accounting two fall final
If the ABC Company has total owner's equity of $625 what is the debt-to-equity ratio?: .184 1.4916 .4864 .6704
.6704
ABC Company produces and sells Product A. The selling price is $15 per unit. It costs $4 per unit to make Product A and $2 per unit to sell it. Fixed manufacturing costs are $600,000 per year and fixed selling and administrative costs are $300,000 per year. ABC Company's tax rate is 25%. Round all answers to the nearest whole number. What is the breakeven point in units? a. 150,000 b. 100,000 c. 54,545 d. 66,667
100000
A company made sales of $50,000 but received only $48,000 in cash from customers. During the same time period, it incurred operating expenses of $39,000 of which it paid for $18,000 in cash. What is the company's accrual-based income? $32,000 $9,000 $11,000 $(7,000)
11000
Veta Corporation purchased $14,650 in supplies from a vendor offering credit terms of 2/10, n/30. If Veta takes advantage of the discount, the amount paid to the vendor (rounded to the nearest dollar) will be: a. $14,357 b. $14,650 c. $13,185 d. $14,621
14357
What is the breakeven point in dollars for ABC Company Product A? a. $1,500,000 b. $818,182 c. $1,000,005 d. $2,250,000
1500000
Selling price less variable costs equals: a. gross margin b. markup c. contribution margin d. net income
CM
Total sales less total variable cost at a given point of activity.
CM
Abel Corp. ordered $50,000 of energy drinks from Moster Energy Incorated and were given terms of 2/15 net/60. Which of the following describes how soon the payment must be made in order to receive a discount and the amount of the discount available. Payment Made Within Amount of Discount A)Between 2 and 15 Days $20,000 B) 60 Days $ 7,500 C) Between 2 and 15 $ 1,000 D) Within 15 Days $ 1,000 B D C A
D
Which of the following is a short-term operating decision? a. Decision to reduce the normal price to get large order from one customer b. Decision to buy a new plant c. Decision to discontinue a product line d. Decision to make a new product
Decision to discontinue a product line
The Capital Resources Process features which of the following pairs of activities? a. Financing and Planning Activities b. Financing and Investing Activities c. Operating and Investing Activities d. Reporting and Operating Activities
Financing and Investing Activities
Goods shipped from a seller's warehouse on June 10, 2010, arrived at the buyer's warehouse on June 16, 2010. The invoice for the goods arrived at the buyer's accounting department on June 13, 2010 and was paid on June 20, 2010. If the goods were sold FOB destination, the buyer took legal title on: a. June 16, 2008 b. June 20, 2008 c. June 10, 2008 d. June 13, 2008
June 16, 2008
Beta Company currently makes 350,000 units of product Gamma along with its other products. Its production costs per unit are: direct materials, $5; direct labor, $4; unit-related overhead, $2. Facility-sustaining overhead is $700,000 per year. A company has made Beta an offer to supply all the units of Gamma it needs for $12 per unit. Should Beta Company buy Gamma from the supplier? a. Yes, it will save $3 per unit. b. No, it will lose $1 per unit. c. Yes, it will save $1 per unit.
No, it will lose $1 per unit
Tri-State Corporation ordered materials from Down-State Manufacturing on October 1, 2006. Down-State shipped the materials by rail on October 5 and the railroad notified Tri-State on October 12, that the goods had arrived. Tri-State picked up the materials on October 13. The terms of the sale are FOB shipping point. On what date should Tri-State consider this a purchase? a. October 5 b. October 12 c. October 13 d. October 1
October 5
When a company operates in an uncertain environment that has rapidly changing products it is more likely to have an a. Holistic organizational structure with an organic strategy b. Organic organizational structure with a flexible strategy c. Mechanistic organizational structure with an efficiency strategy d. Synthetic organizational structure with an decentralized strategy
Organic organizational structure with a flexible strategy
The Balanced Scorecard Approach is part of which of the following processes? a. Operating process b. Capital Resources Process c. Performance Measurement and Management Process d. Business Organization and Strategy Process
Performance Measurement and Management Process
Which of the following is not part of the revenue process? a. Provide customer support b. Receive goods and services c. Receive payments for goods and services rendered d. Receive and accept order for goods and services
Receive goods and services
Short-term decision making differs from long-term decision making because: a. Short-term decision making assumes the accounting data is fixed. b. Short-term decision making assumes that variable costs are fixed. c. Short-term decision making assumes selling prices are fixed. d. Short-term decision making assumes capacity is fixed.
Short-term decision making assumes capacity is fixed.
Which of the following is not part of the expenditure process? a. Using equipment to manufacture products b. Ordering goods and services c. Paying suppliers d. Receiving goods and services
Using equipment to manufacture products
Largo Company's highest and lowest monthly costs during the past year were $108,000 and $72,000, respectively. Activity levels were 5,000 hours and 3,000 hours, respectively. Determine Largo's cost formula. a. unable to determine from the information given b. Y=24.60(X) + 36,000 c. Y=18(X) + 18,000 d. Y=21.60(X) + 0
Y=18(X) + 18,000
basis that reflect the consumption or provision of resources
activity driver
Which of the following is a balanced scorecard perspective? a. internal processes b. learning and growth c. customer d. all of the above are balanced scorecard perspectives
all of the above are balanced scorecard perspectives
Which of the following is an asset for ABC Company? amounts ABC's customers owe it amounts ABC owes its owners amounts ABC owes its suppliers all of the above
amounts ABC's customers owe it
The cost incurred to detect mistakes as early as possible.
appraisal cost
salary of the quality control inspector (u,b,p,f)
b
set up cost to change from one piece of equipment to another (u,b,p,f)
b
Which financial statement is designed to show the amounts of assets, liabilities, and owners' equity at the end of the period? income statement statement of owners' equity statement of cash flows balance sheet
balance sheet
shipping document that describes agreement between business and common carrier
bill of lading
The point where the total cost line intersects the total revenue line.
breakeven point
The point where the total revenue line intersects the total cost line is called the: a. X axis intercept b. origin c. Y axis intercept d. breakeven point
breakeven point
A collection of activities that takes one or more kinds of input and creates an output that is valued by customers.
business process
FOB shipping point indicates that goods in transit belong to the: a. either the buyer or seller depending upon the terms of the bill of lading b. Seller c. Buyer d. Common carrier
buyer
Fit for Fun, Inc. sells fitness equipment. The company has 75 stores located in malls throughout the country. The company recently borrowed $50,000 from the bank. This transaction is part of which process? a. operating process, b. Performance Measurement and Management c. Business Organization and Strategy Process d. capital resources process
capital resources process
Fit for Fun, Inc. sells fitness equipment. The company has 75 stores located in malls throughout the country. The company recently made a $4,000 payment on the mortgage. Identify this activity as part of the (B) Business Organization and Strategy Process (O) operating process, (CR) capital resources process (P) Performance Measurement and Management a. operating process b. capital resources process c. Business Organization and Strategy Process d. Performance Measurement and Management
capital resources process
Total sales less total variable costs at a given level of activity.
contribution margin
The contribution margin per unit divided by the selling price per unit.
contribution margin ratio
Manufacturing products is associated with which of the following processes? a. Revenue process b. Conversion process c. Evaluation process d. Expenditure process
conversion process
a series of interrelated activities designed to produce goods a company sells
conversion process
ABC Company has one owner with limited liability. ABC Company is organized as a: partnership sole proprietorship none of the above corporation
corporation
If only the selling price increase the breakeven point. a. Stays the same. b. Depends on customer demand c. Decrease d. Increase
decrease
The cost of materials that are directly traceable to the product and that are costly enough to warrant tracing them.
direct material
wages of employees who put the equipment together
dl
cost of cables used in the equipment
dm
Activities that involve the purchase and sale of long-term assets and other major items to achieve the business's strategy.
investing activities
All cost other than direct materials and direct labor that are incurred in the manufacture of products.
manufacturing overhead
manufacturing cost not directly associated with the production of a product
manufacturing overhead
A structure in which activities and people are arrange by functions.
