accounting ch. 1,2,&3

On May 31, Carlson International had a cash ledger balance of $22,370. The May bank statement balance was $20,832. Outstanding checks were $1,755; deposits in transits were $3,070. There was a service charge of $45 and a non-sufficient funds check of $178. What is the correct amount of cash?

$22,147

A linear regression analysis indicated a constant of 800, an X coefficient of 6.5, and an R-squared of 0.83. The estimated cost when the independent variable is 650 is:

$5,025

McCall Brothers purchased $65,000 of inventory from a vendor who offered credit terms of 1/15, n/45. If McCall takes advantage of the discount, the amount paid to the vendor will be:

$64,350

External failure cost occurs when:

A company repairs a product after it is sold to the customer.

Which of the following statements about the use of accounting information by the marketing function is true?

Accounting information would be needed to select the best alternative for getting the firm's product to its customers.

One of the following is not one of the financial statements required for external reporting today.

All of the above are required financial statements

Which of the following is not information that a company should collect when placing an order with a vendor?

All of the above should be collected

FOB shipping point indicates that goods in transit belong to the ______ and the freight charges are paid by the _____.

Buyer - Buyer

Which one of the following processes is responsible for borrowing money on a long-term basis to acquire long-term assets?

Capital Resources Process

Which of the following is the Quick Ratio?

Cash + Temporary Investments + Receivables / Current Liabilities

A bank reconciliation will identify all of the following except?

Check written and recorded for the wrong amount

On a bank reconciliation, which of the following will increase the book's cash balance?

Company writes a check for the correct amount but records the amount of the check on the company's records for an amount greater than the check.

Determining the company's labor needs for a manufacturing company is part of which of the following processes?

Conversion process

Which of the following are the ratios for calculating the current ratio and debt to equity respectively?

Current Assets / Current Liabilities and Total Liabilities / Owners' Equity

The preparation of a sales invoice is triggered by _____ and is completed by the ______ department.

Customer and Sales Department

Determining the payment policies to suppliers and vendors who provide merchandise the company expects to sell later is part of the:

Expenditure process

Generally accepted accounting principles (GAAP) are authoritative pronouncements that define what constitutes acceptable accounting practice for financial reporting. GAAP today is set by:

FASB - Financial Accounting Standards Board, a private standard setting organizations.

Which of the following strategies focuses mainly on developing new products to meet rapidly changing consumer demand?

Flexible strategy

The Debt to Equity Ratio measures which of the following?

How much debt is used to finance a company.

Which of the following is not true about the return on sales ratio?

It measures the profitability and liquidity of the firm.

When a company operates in a static environment and focuses on reducing cost and increasing efficiency it is more likely to use:

Mechanistic organizational structure with an efficiency strategy

In Luca Pacioli's 15th century book "The Summa" the accounting system he describes uses three books. Which of the books are not used in today's accounting system?

Memorandum

French Corporation ordered materials from Manson Manufacturing on October 1, 2009. Manson shipped the materials by rail on October 5 and the railroad notified French on October 12, that the goods had arrived. French picked up the materials on October 13. The terms of the sale are FOB shipping point. On what date should Manson consider this a sale?

October 5

Which of the following is not one of the four perspectives of the Balanced Scorecard Approach?

Operating Perspective

Which of the following is not one of the management cycle phases?

Performance Measurement and Management Phase

Which of the following is considered value added time?

Processing time

A document sent to the purchasing department to order a specific quantity of goods or services is called a:

Purchase Requisition

Which of the following is not part of the revenue process?

Purchase merchandise for resale to customers

The profitability generated by the assets of a corporation would be best measured by the:

Return on Investment

Which of the following ratios measures the profit earned by the firm for those who invested in the company?

Return on Owners' Equity

Which of the following is not true about the relationships between the financial statements?

The cash inflows identified on the Statement of Cash Flows are reported on the Income Statement.

Which of the following is not an example of a liability?

The claims of the owners on the firm's net assets

The Report of the Independent Auditor is the opinion of the CPA firm that examined the financial statements of a company and states which of the following?

The financial statements are presented fairly in accordance with GAAP.

Which of the following reflects a weakness in the internal control for cash?

The person receiving cash in the mail makes out the deposit ticket, deposits the cash and then records the deposit in the accounting records.

Y = m(X) is the formula for a(n):

Variable cost

The formula for a mixed cost is:

Y = m(X) + b

The document listing the quantities of materials being shipped by a common carrier is referred to as a:

bike of lading

Because this type of business is considered a separate legal entity it rather than its owners are taxed.

corporation

In its annual report the Jones Farm Supply reported the number of trailers it had in stock, rather than the cost in dollars of the trailers. This violates which of the following concepts:

monetary unit concept

Mutual agency and unlimited liability is the characteristic of which of the following business entity?

partnership

A company that only prepares financial statements when it is convenient for the management of the firm is violating which of the following accounting concepts.

periodicity concept

The controller of Quinter, Inc. requires only one person is allowed to run a cash register during a particular span of time. This is an application of which of the following internal controls:

physically controlling assets and documents