On July 7, Smithview Bank lent $430,000 to Andrews Retail Shop on a 90 day, 6%
note. What is the maturity date of the note?
A) October 7
B) October 5
C) October 6
D) October 8
Princeton Avionics makes aircraft instrumentation. Its basic navigation radio requires
$90 in variable costs and $3,000 per month in fixed costs. Princeton sells 20 radios per
month. If the company further processes the radio, to enhance its functionality, it will
require an additional $30 per unit of variable costs, plus an increase in fixed costs of
$400 per month. The current sales price of the radio is $270. The CEO wishes to
improve operating income by $1,100 per month by selling the enhanced version of the
radio. In order to meet this target, the sales price to be charged for the enhanced product
is ________.
A) $300 per unit
B) $375 per unit
C) $105 per unit
D) $390 per unit
Realized gains or losses on available-for-sale investments represent the difference
between the ________.
A) historical cost and the average market value of the investment
B) historical cost and the current market value of the investment
C) cash received at time of disposition and the fair value of the investment
D) cash received at time of disposition and the cost of the investment
Empire Moving Company reported the following amounts on its balance sheet as of
December 31, 2016 and December 31, 2017:
For the vertical analysis, what is the percentage of total liabilities for December 31, 2016?
(Round your answer to two decimal places.)
A) 100.00%
B) 43.07%
C) 19.10%
D) 42.18%
Back Bay Company is a price-taker and uses target pricing. Refer to the following
information:
What is the target full product cost per unit? (Round your answer to nearest cent.) Assume
all units produced are sold.
A) $32.00
B) $28.59
C) $4.80
D) $27.20
Middlebrook Financial Services, Inc. invested $30,000 to acquire 6,250 shares of Mitt
Investments, Inc. on March 15, 2013. This investment represents less than 20% of the
investee’s voting stock. On May 7, 2017, Middlebrook Financial Services, Inc. sells
2,000 shares for $21,250. Which of the following will be the correct journal entry for
the May 1, 2017 transaction?
A)
B)
C)
D)
A bond is issued at premium ________.
A) when a bond’s stated interest rate is equal to the market interest rate
B) when a bond’s stated interest rate is less than the effective interest rate
C) when a bond’s stated interest rate is less than the market interest rate
D) when a bond’s stated interest rate is higher than the market interest rate
Malcom, Inc. had the following balances and transactions during 2017:
What would be reported as Cost of Goods Sold on the income statement for the year
ending December 31, 2017 if the perpetual inventory system and the first-in, first-out
inventory costing method are used?
A) $12,150
B) $17,490
C) $35,100
D) $22,350
Bryson Services, Inc. performed accounting services for a client in December. A bill
was mailed to the client on December 30. The company received a check by mail on
January 5. Which of the following accounts should appear on the balance sheet as of
December 31 as related to the services performed?
A) Prepaid Expense
B) Accounts Receivable
C) Unearned Revenue
D) None, there is no entry in December.
Risa, Inc. has provided the following extracts from their budget for the first quarter of
the forthcoming year:
The vendors are allowed the following terms of payment:
Calculate the total payment on account for the month of March.
A) $168,275
B) $136,955
C) $320,000
D) $291,650
The Assembly Department of Fallon, Inc., manufacturer of computers, had 4,500 units
of beginning inventory in September, and 8,000 units were transferred to it from the
Production Department. The Assembly Department completed 4,000 units during the
month and transferred them to the Packaging Department. Calculate the total number of
units to account for by the Assembly Department.
A) 3,500 units
B) 8,000 units
C) 4,500 units
D) 12,500 units
Delivery expense is a(n) ________.
A) administrative expense
B) part of Cost of Goods Sold
C) operating expense
D) overhead expense
Which of the following inventory costing methods requires the calculation of a new
average cost after each purchase?
A) specific identification
B) weighted-average
C) last-in, first-out
D) first-in, first-out
Which of the following costs change in total in direct proportion to a change in volume?
A) fixed costs
B) variable costs
C) mixed costs
D) period costs
If an adjusting entry includes a debit to Rent Expense, it indicates that the payment of
rent had been previously recorded as a(n) ________.
A) deferred expense
B) depreciation expense
C) accrued expense
D) accrued revenue
The accountant of Zeus Legal Services failed to make an adjusting entry for supplies
that had been used for the year. Assume the supplies were initially recorded as an asset.
Which of the following statements is true?
A) The total liabilities will be overstated.
B) The equity will be understated.
C) The total assets will be overstated.
D) The total assets will be understated.
Urban, Inc. provides the following data:
Urban, Inc.
Comparative Balance Sheet
Year Ended Dec. 31, 2017
Calculate the debt to equity ratio. (Round your answer to two decimal places.)
A) 0.39
B) 0.05
C) 1.24
D) 0.64
Which of the following represents the combined sum of direct materials and direct
labor?
A) conversion costs
B) period costs
C) prime costs
D) fixed costs
________ in just-in-time management systems is completed in self-contained work
cells.
A) Selling
B) Production
C) Administration
D) Purchasing
Regarding impairment of intangible assets, which of the following statements is
incorrect?
A) Impairment occurs when the fair value of an intangible asset is less than the book
value.
B) Intangible assets are impaired when there has been a permanent decline in the value
of the asset.
C) Intangible assets are tested for impairment annually.
D) If any impairment occurs, the company records a loss in the period in which the
intangible asset was acquired.
Missan, Inc. reports the following information:
There are no beginning inventories. What is the ending balance in Finished Goods
Inventory using absorption costing? (Round any intermediate calculations to the nearest
cent, and your final answer to the nearest dollar.)
A) $13,981
B) $5,781
C) $11,800
D) $17,582
Allen Boating Company manufactures special metallic materials and decorative fittings
for luxury yachts that require highly skilled labor. Allen uses standard costs to prepare
its flexible budget. For the first quarter of the year, direct materials and direct labor
standards for one of their popular products were as follows:
Direct materials: 1 pound per unit; $11 per pound
Direct labor: 4 hours per unit; $19 per hour
Allen produced 4,000 units during the quarter. At the end of the quarter, an examination
of the direct materials records showed that the company used 7,500 pounds of direct
materials and actual total materials costs were $99,300.
What is the direct materials efficiency variance?
A) $44,000 U
B) $38,500 U
C) $44,000 F
D) $38,500 F
A company is analyzing its month-end results by comparing it to both static and flexible
budgets. During the previous month, the actual sales price was higher than the expected
sales price as per the static budget. This difference results in a(n) ________.
A) favorable flexible budget variance for sales revenues
B) favorable sales volume variance for sales revenues
C) unfavorable flexible budget variance for sales revenues
D) unfavorable sales volume variance for sales revenues
Liquidity is a measure of how ________.
A) quickly an asset may be converted into cash
B) long an asset can be used
C) easily an asset can be exchanged for another asset
D) short an operating cycle is
Refer to the following trial balance.
How much is the net sales revenue?
A) $463,000
B) $479,000
C) $145,000
D) $141,000
Which one of the following account groups normally has a credit balance?
A) assets and liabilities
B) equity and assets
C) liabilities and revenues
D) assets and expenses
Carey, Inc. provides the following information:
Calculate the return on investment.
A) 10%
B) 45%
C) 4%
D) 14%
The terms of an invoice are 3/10, n/25. This means that a ________.
A) discount of 10 percent is allowed if the invoice is paid within three days
B) discount of 3 percent is allowed if the invoice is paid within 10 days
C) discount of 25 percent is allowed if the invoice is paid within 10 days
D) discount of 3 percent is allowed if the invoice is paid after 25 days
Under the periodic inventory system, which of the following amounts will always stay
the same regardless of the inventory valuation method used?
A) ending merchandise inventory
B) cost of goods sold
C) gross profit
D) purchases
Which of the following will be categorized as a manufacturing overhead cost?
A) depreciation on factory plant and equipment
B) wages paid to assembly line workers
C) administration charges of showroom
D) cost of direct materials used
A coal mine cost $1,003,000 and is estimated to hold 51,000 tons of coal. There is no
residual value. During the first year of operations, 6,000 tons are extracted and sold.
Calculate depletion expense for the first year. (Round any intermediate calculations to
the nearest cent.)
A) $100,300
B) $150,450
C) $200,600
D) $118,020
Gallup Foods produces a gourmet condiment that sells for $22 per unit. Variable cost is
$8 per unit, and fixed costs are $6,000 per month. If Gallup expects to sell 2,000 units,
compute the margin of safety in dollars. (Round any intermediate calculations to the
nearest whole unit, and your final answer to the nearest dollar.)
A) $34,571
B) $1,571
C) $6,000
D) $12,571
