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Chapter 1 The net income figure appears in all the following financial
47. Flores Realty Corporation had the following balance sheet accounts and balances: Accounts Payable $6,000 Common Stock ? Accounts Receivable 1,000 Equipment $7,000 Building ? Land 7,000 Cash 3,000 Retained Earnings 2,000 If the balance of the Building account were […]
Chapter 1 The primary external users of accounting information are
Chapter 01 – Uses of Accounting Information and the Financial Statements TRUE/FALSE 1. The intentional preparation of misleading financial statements is referred to as fraudulent financial reporting. 2. Fraudulent financial reporting can result from the misapplication of accounting principles. ANS: […]
Chapter 10 Suffolk Corporation Issued 100000 20 year Percent
Chapter 10 – Long-Term Liabilities TRUE/FALSE 1. Financial leverage is also known as trading on the equity. 2. Dividends on stock are tax-deductible to the issuing corporation, whereas interest on debt is not. ANS: F PTS: 1 OBJ: LO1 NAT: […]
Chapter 10 The Corporations Accounting Year Ends December
14. Fiona Corporation has a 7 percent, $600,000 bond issue that originally was issued five years ago. There are now ten years remaining on the bond issue, and the market interest rate is 12 percent. Interest is paid semi-annually. Calculate […]
Chapter 10 The Entry To record The Retirement Bonds Would
Cash 3,000 47. Suffolk Corporation issued $100,000 of 20-year, 6 percent bonds at 98 on one of its semi-annual interest dates. The straight-line method of amortization is to be used. After seven years, what is the carrying value of the […]
Chapter 11 For Example Because Its Stock Had Declined
23. Poquito Corporation had both the following transactions occur on the same day: 1. Issued 30,000 shares of its $5 par value common stock for $360,000 cash. 2. Issued 10,000 shares of its $5 par value common stock in exchange […]
Chapter 11 Identify By Code Letter Each The Following
61. Dividends in arrears cannot exist in conjunction with a. callable preferred stock. b. convertible preferred stock. c. noncumulative preferred stock. d. cumulative preferred stock. ANS: C PTS: 1 OBJ: LO3 NAT: AACSB correlation: analytic LOC: Learning type: Recall KEY: […]
Chapter 11 Prepare in proper form the stockholders’ equity section
35. Use the following information to obtain the ratios requested below. Where necessary, carry answers to one decimal place. Dividends per share: $.76 Market price per share: $40 Net income: $64,000 Stockholders’ equity, beginning of year: $500,000 Stockholders’ equity, end […]
Chapter 11 They All Serve Compensate Employee Sans
Chapter 11 – Contributed Capital TRUE/FALSE 1. The price/earnings (P/E) ratio is a measure of investors’ confidence in a company’s future. 2. The dividends yield is measured in terms of “times.” ANS: F PTS: 1 OBJ: LO1 NAT: AACSB correlation: […]
Chapter 12 Consolidated financial statements are useful because
Cash 450,000 d. Investment in Luffy Corporation 450,000 Cash 450,000 40. West Corporation purchased 15,000 shares of Luffy Corporation common stock for $60 per share on January 2, 2009. Luffy Corporation reported net income of $1,500,000 for 2009 and paid […]
Chapter 12 They Are Valued The Balance Sheet Cost
Chapter 12 – Investments TRUE/FALSE 1. Gains and losses on the sale of investments appear as adjustments within the operating activities section of the statement of cash flows. 2. Investments are valued on the balance sheet at the original purchase […]
Chapter 12 When this amount is added to the earnings of the subsidiaries
15. Briefly explain, what are the consolidated financial statements, and how is the consolidation accomplished? ANS: Consolidated financial statements are the combined statements of a parent company and its subsidiaries. All material intercompany balances and transactions are eliminated to produce […]
Chapter 13 Indicate The Blanks Below The Effect
