If title to merchandise purchases passes to the buyer when the goods are delivered to the
buyer, the terms are
A.consigned
B.n/30
C.FOB shipping point
D.FOB destination
Answer:
Mandy Corporation sells a single product. Budgeted sales for the year are anticipated to
be 640,000 units, estimated beginning inventory is 98,000 units, and desired ending
inventory is 80,000 units. The quantities of direct materials expected to be used for each
unit of finished product are given below.
Material A .50 lb. per unit @ $ .60 per pound
Material B 1.00 lb. per unit @ $1.70 per pound
Material C 1.20 lb. per unit @ $1.00 per pound
The dollar amount of direct material B used in production during the year is:
A.$1,057,400
B.$1,193,400
C.$1,026,800
D.$1,224,000
Answer:
Alma Corp. issues 1,000 shares of $10 par value common stock at $14 per share. When
the transaction is recorded, credits are made to:
A.Common Stock $14,000.
B.Common Stock $10,000 and Paid-in Capital in Excess of Par Value $4,000.
C.Common Stock $4,000 and Paid-in Capital in Excess of Stated Value $10,000.
D.Common Stock $10,000 and Retained Earnings $4,000.
Answer:
A $300,000 bond was redeemed at 98 when the carrying value of the bond was
$296,000. The entry to record the redemption would include a
A.loss on bond redemption of $4,000.
B.gain on bond redemption of $4,000.
C.gain on bond redemption of $2,000.
D.loss on bond redemption of $2,000.
Answer:
Bob Evans owns a business, Beachside Realty, that rents condominiums and
furnishings. Below is the adjusted trial balance at December 31, 2014.
The entry required to close the expense accounts at the end of the period includes a:
A.a debit to Income Summary for $35,520
B.a credit to Income Summary for $35,520
C.a debit to Income Summary for $33,520
D.a credit to Income Summary for $33,520
Answer:
A company with working capital of $720,000 and a current ratio of 2.2 pays a $125,000
short-term liability. The amount of working capital immediately after payment is
A.$845,000
B.$595,000
C.$720,000
D.$125,000
Answer:
Mandy Corporation sells a single product. Budgeted sales for the year are anticipated to
be 640,000 units, estimated beginning inventory is 98,000 units, and desired ending
inventory is 80,000 units. The quantities of direct materials expected to be used for each
unit of finished product are given below.
Material A .50 lb. per unit X $ .60 per pound
Material B 1.00 lb. per unit X $1.70 per pound
Material C 1.20 lb. per unit X $1.00 per pound
The dollar amount of direct material C used in production during the year is:
A.$746,400
B.$724,800
C.$824,400
D.$758,160
Answer:
If accounts payable have increased during a period
A.revenues on an accrual basis are less than revenues on a cash basis.
B.expenses on an accrual basis are less than expenses on a cash basis.
C.expenses on an accrual basis are the same as expenses on a cash basis.
D.expenses on an accrual basis are greater than expenses on a cash basis.
Answer:
ABC Corporation has three service departments with the following costs and activity
base:
ABC has three operating divisions, Micro, Macro and Super. Their revenue, cost and
activity information are as follows:
What is the service department charge rate for the Accounting Department?
A.$714
B.$250
C.$625
D.$.004
Answer:
Cash flow per share is
A.required to be reported on the balance sheet
B.required to be reported on the income statement
C.required to be reported on the statement of cash flows
D.not required to be reported on any statement
Answer:
Production estimates for July are as follows:
For each unit produced, the direct materials requirements are as follows:
The number of pounds of materials A and B required for July production is:
A.216,000 lbs. of A; 36,000 lbs. of B
B.216,000 lbs. of A; 72,000 lbs. of B
C.234,000 lbs. of A; 39,000 lbs. of B
D.225,000 lbs. of A; 37,500 lbs. of B
Answer:
Antonio and Barbara are partners who share income in the ratio of 1:2 and have capital
balances of $40,000 and $70,000 at the time they decide to terminate the partnership.
After all noncash assets are sold and all liabilities are paid, there is a cash balance of
$80,000. What amount of loss on realization should be allocated to Barbara?
A.$80,000
B.$10,000
C.$20,000
D.$30,000
Answer:
The amount of cash to be reported on the balance sheet at June30 is the
A.total of the cash column in the cash receipts journal as ofJune 30
B.adjusted balance appearing in the bank reconciliation for June30
C.total of the cash column in the cash payments journal as of June 30
D.balance as of June 30 on the bank statement
Answer:
The Bitterns Company produces their product at a total cost of $89 per unit. Of this
amount $14 per unit is selling and administrative costs. The total variable cost is $58
per unit. The desired profit is $25 per unit. Determine the mark up percentage on (a)
total cost, (b) product cost and (c) variable cost concepts.
Answer:
The journal entry a company uses to record accrued vacation privileges for its
employees at the end of the year is
A.debit Vacation Pay Expense; credit Vacation Pay Payable
B.debit Vacation Pay Payable; credit Vacation Pay Expense
C.debit Salary Expense; credit Cash
D.debit Salary Expense; credit Salaries Payable
Answer:
Which of the items below is nota business entity?
A.entrepreneurship
B.proprietorship
C.partnership
D.corporation
Answer:
An overpayment error was discovered in computing and paying the wages of a Jamison
Tree Trimming employee. When Jamison receives cash from the employee for the
amount of the overpayment, which of the following entries will Jamison make?
A.Cash, debit; Wages Expense, credit
B.Wages Payable, debit; Wages Expense, credit
C.Wages Expense, debit, Cash, credit
D.Cash, debit; Wages Payable, credit
Answer:
The amount of the promissory note plus the interest earned on the due date is called the
A.interest value
B.maturity value
C.face value
D.issuance value
Answer:
The standard factory overhead rate is $7.50 per machine hour ($6.20 for variable
factory overhead and $1.30 for fixed factory overhead) based on 100% capacity of
80,000 machine hours. The standard cost and the actual cost of factory overhead for the
production of 15,000 units during August were as follows:
What is the amount of the factory overhead controllable variance?
A.$12,000 unfavorable
B.$12,000 favorable
C.$14,000 unfavorable
D.$26,000 unfavorable
Answer:
Miramar Industries manufactures two products, A and B. The manufacturing operation
involves three overhead activities – production setup, material handling, and general
factory activities. Miramar uses activity-based costing to allocate overhead to products.
An activity analysis of the overhead revealed the following estimated costs and activity
bases for these activities:
Each product’s total activity in each of the three areas are as follows:
What is the overhead allocated to Product B using activity-based costing?
A.$135,000
B.$175,000
C.$292,500
D.$285,500
Answer:
Raven Company is considering replacing equipment which originally cost $500,000
and which has $420,000 accumulated depreciation to date. A new machine will cost
$790,000. What is the sunk cost in this situation?
A.$370,000
B.$790,000
C.$80,000
D.$290,000
Answer:
Edison Corporation paid a dividend of $10 per share on its $100 par preferred stock and
$4 per share on its $20 par common stock. The market value of the common stock is
$80 per share. Edison’s dividend yield is:
A.5%
B.10%
C.25%
D.20%
Answer:
The particular analytical measures chosen to analyze a company may be influenced by
all of the following except:
A.industry type
B.capital structure
C.diversity of business operations
D.product quality or service effectiveness
Answer:
What type of company would normally offer trade discounts to its customers?
A.Service companies
B.Retailers
C.Wholesalers
D.On-line retailers
Answer:
An employee receives an hourly rate of $15, with time and a half for all hours worked
in excess of 40 during the week. Payroll data for the current week are as follows: hours
worked, 46; federal income tax withheld, $110; cumulative earnings for the year prior
to this week, $24,500; Social security tax rate, 6% on maximum of $100,000; and
Medicare tax rate, 1.5% on all earnings; state unemployment compensation tax, 3.4%
on the first $7,000; federal unemployment compensation tax, .8% on the first $7,000.
What is the net amount to be paid to the employee?
A.$569.87
B.$539.00
C.$625.00
D.$544.88
Answer:
The asset section of the Balance Sheet normally presents assets in
A.alphabetical order.
B.order of largest to smallest dollar amounts.
C.in the order what will be converted into cash.
D.any order.
Answer:
Dove Corporation began its operations on September 1 of the current year. Budgeted
sales for the first three months of business are $250,000, $320,000, and $410,000,
respectively, for September, October, and November. The company expects to sell 25%
of its merchandise for cash. Of sales on account, 70% are expected to be collected in
the month of the sale, 30% in the month following the sale.
The cash collections in November are:
A.$317,750
B.$389,750
C.$490,000
D.$410,000
Answer:
Unearned rent, representing rent for the next six months’ occupancy, would be reported
on the landlord’s balance sheet as a(n)
A.asset
B.liability
C.capital account
D.contra liability
Answer:
Target costing is arrived at by
A.taking the selling price and subtracting desired profit.
B.taking the selling price and adding desired profit.
C.taking the selling price and subtracting the budget standard cost.
D.taking the budget standard cost and reducing it by 10%.
Answer:
Materials purchased on account during the month amounted to $180,000. Materials
requisitioned and placed in production totaled $165,000. From the following, select the
entry to record the transaction on the day the materials were requisitioned by the
production department.
A.Materials165,000
Work in Process165,000
B.Work in Process180,000
Materials180,000
C.Work in Process165,000
Materials165,000
D.Work in Process165,000
Cash165,000
Answer:
Which statement below is not a reason for a corporation to buy back its own stock.
A.resale to employees
B.bonus to employees
C.for supporting the market price of the stock
D.to increase the shares outstanding
Answer:
Which of the following should be deducted from net income in calculating net cash
flow from operating activities using the indirect method?
A.depreciation expense
B.gain on sale of land
C.a loss on the sale of equipment
D.dividends declared and paid
Answer:
Which of the following costs are referred to as conversion costs?
A.Direct labor cost and factory overhead cost
B.Direct materials cost and direct labor cost
C.Factory overhead cost
D.Direct materials cost and factory overhead cost
Answer:
Singer and McMann are partners in a business. Singer’s original capital was $40,000
and McMann’s was $60,000. They agree to salaries of $12,000 and $18,000 for Singer
and McMann respectively and 10% interest on original capital. If they agree to share
remaining profits and losses on a 3:2 ratio, what will McMann’s share of the income be
if the income for the year was $30,000?
A.$20,000
B.$18,000
C.$18,600
D.$17,400
Answer: