From the graph given below, identify the sales revenue line.
A) OB
B) AC
C) AD
D) AE
Black Hills Manufacturing has two processing departments, Department I and
Department II. During the year, direct materials worth $38,000 purchased on account
were assigned to Department I. At the end of the year, when the production cost report
for Department I was prepared, Black Hills assigned $40,000 to the units transferred
from Department I to Department II. The journal entry to record the transfer of units to
Department II will ________.
A) debit Work-in-Process Inventory—Department II for $38,000 and credit
Work-in-Process Inventory—Department I for $38,000
B) debit Work-in-Process Inventory—Department I for $40,000 and credit
Work-in-Process Inventory—Department II for $40,000
C) debit Work-in-Process Inventory—Department I for $38,000 and credit
Work-in-Process Inventory—Department II for $38,000
D) debit Work-in-Process Inventory—Department II for $40,000 and credit
Work-in-Process Inventory—Department I for $40,000
Which of the following statements is true of the worksheet?
A) The worksheet is a ledger.
B) The worksheet is a document used to summarize data to prepare financial
statements.
C) The worksheet is a financial statement issued to the public to communicate the
financial results of a company.
D) The worksheet is a journal.
Refer to the following list of liability balances at December 31, 2017.
What is the total amount of current liabilities?
A) $35,380
B) $27,880
C) $27,480
D) $26,280
A security is a ________.
A) regulation dealing with the transactions of investments
B) system aimed at protecting the interests of the market participants
C) share or interest representing financial value
D) process related to the valuation of a financial instrument
Which of the following is the correct formula for calculating return on investment?
A) Net profit / Sales
B) Gross profit / Sales
C) Operating income / Average total assets
D) Earnings available to stockholders / Number of outstanding shares of stock
The journal entry to record $1,600 of direct labor and $200 of indirect labor incurred
will include debit(s) to the ________.
A) Manufacturing Overhead account for $1,800
B) Work-in-Process Inventory account for $1,600 and Finished Goods Inventory
account for $200
C) Finished Goods Inventory account for $1,800
D) Work-in-Process Inventory account for $1,600 and Manufacturing Overhead account
for $200
Ross Corporation reported the following:
Which of the following is included in the entry to record the corporation’s purchase of
40,000 shares of its common stock for $10.00 per share?
A) Treasury Stock—Common is debited for $400,000.
B) Paid-In Capital From Treasury Stock Transactions is credited for -$25,000.
C) Retained Earnings is debited for $400,000.
D) Common Stock—$5 Par Value is credited for $200,000.
A check was written by a business for $549 but was recorded erroneously in the Cash
account as $459. How would this error be included on the bank reconciliation?
A) an addition on the book side
B) a deduction on the bank side
C) a deduction on the book side
D) an addition on the bank side
Gardner Machine Shop estimates manufacturing overhead costs for the coming year at
$318,000. The manufacturing overhead costs will be allocated based on direct labor
hours. Gardner estimates 5,000 direct labor hours for the coming year. In January,
Gardner completed Job A33, which used 70 machine hours and 23 direct labor hours.
What was the amount of manufacturing overhead allocated to Job A33? (Round any
intermediate calculations to the nearest cent, and your final answer to the nearest
dollar.)
A) $1,463
B) $4,452
C) $5,915
D) $4,543
Under process costing, the costs incurred by each department are reported in ________.
A) a job cost sheet
B) the Finished Goods Inventory account
C) the Cost of Goods Sold account
D) a production cost report
The following is summary of information presented on the financial statements of a
company on December 31, 2017.
With respect to net income, a horizontal analysis reveals ________. (Round your answer to
two decimal places.)
A) that net income is 168.00% of net sales revenue
B) a $25,000 increase in net income
C) a 168.00% decrease in net income
D) a 168.00% increase in net income
When preparing the operating budgets for a manufacturing company, the manufacturing
overhead budget ________.
A) represents the last period cost to be considered
B) only includes variable manufacturing overhead
C) only computes the budgeted overhead cost for the year
D) includes costs that are projected by the cost accountant and the production manager
Flint Systems is considering investing in production-management software that costs
$630,000, has $67,000 residual value, and leads to cost savings of $1,650,000 per year
over its five-year life. Calculate the average amount invested in the asset that should be
used for calculating the accounting rate of return.
A) $697,000
B) $630,000
C) $348,500
D) $67,000
Which of the following is true of freight in?
A) It is an administrative expense.
B) It is a selling expense.
C) It is the transportation cost on purchases.
D) It is the transportation cost on sales.
Connecticut Manufacturing began business on January 1. During its first year of
operation, Connecticut worked on five industrial jobs and reported the following
information at year-end:
Connecticut’s allocation of overhead costs left a debit balance of $1,400 in the
Manufacturing Overhead account, which was adjusted to zero at year-end. What was the
final balance in Cost of Goods Sold for the year ended December 31?
A) $55,300
B) $56,700
C) $53,900
D) $17,900
Which of the following statements is true of a trial balance?
A) A trial balance is the first step in the accounting cycle.
B) A trial balance is also known as a balance sheet.
C) A trial balance is a list of all accounts with their balances.
D) A trial balance is also known as the chart of accounts.
The following information has been provided by Squash Corporation:
The beginning balance of Work-in-Process Inventory account was ________.
A) $4,500
B) $5,000
C) $21,000
D) $9,400
Tryst, Inc. has a policy of accruing $2,300 for every employee as a vacation benefit.
Sarah, an employee, took a vacation. Which of the following is the correct journal entry
for the vacation benefit paid?
A)
B)
C)
D)
Nobula Corp. is preparing their budget for the second quarter and provides the
following data:
Assume that accounts payable pertains only to suppliers of inventory. Based on the above
data, the amount of Accounts Payable that should be shown in the budgeted balance sheet
as of June 30 is ________.
A) $23,600
B) $14,400
C) $13,800
D) $9,200
On the date of record for a dividend, the company ________.
A) issues new shares of stock on that date
B) disburses dividend payments to stockholders on that date
C) records the dividend payable amount on that date
D) determines who owns the shares of stock on that date
________ represents a short-term liability created by purchasing “on account.”
A) Accounts Receivable
B) Notes Payable
C) Accounts Payable
D) Expenses
When there are no beginning or ending balances in Finished Goods Inventory, variable
and absorption costing will result in ________.
A) different amounts for ending Finished Goods Inventory
B) the same operating income
C) different sales revenue
D) different amounts for cost of goods sold
The Washington Fish Company completed the flexible budget analysis for the second
quarter, which is given below.
Which of the following statements would be a correct analysis of the sales volume
variance for operating income?
A) decrease in sales price per unit
B) increase in variable cost per unit
C) increase in sales volume
D) increase in fixed costs
Orleans, Inc. was incorporated on January 1, 2014. Orleans issued 4,000 shares of
common stock and 1,200 shares of preferred stock on that date. The preferred stock is
cumulative, $100 par, with an 12% dividend rate. Orleans has not paid any dividends
yet. In 2017, Orleans had its first profitable year, and on November 1, 2017, Orleans
declared a total dividend of $63,000. What is the total amount that will be paid to
preferred shareholders?
A) $14,400
B) $57,600
C) $13,200
D) $63,000
Maple Corp. had net sales of $201,550 for the year ended December 31, 2017. Its
beginning and ending total assets were $88,200 and $112,500, respectively. Determine
Maple’s asset turnover ratio for the year ended December 31, 2017.
A) 0.5 times
B) 2.29 times
C) 1.11 times
D) 2.01 times
The materiality concept states that a company must ________.
A) report only such information that enhances the financial position of the company
B) perform strictly proper accounting only for significant items
C) report enough information for outsiders to make knowledgeable decisions about the
company
D) use the same accounting methods and procedures from period to period
The term “freight out” refers to ________.
A) transportation costs on purchases
B) cost of inventory purchased
C) costs that are not actually paid in cash
D) transportation costs on sales
Which of the following depreciation methods allocates a higher amount of depreciation
in earlier years than in later years?
A) the units-of-production method
B) the straight-line method
C) the double-declining-balance method
D) the first-in, first-out method
Isabelle’s Furniture manufactures a small table and a large table. The small table sells
for $700, has variable costs of $560 per table, and takes 10 direct labor hours to
manufacture. The large table sells for $1,600, has variable costs of $970, and takes eight
direct labor hours to manufacture. The company has a maximum of 5,000 direct labor
hours per month when operating at full capacity. If there are no constraints on sales of
either product, and the company could choose any proportions of product mix that they
wanted, what is the optimum product mix to maximize operating income of the
company?
A) 500 units of small and 625 units of large
B) 0 units of small and 625 units of large
C) 625 units of small and 500 units of large
D) 500 units of small and 0 units of large
Which of the following statements is true of variable costing?
A) It considers variable manufacturing overhead as period costs.
B) It considers fixed manufacturing overhead as product costs.
C) It considers variable selling and administrative costs as product costs.
D) It considers fixed selling and administrative costs as period costs.
Olympia Manufacturing uses a predetermined overhead allocation rate based on a
percentage of direct labor cost. At the beginning of the year, Olympia estimated total
manufacturing overhead costs at $1,010,000 and total direct labor costs at $830,000. In
June, Job 511 was completed. The details of Job 511 are shown below.
What is the amount of manufacturing overhead costs allocated to Job 511? (Round any
percentages to two decimal places and your final answer to the nearest dollar.)
A) $13,386
B) $32,247
C) $9,040
D) $21,777
Product costs are expensed ________.
A) when the products are consumed or sold
B) when the accounting period they are incurred in comes to an end
C) when the products are transferred to the Work-in-Process Inventory account
D) when the market value of products goes above the recorded value