22. Draw two distinctions between accounting for a stock split and accounting for a stock dividend. ANS: A stock dividend requires a transfer from retained earnings to contributed capital, whereas a stock split does not (nor does it require an […]
Chapter 13 Kappa Corporation Had Taxable Income 69000 For
b. Retained earnings decreases. c. Contributed capital increases. d. Par value per share remains the same. 56. At the beginning of 20xx, Helms Corporation had 34,000 shares of $10 par value common stock issued and outstanding. During January 20xx, Helms […]
Chapter 13 Net Income Does Not Include Income Taxes
Chapter 13 – The Corporate Income Statement and the Statement of Stockholders’ Equity TRUE/FALSE 1. The quality of earnings is an indication of the sustainability of earnings into future accounting periods. 2. Both restructurings and write-downs reduce current operating income. […]
Chapter 14 Assume that the balance of accounts payable does not change
c. Not used to adjust net income to calculate net cash flows from operating activities 61. Assume the indirect method is used to compute net cash flows from operating activities. For this item extracted from the financial statements—Gain on Disposal […]
Chapter 14 Assume The Indirect Method Used Compute
Chapter 14 – The Statement of Cash Flows TRUE/FALSE 1. The purchase of trading securities with cash is considered an investing activity. 2. Because noncash investing and financing transactions do not affect cash, they should be excluded from the statement […]
Chapter 14 Round Amounts to One Decimal Place Ansa 15 Times
13. Following are the income statement and other information for Polk Corporation. Polk Corporation Income Statement For the Year Ended December 31, 20xx Sales $6,000 Cost of goods sold 3,000 Gross margin $3,000 Operating expenses $1,200 Depreciation expense 600 1,800 […]
Chapter 15 Internal accounting reports should be prepared when they
Chapter 15 – The Changing Business Environment – A Manager’s Perspective TRUE/FALSE 1. Management accounting is not a subordinate activity to financial accounting. 2. Management accounting is the process of identifying, measuring, accumulating, analyzing, preparing, and communicating financial information used […]
Chapter 15 Jean Contracted With The Homeowner Forgone Employee
c. the “communicate” stage of the management process. d. all stages of the management cycle. 29. Which of the following is a nonfinancial performance measure? a. Return on investment b. Net income as a percentage of sales c. Cost of […]
Chapter 16 Purchase Order Time Card Materials Requisition Job
48. Which of the following account balances is not reported on the balance sheet? a. Materials Inventory b. Manufacturing Patents c. Cost of Goods Sold d. Work in Process Inventory 49. The presentation of merchandise inventory and cost of goods […]
Chapter 16 Recall 80 Cost Pool Collection Overhead Costs Related
Chapter 16 – Cost Concepts and Cost Allocation TRUE/FALSE 1. Product costs for a manufacturing company consist of direct materials, direct labor, and overhead. 2. Period cost and product cost are synonymous terms. ANS: F PTS: 1 OBJ: LO1 NAT: […]
Chapter 17 Because All Costs Are Charged One Work
17,000 (1) 3,000 (5) Finished Goods Inventory Beg Bal 16,000 (7) 63,600 End Bal 13,000 Payroll Payable 5,000 Beg Bal 31,000 (4) Office Salaries Expense (4) 9,000 Accumulated Depreciation (Factory) 80,000 Beg Bal 14,000 (3) At the end of the […]
Chapter 17 Correlation Reflective key Job Order
Chapter 17 – Costing Systems- Job Order Costing TRUE/FALSE 1. The types of computations for costs to be transferred out of Work in Process Inventory differ if the production process involves multiple departments rather than a single department. 2. Unlike […]
Chapter 18 Beginning work in process is 30 percent complete
Equivalent units based on the FIFO costing method 58,000 56,500 Units completed—55,000 Units in ending work in process—5,000 Direct materials are added at the beginning of the process. Beginning work in process is 40 percent complete as to conversion costs; […]
Chapter 18 In a process costing system, products flow in a LIFO manner
Chapter 18 – Costing Systems- Process Costing TRUE/FALSE 1. In a process costing system, each product is assigned the same amount of costs. 2. In a process costing system, product costs are traced to individual products. ANS: F PTS: 1 […]
Chapter 18 The Amount Should Transferred Finished Goods
8. Montell Inc. produces a variety of outdoor equipment products and utilizes a process costing system. The following information was provided by the accounting department as of March 31, 20xx: a. Units started during the month of March totaled 314,000. […]
Chapter 19 Customer Relations Are Usually Part Ofa The
Chapter 19 – Value-Based Systems- ABM and Lean TRUE/FALSE 1. Nonproduction costs are not included in full product cost. 2. Value-based systems are information systems that provide only customer-related information but not activity-based information. ANS: F PTS: 1 OBJ: LO1 […]
Chapter 19 Key Jit Management Information Systems 43 Justin time Environmental
43. In a just-in-time environment, a. production runs are interrupted each day at setup time to perform routine maintenance. b. scheduled and preventive maintenance is extremely important. c. cost savings are realized by performing maintenance whenever it is needed. d. […]
Chapter 2 A master budget consists of a set of operating budgets and a set
Chapter 21 – The Budgeting Process TRUE/FALSE 1. Budgeting is the process of identifying, gathering, summarizing, and communicating financial and nonfinancial information about an organization’s future activities. 2. A budget need not contain both revenue and expense components. ANS: T […]
Chapter 2 Corporation June 30 2010 Proper Order Compute
Accounts Payable Account No. 212 Date Item Post. Ref. Debit Credit Balance Debit Credit 2010 Dec. 1 J1 8,200 7 J1 2,800 8 J2 600 12 J2 800 19. Given the following ledger account and postings, complete the Balance column. […]
Chapter 2 Retained Earnings Notes Payable Prepaid Rentd Supplies
d. $19,000 53. Which of the following errors will not cause the debit and credit columns of the trial balance to be unequal? a. A debit entry was recorded in the wrong account. b. A debit was entered in an […]
Chapter 2 Should Tools Recorded Asset Expensed What Point
Chapter 02 – Analyzing Business Transactions TRUE/FALSE 1. When a company receives a product previously ordered, a recordable transaction has occurred. 2. When a business hires a new employee, a recordable transaction has occurred. ANS: F PTS: 1 OBJ: LO1 […]
Chapter 20 Costs Stay Fairly Constant With Changes Volume
Chapter 20 – Cost Behavior Analysis TRUE/FALSE 1. Cost behavior is the way prices are adjusted due to changes in costs. 2. Cost behavior is defined as the manner in which costs respond to changes in volume or activity. ANS: […]
Chapter 20 The targeted level of profit must be
Unit Sales Price Unit Variable Costs Unit Sales Product A $150 $100 8,000 Product B 100 60 2,000 Fixed costs are $480,000. The weighted-average contribution margin is a. $42. b. $45. c. $48. d. $90. 55. Lakeside has gathered the […]
Chapter 20 Use The Contribution Margin Part Your
13. a. What is the formula for breakeven units? b. How is knowledge of the contribution margin of a product helpful? In your answer, explain two possible benefits of computing the contribution margin of a product. ANS: a. a. Breakeven […]
Chapter 21 Purchases Are All Paid The Following Month
52. Mi Casa Corporation wishes to prepare a cash budget for November 2010. Sales, purchases, and expenses for October (actual) and November and December (estimated) are as follows: Sales Purchases Expenses October $48,000 $35,000 $14,000 November 40,000 30,000 11,000 December […]
Chapter 22 Use The Following Performance Report For
Chapter 22 – Performance Management and Evaluation TRUE/FALSE 1. The balanced scorecard links the perspectives of an organization’s stakeholders with the organization’s mission and vision, performance measures, strategic plan, and resources. 2. An organization’s four basic stakeholder groups include investors, […]
Chapter 22 Which of the following performance measures is most concerned with long-term financial performance?