mechanistic organizational structure
A company operates in a relatively certain environment; it is more likely to use a _________ structure and a _________ strategy. a. organic structure; efficiency strategy b. mechanistic structure; flexibility strategy c. organic structure; flexibility strategy d. mechanistic structure; efficiency strategy
mechanistic structure; efficiency strategy
ABC Company is organized to buy and sell Widgets. What type of organization is ABC Company? manufacturing firm merchandising firm none of the above service firm
merchandising firm
a cost that varies, but not proportionately, to a change in activity
mixed cost
cost of the oil used to cut metal tubing
moh
A company's long-term plan for using its resources both physical and human.
organizational strategy
Metal Fabricators, Inc. manufactures file cabinets. A new customer purchases 3,000 file cabinets. Is this activity planning, performing, or evaluating. a. planning b. performing c. None of these listed d. evaluating
performing
A company deposits checks from customers every night and backs up its computer systems daily. What internal control procedure is being practiced? physically controlling assets and documents maintaining adequate documentation requiring proper authorization separation of duties
physically controlling assets and documents
Metal Fabricators, Inc. manufactures file cabinets. Some of the company's activities are listed below. Management sets a goal of obtaining a 22% share of the total market. Is this activity planning, performing, or evaluating. a. None of the listed b. planning c. evaluating d. performing
planning
A company trains its employees so that mistakes happen less frequently. The costs associated with this training are __________ quality costs. a. prevention b. appraisal c. internal failure d. external failure
prevention
discount given buyer for amount due early
purchase discounts
A company has one person who is responsible for receiving checks from customers and another person who is responsible for recording the receipts. What internal control procedure is being practiced? a. maintaining adequate documentation b. physically controlling assets and documents c. requiring proper authorization d. separation of duties
separation of duties
cost of the cable used in the equipment (u,b,p,f)
u
What is the total amount of current assets of ABC Company? $339 $1,989 $1,161 $1,105
1161
A company used the high/low method and determined that the variable revenue per order was $3.00. At the lowest level of activity, 100 orders, the total revenue was $800. What is the fixed revenue per order? a. $300 b. $1,100 c. $800 d. $500
500
Use the following information to answer the next 6 questions. The following data is available for ABC Company. Cash $339 Sales $828 Accounts receivable 766 Cost of goods sold 620 Inventory 56 Operating expenses 94 Accounts payable 115 Provision for income taxes 36 Other current liabilities 304 Given the information above, what is the net income for ABC Company? $78 $(131) $208 $828
78
The variable housekeeping cost per room rental is: a. $10.13 b. $ 9.00 c. $ 9.06 d. $14.36
9.00
What is the return on sales ratio for ABC Company? 9.4% (15.8%) 74.9% 100%
9.4%
A cost incurred to fix mistakes before the mistakes become known to the customer.
internal failure cost
the return generated per dollar of total investment.
return on investment ratio
The financial statement item, "sales" is a(n): expense liability revenue asset
revenue
Norton Corporation has purchased raw materials from a vendor and was offered credit terms of 2/10, n/30. Which of the following reflects these terms? a. 2% discount if paid between 10 and 30 days. b. 10% discount if paid within 30 days and 2% after 30 days c. 2% discount if paid within 10 days d. 20% discount (2/10) if paid within 30 days
2% discount if paid within 10 days
What is the current ratio of ABC Company? 2.77 3.62 9.61 2.63
2.77
The current ratio shows the relationship between current assets and long-term liabilities current liabilities and long-term liabilities current assets and current liabilities current assets and long-term assets
current assets and current liabilities
When a company operates in a more certain environment it tends to focus inward and have a a. Loose strategy b. Flexible strategy c. Efficiency strategy d. Rigid strategy
efficiency strategy
Selecting suppliers for a company's goods and services is part of the: a. Revenue process b. Conversion process c. Selection process d. Expenditure process
expenditure process
A cost incurred to fix mistakes after the mistakes become know by the customer.
external failure cost
a ratio used to moniter the profitability of the company's products
gross margin ratio
the additional cost associated with an alternative
incremental cost
The difference between the incremental revenues and incremental cost of a particular alternative.
incremental profit
The cost of production employees who do not physically manufacture the product.
