Edmonco’s operating leverage factor was:
A. 4.
B. 5.
C. 6.
D. 7.
E. 8.

Question:
80. If Edmonco’s sales revenues increase 15%, what will be the percentage increase in income before income taxes?
A. 15%.
B. 45%.
C. 60%.
D. 75%.
E. An amount other than those above.
Question:
83. A company, subject to a 40% tax rate, desires to earn $500,000 of after-tax income. How much should the firm add to fixed costs when figuring the sales revenues necessary to produce this income level?
A. $200,000.
B. $300,000.
C. $500,000.
D. $833,333.
E. $1,250,000.

Question:
84. Barrey, Inc. is subject to a 40% income tax rate. The following data pertain to the period just ended when the company produced and sold 45,000 units:

How many units must Barrey sell to earn an after-tax profit of $180,000?
A. 42,000.
B. 45,000.
C. 51,000.
D. 61,000.
E. An amount other than those above.
Question:
85. Barrey, Inc. is subject to a 40% income tax rate. The following data pertain to the period just ended when the company produced and sold 45,000 units:

How many units must Barrey sell to earn an after-tax profit of $225,000?
A. 67,250.
B. 62,250.
C. 61,000.
D. 51,000.
E. An amount other than those above

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Category: Accounting Tags: accounting, accounting, company, contribution, cost, costs, decrease, direct, figure, finished, fixed, following, goods, increase, inventory, jobs, labor, management, margin, materials, overhead, proce, production, quiz, ratio, sales, sold, total, unit, units, variable, work, year

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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 â€œrelevant range.â€
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 equal
A) $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 been
A) 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, â€œNext to the federal government, weâ€™re one of the few companies allowed to print money. We have no marginal costs. Wahoo.â€ Inktomiâ€™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 Joeâ€™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

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Category: Accounting Tags: 0, 15000d, account, accounting, accounting, accounts, aets, busine, capital, cash, column, computer, decrease, decreaseb, equipment, equity, exchange, following, increase, increasea, increasec, increased, invested, liabilities, office, owners, paid, payable, purchase, purchased, quiz, recorded, total

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1) Which of the following transactions would cause one asset to increase and another asset to decrease?

A. The owner invested cash in the business
b. the business paid a creditor
c. the business incurred an expense on credit
d. the business bought supplies for cash.

2) Bob purchased a new computer for the company on account. The transaction will.

a. increase computer; increase capital
b. decrease cash; increase accounts payable
c. decrease cash; increase computer
d. increase computer; increase accounts payable

3) Mary invested cash in her new business. What effect will this have?

a. increase an asset and increase a liability
b. decrease as asset and increase a liability
c. increase an asset and increase owner’s equity
d. increase as asset and decrease owner’s equity

4) Bonnie’s Baskets purchases $4,000 worth of office equipment on account. This causes

a. cash and capital to decrease
b. office equipment and accounts payable to increase
c. office equipment to decrease and accounts payable to increase
d. accounts payable to increase and capital to decrease

5) Which of the following would result if a business purchased equipment paying a 40% down payment in cash?

a. equipment would increase and cash would decrease
b. accounts payable would increase
c. since the equipment has not been paid in full, there is nothing to record
d. both and b are correct.

6) Katie’s vegetarian restaurant, with total assets of $90,000, borrows $15,000 fromÂ . Which of the following is a true statement upon borrowing the money?

a. total assets are now $105,000
b. total assets are now $80,000
c. total assets are now $15,000
d. total assets are now $75,000

7) Which of the following will be recorded in the owner’s equity column as an increase?

a. an exchange of assets
b. the purchase of an asset on credit
c. an investment by the owner
d. a withdrawal by the owner

8) How does the purchase of office equipment on account affect the accounting equatiion?

a. assets increase; liabilities decrease
b. assets increase; owner’s equity increases
c. assets increase; liabilities increase
d. liabilites increase; owner’s equity decreases

9) If total liabilities are $1,000 and total assets are $8,000, owner’s equity must be.

a. $7,000
b. $3,000
c.$10,000
d. $13,000

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Category: Accounting Tags: accounting, accounting, analyzing, animation, animations, apresentation, audience, collaborate, content, create, creating, deck, effective, following, good, helps, idea, includes, interact, need, outcome, point, poor, presentation, quiz, slide, slides, template, thepresentation, time, training, used, word

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Which of the following is a question that you need to answer
to successfully analyze your audience? ?

A. What is the main concern of the presentation?

B. Who are the key players?

C. Will I be standing and presenting the slides?

D. How quickly can I complete the presentation?

The question-and-answer session with the audience during your presentation __________.

A. helps you build your credibility by demonstrating your
expertise and openness

B. does not allow you to deflect or address your audience’s
criticism

C. undermines and trivializes the important parts of your
presentation

D. does not allow you to emphasize and expand on important
points

For most business presentations, the main message should
__________.

A. not include a solution to the problem discussed in the
presentation

B. lead your audience to the intended outcome

C. not highlight what the audience will gain from the
presentation

D. take the presenter’s rather than the audience’s point of
view

Rosie includes detailed text of her speech for a
presentation on slides so that she can use it as her “speaking
script.” This is __________.

A. a good idea, as this will give her the fluency required
for the presentation

B. a good idea, as white spaces on slides are undesirable

C. a poor idea, because this layout will let the audience
know what she is going to say in advance

D. a poor idea, since the audience can absorb more if the
slides contain less information

A slide master __________.

A. is a word processing tool

B. enforces consistency in your visual elements

C. saves you time but runs the risk of inconsistent
formatting

D. is useful as it allows you to cut and paste the
formatting from one slide to the next

Which of the following would be the most effective way to
begin a presentation on implementing a new training program? ?

A. Our current training system is not up to par.

B. Are you aware that our training system is outdated?

C. Three out of five employees are not sufficiently prepared
for their jobs by our current training system.

D. Training is very important to the success of our company.

The more specific your objective, __________.

A. the more time it will take to create an effective
presentation

B. the longer your presentation will need to be to be
effective

C. the easier it will be to create an effective presentation

D. the less persuasive your presentation will be

__________ help you see the big picture of a presentation
before you get too involved with creating individual slides.

A. Animations

B. Storyboards

C. Slide decks

D. Message headlines

Dexter is delivering a presentation on a new project that is
perceived as risky by some members of his audience. He opens his presentation
with the following words: “Nothing ventured, nothing gained.” This is
an example of capturing attention by __________.

A. stating a fact

B. telling an anecdote

C. quoting a familiar saying

D. sharing a secret

Your colleague Anita previews for you the slides she created
for an upcoming presentation. You notice that she used slide animations on almost
every slide. What advice would you give her?

A. Animations are engaging and should be used anywhere
possible on your slides.

B. Animation should be used only to reveal bullet points one
at a time.

C. Animation is encouraged only when it helps your audience
to better understand your point.

D. Animation trivializes your concepts and should not be
used in serious presentations.

If a slide deck makes “stand-alone sense,” then it
means that the slide deck __________.

A. is comprehensible only by those people who have prior
knowledge of the topic

B. includes every word the presenter plans to say

C. requires supporting documents like handouts for it to be
understood

D. can be understood by anyone who reads it without the
benefit of the presenter

Jane needs to create a presentation to teach her co-workers
how to work with a new database system. This means that her presentation will
be __________.

A. informational

B. persuasive

C. instructional

D. collaborative

When you deliver a business presentation, __________.

A. you are limited to only one medium

B. you should never embed video or audio files with your
slides

C. mixing several media is not recommended, as this will
likely confuse your audience

D. you can combine multiple options to best serve your
purpose, content, and setting

Starting a presentation with a(n. __________ can be risky.

A. anecdote

B. quotation

C. question

D. statistic

The first step in the process of designing slide
presentations is __________.

A. organizing the content

B. developing a template

C. identifying the type of presentation

D. creating a storyboard

Which of the following guidelines should be followed for
creating a template that supports effective visual communication?

A. Avoid templates with decorative, nonfunctional graphics.

B. Use highly ornate symbols as bullets.

C. Avoid including slide numbers.

D. Use dramatic color gradations on backgrounds.

Which of the following is a goal of the opening of a
presentation?

A. establishing rapport with the audience

B. analyzing the requirements of the audience

C. identifying the tools that will be needed during the
presentation

D. visualizing the outcome of the presentation

Which of the following media is most appropriate if you want
to encourage your audience to collaborate, interact, and create content?

A. slides

B. podcasts

C. video conferences

D. flipcharts

Which of the following statements is true regarding the use
of a document camera during a presentation?

A. It encourages the audience to collaborate, interact, and
create content.

B. It helps with communicating complex material that people
need to look at carefully.

C. It is used for presenting to a distant audience
accessible by computer technology.

D. It can be used to share content that is not in electronic
form.

Which of the following is considered part of analyzing your
setting?

A. Who are the key players?

B. What are the needs of your audience?

C. Will you be using your own computer to present slides?

D. How far do you need to move your audience before they
act?

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Category: Accounting Tags: 0, account, accounting, accounting, accounts, aets, answers, balance, capital, cash, cause, company, correct, decrease, equity, equityc, flowsb, following, income, increase, liabilities, owners, period, quiz, revenues, sheetb, statement, statementc, thea, utilities, withdrawal, withdrawals

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If ‘Ol Fashioned toys’ revenues are less than its expenses
during the accounting period, then.

a. owner’s withdrawals decrease net income

b. net income causes liabilities to decrease

c. the business will incur a loss

c. owner’s withdrawals increase owner’s equity

2. The statement of owner’s equity contains the

a. owner’s capital for the beginning of the period

b. liabilities of the company

c. total amount owed by credit customers

d. balance in the cash account

3. Ryan withdrew cash from the business to pay his personal
cell ophone bill. The expanded accounting equation changes include

a. increase in both cash and withdrawal

b. decrease in both cash and withdrawal

c. decrease in cash and increase in withdrawal

d. increase in cash and decrease in withdrawal

4. a company has $4,500 in its Revenue account at the end of
a period. The Expenses are as follows: Rent, $750; Utilities, $150; Salaries,
$2,400; Insurance, $225. The net income (loss for the period is

a. $3,600

b. ($2,100

c. $975

d. ($1,425

5. An expense should be recorded when

a. the bill is paid

b. the expense is incurred

c. a bill is rreceived in the mail.

d. None of the above answers are correct.

6. The increase or decrease in the owner’s equity is
reported on the

a. income statement

b. statement of owner’s equity

c. balance sheet

d. all of these answers are correct

7. Expense

a. are costs the company incurs in carrying on operations

b. are a subdivision of owner’s equity

c. record personal expenses not related to the business

d. both A and B are correct

8. Which of the following is included in the balance sheet?

a. revenue

b. salaries expense

c. utilities expense

d. accounts payable

9. Which financial statement is considered a link between
the income statement and balance sheet?

a. statement of cash flows

b. statement of company assets

c. statement of company liquidity

d. statement of owner’s equity

10. Which of the following transactions has no effect on
owner’s equity?

a. paying salaries expense

b. equipment purchase

c. billing for services rendered

d. a withdrawal

11. Carrie billed her legal clients $6,000 for legal work
completed during the month. This transaction will

a. cause a $6,000 increase in revenues and liabilities

b. cause a $6,000 increase in revenues and a decrease in
liabilities

c. cause a $6,000 increase in assets and revenues

d. not be recorded until the cash is collected

12. An accounting report that shows the changes in capital
during the accounting period is

a. a balance sheet

b. an income statement

c. a statement of owner’s equity

d. all of these ansers are correct

13. The financial statement that shows revenue and expenses
for a period of time is the

a. balance sheet

b. income statement

c. statement of owner’s equity

d. statement of cash flows

14. Which of the following is not one of the four basic
financial statements?

a. statement of cash flows

b. income statement

c. statement of company position

d. balance sheet

15. When services are rendered but payment is not made,
which account would be increased?

a. accounts receivable

b. accounts payable

c. cash

d. withdrawal

16. The net income or net loss is calculated on the

a. balance sheet

b. statement of owner’s equity

c. income statement

d. none of the above answers are correct

17. Which accounts are affected when the company buys
supplies on account?

a. assets and capital

b. liabilities and capital

c. assets and liabilities

d. none of the above answers are correct

18. If beginning capital was $110,000, ending capital is
$95,000, and the owner’s withdrawals were $10,000, the amount of net income or
net loss was

a. net income of $5,000

b. net income of $15,000

c. net loss of $15,000

d. net loss of $5,000

19. Which of the following items are on both the balance
sheet and the statement of owner’s equity?

a. net loss

b. capital

c. additional owner’s investment

d. owner’s withdrawals

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accounting mcq quiz

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Category: Accounting Tags: accounting, accounting, aets, answer, application, cash, cognitively, complex, consistent, convincing, deception, deemed, easier, easy, expenses, fabricate, facts, funds, income, increases, method, observer, persons, plausible, quiz, source, sources, statement, task, taxpayers, understatement, variation, worth

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1. The cognitive load framework emphasizes that
a. deception is a cognitively complex task and it is cognitively easier to fabricate a plausible and convincing lie consistent with everything the observer knows
b. deception is a cognitively easy task and it is cognitively easier to fabricate a plausible and convincing lie consistent with everything the observer knows
c. deception is a cognitively easy task and it is cognitively more difficult to fabricate a plausible and convincing lie consistent with everything the observer knows
d. deception is a cognitively complex task and it is cognitively more difficult to fabricate a plausible and convincing lie consistent with everything the observer knows
e. none of the above

2. Experts agree that if when asked a question the hands gesture away from the body
a. the answer is probably false
b. the answer may be either false or true
c. the answer is probably true
d. the interviewee is uncertain of the correct answer
e. none of the above

3. Based upon the following facts, determine a personâ€™s preliminary understatement of income:

Schedule C receiptsâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦. $280,000
Schedule C expensesâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦. 135,000
Personal living expensesâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦ 65,000

a. an overstatement
b. $80,000
c. $135,000
d. $280,000
e. None of the above

4. Which statement is false?
a. The source and application of funds technique is a variation of the net worth method that shows increases and decreases in a taxpayerâ€™s accounts at the end of the year.
b. Often the IRS agent will use the expenditure approach when a taxpayer is spending income lavishly rather than purchasing assets or investments.
c. The expenditure approach is similar to the Cash T, except that the data used are the increases and decreases in the taxpayerâ€™s accounts.
d. The source and application of funds method is a variation of the bank deposit method.
e. None of the above.

5. Which statement is true?
a. Beauty and barber shops are cash intensive businesses.
b. Where the application of funds is less than the sources, a taxpayer is deemed to have an understatement of income.
c. Where the application of funds is greater than the sources, a person is deemed to have an overstatement of income.
d. The Cash T is appropriate for persons where a substantial amount of income is deposited in banks and the expenditures are proportionate to the income reported.
e. None of the above is true

6. In computing income under the net worth method, the following facts are found:

Total assets $1,600,000
Total liabilities 825,000
Nondeductible expenses 120,000
Net worth at beginning of year 560,000

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accounting mcq quiz

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Category: Accounting Tags: abovee, accounting, accounting, activity, aets, bank, begin, believea, criminal, deposit, deposited, establish, following, funds, government, hidden, income, matters, method, owner, profeional, property, quiz, semantic, speaker, statement, strategy, taxable, time, used, week, wire, worth

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1. Which statement is false?
a. The net worth analysis may be used when searching for hidden income in drug trafficking and insurance fraud situations.
b. Whereas the focus of the net worth method is on the year-end balances as well as other assets and liabilities, the bank deposit technique looks at the funds deposited during the year.
c. The bank deposit method attempts to reconstruct gross taxable receipts rather than adjusted taxable income.
d. The bank deposit method is appropriate when most of the income is deposited in banks and most of the expenses are paid by checks.
e. All of the above are true.

