Accounting Final

horizontal analysis

(number of year in question - previous year) / previous year

When a company sells a gift card, the transaction used to record the sale would include ______ and _________ .

+cash, +unearned revenue

The Khalid Company manufactures and sells Paso-the-Salsa, which is a bottled condiment used on a variety of foods. Each bottle is sold for $5. The company recently had the following costs to produce and sell 12,000 units of its product during August: A. Rent of $5,000 on a billboard to help advertise the product B. Rent on factory and equipment of $8,000 C. Total payroll for hourly paid, factory workers $24,000 D. Tomatoes, onions, spices and bottles $18,000 E. Total payroll for salaried, administrative staff $6,000 If the cost of tomatoes increased by $0.25 per unit next month and the company raised its price by $0.15 per unit to help off set that cost, what is the company's projected net income assuming 13,000 units are produced and sold?

-800

The Barnes Company reported the following ending information after its first month of operations: Common stock $5,000 Notes payable $9,000 Inventory ? Equipment 16,000 Revenues 24,000 Cost of goods sold 13,000 Cash 3,000 Administrative expenses 4,000 What amount of inventory would the company report in its financial statements?

2000

The Carlile Corporation purchased some equipment on June 1, 2017 for $53,240 that it expects will be useful for six years at which time it could be sold for $5,000 If the equipment were sold for $34,000 on December 31, 2019, what amount of gain or loss would the company report on the sale? Use a positive number to indicate a gain or a negative number to indicate a loss.

1530

The Manchester Corporation manufactures wooden pictures frames and reported the following information related to the production and sale of 20,000 units: Budget Actual Sales $655,000 $687,000 Direct materials $180,000 $168,000 Direct labor $160,000 $190,000 Overhead $222,000 $240,000 What is the budget variance for sales?

32000

depreciation

A decrease or loss in value (cost - estimated residual value)/ estimated useful life recorded as (negative AD) and (negative RE)

current liabilities

AP, other current liabilities

How many of the following are a measure of liquidity? -Return on investment -Current ratio -Days sales in inventory -Gross margin percentage A. 0 B. 1 C. 2 D. 3 E. 4

C. 2

How many of the following accounts would be classified as an asset? -Cash -Inventory -Retained earnings -Equipment A. 0 B. 1 C. 2 D. 3 E. 4

D. 3

The payment of a dividend would be considered a(n) _____ cash ______.

Financing, outflow

mixed cost

a cost that contains both variable and fixed cost elements ex. phone service plan with caps on data, car rental costs

fixed cost

a cost that does not change, no matter how much of a good is produced ex. rent, salaries

break even

amount of sales required to avoid a loss fixed cost/ (price - variable cost per unit) = break even point

dividends

on statement of equity, not an expense

investing

purchase or sale of long terms resources such as land, building, and equipment ex. purchasing equipment

expenses (cash basis)

recorded when cash is paid

The Graves Corporation started operations this month and had the following transactions: 1 Owners invested $8,000 to start company 1 Purchased a 4-month insurance policy for $600 12 Purchased $400 of supplies on account 20 Customers paid for $500 of services in advance. 25 Completed $800 of services for another customer; sent bill. 30 Paid $200 to suppliers for supplies previously purchased on account At the end of the month, $80 of supplies were on still hand. what is the company's net income for the month?

330

If a company reported net income of $1,825, ending retained earnings of $6,000 and beginning retained earnings of $4,800, what amount of dividends were paid during the period?

625

When recording a transaction in an accounting framework... A. each row must balance mathematically. B. each transaction must have at least one positive number. C. every column must have activity types labeled. D. the change in change in cash must be positive.

A. Each row must balance mathematically

deferrals

cash received or paid before revenues have been earned or expenses have been incurred. supplies, prepaid expenses, unearned revenues, depreciation

book value

cost - accumulated depreciation

cost center

expenses

The Khalid Company manufactures and sells Paso-the-Salsa, which is a bottled condiment used on a variety of foods. Each bottle is sold for $5. The company recently had the following costs to produce 12,000 units of its product during August: A. Rent of $5,000 on a billboard to help advertise the product B. Rent on factory and equipment of $8,000 C. Total payroll for hourly paid, factory workers $24,000 D. Tomatoes, onions, spices and bottles $18,000 E. Total payroll for salaried, administrative staff $6,000 However, assume that the company only sold 8,000 units of those produced (i.e. 2/3 of the units produced) for the month of August. What is the company's costs of goods sold for the month?

