Accounting Final Belmont Alleyne
An accounting entry that is characterized by having multiple debits and/or multiple credits is called a ________ entry. a. posted b. balanced c. compound journal d. chart of accounts
compound journal
Which of the following is an asset account? a. Accounts Receivable b. Unearned Revenue c. Notes Payable d. Wages Payable
Accounts Receivable
Which of the following is the correct formula to calculate the debt ratio? a. Debt ratio = Total liabilities + Total assets b. Debt ratio = Total liabilities - Total assets c. Debt ratio = Total liabilities × Total assets d. Debt ratio = Total liabilities / Total assets
Debt ratio = Total liabilities / Total assets
Where does net income appear on a worksheet? Selected: a. Net income appears only in the income statement debit column. b. Net income appears only in the balance sheet credit column. c. Net income appears in the balance sheet credit column and in the income statement debit column. d. Net income appears in the income statement credit column and in the balance sheet debit column.
Net income appears in the balance sheet credit column and in the income statement debit column.
Nurix, Inc. is a business consulting firm. During the month of February, Nurix earned $55,600 of revenues by providing services to 47 clients. Operating costs for February were $8500 and non-operating costs were $6000. What is the unit cost per service? (Round your answer to the nearest cent.) a. $180.85 b. $308.51 c. $127.66 d. $1182.98
a. $180.85
Jones Financial Services, Inc. performed accounting services for a client in December. A bill was mailed to the client on December 30. The company received the client's check by mail on January 5. Which of the following accounts should appear on the income statement for the year ended December 31 as related to the services performed? a. Unearned Revenue b. Prepaid Expense c. Service Revenue d. Accounts Payable
Service Revenue
The accountant for Eagle Financial Services, Inc. failed to make an adjusting entry to record $3,000 of telephone expenses for the last two months of the year. Which of the following statements is true? a. The total assets will be understated. b. The total liabilities will be overstated. c. The total assets will be overstated. d. The total liabilities will be understated.
The total liabilities will be understated
Boyko, Inc. has fixed costs of $400,000. Total costs, both fixed and variable, are $550,000 when 40,000 units are produced. Calculate the total costs if the volume increases to 64,000 units. (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.) a. $640,000 b. $150,000 c. $950,000 d. $550,000
a. $640,000
Logan Sales provides the following information: Net credit sales: $790,000 Beginning net accounts receivable: $43,000 Ending net accounts receivable: $20,000 Calculate the accounts receivable turnover ratio. (Round your answer to the nearest whole number.) a. 25 times b. 18 times c. 37 times d. 40 times
a. 25 times
Which of the following is a philosophy designed to integrate all organizational areas in order to provide customers with superior products and services, while meeting organizational goals throughout the value chain? a. Total Quality Management (TQM) b. Supply Chain Management (SCM) c. Enterprise Resource Planning (ERP) d. Just-in-Time (JIT) Management
a. Total Quality Management (TQM)
Evaluated Receipts Settlement is ________. a. a procedure that compresses the payment approval process into a single step by comparing the receiving report to the purchase order b. a process that eliminates the need for separation of duties c. a streamlined process that bypasses paper documents altogether d. an organizational plan and all the related measures adopted by an entity to safeguard assets, encourage employees to follow company policies, promote operational efficiency, and ensure accurate and reliable accounting records
a. a procedure that compresses the payment approval process into a single step by comparing the receiving report to the purchase order
The ________ is a measure of a company's ability to pay its current liabilities from cash and cash equivalents. a. cash ratio b. cash conversion cycle c. gross profit d. debt equity ratio
a. cash ratio
Goldman Services hired a new clerk to keep custody of and maintain all the equipment in the equipment yard. The clerk has not yet been adequately trained on the maintenance needs of the equipment. Which internal control procedure needs strengthening? a. competent, reliable, and ethical personnel b. separation of duties c. assignment of responsibilities d. documents
a. competent, reliable, and ethical personnel
A planning tool that expresses the relationships among costs, volume, and prices and their effects on profits and losses is called ________. a. cost-volume-profit analysis b. breakeven point analysis c. contribution margin ratio analysis d. target profit analysis
a. cost-volume-profit analysis
When inventory costs are declining, which of the following inventory costing method will result in the lowest ending merchandise inventory? a. first-in, first-out b. specific identification c. last-in, first-out d. weighted-average
a. first-in, first-out
Which of the following inventory costing methods yields the highest net income during a period of rising inventory costs? a. first-in, first-out b. weighted-average c. specific identification d. last-in, first-out
a. first-in, first-out
Investors who want to know the amount of cash a company has available for new opportunities, such as expanding into a new sales region, should analyze the company's ________. a. free cash flow b. acid ratio c. earnings per share d. net cash flow from investing activities
a. free cash flow
In which of the columns of a worksheet would a net loss be found? a. in the balance sheet debit column and the income statement credit column b. in the unadjusted trial balance credit column, the adjusted trial balance credit column, and the balance sheet credit column c. in the unadjusted trial balance debit column, the adjusted trial balance debit column, and the balance sheet debit column d. in the balance sheet credit column and the income statement debit column
a. in the balance sheet debit column and the income statement credit column
The Estimated Returns Inventory account _______. a. is credited when a customer returns merchandise to the seller b. represents the selling price of goods the company believes it will receive in returns c. is a liability account d. is an expense account
a. is credited when a customer returns merchandise to the seller
Notes Payable due within two years are classified as ________. a. long-term liabilities b. long-term assets c. current liabilities d. current assets
a. long-term liabilities
When a company uses the perpetual inventory system _________. a. the Merchandise Inventory account is debited for purchases of goods that the company intends to resell to customers. b. the purchase of merchandise inventory on account is recorded as a debit to Accounts Payable and a credit to Merchandise Inventory. c. purchases of Office Supplies and Equipment that will be used in the day-to-day operations of the business are recorded as debits to Merchandise Inventory. d. the Merchandise Inventory account is reported as an expense on the income statement.
a. the Merchandise Inventory account is debited for purchases of goods that the company intends to resell to customers.
A company purchased a computer on July 1, 2019 for $50,000. The estimated useful life of the computer was five years, and it has no residual value. Which of the following methods should be used to best match its expense against the revenue it produces? a. the double-declining-balance method b. the straight-line method c. the first-in, first-out method d. the units-of-production method
a. the double-declining-balance method
Which of the following sections from the statement of cash flows includes borrowing cash and paying off loans? a. the financing activities section b. the investing activities section c. the operating activities section d. the non-cash investing and financing section
a. the financing activities section
Absorption costing considers ________ as product costs. a. variable manufacturing overhead b. sales salaries and commissions c. administrative office salaries d. advertising costs
a. variable manufacturing overhead
Delectable Foods produces a gourmet condiment that sells for $20 per unit. Variable cost is $8 per unit, and fixed costs are $5000 per month. If Delectable expects to sell 1500 units, compute the margin of safety in dollars. (Round any intermediate calculations to the nearest whole unit, and your final answer to the nearest dollar.) a. $1083 b. $21,660 c. $8664 d. $5000
b. $21,660
Delos, Inc. reports the following information for April: Sigma Gamma Units sold 2000 units 750 units Sales price per unit $350 $700 Variable manufacturing cost per unit 175 500 Sales commission per unit: Sigma: 8% of sales price 28 Gamma: 8% of sales price 56 What is the contribution margin of Sigma? a. $119,000 b. $294,000 c. $644,000 d. $350,000
b. $294,000
McLeod, Inc. incurred fixed costs of $300,000. Total costs, both fixed and variable, are $500,000 when 59,000 units are produced. It sold 35,000 units during the year. Calculate the variable cost per unit. (Round your answer to the nearest cent.) a. $5.08 b. $3.39 c. $8.47 d. $14.29
b. $3.39
High Quality Jewelers uses the perpetual inventory system. On March 3, High Quality sold merchandise for $55,000 to a customer on account with terms 4/15, n/30. The cost of goods sold was $22,000. On March 18, High Quality received payment from the customer. Calculate the amount of gross profit. a. $33,000 b. $30,800 c. $52,800 d. $22,000
b. $30,800
On October 1, 2018, Equipment Suppliers, Inc. made a loan to one of its customers. The customer signed a 4-month note for $110,000 at 12%. How much interest revenue did the company record in the year 2018? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.) a. $4400 b. $3300 c. $1100 d. $1320
b. $3300
Khayyam Company, which sells tents, has provided the following information: Sales price per unit $45 Variable cost per unit 11 Fixed costs per month $12,700 What are the required sales in units for Khayyam to break even? (Round your answer up to the nearest whole unit.) a. 1155 units b. 374 units c. 227 units d. 283 units
b. 374 units
Which of the following statements is true of managerial accounting? a. The external stakeholders of a company are the primary users of managerial accounting. b. Managerial accounting information is used to help managers plan, direct and control their operations. c. An external audit by an independent CPA is required for managerial accounting information. d. Managerial accounting information must comply with Generally Accepted Accounting Principles.
b. Managerial accounting information is used to help managers plan, direct and control their operations.
Second Street, Inc. has 7 units in ending merchandise inventory on December 31. The units were purchased in November for $180 each. The price lists from suppliers indicate the current replacement cost of the item to be $178 each. Which of the following statements is true of the effects of the adjustments to ending merchandise inventory and the cost of goods sold? a. The cost of goods sold would increase by $2. b. The cost of goods sold would increase by $14. c. The cost of goods sold would not be affected. d. The cost of goods sold would decrease by $14.
b. The cost of goods sold would increase by $14.
Louis Petit, a manager of Doggone Gorgeous, Inc., was reviewing the water bills of a dog daycare and spa. He determined that its highest and lowest bills of $3800 and $2000 were incurred in the months of May and November, respectively. If 600 dogs were washed in May and 200 dogs were washed in November, what was the fixed cost associated with the company's water bill? (Round any intermediate calculations to the nearest cent and your final answer to the nearest dollar.) a. $3800 b. $1800 c. $1100 d. $2000
c. $1100
Regarding the gross method of handling credit and debit card transactions, which of the following statements is correct? a. The journal entry on the date of sale is identical to a journal entry made for a sale on account. b. The processing fees for all transactions processed for the month are deducted from the company's bank account, often on the last day of the month. c. The total sale amount is deposited on the date of the actual sale. d. On the date of sale, the Sales Revenue account is credited for the amount of sale less the processing fee.
b. The processing fees for all transactions processed for the month are deducted from the company's bank account, often on the last day of the month.
In a good internal control system, which of the following sets of documents is required for proper approval of a payment to a supplier? a. a purchase order, a journal entry, and a price catalog b. a receiving report, an invoice, and a purchase order c. a supplier invoice, a bill of lading, and the supplier's financial statements d. a journal entry, a supplier invoice, and a description of the goods being purchased
b. a receiving report, an invoice, and a purchase order
Which of the following costing methods charges all the manufacturing costs to the products? a. contribution costing b. absorption costing c. direct costing d. variable costing
b. absorption costing
The goal of reporting realistic figures and never overstating assets or net income applies to the ________. a. consistency principle b. conservatism principle c. disclosure principle d. materiality concept
b. conservatism principle
Intangible assets ______. a. represent assets for which the market value cannot be determined b. convey special rights from patents, copyrights, trademarks, and other creative works c. are not recorded in the books because they have no physical substance d. All of the statements are correct.
