Using or not using the contribution margin for cost-volume-profit computations will not
change the resulting amount of breakeven units in a given situation.
Bonding provides a guarantee against theft.
Under the perpetual inventory system, the return of goods to the supplier is recorded
with a credit to Merchandise Inventory.
Participative budgeting involves only personnel at top levels of the organization.
A company’s management information system is a subsystem of its accounting
information system.
If fixed costs are $180,000, variable costs are $38 per unit, and the product sells for
$70, the breakeven point in sales dollars is $5,625.
The 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.
Partner A purchases partner B’s $3,000 interest from partner B for $5,000. The entry to
record the transaction is for $3,000.
Full disclosure of all important facts aids in overcoming the limitations of accounting
information.
The degree of separation of duties varies with the size of the business.
Which of the following statements is not TRUE of performance reports?
A.Performance reports should be tailored to the responsibilities of the manager or
department for which they are prepared.
B.Performance reports normally report standard costs and variances.
C.Performance reports should contain space for explanation of variances.
D.Performance reports do not present the causes of variances.
Budgetsare plans of action based on forecasted transactions, activities, and events.
A capital expenditure is an expenditure that benefits only the current accounting period.
Long-term notes and bonds have similar effects on the financial statements.
The statement of cash flows discloses the effect on cash of the purchase and sale of both
short- and long-term investments.
The account ‘˜Wages Payable’ would appear on the income statement.
Commercial paper normally is issued by companies with poor credit ratings.