ACC Quiz

65. Fire Cat, Inc. selected cost data for the year are shown below: Cost of Goods Manufactured $145,500 Work-in-Process Inventory, Jan. 1 19,500 Work-in-Process Inventory, Dec. 31 22,000 Direct Materials Used 18,600 What is the total of manufacturing costs incurred by Fire Cat, Inc. during the year?

*A) $148,000

2. Venus Corp. sold goods, with a selling price of $17,221, for cash. The state sales tax rate is 8%. What amount is credited to the Sales Revenue account? (Round calculations to the nearest dollar.)

*A) $17,221

62. Artisan Inspiration, Inc. is a merchandiser of stone ornaments. The company sold 8000 units during the year. The company has provided the following information: Sales Revenue $593,000 Purchases (excluding Freight In) 304,000 Selling and Administrative Expenses 68,000 Freight In 14,000 Beginning Merchandise Inventory 46,000 Ending Merchandise Inventory 42,000 What is the operating income for the year? (Round your answer to the nearest whole dollar.)

*A) $203,000

89. Avia Company sells a product for $150 per unit. Variable costs are $70 per unit, and fixed costs are $1200 per month. The company expects to sell 640 units in September. The unit contribution margin is ________.

*A) $80 per unit

39. Allstate Moving Company reported the following amounts on its balance sheet as of December 31, 2019 and December 31, 2018:2019 2018 Cash and Receivables $75,000 $145,000 Merchandise Inventory 175,000 250,000 Property, Plant and Equipment, net 820,000 710,000 Total Assets $1,070,000 $1,105,000 Total Liabilities $455,000 $405,000 For the vertical analysis, what is the percentage of current assets as of December 31, 2019? (Round your answer to two decimal places.)

*A) 23.36%

95. Hughes Company manufactures harmonicas which it sells for $31 each. Variable costs for each unit are $18 and total fixed costs are $3925. How many units must be sold to earn income of $5500?

*A) 725

74. In a job order costing system, a credit to Finished Goods Inventory will be accompanied by a debit to ________.

*A) Cost of Goods Sold

25. Which of the following is true of dividends?

*A) Dividends are a distribution of cash, stock, or other property to stockholders.

7. It is mandatory for both the employer and employee to pay ________.

*A) FICA

69. Which of the following is a reason why a job order costing system is appropriate for a custom furniture manufacturer?

*A) The cost incurred for each job will differ as per the order specifications.

6. Regarding net pay, which of the following statements is incorrect?

*A) The net pay amount is not important for accounting purposes.

75. Companies that manufacture identical items through a series of uniform production steps use ________ to determine the cost per unit produced.

*A) a process costing system

Amounts owed for products or services purchased on account are called ________ .

*A) accounts payable

50. Which of the following is an example of a period cost for a manufacturing company?

*A) advertising expense

19. Outstanding stock represents shares of stock that ________.

*A) are held by the stockholders

32. Colorado Company uses the indirect method to prepare the statement of cash flows. Refer to the following section of the comparative balance sheet: Colorado Company Comparative Balance Sheet December 31, 2019 and 2018 2019 2018 Increase/(Decrease) Accounts Payable $4,000 $6,000 $(2,000) Accrued Liabilities 2,000 1,000 1,000 Long-term Notes Payable 84,000 90,000 (6,000) Total Liabilities $90,000 $97,000 $(7,000) How will the change in Accrued Liabilities be shown on the statement of cash flows?

*A) as an addition to Net Income

37. Which of the following best describes horizontal analysis?

*A) comparing financial statement line items from year to year for the same company

59. Which of the following represents the combined sum of direct labor costs and manufacturing overhead costs?

*A) conversion costs

26. On the ________, cash dividends become a liability of a corporation.

*A) declaration date

83. The costs most easily traced to each product manufactured are ________.

*A) direct materials and direct labor

8. The matching principle requires businesses to report Warranty Expense ________.

*A) in the same period that the company records the revenue related to that warranty

88. The fixed costs per unit will ________.

*A) increase as production decreases

96. When the sales price per unit decreases, the breakeven point ________.

*A) increases

52. ) Which of the following will be included in manufacturing overhead costs?

*A) indirect labor and indirect materials used

86. The activity-based costing system improves the allocation of ________.

*A) indirect manufacturing costs

20. The retained earnings of a corporation is ________.

*A) internally generated equity that is earned by profitable operations that is not distributed to stockholders

90. Contribution margin ratio is the ratio of contribution margin to ________.

*A) net sales revenue

1) Maxwell Plumbing Services earned $500 by completing a job for Smith Company. The $500 earned by Maxwell Plumbing Services is its ________.

*A) revenue

49. Which of the following will most likely be considered an indirect material cost for a bakery?

*A) spices

36) Which of the following sections from the statement of cash flows includes the cash paid for the purchase of Treasury Stock?

*A) the financing activities section

57. Which of the following would be considered a direct labor cost for a manufacturing company?

*A) wages of the assembly line staff

4. Fleetwood, Inc. signed a three-year note payable for $59,000 at 7% annual interest. What is the interest expense for 2019 if the note was signed on August 1, 2019? (Do not round any intermediate calculations, and round your final answer to the nearest dollar.)

*B) $1,721

77. Singh Enterprises manufactures picture frames. Its production operations are divided into two departments — Assembly and Finishing. The company uses a process costing system. Singh incurred the following costs during the year to produce 6000 picture frames: Assembly $9700 Finishing $2250 If Singh can only sell 5100 picture frames during the year, what will be the cost per unit of the picture frames produced? (Round your answer to the nearest cent.)

*B) $1.99

66. A corporation used $34,000 of direct materials. It incurred $74,000 in direct labor costs and $112,500 in manufacturing overhead costs during the period. What is the cost of goods manufactured if the beginning and ending Work-in-Process Inventories were $27,500 and $20,500, respectively?

*B) $227,500

22) Milton, Inc. had the following transactions in 2019, its first year of operations: Issued 8000 shares of common stock. Stock has par value of $0.01 per share and was issued at $40.00 per share. Earned net income of $200,000. Paid dividends of $8.00 per share. At the end of 2019, what is total stockholders' equity?

*B) $456,000

67. Given the following information, determine the cost of goods manufactured. Direct Labor Incurred $62,000 Manufacturing Overhead Incurred 177,000 Direct Materials Used 151,000 Finished Goods Inventory, Jan. 1 197,000 Finished Goods Inventory, Dec. 31 99,000 Work-in-Process Inventory, Jan. 1 221,000 Work-in-Process Inventory, Dec. 31 108,000

*B) $503,000

56. The following information was obtained from Durand, Inc.: Advertising Costs $11,600 Indirect Labor 8000 CEO's Salary 470,000 Direct Labor 53,000 Indirect Materials Used 8000 Direct Materials Used 390,000 Factory Utilities 840 Factory Janitorial Costs 1000 Manufacturing Equipment Depreciation 1700 Delivery Vehicle Depreciation 2110 Administrative Wages and Salaries 22,300 How much were Durand's period costs?

*B) $506,010

10) On March 1, 2018, Mandy Services issued a 3% long-term notes payable for $15,000. It is payable over a 3-year term in $5000 principal installments on March 1 of each year, beginning March 1, 2019. Each yearly installment will include both principal repayment of $5000 and interest payment for the preceding one-year period. What is the amount of total cash payment that Mandy will make on March 1, 2019?

*B) $5450

40. The financial statements of Carrier Office Furniture Company include the following items: 2019 2018 Cash $42,500 $42,000 Short-term Investments 28,000 19,000 Net Accounts Receivable 102,000 98,000 Merchandise Inventory 166,000 148,000 Total Assets 527,000 547,000 Total Current Liabilities 273,000 285,000 Long-term Note Payable 64,000 60,000 What is working capital for 2019?

*B) $65,500

92. Clay Earth Company sells ceramic pottery at a wholesale price of $5 per unit. The variable cost of manufacture is $2.50 per unit. The fixed costs are $6200 per month. It sold 5700 units during this month. Calculate Clay Earth's operating income (loss) for this month.

*B) $8050 94. Zander Company has fixed costs of $14,000. The company's contribution margin ratio is 46%. What is the breakeven point in sales dollars? (Round your answer to the nearest dollar.) *B) $30,435

42. Elephant, Inc.'s cost of goods sold for the year is $2,000,000, and the average merchandise inventory for the year is $129,000. Calculate the inventory turnover ratio of the company. (Round your answer to two decimal places.)

*B) 15.50 times

78. If 34,000 units are 80% complete with respect to direct materials, then the equivalent units of production for direct materials are ________. The weighted-average method is used.

*B) 27,200 units

44.A company reports total assets of $910,000 and stockholders' equity of $530,000. Calculate the debt ratio. (Round your answer to two decimal places.)

*B) 41.76%

46. Walton, Inc. provides the following data: 2019 2018 Cash $44,000 $25,000 Accounts Receivable, Net 101,000 62,000 Merchandise Inventory 78,000 50,000 Property, Plant, and Equipment, Net 182,000 120,000 Total Assets $405,000 $257,000 Additional information for the year ending December 31, 2019: Net Credit Sales $550,000 Cost of Goods Sold 150,000 Interest Expense 24,000 Net Income 184,000 Calculate the rate of return on total assets for 2019. (Round your answer to two decimal places.)

