ACC Final
Which of the following terms fit this definition: "The area of accounting principally concerned with reporting to external users." a. Financial accounting b. Managerial accounting c. Matching principle d. Double-entry concept
a. Financial accounting
Which of the following would be unethical? a. Recording backdated revenue. b. Recording prepaid expense adjustments. c. Recording accrued salaries and wages expense. d. Recording accrued interest revenue.
a. Recording backdated revenue
A firm operated at 80% of capacity for the past year, during which fixed costs were $330,000, variable costs were 70% of sales, and sales were $1,000,000. Operating income (loss) was a.$(30,000) b.$370,000 c.$140,000 d.$670,000
a.$(30,000)
For April, sales revenue is $700,000, sales commissions are 5% of sales, the sales manager's salary is $98,000, advertising expenses are $90,000, shipping expenses total 2% of sales, and miscellaneous selling expenses are $2,100 plus 1/2 of 1% of sales. Total selling expenses for the month of April are a.$242,600 b.$182,100 c.$159,100 d.$186,000
a.$242,600
The Corbit Corp. sold merchandise for $10,000 cash. The cost of the goods sold was $7,590. The journal entries to record this transaction under the perpetual inventory system would be a.Cash 10,000 Sales 10,000 Cost of Goods Sold 7,590 Inventory 7,590 b.Cash 10,000 Inventory 10,000 Cost of Goods Sold 7,590 Sales 7,590 c.Cash 7,590 Sales 7,590 Cost of Goods Sold 7,590 Inventory 7,590 d.Cash 10,000 Sales 10,000 Cost of Goods Sold 10,000 Inventory 10,000
a.Cash 10,000 Sales 10,000 Cost of Goods Sold 7,590 Inventory 7,590
Which of the following has steps of the accounting cycle in proper sequence (some steps may be missing)? a.analyze and record transactions, post transactions to the ledger, prepare a trial balance, analyze adjustment data, prepare adjusting entries, prepare financial statements, journalize closing entries and post to the ledger, and prepare a post-closing trial balance b.prepare financial statements, journalize closing entries and post to the ledger, analyze and record transactions, post transactions to the ledger, prepare a trial balance, analyze adjustment data, prepare adjusting entries c.analyze and record transactions, post transactions to the ledger, prepare a trial balance, prepare financial statements, journalize closing entries, analyze adjustment data and prepare adjusting entries d.prepare a trial balance, analyze adjustment data, prepare adjusting entries, prepare financial statements, journalize closing entries and post to the ledger, analyze and record transactions, post transactions to the ledger
a.analyze and record transactions, post transactions to the ledger, prepare a trial balance, analyze adjustment data, prepare adjusting entries, prepare financial statements, journalize closing entries and post to the ledger, and prepare a post-closing trial balance
A financial statement user would determine if a company was profitable or not during a specific period of time by reviewing the a.income statement b.balance sheet c.statement of cash flows d.statement of stockholders' equity
a.income statement
Understanding how costs behave is useful to management for all of the following reasons except a.predicting customer demand b.predicting profits as sales and production volumes change c.changing an existing product production d.estimating costs
a.predicting customer demand
Which of the following budgets provides the starting point for the preparation of the direct labor cost budget? a.production budget b.direct materials purchases budget c.cash budget d.sales budget
a.production budget
The increases in stockholders' equity attributable to selling services or products to customers are called a.revenues b.liabilities c.assets d.expenses
a.revenues
An internal Control system is important to a business because it a. Involves procedures adopted by a business to encourage adherence to prescribed managerial policies and safeguard assets b. Is a system which promotes operational efficiencies and protects the business assets from waste, fraud, and theft c. All of the above d. Helps ensure that accurate and reliable accounting records are produced
c. All of the above
The revenue recognition principle dictates that revenue should be recognized in the accounting period in which it is: a. Collected b. Most likely to be collected c. Earned d. Earned and collected
c. Earned
The amount of income under absorption costing will be more than the amount of income under variable costing when units manufactured a.are less than units sold b.exceed units sold c.equal units sold d.are equal to or greater than units sold
b.exceed units sold
Accrued expenses are ordinarily reported on the balance sheet as a.prepaid expenses b.liabilities c.assets d.fixed assets
b.liabilities
Prepaid expenses have a.been recorded as expenses and paid b.not yet been recorded as expenses but have been paid c.not yet been recorded as expenses or paid d.been incurred and paid
b.not yet been recorded as expenses but have been paid
Gross profit is equal to a.sales less selling expenses b.sales less cost of goods sold c.sales plus cost of goods sold d.sales plus selling expenses
b.sales less cost of goods sold
ABC Company showed the following information at the end of the first year: What is the company's net income for the year based on the accrual basis of accounting? a. $604 b. $214 c. $864 d. $554
d. $554
Based on the following information, what is (1) inventory turnover; (2) average daily cost of goods sold using a 365 day year; and (3) number of days' sales in inventory. Cost of goods sold $195,640 Inventory: Beginning of year 20,500 End of year 18,628 a. (1) 9.9 times (2) $543.44 (3) 36.3 days b. (1) 9.5 times (2) $543.44 (3) 37.7 days c. (1) 10 times (2) $536 (3) 36.5 days d. (1) 10.5 times (2) $536 (3) 34.8 day
c. (1) 10 times (2) $536 (3) 36.5 days
For Year 2 Daisy Corporation reported net income of $60; net sales $800; and average shares outstanding 6. There were no preferred stock dividends. What were the Year 2 earnings per share for Daisy? a. $0.40 b. $133.33 c. $10.00 d. $143.33
c. $10.00
The interest charged on a $400 note payable, at the rate of 6%, on a 90-day note would be a. $12 b. $2 c. $6 d. $24
c. $6
During a period of consistently rising prices, the method of inventory that will result in reporting the greatest cost of goods sold is a.LIFO b.weighted average c.average cost d.FIFO
a.LIFO
Which group of accounts is composed of only assets? a.Prepaid Expenses, Buildings, Patents b.Cash, Accounts Payable, Buildings c.Accounts Receivable, Revenue, Cash d.Unearned Revenues, Prepaid Expenses, Cash
a.Prepaid Expenses, Buildings, Patents
A fiscal year for a business a.should end at the height of the business's annual operating cycle b.always begins on January 1 and ends on December 31 of the same year c.is determined by the federal government d.ordinarily begins on the first day of a month and ends on the last day of the following twelfth month
d.ordinarily begins on the first day of a month and ends on the last day of the following twelfth month
In a cost-volume-profit chart, the a.total cost line normally ends at the highest sales value b.slope of the total cost line is dependent on the fixed cost per unit c.total cost line begins at zero d.total cost line begins at the total fixed cost value on the vertical axis
d.total cost line begins at the total fixed cost value on the vertical axis
The production budget is used to prepare which of the following budgets? a.sales in dollars b.operating expenses c.sales in units d.direct materials purchases, direct labor cost, and factory overhead cost
d.direct materials purchases, direct labor cost, and factory overhead cost
Cash, Accounts Receivable and Prepaid Insurance will be classified on a balance sheet as a. Current assets b. Property, plant and equipment c. Long-term assets d. Intangible assets
a. Current assets
A business pays biweekly salaries of $20,000 every other Friday for a ten-day period ending on that day. The adjusting entry necessary at the end of the fiscal period ending on the second Wednesday of the pay period includes a a.credit to Salary Expense of $16,000 b.debit to Salary Expense of $8,000 c.credit to Salaries Payable of $16,000 d.debit to Salaries Payable of $8,000
c.credit to Salaries Payable of $16,000
If variable costs per unit decreased because of a decrease in utility rates, the break-even point would a.increase b.remain the same c.decrease d.increase or decrease, depending on the percentage increase in utility rates
c.decrease
For a supervisor of a manufacturing department, which of the following costs is controllable? a.sales salaries b.depreciation of factory building c.direct materials d.insurance on factory building
c.direct materials
A retailer purchases merchandise with a catalog list price of $30,000. The retailer receives a 15% trade discount and has credit terms of 2/10, n/30. How much cash will be needed to pay this invoice within the discount period? a.$30,000 b.$24,900 c.$29,400 d.$24,990
d.$24,990
During the current year, merchandise is sold for $147,500 cash and $381,750 on account. The cost of the goods sold is $242,000. What is the amount of the gross profit? a.$771,250 b.$476,250 c.$7,750 d.$287,250
d.$287,250
Gently Laser Clinic purchased laser equipment for $8,500 and paid $2,250 down, with the remainder to be paid later. The correct entry would be a.Equipment 2,250 Cash 2,250 b.Cash 2,250 Accounts Payable 6,250 Equipment 8,500 c.Equipment 8,500 Accounts Payable 6,250 Cash 2,250 d.Equipment Expense 8,500 Accounts Payable 2,250 Cash 6,250
c.Equipment 8,500 Accounts Payable 6,250 Cash 2,250
The accounting principle upon which deferrals and accruals are based is a.conservatism b.price-level adjustment c.cost d.matching
d.matching
Which of the following methods allocates joint costs based on measures estimated after the final products are fully processed and are ready to be sold? a.weighted average method b.physical units method c.market value at split-off method d.net realizable value method
d.net realizable value method
The contribution margin ratio is computed as a.contribution margin divided by cost of sales b.contribution margin divided by sales c.sales divided by contribution margin d.contribution margin divided by variable cost of sales
b.contribution margin divided by sales
Which of the following methods allocates joint costs using a measure such as pounds, gallons, or inches at the split-off point? a.market value at split-off method b.net realizable value method c.physical units method d.weighted average method
c.physical units method
FIFO reports higher gross profit and net income than the LIFO method when a.prices are decreasing b.prices are reduced by 50% c.prices are increasing d.prices remain stable
c.prices are increasing
Net income will result when a.revenues (credits) = expenses (debits) b.revenues (debits) > expenses (credits) c.revenues (credits) > expenses (debits) d.expenses (credits) = revenues (debits)
c.revenues (credits) > expenses (debits)
Net Income may be defined as follows a. The excess of revenues over expenses for the time period b. The excess of expenses over revenues for the time period c. The increase in assets arising from the sale of a product or service d. The cost of assets consumed or services used in the process of generating revenues
a. The excess of revenues over expenses for the time period
Which of the following activity bases would be the most appropriate for gasoline costs of a delivery service? a.number of trucks in service b.total miles driven c.number of truck drivers d.number of packages picked up
b.total miles driven
Costs that vary in total in direct proportion to changes in an activity level are called ______ costs. a.differential b.variable c.sunk d.fixed
b.variable
If sales are $425,000, variable costs are 62% of sales, and operating income is $50,000, the contribution margin ratio is a.26.8% b.62.0% c.38.0% d.11.8%
c.38.0%
Which of the following principles dictates that expenses are recognized in the same accounting period as their related revenue? a. Expense recognition (Matching) b. Cash Basis c. Cost (Measurement) d. Time Period (Periodicity)
a. Expense recognition (Matching)
Astin Company has current assets of $82,530, total assets of $242,050, total net income of $58,240, current liabilities of $72,120, and total liabilities of $205,300. Astin's Company's working capital is a.$68,650 b.$24,920 c.$36,570 d.$10,410
d.$10,410
Costs that remain constant in total dollar amount as the level of activity changes are called ________ costs. a.product b.variable c.mixed d.fixed
d.fixed
When a single manufacturing process generates multiple outputs, it is called a(n) a.multiple output manufacturing process b.joint activity manufacturing process c.activity-based manufacturing process d.joint manufacturing process
d.joint manufacturing process
If total assets are $100,000, liabilities are $60,000, and Common Stock is $25,000, the Retained Earnings of the firm is: a. $15,000 b. $135,000 c. $160,000 d. $185,000
a. $15,000
Retained Earnings is reduced by which of the following? a. Dividends b. Net Income c. Purchase of an asset d. Collection of an Account Receivable
a. Dividends
A company using the periodic inventory system has inventory costing $210 on hand at the beginning of a period. During the period, merchandise costing $635 is purchased. At year-end, inventory costing $160 is on hand. The cost of goods sold for the year is a.$685 b.$265 c.$635 d.$795
a.$685
The balance in the office supplies account on January 1 was $7,000, supplies purchased during January were $3,000, and the supplies on hand at January 31 were $2,000. The amount to be used for the appropriate adjusting entry is a.$8,000 b.$12,000 c.$4,300 d.$5,000
a.$8,000
If fixed costs are $500,000 and the unit contribution margin is $20, the break-even point in units if fixed costs are reduced by $80,000 is a.21,000 units b.4,000 units c.29,000 units d.25,000 units
a.21,000 units
Carter Co. sells two products: Arks and Bins. Last year, Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are as follows: Assuming that last year's fixed costs totaled $960,000, Carter Co.'s break-even point in units was a.40,000 units b.12,000 units c.35,000 units d.28,000 units
a.40,000 units
The accounting equation may be expressed as a.Assets − Liabilities = Stockholders' Equity b.Assets = Revenues − Liabilities c.Assets + Liabilities = Stockholders' Equity d.Assets = Expenses − Liabilities
a.Assets − Liabilities = Stockholders' Equity
Which of the following terms is commonly used to describe the concept whereby the cost of manufactured products is composed of direct materials cost, direct labor cost, and all factory overhead cost? a.absorption costing b.variable costing c.marginal costing d.standard costing
a.absorption costing
How does paying a liability in cash affect the accounting equation? a.assets decrease; liabilities decrease b.assets increase; liabilities increase c.assets increase; liabilities decrease d.liabilities decrease; stockholders' equity increases
a.assets decrease; liabilities decrease
A key aspect to the multiple production department rate method for overhead application is a.choosing an appropriate cost driver for each production department b.choosing an appropriate cost driver for each product manufactured c.determining the amount of support activity used by the entire production facility d.choosing an appropriate number of support departments to include in overhead
a.choosing an appropriate cost driver for each production department
Another name for variable costing is a.direct costing b.indirect costing c.process costing d.differential costing
a.direct costing
The three most common cost behavior classifications are a.fixed costs, variable costs, and mixed costs b.variable costs, period costs, and differential costs c.variable costs, sunk costs, and opportunity costs d.variable costs, product costs, and sunk costs
a.fixed costs, variable costs, and mixed costs
The primary difference between a static budget and a flexible budget is that a static budget a.is a plan for a single level of activity, whereas a flexible budget adjusts for changes in the activity level b.is concerned only with future acquisitions of fixed assets, whereas a flexible budget is concerned with expenses that vary with sales c.is suitable in a volatile demand situation while a flexible budget is suitable in a stable demand situation d.includes only fixed costs, whereas a flexible budget includes only variable costs
a.is a plan for a single level of activity, whereas a flexible budget adjusts for changes in the activity level
Debts owed by a business are referred to as a.liabilities b.accounts receivables c.expenses d.stockholders' equity
a.liabilities
Management should focus its sales and production efforts on the product or products that will provide the a.maximum contribution margin b.lowest product costs c.highest sales revenue d.lowest direct labor hours
