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Accountants record ________.
A) economic recessions
B) estimated future transactions
C) a transaction or any event that affects the financial position of the business and can
be measured with faithful representation
D) the $20,000 increase in value of a building that actually cost $50,000 but could be
sold for $70,000
Which of the following is subtracted from net sales revenue to arrive at gross profit on a
multi-step income statement?
A) cost of goods available for sale
B) cost of goods sold
C) sales discounts and sales returns and allowances
D) operating expenses
Halcyon, Inc. completed Job 10B last month. The cost details of Job 10B are shown
below.
Calculate the total job cost for Job 10B.
A) $2,349
B) $4,593
C) $2,145
D) $4,797
During September, the Filtering Department of Downtown Center, Inc. had a beginning
Work-in-Process Inventory of 600 units with costs of $72,000. During the month, 700
units were transferred in from the Milling Department with costs of $209,000. It had
600 units in ending Work-in-Process Inventory. What is the cost per equivalent unit of
production for the transferred in units that were transferred to the Filtering Department
in September under the first-in, first-out (FIFO) method? (Round your answer to the
nearest cent.)
A) $55.38 per equivalent unit of production for transferred in
B) $1.00 per equivalent unit of production for transferred in
C) $54.17 per equivalent unit of production for transferred in
D) $298.57 per equivalent unit of production for transferred in
During September, the Filtering Department of Coronet, Inc. had a beginning
Work-in-Process Inventory of 800 units with costs of $120,000. During the month, 600
units were transferred in from the Milling Department with transferred in costs of
$187,000. It had 100 units in ending Work-in-Process Inventory. What is the total cost
of production for the units transferred to the Filtering Department in September under
the first-in, first-out (FIFO) method?
A) $275,835
B) $120,000
C) $187,000
D) $307,000
Frittata, Inc. started the year with 200 units in the Finished Goods Inventory account. It
produced 600 units during the year and sold 800 units. If Frittata uses variable costing,
________.
A) its operating income for the period will be higher than under absorption costing
B) its operating income for the period will be lower than under absorption costing
C) its value of ending Finished Goods Inventory reported in the balance sheet will be
higher than under absorption costing
D) its operating income will be the same as under absorption costing
Karl, an employee of Smith Electric, Inc., has gross salary for March of $4,000. The
entire amount is under the OASDI limit of $117,000 and thus subject to FICA. He is
also subject to federal income tax at a rate of 18%. Karl has a deduction of $320 for
health insurance and $80 for United Way. Provide the journal entry to record salaries
expense and payroll withholdings. (Assume a FICA—OASDI Tax of 6.2% and FICA—
Medicare Tax of 1.45%.)
Atlantis, Inc. reported the following data:
The horizontal analysis shows that cost of goods sold has ________. (Round your answer
to two decimal places.)
A) increased by 29.35%
B) decreased by 29.35%
C) increased by 42.08%
D) decreased by 42.08%
Which of the following describes the environment in internal control?
A) Internal auditors monitor company controls to safeguard assets, and external
auditors monitor the controls to ensure that the accounting records are accurate.
B) The environment is the "tone at the top" of the business.
C) The environment is designed to ensure that the business earns profit.
D) A company must identify its risks.
The interest rate that determines the amount of cash interest the borrower pays and the
investor receives each year is called the ________.
A) amortization rate
B) market interest rate
C) stated interest rate
D) discounting rate
Genity Corporation records business transactions in dollars and disregards changes in
the value of a dollar over time. Which of the following accounting assumptions does
this represent?
A) economic entity assumption
B) going concern assumption
C) accounting period assumption
D) monetary unit assumption
Period costs are the ________.
A) product costs that must be paid in the accounting period in which they are incurred
B) costs that are incurred and expensed during the same accounting period
C) costs related to production of products the company purchases and sells
D) same as manufacturing overhead costs
Which of the following is a reason companies use standard costs?
A) to enhance customer loyalty
B) to set sales prices of products and services
C) to share best practices with other companies
D) to ensure the accuracy of the financial records
Lloyd's Moving Company is considering purchasing new equipment that costs
$728,000. Its management estimates that the equipment will generate cash flows as
follows:
Present value of $1:
The company's annual required rate of return is 9%. Using the factors in the table,
calculate the present value of the cash flows. (Round all calculations to the nearest whole
dollar.)
A) $892,000
B) $864,646
C) $853,320
D) $894,000
Which of the following statements is true of the operating budget?
A) It is a part of the financial budget.
B) It includes the capital expenditures budget.
C) It includes the sales budget.
D) Its final component is the cash budget.
Which of the following is an example of a source document in a computerized
accounting information system?
A) statement of cash flows
B) balance sheet
C) bank checks
D) general ledger
Which of the following will be shown under the investing activities section of the
statement of cash flows?
A) purchased treasury stock for cash
B) issued notes payable to purchase equipment
C) paid cash dividends to stockholders
D) loaned money to a third party
A corporation has 4,000 shares, 10% preferred stock of $55.00 par preferred stock, and
8,000 shares of common stock outstanding. The net income for the year is $260,000.