$33,333

The Hill Company reported the following results: Year 3 Year 2 Year 1 Income Stmt Revenue 10,972 11,598 10,470 CoGS 8,942 8,767 7,901 Selling, General 2,470 2,611 2,479 & Admin. Exp. Interest exp. 76 80 28 Net Income (516) 140 62 Balance Sheet Assets Cash 1,354 1,316 1,880 Prepaid exp. 202 522 125 Acc. receivable 375 250 231 Inventory 745 698 455 Prop & equip (net) 20,464 18,810 17,727 Total Assets 23,140 21,596 20,418 Liabilities Accounts payable 2,824 743 678 Unred. gift cards 410 850 636 Notes Payable1 5,457 18,048 17,024 Stockholders' Equity Common Stock 985 545 815 Retained Earnings 3,464 1,410 1,265 Total Liab & Equity 23,140 21,596 20,418 For a horizontal analysis, what is the percent change in revenues for year 3?

-5.4

The Manchester Corporation manufactures wooden pictures frames and reported the following information related to the production and sale of 20,000 units: Budget Actual Sales $655,000 $687,000 Direct materials $180,000 $168,000 Direct labor $160,000 $190,000 Overhead $222,000 $240,000 What is the budget variance for overhead?

.18,999

The Clarke Company developed the following standards for the manufacture of its product: -Each unit should have 4 pounds of direct materials purchased at $12 per pound. -Each unit should be produced in 2 hours at a direct labor cost of $20 per hour. Actual production was 12,000 units using 49,000 pounds of direct materials at a total cost of $586,200 and required 23,500 direct labor hours at a total cost of $479,000. What was the direct labor "quantity" variance for the company?

10000

The Cabello Company buys air conditioners for $3,900 and sells them for $4,800 each; the company has the following sales forecast: April 120 units May 140 units June 180 units The company wants to maintain ending inventory for each month at 15% of the next month's sales and had 20 units on hand on April 1st. The company also has monthly rent of $15,000 and salaries of $80,000. The company pays for all inventory purchases in the month of the purchase and pays for all selling and administrative costs in the month incurred. The company's customers also pay for all products in the month they are purchased. What dollar amount of inventory would be reported in the company's budgeted financial statements for May?

105,300

The Kweller Company is considering two different capital investment projects with the following cash flows Commerce Sawdust Year 0 (20,000) (18,000) Year 1 8,000 4,000 Year 2 6,000 8,000 Year 3 4,000 6,000 Year 4 3,000 3,000 As needed, the company uses a 4% interest rate for capital investment decisions. What is the net present value (NPV) for Sawdust?

1141

The Gray Corporation completed the following transactions for the month: 1 Owners begin company by investing $30,000. 1 Purchased $10,000 of equipment which has a useful life of 5 years and is expected to be worthless at the end of that time. 1 Purchased a three-month insurance policy for $525. 9 Performed $6,000 of services to customers; sent bill. 15 Paid $300 for office supplies. 20 Received $1,200 from a customer for services sold in advance. 30 Paid employee payroll of $3,200. 30 Supplies on hand reported at $200. Based on the transactions above, what is the company's cash balance at the end of the month?

17175

The Hill Company reported the following results: Year 3 Year 2 Year 1 Income Stmt Revenue 10,972 11,598 10,470 CoGS 8,942 8,767 7,901 Selling, General 2,470 2,611 2,479 & Admin. Exp. Interest exp. 76 80 28 Net Income (516) 140 62 Balance Sheet Assets Cash 1,354 1,316 1,880 Prepaid exp. 202 522 125 Acc. receivable 375 250 231 Inventory 745 698 455 Prop & equip (net) 20,464 18,810 17,727 Total Assets 23,140 21,596 20,418 Liabilities Accounts payable 2,824 743 678 Unred. gift cards 410 850 636 Notes Payable1 5,457 18,048 17,024 Stockholders' Equity Common Stock 985 545 815 Retained Earnings 3,464 1,410 1,265 Total Liab & Equity 23,140 21,596 20,418 What is the company's gross profit ratio for Year 3?

