Based on the following data for the current year, what is the number of days’ sales in
inventory?
A.51.2
B.44.4
C.6.5
D.7.5
Answer:
What is the term used to describe expenses that are incurred for the benefit of a specific
department?
A.Indirect expenses
B.Margin expenses
C.Departmental expenses
D.Direct expenses
Answer:
Calculate the Direct Labor Time Variance using the above information
A.$2,362.50 Favorable
B.$2,362,50 Unfavorable
C.$6,540.00 Favorable
D.$6,540.00 Unfavorable
Answer:
Below is a table for the present value of $1 at compound interest.
Below is a table for the present value of an annuity of $1 at compound interest.
Using the tables above, what would be the present value of $15,000 (rounded to the
nearest dollar) to be received at the end of each of the next two years, assuming an
earnings rate of 6%?
A.$27,495
B.$26,040
C.$30,000
D.$25,350
Answer:
Notes or accounts receivables that result from sales transactions are often called
A.non-trade receivables.
B.trade receivables.
C.merchandise receivables.
D.sales receivables.
Answer:
The following budget data are available for Oldest Company:
If factory overhead is to be applied based on direct labor hours, the predetermined
overhead rate is
A.$7.50
B.$.13
C.$.061
D.$16.50
Answer:
When a company discards machinery that is fully depreciated, this transaction would be
recorded with the following entry
A.debit Accumulated Depreciation; credit Machinery
B.debit Machinery; credit Accumulated Depreciation
C.debit Cash; credit Accumulated Depreciation
D.debit Depreciation Expense; credit Accumulated Depreciation
Answer:
Prepare the required entries for the following transactions:
(a) Austin Company pays daily wages of $645 (Monday – Friday). Paydays are every
other Friday. Prepare the Monday, January 31 adjusting entry assuming that the last
payday was Friday, January 21.
(b) Prepare the journal entry to record the Austin Company’s payroll on Friday,
February 4.
(c) Annual depreciation expense on the company’s fixed assets is $39,600. Prepare the
adjusting entry to recognize depreciation for the month of January.
(d) The company’s Office Supplies account shows a debit balance of $3,755. A count of
office supplies on hand on January 31 shows $635 worth of supplies on hand. Prepare
the January 31 adjusting entry for Office Supplies.
Answer:
Period costs include:
A.current assets on the balance sheet
B.current liabilities on the balance sheet
C.operating costs that are shown on the income statement when products are sold
D.operating costs that are shown on the income statement in the period in which they
are incurred
Answer:
An investor purchased 500 shares of common stock, $25 par, for $19,250.
Subsequently, 100 shares were sold for $35 per share. What is the amount of gain or
loss on the sale?
A.$3,500 gain
B.$350 gain
C.$350 loss
D.$500 gain
Answer:
Differentiate between:
a) direct materials versus indirect materials
b) direct labor versus indirect labor
Answer:
A computerized accounting system will not allow which of the following type of
journalizing error?
A.Entering an amount in an incorrect account
B.Reversing the debit and credit account in a transaction
C.Processing a transaction that has unequal debits and credits.
D.Entering a transaction with an incorrect date.
Answer:
Which of the following accounts would be included in the chart of accounts of a
merchandising company using the: (a) periodic inventory system, (b) perpetual
inventory system, or (c) both systems?
(1) Purchases
(2) Freight in
(3) Sales Returns and Allowances
(4) Delivery Expense
(5) Purchases Returns and Allowances
Answer:
As of January 1 of the current year, the Grackle Company had accounts receivables of
$50,000. The sales for January, February, and March of 2012 were as follows:
$120,000, $140,000 and $150,000. 20% of each month’s sales are for cash. Of the
remaining 80% (the credit sales), 60% are collected in the month of sale, with
remaining 40% collected in the following month. What is the total cash collected (both
from accounts receivable and for cash sales) in the month of January?
A.$$74,000
B.$110,000
C.$71,600
D.$131,600
Answer:
The debits to Work in Process–Assembly Department for April, together with data
concerning production, are as follows:
All direct materials are placed in process at the beginning of the process and the first-in,
first-out method is used to cost inventories. The materials cost per equivalent unit for
April is:
A.$3.00
B.$3.80
C.$2.92
D.$2.31
Answer:
The Flapjack Corporation had 8,200 actual direct labor hours at an actual rate of $12.40
per hour. Original production had been budgeted for 1,100 units, but only 1,000 units
were actually produced. Labor standards were 7.6 hours per completed unit at a
standard rate of $13.00 per hour.
Compute the labor rate variance.
A.4,920U
B.4,920F
C.4,560U
D.4,560U
Answer:
The amount of a promissory note is called the
A.realizable value
B.maturity value
C.face value
D.proceeds
Answer:
Which of the following is an advantage of the cash payback method?
A.It is easy to use.
B.It takes into consideration the time value of money.
C.It includes the cash flow over the entire life of the proposal.
D.It emphasizes accounting income.
Answer:
A legal document that indicates the name of the issuer, the face value of the bond and
such other data is called
A.trading on the equity.
B.convertible bond.
C.a bond debenture.
D.a bond certificate.
Answer:
Which of the following is a manufacturing business?
A.Amazon.com.
B.Wal-Mart.
C.Ford Motors.
D.Delta Airlines
Answer:
The bond indenture may provide that funds for the payment of bonds at maturity be
accumulated over the life of the issue. The amounts set aside are kept separate from
other assets in a special fund called a(n)
A.enterprise fund
B.sinking fund
C.special assessments fund
D.general fund
Answer:
Balance sheet and income statement data indicate the following:
Based on the data presented above, what is the number of times bond interest charges
were earned (round to two decimal places)?
A.5.67
B.4.33
C.3.24
D.3.50
Answer:
Mandolin Company has two divisions. Division A is interested in purchasing 10,000
units from Division B. Capacity is available for Division B to produce these units. The
per unit market price is $30 per unit, with a variable cost of $17. The manager of
Division A has offered to purchase the units at $15 per unit. In an effort to make this
transfer price beneficial for the company as a whole, what is the range of prices that
should be used during negotiations between the two divisions?
A.$15 to $30
B.$15 to $17
C.over $30
D.$17 to $30
Answer:
Temporary investments such as in trading securities are
A.recorded at cost but reported at fair market value
B.recorded at cost and reported at cost
C.recorded at cost but reported at lower of cost or fair market value
D.recorded at fair market value and reported at fair market value
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 revenue accounts at the end of the period includes a:
A.debit to Income Summary for $37,000
B.credit to Income Summary for $38,300
C.debit to Income Summary for $38,200
D.credit to Income Summary for $37,000
Answer:
On January 1, 2014, Gemstone Company obtained a $165,000, 10-year, 7% installment
note from Guarantee Bank. The note requires annual payments of $23,492, with the first
payment occurring on the last day of the fiscal year. The first payment consists of
interest of $11,550 and principal repayment of $11,942. The journal entry to record the
payment of the first annual amount due on the note would include:
A.a debit to cash of $11,942
B.a credit to Interest Payable of $11,550
C.a debit to Notes Payable of $11,942
D.a debit to Interest Expense of $23,492
Answer:
The classification and normal balance of the accounts payable account is
A.an asset with a credit balance
B.a liability with a credit balance
C.owner’s equity with a credit balance
D.revenue with a credit balance
Answer:
Calculate income from operations for Jonas Company based on the data given below:
A.753,250
B.700,750
C.162,750
D.215,250
Answer:
If bonds are issued at a discount, it means that the
A.bondholder will receive effectively less interest than the contractual rate of interest.
B.market interest rate is lower than the contractual interest rate.
C.market interest rate is higher than the contractual interest rate.
D.financial strength of the issuer is suspect.
Answer:
On January 1, 2014, Blanton Company’s Valuation Allowance for Trading Investments
account has a debit balance of $23,200. On December 31, 2014, the cost of the trading
securities portfolio was $80,000. The fair value was $98,000. Which of the following
would Blanton report on the income statement for 2014?
A.an Unrealized Loss on Trading Investments of $5,200.
B.an Unrealized Gain on Trading Investments of $5,200.
C.an Unrealized Gain on Trading Investments of $18,000.
D.an Unrealized Loss on Trading Investments of $18,000.
Answer:
Department E had 4,000 units in Work in Process that were 40% completed at the
beginning of the period at a cost of $12,500. Of the $12,500, $8,000 was for material
and $4,500 was for conversion costs. 14,000 units of direct materials were added during
the period at a cost of $28,700. 15,000 units were completed during the period, and
3,000 units were 75% completed at the end of the period. All materials are added at the
beginning of the process. Direct labor was $32,450 and factory overhead was $18,710.
If the average cost method is used the conversion cost per unit (to the nearest cent)
would be:
A.$3.71
B.$2.84
C.$2.97
D.$3.23
Answer:
As part of the initial investment, Omar contributes accounts receivable that had a
balance of $22,500 in the accounts of a sole proprietorship. Of this amount, $2,000 is
completely worthless. For the remaining accounts, the partnership will establish a
provision for possible future uncollectible accounts of $1,500. The amount debited to
Accounts Receivable for the new partnership is
A.$19,000
B.$22,500
C.$21,000
D.$20,500
Answer:
After the accounts are adjusted and closed at the end of the fiscal year, Accounts
Receivable has a balance of $340,000 and Allowance for Doubtful Accounts has a
balance of $51,000. What is the net realizable value of the accounts receivable?
A.$51,000
B.$289,000
C.$340,000
D.$391,000
Answer: