The amount of cost of goods manufactured is transferred from the Work in Process
Inventory account to the Finished Goods Inventory account.
A just-in-time operation would attempt to eliminate inspection time.
Managers at all levels are evaluated in terms of their ability to manage their areas of
responsibility in keeping with organizational goals.
The accounting rate-of-return is calculated by dividing the cost of investment by annual
net cash inflows.
Although some management accountants strive to update their knowledge and skills,
such updating is within the realm of management accountants’ ethical standards.
Only not-for-profit organizations form joint ventures.
When the cost-adjusted-to-market method is used to account for an investment in stock,
dividends received are accounted for as an increase to dividend income.
Adjusting entries affect cash flows in the current period.
The adjusting entries involving Depreciation Expense’“Buildings and Supplies Expense
could be reversed.
Obsolescence is not a reason for an asset’s limited useful life.
Computerization has led to a large increase in the use of the perpetual inventory system.
A statement of stockholders’ equity can take the place of a statement of retained
earnings.
When a petty cash fund is established, the entry contains a credit to Cash.
If a state unemployment tax is imposed, then the federal unemployment tax is not
imposed.
The fewer debt securities a corporation issues, the greater the risk of default.
The stockholders’ equity in a corporation consists of capital contributed by stockholders
and retained earnings.
The standard fixed overhead rate is usually based on the expected number of standard
labor hours.
Compute the residual income for Zeus Company’s investment center from the
information below.
A.$600
B.$3,100
C.$4,350
D.$1,850
Use this balance sheet and income statement for the first year of operations for Cane
Construction to answer the following question. Use ending balances whenever average
balances are required for computing ratios.
The return on assets for Cane Construction is
A.80 percent.
B.70 percent.
C.36 percent.
D.133 percent.
If creditors’ payment terms are 60 days, financing period is 20 days, and it takes 30 days
to collect the amount from customers. What time does it take to sell the inventory?
A.60 days.
B.20 days.
C.30 days.
D.50 days.
Which of the following accounts is a contra account?
A.Accumulated Depreciation’“Office Furniture
B.Interest Payable
C.Depreciation Expense’“Office Furniture
D.Unearned Revenue
Failure to adjust for expired prepaid insurance at year end will result in an
A.overstatement of liabilities.
B.understatement of assets.
C.understatement of owner’s equity.
D.overstatement of net income.
Which of the following is both an estimated liability and a contingent liability?
A.Cosignature on $500 loan
B.Current portion of long-term debt
C.Warranty liability
D.Liability for dividends
A reversing entry could include a
A.debit to a revenue account.
B.debit to an expense account.
C.credit to a revenue account.
D.debit or a credit to Cash.
Areas that require accounting estimates include all of the following except
A.executive compensation.
B.residual value of assets.
C.amortization periods.
D.environmental cleanup costs.
Which of the following situations does not involve an accrual?
A.Recording accrued interest.
B.Recording depreciation.
C.Recording unrecorded wages.
D.Recording unrecorded revenue.
Hugley Corp. recently installed three just-in-time work areas in its blank key-making
division. The work areas will make large quantities of identical key blanks for door lock
manufacturers. Select the best answer for how Hugley should run its business and
account for product costs.
A.Backflush costing
B.ABC
C.JIT and ABM
D.ABC and backflush costing
Activity-based management includes all of the following except identifying
A.the level of customer satisfaction with a product or service.
B.the resources that are consumed by each activity.
C.activities as value-adding.
D.how resources are consumed by each activity.
The post-closing trial balance contains
A.neither real accounts nor nominal accounts.
B.nominal accounts only.
C.real accounts only.
D.both real accounts and nominal accounts.
Which of the following is a measure of liquidity?
A.payables turnover
B.the current ratio
C.working capital
D.All of these are used to evaluate a company’s liquidity.
The following information pertains to Patterson Corporation. Assume that all balance
sheet amounts represent both average and ending figures.
Patterson Corporation had 6,000 shares of common stock issued and outstanding. The
market price of Patterson common stock on December 31, 20×5, was $20. Patterson
paid dividends of $0.90 per share during 20×5.
What is the return on equity for this corporation? Round your answer to 1 decimal
place.
A.5.0 percent
B.10.0 percent
C.23.3 percent
D.53.3 percent
IFRS are important to multinational companies because
A.if they can use IFRS for all their operations, it would simplify the process of
preparing financial statements.
B.it would lower their taxes in each country in which they do business.
C.it would enable them to achieve higher profitability due to the different reporting
standards under IFRS.
D.All of these choices.
During 20×5, Oates Company had sales of $250,000, net income of $25,000, average
total assets of $350,000, dividend payments of $17,500, net cash flows from operating
activities of $36,000, purchases of plant assets of $37,500, and sales of plant assets of
$45,000. Cash flows to assets equals (Round amounts to one decimal place)
A.18.0 percent.
B.14.4 percent.
C.12.0 percent.
D.10.3 percent.
The Raquet Business is planning to manufacture a new type of tennis ball. Each tennis
ball would sell for $3.75 and would require $1.75 in variable costs. In addition, annual
fixed costs associated with the project would total $64,000.
a. Use the contribution margin approach to calculate:
(1) the breakeven point in units
(2) the breakeven point in dollars
b. Determine the operating income or loss at a sales volume of 30,000 tennis balls.
c. Determine the number of tennis balls that must be sold to earn a profit of $80,000.
Use this balance sheet and income statement for the first year of operations for Cane
Construction to answer the following question. Use ending balances whenever average
balances are required for computing ratios.
The return on equity for Cane Construction is
A.62.5 percent.
B.43.2 percent.
C.84 percent.
D.60 percent.
To calculate the total cost of goods manufactured from total manufacturing costs
A.subtract all period costs from total manufacturing costs.
B.add beginning and subtract ending finished goods inventory to total manufacturing
costs.
C.you must know how many goods were sold during the period.
D.add beginning and subtract ending work in process inventory to total manufacturing
costs.
An example of a monetary asset is
A.Accounts Receivable.
B.Copyright.
C.Retained Earnings.
D.Land.
Following are the financial statements for Flynn Corporation for the year ended
December 31, 20×5. Assume that all balance sheet amounts represent both average and
ending figures.
What is the return on assets for this corporation? Round your answer to one decimal
place.
A.37.5 percent
B.26.7 percent
C.20.0 percent
D.15.0 percent
The following facts pertain to Alameda Corporation for 20×5:
Based on the above facts, net income for 20×5 for Alameda Corporation amounted to
A.$207,500.
B.$182,500.
C.$232,500.
D.$257,500.
Preparing the work sheet and closing entries
A.saves money.
B.prevents mistakes.
C.provides a mechanism for applying the periodicity concept.
D.All of these choices.
Using the following data, prepare a multistep income statement for Romano’s Catering
Co. for the month ended February 28, 20×5.
Use the following information to calculate the ratios requested below. Round answers to
two decimal places. Show your work.
Mention the two cost allocation methods used in a process costing system.
William Wills Inc. estimates the following for 2014:
The ending cash balance for 2013 was $210,000.
Prepare a cash budget to determine the ending cash balance for 2014.
Northbrook Corporation issued $60,000 bonds payable to acquire Machinery. The
journal entry to record the transaction is:
Custom Enterprises had supplies on hand costing $3,840 at the beginning of the year
and $4,800 at the end of the year. During the year, supplies totaling $7,600 were
consumed. How much was the total cost of supplies purchased during the year?
What does the preparation of reversing entries accomplish?
Why do businesses need to keep some currency on hand?
If a debit to Supplies were posted as a credit, and a credit of the same amount to Cash
were posted as a debit, what would be the effect, if any, on the two accounts and on the
trial balance column totals?
What is a contingent liability, and how does it relate to the discounting of a note
receivable at the bank?