1) In a process costing system, each process will have a work in process inventory
account.
2) The form of the balance sheet in which assets, liabilities, and owner’s equity are
presented in a downward sequence is called the report form.
3) Conversion costs consist of product costs and period costs.
4) A manager in a cost center also has responsibility and authority over the revenues
and the costs.
5) The post reference notation used in the ledger is the account number.
6) In rate of return on investment analysis, the investment turnover component focuses
on efficiency in the use of assets and indicates the rate at which sales are being
generated for each dollar of invested assets.
7) An equity investment in less than 20% of another companys stock is accounted for
using the cost method.
8) Under the negotiated price approach, the transfer price is the price at which the
product or service transferred could be sold to outside buyers.
9) Though a piece of equipment is still being used, the equipment should be removed
from the accounts if it has been fully depreciated.
10) In using the variable cost concept of applying the cost-plus approach to product
pricing, fixed manufacturing costs and fixed selling and administrative expenses must
be covered by the markup.
11) A cash flow per share amount should be reported on the statement of cash flows.
12) In most business organizations, the chief accountant is called the treasurer.
13) An employee receives an hourly rate of $30, with time and a half for all hours
worked in excess of 40 during a week. Payroll data for the current week are as follows:
hours worked, 48; federal income tax withheld, $300; cumulative earnings for year
prior to current week, $90,700; social security tax rate, 6.0% on maximum of $100,000;
and Medicare tax rate, 1.5% on all earnings. What is the net amount to be paid to the
employee?
A.$1,032.00
B.$1,143.00
C.$1,053.60
D.$1,166.40
14) Albright Company purchased as a long-term investment $500,000 of Benton
Corporation 10-year, 9% bonds. Present entries to record the following selected
transactions:
15) On July 1st, Harding Construction purchases a bulldozer for $228,000. The
equipment has a 8 year life with a residual value of $16,000. Harding uses straight-line
depreciation.
(a) Calculate the depreciation expense and provide the journal entry for the first year
ending December 31st.
(b) Calculate the third years depreciation expense and provide the journal entry for the
third year ending December 31st.
(c) Calculate the last years depreciation expense and provide the journal entry for the
last year.
Annual depreciation is:
16) Production and sales estimates for April are as follows:
The number of units expected to be manufactured in April is:
A.11,500
B.10,000
C.12,500
D.13,500
17) Which of the following is an example of a factory overhead cost?
A.Repair and maintenance cost on the administrative building
B.Factory heating and lighting cost
C.Insurance premiums on salespersons’ automobiles
D.President’s salary
18) A formal written statement of management’s plans for the future, expressed in
financial terms, is a:
A.gross profit report
B.responsibility report
C.budget
D.performance report
19) In which order are the accounts listed in the chart of accounts?
A.assets, expenses, liabilities, owners equity, revenues
B.owners equity, assets, liabilities, revenues, expenses
C.assets, liabilities, owners equity, revenues, expenses
D.assets, liabilities, revenues, expenses, owners equity
20) Equipment with an estimated market value of $30,000 is offered for sale at $45,000.
The equipment is acquired for $15,000 in cash and a note payable of $20,000 due in 30
days. The amount used in the buyer’s accounting records to record this acquisition is
A.$30,000
B.$35,000
C.$15,000
D.$45,000
21) The recording of the factory labor incurred for general factory use would include a
debit to:
A.Factory Overhead
B.Wages Payable
C.Wages Expense
D.Cost of Goods Sold
22) Immediately prior to the process of liquidation, partners Micco, Niccum, and
Orwell have capital balances of $70,000, $20,000, and $30,000 respectively. There is a
cash balance of $10,000, noncash assets total $160,000, and liabilities total $50,000.
The partners share net income and losses in the ratio of 2:2:1.
Journalize the entries to record the liquidation outlined below, using Assets as the
account title for the noncash assets and Liabilities as the account title for all creditors’
claims.
(a) Sold the noncash assets for $80,000 in cash.
(b) Divided the loss on realization.
(c) Paid the liabilities.
(d) Received cash from the partner with the deficiency.
(e) Distributed the cash to the partners.
23) Rusty Co. sells two products, X and Y. Last year Rusty sold 5,000 units of Xs and
35,000 units of Ys. Related data are:
Assuming that last years fixed costs totaled $675,000. What was Rusty Co.s break-even
point in units?
A.16,875 units
B.30,100 units
C.30,000 units
D.11,250 units
24) Job order costing and process costing are
A.pricing systems
B.cost accounting systems
C.cost flow systems
D.inventory tracking systems
25)
Based on the above data, what is the quick ratio, rounded to one decimal point?