2. Which of the following is a step in locating offshore assets?
a. determine if a subject traveled overseas
b. locate the subjectâ€™s travel agency
c. identify the means employed to move cash offshore
d. all of the above
e. none of the above

3. Which of the following are specialized bank accounts, in connection with wire transfer services, that invite misuse by sophisticated and professional money launderers?
a. basic checking accounts
b. threshold accounts
c. cupo accounts
d. b and c
e. none of the above

4. Which semantic strategy is being used by the speaker of the following statement?

A lot of these customers are elderly people with a lot of time on their hands. They are just glad for the company.

a. emphasizing
b. rationalizing
c. debating
d. term-shifting
e. none of the above

5. One important initial goal in asset tracing for the professional is
a. to establish a cooperative relationship with the foreign government involved
b. to attach any assets hidden offshore
c. to establish some paper trail that evidences communication, either initially or ongoing, with the holder of the assets
d. a and b
e. none of the above

6. Which type of semantic dodger is most likely to use sentences throughout a statement that begin with phrases such as â€œI think,â€ â€œI guess,â€ and â€œI believe?â€
a. the term-shifter
b. the nonconformist
c. the joker
d. Mr. I cannot commit
e. none of the above

7. Which statement contains a qualifying word that suggests that the speaker is evading a straightforward statement of the facts?
a. I saw him a week ago.
b. The last time I saw him was a week ago.
c. The last time I actually saw him was a week ago.
d. I saw him less than a week ago.
e. None of the above

8. Which of the following statements is true?
a. it matters whether the owner of property was involved in the crime for purposes of civil forfeiture
b. the owner does not even have to be accused or even suspected of involvement in the criminal activity for his property to be forfeited
c. it matters whether the owner of property was even aware that criminal activity was taking place
d. even if the owner can prove the objectâ€™s innocence, the government still has a right to the property that relates back to the time of its illegal use
e. none of the above
9. Which of the following is not a method used to move funds offshore?
a. wire transfers
b. professional intermediaries
c. personal checks
d. all of the above
e. none of the above

10. What semantic strategy is evidenced in the following sentence?

I am telling you the truth, with God as my witness.

a. Lying
b. Rationalization
c. Swearing of oaths
d. Euphemization
e. None of the above

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Category: Accounting Tags: 0, accounting, accounting, accounts, activities, aets, capital, cash, common, company, corporation, cost, earnings, equity, exce, following, income, increased, operating, operations, preferred, quiz, rate, return, sales, section, shares, statement, stock, stockholders, total, turnover, vertical

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1. Operating cash flows affect
A. current assets and current liabilities.
B. equity accounts.
C. long-term asset accounts.
D. long-term liability accounts.

2. Which activities are computed differently using the two methods of formatting a statement of cash
flows?
A. Operating activities
B. Both operating activities and investing activities
C. Financing activities
D. Investing activities

3. If Rick’s net sales increased from $40,000 to $80,000 and its operating expenses increased from $30,000
to $50,000, then vertical analysis based on net sales would show which of the following for operating
expenses for the two periods (to the nearest tenth of a percent)?
A. 133.3% and 160.0%
B. 62.5% and 75.0%
C. 75.0% and 62.5%
D. 160.0% and 133.3%

4. The Isaiah Corporation Stockholders’ Equity section includes the following information:

Total par value of the preferred and common stock is
Preferred Stock $22,000
Paid-in Capital in Excess of Parâ€”Preferred 2,980
Common Stock 48,000
Paid-in Capital in Excess of Parâ€”Common 3,400
Retained Earnings 7,350
A. $83,730.
B. $70,000.
C. $76,380.D. $77,350.

5. If you own 500 shares (2% of a corporation’s stock) and the corporation issues 15,000 new shares, how
many of the new shares can you purchase under preemptive right?
A. 500
B. 300
C. 800
D. 0

6. Casey Company has an accounts receivable turnover of 36 days, an inventory turnover of 77 days, and
an accounts payable turnover of 40 days. Casey’s cash conversion cycle is _______ day(s).
A. 73
B. 81
C. 1
D. 153

7. What is the rate of return on equity if net income is $22,700; preferred dividends are $3,000; sales are
$100,000; and average common stockholders’ equity is $86,000?
A. 22.9%
B. 22.7%
C. 86.0%
D. 26.4%

8. What is Jane’s rate of return on total assets if average total assets are $100,000; net income is $2,000;
interest expense if $1,600; and income tax is $2,000?
A. 5.6%
B. 3.6%
C. 4.6%
D. 5.2%

9. Which section of the income statement does not report net of income taxes or net of.justanswer.com/multiple-problems/8gxea-1-operating-cash-flows-affect-a-current-assets-current.html#”>incometax savings?
A. Cumulative effect of changes in accounting principles section
B. Extraordinary items section
C. Discontinued operations section
D. Continuing operations section

10. Isaiah Corporation’s Accounts Receivable increased by $35,000, and its Accounts Payable decreased
by $18,000. What is the net effect on cash from operations under the indirect method?
A. ?$18,000
B. ?$53,000
C. +$35,000
D. +$17,000
11. Earnings that a stockholder receives from a corporation are an example of which stockholder right?
A. Preemption
B. Liquidation
C. Dividends
D. Vote

12. The Amanda Corporation Stockholders’ Equity section includes the following information:

What was the total selling price of the preferred stock?
Preferred Stock $12,000
Paid-in Capital in Excess of Parâ€”Preferred 2,700
Common Stock 15,000
Paid-in Capital in Excess of Parâ€”Common 4,100
Retained Earnings 8,200
A. $16,100
B. $12,000
C. $14,700
D. $20,200

13. Rick Company has declared a $40,000 cash dividend to shareholders. The company has 5,000 shares
of $20 par, 6% preferred stock, and 10,000 shares of $15 par common stock. The preferred stock is
noncumulative. How much will be distributed to the preferred and common stockholders on the date of
payment?
A. $34,000 preferred; $6,000 common
B. $0 preferred; $40,000 common
C. $40,000 preferred; $0 common
D. $6,000 preferred; $34,000 common

14. What is the rate of return on common stockholders’ equity if sales are $100,000, net income is
$22,700, and average common stockholders’ equity is $86,000?
A. 86.0%
B. 26.4%
C. The rate of return can’t be determined from the information given.
D. 22.7%

15. Casey Company has 5,000 shares of treasury cost that it purchased for $13 per share. It later resold
2,000 of those shares for $17 per share. The amount to be credited to Paid-in Capitalâ€”Treasury Stock is
A. $34,000.
B. $8,000.
C. $30,000.
D. $26,000.

16. For vertical analysis purposes, the base item on the income statement isEnd of exam
A. net income.
B. total expenses.
C. gross profit.
D. net sales.

17. Net sales at Kelly’s Bakery increased from $40,000 to $60,000, and its cost of goods sold increased
from $20,000 to $40,000. Vertical analysis based on net sales would show which percentages for cost of
goods sold (rounded to the nearest %)?
A. 40% and 20%
B. 10% and 30%
C. 67% and 40%
D. 50% and 67%

18. Brandon Company had extraordinary losses of $150,000. If its corporate tax rate is 30%, at which
amount will the losses be shown on the income statement?
A. Not enough information is given to answer the question.
B. $45,000
C. $105,000
D. $150,000

19. The records of Ashley Boutique showed a net loss of $30,000; depreciation expense of $25,000; and
an increase in supplies on hand of $5,000. The amount of net cash flow from operating activities using the
indirect method is
A. $15,000.
B. $20,000.
C. ($10,000).
D. ($15,000).

20. In a common-size income statement, selling expenses are 55%. This means that they’re 55% of
A. net income.
B. net sales.
C. gross profit.
D. net profit.

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Category: Accounting Tags: , 0, 1, 2, 3, 4, 5, accounting, accounting, aets, balance, cash, current, debt, equipment, equity, fixed, forma, liabilities, longterm, owners, payable, percentage, question, quiz, sales, sheet, table, total, year

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Which of the following is the correct sequence of events?

pro forma balance sheet, pro forma cash budget, pro forma income statement

pro forma balance sheet, pro forma income statement, pro forma cash budget

pro forma income statement, pro forma cash budget, pro forma balance sheet

none of the above.

Refer to Table 6.1 to answer this question.

Table 6-1

Balance Sheet

Total Sales

Percentage

Forecast Sales

Current Year

Next Year

$225,000

Sales

$300,000

Assets

Current Assets

Cash

$5,694

Accounts Receivable

19,662

Inventory

3,381

Total Current Assets

28,737

Fixed Assets

Furniture & Fixtures

5,595

Equipment

25,456

Total Fixed Assets

31,051

Total Assets

$59,788

Liabilities and Owner’s Equity

Current Liabilities

Notes Payable

$15,456

Accrued Taxes Payable

3,598

Total Current Liabilities

19,054

Long-Term Debt

18,654

Total Liabilities

37,708

Owner’s Equity

22,080

Total Liabilities & Owner’s Equity

$59,788

The current ratio for the current year is __________.

1.51.

0.76.

1.59.

1.54.

2 points

Question 29

Refer to Table 6-1 to answer this question.

Table 6-1

Balance Sheet

Total Sales

Percentage

Forecast Sales

Current Year

Next Year

$225,000

Sales

$300,000

Assets

Current Assets

Cash

$5,694

Accounts Receivable

19,662

Inventory

3,381

Total Current Assets

28,737

Fixed Assets

Furniture & Fixtures

5,595

Equipment

25,456

Total Fixed Assets

31,051

Total Assets

$59,788

Liabilities and Owner’s Equity

Current Liabilities

Notes Payable

$15,456

Accrued Taxes Payable

3,598

Total Current Liabilities

19,054

Long-Term Debt

18,654

Total Liabilities

37,708

Owner’s Equity

22,080

Total Liabilities & Owner’s Equity

$59,788

When forecasted sales for next year are $300,000, projected long-term debt using the percentage of sales method for next year is __________.

$25,410.

$28,281.

$29,430.

$24,870.

2 points

Question 30

Refer to Table 6-1 to answer this question.

Table 6-1

Balance Sheet

Total Sales

Percentage

Forecast Sales

Current Year

Next Year

$225,000

Sales

$300,000

Assets

Current Assets

Cash

$5,694

Accounts Receivable

19,662

Inventory

3,381

Total Current Assets

28,737

Fixed Assets

Furniture & Fixtures

5,595

Equipment

25,456

Total Fixed Assets

31,051

Total Assets

$59,788

Liabilities and Owner’s Equity

Current Liabilities

Notes Payable

$15,456

Accrued Taxes Payable

3,598

Total Current Liabilities

19,054

Long-Term Debt

18,654

Total Liabilities

37,708

Owner’s Equity

22,080

Total Liabilities & Owner’s Equity

$59,788

When forecasted sales for next year are $300,000, total assets next year are estimated at __________ when the percentage of sales method is used.

$104,629.

$77,724.

$79,710.

$79,717.

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Category: Accounting Tags: 0, 1, account, accounting, accounting, accounts, balance, balanced, bought, busine, cash, cashd, credit, creditc, debit, decrease, ending, entries, expense, footing, john, liability, normal, payable, postings, provided, quiz, records, revenue, services, sidec, supplies, tool

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The accounts receivable account has total debit postings of $1,900 and credit postings of $1,100. The balance of the account is
a. 800 debit
b. 800 credit
c. 2,600 credit
d. 2,600 debit

2) Jim Walton performed services on credit for 2,450. a debit for this transaction should be recorded to
a revenue
b. accounts receivable
c. accounts payable
d. cash

3) Accounts payable had a normal starting balance of 800. There were debit postings of 600 and credit postings of 300 during the month. The ending balance is
a. 500 credit
b. 1,000 debit
c. 500 debit
d. 1,000 credit

4) When an owner records a credit for 650 for revenue earned but not yet received, the amount of the debit should be
a. 325
b. 0
c. 975
d. 650

5) A category that is not in the chart of accounts is
a. assets
b. liabilities
c. cash flows
d. revenue

6) Which of the statements of the rules of debit and credit is true?
a. decrease accounts receivable with a credit and the normal balance is a credit
b. increase accounts payable with a credit and the normal balance is a credit
c. increase capital with a debit and the normal balance is a debit
d. decrease cash with a debit and the normal balance is a debit

7) The left side of any account is the
a. debit side
b. credit side
c. ending balance
d. footings

8) Which of the following entries records the investment of cash by john, owner of a sole proprietorship?
a. debit john, capital; credit cash
b. debit cash; credit john, withdrawals
c. debit john, withdrawals; credit cash
d. debit cash; credit john, capital

9) The accounts payable account is
a. a revenue, and it has normal debit balance
b. an expense, and it has a normal credit balance
c. a liability, and it has a normal debit balance
d. a liability, and it has a normal credit balance

10) A debit increases the balance in all of the following accounts, except
a. cash
b. withdrawals
c. expenses
d. accounts payable

11) The rigt side of any accounts is the
a. debit side
b. credit side
c. ending balance
d. footings

12) The ledger is
a. a group of accounts that records data from business transactions
b. a tool used to make sure that all accounts have normal balances
c. chronological record of the day’s transactions
d. a tool used to ensure that debits equal credits

13) The beginning balance in the computers account was 2,000. The company purchased an additional 1,000 worth of computers. The balance in the account is
a. debit of 2,000
b. credit of 3,000
c. debit of 3,000
d. credit of 2,000

14) An account is said to have a debit balance if
a. the footing of the debits exceeds the footing of the credits
b. there are more entries on the debit side than on the credit side
c. its normal balance is debit without regard to the amounts or number of entries on the debit side
d. the last entry of the accounting period was posted on the debit side

15) A liability would be credited and an expense debited if
a. the business paid a creditor
b. the business incurred an expense and did not pay the expense immediately
c. the business bought supplies on account
d. the business bought supplies for cash

16) One asset would be debited and another credited if
a. the business provided services to a cash customer
b. the business paid a creditor
c. the business bought supplies paying cash
d. the business provided services to a credit customer

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You invested $5,000 in the Cog corporation and $5,000 in the Gear corporation. Both of these corporations have $100 million in total assets. The Cog corporation had a net profit of $5 million and the Gear corporation had a net profit of $10 million. You read their annual reports and both companies had established a goal of having net profit equal to 10% of total assets. Which of the following statements is true regarding these 2 firms?

Cog is effective and more efficient than Gear.

Cog is effective but less efficient than Gear.

Gear is effective and more efficient then Cog.

Gear is effective but less efficient than Cog.

Cannot tell without more information.
2 points

Question 3

Sam quit his job as an accountantÂ with We Keep Books Accurately to open his own accounting firm. He earned $40,000 with the accounting firm We Keep Books Accurately. During the current year Sam had revenues of $190,000 and total expenses of $110,000. Sam earned an

accounting profit of $40,000.

accounting profit of $80,000 and an entrepreneurial profit of $40,000.

entrepreneurial profit of $80,000, but an accounting of $40,000.

entrepreneurial profit of $80,000.

Cannot tell from the information provided.
2 points

Question 4

Sam quit his job as an accountant with We Keep Books Accurately to open his own accounting firm. He earned $40,000 with the accounting firm We Keep Books Accurately. During the current year Sam had revenues of $150,000 and total expenses of $110,000. For Sam the opportunity cost of going into business was

$40,000.

$110,000.

$150,000.

zero because he has a profitable business.
2 points

Question 5

All of the costs that a firm must pay, even if there are no sales, are

contribution costs.

fixed costs.

variable costs.

sales cost.
2 points

Question 6

Table 5-1. Steel Shelf Company

Category Cost

Payment Period

Cost

Rent

Monthly

$ 3,000

Utilities

Monthly

1,100

Insurance

Quarterly

1,200

Property Taxes

Annually

6,000

Steel

Per Shelf

9.00

Forming

Per Shelf

0.25

Labor

Per Shelf

0.75

Price

Per Shelf

20.00

Refer to Table 5-1. The Steel Shelf company has variable costs per unit of ________ .

$10.00

$18.33

$20.00

$25.00

$30,00
2 points

Question 7

Table 5-1. Steel Shelf Company

Category Cost

Payment Period

Cost

Rent

Monthly

$ 3,000

Utilities

Monthly

1,100

Insurance

Quarterly

1,200

Property Taxes

Annually

6,000

Steel

Per Shelf

9.00

Forming

Per Shelf

0.25

Labor

Per Shelf

0.75

Price

Per Shelf

20.00

Refer to Table 5-1. The Steel Shelf company has monthly fixed costs of _____ and a contribution margin of _____.

$5,000; $10

$5,000; $20

$5,800; $10

$11,300; $10

$11,300; $20
2 points

Question 8

Table 5-1. Steel Shelf Company

Category Cost

Payment Period

Cost

Rent

Monthly

$ 3,000

Utilities

Monthly

1,100

Insurance

Quarterly

1,200

Property Taxes

Annually

6,000

Steel

Per Shelf

9.00

Forming

Per Shelf

0.25

Labor

Per Shelf

0.75

Price

Per Shelf

20.00

Refer to Table 5-1. The Steel Shelf company has a monthly break-even quantity of _____ shelves.

250

500

580

1,130

Cannot calculate with information provided.
2 points

Question 9

Table 5-1. Steel Shelf Company

Category Cost

Payment Period

Cost

Rent

Monthly

$ 3,000

Utilities

Monthly

1,100

Insurance

Quarterly

1,200

Property Taxes

Annually

6,000

Steel

Per Shelf

9.00

Forming

Per Shelf

0.25

Labor

Per Shelf

0.75

Price

Per Shelf

20.00

Refer to Table 5-1. If the Steel Shelf Company wants to earn a profit of $3,000 per month they will have to produce _____ shelves.