18.5

The Hill Company reported the following results: Year 3 Year 2 Year 1 Income Stmt Revenue 10,972 11,598 10,470 CoGS 8,942 8,767 7,901 Selling, General 2,470 2,611 2,479 & Admin. Exp. Interest exp. 76 80 28 Net Income (516) 140 62 Balance Sheet Assets Cash 1,354 1,316 1,880 Prepaid exp. 202 522 125 Acc. receivable 375 250 231 Inventory 745 698 455 Prop & equip (net) 20,464 18,810 17,727 Total Assets 23,140 21,596 20,418 Liabilities Accounts payable 2,824 743 678 Unred. gift cards 410 850 636 Notes Payable1 5,457 18,048 17,024 Stockholders' Equity Common Stock 985 545 815 Retained Earnings 3,464 1,410 1,265 Total Liab & Equity 23,140 21,596 20,418 What is the company's days sales in inventory ratio for Year 2?

24

The Feller Corporation completed the following transactions for the month: (a) Owners begin company by investing $50,000, (b) Purchased $6,000 of office equipment, (c) Purchased 40 units of inventory for a total of $20,000, (d) Sold 12 units of the inventory to a customer for a total price of $7,200, (e) Purchased another 8 units of inventory for $4,000. Based on these transactions, what amount would the company report as cash in its financial statements at the end of the month?

27200

The Khalid Company manufactures and sells Paso-the-Salsa, which is a bottled condiment used on a variety of foods. Each bottle is sold for $5. The company recently had the following costs to produce and sell 12,000 units of its product during August: A. Rent of $5,000 on a billboard to help advertise the product B. Rent on factory and equipment of $8,000 C. Total payroll for hourly paid, factory workers $24,000 D. Tomatoes, onions, spices and bottles $18,000 E. Total payroll for salaried, administrative staff $6,000 For future reference, what is the company's variable cost per unit (rounded to the nearest penny)?

3.5

The Kweller Company is considering two different capital investment projects with the following cash flows Commerce Sawdust Year 0 (20,000) (18,000) Year 1 8,000 4,000 Year 2 6,000 8,000 Year 3 4,000 6,000 Year 4 3,000 3,000 As needed, the company uses a 4% interest rate for capital investment decisions. What is the cash payback period for Commerce?

3.67

The Cabello Company buys air conditioners for $3,900 and sells them for $4,800 each; the company has the following sales forecast: April 120 units May 140 units June 180 units The company wants to maintain ending inventory for each month at 15% of the next month's sales and had 20 units on hand on April 1st. The company also has monthly rent of $15,000 and salaries of $80,000. The company pays for all inventory purchases in the month of the purchase and pays for all selling and administrative costs in the month incurred. The company's customers also pay for all products in the month they are purchased. If the company's cash balance on April 1st was $22,000, what was its ending cash balance at the end of May?

38,700

If a company reported assets of $100, common stock of $40 and retained earnings of $20, what amount of liabilities does the company have?

40

The Matthews Company started operations this month and had the following transactions -Owners invested $40,000 to start the company -Purchased 50 units of inventory for $10,000 -Borrowed $3,000 from a bank -Paid $400 for advertising What are the company's total assets at the end of the month?

42,600

The Carlile Corporation purchased some equipment on June 1, 2017 for $53,240 that it expects will be useful for six years at which time it could be sold for $5,000 What amount of depreciation expense would the company report in its 2017 financial statements?

4690

The Lange Company reported the following ending information after its first month of operations: Common stock $2,800 Equipment $2,600 Revenue $3,000 Liabilities $1,200 Advertising expense $100 Cash $1,400 Inventory $800 Payroll expense $900 Cost of Goods Sold $1,200 What are the company's total assets?

4800

The Hall Corporation had the following costs when it produced 80,000 units Direct material costs $30,000 Admin. costs $6,000 Selling costs 8,000 Direct labor costs 24,000 Overhead costs 12,000 If the company only sold 60,000 units what is cost of goods sold for the period?

49,500

The Gray Corporation completed the following transactions for the month: 1 Owners begin company by investing $30,000. 1 Purchased $10,000 of equipment which has a useful life of 5 years and is expected to be worthless at the end of that time. 1 Purchased a three-month insurance policy for $525. 9 Performed $6,000 of services to customers; sent bill. 15 Paid $300 for office supplies. 20 Received $1,200 from a customer for services sold in advance. 30 Paid employee payroll of $3,200. 30 Supplies on hand reported at $200. Based on the transactions above, what was the company's net income for the month?

525

The Cabello Company buys air conditioners for $3,900 and sells them for $4,800 each; the company has the following sales forecast: April 120 units May 140 units June 180 units The company wants to maintain ending inventory for each month at 15% of the next month's sales and had 20 units on hand on April 1st. The company also has monthly rent of $15,000 and salaries of $80,000. What total dollar amount would appear on the company's purchases budget for May?

569,400

Jill has always wanted to travel to China and plans to take a trip there in five years; she estimates that she will need $3,000 to pay for the trip and plans to make annual deposits to a savings account to reach her goal for pay for the trip. If her account earns 2% interest, how much should she deposit each year to reach her goal?

576

The Cabello Company buys air conditioners for $3,900 and sells them for $4,800 each; the company has the following sales forecast: April 120 units May 140 units June 180 units The company wants to maintain ending inventory for each month at 15% of the next month's sales and had 20 units on hand on April 1st. The company also has monthly rent of $15,000 and salaries of $80,000. What total dollar amount would appear on the company's sales budget for April?

576,000

A. Owner's invested $5,000 in the company B. Purchased $400 of equipment C. Purchased another $500 of equipment D. Borrowed $2,000 from a bank E. Returned $200 of the equipment previously purchased and received a refund F. Purchased $300 of inventory What is the company's ending cash balance?

6000

If you deposited $500 into a savings account that pays 6% interest, how much would be in the account in four years assuming you never made any additional deposits or withdrawals?

631

The Cabello Company buys air conditioners for $3,900 and sells them for $4,800 each; the company has the following sales forecast: April 120 units May 140 units June 180 units The company wants to maintain ending inventory for each month at 15% of the next month's sales and had 20 units on hand on April 1st. The company also has monthly rent of $15,000 and salaries of $80,000. What amount of net income would appear on the company's income statement budget for June?

67,000

The Graves Corporation started operations this month and had the following transactions: 1 Owners invested $8,000 to start company 1 Purchased a 4-month insurance policy for $600 12 Purchased $400 of supplies on account 20 Customers paid for $500 of services in advance. 25 Completed $800 of services for another customer; sent bill. 30 Paid $200 to suppliers for supplies previously purchased on account At the end of the month, $80 of supplies were on still hand. What is the company's cash balance at the end of the month?

7700

The Carlile Corporation purchased some equipment on June 1, 2017 for $53,240 that it expects will be useful for six years at which time it could be sold for $5,000 What amount of depreciation expense would the company report in its 2018 financial statements?

8040

Andres needs a new computer, but did not have enough money to purchase one so he borrowed the $1,800 he needed to make the purchase from a relative. He agreed to pay the loan back by making annual payments over the next two years. Assuming an interest rate of 4 percent, how much is each payment?

954

identify what type of cost is involved using the drop down boxes. A. Rent of $5,000 on a billboard to help advertise the product B. Rent on factory and equipment of $8,000 C. Total payroll for hourly paid, factory workers $24,000 D. Tomatoes, onions, spices and bottles $18,000 E. Total payroll for salaried, administrative staff $6,000

A. Fixed B. Fixed C. Variable D. Variable E. Fixed

If a company sold some old equipment, when recording the transaction, how many of the columns used in the accounting framework would include a positive number assuming the equipment were sold at a loss? A. 0 B. 1 C. 2 D. 3 E. 4

C. 2

Which of the following financial statements reports what dividends were paid for the period? A. Balance Sheet B. Income Statement C. Statement of Equity D. Statement of Wealth E. None of the above