A.1.7
B.2.9
C.1.1
D.1.0
26) All of the following are normally found in a corporation’s stockholders’ equity
section except
A.Common Stock
B.Paid-In Capital in Excess of Par
C.Dividends in Arrears
D.Retained Earnings
27) Balance sheet and income statement data indicate the following:
Based on the data presented above, what is the number of times bond interest charges
were earned (round to two decimal places)?
A.5.72
B.6.83
C.4.72
D.4.83
28) At the end of April, Cavy Company had completed Job 766 and 765. According to
the individual job cost sheets the information is as follows:
Job 765 produced 152 units, and Job 766 consisted of 250 units.
Assuming that the predetermined overhead rate is applied by using machine hours at a
rate of $200 per hour, determine the (a) balance on the job cost sheets for each job, and
(b) the cost per unit at the end of April.
29) Ruby Company produces a chair that requires 5 yds. of material per unit. The
standard price of one yard of material is $7.50. During the month, 8,500 chairs were
manufactured, using 43,600 yards at a cost of $7.55 per yard. Determine the (a) price
variance, (b) quantity variance, and (c) cost variance.
30) The following data are taken from the financial statements:
31) If the direct write-off method of accounting for uncollectible receivables is used,
what general ledger account is debited to write off a customer’s account as
uncollectible?
A.Uncollectible Accounts Receivable
B.Accounts Receivable
C.Allowance for Doubtful Accounts
D.Bad Debts Expense
32) Forde Co. has an operating leverage of 4. Sales are expected to increase by 12%
next year. Operating income is:
A.unaffected
B.expected to increase by 3%
C.expected to increase by 48%
D.expected to increase by 4 %
33) Costs on the income statement for both a merchandiser and a manufacturer would
include:
A.operating expenses
B.direct materials
C.direct labor incurred
D.cost of goods manufactured
34) Balance sheet and income statement data indicate the following:
35) A company will most likely use an estimated method of determining inventory
when
A.the company decides not to do a physical inventory
B.a natural disaster has destroyed most of their inventory
C.the company has not kept up with their inventory records
D.the company is preparing annual financial statements
36) The chart of account for the Miguel Company includes some of the following
accounts:
On the journal page 5, the following transaction was found:
What is the post reference that will be found on the Salaries Expense account?
A.5
B.11
C.54
D.None
37) Financial statements in which financial data for two or more companies are
combined as a single entity are called
A.conventional statements
B.consolidated statements
C.audited statements
D.constitutional statements
38) What is meant by the term B2C?
A.Balance to cash
B.Business to cash
C.Book to capital
D.Business to consumer
39) Internal control does not consist of policies and procedures that
A.protect assets from misuse
B.aid management in directing operations toward achieving business goals
C.guarantee the company will not go bankrupt
D.ensure that business information is accurate
40) The following journal entries would be used in one of the two methods of
accounting for uncollectible receivables. Identify each.
(a)
(b)
41) Sampson Co. sold merchandise to Batson Co. on account, $46,000, terms 2/15, net
45. The cost of the merchandise sold is $38,500. Sampson Co. issued a credit memo for
$1,500 for merchandise returned that originally cost $950. The Batson Co. paid the
invoice within the discount period. Prepare the entries that both Sampson and Batson
Companies would record for the above. Assume both Sampson and Batson use a
perpetual inventory system.
42) Journalize the following transactions:
43) Differentiate between financial and managerial accounting, addressing such issues
as what reports are generated, when, and for whom.
44) Describe the major differences in preparing the financial statements for a service
business and a merchandising business.
45) Describe a classified balance sheet.
46) Discuss the similarities and differences in reporting trading securities,
available-for-sale securities and held-to-maturity securities.
47) Kamin Companys mixing department had a beginning inventory of 4,000 units
which had accumulated conversion costs of $55,000. During the period, the mixing
department accumulated conversion costs of $92,000 and started 8,000 new units.
Ending inventory was 2,500 units which were 40% complete with respect to conversion
costs. Kamin uses the average cost method to cost inventories.
Required:
Calculate the cost per equivalent unit for conversion costs in the mixing department.
48) The account balances of Trendsetter Travel Services at December 31, 2014 are
listed below:
Prepare an income statement, statement of owners equity, and a balance sheet as of
December 31, 2014.
49) For Garrison Corporation, the working capital at the end of the current year is
$10,000 more than the working capital at the end of the preceding year, reported as
follows:
Required:
Has the current position improved? Explain.
50) Given the following information:
Variable cost per unit = $5.00
July fixed cost per unit = $7.00
Units sold and produced in July 25,000
What is total estimated cost for August if 30,000 units are projected to be produced and
sold?