Write-downs and restructurings increase current operating income and decrease future
income by shifting future costs to the future periods.
The death of a partner dissolves the partnership.
Trend analysis requires the establishment of a base year for comparison purposes.
No entry is required on the date of payment for a cash dividend.
Extraordinary repairs are recorded with a debit to Accumulated Depreciation.
The activity on the balance sheet to be presented in the financing activities section of
the statement of cash flows is based on an analysis of stockholders’ equity only.
Commercial paper consists of secured loans that are sold to the public.
When the periodic inventory system is used, a physical inventory should be taken at the
end of the fiscal year.
Depreciation for tax purposes is identical to depreciation for financial reporting
purposes.
The classification of a liability as current or long-term is not important to the evaluation
of a company’s liquidity.
The production method is an accelerated method of depreciation.
When the date of declaration and the payment date occur in the same period, the
amount of dividends shown on the statement of stockholders’ equity and on the
statement of cash flows will be equal.
One of the best ways to control a petty cash fund is through an imprest system.
A master budget consists of a set of operating budgets and a set of financial budgets for
a specific accounting period.
Inventory is classified as a long-term asset.
When a company records the purchase of 1 month of prepaid expense the transaction
does not affect the totals of assets or liabilities and owner’s equity.
The use of a cash register would be an example of a physical control.
The bonding of employees is an example of which feature of a good system of internal
control?
A.Authorization of transactions
B.Sound personnel policies
C.Separation of duties
D.Limited access to assets
The Sarbanes-Oxley Act of 2002 applies to all except
A.quarterly statements
B.annual reports
C.internal management reports
D.none of these are exceptions
Use this information to answer the following question.
In addition, beginning merchandise inventory was $11,000 and ending merchandise
inventory was $7,000.
Cost of goods sold for the period was
A.$31,000.
B.$25,000.
C.$38,000.
D.$23,000.
For each of the following oversights, state whether total assets will be understated,
overstated, or not affected.
______ a.Failure to record revenue earned but not yet received
______ b.Failure to record expired rent
______ c.Failure to record accrued interest in the bank
______ d.Failure to record depreciation
______ e.Failure to record accrued wages
______ f.Failure to convert unearned revenue to earned revenue
Use this inventory information for the month of May to answer the following question.
Assuming that a perpetual inventory system is used, what is cost of goods sold
(rounded) under the average-cost method?
A.$5,620
B.$6,420
C.$10,380
D.$12,040
Paul, Quinn, and Ralph have equities in a partnership of $120,000, $180,000, and
$100,000, respectively, and share income and losses in a ratio of 2:1:2, respectively.
The partners have agreed to admit Sandy to the partnership. Prepare entries in journal
form without explanations to record the admission of Sandy to the partnership under
each of the following assumptions:
a. Sandy invests $100,000 for a 30 percent interest, and a bonus is recorded for Sandy.
b. Sandy invests $150,000 for a one-fifth interest, and a bonus is recorded for the old
partners.
When accounting for property taxes, which of the following accounts normally would
not be credited?
A.Prepaid Property Taxes
B.Cash
C.Estimated Property Taxes Payable
D.Property Taxes Expense
Lopez Inc. sells 400 watches at $59 per watch and has variable costs of $26 per watch
and fixed costs of $4,000, what is the projected profit?
A.$4,000
B.$9,200
C.$7,248
D.$23,600
Which of the following companys would be required to files its Form 10-K
electronically?
A.A privately-held corporation with 1,500 shareholders.
B.A municipality with $20 million in assets.
C.A public company with 520 shareholders.
D.All of these choices.
Use this information to answer the following question.
The selected accounts and balances for Keystone Market appear as follows:
Cost of goods available for sale would appear on the income statement as
A.$124,000.
B.$71,000.
C.$131,000.
D.$61,000.
Use the following data of Daylight Incorporation, a company using a process costing
system, to answer the questions below.
The company uses average process costing method.
Equivalent units for conversion costs of Daylight during the month totaled
A.9,500.
B.8,190.
C.8,690.
D.9,000.
The depreciable cost of an asset is
A.the unexpired cost of the asset.
B.original cost minus residual value.
C.the expired cost of the asset.
D.original cost minus accumulated depreciation.
A digitized music tuner has been a staple in Smooth Sounds’ product line for several
years. Annual fixed costs of production and administration related to this product in the
past have been $643,500. Variable costs of production and sales have been $17 per unit.
The selling price in the past has been $28 per unit. Based on the appearance of
competing products on the market, management has asked you to do the following:
a. Compute the breakeven point in units and sales dollars for the present product.
b. Compute the breakeven point in units and sales dollars if the variable costs increased
by $3 per unit and the fixed costs increased by $14,375 per month.
c. Using the information from (b), an expected additional monthly advertising charge of
$10,000, and a monthly sales rate of 15,000 units, compute the competitive selling price
that the company must obtain in order to have a profit of $32,000 per month. (Round
answers to two decimal places.)
Which of the following is a unit-level activity?
A.Redesigning the process
B.Setting up the production process
C.Purchase of raw materials
D.Insuring the factory
Woodies Inc. produces wooden desks. Which of the following is not an indirect material
for Woodies?
A.Wood in a desk
B.Nails in a desk
C.Screws in a desk
D.Lubricants for production machinery
Which of the following transactions will result in the recognition of an expense?
A.Interest accrued on a bank loan.
B.A cash withdrawal by the owner.
C.Payment on accounts payable.
D.All of these choices.
Which of the following is not a temporary account?
A.Depreciation Expense’“Vehicles
B.Service Revenue
C.Unearned Revenue
D.Interest Income
Which of the following has an effect on total stockholders’ equity?
A.Conversion of preferred stock into common stock
B.Cash dividend
C.Stock dividend
D.Stock split
A large stock dividend should be recorded on the basis of
A.par or stated value.
B.original issue price.
C.market value.
D.cost.