Archives: Quiz

The time needed to respond to a customer’s order is called the customer response time. Answer: Decomposition of a time series means identifying and separating the time series data into its components. Answer: TRUE Decomposition of a time series means […]

Services are intangible processes that cannot be weighed or measured. Answer: Continual review and updating in light of new data is a forecasting technique called second-guessing. Answer: FALSE Second guessing is not a forecasting technique. In the weighted moving average […]

The demand on a hospital’s emergency medical services is considered a controllable arrival pattern of the calling population. Answer: Subcontractor networks are not very important in Japanese manufacturing. Answer: FALSE Toyota relies heavily on subcontractor networks. The term CTQ stands […]

A car wash is an example of a single channel, multiphase queuing system. Answer: A project layout is characterized by a relatively low number of production units in comparison with process and product layout formats. Answer: TRUE See exhibit 6.3, […]

The fixed-order quantity inventory model favors less expensive items because average inventory is lower. Answer: In services, once the aggregate staffing level is determined, the focus is on short-term workforce and customer scheduling. Answer: TRUE See Exhibit 8.1. The term […]

A quality guru named Philip Crosby defined quality as fitness for use. Answer: Strategic sourcing is the development and management of supplier relationships to acquire goods and services in a way that aids in achieving the immediate needs of the […]

Once an operations strategy is adopted and articulated, the primary emphasis becomes perfecting the system of activities that make up the strategy through detailed refinements over a long period of time. Answer: In contrast to careers in finance and marketing, […]

The standard error of the estimate of a linear regression is not useful for judging the fit between the data and the regression line when doing forecasts. Answer: The fact that organizations are flattening is one of the reasons that […]

One difference between an assembly line process flow and a continuous process flow is that on the assembly line the flow is discrete rather than continuous. Answer: An organizationally-driven reason for outsourcing is that it can improve effectiveness by focusing […]

In facility location decision-making the educational and skill levels of the labor pool must match the company’s needs. Answer: One of the tools common to all quality efforts is leadership. Answer: FALSE The tools common to all quality efforts, including […]

The state unemployment tax rate is usually 4% on the first $7,000 of wages paid to an employee during the year. Answer: When counting the exact number of days to determine the maturity date of a note, the date of […]

Additions and improvements to a plant asset that increase the asset’s operating efficiency, productive capacity, or expected useful life are generally expensed in the period incurred. Answer: Compute the net income for 2015 based on the following amounts presented on […]

A segregation of duties among employees eliminates the possibility of collusion. Answer: A company may use more than one inventory costing method concurrently. Answer: T A change in the estimated salvage value of a plant asset requires a restatement of […]

If Kelly Cranford invests $11,970 now, she will receive $40,000 at the end of 14 years. What annual rate of return will Kelly earn on her investment? Answer: If the present value of the cash ______________ exceeds the present value […]

An error that overstates the ending inventory will also cause net income for the period to be overstated. Answer: On March 8, Black Candy Company bought supplies on account from the Arcade Fire Company for $550. Black Candy Company incorrectly […]

Magnolia Electric Car Cleaning has the following accounts: Answer: An event or transaction should be classified as an extraordinary item if it is unusual in nature or if it occurs infrequently. Answer: F (1) Assets’”Equipment, Cash, Supplies, Accounts Receivable (2) […]

Cash flow from investing activities is considered the most important category on the statement of cash flows because it is considered the best measure of expected income. Answer: On January 1, 2013 Grier Company purchased and installed a telephone system […]

Sales resulting from the use of Visa and MasterCard are considered ______________ by the retailer. Answer: The following information is available for Gordon Corporation: Instructions Based on the preceding information, calculate the book value per share. Answer: Book value per […]

The following transactions were made by Allen Company. Assume all investments are short-term and are readily marketable. Instructions Journalize the transactions. Answer: The worksheet for Montoya Company has been completed through the adjusted trial balance. You are ready to extend […]

Match the items below by entering the appropriate code letter in the space provided. 1> A general ledger account that summarizes detailed information in a subsidiary ledger. 2> A subsidiary ledger that contains accounts with individual creditors. 3> A special […]

If stock is issued in exchange for noncash assets, the assets should be valued at the ____________________ of the consideration ___________________ or the assets ____________________, whichever is more clearly evident. Answer: Retained earnings that are restricted are unavailable for dividends. […]

The _________________ basis of estimating uncollectibles normally results in the best approximation of _______________ value and therefore emphasizes balance sheet relationships. Answer: Cash registers are an important internal control device used in controlling over-the-counter receipts. Answer: T A new sales […]

Jose Reynolds deposited $10,000 in an account paying interest of 4% compounded annually. What amount will be in the account at the end of 4 years? Answer: A detailed stockholders’ equity section in the balance sheet will list the names […]

Financial statements can be prepared from the information provided by an adjusted trial balance. Answer: The expense recognition principle requires that expenses be matched with revenues. Answer: T Control over cash disbursements is improved if major expenditures are paid by […]

The paid-in capital section of the balance sheet consists of two classifications: ______________________ and ______________________. Answer: Aeroplane Insurance Agency prepares monthly financial statements. Presented below is an income statement for the month of June that is correct on the basis […]

