Sim Test #2
a)bankrupt.
The legal status of a person who cannot repay their debts is: a)bankrupt. b)corrupt. c)liquid.
c)psychological factors.
A Mercedes-Benz priced the same as a Ford Focus might not sell as well because of: a)history of performance on similar Mercedes products. b)overall company reputation. c)psychological factors.
a)a company is not in good financial position to repay its short-term debts.
A current ratio of 1:2 means: a)a company is not in good financial position to repay its short-term debts. b)a company is in good financial position to repay its short-term debts.
b)a commission.
A form of compensation to reward salespeople for services rendered or products sold is called: a)a fixed salary. b)a commission. c)a bonus. d)a stock option.
b)overhead.
A janitor cleaning a production facility would be considered: a)direct labor. b)overhead. c)asset.
a)Direct materials, Direct labor and Overhead
A job cost sheet will measure: a)Direct materials, Direct labor and Overhead b)Direct materials, Indirect labor and Overhead c)Indirect materials, Indirect labor and Overhead
c)Needing to pay capital gains tax on profits made from selling
A negative financial outcome of buying shares of stock at a low price and selling it at a higher price: a)Losing the ability to vote b)No longer be able to earn commissions c)Needing to pay capital gains tax on profits made from selling
b)an employer sponsored retirement plan for employees
A pension is: a)a term used to describe a white-collar criminal b)an employer sponsored retirement plan for employees c)a white-collar crime prison
a)a voucher.
A prenumbered form used in the accounts payable department to standardize and enhance a company's internal control over payments to its vendors and service providers is called: a)a voucher. b)a purchase order. c)an invoice.
c)pricing of products and services.
A purchase order is an integral part of: a)bank reconciliation. b)employee contracts. c)pricing of products and services.
a)ROS increases while cost of sales decreases
An ideal scenario would be when: a)ROS increases while cost of sales decreases b)ROI increases while cost of sales increases c)ROS decreases while cost of sales decreases
a)inventory shrinkage.
An inventory reconciliation would identify: a)inventory shrinkage. b)proper cash balance. c)inventory purchasing policy.
c)both A and B
An investor can make money investing in stocks by: a)buying the stock at a lower price and selling it at a higher price. b)receiving dividends. c)both A and B
b)best described as an audit
An unbiased examination and evaluation of a company's financial statements is: a)required of every company b)best described as an audit c)an IRS responsibility
d)Budgeting
Aspects of managerial accounting include: a)Posting b)Adjustments c)Trial balance d)Budgeting
d)All of the above
Before a company puts a price tag on its product it should: a)Determine what it spends to create or provide it b)Assess the price of its competitors c)Know how much of a mark up it may want d)All of the above
c)Both a and b
Businesses track their largest cost by using: a)Time Sheet b)Job Cost Sheet c)Both a and b
c)Board of Directors
Dividends amounts are determined by: a)CEO b)President c)Board of Directors d)CFO
b)sweethearting.
Giving customers unauthorized discounts or free merchandise or services is called: a)a bonus. b)sweethearting. c)a commission.
a)Sales are declining at a slower rate
How can declining sales be good news? a)Sales are declining at a slower rate b)Sales are declining but expenses rising c)Sales are declining but gross margins are decreasing
a)At least once a year
How often should a physical inventory be taken of every product the company sells? a)At least once a year b)At least every two years c)At least every three years d)With today's technology, physical inventory is unnecessary
c)Current liabilities is $1,000,000 and current assets is $2,000,000
If the current ratio is 2:1, it is possible that: a)Current liabilities is $2,000,000 and total assets is $1,000,000 b)Current liabilities is $1,000,000 and total assets is $500,000 c)Current liabilities is $1,000,000 and current assets is $2,000,000 d)Current liabilities is $2,000,000 and total assets is $1,000,000
a)12
If the terms offered to credit customers are 2/10, n/30, which of the following could be the accounts receivable turnover rate, assuming no customers pay late? a)12 b)5 c)2
c)3% discount if paid within 10 days
If the terms on an invoice are 3/10, n/30, what are the criteria in order to receive a discount? a)No discount offered, but must pay within 30 days b)3% discount if paid within 30 days c)3% discount if paid within 10 days
b)estimating the cost using a rate
Overhead is usually calculated: a)tracking each indirect labor worker b)estimating the cost using a rate c)identifying the material waste not used in production
a)Risky
Reporting employer corruption, if not done the right way, can be: a)Risky b)Generally free of risks
a)requires corporate management to certify that they have reviewed the financial statements and that they are accurate and truthful.
Section 302 of SOX: a)requires corporate management to certify that they have reviewed the financial statements and that they are accurate and truthful. b)requires that financial information discloses relevant obligations that may exist off the balance sheet. c)requires management to state whether or not the company's internal control procedures are adequate and effective.
c)makes it hard for a single dishonest person to steal from the company.
Separating duties in the accounts payable department: a)makes it easier to finish all work on time. b)allows for more effort to be spent on collecting money in accounts receivable. c)makes it hard for a single dishonest person to steal from the company.
b)Total liabilities divided by total assets
The Debt Ratio is: a)Total assets divided by total liabilities b)Total liabilities divided by total assets c)Current assets divided by current liabilities d)Current liabilities divided by current assets
c)the Sarbanes-Oxley Act.