C. Statement of equity

Book value of equipment equals its A. purchase cost. B. purchase cost less depreciation expense. C. purchase cost less accumulated depreciation. D. purchase cost less depreciation expense and accumulated depreciation. E. None of the above

C. purchase cost less accumulated depreciation.

If you were given the purchase price of a new home and wanted to calculate the required annual payment on a related loan, which time value of money table should you use? A. Future value of $1 B. Present value of $`1 C. Future value of an annuity of $1 D. Present value of an annuity of $1

D. PV of an annuity of $1

If a bank were trying to determine whether to grant a loan to a company, which of the following ratios of the loan candidate would the bank be most interested in reviewing? A. return on investment B. days sales in inventory C. gross margin ratio D. debt ratio

D. debt ratio

When reviewing the days sales in accounts receivable ratio for a short-term loan decision A. a higher result is better than a lower result. B. the overall trend can be ignored. C. the result should be evaluated in conjunction with other profitability ratios. D. the result should be evaluated in conjunction with other liquidity ratios.

D. the result should be evaluated in conjunction with other liquidity ratios.

Which of the following would best explain the variance for overhead? A. Additional production equipment was rented during the period. B. Rented production equipment that was not needed was returned and the rental contract terminated during the period. C. The utility company for the factory increased its rates during the period. D. Two of the above E. None of the above

D. two of them

The Sampson Company produces bottled hot sauce; the cost of labels for the bottles would be considered a(n) (direct material/direct labor/overhead) cost as well as a (fixed/variable) cost.

Direct material, variable

income statement

Revenues - Expenses = Net Income expenses include cogs, payroll, advertising, rent

direct labor

inventory on balance sheet, and cogs in income statement ex. pay for factory workers

overhead

inventory on balance sheet, cogs on income statement ex. maintenance of equipment

The Dickson Corporation reported the following data: Year 3 Year 2 Year 1 Sales $59,800 $52,000 $48,400 Cogs 40,200 38,400 36,600 For a horizontal analysis, what is the percent change in cost of goods sold for year 2?

4.9

Which of the following would likely be considered a profit center? A. Division headquarters B. Maintenance Department C. Sales Division D. All of the above E. None of the above

C. Sales Division

accruals

activity then cash

business stakeholders

employees and managers - employment, set prices, manage costs investors - buy and sell ownership banks and suppliers - loan and collect funds, sell goods on account government - collect taxes and fees

contribution margin/sales

gross profitability of each product

direct materials

part of inventory on balance sheet, and cogs on income statement ex. materials needed to produce a product

revenues (accrual basis)

recorded when Amounts earned from providing goods and services

The Khalid Company manufactures and sells Paso-the-Salsa, which is a bottled condiment used on a variety of foods. Each bottle is sold for $5. The company recently had the following costs to produce 12,000 units of its product during August: A. Rent of $5,000 on a billboard to help advertise the product B. Rent on factory and equipment of $8,000 C. Total payroll for hourly paid, factory workers $24,000 D. Tomatoes, onions, spices and bottles $18,000 E. Total payroll for salaried, administrative staff $6,000 However, assume that the company only sold 8,000 units of those produced (i.e. 2/3 of the units produced) for the month of August. What is the net income for the month?

$-4,333

The Gryffin Company started operations this year and reported the following ending information (i.e. at the end of the year): Revenue$16,900 Equipment$10,700 Notes payable$2,200 Cost of Goods Sold$12,600 Cash$1,650 Payroll expense$2,400 Common stock$10,000 Inventory$850 Advertising expense$750 Dividends$150 What amount of ending retained earnings would the company report?

$1000

The Gryffin Company started operations this year and reported the following ending information (i.e. at the end of the year): Revenue$16,900 Equipment$10,700 Notes payable$2,200 Cost of Goods Sold$12,600 Cash$1,650 Payroll expense$2,400 Common stock$10,000 Inventory$850 Advertising expense$750 Dividends$150 What net income would the company report?

$1150

The Gryffin Company started operations this year and reported the following ending information (i.e. at the end of the year): Revenue$16,900 Equipment$10,700 Notes payable$2,200 Cost of Goods Sold$12,600 Cash$1,650 Payroll expense$2,400 Common stock$10,000 Inventory$850 Advertising expense$750 Dividends$150 What amount of total assets would the company report?

$13200

How many of the following would be included in the calculation of the current ratio? -Inventory -Retained earnings -Notes payable -Equipment A. 0 B. 1 C. 2 D. 3 E. 4

B. 1

Under the accrual basis of accounting, revenue is recorded when A. cash is received from a customer. B. a product has been ordered by a customer. C. a product has been shipped to a customer. D. any of the above

C. a product has been shipped to a customer.

The sale of equipment would be considered a(n) ______ cash _________

Investing, inflow

accounting framework

assets = liabilities + equity

current assets

cash, AR, inventory, prepaid expenses

operating

daily operations including sales, payroll or utilities ex. purchasing inventory

product costs

direct materials, direct labor, and overhead

period costs

expenses, show up on income statement

Expenses (Accrual basis)

recorded when amounts incurred in an attempt to generate revenues

capital expenditure

benefits current and future periods, asset improvement that adds service value, extraordinary repair that extends life, update asset accounts

Revenue expenditure

benefits current period only, ordinary repair and maintenance, record as expense

statement of cash flows

operating, financing, and investing activities

The Hill Company reported the following results: Year 3 Year 2 Year 1 Income Stmt Revenue 10,972 11,598 10,470 CoGS 8,942 8,767 7,901 Selling, General 2,470 2,611 2,479 & Admin. Exp. Interest exp. 76 80 28 Net Income (516) 140 62 Balance Sheet Assets Cash 1,354 1,316 1,880 Prepaid exp. 202 522 125 Acc. receivable 375 250 231 Inventory 745 698 455 Prop & equip (net) 20,464 18,810 17,727 Total Assets 23,140 21,596 20,418 Liabilities Accounts payable 2,824 743 678 Unred. gift cards 410 850 636 Notes Payable1 5,457 18,048 17,024 Stockholders' Equity Common Stock 985 545 815 Retained Earnings 3,464 1,410 1,265 Total Liab & Equity 23,140 21,596 20,418 What is the company's return on investment ratio for Year 1?

0.3

The Hill Company reported the following results: Year 3 Year 2 Year 1 Income Stmt Revenue 10,972 11,598 10,470 CoGS 8,942 8,767 7,901 Selling, General 2,470 2,611 2,479 & Admin. Exp. Interest exp. 76 80 28 Net Income (516) 140 62 Balance Sheet Assets Cash 1,354 1,316 1,880 Prepaid exp. 202 522 125 Acc. receivable 375 250 231 Inventory 745 698 455 Prop & equip (net) 20,464 18,810 17,727 Total Assets 23,140 21,596 20,418 Liabilities Accounts payable 2,824 743 678 Unred. gift cards 410 850 636 Notes Payable1 5,457 18,048 17,024 Stockholders' Equity Common Stock 985 545 815 Retained Earnings 3,464 1,410 1,265 Total Liab & Equity 23,140 21,596 20,418 What is the company's current ratio for Year 2?

1.75

The Clarke Company developed the following standards for the manufacture of its product: -Each unit should have 4 pounds of direct materials purchased at $12 per pound. -Each unit should be produced in 2 hours at a direct labor cost of $20 per hour. Actual production was 12,000 units using 49,000 pounds of direct materials at a total cost of $586,200 and required 23,500 direct labor hours at a total cost of $479,000. What was the "total" direct labor variance for the company?

1000

The Khalid Company manufactures and sells Paso-the-Salsa, which is a bottled condiment used on a variety of foods. Each bottle is sold for $5. The company recently had the following costs to produce 12,000 units of its product during August: A. Rent of $5,000 on a billboard to help advertise the product B. Rent on factory and equipment of $8,000 C. Total payroll for hourly paid, factory workers $24,000 D. Tomatoes, onions, spices and bottles $18,000 E. Total payroll for salaried, administrative staff $6,000 However, assume that the company only sold 8,000 units of those produced (i.e. 2/3 of the units produced) for the month of August. What is the ending inventory for the month?

$16,667

The Khalid Company manufactures and sells Paso-the-Salsa, which is a bottled condiment used on a variety of foods. Each bottle is sold for $5. The company recently had the following costs to produce and sell 12,000 units of its product during August: A. Rent of $5,000 on a billboard to help advertise the product B. Rent on factory and equipment of $8,000 C. Total payroll for hourly paid, factory workers $24,000 D. Tomatoes, onions, spices and bottles $18,000 E. Total payroll for salaried, administrative staff $6,000 For each item, identify what type of cost is involved

A. Period B. Overhead C. Direct labor D. Direct material E. Period

SuperSnacks, Inc. sells a variety of packaged snack foods. In a recent report, there was a favorable "quantity" variance related to direct materials. How many of the following may help explain that variance? -Several crates of direct materials were lost. -Improved storage practices increased shelf life of direct materials. -The sales price of the company's products were increased. -A shortage of direct materials caused an increase in their price. A. 0 B. 1 C. 2 D. 3 E. 4

B. 1

Which of the following financial statements reports inventory at the end of the period? A. Income Statement B. Balance Sheet C. Statement of Equity D. Statement of Wealth E. All of the above

B. Balance sheet

How many of the following could appear on an income statement? -Cash -Dividends -Cost of goods sold -Payroll expense A. 0 B. 1 C. 2 D. 3 E. 4

C. 2

SuperSnacks, Inc. sells a variety of packaged snack foods. In a recent report, there was a favorable "cost" variance related to direct materials. Which of the following may help explain that variance? A. Several crates of direct materials were lost. B. Improved storage practices increased shelf life of direct materials. C. The sales price of the companies products were increased. D. A shortage of direct materials caused an increase in their price. E. None of the above

E. None of the above

Which of the following would best explain the variance for sales? A. Many members of the sales team were on vacation during the period. B. The company had to recall many of its products due to production defects during the period. C. The company's products were backordered with long fulfillment wait times during the period. D. All of the above E. None of the above

E. none of the above

The cash payback method of evaluating a capital investment decision... A. is more informative than the net present value method. B. incorporates time value of money factors in its calculation. C. includes all cash flows related to a capital investment. D. all of the above are true E. none of the above are true.

E. none of the above are true

Accounting

an information system that provides reports to stakeholders about the economic activities and condition of a business to help make informed decisions

inventory on balance sheet includes

direct material costs, direct labor costs, and overhead costs

The Hill Company reported the following results: Year 3 Year 2 Year 1 Income Stmt Revenue 10,972 11,598 10,470 CoGS 8,942 8,767 7,901 Selling, General 2,470 2,611 2,479 & Admin. Exp. Interest exp. 76 80 28 Net Income (516) 140 62 Balance Sheet Assets Cash 1,354 1,316 1,880 Prepaid exp. 202 522 125 Acc. receivable 375 250 231 Inventory 745 698 455 Prop & equip (net) 20,464 18,810 17,727 Total Assets 23,140 21,596 20,418 Liabilities Accounts payable 2,824 743 678 Unred. gift cards 410 850 636 Notes Payable1 5,457 18,048 17,024 Stockholders' Equity Common Stock 985 545 815 Retained Earnings 3,464 1,410 1,265 Total Liab & Equity 23,140 21,596 20,418 Over the three year period, the company's current ratio is...

getting worse

revenue (cash basis)

recorded when cash received

profit center

revenues and expenses

investment center

revenues, expenses, and assets

master budget

sales budget (sales forecast), purchases budget, income statement budget, cash budget, balance sheet budget

The Kweller Company is considering two different capital investment projects with the following cash flows Commerce Sawdust Year 0 (20,000) (18,000) Year 1 8,000 4,000 Year 2 6,000 8,000 Year 3 4,000 6,000 Year 4 3,000 3,000 As needed, the company uses a 4% interest rate for capital investment decisions. Which project has a better NPV?

sawdust

The Kweller Company is considering two different capital investment projects with the following cash flows Commerce Sawdust Year 0 (20,000) (18,000) Year 1 8,000 4,000 Year 2 6,000 8,000 Year 3 4,000 6,000 Year 4 3,000 3,000 As needed, the company uses a 4% interest rate for capital investment decisions. Which project has a better cash payback period?

