As long as the action is within the scope of the partnership, any partner can bind the
partnership.
When the balance of a petty cash fund is increased, the entry would contain a credit to
Petty Cash.
Intangible assets are also called wasting assets.
To succeed, an organization must add value for all of its stakeholders in the short term
only.
When individuals invest property in a partnership, the property becomes an asset of the
partnership and is owned jointly by the partners.
Net income is a measure of profitability.
There is sufficient information on a post-closing trial balance to prepare an income
statement.
Independence means subordinating personal gain to service and the public trust.
Prior to the sale of an asset, depreciation should be updated and recorded.
Accounts Receivable is an asset that is considered nonmonetary in nature.
Total manufacturing costs decrease the balance of the Work in Process Inventory
account.
Group depreciation is an appropriate method for a large company calculating
depreciation on office equipment.
The matching rule relates to credit losses by stating that Uncollectible Accounts
Expense should be recorded
A.in the period of the loss.
B.for an exact amount.
C.in the same period as allowed for tax purposes.
D.in the period of the sale.
Which of the following entities probably would use a process costing system?
A.An oil refinery
B.A yacht builder
C.A custom furniture company
D.A website designer
A net loss results in a decrease in
A.revenues.
B.expenses.
C.owner’s equity.
D.liabilities.
A quick ratio that is about equal to the current ratio indicates that
A.inventories represent a large portion of current assets.
B.the company has a low inventory turnover.
C.inventories represent a small portion of current assets.
D.the company has a high inventory turnover.
Retleb Manufacturing Company noticed that, during its busiest month of 2014,
maintenance costs totaled $15,400, resulting from the production of 32,000 units.
During its slowest month, $12,600 in maintenance costs were incurred, resulting from
the production of 24,000 units. Use the high-low method to estimate the maintenance
cost that the company will incur if it produces 20,000 units?
A.$7,000
B.$11,200
C.$8,400
D.$2,800
Saguaro Corporation has total contributed capital of $840,000 and retained earnings of
$427,000. It has 1,000 shares of $100 par value preferred stock with no dividends in
arrears and 5,000 shares of $100 par value common stock. The preferred stock is
callable at 105. The book value of each share of common stock is
A.$225.40.
B.$120.40.
C.$232.40
D.$253.40.
Dividends yield equals
A.market price per share divided by dividends per share.
B.net income divided by dividends per share.
C.dividends per share divided by net income.
D.dividends per share divided by market price per share.
The Sarbanes-Oxley Act of 2002 requires all of the following to certify a public
company’s system of internal control, except for the
A.chief financial officer.
B.the independent auditors.
C.the board of directors.
D.chief executive officer.
A revenue expenditure results in a
A.debit to an expense account.
B.credit to an expense account.
C.debit to an asset account.
D.credit to an asset account.
Treasury shares plus outstanding shares equal
A.unissued shares.
B.subscribed shares.
C.authorized shares.
D.issued shares.
The direct method of preparing the statement of cash flows
A.results in more cash from operating activities, but less cash from investing activities,
and the same total cash flow as the indirect method.
B.converts each item on the income statement to its cash equivalent.
C.reports interest and dividends received in the investing activities section.
D.All of these choices.
Holders of preferred stock normally do not have
A.preference as to dividends.
B.preference as to assets in liquidations.
C.full voting rights.
D.ownership interests in the corporation.
Which of the following is not included in performance reports?
A.Standard costs
B.Normal capacity
C.Total plantwide overhead costs
D.Budgeted costs
The breakeven formula adjusted for profits may be stated as
A.Sales Revenue = Variable Costs Fixed Costs + Profit
B.Sales Revenue = Variable Costs Fixed Costs Profit
C.Variable Costs + Fixed Costs Profit = Sales Revenue
D.Sales Revenue = Variable Costs + Fixed Costs + Profit
The financial statements of nonpublic companies are not required to be audited by an
independent CPA.
Gomez Company purchases a piece of equipment on Jan. 2, 2014, for $30,000. The
equipment has an estimated life of eight years or 50,000 units of production and an
estimated residual value of $3,000. Lester uses a calendar fiscal year. The entry to
record the amount of depreciation for 2014, using the production method and assuming
8,000 units are produced, is
A.debit to Depreciation Expense, 4,000; credit to Cash, 4,000
B.debit to Cash, 4,160; credit to Accumulated Depreciation, 4,160
C.debit to Depreciation Expense, 4,320; credit to Accumulated Depreciation, 4,320
D.debit to Depreciation Expense, 4,800; credit to Accumulated Depreciation, 4,800
Managerial accounting information is primarily used by
A.lenders.
B.supply-chain partners.
C.governmental agencies.
D.customers.
Sol Del Inc. was preparing the master budget for 2014 when a computer virus deleted
some of the data contained in the cash budget for the first quarter shown below:
a. Determine the missing amounts.
b. Should Sol Del Inc. anticipate borrowing during the quarter? How much and when?
What effect would this have on the cash budget shown? When will the company have
sufficient funds available to pay back any loans?
Use the following information regarding Larson Company to answer the question
below.
1> Established a petty cash fund in the amount of $250.
2> Reimbursed the petty cash fund given the following petty cash fund disbursements:
a. Payment for postage, $20.
b. Payment for supplies, $70.
3> Increased the petty cash fund to $300.
4> Cash over at the end of the first period was $5.
The entry to record the increase in the Petty Cash account would include a
A.debit to the Petty Cash account for $50.
B.credit to the Petty Cash account for $50.
C.memorandum entry only in the ledger.
D.debit to the Cash account for $50.
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 debt to equity ratio for Cane Construction is
A.16-2/3 percent.
B.20 percent.
C.80 percent.
D.83-1/3 percent.
Bianca Publishing has a number of investment centers to track on a day-to-day basis.
The following represent key figures related to one of Bianca’s investment centers for
February 2014:
What is the investment center’s ROI for February 2014 (rounded percentage answer to
two decimal places)?
A.38.81 percent
B.76.40 percent
C.61.19 percent
D.23.60 percent
Which of the following adjustments most likely would be reversed?
A.Adjustment to record depreciation expense
B.Adjustment to allocate prepaid insurance to the current period
C.Adjustment to determine supplies expense for the period
D.Adjustment to accrue salaries
Which of the following costs is not an inventoriable cost?
A.Cost to ship products to a customer
B.Cost of factory machinery used in production
C.Cost to design the product
D.Plant supervisor’s salary
Discuss the qualitative factors that should be considered in the evaluation of proposals
in addition to the quantitative factors.
Given the following ledger account and postings, complete the Balance column.
Assume no previous postings in the account
Discuss the keys to preparing a performance report based on standard costs and related
variances.
A partner invests into a partnership a building with a $50,000 carrying value and
$80,000 fair market value. The related mortgage payable of $25,000 is assumed by the
partnership. The entry to record the investment in partnership is: