Return on assets is a combination of the profit margin and the asset turnover.
To increase their levels of inventory, many merchandisers and manufacturers use
supply-chain management in conjunction with a just-in-time operating environment.
One example of a periodic independent verification is the bank reconciliation.
In cost-volume-profit analysis, sales revenue is computed by multiplying units sold by
the selling price per unit, and the targeted profit is projected by management.
Market is the amount that a merchandising company would pay at the present time for
the same goods as are in the inventory and from the usual suppliers in the usual
quantities
Asset turnover is most closely associated with a company’s liquidity position.
Total costs and savings are examples of qualitative factors.
The carrying value of a bond is also referred to as its present value.
When a partner invests a noncash asset into the partnership, the partner’s Capital
account is debited and an asset account is credited.
A company that manufactures potato chips would probably use a process costing
system.
An ordinary annuity is a series of equal payments made at the end of equal intervals of
time.
In the calculation of free cash flow, dividends and sales of plant assets are both
deducted.
The product unit cost is the sum of the cost elements added in all production department
processes.
Many indirect costs in a traditional system become direct costs in a JIT system.
A mixed costs line, plotted on a graph, will start at the Y axis at the amount of fixed
cost.
Which of the following would not appear in the owner’s equity section of a corporation?
A.I. Muller, Capital
B.Retained earnings
C.Additional paid-in capital
D.Common stock
When a single-column purchases journal is used,
A.only credit purchases of merchandise for resale to customers are recorded.
B.credit purchases of items other than merchandise are recorded in the general journal.
C.cash purchases of merchandise for resale to customers are recorded in the cash
payments journal.
D.All of these choices.
Equipment costing $60,000 with a residual value of $6,000 and an estimated life of
eight years has been depreciated using the straight-line method for two years. Assuming
a revised estimated total life of five years, the depreciation expense for year 3 would be
A.$6,750.
B.$9,000.
C.$13,500.
D.$10,800.
A sale on March 21 with terms of n/10 eom is due to be collected by
A.April 30.
B.March 31.
C.April 10.
D.April 1.
Manix Company has gathered the following data:
Fixed costs are $233,280. Calculate the weighted-average breakeven point for Manix.
(Do not round your intermediate calculations.)
A.34,500 units
B.28,800 units
C.25,200 units
D.29,900 units
Which of the following is irrelevant in computing a machine’s depreciation expense
using the production method?
A.Actual units produced in a given period
B.Residual value
C.Estimated useful life in years
D.Estimated units produced over its life
Which of the following would normally be included in the inventory?
A.Outgoing goods shipped FOB destination
B.Goods sold but not yet delivered
C.Incoming goods shipped FOB destination
D.Goods held on consignment
Interest expense on a mortgage would be classified on a multistep income statement
under the heading
A.general and administrative expenses.
B.selling expenses.
C.cost of goods sold.
D.other revenue and expenses.
The normal selling price of Daniel Company’s product is $35 per unit. The costs of
production are: direct materials, $6; direct labor, $5; variable overhead, $5; and fixed
overhead, $6 (based on normal capacity). The company has received a special order for
12,800 units at a unit sales price of $19. There is ample unused capacity to fill the order
and $2 per unit will be incurred for additional packaging. If the order is accepted,
operating income will
A.increase by $12,800.
B.decrease by $38,400.
C.increase by $38,400.
D.decrease by $12,800.
The key steps followed by the managers in capital investment analysis include all of the
following except
A.identification of capital investment needs.
B.preliminary screening.
C.formal requests for capital investments.
D.analyzing sunk costs.
In a just-in-time operating environment, the key measure of cost incurred is
A.machine hours.
B.push-through time.
C.throughput time.
D.indirect costs.
An adjusting entry was made on the last day of the previous fiscal year debiting
Accounts Receivable and crediting Service Revenue. If a reversing entry has been
made, then at the time of cash collection
A.the accountant needs to find out how much of the cash collection applies to the
current period and how much applies to the previous period.
B.the accountant will debit Accounts Receivable and credit Service Revenue.
C.the accountant will debit Cash and credit Service Revenue.
D.the accountant will debit Service Revenue and credit Cash.
Total partners’ equity will not change when a withdrawing partner
A.withdraws assets equal to his or her capital balance
B.withdraws assets amounting to less than his or her capital balance
C.sells his or her interest to a new or remaining partner
D.withdraws assets amounting to greater than his or her capital balance
Lincoln Company engaged in this transaction:
Received dividends on marketable securities held as a long-term investment.
Indicate which section, if any, the above transaction would appear in, or relate to, on a
statement of cash flows.
A.Schedule of noncash investing and financing transactions.
B.Operating activities section.
C.Financing activities section.
D.Investing activities section.
The 20×5 income statement for Almond Company showed rent expense of $10,800 and
salaries expense of $7,200. The related balance sheet account balances at year end for
last year and this year were as follows:
a. Compute cash paid for rent during the year.
b. Compute cash paid for salaries during the year.
Use the following information to calculate at or for the year ended December 31, 2014:
(a) net income, (b) owner’s capital, (c) total liabilities and owner’s equity, and (d)
accounts receivable.
Which of the following is reported as a noncash investing and financing transaction on
the statement of cash flows?
A.Purchase of a building by taking out a long-term mortgage.
B.Purchase of treasury stock.
C.Payment of long-term debt.
D.Sale of preferred stock.
Which of the following is an irrelevant cost in deciding whether or not to eliminate a
producing department?
A.The current residual value of the department’s equipment
B.The salary of a supervisor who would be laid off
C.The carrying value of the department’s equipment
D.Revenue that could be generated by renting out the department’s space
Noncash investing and financing transactions
A.appear as a separate schedule on the statement of cash flows.
B.appear in either the investing or financing activities section, but not both.
C.are excluded from the statement of cash flows.
D.appear in both the investing and financing activities sections.
Johnson Technology specializes in graphic design and video production. In October
2014, the company incurred the following costs for providing services to one of its
clients.
Johnson Technology’s contract with the client discloses 20% profit margin on the cost
incurred. Determine the total amount to be received by the company from its client.
A.$3,500
B.$3,860
C.$4,200
D.$2,800
Bear Country produces hand-carved wooden bears and uses a job order costing system.
The following are data on the three jobs worked on in the company’s first month of
operations:
Overhead cost is applied to job orders on the basis of direct labor hours at a
predetermined rate of $10 per hour. The Smokey and Rocky bears were completed
during the month, and the Curious bears remained in work in process at the end of the
month.
a. Compute the cost transferred to finished goods during the month.
b. Compute the unit cost for a Rocky bear.
The owner’s Capital, Withdrawals, and Income Summary accounts for Laurel Repair
Company for the accounting period are presented below in T account form after the
recording and posting of closing entries:
The total amount of expenses for the period is
A.$200.
B.$400.
C.$900.
D.$500.
During October, Department A of Answer Inc. started 320,000 units of product in a
particular manufacturing process. The beginning work in process inventory was 50,000
units, and the ending inventory was 30,000 units. Direct materials are introduced at the
start of processing, and beginning and ending inventories are considered to be 50
percent complete with respect to conversion costs. Department A uses the FIFO costing
method.
The number of equivalent units for conversion costs of Answer was
A.345,000.
B.330,000.
C.360,000.
D.375,000.
As the staff accountant for Investment Center 916, calculate the October 2014 ROI,
using the following information:
Round your answers to two decimal places.
How can activity-based systems help managers in a global marketplace?
Tire Corp. had income before income taxes of $4,000,000 and interest expense of
$450,000. Calculate Tire’s interest coverage ratio, rounded to one decimal place.
Briefly describe each of the following type of bonds:
1) Convertible bonds.
2) Callable bonds.
3) Debenture bonds.
4) Serial bonds.
5)Term bonds.
Indicate by letter the agency that applies each statement.
Use this information to answer the following question.
The transactions below pertain to Dunhill Company, whose fiscal year ends April 30.
The April 30 adjusting entry, rounded to the nearest dollar, to accrue the interest
expense on the note payable is:
Using the direct method, calculate the amount of cash receipts from sales. Show your
work
If there is no change in the number of shares authorized and issued from one year to the
next, but there is a change in the number of shares outstanding on those same dates,
how would you explain that change?
During the performance of the steps in the accounting cycle, the trial balance and the
adjusted trial balance are prepared at two key points. Using specific names where
applicable, discuss the time of preparation and the purpose served by both of these trial
balances.
Following are the income statement and other information for Zambrano Corporation.
Accounts receivable (net) decreased by $1,500 during the year. Inventory increased by
$900, and Accounts Payable decreased by $1,200 during the year. Income Taxes
Payable increased by $300 during the year.
Prepare a schedule of cash flows from operating activities using the indirect method.