sawdust

How many of the following would be considered an expense? -Advertising expense -Cost of goods sold -Rent expense -Dividends A. 0 B. 1 C. 2 D. 3 E. 4

D. 3

Contribution margin equals A. fixed costs plus variable costs. B. sales minus fixed costs. C. fixed costs minus variable costs. D. sales minus variable costs minus fixed costs. E. none of the above

E. None of the above

The Khalid Company manufactures and sells Paso-the-Salsa, which is a bottled condiment used on a variety of foods. Each bottle is sold for $5. The company recently had the following costs to produce and sell 12,000 units of its product during August: A. Rent of $5,000 on a billboard to help advertise the product B. Rent on factory and equipment of $8,000 C. Total payroll for hourly paid, factory workers $24,000 D. Tomatoes, onions, spices and bottles $18,000 E. Total payroll for salaried, administrative staff $6,000 For future reference, what are the company's total fixed costs?

$19,000

Which of the following is false? A. Revenues - expenses = net income B. Assets + Liabilities = Equity C. Beginning retained earnings + net income - dividends = ending retained earnings D. All of the above are true.

B. Assets + Liabilities does not equal equity

The Hill Company reported the following results: Year 3 Year 2 Year 1 Income Stmt Revenue 10,972 11,598 10,470 CoGS 8,942 8,767 7,901 Selling, General 2,470 2,611 2,479 & Admin. Exp. Interest exp. 76 80 28 Net Income (516) 140 62 Balance Sheet Assets Cash 1,354 1,316 1,880 Prepaid exp. 202 522 125 Acc. receivable 375 250 231 Inventory 745 698 455 Prop & equip (net) 20,464 18,810 17,727 Total Assets 23,140 21,596 20,418 Liabilities Accounts payable 2,824 743 678 Unred. gift cards 410 850 636 Notes Payable1 5,457 18,048 17,024 Stockholders' Equity Common Stock 985 545 815 Retained Earnings 3,464 1,410 1,265 Total Liab & Equity 23,140 21,596 20,418 Based on the three years of data, the company's return on investment ratio has A. improved. B. worsened. C. stayed the same.

B. worsened

Generally accepted accounting principles (GAAP) rely on how many of the following concepts? -Business entity -Objectivity -Unit of Measure -Going Concern A. 0 B. 1 C. 2 D. 3 E. 4

E. 4

Which of the following statements is false? A. Dividends decrease retained earnings. B. Common stock plus ending retained earnings equals owner's equity. C. Expenses decrease retained earnings. D. Total assets minus total liabilities equals total equity. E. None of the above are false

E. None are false

variable cost

changes in proportion to changes in the volume of activity ex. gas, utilities, wages/hourly pay

financing

funds needed to start/operate a business from owners or banks ex. investing in the company

The Khalid Company manufactures and sells Paso-the-Salsa, which is a bottled condiment used on a variety of foods. Each bottle is sold for $5. The company recently had the following costs to produce and sell 12,000 units of its product during August: A. Rent of $5,000 on a billboard to help advertise the product B. Rent on factory and equipment of $8,000 C. Total payroll for hourly paid, factory workers $24,000 D. Tomatoes, onions, spices and bottles $18,000 E. Total payroll for salaried, administrative staff $6,000 If the company produced and sold 14,000 units next month, what is the company's projected net income?

$2,000

Samir received $500 as a graduation gift this year and plans to deposit in an investment account. If the account pays interest of 6 percent, how much will be in his account in three years?

596

Overhead costs will A. always impact the balance sheet. B. only impact the income statement. C. never have an impact on the statement of cash flows. D. can never impact the statement of equity.

A. Always impact the balance sheet

A. Owner's invested $5,000 in the company B. Purchased $400 of equipment C. Purchased another $500 of equipment D. Borrowed $2,000 from a bank E. Returned $200 of the equipment previously purchased and received a refund F. Purchased $300 of inventory Identify what type of activity for each transaction

A. Financing B. Investing C. Investing D. Financing E. Investing F. Operating

How many of the following financial statements report net income for the period? -Statement of Cash Flows -Balance Sheet -Income Statement -Statement of Equity A. 0 B. 1 C. 2 D. 3 E. 4

C. 2