Accounting Chapters 14-20
Cash flows from investing activities, as part of the statement of cash flows, would include any payments for the purchase of treasury stock.
False
Interest payments on 12% bonds with a face value of $20,000 and interest paid semiannually would be $2,400 every 6 months.
False
Managerial accounting information is for external as well as internal stakeholders.
False
Managerial accounting uses only past data in reports to aid management in the decision-making process.
False
The adjusting entry for the amortization of a discount on bonds payable is
debit Interest Expense, credit Discount on Bonds Payable
Question Content Area Alan Company purchased $400,000 of ABC Co. 5% bonds at 100 plus accrued interest of $4,500. Alan later sold $250,000 of the bonds at 97. The journal entry for the purchase would include a
debit to Interest Receivable for $4,500
The two categories of cost comprising conversion costs are
direct labor and factory overhead
Department M had 2,600 units 55% completed in process at the beginning of June, 12,200 units completed during June, and 1,800 units 29% completed at the end of June. What was the number of equivalent units of production for conversion costs for June if the first-in, first-out method is used to cost inventories?
11,292 units
D R had 4,300 units in work in process that were 75% completed as to labor and overhead at the beginning of the period. During the period, 34,300 units of direct materials were added, 35,600 units were completed, and 3,000 units were 37% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories. The number of equivalent units of production for conversion costs for the period wa
33,485
The direct materials costs and direct labor costs incurred by a production department are referred to as conversion costs.
False
The statement of cash flows is not one of the basic financial statements.
False
When goods are sold, their costs are transferred from Work in Process to Finished Goods.
False
A financial statement showing each item on the statement as a percentage of one key item on the statement is called a common-sized financial statement.
True
An equity investment in less than 20% of another company's outstanding stock is accounted for using the fair value method.
True
Analyzing a company's performance should take into account conditions peculiar to the industry and the general economic conditions.
True
Cash flows from investing activities, as part of the statement of cash flows, would include any receipts from the sale of land.
True
Conversion cost is the combination of direct labor cost and factory overhead cost.
True
If bonds are purchased between interest dates, the buyer must also pay the seller any accrued interest since the last interest payment date.
True
In the vertical analysis of an income statement, each item is generally stated as a percentage of sales.
True
When the market rate of interest is less than the contract rate for a bond, the bond will sell for a premium.
True
When you are interpreting financial ratios, it is useful to compare a company's ratios to the same ratios from a prior period or to the ratios of another company in the same industry.
True
If one company owns more than 50% of the common stock of another company
a parent-subsidiary relationship exists
Which of the following should be deducted from net income in computing the net cash flows from operating activities using the indirect method?
gain on sale of land
Question Content Area The account Unrealized Gain (Loss) on Trading Investments should be included on the
income statement in the Other Revenue and Expense section
Which of the following would be most likely to use a process cost system?
lawn fertilizer manufacturer
The primary goal of managerial accounting is to provide information to
management
Question Content Area Equity securities include
preferred stock
When the maturities of a bond issue are spread over several dates, the bonds are called
serial bonds
Depreciation on factory equipment would be reported on the statement of cash flows prepared by the indirect method in
the Cash Flows from (used for) Operating Activities section
An analysis in which all the components of an income statement are expressed as a percentage of sales is a
vertical analysis
Question Content Area In general, consolidated financial statements should be prepared
when a corporation owns more than 50% of the common stock of another company
Goods that are partially completed by a manufacturer are
work in process inventory
The analysis of increases and decreases in the amount and percentage of comparative financial statement items is referred to as horizontal analysis.
True
The excess of current assets over current liabilities is referred to as working capital.
True
The relationship of each asset item as a percent of total assets is an example of vertical analysis.
True
An investor purchased 417 shares of common stock, $22 par, for $20,433. Subsequently, 105 shares were sold for $32 per share. What is the amount of gain or loss on the sale?
$1,785 loss
Question Content Area The current period statement of cash flows includes the following: Cash balance at the beginning of the period$416,555 Net cash flows from operating activities189,098 Net cash flows used for investing activities(59,042)Net cash flows used for financing activities(104,161) The cash balance at the end of the period is
$442,450
Which of the following accounts will not be found on the statement of cost of goods manufactured?
Cost of Goods Sold
In horizontal analysis, each item is expressed as a percentage of the
base year figure
On the statement of cash flows, the Cash Flows from (used for) Operating Activities section would include
cash received from customers
Which of the following is an example of direct materials cost for an automobile manufacturer?
cost of interior upholstery
A bond is simply a form of an interest-bearing note.
True