b. convey special rights from patents, copyrights, trademarks, and other creative works
Harrison, an employee of Safe Associates, Inc., has gross salary for March of $4,000. The entire amount is under the OASDI limit of $118,500 and thus subject to FICA. He is also subject to federal income tax at a rate of 18%. Harrison has a deduction of $320 for health insurance and $80 for United Way. Which of the following is included in the entry to record the disbursement of his net pay? a. debit to United Way Payable b. credit to Cash c. credit to Salaries and Wages Payable d. debit to FICA Taxes Payable
b. credit to Cash
Inventory turnover measures ________. a. the time period for inventory to become obsolete b. how rapidly merchandise inventory is sold c. the days' sales in inventory ratio d. how rapidly merchandise inventory is purchased
b. how rapidly merchandise inventory is sold
In its first year of business, Talula, Inc. produced and sold 600 units. If Talula uses variable costing, ________. a. its operating income for the period will be higher than under absorption costing b. its operating income will be the same as under absorption costing c. its value of ending Finished Goods Inventory reported in the balance sheet will be higher than under absorption costing d. its operating income for the period will be lower than under absorption costing
b. its operating income will be the same as under absorption costing
Green Bay Sales purchased equipment for $50,000 by issuing a three-year note payable. On the statement of cash flows, this transaction would be shown in the ________. a. operating activities section b. non-cash financing and investing activities section c. investing activities section d. financing activities section
b. non-cash financing and investing activities section
Westin Delivery Service, Inc. owns a delivery truck. Which of the following costs, associated with the truck, will be treated as a revenue expenditure? a. major engine overhaul b. oil change and lubrication c. modification for new use d. addition to storage capacity
b. oil change and lubrication
Which of the following is the primary focus of financial accounting? a. providing highly detailed information on product lines, regions, and divisions b. providing summarized information on operational results to investors and creditors c. providing information that managers need to make operational decisions d. providing information to managers to assist in planning, directing and controlling operations
b. providing summarized information on operational results to investors and creditors
In 2018, a corporation purchased a small business for $250,000. The market value of the small business's assets was $400,000, and the market value of the liabilities was $200,000. The corporation recorded goodwill of $50,000 at the time of acquisition. At the end of 2019, it measured goodwill and found it had a remaining fair value of only $20,000. At year-end 2019, the corporation will ________. a. record a loss on sale of assets b. record an impairment loss c. record accumulated depletion d. record a gain in goodwill
b. record an impairment loss
Variable cost per unit, within the relevant range, will ________. a. increase as production decreases b. remain the same as production levels change c. decrease as production increases d. decrease as production decreases
b. remain the same as production levels change
Ending inventory for the current accounting period is overstated by $2,700. What effect will this error have on Cost of Goods Sold and Net Income for the current accounting period? a. Cost of Goods Sold Net Income Overstated Overstated b. Cost of Goods Sold Net Income Overstated Understated Selected: c. Cost of Goods Sold Net Income Understated Overstated This answer is correct. d. Cost of Goods Sold Net Income Understated Understated
c. Cost of Goods Sold Net Income Understated Overstated
Aqua Primavera, Inc. has provided the following information for the year. Units produced 11,000 units Sales price $500 per unit Direct materials $45 per unit Direct labor $30 per unit Variable manufacturing overhead $55 per unit Fixed manufacturing overhead $480,000 per year Variable selling and administration costs $75 per unit Fixed selling and administration costs $300,000 per year What is the unit product cost using variable costing? a. $174 b. $85 c. $130 d. $75
c. $130
Advantage, Inc., a tennis equipment manufacturer, has variable costs of $0.60 per unit of product. In August, the volume of production was 27,000 units, and units sold were 21,800. The total production costs incurred were $30,600. What are the fixed costs per month? a. $17,520 b. $3600 c. $14,400 d. $16,200
c. $14,400
The following information is from the records of Mountainview Camera Shop: Accounts receivable, December 31, 2018 $80,000 (debit) Net credit sales for 2018 160,000 Accounts written off as uncollectible during 2018 16,000 Cash sales during 2018 42,000 The company uses the direct write-off method for bad debts. What is the amount of bad debts expense? a. $42,000 b. $64,000 c. $16,000 d. $80,000
c. $16,000
Kim Airedale, a manager of Waggers, Inc., was reviewing the water bills of a dog daycare and spa. She determined that its highest and lowest bills of $3600 and $2800 were incurred in the months of May and November, respectively. If 500 dogs were washed in May and 200 dogs were washed in November, what was the variable cost per dog associated with the company's water bill? (Round your answer to the nearest cent.) a. $7.20 b. $4.00 c. $2.67 d. $14.00
c. $2.67
O'Keith Corp. purchased a mine on January 1, 2018, for $500,000. The mine is estimated to contain 40,000 tons of iron ore. There is no residual value. The business extracted and sold 8500 tons of ore in 2018 and 11,800 tons of ore in 2019. What is the book value of the mine at the end of 2019? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.) a. $500,000 b. $420,000 c. $246,250 d. $350,000
c. $246,250
The highest value of total cost was $70,000 in June for Acai Beverages, Inc. Its lowest value of total cost was $52,000 in December. The company makes a single product. The production volume in June and December were 13,000 and 7000 units, respectively. What is the variable cost per month? (Round your answer to the nearest cent.) a. $2.57 per unit b. $1.38 per unit c. $3.00 per unit d. $11.67 per unit
c. $3.00 per unit
Classic Autos specializes in selling gently used specialty sports cars and uses the specific identification method of determining ending inventory and cost of goods sold. Item 507K was sold for $90,000. Classic purchased the sports car for $50,000 and paid $1800 for freight in and $1000 for freight out. What is the cost of goods sold? a. $51,000 b. $50,000 c. $51,800 d. $38,200
c. $51,800
Which of the following is a measure for discouraging theft for a retail store that accepts cash receipts over the counter? a. The sales clerk uses the machine tape to record the journal entry for cash receipts and sales revenue. b. The store clerk deposits the cash in the bank. c. A receipt is issued for each transaction to ensure that each sale is recorded. d. At the end of the day, the sales clerk proves the cash by comparing the cash in the drawer against the machine's record of cash sales.
c. A receipt is issued for each transaction to ensure that each sale is recorded.
Partial income statements of Company A and Company B are provided below: Company A Revenue $80,000 Expenses: Utilities Expense $5,000 Salaries Expense 15,000 Rent Expense 3,700 Total Expenses 23,700 Operating Income $56,300 Company B Revenue $50,000 Cost of Goods Sold: Beginning Merchandise Inventory $4,000 Purchases and Freight In 23,000 Cost of Goods Available for Sale 27,000 Ending Merchandise Inventory (5,500) Cost of Goods Sold 21,500 Gross Profit $28,500 Which of the following statements is true? a. Company A is a merchandising company. b. Company B is a manufacturing company. c. Company A is a service company. d. Company A is a manufacturing company
c. Company A is a service company.
Which of the following will appear as a line item in the income statement prepared under variable costing? a. Total Cost of Goods Sold b. Work-in-Process Inventory c. Contribution Margin d. Gross Profit
c. Contribution Margin
Question 4 Which of the following is a characteristic of a plant asset, such as a building? a. It will have a negligible value at the end of its useful life. b. It has a short useful life. c. It is used in the operations of a business. d. It is available for sale to customers in the ordinary course of business.
c. It is used in the operations of a business.
Which of the following is a product cost? a. delivery van depreciation b. sales commissions c. depreciation on production equipment d. CEO's salary
c. depreciation on production equipment
Which of the following would be included as manufacturing overhead for a manufacturing company? a. direct labor b. advertising c. indirect materials cost d. direct materials cost
c. indirect materials cost
Which of the following is an application of conservatism? a. using the same depreciation method from period to period b. reporting all relevant information in the financial statements c. reporting inventory at the lower of cost or market d. reporting only material amounts in the financial statements
c. reporting inventory at the lower of cost or market
Which of the following would be included as indirect manufacturing costs for a manufacturing company? a. wages of the assembly line workers b. sales commissions c. wages of the factory manager d. fuel and maintenance for delivery vehicles
c. wages of the factory manager
An asset is considered to be obsolete ________. a. only when it wears out b. only at the end of its useful life c. when a newer asset can perform the job more efficiently than the old asset can d. when it is fully depreciated
c. when a newer asset can perform the job more efficiently than the old asset can
On August 14, Park Avenue Bank lent $240,000 to City Coffee Shop on a 75 day, 2% note. What is the maturity value of the note? (Use a 360-day year and round answers to the nearest dollar.) a. $244,800 b. $240,986 c. $240,000 d. $241,000
d. $241,000
Ryker Manufacturing, Inc. provided the following information for the year: Purchases — Direct Materials $91,000 Plant Utilities and Insurance 66,000 Indirect Materials Used 11,240 Indirect Labor 4,830 Direct Materials Used in Production 98,000 Direct Labor 118,500 Depreciation on Factory Plant and Equipment 8,000 Cost of Goods Manufactured 292,000 Cost of Goods Sold 290,000 The inventory account balances as of January 1 are given below. Direct Materials $45,000 Work-in-Progress Inventory 11,000 Finished Goods Inventory 304,570 What is the ending balance in the Finished Goods Inventory? a. $596,570 b. $304,570 c. $302,570 d. $306,570
d. $306,570
At the beginning of 2019, Statewide Delivery, Inc. has the following account balances: Accounts Receivable $42,000 (debit balance) Allowance for Bad Debts $9000 (credit balance) Bad Debts Expense $0 During the year, credit sales amounted to $800,000. Cash collected on credit sales amounted to $790,000, and $18,000 has been written off. At the end of the year, the company adjusted for bad debts expense using the percent-of-sales method and applied a rate, based on past history, of 3.5%. The ending balance of Accounts Receivable is ________. a. $42,000 b. $57,120 c. $18,000 d. $34,000
d. $34,000
Carpenters, Inc., a manufacturing company, acquired equipment on January 1, 2017 for $530,000. Estimated useful life of the equipment was seven years and the estimated residual value was $14,000. On January 1, 2020, after using the equipment for three years, the total estimated useful life has been revised to nine total years. Residual value remains unchanged. The company uses the straight-line method of depreciation. Calculate depreciation expense for 2020. (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.) a. $57,333 b. $50,476 c. $58,889 d. $49,143
d. $49,143
Tim's gross pay for this month is $8950. His gross year-to-date pay, prior to this month, totaled $111,500. What is the amount of FICA tax withheld from Tim's pay for this month? (Assume an OASDI rate of 6.2%, applicable on the first $118,500 earnings, and a Medicare rate of 1.45%, applicable on all earnings. Do not round any intermediate calculations, and round your final answer to the nearest cent.) a. $434.00 b. $129.78 c. $554.90 d. $563.78
d. $563.78
At the beginning of the year, Swift, Inc.'s Work-in-Process Inventory account had a balance of $124,000. During the year, $250,000 of direct materials were used in production, and $72,000 of direct labor costs were incurred. Manufacturing overhead amounted to $832,000. The cost of goods manufactured was $676,000. What is the balance in the Work-in-Process Inventory account on December 31? a. $1,352,000 b. $676,000 c. $1,154,000 d. $602,000
d. $602,000
Gulfcoast, Inc. purchased a van on January 1, 2019, for $930,000. Estimated life of the van was five years, and its estimated residual value was $93,000. Gulfcoast uses the straight-line method of depreciation. Calculate the book value of the van at the end of 2019. a. $755,625 b. $837,000 c. $871,875 d. $762,600
d. $762,600
A company's accountant capitalized a payment that should have been recorded as a revenue expenditure. How will this error affect the company's financial statements? a. Expenses will be overstated. b. Liabilities will be overstated. c. Net income will be understated. d. Assets will be overstated.
d. Assets will be overstated.
Which of the following describes the financing activities section of the statement of cash flows? a. It includes interest and dividend income and cash payments for interest expense. b. It includes increases and decreases in long-term assets. c. It reports on activities that create revenue or expenses for the entity's business. d. It includes cash inflows and outflows related to long-term liabilities and equity.
d. It includes cash inflows and outflows related to long-term liabilities and equity.
Which of the following is true of freight in? a. It is a selling expense. b. It is an administrative expense. c. It is the transportation cost on sales. d. It is the transportation cost on purchases.
d. It is the transportation cost on purchases.
A company's accountant capitalized a payment that should have been recorded as a revenue expenditure. How will this error affect the company's financial statements? a. Liabilities will be understated. b. Revenues will be understated. c. Assets will be understated. d. Net income will be overstated.
d. Net income will be overstated.
In counting the number of days in a note term, __________. a. do not count the maturity date b. count the date the note was issued c. do not count the interest periods d. None of the statements are correct.
d. None of the statements are correct.