In horizontal analysis, if an item has a negative amount in the base year, and a positive amount in the following year, no percentage change for that item can be computed. Answer: Handel Company uses the allowance method for estimating […]

Under a perpetual inventory system, the cost of goods sold is determined each time a sale occurs. Answer: Goodwill is not recognized in accounting unless it is acquired from purchasing another business enterprise. Answer: T Bell Food Store developed the […]

What is the order in which assets are generally listed on a classified balance sheet? •Current and long-term •Current; property, plant, and equipment; long-term investments; intangible assets •Current; property, plant, and equipment; intangible assets; long-term investments •Current; long-term investments; property, […]

The ___________________ is calculated by dividing net sales by average total assets. Answer: Phast Express specializes in the overnight transportation of medical equipment and laboratory specimens. The company has selected the following information from its most recent annual report to […]

A good internal control feature is to have several employees choose one person to punch all of their time cards. Answer: Amy Pond, a fellow employee, wants to understand the basic steps in the recording process. Identify and briefly explain […]

Condensed financial data of Drake Company appear below: Additional information: 1> New plant assets costing $100,000 were purchased for cash in 2015. 2> Old plant assets costing $25,000 were sold for $10,000 cash when book value was $13,000. 3> Bonds […]

Roxy Corporation makes a short-term investment in 180 shares of Sager Company’s common stock. The stock is purchased for $53 a share. The entry for the purchase is Answer: A 75-day note receivable dated June 10 would mature on ______________. […]

On October 1, 2015, Ellington Company establishes an imprest petty cash fund by issuing a check for $200 to Erin Angelo, the custodian of the petty cash fund. On October 31, 2015, Erin Angelo submitted the following paid petty cash […]

In a single-step income statement, all data are classified under two categories: (1) Revenues, or (2) Expenses. If the income statement is recast in a multiple-step format, what additional information or intermediate components of income would be presented? Answer: The […]

Each transaction must be analyzed in terms of its effect on the accounts before it can be recorded in a journal. Answer: In computing cash payments for operating expenses, a decrease in prepaid expenses is ______________ and an increase in […]

In computing the present value of an annuity, it is not necessary to know the number of discount periods. Answer: Expressing an opinion as to the fairness of the information presented in financial statements is a service performed by CPAs. […]

In accounting for stock investments of less than 20%, the equity method is used. Answer: Indicate whether the following items would appear on the balance sheet (BS), income statement (IS), or retained earnings statement (RE). 1> Advertising expense 2> Accounts […]

The process of entering an amount on the left side of an account is called ____________ the account, and making an entry on the right side is called _________________ the account. Answer: An aging of accounts receivable schedule is based […]

Horizontal analysis (trend analysis) percentages for Staas Company’s sales, cost of goods sold, and expenses are listed here. Instructions Explain whether Staas’ net income increased, decreased, or remained unchanged over the 3-year period. Answer: Prepare an income statement, a retained […]

Consistency in accounting means that a company uses the same accounting principles from one accounting period to the next accounting period. Answer: On April 1, Sign Company buys 4,000 shares of Polk common stock for $61,500. On October 1, Sign […]

Greyhound Stables, Inc. operates several dog racing tracks throughout the United States. Since most facilities are outdoor tracks only, most of the cash receipts for Greyhound are received from April through October. These funds are usually invested in short-term, very […]

GAAP’s accounting and internal control procedures related to cash and the definition of cash equivalents, as compared to IFRS are: Answer: Banks that issue credit cards generally charge retailers a fee of 2 to 4% of the amount of sale. […]

Closing the dividends account to Retained Earnings is not necessary if net income is greater than dividends during the period. Answer: Match the ratios with the appropriate ratio computation by entering the appropriate letter in the space provided. F Answer: […]

Identify which of the following reconciling items would require an adjusting entry to be made by Danielle Doyle Company. 1> Deposits in transit totaled $2,000. 2> A check written to the company for $415 by Cartography Company was returned NSF. […]

The Dividends account is closed to the ______________ account at the end of the accounting period. Answer: Working capital is current assets divided by current liabilities. Answer: F The accounts in the ledger of Ace Delivery Service contain ithe following […]

Match the items below by entering the appropriate letter in the space. 1> Partnership 2> Liabilities 3> Revenues 4> General ledger 5> Expense recognition principle 6> Unearned service revenue 7> Income summary 8> Intangible assets 9> Freight-out 10> Sales returns […]

Rent received in advance and credited to a rent revenue account which is still unearned at the end of the period, will require an adjusting entry crediting a liability account for the amount still unearned. Answer: Using the indirect approach, […]

During July, the following purchases and sales were made by Big Dan Company. There was no beginning inventory. Big Dan Company uses a perpetual inventory system. Under the FIFO method, the cost of goods sold for each sale is: Answer: […]

Ordinary repairs should be recognized when incurred as revenue expenditures. Answer: Give the definition of current assets and current liabilities and provide two examples of each. Answer: Current assets are assets that a company expects to convert to cash or […]

Dividends in arrears on cumulative preferred stock are considered a liability. Answer: Dolan Company exchanges equipment with Eaton Company and Pawnee Company exchanges equipment with Fiero Company. The following information pertains to the exchanges: Instructions Prepare the journal entries to […]