Archives: Quiz

1) Explain the impact, if any, on depreciation when estimates that determine depreciation change. 2) An employer has an employee benefit package that includes employer-paid health insurance and an employer-paid retirement program. During March, the employer paid $5,500 for health […]

1) A ____________________ contains features of both process and job order costing systems. 2) On May 1 of the current year, a company paid $200,000 to purchase 7%, 10-year bonds with a par value of $200,000; interest is paid semiannually […]

1) The means of recording purchases under the assumption that the cash discount for prompt payment will be taken is called the _________________________. 2) A company reported net income of $78,000 and had 15,000 common shares outstanding throughout the current […]

1) Chen Service applied overhead on the basis of direct labor costs during the current year. Overhead applied was $16,500. Actual overhead incurred was $17,200. (a) Prepare a journal entry to remove this difference assuming that it is not material. […]

1) Costs that the manager does not have the power to determine or at least significantly affect are: A.Variable costs. B.Uncontrollable costs. C.Indirect costs. D.Direct costs. E.Joint costs. 2) Tate Company’s 2015 income statement and changes in selected balance sheet […]

1) Match the following terms with the definitions. A. Volume variance B. Fixed budget C. Standard costs D. Variance analysis E. Price variance F. Flexible budget G. Quantity variance H. Controllable variance I. Management by exception J. Cost variance 2) […]

1) Flagstaff Company has budgeted production units of 7,900 for July and 8,100 for August. The direct materials requirement per unit is 2 ounces. The company has determined that it wants to have safety stock of direct materials on hand […]

1) Pepperdine reported net sales of $8,600 million, net income of $126 million and average accounts receivable of $890 million. Its accounts receivable turnover is: A.37.8. B.9.7. C.68.3. D.7.1. E.51.7. 2) The F. Mercury, Capital account has a credit balance […]

1) In preparing a company’s statement of cash flows for the most recent year, the following information is available: Net cash flows from investing activities for the year were: A.$234,000 of net cash used. B.$120,000 of net cash provided. C.$340,000 […]

1) When analyzing the changes on a spreadsheet used to prepare a statement of cash flows, the cash flows from financing activities generally affect: A.Net income, current assets, and current liabilities. B.Noncurrent assets. C.Noncurrent liability and equity accounts. D.Both noncurrent […]

1) Division A makes a part that it sells to customers outside of the company. Data concerning this part appear below: Division B of the same company would like to use the part manufactured by Division A in one of […]

1) The master budget process usually ends with: A.The production budget. B.The sales budget. C.The selling expense budget. D.The budgeted balance sheet. E.The overhead budget. 2) Ultimate Sportswear has $100,000 of 8% noncumulative, nonparticipating, preferred stock outstanding. Ultimate Sportswear also […]

1) A premium on common stock: A.Occurs when a corporation sells its stock for more than par or stated value. B.Is the difference between par value and issue price when the amount paid is below par. C.Represents profit from issuing […]

1) Freeman Co. had net sales of $4.2 million and ending accounts receivable of $0.8 million. Its days’ sales uncollected equals: A.5.3 days. B.69.5 days. C.19.2 days. D.11.5 days. E.292 days. 2) Which of the following transactions or events should […]

1) Kline Company accrued wages of $7,350 that were earned by employees unpaid at the end of 2014. Assuming Kline uses reversing entries, which of the following entries is appropriate for reversing the accrued wages at the beginning of 2015? […]

1) Match each of the following transactions with the applicable internal control principle that is being violated listed. A. Establish responsibility B. Maintain adequate records C. Insure assets and bond employees D. Separate recordkeeping from custody of assets E. Divide […]

1) A company has the following per unit original costs and replacement costs for its inventory. LCM is applied to individual items. Part A: 50 units with a cost of $5, and replacement cost of $4.50 Part B: 75 units […]

1) The following information is available regarding Grace Smit’s capital account in Enterprise Consulting Group, a general partnership, for a recent year: What is Smit’s partner return on equity during the year in question? A.36.6% B.34.7% C.10.8% D.11.4% E.55.7% 2) […]

2) Lucia Company reported cost of goods sold for Year 1 and Year 2 as follows: Lucia Company made two errors: 1) ending inventory at the end of Year 1 was understated by $15,000 and 2) ending inventory at the […]

1) Which of the following accounts is not included in the calculation of a company’s ending owner’s equity? A.Revenues. B.Expenses. C.Withdrawals. D.Owner investments. E.Cash. 2) The formula to compute annual straight-line depreciation is: A.Depreciable cost divided by useful life in […]

1) Division M makes a part that it sells to customers outside of the company. Data concerning this part appear below: Division O of the same company would like to use the part manufactured by Division M in one of […]

1) Northington, Inc. is preparing the company’s statement of cash flows for the fiscal year just ended. Using the following information, determine the amount of cash flows from financing activities: A.($168,000). B.$200,000. C.$168,000. D.($191,700). E.$191,700. 2) Which of the following […]

1) The number of shares that a corporation’s charter allows it to sell is referred to as: A.Issued stock. B.Outstanding stock. C.Common stock. D.Preferred stock. E.Authorized stock. 2) Basic bank services do not include: A.Bank accounts. B.Bank deposits. C.Checking. D.Electronic […]

1) On October 17 of the current year, a company determined that a customer’s account receivable was uncollectible and that the account should be written off. Assuming the allowance method is used to account for bad debts, what effect will […]

