1) The following information is available for the year ended December 31:
The amount of raw materials used in production for the year is:
A.$76,400.
B.$95,500.
C.$72,500.
D.$74,900.
E.$70,100.
2) Comparative calendar-year financial data for a company are shown below. Calculate
the following ratios for the company for 2016:
(a) accounts receivable turnover
(b) day’s sales uncollected
(c) inventory turnover
(d) days’ sales in inventory
3) Use the following information about the current year’s operations of a company to
calculate the cash paid for merchandise.
A.$218,000.
B.$223,200.
C.$220,000.
D.$228,800.
E.$234,000.
4) Based on a predicted level of production and sales of 22,000 units, a company
anticipates total variable costs of $99,000, fixed costs of $30,000, and operating income
of $36,000. Based on this information, the budgeted amount of sales for 20,000 units
would be:
A.$165,000.
B.$150,000.
C.$117,272.
D.$181,500.
E.$141,900.
5) FUTA taxes are:
A.Social Security taxes.
B.Medicare taxes.
C.Employee income taxes.
D.Unemployment taxes.
E.Employee deductions.
6) Which of the following types of businesses might have an operating cycle longer
than one year?
A.Ski resort.
B.Clothing retailer.
C.Florist.
D.Wheat farmer.
E.Commercial airplane manufacturer.
7) The cost of land would not include:
A.Purchase price.
B.Cost of parking lot lighting.
C.Costs of removing existing structures.
D.Fees for insuring the title.
E. Government assessments.
8) Thornton Foods bakes and sells 2,000 dozen muffins each week to food service
operations. Among the costs are bakers’ salaries, $24,000; production management
salaries, $16,000; production equipment operating costs, $32,000; and flour and
ingredient costs, $15,000. Using this information, compute: (a) prime costs and (b)
conversion costs.
9) Hassock Corp. produces woven wall hangings. It takes 2 hours of direct labor to
produce a single wall hanging. Bartels’ standard labor cost is $12 per hour. During
August, Bartels produced 10,000 units and used 21,040 hours of direct labor at a total
cost of $250,376. What is Bartels’ labor efficiency variance for August?
A.$12,480 favorable.
B.$10,376 unfavorable.
C.$14,584 unfavorable.
D.$4,160 favorable.
E.$12,480 unfavorable.
10) Match each of the following terms with the appropriate definitions.
1>Fundamental guidelines applicable to all companies established to minimize the risk
of fraud and theft and to increase the reliability and accuracy of the accounting records.
A. Bank reconciliation
2>A method of initially recording purchases at the full invoice price ignoring any cash
discount. B. Voucher system
3>A document used within the company to notify the appropriate persons that ordered
goods have been received and to describe the quantity and condition of the goods. C.
Principles of internal control
4>An income statement account used to record the income effects of cash overages and
cash shortages arising from missing petty cash receipts or errors in making change. D.
Days’ sales uncollected
5>A measure of how quickly a company can convert its accounts receivable into cash.
E. Liquidity
6>A document the purchasing department uses to place an order with a supplier. F.
Gross method
7>A set of procedures and approvals designed to control cash disbursements and the
acceptance of obligations. G. Net method
8>A method of initially recording purchases at the invoice price less any purchase
discounts offered by the seller. H. Purchase order
9>A report explaining any differences between the checking account balance according
to the depositor’s records and the balance reported on the bank statement. I. Receiving
report
10>The ability of a company to pay for its near-term obligations. J. Cash Over and
Short
11) Refer to the following selected financial information from McCormik, LLC.
Compute the company’s working capital for Year 2.
A.$232,700.
B.$220,600.
C.$147,200.
D.$111,700.
E.$142,700.
12) Jerry’s Butcher Shop had the following assets and liabilities at the beginning and
end of the current year:
If Jerry made no investments in the business and withdrew no assets during the year,
what was the amount of net income earned by Jerry’s Butcher Shop?
13) The income level most likely to continue into the future and is commonly used in
PE ratios and other market-based measures of performance is the
________________________.
14) _____________ activities include the cash effects of transactions and events that
determine net income.
15) A company uses a process costing system and the weighted average method for
inventory costs. The following information is available regarding direct labor for the
current year:
Calculate the average cost per equivalent unit for direct labor (round to the nearest
cent).
16) A company has the following unadjusted account balances at December 31, of the
current year; Accounts Receivable of $183,400 and Allowance for Doubtful Accounts
of $1,600 (credit balance). The company uses the aging of accounts receivable to
estimate its bad debts. The following aging schedule reflects its accounts receivable at
the current year-end:
Calculate the amount of the Allowance for Doubtful Accounts that should appear on the
December 31, of the current year, balance sheet.