c. $30 d. $40 36. Chow Company has a number of investment centers to track on a day-to-day basis. The following represent key figures related to one of Chow’s investment centers for May 20xx: Operating income $ 6,000,000 Sales 15,000,000 […]
Chapter 23 Direct Materials Cost Variances Direct Materials Price
(F) (F) (U) Price variance, sheet aluminum = difference in price actual quantity = $0.05 (F) 241,200 sheets = $12,060 (F) Price variance, coating = $0.03 (F) 148,500 liters = $4,455 (F) Price variance, gas jet assemblies […]
Chapter 23 Landscaping Co Uses Chicken Manure
b. $300 (U) c. $1,950 (F) d. $1,950 (U) 60. Point Company uses the standard costing method. The company’s main product is a fine-quality audio speaker that normally takes 0.25 hour to produce. Normal annual capacity is 3,000 direct labor […]
Chapter 23 Point Company Uses The Standard Costing
Chapter 23 – Standard Costing and Variance Analysis TRUE/FALSE 1. Standard costs are based solely on expected future costs and conditions. 2. A variance is the difference between a standard cost and a budgeted cost. ANS: F PTS: 1 OBJ: […]
Chapter 24 All of the following are relevant in a sell or process
25. Anderson Co. makes and uses 5,000 components each year in its manufacturing operations. An outside supplier has offered to supply the components to Anderson at $66 per unit. Anderson’s production costs are as follows: Direct materials $ 8 Direct […]
Chapter 24 The Normal Selling Price Our Product
Chapter 24 – Short Run Decision Analysis TRUE/FALSE 1. Managers rely strictly on financial information when faced with decisions. 2. Competition, social issues, and timeliness are examples of qualitative factors. ANS: T PTS: 1 OBJ: LO1 NAT: AACSB correlation: reflective […]
Chapter 25 Cost of capital information is not at all necessary to establish
Chapter 25 – Capital Investment Analysis TRUE/FALSE 1. Capital investment analysis can be applied in case of expensive and long-term projects. 2. Capital investment analysis ensures that the resources are used wisely. ANS: T PTS: 1 OBJ: LO1 NAT: AACSB […]
Chapter 25 The sooner the dollars are received, the higher their
d. $22,740. 36. Chicago Co. is interested in purchasing a machine that would improve its operational efficiency. The cost is $200,000 with an estimated residual value of $20,000 and a useful life of eight years. Cash inflows are expected to […]
Chapter 26 Define the desired profit to be made on that product
b. ($1,203,000.00 ÷ 100,000) + [($1,203,000.00 ÷ 100,000) ($90,000 ÷ $1,203,000.00)] c. ($1,203,000.00 ÷ 100,000) + [($500,000 ÷ 100,000) 0.1875] d. None of these 20. The state of Illinois has passed a law requiring that every automobile be […]
Chapter 26 Factors that influence the pricing decision are only external
Chapter 26 – Pricing Decisions, Incl. Target Costing and Transfer Pricing TRUE/FALSE 1. The long-term objectives of a company need not include statements concerning pricing policy. 2. A company that produces standard items for a competitive market should have the […]
Chapter 27 In the new manufacturing environment, the point of sale
Chapter 27 – Quality Management and Measurement TRUE/FALSE 1. Many traditional management information systems do not produce meaningful results for today’s business environment. 2. Traditional management information systems focus on financial reporting. ANS: T PTS: 1 NAT: AACSB correlation: analytic […]
Chapter 27 Sandiego County Division Has The Strongest Program
27. United Insurance Agency incurred the following activity costs related to service quality. Total sales $1,000,000 Costs of quality: Prevention 50,000 Appraisal 47,000 Internal failure 36,000 External failure 64,000 Costs of conformance total a. $15,500. b. $55,000. c. $120,000. d. […]
Chapter 28 Both diversified companies and conglomerates operate
Chapter 28 – Financial Analysis of Performance TRUE/FALSE 1. It is in the best interests of a company to base executive compensation on a single performance measure. 2. Per the Sarbanes-Oxley Act of 2002, a compensation committee, comprised of a […]
Chapter 28 Company Wouldhave Financial Ratios That Most
Total liabilities and stockholders’ equity $300,000 Starman Corporation Income Statement For the Year Ended December 31, 20xx Net sales $400,000 Cost of goods sold 240,000 Gross margin $160,000 Operating expenses 40,000 Income before income taxes $120,000 Income taxes expense 30,000 […]
Chapter 28 The Following Selected Amounts Were Extracted
17. The following information pertains to Flintridge Corporation: Profit margin for 2010 10.0% Total assets, 12/31/2009 $430,000 Total assets, 12/31/2010 $470,000 Net income, 2010 $ 53,000 Calculate the asset turnover ratio for 2010. Round your answer to two decimal places. […]
Chapter 3 A cash payment that reduces a liability does not result in an
Chapter 03 – Measuring Business Income TRUE/FALSE 1. The intentional preparation of misleading financial statements is referred to as fraudulent financial reporting. 2. Net income is misleading when revenue is overstated or expenses are understated by significant amounts. ANS: T […]
Chapter 3 Assume That Financial Statements Are Prepared Quarterly
32. Joan Miller owns an advertising agency. One of the adjustments her accountant made at the end of July was $360 for unpaid wages of the secretary. Joan Miller might ask, “Why go to the trouble of making this adjustment? […]
Chapter 3 Balance Sheet Columns Work Sheeta Dividends Depreciation
ANS: F PTS: 1 LOC: Learning type: Recall ANS: F PTS: 1 LOC: Learning type: Recall ANS: T PTS: 1 LOC: Learning type: Comprehension ANS: T PTS: 1 LOC: Learning type: Recall ANS: F PTS: 1 LOC: Learning type: Recall […]
Chapter 3 Internet 90 Which The Following Sequences Documents Records
December 31, 2010 Cash $ 200 Accounts Receivable 500 Prepaid Insurance 50 Supplies 150 Office Equipment 400 Accumulated Depreciation–Office Equipment $ 200 Accounts Payable 300 Common Stock 600 Service Revenue Earned 500 Salaries Expense 100 Rent Expense 200 ______ $1,600 […]
Chapter 3 Prepaid Rent Had 8000 Normal Balance Prior
133. Accounts Receivable was $750 at the end of November and $525 at the end of December. Revenue totaled $4,775 for December. How much cash was received from revenues during December? a. $6,050 b. $5,000 c. $4,550 d. $3,550 134. […]
Chapter 4 Because Some Periods Were More Profitable Than others
Assets Cash $ 70,000 Short-term investments 56,000 Accounts receivable 28,000 Notes receivable (due in one year) 42,000 Merchandise inventory 98,000 Land held for future use 112,000 Land 140,000 Building $150,000 Less accumulated depreciation 28,000 122,000 Trademark 92,000 Total assets $760,000 […]
Chapter 4 The Accounting Convention That Most Responsible For
Chapter 04 – Financial Reporting and Analysis TRUE/FALSE 1. Both investors and creditors have an interest in a company’s ability to generate favorable cash flows. 2. Investors and creditors use financial statements to evaluate a company’s ability to pay dividends […]
Chapter 4 The other revenues and expenses section of a multistep income statement
Costs and expenses Costs of goods sold $ 29,000 Selling expenses 10,000 General and administrative expenses 13,750 Interest expense 6,250 Total costs and expenses 59,0000 Income before income taxes $ 49,750 Income taxes 19,500 Net income $ 30,250 If the […]
Chapter 5 Recall 5 Which The Following Companies Would Most
Chapter 05 – The Operating Cycle and Merchandising Operations TRUE/FALSE 1. Service businesses can be classified as wholesalers and retailers. 2. The operating cycle involves the purchase and sale of merchandise inventory as well as the subsequent collection of cash […]
Chapter 5 Using Prenumbered Sales Ticket Sansa
13. Assume that the sales made by Wessling Corporation for the month ended February 28, 20xx, were made to customers using credit cards and totaled $5,666. Prepare one journal entry to record these sales assuming that all of the credit […]
Chapter 5 Which The Following Appropriate Internal Control Activity
41. On June 3, Maryland Company purchased merchandize worth $800 on credit, terms 2/10, n/30. The amount paid on June 15. What is the required journal entry to record the payment under the periodic inventory system? a. Accounts Payable 784 […]
Chapter 6 Correlation Analytic key Level Inventory obj
Chapter 06 – Inventories TRUE/FALSE 1. Supply-chain management works well in a just–in-time operating environment. 2. The lower the value assigned to ending inventory, the lower the gross margin. ANS: T PTS: 1 OBJ: LO1 NAT: AACSB correlation: analytic LOC: […]
Chapter 6 Earnings Before Income Taxes Would Overstated By 750000
41. Use this information to answer the following question. Jan. 1 Inventory 15 units @ $4.00 8 Purchase 60 units @ $4.40 17 Purchase 30 units @ $4.20 25 Purchase 45 units @ $4.80 Total sales 100 units A periodic […]
Chapter 7 The Following Information Pertains The Bank
20. Assume that part of accounts and other receivables on Thompson Toys’ balance sheet is $16 million and that Thompson estimates its uncollectible accounts as 2 percent of all accounts receivable. Record the adjusting entry assuming that the company uses […]
Chapter 7 The General Ledger Account For Accounts
Chapter 07 – Cash and Receivables TRUE/FALSE 1. Under securitization, a company sells its receivables in batches at a discount. 2. Purchasing receivables with recourse is riskier than purchasing them without recourse. ANS: F PTS: 1 OBJ: LO1 NAT: AACSB […]
Chapter 7 When Accompany Discounts Note Receivable The Bank
57. The general ledger account for Accounts Receivable shows a debit balance of $25,000. Allowance for Uncollectible Accounts has a credit balance of $1,500. Net sales for the year were $250,000. In the past, 3 percent of sales have proved […]
Chapter 8 Assuming Interest Rate Percent What The Present
4. Anson’s Auto Parts had cash sales of $10,000 for the month of April. Sales are subject to a 6 1/2 percent sales tax and an 8 percent excise tax. In the journal provided, prepare a compound entry without explanation […]
Chapter 8 Learning Type Comprehension 68 Compound Interest Computed
a. Estimated Liability for Vacation Pay 840 Cash 840 b. Vacation Pay Expense 480 Cash 480 c. Vacation Pay Expense 336 Estimated Liability for Vacation Pay 336 d. Cash 168 Estimated Liability for Vacation Pay 168 44. During May, Photo […]
Chapter 8 Only the unused portion of a line of credit is recognized
Chapter 08 – Current Liabilities and Fair Value Accounting TRUE/FALSE 1. Working capital equals current assets plus current liabilities. 2. Payables turnover is measured in number of days. ANS: F PTS: 1 OBJ: LO1 NAT: AACSB correlation: analytic LOC: Learning […]
Chapter 9 The basic accounting problems associated
Chapter 09 – Long Term Assets TRUE/FALSE 1. Free cash flow is a good measure of a company’s ability to finance long-term assets. 2. In the calculation of free cash flow, dividends and sales of plant assets are both deducted. […]
Chapter 9 The Equipment Has An estimated Life Four Years
16. Speedy Printing purchased a new printing press for $80,000. It depreciates the press over a five-year period, using the double-declining-balance method of depreciation. If the press has an $8,000 estimated residual value, calculate depreciation expense for each of the […]
Chapter 9 The Exclusive Right Sell Product Within
51. A machine was purchased for $40,000. It has a current carrying value of $26,000 and had a depreciable cost of $36,000. Its estimated residual value must have been a. $4,000. b. $10,000. c. $14,000. d. impossible to determine from […]