a.maximum contribution margin
A cost that has characteristics of both a variable cost and a fixed cost is called a a.mixed cost b.discretionary cost c.variable/fixed cost d.sunk cost
a.mixed cost
Which of the following activity bases would be the most appropriate for food costs of a hospital? a.number of patients who stay in the hospital b.number of nurses scheduled to work c.quantity of prescriptions filled d.how many MRIs are taken
a.number of patients who stay in the hospital
Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to determine Bounty's variable utilities cost per machine hour. Round your answer to the nearest cent. a. $0.63 b. $0.11 c. $0.67 d. $10.00
b. $0.11
A business organized as a separate legal entity from its owners is a: a. Partnership b. Corporation c. Proprietor d. Government unit
b. Corporation
A corporation purchased a three-year insurance policy on December 1, Year A for $7,200. Assuming that the. corporation debited the prepaid insurance account in recording the original transaction, the adjusting entry on December 31, Year A, the company's yearend, will include a: a. Debit to prepaid insurance for $200 b. Credit to prepaid insurance for $200 c. Debit to insurance expense for $7,000 d. Credit to insurance expense for $7,000
b. Credit to prepaid insurance for $200
All of the following accounts are increased with a debit except a.Cash b.Land c.Accounts Receivable d.Unearned Revenues
d.Unearned Revenues
Miller and Sons' static budget for 10,000 units of production includes $50,000 for direct materials, $44,000 for direct labor, variable utilities of $5,000, and supervisor salaries of $24,000. A flexible budget for 12,000 units of production would show a.direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $24,000 b.direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $29,000 c.the same cost structure in total d.total variable costs of $148,000
a.direct materials of $60,000, direct labor of $52,800, utilities of $6,000, and supervisor salaries of $24,000
Gracie, Inc. made a prepaid rent payment of $2,800 on January 1. The company's monthly rent is $700. The amount of prepaid rent that would appear on the January 31 balance sheet after adjustment is a.$2,800 b.$2,100 c.$700 d.$1,400
b.$2,100
Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the FIFO perpetual inventory method. a. Total sales: $56,975.00 Cost of goods sold: $37,312.50 Gross profit: $19,662.50 Ending inventory: $19,573.25 b. Total sales: $56,975.00 Cost of goods sold: $37,401.75 Gross profit: $19,573.25 Ending inventory: $19,010.75 c. Total sales: $56,975.00 Cost of goods sold: $36,431.25 Gross profit: $20,543.75 Ending inventory: $19,981.2 d. Total sales: $56,975.00 Cost of goods sold: $36,587.50 Gross profit: $20,387.50 Ending inventory: $19,825.00
c. Total sales: $56,975.00 Cost of goods sold: $36,431.25 Gross profit: $20,543.75 Ending inventory: $19,981.2
The accounts in the ledger of Nilles Consulting Co. are listed below. All accounts have normal balances. Prepare a trial balance. The total of the credits is a.$22,600 b.$21,300 c.$26,200 d.$15,800
c.$26,200
Which of the following is not a characteristic of the accrual basis of accounting? a.revenues and expenses are reported in the period in which cash is received or paid b.revenues are reported when services have been performed or products have been delivered to customers c.accrual basis of accounting supports the matching concept d.expenses are reported in the same period as the revenues to which they relate
a.revenues and expenses are reported in the period in which cash is received or paid
Which of the following is an example of an accrued expense? a.salary owed but not yet paid b.supplies on hand c.fees received but not yet earned d.a two-year premium paid on a fire insurance policy
a.salary owed but not yet paid
Which one of the following relationships shows the proper structure of a corporation? a. Stockholders select officers, who select the board of directors. b. Stockholders select the board of directors, who select officers. c. Officers select board of directors, who select the stockholders. d. Officers select stockholders, who select the board of directors.
b. Stockholders select the board of directors, who select officers.
Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the LIFO perpetual inventory method. a. Total sales: $56,975.00 Cost of goods sold: $37,401.75 Gross profit: $19,573.25 Ending inventory: $19,010.75 b. Total sales: $56,975.00 Cost of goods sold: $36,587.50 Gross profit: $20,387.50 Ending inventory: $19,825.00 c. Total sales: $56,975.00 Cost of goods sold: $36,431.25 Gross profit: $20,543.75 Ending inventory: $19,981.2 d. Total sales: $56,975.00 Cost of goods sold: $37,312.50 Gross profit: $19,662.50 Ending inventory: $19,573.25
b. Total sales: $56,975.00 Cost of goods sold: $36,587.50 Gross profit: $20,387.50 Ending inventory: $19,825.00
Brutus Corporation, a newly formed corporation, has the following transactions during May, its first month of operations. Using the table provided, calculate total sales, cost of goods sold, gross profit, and ending inventory using each of the average cost periodic inventory method. Round the average to the nearest cent. a. Total sales: $56,975.00 Cost of goods sold: $36,431.25 Gross profit: $20,543.75 Ending inventory: $19,981.2 b. Total sales: $56,975.00 Cost of goods sold: $37,401.75 Gross profit: $19,573.25 Ending inventory: $19,010.75 c. Total sales: $56,975.00 Cost of goods sold: $36,587.50 Gross profit: $20,387.50 Ending inventory: $19,825.00 d. Total sales: $56,975.00 Cost of goods sold: $37,312.50 Gross profit: $19,662.50 Ending inventory: $19,573.25
b. Total sales: $56,975.00 Cost of goods sold: $37,401.75 Gross profit: $19,573.25 Ending inventory: $19,010.75
The amount of income under absorption costing will be less than the amount of income under variable costing when units manufactured a.exceed units sold b.are less than units sold c.are equal to or greater than units sold d.equal units sold
b. are less than units sold
If budgeted beginning finished goods inventory is $8,000, budgeted ending finished goods inventory is $9,400, and budgeted cost of goods sold is $10,260, budgeted cost of goods manufactured should be a.$1,400 b.$11,660 c.$9,600 d.$11,550
b.$11,660
As of January 1 of the current year, Grackle Company had accounts receivable of $50,000. The sales for January, February, and March were $120,000, $140,000, and $150,000, respectively. Of each month's sales, 20% are for cash. Of the remaining 80% (the credit sales), 60% are collected in the month of sale, with the remaining 40% collected in the following month. The total cash collected (both from accounts receivable and cash sales) in the month of March is a.$102,000 b.$146,800 c.$74,800 d.$116,800
b.$146,800
At the beginning of the period, the Cutting Department budgeted direct labor of $155,000, direct materials of $165,000, and fixed factory overhead of $15,000 for 9,000 hours of production. The department actually completed 10,000 hours of production. The appropriate total budget for the department, assuming it uses flexible budgeting, is a.$416,000 b.$370,50 c.$368,889 d.$335,000
b.$370,500
As of the end of its accounting period, December 31, Year 1, Great Plains Company has assets of $940,000 and liabilities of $300,000. During Year 2, stockholders invested an additional $73,000 and received $33,000 in dividends from the business. What is the amount of net income during Year 2, assuming that as of December 31, Year 2, assets were $995,000 and liabilities were $270,000? a.$50,000 b.$45,000 c.$106,000 d.$370,000
b.$45,000
If the equipment account has a balance of $80,400 and its accumulated depreciation account has a balance of $22,500, the book value of the equipment is a.$22,500 b.$57,900 c.$80,400 d.$102,900
b.$57,900
Unearned Fees appear on the a.income statement as revenue b.balance sheet as a current liability c.balance sheet in the current assets section d.balance sheet in the stockholders' equity section
b.balance sheet as a current liability
The income statement should be prepared a.after the statement of stockholder's equity and balance sheet b.before the statement of stockholder's equity and balance sheet c.after the statement of stockholder's equity and before the balance sheet d.after the balance sheet and before the statement of stockholder's equity
b.before the statement of stockholder's equity and balance sheet
Accountants prefer the variable costing method over the absorption costing method for evaluating the performance of a company because a.by using the absorption costing method, income could appear to be lower by producing more inventory. b.by using the absorption costing method, income could appear to be higher by producing more inventory. c.by using the variable costing method, all fixed and variable costs are included in the unit cost of the product manufactured. d.by using the variable costing method, the cost of goods sold will be higher as more units are manufactured and sales remain the same.
b.by using the absorption costing method, income could appear to be higher by producing more inventory.
Which of the following would be included in the cost of a product manufactured according to absorption costing? a.sales salaries b.depreciation expense on factory building c.advertising expense d.office supplies costs
b.depreciation expense on factory building
Which of the following would be included in the cost of a product manufactured according to variable costing? a.interest expense b.direct materials c.sales commissions d.office supply costs
b.direct materials
The budget process involves all of the following except a.executing plans to achieve the goals b.dismissing all managers who fail to achieve operational goals specified in the budget c.periodically comparing actual results with the goals d.establishing specific goals
b.dismissing all managers who fail to achieve operational goals specified in the budget
Profit is the difference between a.the incoming cash and outgoing cash b.the amounts received from customers for goods or services and the amounts paid for the inputs used to provide the goods or services c.the assets purchased with cash contributed by the owner and the cash spent to operate the business d.assets and liabilities
b.the amounts received from customers for goods or services and the amounts paid for the inputs used to provide the goods or services
Contribution margin is a.profit b.the excess of sales revenue over variable cost c.another term for volume in cost-volume-profit analysis d.the same as sales revenue
b.the excess of sales revenue over variable cost
Which of the following terms is commonly used to describe the concept whereby the cost of manufactured products is composed of direct materials cost, direct labor cost, and variable factory overhead cost? a.absorption costing b.variable costing c.standard costing d.differential costing
b.variable costing
On the variable costing income statement, the figure representing the difference between manufacturing margin and contribution margin is a.fixed manufacturing costs b.variable selling and administrative expenses c.fixed selling and administrative expenses d.variable cost of goods sold
b.variable selling and administrative expenses
Stevens Company started the year with an inventory cost of $145,000. During the month of January, Stevens purchased inventory that cost $53,000. January sales totaled $140,000. Estimated gross profit is 35%. The estimated ending inventory as of January 31 is a.$69,300 b.$91,000 c.$107,000 d.$58,000
c.$107,000
Revenues for the year totaled $162,000 and expenses totaled $174,000. The stockholders purchased $15,000 of common stock and were paid $6,000 in dividends during the year. What was the net income or net loss for the year? a.$12,000 net income b.$18,000 net loss c.$12,000 net loss d.$6,000 net loss
c.$12,000 net loss
Which of the following is not a characteristic of a corporation? a.Ownership is divided into shares of stock. b.Corporations are organized as a separate legal taxable entity. c.A corporation's resources are limited to its individual owners' resources. d.Corporations experience an ease in obtaining large amounts of resources by issuing stock.
c.A corporation's resources are limited to its individual owners' resources.
Which of the following entries records the receipt of cash for two months' rent? The cash was received in advance of providing the service. a.Cash, debit; Prepaid Rent, credit b.Prepaid Rent, debit; Rent Revenue, credit. c.Cash, debit; Unearned Rent, credit. d.Cash, debit; Rent Expense, credit.
c.Cash, debit; Unearned Rent, credit.
If total assets decreased by $88,000 during a period of time and stockholders' equity increased by $71,000 during the same period, then the amount and direction (increase or decrease) of the period's change in total liabilities is a.an $88,000 decrease b.a $17,000 increase c.a $159,000 decrease d.a $159,000 increase
c.a $159,000 decrease
Accrued revenues would appear on the balance sheet as a.common stock b.prepaid expenses c.assets d.liabilities
c.assets
Accumulated Depreciation appears on the a.balance sheet in the long-term liabilities section b.income statement as an operating expense c.balance sheet in the property, plant, and equipment section d.balance sheet in the current assets section
c.balance sheet in the property, plant, and equipment section
The point where the sales line and the total costs line intersect on the cost-volume-profit chart represents the a.maximum possible operating loss b.maximum possible operating income c.break-even point d.total fixed costs
c.break-even point
The amount of income under absorption costing will equal the amount of income under variable costing when units manufactured a.are less than units sold b.exceed units sold c.equal units sold d.are equal to or greater than units sold
c.equal units sold
If variable costs per unit increased because of an increase in hourly wage rates, the break-even point would a.decrease b.remain the same c.increase d.increase or decrease, depending on the percentage increase in wage rates
c.increase
Which of the following methods allocates joint costs based on the potential market value at the point where the products will be separated to be processed further? a.weighted average method b.net realizable value method c.market value at split-off method d.physical units method
c.market value at split-off method
The first budget customarily prepared as part of an entity's master budget is the _____ budget. a.production b.direct materials purchases c.sales d.cash
c.sales
Which of the following terms is commonly used to describe the departments within a company that provide a necessary service to produce a product but are not directly involved in production? a.investment center departments b.costing departments c.support departments d.expense departments
c.support departments
A chart of accounts is a.used in place of a ledger b.usually a listing of accounts in alphabetical order c.usually a listing of accounts in financial statement order d.the same as a balance sheet
c.usually a listing of accounts in financial statement order
Which of the following methods allocates joint costs based on physical units that are weighted and then multiplied by actual physical units? a.physical units method b.market value at split-off method c.weighted average method d.net realizable value method
c.weighted average method
The following accounts were taken from the Adjusted Trial Balance columns of the end-of-period spreadsheet: Accumulated Depreciation $ 3,200 Fees Earned 17,400 Depreciation Expense 1,300 Insurance Expense 400 Prepaid Insurance 4,800 Supplies 900 Supplies Expense 3,800 Net income for the period is a.$8,700 b.$17,400 c.$5,500 d.$11,900
d.$11,900
Calculate the gross profit for Jefferson Company based on the following: Sales $764,000 Selling expenses 42,500 Cost of goods sold 538,000 a.$721,500 b.$183,500 c.$495,500 d.$226,000
d.$226,000
Use the adjusted trial balance for Stockton Company below to answer the questions that follow. Determine the total liabilities for the period. a.$1,900 b.$4,300 c.$20,240 d.$6,200
d.$6,200
Richardson Company has a condensed income statement as shown Using horizontal analysis, calculate the amount and percent change for sales. Round percentages to one decimal place. a.$15,500, 10.3% b.$15,500, 19.6% c.($15,500), (10.3%) d.($15,500), (9.4%)
d.($15,500), (9.4%)
If fixed costs are $250,000, the unit selling price is $125, and the unit variable costs are $73, the break-even sales (units) is a.2,000 units b.3,425 units c.2,381 units d.4,808 units
d.4,808 units
Contribution margin reporting can be beneficial for analyzing which of the following? a.sales personnel b.products c.sales territory d.all of these choices
d.all of these choices
Principal components of a master budget include a.production budget b.sales budget c.capital expenditures budget d.all of these choices
d.all of these choices
The budget that summarizes future plans for the acquisition of fixed assets is the _____ budget. a.direct materials purchases b.sales c.production d.capital expenditures
d.capital expenditures
Costs that can be influenced by management at a specific level of management are called a.direct costs b.variable costs c.noncontrollable costs d.controllable costs
d.controllable costs
Shores Sports rents canoes and kayaks. Below is the adjusted trial balance at December 31. The entry required to close the revenue and expense accounts at the end of the period includes a: a.debit to Retained Earnings for $4,780 b.debit to Retained Earnings for $33,520 c.credit to Retained Earnings for $33,520 d.credit to Retained Earnings for $4,780
d.credit to Retained Earnings for $4,780
When a manager seeks to achieve personal departmental objectives that may work to the detriment of the overall firm, the manager is experiencing a.padding b.cushions c.budgetary slack d.goal conflict
d.goal conflict