An informational tax return must be filed for a partnership.
Tying compensation incentives to performance targets decreases the likelihood that the
goals of responsibility centers, managers, and the entire organization will be well
coordinated.
Lubrication used for machines is an example of a direct material.
Investments are valued on the balance sheet at the original purchase price, even if the
price has changed since the date of purchase.
The petty cash voucher should be kept by the person being reimbursed.
The days’ payable shows the maximum time a company takes to pay its accounts
payable.
The term owner’s equity is preferred over the term net worth because most assets are
carried at original cost rather than at current value.
If standard costing is not economically feasible for a company, predetermined overhead
rates should not be used.
A value chain involves a sequence of value-creating activities within an organization.
Which of the following statements isTRUE of a traditional operating environment?
A.It plans by using pull-through production scheduling.
B.It has long production runs with infrequent setups.
C.It always maintains less or no inventory.
D.It uses a multiskilled work force.
Ending merchandise inventory for LIFO will be the same dollar amount under a
periodic inventory system as under a perpetual inventory system.
For a merchandising company, the difference between net sales and operating expenses
is called gross margin.
The account Allowance to Adjust Short-Term Investments to Market appears as a
contra-asset on the balance sheet.
Stockholders elect the board of directors who then appoint the officers of a corporation.
The direct labor rate variance is the difference between the standard hours allowed and
the actual hours multiplied by the actual labor rate.
Which of the following is not an appropriate method used in evaluating proposed
capital investments?
A.Net present value
B.Payback period
C.Carrying value of equipment
D.Accounting rate of return
When a work sheet is prepared
A.closing entries need not be entered into the journal.
B.a trial balance need not be prepared.
C.adjusting entries need not be entered into the journal.
D.financial statements need not be prepared.
Which of the following is a common assumption in the balanced scorecard?
A.An organization will get only what it measures
B.An organization will achieve the benchmark set
C.Organization goals can be set only for a short-term period
D.An organization does not the follow traditional costing method
Disadvantages of a partnership include
A.Facilitates pooling of resources.
B.No corporate tax burden.
C.Mutual agency.
D.Freedom and flexibility for partners.
The actual amount of time that a product is being worked on is known as the
A.moving time.
B.inspection time.
C.processing time.
D.queue time.
Preparation of closing entries
A.is an optional step in the accounting cycle.
B.is the first step after posting to the general ledger.
C.assist in achieving periodicity and accrual accounting.
D.All of these choices.
Which of the following is a manager likely to do while preparing internal performance
evaluation reports?
A.Review possible one-time order opportunities
B.Record adjusting journal entries
C.Determine human resource needs for the following period
D.Compare actual costs with targeted costs
The general ledger account for Accounts Receivable shows a debit balance of $50,000.
Allowance for Uncollectible Accounts has a credit balance of $3,000. Net sales for the
year were $500,000. In the past, 3 percent of sales have proved uncollectible, and an
aging of accounts receivable resulted in an estimate of $20,000 of uncollectible
accounts receivable.
Using the percentage of net sales method, the Allowance for Uncollectible Accounts
balance (after adjustment) would be
A.$12,000.
B.$15,000.
C.$18,000.
D.$20,000.
Closing entries will
A.decrease the owner’s Capital balance.
B.either increase or decrease the owner’s Capital balance.
C.increase the owner’s Capital balance.
D.not affect the owner’s Capital balance.
Under the cost-adjusted-to-market method of accounting for an investment,
A)Dividend Income is credited when dividends are receiveD)
B)the investment account is credited when dividends are receiveD)
C)the investment account is credited when the investee reports a net income.
D)Investment Income is credited when the invested reports a net income.
Margo Dhang is paid $8 per hour plus time-and-one-half for hours over 40 for a given
week. During the week of January 21, Margo worked 46 hours. Social security taxes are
6.2 percent, Medicare taxes are 1.45 percent, $50 is withheld for federal income taxes,
$12 is withheld for state income taxes, and $15 is withheld for medical insurance. In
addition, Margo’s employer must pay Social Security taxes of 6.2 percent, Medicare
taxes of 1.45 percent, state unemployment taxes of 5.4 percent, and federal
unemployment taxes of 0.8 percent. Calculate (a) Margo’s gross earnings, (b) Margo’s
take-home pay, (c) the employer’s payroll taxes expense, and (d) the total cost of
employing Margo for the week. Round all amounts to the nearest penny.
J. J. Johnson has decided to supplement his income by selling beehives. He expects to
sell 25,000 hives in 2014. He ended 2013 with 2,500 completed hives in inventory and
would like to complete operations in 2014 with at least 2,800 completed hives in
inventory. There is no ending work in process inventory. One beehive holds about 250
bees. The bees are purchased for $4.00 per 1,000 bees. The hives sell for $15.00 each.
What would be the yearly total on the direct materials purchases budget for bee
purchases of Johnson? (Assume for this question that 40,000 beehives will be
produced.)
A.$44,000
B.$16,000
C.$64,000
D.$40,000
A truck is purchased for $70,000. It has a five-year life and a $10,000 residual value.
Under the double-declining-balance method, what is the accumulated depreciation after
two years?
A.$38,400
B.$42,400
C.$44,800
D.$51,200
Which of the following is the first step in assigning costs in the activity-based costing?
A.Analyze all nonvalue-adding activities to determine if they are necessary support
areas
B.Accumulate costs for each activity
C.Identify and classify each activity
D.Separate nonvalue-adding activities from value-adding activities
Compute the profit margin (rounded to nearest percent) for Titania Corporation’s
Investment center using the following information.
A.5%
B.6%
C.8%
D.13%
Use this inventory information for the month of July to answer the following question.
What is cost of goods sold under the specific identification method?
A.More information is needed.
B.$3,704
C.$7,696
D.$7,736
Match each of the following terms with its correct definition.
Partners A and B receive a salary of $30,000 and $60,000, respectively, and share
income and losses in a 2:1 ratio, respectively. If the partnership suffers a $30,000 net
loss in 20×5, the entry to close the income or loss into their capital accounts is:
What type of information does the general journal include for each transaction?
The following amounts were reported by Paloma Corporation on December 31, 20×4 :
On January 3, 20×5 , 5,000 shares of treasury stock were sold. After the sale of the
treasury shares, total stockholders’ equity amounted to $277,500. No stockholders’
equity transactions other than the sale of the treasury stock occurred between December
31, 20×4 , and January 3, 20×5. From the information given, compute the selling price
per share of the treasury stock.
The information that follows pertains to stockholders’ equity data of Frame Corporation
on December 31, 20×5. Compute the amount of each item indicated by a letter in the
listing below.
Discuss standard costing. As part of your discussion, define a standard cost. In addition,
compare and contrast standard costs and predetermined overhead costs. Include in your
discussion at least three reasons why standard costs are introduced into a cost
accounting system. How is a standard cost accounting system useful to management?