1) After analyzing transactions, the next step would be to post the transactions in the
ledger.
2) The market rate of interest is affected by a variety of factors, including investors’
assessment of current economic conditions.
3) It is necessary for a company to use the same depreciation method for all of its
depreciable assets.
4) Prime costs are the combination of direct labor costs and factory overhead costs.
5) The cash budget presents the expected inflow and outflow of cash for a specified
period of time.
6) The auditor’s report is where the auditor certifies that the financial statements are
correct and accurate.
7) The anticipated purchase of a fixed asset for $400,000, with a useful life of 5 years
and no residual value, is expected to yield total net income of $200,000 for the 5 years.
The expected average rate of return on investment is 50%.
8) A devotes full time and B devotes one-half time to their partnership. If the
partnership agreement is silent concerning the division of net income, A will receive a
$20,000 share of a net income of $30,000.
9) The process by which management allocates available investment funds among
competing capital investment proposals is termed capital rationing.
10) If the products of a manufacturing process are produced to customer specifications,
a process cost system is more appropriate than a job order cost system.
11) There are two alternatives to reporting cash flows from operating activities in the
statement of cash flows: (1) the direct method and (2) the indirect method.
12) Costs other than direct materials cost and direct labor cost incurred in the
manufacturing process are classified as factory overhead cost.