Calculate earnings per share. (Round your answer to the nearest cent.)
A) $55.00
B) $29.75
C) $32.50
D) $65.00
Which of the following will be categorized as an operating activity on the statement of
cash flows?
A) Cash received by selling old equipment
B) Cash paid for purchase of new machinery
C) Cash paid for purchase of office supplies
D) Cash received from issuance of shares of common stock
A $49,000, three-month, 12% note payable was issued on December 1, 2017. What is
the amount of accrued interest on December 31, 2017?
A) $490
B) $708
C) $354
D) $823
Flamingo, Inc. has the following budgeted figures:
Calculate cost of goods sold for the month of February.
A) $16,750
B) $30,120
C) $29,370
D) $40,200
Wood Designs Company, a custom cabinet manufacturing company, is setting standard
costs for one of its products. The main material is cedar wood, sold by the square foot.
The current cost of cedar wood is $6.00 per square foot from the supplier. Delivery
costs are $0.20 per square foot. Carpenters' wages are $20.00 per hour. Payroll costs are
$4.00 per hour, and benefits are $5.00 per hour. How much is the direct materials
standard cost per square foot?
A) $11.20
B) $10.20
C) $6.20
D) $6.00
Which of the following accounts increases with a credit?
A) Cash
B) Common Stock
C) Accounts Receivable
D) Prepaid Expense
What is Total Quality Management (TQM)?
A) a philosophy of supplying customers with superior products and services
B) an exchange of information with suppliers and customers to create efficient and
effective processes
C) a software system that integrates a company's functions, departments, and data into a
single system
D) a system that speeds the transformation of raw materials into finished products
The petty cash fund at Bryan Company has a designated balance of $300. The fund
currently holds $120 in cash and $187 in petty cash tickets. Based on this information,
which of the following statements is correct?
A) The total of the cash on hand plus petty cash tickets is more than the designated fund
balance.
B) A shortage of $7 exists.
C) To replenish the petty cash fund, the company must write a check, payable to Petty
Cash, for $187.
D) The petty cash fund custodian must locate the $7 discrepancy.
Which of the following accounts has a balance equal to net income immediately before
it is closed?
A) Income Summary
B) Dividends
C) Net Income
D) Retained Earnings
Which of the following is an entry-level accounting software package?
A) Microsoft Word
B) QuickBooks
C) Cloud Computing
D) Oracle
In which of the columns of a worksheet would a net loss be found?
A) in the balance sheet credit column and the income statement debit column
B) in the balance sheet debit column and the income statement credit column
C) in the unadjusted trial balance credit column, the adjusted trial balance credit
column, and the balance sheet credit column
D) in the unadjusted trial balance debit column, the adjusted trial balance debit column,
and the balance sheet debit column
A merchandiser returned inventory worth $2,000 that was purchased on account. Under
the periodic inventory system, the journal entry to record the return would include
________.
A) a debit to Purchase Returns and Allowances for $2,000 and a credit to Accounts
Payable for $2,000
B) a debit to Accounts Payable for $2,000 and a $2,000 credit to Purchase Returns and
Allowances
C) a debit to Purchases for $2,000 and a credit to Accounts Payable for $2,000
D) a debit to Accounts Payable for $2,000 and a credit to Purchases for $2,000
Archid, Inc., a manufacturer of spare parts, has two production departments—
Assembling and Packaging. The Assembling department is mechanized, while the
Packaging department is labor oriented. Estimated manufacturing overhead costs for the
year were $19,300,000 for Assembling and $13,900,000 for Packaging. Calculate the
department predetermined overhead allocation rates for the Assembling and Packaging
departments, respectively, if the total estimated machine hours were 30,000 and labor
hours were 20,000 for the year. (Round your answer to the nearest cent.)
A) $965.00, $463.33
B) $643.33, $695.00
C) $463.33, $965.00
D) $643.33, $965.00
A business repays the amount borrowed on a note with cash. Which of the following
accounts is credited?
A) Accounts Payable
B) Cash
C) Notes Payable
D) Notes Receivable
Which of the following is included in the entry to record the issuance of 14,000 shares
of $7 par value common stock at $21 per share cash?
A) Cash is debited for $294,000.
B) Common Stock is debited for $98,000.
C) Common Stock is credited for $294,000.
D) Paid-In Capital in Excess of Par—Common is debited for $196,000.
The following transactions for the month of March have been journalized and posted to
the proper accounts.
Mar. 1 The business received $9,000 cash and issued common stock to stockholders.
Mar. 2 Paid the first month's rent of $900.
Mar. 3 Purchased equipment by paying $3,000 cash and executing a note payable for
$7,000.
Mar. 4 Purchased office supplies for $730 cash.
Mar. 5 Billed a client for $10,000 of design services completed.
Mar. 6 Received $7,900 on account for the services previously recorded.
What is the balance in Cash?
A) $13,170
B) $12,270
C) $15,270
D) $13,900
Contribution margin is calculated by deducting ________ from sales revenue.
A) total product costs
B) total selling and administrative costs
C) total fixed costs
D) total variable costs