indirect laboe
a measure of the speed at which the company sells its inventory
inventory turnover
a revenue that changes, but not proportionately, to a change in activity
mixed revenue
insurance on factory equipment
moh
salary of the quality control inspector
moh
salary of the warehouse foreman where raw material is stored
moh
Depreciation on salespersons' cars (p,np)
np
cost of office supplies (p,np)
np
cost of shipping equipment to customers
np
research cost incurred to develop new types of equipment
np
the president of the corporation's salary
np
A cost that is related to selling the products and services or administering the company.
np cost
The profit making activities of an enterprise are referred to as: a. financing activities b. planning activities c. operating activities d. investing activities
operating activities
Fit for Fun, Inc. sells fitness equipment. The company has 75 stores located in malls throughout the country. The company recently purchased 300 treadmills for resale. This transaction is part of which process? a. Performance Measurement and Management b. Business Organization and Strategy Process c. capital resources process d. operating process
operating process
The profit-making activities of a business enterprise.
operating process
A benefit forgone when choosing one alternative over another.
opportunity cost
A structure in which activities and people are arrange in cross-functional teams.
organic organizational structure
cost of the fabric used on the recliners (p,np)
p
cost of the glue used to assemble the chairs
p
cost of the utilities incurred to run the manufacturing plant (p,np)
p
cost of wood used in the chairs (p,np)
p
research cost incurred to develop new types of equipment (u,b,p,f)
p
the salary of the foreman who oversees the raw materials warehouse (p,np)
p
wages paid to employees assemble the chairs
p
A cost incurred to prevent mistakes from occurring.
prevention cost
Which of the following is part of the revenue process? a. Convert raw material into inventory for sale b. Order inventory for resale c. Provide customer support
provide customer support
reduction in price of goods purchased as a result of dissatisfaction by customer (buyer's books)
purchase allowances
A document sent by the purchasing department to order a specific quantity of goods or services is called a: a. Purchasing report b. Purchase requisition c. Vendor invoice d. Purchase order
purchase order
goods return by buyer on buyer's books
purchase returns
a measure of the company's ability to meet its current obligations as they come due
quick ratio
the span of operating activity that is considered normal for a company
relevant range
The bookkeeper who records cash receipts also deposits daily cash receipts at the bank on his way home from work. This is a violation of which of the following characteristics of good internal control: a. maintaining adequate documents and records b. requiring proper authorization c. separating incompatible duties d. physically controlling assets and documents
separating incompatible duties
The "I Can't Believe It's Yogurt" shop sells only yogurt and only in cups. Which of the following would be a variable cost if number of customers is the cost driver? a. Rent on the shop b. Wages c. Spoons d. Electricity
spoons
A company has assets of $500,000 and liabilities of $300,000, what is its total owners' equity? $200,000 $800,000 $300,000 $500,000
200000
A company has $28,000 in total owners' equity and $86,000 of total assets. What are the company's total liabilities? $58,000 $86,000 $28,000 $114,000
58000
how a revenue reacts to a change in the level of operating activity
revenue behavior
A company used the high/low method and determined that the variable cost per unit was $6 while the fixed cost per month was $10,000. What is the estimated total cost if 200 units are produced? a. $1,200 b. $11,200 c. $10,206 d. Cannot be determined without knowing how many months were worked.
11200
A company used the high/low method and determined that the change in cost was $10,000 when the change in activity was 5,000 orders. What is the variable cost per order? a. $0.50 b. $2.00 c. $5.00 d. $10.00
2.00
A company ships $20,000 of merchandise with terms 1/10, n/30, FOB destination. What is the amount of the discount available to the purchaser? a. $2,000 b. $0, the goods were shipped free on board c. $200 d. $6,000
200
A company purchases $25,000 of merchandise with terms 3/10, n/60; FOB shipping point on December 30 and is invoices on Dec. 30th. The merchandise arrives on January 3 and the company pays its bill on January 13. How much does the company owe? a. $24,250 b. $22,500 c. Cannot be determined since the purchase and the payment occurred in different years. d. $25,000
25000
A company made sales of $50,000 but received only $48,000 in cash from customers. During the same time period, it incurred operating expenses of $39,000 of which it paid for $18,000 in cash. What is the company's cash-based income? $32,000 $(9,000) $9,000 $30,000
30000
What is the total amount of current liabilities of ABC Company? $549 $419 $115 $513
419
At May 31, Allegro Company had a general ledger cash balance of $7,400. At the end of May, the bank statement had a balance of $7,500. Deposits in transit amounted to $1,000 and there was a service charge of $10. Outstanding checks totaled $1,110. What is the correct amount of cash? a. $7,000 b. $6,380 c. $6,390 d. $7,390
7390
Decatron, Inc. purchased $76,500 of parts from a vendor who offered credit terms of 3/15, n/45. If Decatron takes advantage of the discount, the amount paid to the vendor (rounded to the nearest dollar) will be: a. $74,205 b. $76,500 c. $76,271 d. cannot be determined from the information given
74205
how a cost reacts to change in the level of operating activity
cost behavior
The study of how costs and profits change in response to changes in the volume of goods and services provided to consumers.
cost volume profit analysis
the amount of time from when a customer places an order until the order is received.
customer response time
insurance on the factory equipment (u,b,p,f)
f
Activities that involve obtaining the cash or other resources as means to pay for long-term assets, to repay borrowed funds, and provide a return to owners.
financing activities
a cost that does not change in total as the amount of activity changes
fixed cost
a revenue that does not change in total as activity changes
fixed revenue
legal title transfers to customer when goods are received
fob destination
legal title transfer when goods leave the seller's place of business
fob shipping point
The auditor's report indicates the auditors' opinion concerning whether the company all of the above followed generally accepted accounting principles should be audited is a good investment
followed generally accepted accounting principles
Which financial statement is designed to show the net income for a period of time? statement of owners' equity balance sheet income statement statement of cash flows
income statement
The set of policies and procedures that promotes operational efficiency, accurate accounting information, and compliance with laws and regulation.
internal control system
A company must rework some products because mistakes were made. The costs associated with this rework are _____________ quality costs. a. appraisal b. external failure c. internal failure d. prevention
internal failure
Activities involving the purchase and sale of long-term assets as well as other major items used in a business's operation are referred to as: a. financing activities b. planning activities c. operating activities d. investing activities
investing activities
set up cost to change from one piece of equipment to another
moh
A cost or revenue that will occur in the future and that differs among the alternatives considered.
relevant variable
Which of the following should be monitored as part of the learning and growth perspective of the balanced scorecard? employee satisfaction research and development customer satisfaction tax liabilities
research and development
Delivery of goods is associated with which of the following process? a. Revenue process b. Evaluation process c. Expenditure process d. Conversion process
revenue process
Determining the credit and payment policies for customers is part of the: a. Conversion Process b. Collection process c. Revenue process d. Expenditure process
revenue process
a series of interrelated activities designed to generate revenue
revenue process
Using the accrual basis of accounting, income is measured as: revenues earned less expenses incurred revenues received less expenses paid revenues earned less expenses paid revenues received less expenses incurred
revenues earned less expenses incurred
discounts given to unhappy customers by sellers (sellers books)
sales allowance
A sales invoice originates with the: a. Vendor b. Purchasing Department c. Accounting Department d. Sales Department
sales department
The relative proportions of units of products sold in a multiple-product company.
sales mix
The process of changing key variables to determine how a prior outcome is impacted by the change in the variable.
sensitivity analysis
Which financial statement is designed to show the cash flows from operating, investing, and financing activities for a period of time? income statement statement of cash flows balance sheet statement of owners' equity
statement of cash flows
A past cost that is not relevant in short-term decisions.
sunk cost
As part of its internal perspective, a company calculates an inventory turnover ratio and the days in the selling cycle. These results should be compared to: a. The number of days in the month. b. The credit terms offer to customers. c. The credit terms offered by suppliers. d. The inventory shelf life.
the inventory shelf life
cost of the oil used to cut metal tubing (u,b,p,f)
u
a cost that varies with the number of units
unit related cost
Time spent on activities that add worth to the company's products. services, or processes.
value-added time
a cost that changes in direct proportion to the change in activity
variable cost
A revenue that changes in direct proportion to the change in activity
variable revenue