1) Pravis Corporation owns 30% of Kuster Corporation. Pravis Corporation received $9,000 in cash dividends from Kuster Corporation. The entry to record receipt of these dividends is: A.Debit Cash, $9,000; credit Long-Term Investments, $9,000. B.Debt Long-Term Investment, $9,000; credit Cash, […]

1) A department that incurs costs without directly generating revenues is a: A.Service center. B.Production center. C.Profit center. D.Cost center. E.Performance center. 2) A college uses advisors who work with all students in all divisions of the college. The most […]

1) MOB Corp. maintains an internet-based general ledger. Overhead is applied on the basis of direct labor costs. Its bookkeeper accidentally deleted most of the entries that had been recorded for January. A printout of the general ledger (in T-account […]

1) The depreciation method that produces larger depreciation expense during the early years of an asset’s life and smaller expense in the later years is a(an): A.Accelerated depreciation method. B.Book value depreciation method. C.Straight-line depreciation method. D.Units-of-production depreciation method. E.Unrealized […]

1) Lattimer Company had the following results of operations for the past year: A foreign company whose sales will not affect Lattimer’s market offers to buy 5,000 units at $7.50 per unit. In addition to existing costs, selling these units […]

1) A company’s prime costs total $4,500,000 and its conversion costs total $5,500,000. If direct materials are $2,000,000, calculate the overhead costs: A.$2,500,000. B.$3,500,000. C.$2,000,000. D.$1,000,000. E.$3,000,000. 2) Hunter Sailing Company exchanged an old sailboat for a new one. The […]

1) The sales budget for Modesto Corp. shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12, respectively. The desired ending inventory of Product A is […]

1) All of the following statements regarding uncertainty in liabilities are true except: A.Liabilities can involve uncertainty in whom to pay. B.A company can create a liability with a known amount even when the holder of the note may not […]

1) Deacon Company provides you with following information related to payroll transactions for the month of May. Prepare journal entries to record the transactions for May. a. Recorded the May payroll using the payroll register information given above. b. Recorded […]

1) Minor Company installs a machine in its factory at the beginning of the year at a cost of $135,000. The machine’s useful life is estimated to be 5 years, or 300,000 units of product, with a $15,000 salvage value. […]

1) Plimpton Sales uses special journals to record business transactions. Plimpton sells office equipment. The company completed the following transactions a through j. Identify the journal in which each transaction should be recorded. a. Paid an installment on a bank […]

1) McCarthy Company has inventory of 8 units at a cost of $200 each on October 1. On October 2, it purchased 20 units at $205 each. 11 units are sold on October 4. Using the FIFO perpetual inventory method, […]

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. […]

1) During March, the production department of a process operations system completed and transferred to finished goods 25,000 units that were in process at the beginning of March and 110,000 that were started and completed in March. March’s beginning inventory […]

1) A company sells sofas with a 6-month warranty. In January, the company sold 100,000 sofas at $1,750 each; and 500 sofas needed repairs during that same month. The total repairs amounted to $85,000 costs from the upholstery materials inventory. […]

1) Select the correct statement from the following: A.Profit margin reflects a company’s ability to produce net sales from total assets. B.Total asset turnover reflects the percent of net income in each dollar of net sales. C.Return on total assets […]

1) The most useful allocation basis for the departmental costs of an advertising campaign for a storewide sale is likely to be: A.Floor space of each department. B.Relative number of items each department had on sale. C.Number of customers to […]

1) The monetary unit assumption means that all companies doing business in the United States must express transactions and events in U.S. dollars. 2) A system of performance measures, including nonfinancial measures, used to assess company and division manager performance […]

1) A flexible budget expresses variable costs on a per unit basis and fixed costs on a total basis. 2) If the purchase price of retired stock exceeds the net amount removed from paid-in capital, the excess is debited to […]

1) Hamasaki Company owns 30% of CDW Corp. stock. Hamasaki received $6,500 in cash dividends from its investment in CDW. The entry to record receipt of these dividends includes a debit to Cash for $6,500 and a credit to Long-Term […]

1) An asset’s cost includes all normal and reasonable expenditures necessary to get the asset in place and ready for its intended use. 2) All plant assets, including land, are depreciated. Answer: FALSE 3) An employee earnings report is a […]

1) The legal contract between the issuing corporation and the bondholders is called the bond indenture. 2) The cost of fees for insuring the title and any accrued property taxes are included in the cost of land. Answer: TRUE 3) […]

1) A lease is a contractual agreement between a lessor and a lessee that grants the lessee the right to use the asset for a period of time in return for cash payment(s) to the lessor. 2) The sales commission […]

1) Federal laws prohibit the selling of accounts receivables to factors. 2) A profit center generates revenue, incurs costs, and has the authority to make significant investing decisions. Answer: FALSE 3) Hybrid systems contain features of both process and job […]

1) The amount of federal income tax withheld from employee pay depends on the employee’s annual earnings rate and the number of withholding allowances claimed by the employee. 2) The full disclosure principle requires that noncash investing and financing activities […]

1) A manufacturer’s cost of goods manufactured is the sum of direct materials, direct labor, and factory overhead costs incurred in producing products. 2) Overapplied overhead is the amount by which overhead applied to jobs using the predetermined overhead rate […]