The Enron case helped prompt the development of: a)a pension plan. b)FDIC regulations. c)the Sarbanes-Oxley Act.
d)all of the above
The Sarbanes-Oxley Act (SOX): a)can impose jail time. b)requires upper management to certify the accuracy of financial statements. c)requires management to state the effectiveness of internal control procedures. d)all of the above
b)net pay.
The amount of money deposited into an employee's bank account from the employer is called: a)gross pay. b)net pay. c)base pay.
a)direct labor.
The labor of the production crew that produces goods is called: a)direct labor. b)indirect labor.
c)the passing of the Sarbanes-Oxley Act
The need for more accountants this century was created largely by: a)more colleges offering the major b)the higher salary the profession commands c)the passing of the Sarbanes-Oxley Act
c)the process in which a business buys, sells, and collects from customers.
The operating cycle is: a)the amount of time it takes to collect money owed from accounts receivables. b)a ratio that measures short-term liquidity. c)the process in which a business buys, sells, and collects from customers.
b)Deposit in transit
The term that describes, when reviewing your bank statement, you learn that a deposit you made during that month doesn't yet appear on the statement, but is recorded on your check register: a)Outstanding deposit b)Deposit in transit c)Bank error d)Certificate of deposit
b)Subtract current liabilities from current assets
To calculate Working Capital: a)Subtract current assets from current liabilities b)Subtract current liabilities from current assets c)Subtract total assets from total liabilities d)Subtract total liabilities from total assets
a)true
True or false: A forensic accountant can testify in court. a)true b)false
b)false
True or false: Because of Enron's limited liability status, upper management did not go to prison. a)true b)false
a)true
True or false: Forensic accounting is conducted by the IRS when it does audits. a)true b)false
a)true
True or false: If a company doesn't send its employees' tax withholdings to the government, managers may be liable for prosecution and prison time. a)true b)false
b)false
True or false: Sound business ethics are good practice but ultimately have little impact on a company's long-term growth. a)true b)false
b)false
True or false: Stockholders are the owners of a corporation, so it is their responsibility to hire and fire CEOs. a)true b)false
a)true
True or false: The main purpose of SOX is to protect shareholders from fraudulent representations in corporate financial statements. a)true b)false
b)false
True or false: Two ways to make money investing in stocks are capital gains and increasing net income of the corporation. a)true b)false
c)cost drivers
What are causal factors in overhead costs called? a)job orders b)cost-accounting systems c)cost drivers
c)cost-accounting systems
What are the methods and techniques used by businesses to track costs to deliver products and/or services called? a)overhead accounting b)cost-control systems c)cost-accounting systems d)cost systems
a)ROI
What business measurement tool tells upper management how effective the purchase of an asset was? a)ROI b)ROS c)dividend
a)The quick ratio doesn't include inventory.
What is the difference between the quick ratio and the current ratio? a)The quick ratio doesn't include inventory. b)Land and buildings are included in the current ratio and not the quick ratio. c)The quick ratio usually is larger than the current ratio.
c)to document what the company has received in any delivery to them
What is the main purpose of a receiving report? a)to maintain accurate inventory records b)to cross reference the Accounts Receivable records c)to document what the company has received in any delivery to them
c)Use a voucher to document payment
What system can prevent duplicate payment? a)Hire a CPA b)Use cash c)Use a voucher to document payment
d)Purchase order
When a business wants to buy a product from another business, the company offering the product may ask for _____________, fill in the blank, before providing the product to ensure the price is agreed upon by both parties: a)Receipt b)Credit application c)Insurance d)Purchase order
b)outstanding check.
When a company writes a check but the check does not show up on the bank statement, it's called a(n): a)bank reconciliation. b)outstanding check. c)deposit in transit.
d)Not receive pay for any additional days taken off
When an employee exhausts his or her paid days off, they should: a)Fill out a vacation requisition form to schedule any additional days off b)Go on probation c)Reduce their pay by 10% d)Not receive pay for any additional days taken off
a)common stock
Which class of stock provides voting privileges on board of directors elections and corporate policy? a)common stock b)preferred stock c)capital stock
d)All of the above
Which of the following is a method to achieve internal control over cash? a)Preparing a control listing of cash receipts b)Requiring daily deposits c)Promptly reconciling bank statements d)All of the above
b)Board of Directors
Who is responsible for incentivizing upper management to meet or exceed goals? a)CEO b)Board of Directors c)Stockholders
b)SEC
Who protects the investing public against fraudulent and manipulative practices in the securities markets? a)CPA b)SEC c)CEO
a)It's easier to identify trends.
Why do businesses calculate percentage changes? a)It's easier to identify trends. b)They don't require math. c)Using dollars may prove to be inaccurate.
c)Reconciliation
_____________, fill in the blank, is a process of ensuring that two sets of records (usually the balances of two accounts) are in agreement. a)Mediation b)Arbitration c)Reconciliation d)Obfuscation