*B) 62.84%

55. Which of the following correctly describes the accounting for advertising costs?

*B) Advertising costs are period costs and are expensed as incurred.

14. State Street Beverage Company issues $805,000 of 9%, 10-year bonds on March 31, 2017. The bonds pay interest on March 31 and September 30. Which of the following statements is true?

*B) If the market rate of interest is 10%, the bonds will issue at a discount.

28) Which of the following describes the financing activities section of the statement of cash flows?

*B) It includes cash inflows and outflows related to long-term liabilities and equity.

15. Which of the following statements is true if a bond's stated interest rate is the same as the market rate?

*B) The bond will be issued at par.

18. Which of the following is true of a corporation?

*B) The earnings of a corporation may be subject to double taxation.

53. Goods that have been started in the manufacturing process but are not yet complete are included in the ________.

*B) Work-in-Process Inventory account

68. Which one of the following companies is most likely to use job order costing?

*B) a law firm

30) The activities that are included in the operating activities section of the statement of cash flows are ________.

*B) activities that create revenue or expenses

23. When a stockholder contributes land to a corporation in exchange for stock, ________.

*B) assets and stockholders' equity are increased

48. Managerial accounting includes the planning function. Which of the following items would be part of the planning function of a business's managerial accounting?

*B) choosing goals and deciding how to achieve them

100. When the total fixed costs decrease, the breakeven point ________.

*B) decreases

60. The Work-in-Process Inventory account includes the ________.

*B) goods that are partially completed

51. For a manufacturing company, which of the following is a period cost?

*B) office rent

13. Which of the following concepts represent the time value of money?

*B) the concept that money earns interest over time

35. Which of the following sections of the statement of cash flows includes the issuance of stock and the payment of cash dividends?

*B) the financing activities section

11. On January 1, 2018, Benbrook Company purchased equipment and signed a six-year mortgage note for $160,000 at 15%. The note will be paid in equal annual installments of $42,278, beginning January 1, 2019. Calculate the balance of Mortgage Payable after the payment of the first installment. (Round your answer to the nearest whole number.)

*C) $141,722

3) Precision Camera Services started the year with total assets of $90,000 and total liabilities of $65,000. The revenues and the expenses for the year amounted to $100,000 and $70,000, respectively. During the year, the company did not issue any common stock, but it distributed dividends of $40,000. What is the amount of stockholders' equity at the end of the year?

*C) $15,000

12. If bonds with a face value of $209,000 are issued at 93, the amount of cash proceeds is ________.

*C) $194,370

43. National, Inc. provides the following data: 2019 2018 Cash $45,000 $25,000 Accounts Receivable, Net 138,000 62,000 Merchandise Inventory 70,000 50,000 Property, Plant, and Equipment, Net 200,000 120,000 Total Assets $453,000 $257,000 For the year ending December 31, 2019: Net Credit Sales $250,000 Cost of Goods Sold (110,000) Gross Profit $140,000 Calculate the accounts receivable turnover ratio for 2019. (Round your answer to two decimal places.)

*C) 2.50 times

9. On March 1, 2018, Everson Services issued a 4% long-term notes payable for $16,000. It is payable over a 4-year term in $4000 annual principal payments on March 1 of each year plus interest, beginning March 1, 2019. Each yearly installment will include both principal repayment of $4000 and interest payment for the preceding one-year period. On March 1, 2019, ________. The accounting period ends on December 31.

*C) Everson must pay $640 of interest to the note holder

27. Which of the following describes the operating activities section of the statement of cash flows?

*C) It reports on activities that create revenue or expenses for the entity's business.

3. In regards to corporate income tax, which of the following statements is incorrect?

*C) When the corporation makes payment for federal income taxes, the account Income Tax Payable is credited.

76) Which of the following businesses is most likely to use a process costing system?

*C) a soda manufacturer

73. The predetermined overhead rate is calculated ________.

*C) before the accounting period begins

41. Which of the following items is a measure of a company's ability to collect receivables?

*C) days' sales in receivables

87. Which of the following is a variable cost?

*C) direct materials cost

2) The owners' claims to the assets of the business are called ________.

*C) equity

38. MacMan, Inc. reported the following data: 2019 2018 Amount Percentage Revenues $6370 $4940 $1430 28.95% Cost of goods sold 3450 2200 1250 56.82% Gross profit 2920 2740 180 6.57% Operating expenses: Sales and marketing expense 710 630 80 12.7% General and administrative expenses 410 425 -15 -3.53% Research and development expense 480 490 -10 -2.04% Other expense 440 710 (270) (38.03)% Total operating expenses 2040 2255 (215) (9.53)% Income before income tax 880 485 395 81.44% Income tax expense 260 240 $20 8.33% Net income (loss) $620 $245 $375 153.06% The horizontal analysis shows that cost of goods sold has ________. (Round your answer to two decimal places.)

*C) increased by 56.82%

34. Atlanta Company sold equipment for cash. The income statement shows a gain on the sale of $1020. The net book value of the asset was $3710. Which of the following statements describes the cash effect of the transaction?

*C) positive cash flow of $4730 from investing activities

70. Which of the following would most likely be accounted for using a job order costing system?

*C) the creation of wedding photography portraits

33. Which of the following sections of the statement of cash flows include purchases and sales of long-term assets?

*C) the investing activities section

31) Which of the following sections of the statement of cash flows include activities that create revenue and expenses of the business?

*C) the operating activities section

What is the total cost incurred for Job 13C?

*D) $40,620

71. Aaron, Inc. estimates direct labor costs and manufacturing overhead costs for the coming year to be $760,000 and $520,000, respectively. Aaron allocates overhead costs based on machine hours. The estimated total labor hours and machine hours for the coming year are 16,000 hours and 8000 hours, respectively. What is the predetermined overhead allocation rate? (Round your answer to the nearest cent.)

*D) $65.00 per machine hour

81. The Assembly Department of Interface, Inc., manufacturer of computers, had 4500 units of beginning inventory in September, and 8000 units were transferred to it from the Production Department. The Assembly Department completed 4000 units during the month and transferred them to the Packaging Department. The weighted-average method is used. Calculate the total number of units to account for by the Assembly Department.

*D) 12,500 units

45. Pizza, Inc. provides the following data: 2019 2018 Assets Current Assets: Cash and Cash Equivalents $30,000 $25,000 Accounts Receivable, Net 37,000 62,000 Merchandise Inventory 59,000 50,000 Total Current Assets $126,000 137,000 Property, Plant, and Equipment, Net $124,000 120,000 Total Assets $250,000 $257,000 For the year ending December 31, 2019: Net Credit Sales $510,000 Cost of Goods Sold (160,000) Gross Profit $350,000 Calculate the asset turnover ratio for 2019. There are no cash sales. (Round your answer to two decimal places.)

*D) 2.01 times

82. A furniture corporation manufactures two models of furniture—Standard and Deluxe. The total estimated manufacturing overhead costs are $64,200. The following estimates are available: Standard Deluxe Direct materials cost per unit $250 $290 Direct labor cost per unit $125 $140 Number of units 240 600 The company uses direct labor costs as the base to allocate manufacturing overhead. Calculate the predetermined overhead rate. (Round your answer to two decimal places.)

*D) 56.32%

63. Which of the following formulas represent cost of goods sold for a merchandising business?

*D) Beginning Merchandise Inventory + Purchases and Freight In - Ending Merchandise Inventory = Cost of Goods Sold

61. Goods that are produced by a manufacturing company and are ready to sell are recorded in the _______ account.

*D) Finished Goods Inventory

98. Which of the following statements is true if the variable cost per unit increases while the sales price per unit and total fixed costs remain constant?

*D) The breakeven point increases.

91. Which of the following is NOT an assumption of cost-volume-profit (CVP) analysis?

*D) The price per unit changes as volume changes.

97. Which of the following will lower the breakeven point?

*D) an increase in the sales price per unit

79. The direct labor costs and manufacturing overhead costs required to produce finished goods from raw materials are called ________.

*D) conversion costs

17. The Golden Company issues $539,000 of 7%, 10-year bonds at 104 on March 31, 2019. The bonds pay interest on March 31 and September 30. Assume that the company uses the straight-line method for amortization. The journal entry to record the issuance includes a ________.

*D) debit to Cash for $560,560

24. Treasury stock ________.

*D) decreases the number of shares outstanding

54. Which of the following is a product cost?

*D) depreciation on production equipment

47. The profit margin ratio ________.

*D) is often compared to the industry average

85. Which of the following is the most appropriate cost driver for allocating the cost of warranty services?

*D) number of service calls

29) Which of the following is the typical order of the sections on a statement of cash flows?

*D) operating, investing, financing

99. When the total fixed costs increase, the contribution margin per unit ________.

*D) remains the same

58. Which of the following would be considered a period cost for a manufacturing company?

*D) sales salaries

21) Preferred stock is stock ________.

*D) that gives its owners certain advantages over common stockholders

80. The beginning inventory costs and the product costs of the current period are combined to determine the average cost of equivalent units of production under the ________.

*D) weighted-average method

64. Lakeshore Manufacturing provided the following information for the month ended March 31: Sales Revenue $30,000 Beginning Finished Goods Inventory 17,000 Ending Finished Goods Inventory 11,500 Cost of Goods Manufactured 12,600

Compute gross profit. *A) $11,900

Direct materials cost $6820

Direct labor cost $26,000 Direct labor hours 31 hours Units of product produced 200