500

800

1,000

1,500
2 points

Question 10

Table 5-1. Steel Shelf Company

Category Cost

Payment Period

Cost

Rent

Monthly

$ 3,000

Utilities

Monthly

1,100

Insurance

Quarterly

1,200

Property Taxes

Annually

6,000

Steel

Per Shelf

9.00

Forming

Per Shelf

0.25

Labor

Per Shelf

0.75

Price

Per Shelf

20.00

Refer to Table 5-1. The Steel Shelf company has annual fixed costs of ________ .

$5,300

$56,400

$60,000

$69,600

$135,600
2 points

Question 11

Table 5-1. Steel Shelf Company

Category Cost

Payment Period

Cost

Rent

Monthly

$ 3,000

Utilities

Monthly

1,100

Insurance

Quarterly

1,200

Property Taxes

Annually

6,000

Steel

Per Shelf

9.00

Forming

Per Shelf

0.25

Labor

Per Shelf

0.75

Price

Per Shelf

20.00

Refer to Table 5-1. The Steel Shelf company has to have annual revenue of _____ in order to break even.

$10,000

$120,000

$69,600

$135,600

Cannot calculate with information provided.
2 points

Question 12

The earning power of a company can be defined as the product of 2 factors:

fixed asset turnover and cash flow per share.

net profit margin and fixed asset turnover.

net profit margin and total asset turnover.

total asset turnover and earnings per share.

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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

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

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

March
6,200
5,980
April
3,500
3,620

May
2,300

2,470

June
4,500

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

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

31. The following information pertains to Raymond Company:

36. Figure 11-5

Sales
$540,000
Variable costs
$378,000
Fixed costs
$120,000
Expected production and sales in units
40,000 units

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

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Category: Accounting Tags: accounting, accounting, agents, civil, concern, correct, crime, criminal, details, enforcement, evidenced, fcpa, federal, following, foreign, forfeiture, government, indicates, intent, laws, owner, procedure, property, quiz, return, seize, seized, sentence, statement, stockholders, subject, used, usually

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1. Civil forfeiture laws allow law enforcement to seize property in the absence of a criminal charge or the establishment of guilt if police believe they find any evidence of a drug-related crime. Which of the following assertions is not correct regarding civil forfeiture?

a. the law has been used against drug cartel leaders, but state and local law enforcement have used the law whenever possible
b. in a majority of cases, the property owner is never charged with a crimes yet government officials usually keep the seized property
c. a property owner may secure the return of property by showing that no crime ever occurred or the government lacked probable cause
d. there is a proportionality test which requires that more highly valued property may be seized only for more serious violations of the law
e. none of the above

2. The government can seize property under the following methods except?
a. initiating a forfeiture procedure under the Federal Rules of Criminal Procedure
b. beginning a summary or administrative procedure under federal customs law
c. seizing the property if it is in the possession of a known felon
d. none of the above

3. When looking at the details given in a statement to determine truthfulness, the investigator should recall that which of the following is true?

a. A difference in the level of detail in different parts of the statement is usually the best indicator of deception
b. A lack of detail always indicates a sensitivity or intent to deceive
c. An overabundance of details more often than not indicates an intent to deceive
d. None of the above

4. What narrative strategy is evidenced in the following exchange?

Investigator Right. My concern is that you transacted the order and there was no return merchandise.

Suspect First of all, I do not do things like that, and second, I would never do it under my number.

a. Scheming
b. Second-person point of view
c. Explaining
d. Diversive dissonance
e. None of the above

5. When someone rearranges the words of a sentence, he is modifying his ______________.

a. Vernacular
b. Syntax
c. Speech
d. Manners
e. Grammar
f. None of the above

6. Which of the following statements is correct?
a. the accounting provisions of the FCPA are broader than the anti-bribery provisions
b. officers, directors, employees, agents, and stockholders of foreign persons are subject to the FCPA if they commit a violation while in the US
c. a foreign citizen who is an agent of a US concern is subject to the FCPA for acts committed outside the US
d. under the FCPA, â€œcorruptlyâ€ makes clear that an offer, payment, promise or gift must be intended to induce the recipient to misuse an official position to wrongfully direct business to the payer or obtain a favorable regulation
e. none of the above

7. What grammatical abnormality is evidenced in the following sentence?

You know, you always try to make sure that the totals are correct and that receipts are all documented, but sometimes you miss things.

a. Using out of sequence information
b. Omitting the pronoun â€œIâ€
c. Using present tense verbs for past events
d. Ending a sentence with a preposition
e. None of the above

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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

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

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

March
6,200
5,980
April
3,500
3,620

May
2,300

2,470

June
4,500

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

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

31. The following information pertains to Raymond Company:

36. Figure 11-5

Sales
$540,000
Variable costs
$378,000
Fixed costs
$120,000
Expected production and sales in units
40,000 units

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

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Category: Accounting Tags: 0, accounting, accounting, accounts, adjustment, bonds, cash, common, company, credit, discount, entry, expense, flows, following, gain, income, investment, investments, iued, method, payable, purchased, quiz, record, reported, sale, securities, sold, statement, stock, trading, unrealized

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1. Kennedy Inc. reported the following data:
Net income $118,000
Depreciation Expense $15,000
Loss on Disposal of equipment $10,000
Increase in accounts receivable $7,000
Decrease in accounts payable ($2,000)
Prepare the cash flows for the operating activities under the indirect method as it would appear on the statement of cash flows.

2. For each of the following, identify whether it would be disclosed as an operating, financing, or investing, activity on the statement of cash flows under the indirect method.
-Purchased buildings A. Operating
-Sold patents B. Financing
-Net income C. Investing
-Issued Common Stock D. Would not be reported
-Paid Cash dividends
-Depreciation Expense

3. Land costing $46,000 was sold for $79,000 cash. The gain on the sale was reported on the income statement as other income. On the statement of cash flows, what amount should be reported as an investing activity from the sale of land?

4. On January 1, 2012, Valuation Allowance for Trading Investments has a zero balance. On December 31, 2012, the cost of trading securities portfolio was $52,400, and the fair value was $53,000. Prepare the December 31, 2012, adjusting journal entry to record the unrealized gain or loss on the trading investments.

5. Jarvis Corporation makes an investment in 100 shares of Saxton Company’s common stock. The stock is purchased for $40 a share plus brokerage fees of $300. Write the journal entry to record this purchase:

6.Match each of the following investment terms with the appropriate definition.

– Equity Securities
– Trading Securities
– Available-for-sale Securities
-Equity Method
– Cost Method

A. Preferred and common stock that represent ownership in a company and do not have a fixed maturity date.
B.The method of reporting an investment that represents less than 20% of the voting stock of another company.
C.When using this, dividends are treated as a reduction of the investment.Se
D.Securities not held for trading or to maturity or other strategic reasons.
E.Debt and equity securities purchased and sold to earn short-term profits from changes in the market price.

7.Using a minimum of 3 sentences, describe the relationship between the market rate of interest, the rate of interest on bonds being issued, and the price the bonds sell at.
8. If $3,000,000 of 10% bonds are issued at 95, the amount of cash received from the sale is
9. The adjusting entry to record the amortization of a discount on Bonds Payable is
A.debit Discount on Bonds Payable, credit Interest Expense
B.debit Interest Expense, credit Discount on Bonds Payable
C.debit Interest Expense, credit Cash
D.debit Bonds Payable, credit Interest Expense
10.When a corporation owns less than 20% of the stock of another company, dividend received are not treated as income.
True or False
11.The account Unrealized Gain (Loss) on Trading Securities should be included in the
A.Income Statement as Other Revenue (Expenses)
B.Balance Sheet as an adjustment to the asset account
C.Balance Sheet as an adjustment to Stockholders’ Equity
D. Statement of Retained Earnings

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Category: Accounting Tags: 0, 1, accounting, accounting, accounts, allowance, balance, bank, bonds, brandon, cash, company, credit, current, debit, doubtfulaccounts, estimating, following, incomewill, liabilities, listed, maturity, overstated, payable, person, quiz, receipts, reported, shows, statement, understated, uses, using

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2. Which of the following would not be considered a
contingent liability?

A. Potential fines from the EPA

B. Mortgage payable

C. Pending legal action

D. Cosigning a loan

3. Using a 365-day year, the maturity value of a 180-day
note for $2,700 at 9% annual interest is (rounded

to the nearest cent)

A. $2,821.50.

B. $119.84.

C. $2,943.00.

D. $2,819.84.

4. Which of the following would be considered a cash
equivalent?

A. Currency

B. Time deposits

C. Checks

D. Money orders

5. Tammy Industries inadvertently debited a $5,000
betterment as an ordinary expense. Which of the

following will occur as a result of this mistake?

A. Net income will be overstated by $5,000.

B. The asset will be overstated by $5,000.

C. The asset will be understated by $5,000.

D. Retained earnings will be overstated by $5,000.

6. Which of the following would indicate poor internal
control over accounts receivable?

A. The person handling cash receipts passes the receipts to
someone who enters them into accounts receivable.

B. The mailroom employees open the mail and give the cash
receipts to another employee.

C. The same person handling cash receipts also records the
accounts receivable transactions.

D. The person who handles accounts receivable wouldn’t write
off accounts as uncollectable.

7. A company receives a note payable for $3,500 at 9% for 45
days. How much interest (to the nearest

cent) will the customer owe using a 360-day year?

A. $354.38

B. $39.38

C. $38.84

D. $315.00

8. Jewell Company has current assets of $56,000; long-term
assets of $135,000; current liabilities of

$44,000; and long-term liabilities of $90,000. Jewell
Company’s debt ratio is

A. 70.2%.

B. 78.6%.

C. 127.3%.

D. 239.3%.

9. Using a 360-day year, the maturity value of a 69-day note
for $1,500 at 7% annual interest is (rounded

to the nearest cent)

A. $1,520.13.

B. $1,605.00.

C. $20.13.

D. $1,584,88.

10. Brandon Company completed an aging of its accounts
receivable and came up with an estimated

amount of $6,342. The credit sales for the period are $85,000.
The balance in the allowance for doubtful

accounts is a debit of $817. If Brandon uses 5% of credit
sales as its estimating uncollectible accounts, how

much will the credit be to the allowance for doubtful
accounts if Brandon uses the percent of credit sales as

its method of estimating uncollectible accounts?

A. $4,250

B. $5,067

C. $5,525

D. $7,159

11. Casey Company’s bank statement shows a bank balance of
$43,267. The statement shows a bank

service charge of $50. Casey’s book balance shows
outstanding checks of $5,288 and deposits in transit of

$9,325. The bank-side reconciliation would show cash of

A. $43,217.

B. $39,230.

C. $47,304.

D. $43,267.

12. By not accruing warranty expense,

A. reported liabilities will be understated, and net income
will be overstated.

B. reported expenses will be understated, and net income
will be understated.

C. reported liabilities will be overstated, and net income
will be understated.

D. reported expenses will be overstated, and reported
liabilities will be understated.

13. Brandon Company completed an aging of its accounts
receivable and came up with an estimated

amount of $6,342. The credit sales for the period are
$85,000. The balance in the allowance for doubtful

accounts is a debit of $817. If Brandon uses 5% of credit
sales as its estimating uncollectable accounts,

how much will the credit be to the allowance for doubtful
accounts if Brandon uses the estimate of aging

receivables as its method of estimating uncollectable
accounts?

A. $5,067

B. $7,159

C. $5,525

D. $4,250

14. Research and development costs (R&D) are generally

A. listed as “current assets” on the balance
sheet.

B. expensed and become part of the income statement.

C. listed as “long-term assets” on the balance
sheet.

D. listed as “other intangibles” on the balance
sheet.

15. A repair that extends the useful life of an asset would
be considered a/an

A. ordinary repair.

B. betterment.

C. extraordinary repair.

D. capital expense.

17. Casey Company’s bank statement shows a bank balance of
$43,267. The statement shows a bank

service charge of $50 and a bank collection of $760 in Casey
Company’s behalf. Casey’s book balance should be adjusted by a total of

A. â€“$710.

B. +$760.

C. +$710.

D. +$810.

18. A $400,000 issue of bonds that sold for $363,000 matures
on August 1, 2015. The journal entry to

End of exam

record the payment of the bond on the maturity date is

A. debit cash, $400,000; credit bonds payable, $400,000.

B. debit bonds payable, $400,000; credit cash, $400,000.

C. debit bonds payable, $363,000; credit cash, $363,000.

D. debit cash, $363,000; credit bonds payable, $363,000.

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Category: Accounting Tags: 0, 1, accounting, accounting, additional, buying, cash, colorpro, costs, discount, favorable, following, ignored, income, incomec, increase, labor, lower, make, making, manager, materials, parta, present, production, quiz, rate, result, save, units, value, variance, year

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.Which of the following is an example of direct labor?
a. chef in a restaurant
b. janitor in a production plant
c. security guard for the factory
d. management accountant

2.If fixed costs increase, the breakeven point in units will
a. increase
b. decrease
c. remain the same
d. remain the same; however, contribution per unit will decrease

3.Which of the following is false?
a. favorable labor efficiency variance could result from using higher quality materials that result in fewer inspections.
b. a favorable labor rate variance could result from lower wage workers quitting
c. a favorable materials price variance could result from purchasing identical materials from another supplier at a lower price
d. an unfavorable materials usage variance could result from not efficiently utilizing raw materials, thus causing waste
e. all of these are false.

The manager of Alpha Division projects the following for next year:
Sales $100,000
Operating income $30,000
Operating assets $200,000
The manager can invest in an additional project that would require $30,000 investment in additional assets and would generate $4,200 of additional income. The companyâ€™s minimum rate of return is 12%

4.What is the residual income for Alpha Division without the additional investment?
a. $30,000
b. $24,000
c. $6,600
d. $4,200
e. $6,000

Color Pro uses part 87 a in the production of color printers. Unit manufacturing costs of part 87a are:
Direct materials $8.00
Direct labor 2
Variable overhead 1
Fixed overhead 4

ColorPro uses 100,000 units of 87a per year. Filbert Company has offered to sell ColorPro 100,000 units of 87a per year for $12.00. Fixed overhead is unavoidable.

5. Should ColorPro make or buy the part?
a. make the part because it will save $100,000 over buying it
b. buy the part because it will save $100,000 over making it
c. make the part because it will save $1,100,000 over buying it
d. buy the part because it will save 1,100,000 over making it
e. buy the part because it will save $300,000 over making it

6.Now suppose that ColorPro discovers that other costs will increase by $7,000 per year if the component is purchased rather than made internally. Should ColorPro make or buy the part?
a. make the part because it will save $100,000 over buying it
b. buy the part because it will save $100,000 over making it
c. make the part because it will save $107,000 over buying it
d. buy the part because it will save $107,000 over making it
e. make the part because it will save $10,000 over buying it

7.A firm is evaluating a project that has a net present value of $0 when a discount rate of 8 percent is used. A discount rate of 6 percent will result in
a. negative net present value
b. positive net present value
c. net present value of $0
d. The question cannot be answered based upon the information provided.

8.In calculating net cash from operating activities using the indirect method, an increase in accounts receivable during a period is
a. deducted from net income
b. added to net income
c. ignored because it does not affect income
d. ignored because it does not affect expenses

9.In vertical analysis, line items on the income statement are generally expressed as a percentage of
a. sales
b. net income
c. total assets
d cost of goods sold

10. Cash flows from operating activities, as reported on the statement of cash flows, would include:
a. receipts from the sale of investments.
b. net income
c. payments of dividends
d receipts from the issuance of common stock

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Category: Accounting Tags: 0, 1, 2, 3, accounting, accounting, bonds, capital, colfax, common, company, corporation, december, dividend, expense, january, june, lease, martin, paidin, payments, quiz, record, retained, sales, share, shares, stock, treasury, uses, value, year, years

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12. Stewart Company acquired Meyer Manufacturing on January 1, 2013 for $6,800,000 and recorded goodwill of $1,800,000 as a result of that purchase. At December 31, 2013, Meyer Manufacturing Division had a fair value of $4,600,000. The net identifiable assets of the Division, excluding goodwill, had a fair value of $3,200,000 at that time. What amount of loss on impairment of goodwill should Stewart record in 2013?
____ $ -0-
____ $2,200,000
____ $1,400,000
____ $400,000