Spruce-Up Company provides cleaning services to commercial and residential customers. The commercial business segment provided services to 250 customers and the residential business segment provided services to 625 customers. Commercial Residential Total Service Revenue $86,000 $115,000 $201,000 Variable Costs 31,000 56,000 87,000 Fixed Costs 46,000 53,000 99,000 Operating Income $9000 $6000 $15,000 Identify the segment with the lower contribution margin ratio and show the amount of its contribution margin ratio. (Round your answer to two decimals.) a. Commercial, 40.00% b. Commercial, 10.47% c. Residential, 48.70% d. Residential, 51.30%
d. Residential, 51.30%
Which of the following adjusted balances would appear in the balance sheet credit column of a worksheet? a. Equipment b. Insurance Expense c. Rent Revenue d. Salaries Payable
d. Salaries Payable
Which of the following is NOT an assumption of cost-volume-profit (CVP) analysis? a. The price per unit does not change as volume changes. b. Total fixed costs do not change. c. The only factor that affects total costs is a change in volume, which increases or decreases total variable and mixed costs. d. The price per unit changes as volume changes.
d. The price per unit changes as volume changes.
Which of the following is used by companies to separate cash duties and establish stronger control over cash receipts? a. a firewall system b. an encryption system c. an imprest system d. a lock-box system
d. a lock-box system
The bank recorded a $3,000 deposit as $300. How would this information be included on the bank reconciliation? a. an addition on the book side. b. a deduction on the book side c. a deduction on the bank side d. an addition on the bank side
d. an addition on the bank side
Following GAAP, the income statement issued to investors and creditors must ________. a. show the value of contribution margin b. be prepared in the contribution margin format c. be prepared using variable costing d. be prepared in the traditional format
d. be prepared in the traditional format
Costs are transferred from the balance sheet to the income statement as cost of goods sold when ________. a. direct materials, direct labor and manufacturing overhead are transferred to the beginning Work-in-Process Inventory account b. the total of Cost of Goods Manufactured is determined c. goods are transferred from the Work-in-Process Inventory account to the Finished Goods Inventory account d. finished goods are sold
d. finished goods are sold
Businesses record goodwill ________. a. if their market value has increased significantly in the recent years b. when they enjoy an outstanding reputation and loyalty with customers c. when they continue the business of an acquired corporation d. if they acquire another company at an amount higher than the market value of its net assets
d. if they acquire another company at an amount higher than the market value of its net assets
A company that uses labor, equipment, supplies, and facilities to convert raw materials into finished products is a ________. a. service company b. trading company c. merchandising company d. manufacturing company
d. manufacturing company
Which of the following components of internal control consist of work performed by internal and external auditors? a. information systems b. control procedures c. control environment d. monitoring of controls
d. monitoring of controls
The materiality concept states that a company must ________. a. report enough information for outsiders to make knowledgeable decisions about the company b. report only such information that enhances the financial position of the company c. use the same accounting methods and procedures from period to period d. perform strictly proper accounting only for significant items
d. perform strictly proper accounting only for significant items
At Radiant, Inc., the sales department is also responsible for recording cash transactions as it does not have a separate accounting department. Which internal control procedure needs strengthening? a. assignment of responsibilities b. competent, reliable, and ethical personnel c. documents d. separation of duties
d. separation of duties
Companies that provide healthcare, communication, banking and other benefits to society are called ________. a. consumer organizations b. merchandising companies c. societal organizations d. service companies
d. service companies
In variable costing, fixed manufacturing overhead is considered a period cost because ________. a. these costs are direct costs incurred for production b. these costs are indirectly related to production c. these are not incurred in the period in which the units are produced d. these costs are incurred whether or not the company manufactures any goods
d. these costs are incurred whether or not the company manufactures any goods
Within the relevant range, which of the following costs remains the same irrespective of the changes in production? a. total variable costs b. total operating costs c. total mixed costs d. total fixed costs
d. total fixed costs
Evaluating a company's performance by its economic, social and environmental impact is called the ________. a. whole company concept b. value chain c. downstream cost d. triple bottom line
d. triple bottom line
