Given the following information, determine the cost of goods sold for December 31
using the FIFO perpetual inventory method.
December 2: 5 units were purchased at $7 per unit.
December 9: 10 units were purchased at $9.40 per unit.
December 11: 12 units were sold at $35 per unit.
December 15: 20 units were purchased at $10.15 per unit.
December 22: 18 units were sold at $35 per unit.
A. $282.15
B. $332.10
C. $281.25
D. $290.70
E. $210.30
Answer:
Sales taxes payable:
A. Is an estimated liability.
B. Is a contingent liability.
C. Is a current liability for retailers.
D. Is a business expense.
E. Is a long-term liability.
Answer:
When a petty cash fund is in use:
A. Expenses paid with petty cash are recorded when the fund is replenished.
B. Petty Cash is debited when funds are replenished.
C. Petty Cash is credited when funds are replenished.
D. Expenses are not recorded.
E. Cash is debited when funds are replenished.
Answer:
How would the accounting equation of Boston Company be affected by the billing of a
client for $10,000 of consulting work completed?
A. +$10,000 accounts receivable, -$10,000 accounts payable.
B. +$10,000 accounts receivable, +$10,000 accounts payable.
C. +$10,000 accounts receivable, +$10,000 cash.
D. +$10,000 accounts receivable, +$10,000 consulting revenue.
E. +$10,000 accounts receivable, -$10,000 consulting revenue.
Answer:
Assuming production needs can be met, companies usually prefer:
A. A lower number of days sales in raw materials inventory.
B. A higher number of days sales in raw materials inventory.
C. That days sales in inventory be higher than the days in the accounting period.
D. That days sales in inventory be greater than the operating cycle
E. That days sales in inventory be equal to the days in the accounting period
Answer:
Held-to-maturity securities are:
A. Always classified as long-term liabilities.
B. Part of equity.
C. Debt securities that a company intends and is able to hold to maturity.
D. Equity securities that a company intends and is able to hold to maturity.
E. Equity securities that have a maturity value greater than cost.
Answer:
A company’s current assets were $17,980, its quick assets were $11,420, and its current
liabilities were $12,190. Its quick ratio equals:
A. 0.94
B. 1.07
C. 1.48
D. 1.57
E. 2.40
Answer:
From an ABC perspective, what causes costs to be incurred?
A. Financial transactions.
B. The volume of units produced.
C. Debits and credits.
D. Management decisions.
E. Activities.
Answer:
The Discounts Lost account:
A. Is used with the gross method of recording purchases to highlight the value of
purchase discounts taken.
B. Is used with the gross method of recording purchases to highlight the value of
purchase discounts available but not taken.
C. Is used to note situations where the accounting department has lost or misplaced
paperwork relating to inventory purchases.
D. Is used with the net method of recording purchases to highlight the value of purchase
discounts taken.
E. Is used with the net method of recording purchases to highlight the value of purchase
discounts available but not taken.
Answer:
A company has inventory of 15 units at a cost of $12 each on August 1. On August 5,
they purchased 10 units at $13 per unit. On August 12, they purchased 20 units at $14
per unit. On August 15, they sold 30 units. Using the FIFO periodic inventory method,
what is the value of the inventory at August 15 after the sale?
A. $140
B. $160
C. $210
D. $380
E. $590
Answer:
Wilder Inc. manufactures a product that contains a small computer chip. The company
has always purchased this computer chip from a supplier for $110 each. Wilder recently
upgraded its own manufacturing capabilities and now has enough excess capacity
(including trained workers) to begin manufacturing the computer chip instead of buying
it. The company prepared the following per unit cost projections of making the
computer chip, assuming that overhead is allocated to the part at the normal
predetermined overhead rate of 150% of direct labor cost.
The volume of output to produce the computer chip will not require any incremental
fixed overhead. Incremental variable overhead cost is $42 per computer chip. What is
the effect on income if Wilder decides to make the computer chips?
A. Income will decrease by $4 per unit.
B. Income will increase by $4 per unit.
C. Income will increase by $38 per unit.
D. Income will decrease by $38 per unit.
E. Income will increase by $44 per unit.
Answer:
Variable budget is another name for:
A. Cash budget.
B. Flexible budget.
C. Fixed budget.
D. Manufacturing budget.
E. Rolling budget.
Answer:
Reference: 22_03
Bridgestreet, Inc. has three operating departments: Cutting, Assembling, and Finishing.
Cutting has 5,000 employees and occupies 15,000 square feet. Assembling has 4,000
employees and occupies 12,000 square feet. Finishing has 1,000 employees and
occupies 23,000 square feet. Indirect factory costs for the current period were
Administrative $170,000 and Maintenance $212,000. Administrative costs are allocated
to operating departments based on the number of workers and maintenance costs are
allocated to operating departments based on square footage occupied.
Based on the preceding data, determine the administrative cost allocated to each
operating department of Bridgestreet, Inc.
A. Cutting: $ 56,666 Assembling: $ 56,666 Finishing: $ 56,666
B. Cutting: $ 5,000 Assembling: $ 4,000 Finishing: $ 1,000
C. Cutting: $127,333 Assembling: $127,333 Finishing: $127,333
D. Cutting: $ 85,000 Assembling: $ 68,000 Finishing: $ 17,000
E. Cutting: $191,000 Assembling: $152,800 Finishing: $ 38,200
Answer:
_______________________ generally consist of a company’s cumulative net income
less any net losses and dividends declared since its inception.
Answer:
Describe the journal entries required to record the issuance of bonds and the payment
of bond interest.
Answer:
________________ is the amount remaining from sales revenues after cost of goods
sold has been deducted.
Answer:
What costs are assigned to merchandise inventory?
Answer:
The _______________________ is a record containing all accounts (with balances)
used by a company.
Answer:
What is the main difference between the income statement of a manufacturer and that of
a merchandiser?
Answer:
Identify and discuss the factors involved in withholding federal income taxes from
employees pay.
Answer:
Describe the recording procedures for the issuance, retirement, and paying of interest
for notes.
Answer:
ABC Co. sold $80,000 of accounts receivable to First Bank and incurred a 2%
factoring fee. Prepare the journal entry for ABC Co. to record the sale.
Answer:
The document the purchasing department sends to the vendor that is used to place an
order is the __________________________.
Answer:
The internal document that is used to notify the appropriate person that ordered goods
have been received and to describe the quantities and condition of the goods is
the____________________.
Answer:
A company has a current ratio of 3.4, total liabilities of $350,240 and long-term notes
payable of $120,000. What are total current assets for the company?
Answer:
What is the purpose of the petty cash account?
Answer:
A __________________________ helps control costs and expenses and evaluates
managers’ performance by assigning costs and expenses to the managers responsible for
controlling them.
Answer:
An investing company that owns more than ________ of another (investee) company’s
voting stock is presumed to have controlling influence over the investee.
Answer:
___________________ is a promise of payment from customers to sellers.
Answer:
Describe at least five benefits of budgeting.
Answer:
Employer payroll taxes are an added employee _______________ beyond the wages
and salaries earned by the employees.
Answer:
The ________________________ overhead rate method uses multiple volume-based
measures to allocate overhead costs to products.
Answer: