The following details have been extracted from the budget of a merchandising
company.
Commissions and salaries expenses are paid 50% in the month to which they are incurred
and the balance in the next month.
Rent and miscellaneous expenses are paid as and when they occur. Insurance is prepaid at
the beginning of the quarter. Calculate cash payments for the selling and administrative
expenses for the first quarter of the next year.
A) $21,100
B) $49,200
C) $70,300
D) $26,200
Crabapples, Inc. purchases and sells boxes of dried fruit. The following information
summarizes its operating activities for the year:
What is the cost per box of dry fruits if Crabapples sold 4,000 boxes of dry fruit during the
year? (Round your answer to the nearest cent.)
A) $8.00
B) $42.00
C) $32.13
D) $24.13
Cameron Enterprises uses special journals. The company borrowed $10,000 from First
Bank. This transaction is recorded in the ________.
A) general journal
B) debt journal
C) cash receipts journal
D) cash payments journal
Unrealized gains or losses on available-for-sale investments occur when a company
adjusts the investment to ________.
A) fair value but has not yet disposed of the asset
B) fair value when an asset is disposed
C) average value but has not yet disposed of the asset
D) average value when an asset is disposed
McIntyre, Inc. has prepared its third quarter budget and provided the following data:
The cash balance on June 30 is projected to be $4,500. The company has to maintain a
minimum cash balance of $5,000 and is authorized to borrow at the end of each month to
make up any shortfalls. It may borrow in increments of $5,000 and has to pay interest
every month at an annual rate of 5%. All financing transactions are assumed to take place
at the end of the month. The loan balance should be repaid in increments of $5,000
whenever there is surplus cash. Calculate the final projected cash balance at the end of
August taking into consideration all the financing transactions.
A) $7,558
B) $(7,442)
C) $47,600
D) $15,000
The accounting principle that ensures all expenses are recorded during the period when
they are incurred and offsets those expenses against the revenues of the period is called
the ________ principle.
A) comparison
B) accrual
C) matching
D) revenue recognition
The fair value of an investment is the price that ________.
A) existed at the time of acquisition
B) would be received if the company were to sell the investment on the market
C) is always equal to the weighted average cost of the investment
D) is not relevant for trading investments
A company is analyzing its month-end results by comparing it to both static and flexible
budgets. During the previous month, the actual fixed costs were lower than the expected
fixed costs as per the static budget. This difference results in a(n) ________.
A) unfavorable flexible budget variance for fixed costs
B) favorable sales volume variance for fixed costs
C) favorable flexible budget variance for fixed costs
D) unfavorable sales volume variance for fixed costs
The ________ is a set of programs or instructions that drive the computer to perform
the work desired.
A) network
B) hardware
C) software
D) router
Which of the following statements is true of the budgeting process?
A) If a company carefully plans for its future, there will be no need to make
modifications during the budget period.
B) It is a continuous process that encourages communication.
C) It shows the actual performance of the business.
D) Managers and employees are motivated to accept the budget’s goals because they
enjoy having their work monitored and evaluated.
Which of the following sections of the statement of cash flows includes activities that
increase and decrease long-term assets?
A) the financing activities section
B) the operating activities section
C) the investing activities section
D) the non-cash investing and financing section
If a company wants to be a price-taker, which of the following strategies should be
taken?
A) Enter a competitive market and focus on cost cutting.
B) Produce a unique product.
C) Exploit the value of a fashionable brand name.
D) Differentiate the product clearly from the competitors.
WAXS-D, merchandisers of musical instruments, has provided the following details:
Credit terms are: 4/20, n/45, FOB shipping point. Calculate the net cost of inventory
purchased assuming that there are no other inventory-related transactions during the
month.
A) $715,000
B) $662,400
C) $650,000
D) $664,000
Anderson Furniture sold 15 desks, with a cost of $5,500, for $12,250 on account.
Anderson uses the periodic inventory system. Which of the following is the correct way
to record this transaction?
A)
B)
C)
D)
The journal entry to issue $600 of direct materials and $30 of indirect materials to
production involves debit(s) to the ________.
A) Work-in-Process Inventory account for $600 and Finished Goods Inventory account
for $30
B) Manufacturing Overhead account for $630
C) Work-in-Process Inventory account for $600 and Manufacturing Overhead account
for $30
D) Work-in-Process Inventory account for $630
On January 1, 2017, Ahrens Services issued $169,000 of six-year, 12% bonds when the
market interest rate was 11%. The bonds were issued for $172,000. Ahrens uses the
effective-interest method to amortize the bond premium. Semiannual interest payments
are made on June 30 and December 31 of each year. Which of the following is the
correct journal entry to record the first interest payment? (Round your answers to the
nearest dollar number.)
A)
B)
C)
D)
Caplico Company has prepared the following sales budget:
Cost of goods sold is budgeted at 40% of sales, and the inventory at the end of February
was $34,000. Desired inventory levels at the end of each month are 10% of the next
month’s cost of goods sold. What is the desired beginning inventory on June 1?
A) $24,800
B) $9,640
C) $96,400
D) $9,920
Sharon Foods, Inc. reported the following transactions for September 2017.
a) The business received $22,000 cash and issued common stock. It was credited to
Common Stock.
b) The business purchased office equipment for $9,000 for which $2,500 cash was paid
and the balance was put on a note payable.
c) Paid insurance expense of $1,500 cash.
d) Paid the September utility bill for $900 cash.
e) Paid $1,500 cash for September rent.
f) The business had sales of $11,000 in September. Of these sales, 60% were cash sales,
and the balance was credit sales.
g) The business paid $8,000 cash for office furniture.
What are the total liabilities at the end of September, 2017?
A) $11,000
B) $1,500
C) $6,500
D) $9,000
A listing of all accounts in numerical order is called a(n) ________.
A) Ledger
B) Journal
C) Income statement
D) Chart of accounts
Pena Corporation manufactures two styles of lamps—a Bedford Lamp and a Lowell
Lamp. The following per unit data are available:
Total fixed costs are $32,000, and Pena can sell a maximum of 10,000 units of each style
of lamp annually. Machine hour capacity is 30,000 hours per year. What is the contribution
margin per machine hour for the Lowell Lamp? (Round your answer to the nearest cent.)
A) $5.50 per machine hour
B) $13.50 per machine hour
C) $2.17 per machine hour
D) $17.50 per machine hour
________ are equity securities in which the investor owns between 20% and 50% of the
investee’s voting stock.
A) Held-to-maturity investments
B) Significant interest investments
C) Controlling interest investments
D) Available-for-sale investments
Mosher, Inc. had the following balances and transactions during 2017:
What would be reported for Ending Merchandise Inventory on the balance sheet at
December 31, 2017 if the perpetual inventory system and the first-in, first-out inventory
costing method are used?
A) $5,740
B) $17,000
C) $5,100
D) $8,200
Percentage of market share and rate of on-time deliveries are indicators of the
________ perspective.
A) quality management
B) internal business
C) customer
D) learning and growth
A company’s production department was experiencing a high defect rate on the
assembly line, which was slowing down production and causing wastage of valuable
direct materials. The production manager decided to recruit some highly skilled
production workers from another company to bring down the defect rate but was
worried that the higher wages of these workers might negatively affect operating
income. This would produce a(n) ________.
A) unfavorable direct materials cost variance
B) favorable direct labor cost variance
C) favorable direct labor efficiency variance
D) unfavorable direct materials efficiency variance
Rearranging plain-text messages by a mathematical process is known as ________.
A) password
B) phishing
C) encryption
D) virus
Which of the following will appear as a line item in the traditional format of an income
statement?
A) contribution margin
B) total variable costs (manufacturing and non-manufacturing)
C) total fixed costs (manufacturing and non-manufacturing)
D) gross profit
A company originally issued 13,000 shares of $6 par value common stock at $12 per
share. The board of directors declares a 12% stock dividend when the market price of
the stock is $22 a share. Which of the following is included in the entry to record the
declaration of a stock dividend?
A) Stock Dividends is debited for $34,320.
B) Stock Dividends is credited for $34,320.
C) Stock Dividends is debited for $18,720.
D) Paid-In Capital in Excess of Par—Common is credited for $18,720.
Beetles, Inc. recorded the following journal entry on March 2, 2016.
From the journal entry above, identify the transaction on March 2, 2016.
A) Beetles purchased goods worth $4,500 and signed a one-year note for the same.
B) Beetles sold goods for $4,500 cash.
C) Beetles received $4,500 for services to be performed in a later period.
D) Beetles paid $4,500 for services to be received at a later date.
Caleb Brown has been the sole owner of a bicycle sales and repair shop for several
years. Which of the following business types would limit Caleb’s personal liability
exposure to the entity’s debts?
A) partnership
B) limited-liability company
C) sole proprietorship
D) limited-liability partnership
Which of the following is a philosophy designed to integrate all organizational areas in
order to provide customers with superior products and services, while meeting
organizational goals throughout the value chain?
A) Supply Chain Management (SCM)
B) Just-in-Time (JIT) Management
C) Enterprise Resource Planning (ERP)
D) Total Quality Management (TQM)