13. Lillian Properties leased a building to Hopping Industries for a ten year term at an annual rental of $250,000. The lease began January 1, 2013, at which time Lillian received $1,000,000 covering the first two years’ rent of $500,000 and a security deposit of $500,000. The deposit will not be returned to Hopping upon expiration of the lease, but will be applied to payment of rent for the last two years of the lease. What portion of the $1,000,000 should be shown as current and long-term liabilities, respectively, in Lillian’s December 31, 2013 balance sheet?
(Answers shown with Current Liabilities listed first, Long-term Liabilities listed second.)
____ $500,000 and $500,000
____ $250,000 and $500,000
____ $500,000 and $250,000
____ -0- and $1,000,000

15. On January 1, 2014, Huntington Corporation issued eight year bonds with a face value of $8,000,000 and a stated interest rate of 6%, payable semiannually on June 30 and December 31. The bonds were sold to yield 8%. Table values are:

What is the issue price of the bonds?
____ $8,990,400
____ $7,360,000
____ $7,078,560
____ $7,068,480

16. On December 31, 2013, the 11% bonds payable of Goodly Corporation had a carrying amount of $2,040,000. The bonds, which had a face value of $2,000,000 were issued at a premium to yield 10%. Goodly uses the effective-interest method of amortization. Interest is paid on June 30 and December 31. On July 1, 2014, several years before their maturity, Goodly retired the bonds at 103. The interest payment on June 30, 2014 was made as scheduled. The loss on retirement, ignoring taxes, is
____ $40,000
____ $28,000
____ $20,000
____ $ -0-

18. On January 1, 2013, Martin Corporation signed a ten-year noncancelable lease for machinery. The terms of the lease called for Martin to make annual payments of $250,000 at the end of each year for ten years with title to pass to Martin at the end of this period. The machinery has an estimated useful life of 20 years and no salvage value. Martin uses the straight-line method of depreciation for all of its fixed assets. Martin accounted for this lease transaction as a capital lease. The lease payments were determined to have a present value of $1,840,023 at an effective interest rate of 6%. With respect to this capitalized lease, Martin should record for 2013:
____ Depreciation expense of $184,002 and interest expense of $150,000.
____ Depreciation expense of $92,001 and interest expense of $110,401.
____ Depreciation expense of 184,002 and interest expense of $110,401.
____ Lease expense of $250,000.

19. On December 31, 2014, Pacific Rail Corporation leased a train car from Southern Transportation Company for a ten year period expiring December 30, 2024. Equal annual payments of $160,000 are due on December 31 of each year, beginning with December 31, 2014. The lease is properly classified as a capital lease on Pacific Rail’s books. The present value at December 31, 2014 of the ten lease payments over the lease term discounted at 8% is $1,159,502. Assuming the first payment is made on time, the amount that should be reported by Pacific Rail Corporation as the lease liability on its December 31, 2014 balance sheet is
____ $1,440,000
____ $1,159,502
____ $1,066,742
____ $999,502

20. Colfax Corporation enters into an agreement with Reynolds Rentals on January 1, 2014 for the purpose of leasing a machine to be used in its manufacturing operations. The term of the noncancelable lease is 4 years with no renewal option. Payments of $200,000 are due on December 31 of each year. The fair value of the machine on January 1, 2014, is $700,000. The machine has a remaining economic life of 10 years, with no salvage value. The machine reverts to the lessor upon termination of the lease. Colfax Corporation’s incremental borrowing rate is 8% per year. Colfax does not have knowledge of the 6% implicit rate used by Reynolds. The factor for the present value of an ordinary annuity of 1, for 4 periods at 8% is 3.31213. The factor for the present value of an ordinary annuity of 1, for 4 periods at 6% is 3.46511. What type of lease is this from Colfax Corporation’s point of view?
____ Capital lease
____ Operating lease
____ Sales-type lease
____ Direct-financing lease

21. Roberts Corporation has 150,000 shares of $10 par common stock authorized. The following transactions took place during 2013, the first year of the corporation’s existence:
Sold 20,000 shares of common stock for $14 per share
Issued 20,000 shares of common stock in exchange for legal services valued at $300,000
At the end of Roberts’ first year, total paid-in capital amounted to
____ $580,000
____ $300,000
____ $280,000
____ $150,000

22. On June 15, Handel Corporation reacquired 10,000 shares of its $10 par value common stock for $22 per share. Handel uses the cost method to account for treasury stock. The journal entry to record the reacquisition of the stock should debit
____ Treasury Stock for $100,000
____ Treasury Stock for $220,000
____ Common Stock for $100,000
____ Common Stock for $100,000 and Paid-in Capital in Excess of Par for $120,000

23. The fair value of Willow Company’s common stock was $57 per share at December 31, 2013 and $63 per share at December 31, 2014. Willow acquired 7,000 shares of its own common stock at $60 per share on March 10, 2014, and sold 5,000 of these shares at $65 per share on September 25, 2014. Willow Company uses the cost method to account for treasury stock. The journal entry to record the sale of the treasury stock should credit
____ Treasury Stock for $300,000 and Retained Earnings for $25,000
____ Treasury Stock for $285,000 and Retained Earnings for $40,000
____ Treasury Stock for $300,000 and Paid-in Capital from Treasury Stock for $25,000
____ Treasury Stock for $325,000

25. Farnsworth Inc. declared a $500,000 cash dividend. It currently has 10,000 shares of 8%, $100 par value cumulative preferred stock outstanding. It is one year in arrears on its preferred stock. How much cash will Farnsworth distribute to the common stockholders?
____ $420,000
____ $500,000
____ $160,000
____ $340,000

26. Weston Corporation owned 80,000 shares of Brandt Corporation, purchased in 2008 for $320,000. On December 20, 2013, Weston declared a property dividend of all of its Brandt Corporation shares on the basis of one share of Brandt for every 10 shares of Weston common stock held by its shareholders. The property dividend was distributed on January 10, 2014. On the declaration date, the aggregate market price of the Brandt Corporation shares held by Weston was $610,000. The entry to record the declaration of the dividend would include a debit to Retained Earnings (property dividends declared) of
____ $320,000
____ $610,000
____ $290,000
____ $ -0-

27. Harping Corporation declared an $800,000 dividend, $200,000 of which was liquidating. How would this distribution affect Retained Earnings and Additional Paid-in Capital, respectively?
(Answer is shown with Retained Earning listed first, Additional Paid-in Capital listed second. )
____ No effect; $800,000 Decrease
____ $800,000 Decrease; No effect
____ $600,000 Decrease; $200,000 Decrease
____ No effect; No effect

28. After several profitable years, Pear Corporation’s stock price had increased by 10-fold. Management prefers the stock price to be within range of the majority of potential investors, and on June 30, 2013, split its stock 2-for-1. Prior to the split, Pear’s stockholders’ equity section showed: Common Stock, 2,000 shares at $100 par. After the split, Pear’s stockholders’ equity section showed:
____ Common stock, 4,000 shares at $50 par
____ Common stock, 2,000 shares at $200 par
____ Common stock, 1,000 shares at $200 par
____ Common stock, 4,000 shares at $100 par\

34. Jollyâ€™s Corner Market made credit sales during the month of October of $225,000. The sales are subject to a 6% sales tax that was also collected. Which of the following would be included in the summary journal entry to reflect the sale transactions?
____ Debit Accounts Receivable for $238,500
____ Credit Sales Taxes Payable for $12,736
____ Credit Sales Revenue for $212,264
____ Debit Sales Taxes Payable for $13,500
40. Monroe Company owes $1 million that is due on January 15. The company borrows $600,000 on January 8 (5-year note) and uses the proceeds to pay down the $1 million note and uses other cash to pay the balance. How much of the $1 million note is classified as long-term in the December 31 financial statements.
____ $1,000,000
____ $0
____ $600,000
____ $400,000

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Category: Accounting Tags: accounting, accounting, activity, actual, budgeting, company, consumed, cost, costing, costs, custom, determining, employees, example, following, information, maintain, management, materials, objective, participative, performance, preparing, pricing, primarily, product, provide, quality, quiz, resources, standard, useful

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Which of the following is a characteristic of management accounting

It must follow generally accepted accounting principles.

It is used primarily by internal users.

It is concerned primarily with reporting past performance.

It uses historical costs as the sole measurement unit.

An example of a period cost is:

advertising costs.

indirect materials.

product design costs.

direct materials.

Which of the following is not an objective of product costing systems?

To provide information for cost planning

To assist in the preparation of the income statement

To determine the optimal amount of products to manufacture

To provide information for product pricing

Which of the following entities probably would use a process costing system?

An oil refinery

A yacht builder

A custom furniture company

A custom screw manufacturer

Activity-based management includes all of the following except identifying:

customer satisfaction with a product or service.

the resources that are consumed by each activity.

activities as value-adding.

how resources are consumed by each activity.

An insurance company pays its employees a commission of 6 percent on each sale. What is the proper classification of the cost of sales commissions?

Constant cost

Variable cost

Mixed cost

Fixed cost

Which type of budgeting utilizes employees at all levels of the company?

Group budgeting

Selective budgeting

Target budgeting

Participative budgeting

Standard costs are useful for all but which of the following?

Determining actual costs

Preparing budgets and forecasts

Evaluating the performance of workers and management

Helping to develop appropriate selling prices

An example of a pricing objective is to:

ignore long-term pricing strategies in favor of short-term profits.

increase market share irrespective of the cost of a product.

maintain a price that is always under that of the competition.

maintain a minimum rate of return.

The overall objective of controlling the costs of quality is to eliminate

appraisal costs.

costs of nonconformance.

costs of conformance.

the costs of quality.

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Category: Accounting Tags: 0, 1, accounting, accounting, accounts, accumulated, balance, bampv, cash, cost, customer, debit, depreciation, enterprises, equipment, estimated, expense, hours, january, lifo, miles, paid, piece, purchased, quiz, receivable, sales, sold, total, used, value, year, years

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1. One example of
a contra-asset is:
A. Sales Discount
B. Sales Returns and Allowances
C. Uncollectible Accounts Expense
D. None of the above are contra assets

2. The journal entry to record a sales return
made by a customer would include:
A. A debit to Accounts Receivable and a credit
to Sales Returns
B. A debit to Cash and Sales Returns
C. A debit to Sales Returns and a credit to
Accounts Receivable
D. A debit to Accounts Receivable and a credit
to Cash

3. Accounts receivable written off during the
year totaled $61,500 while the beginning and ending balance of Allowance for
Doubtful Accounts were $51,300 and $55,700, respectively. The amount of
uncollectible accounts expense for the period was:
A. $57,100
B. $65,900
C. $61,500
D. Cannot be determined from the information
given

4. Cady, Inc., had beginning and ending
accounts receivable balances of $35,000 and 32,000, respectively. During the
period, $100,000 was collected from credit customers. What was the amount of
credit sales during the period?
A. $135,000
B. $132,000
C. $100,000
D. $97,000

5. In times of rising prices, ______ generally
result(s) in the ______ ending inventory.
A. LIFO and FIFO, same
B. LIFO, higher
C. FIFO, lower
D. LIFO, lower

6. Affiliated Industries purchased a piece of
equipment for $5,500, FOB shipping point. The company paid freight of $225 and
installation costs of $485. During installation, the equipment was damaged
requiring $195 in repair costs. The total cost assigned to the equipment should
be:
A. $5,500
B. $5,725
C. $6,210
D. $6,405

7. Ivanhoe Enterprises acquired a piece of
equipment on January 3, 2007. The total cost of the equipment was $35,000.
Ivanhoe estimated that the equipment would be used for 8 years before being
sold for an estimated $7,000. Assuming the use of straight-line depreciation,
the total depreciation expense for the year ended December 31, 2007 was:
A. $3,500
B. $4,000
C. $4,375
D. $5,250

8. Brook side Enterprises acquired a piece of
machinery on January 3, 2006. The total cost of the machinery was $138,600.
Brook side estimated that the machinery would be used for 77,000 hours before
being sold for an estimated $3,850. Brook side uses the units-of-production
method of depreciation. Assuming the machine was used for 15,800 hours during
2006, 18,300 hours during 2007 and 17,400 hours during 2008, the balance in the
accumulated depreciation account on January 2, 2009 would be:
A. $45,900
B. $48,475
C. $90,125
D. $92,700

9. Irmelas Enterprises owns some equipment
with an original cost of $84,700 and accumulated depreciation of $41,650. If
the equipment is sold for $9,500 in cash plus a 9-month $30,000 note receivable
with a stated 12% interest rate, the gain or loss recognized on the sale would
be:
A. $3,550 loss
B. $3,550 gain
C. $2,150 loss
D. $2,150 gain

10. B&V Enterprises exchanged a used crane
with an original cost of $200,000 and accumulated depreciation of $140,000 for
a truck with a fair market value of $100,000. B&V also paid cash of
$25,000. What amount of gain should B&V report on this transaction?
A. $0
B. $15,000
C. $40,000
D. $100,000

11 â€“ 15 Record the following journal
entries.
10/1 Sold $5,000 of tables on account the
terms of payment are 1/15n30

10/5 Customer returned $1,000 of tables

10/14 Customer paid $3,000 of the balance due
on the account

10/30 Customer paid the remaining balance due
on the account

16 â€“ 20 Lorena Company purchased a van at a
total cost of $55,000. At the end of its useful life of 5 years, the van should
have a salvage value of $5,000. The van is expected to be driven 100,000 miles
over this time period as follows: year 1 25,000 miles, year 2 30,000 miles,
year 3 20,000 miles, year 4 15,000 miles, and year 5 10,000 miles. Prepare a
schedule showing the depreciation expense and year-end carrying value of the
van for each of the next two years under each of the following methods of
depreciation:
â€¢ Straight Line
â€¢ Units-of-Production
â€¢ Double-declining-balance

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Category: Accounting Tags: abby, abovequestion, accounting, accounting, average, beginning, complete, corp, cost, costing, costs, current, data, department, ending, equivalent, following, inventory, manufactures, materials, method, month0, outputquestion, points, proce, production, provided, quiz, started, unit, units, using, weighted

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1. (TCO 3) Which system would a manufacturer of unique special orders or batch processes most likely use to accumulate costs? (Points : 3)
Contract costing
Variable costing
Process costing
Job-order costing

Question 2. 2. (TCO 3) Which is NOT a feature of a process costing system? (Points : 3)
Standardized products pass through standardized processes.
Each unit is treated uniquely in receiving a process.
Manufacturing costs are accumulated by a process for a given time period.
Unit costs are calculated for each department.

Question 3. 3. (TCO 3) The whole units that could have been produced in a period given the amount of manufacturing inputs used are called (Points : 3)
FIFO costing.
transferred-in cost.
weighted average cost.
equivalent units of output.

Question 4. 4. (TCO 3) Holly Inc. manufactures dolls. The following data were provided for production results for the current month.
0 Units, beginning work-in-process
300 Units started
? Units completed
100 Units, ending work-in-process (40% complete)
Which are the equivalent units using the weighted average method? (Points : 3)
300
240
260
200
None of the above

Question 5. 5. (TCO 3) Which is NOT a difference between the job-order costing system and the process costing system? (Points : 3)
They accumulate their costs to different cost objectives.
The number of work-in-process accounts is different.
One does not use the finished goods account.
All of the above

Question 6. 6. (TCO 3) Keller Inc. manufactures office chairs. The following data were provided for production results for the current month.
0 Units, beginning work-in-process
10,000 Units started
? Units completed
5,000 Units, ending work-in-process
$440,000 Cost of direct materials
$64,000 Cost of conversion
Ending inventory is 100% complete for materials and 20% complete for conversion.
How many units were started and completed? (Points : 3)
10,000
0
5,000
20,000
None of the above

Question 7. 7. (TCO 3) Unit cost of materials for a department using the FIFO method of process costing is found by taking
the total cost of materials issued to the department during the year divided by (Points : 3)
units in process.
units started and completed.
total units manufactured.
equivalent units of output.

Question 8. 8. (TCO 3) Abby Corp. adds raw materials to production at the beginning of the process in the Assembly Dept. Materials data for this department for the current month are as follows.

Costs

Units

Materials

Conversion

Beginning work-in-process

10,000

$70,750

$175,350

Started during month

65,000

$250,000

$736,350

Ending work-in-process

6,000

Beginning inventory was 70% complete. Ending inventory was 40% complete.
How many equivalent units for conversion costs would there be for Abby Corp. during the month using the weighted average method?
(Points : 3)
65,000
68,400
75,000
64,400

Question 9. 9. (TCO 2) The following information was provided by Sally Company.

% complete

Units

Begninning work-in-process

30%

15,000

Units transferred in

40,000

Ending work-in-process

60%

13,000

Materials are added at the beginning of the process.
How many equivalent units for materials would there be using the weighted average method? (Points : 3)
68,000
40,000
47,800
55,000

Question 10. 10. (TCO 3) The costs included in the cost per equivalent unit using the weighted average method are (Points : 3)
current costs.
beginning work in process.
ending work in process.
Both A and B

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