1) A single basis for allocating service department costs to production departments
should be used for all service departments.
2) Callable preferred stock gives its holders the option of exchanging their preferred
shares into common shares at a specified rate.
3) In the partnership form of business, the owners are called stockholders.
4) A process cost summary shows the cost of a particular job manufactured in the
reporting period.
5) Stocks that pay large dividends on a regular basis are growth stocks.
6) A note payable can be used to extend the payment due on an account payable.
7) The contribution margin per unit is equal to the sales price per unit minus the
variable costs per unit.
8) A common rule of thumb is that a company’s acid-test ratio should be at least 2 or a
company may face near-term liquidity problems.
9) A perpetual inventory system continually updates accounting records for inventory
transactions.
10) In process costing, indirect materials are charged directly to Goods in Process
Inventory.
11) Internal operating activities include research and development, distribution, and
human resources.
12) The ______________ assumption assumes business will continue operating
indefinitely instead of being closed or sold.
13) Kim Jordan, founder of New Belgium Brewing Company, knew that accounting
systems were important for success. Explain how Kim used an accounting system to
assess business operations?
14) A _____________________ arises from a past decision and cannot be avoided or
changed; it is irrelevant to future decisions.
15) Time tickets for factory employees during the month of August are summarized as
follows:
Make the necessary journal entries to record factory payroll.
16) Refer to the following information about the Painting Department in the Richardson
Factory for the month of June. Richardson Factory uses the FIFO method of inventory
costing.
Compute the total cost of all units that were completed and transferred to finished
goods during June. Compute the total cost of the ending goods in process inventory.