Archives: Quiz

1) Public relations is typically a short-term strategy, while publicity is a concerted program extending over a period of time. 2) Advertising targeted to professionals such as doctors, lawyers, dentists, engineers, or professors to encourage them to use a company’s […]

1) Nixon’s Diner bakes pies in large batches. One batch of pies has the following standard costs and amounts: Nixon’s Diner baked 425 batches of pies in the most recent month. Actual costs and usage levels were as follows: Required: […]

1) The Bedford Corporation reported the following income statement and balance sheet amounts and additional information for the end of the current year. Inventory and prepaid expenses account for $30,000 of the current year’s current assets. Average inventory for the […]

1) Use the following information to do a horizontal analysis of Marcus Corporation’s income statement for the current year and prior year: What is the dollar change in gross profit? A) $22,000 B) $(4,840) C) $179,400 D) $25,800 2) Which […]

1) Review the following individual accounting system components that contain the skills and capabilities of individuals in Chart A and review the accounting system components that contain the skills and capabilities of individuals in Chart B. Which of the following […]

1) A company uses the direct method to prepare the statement of cash flows. It presents the following data on its financial statements: *Relates solely to the acquisition of inventory Which of the following is correct about salaries payable in […]

1) A company uses the direct method to prepare the statement of cash flows. It presents the following data on its financial statements: *Relates solely to the acquisition of inventory What will appear in the operating activities section related to […]

1) Which of the following cost of quality categories represent the cost incurred to provide “warranty repair on a juicer?” A) Prevention costs B) Appraisal costs C) External failure costs D) Internal failure costs 2) Sydney’s Barbecue manufactures barbecue equipment […]

1) The manager at Tom’s Taxidermy expects to sell 800 units at $30 each unit. In order for the manager to breakeven, the manager must sell 400 units. What is the margin of safety in dollars? A) $12,000 B) $14,000 […]

1) Crossroads Packaging Co. has budgeted the following amounts for its next fiscal year: To maintain the original breakeven sales in units if fixed expenses were to increase by 10%, the selling price per unit would have to be A) […]

1) All of the following are advantages of using standard costs and variances except A) standard costs have benchmarks managers use to judge actual costs. B) standard costs and benchmarks are useful tools that mangers use as a basis in […]

1) The following is information about the units produced and the total manufacturing costs for Rose’s Rug Company for the past six months. Rose’s Rug Company uses the high-low method to estimate its costs. Answer the following questions: a.What is […]

1) The following information relates to The Roberta Corporation. Required: a.What is the acid-test ratio for the current year? b.What is the inventory turnover for the current year? c.What is days’ sales in receivables for the current year? d.What is […]

1) People’s Public Power is an electric utility company. The new CEO is interested in implementing new projects that will not only benefit the environment, but will also benefit the company through cost savings. One of the proposed projects is […]

1) Which of the following organizations has developed the G4 Guidelines? A) Global Reporting Initiative (GRI) B) International Accounting Standards Board (IASB) C) Carbon Disclosure Project (CDP) D) International Organization for Standardization (ISO) 2) To follow is selected information about […]

1) In a company that uses the direct method to prepare the statement of cash flows, the amount of cash it pays in interest expense is computed as A) the change in interest payable plus interest expense. B) the change […]

1) The new employee at Cork Manufacturing reported to work and the employee reviewed the following information that was audited by the CPA: Which of the following describes the role of the new employee? A) Managerial Accountant B) Financial Accountant […]

1) Total assets is the denominator in the formula managers use to compute ROI. 2) The direct labor efficiency variance tells managers how much of the total labor variance is due to using a greater or lesser amount of time […]

1) Extensive Business Reporting Language (XBRL) will be required of both public and private companies. 2) An investment center is generally a large division of a corporation. Answer: TRUE 3) Managerial accountants must comply with Generally Accepted Accounting Principles (GAAP) […]

1) Businesses are now viewing sustainability and social responsibility as opportunities for innovation and business development. 2) An example of management by exception occurs when a manager investigates a large variance in a performance report to assign responsibility. Answer: TRUE […]

1) If you received a 4% increase in your nominal wage and the price level increased by 6%, then your real wage has increased by 2%. 2) In the extraction of a nonrenewable resource such as coal, the mining firm […]

1) The crowding-out effect will be minimal when the economy is in a severe recession. 2) Public regulation rather than public ownership has been the primary means used in the United States to ensure that the behavior of natural monopolists […]

1) The compound interest formula states that if X dollars is invested today at an interest rate i and allowed to grow for t years, it will become X(1 + i)(t) dollars in t years. 2) In the balance of […]

1) Health maintenance organizations (HMOs) are like health clubs that operate facilities where people can exercise and get physical training. 2) In a well-functioning cap-and-trade system for pollution rights, the right to pollute will go to those who are able […]

1) If the cyclically-adjusted budget has a zero deficit but the actual budget has a $100 billion deficit, then that means that the government is pursuing an expansionary fiscal policy. 2) College graduates who dislike business risk will mostly seek […]

1) The appeal to government for special benefits at taxpayers’ or someone else’s expense is the paradox of voting. 2) When you use money to purchase groceries, money is functioning as a store of value. Answer: FALSE 3) A business […]

1) Dictators/proposers tend act more self-interested when playing the dictator game versus the ultimatum game. 2) In a two-nation two-good world, if one nation is more efficient in producing both goods than the other nation, then the more-efficient nation cannot […]

1) The modern view of technological advance is that it is an external force to which the economy adjusts. 2) An expansionary monetary policy will shift the Security Market Line down. Answer: TRUE 3) The equation of exchange indicates that […]

1) Saving is a larger percentage of domestic output in DVCs than in IACs, but the saving is put to poor use. 2) The equivalent of the aggregate supply curve in the aggregate expenditures model is the 45-degree line. Answer: […]

1) The Laffer Curve indicates that lower tax rates will increase output. 2) Supply-side economists contend that aggregate supply is the relevant policy factor in influencing the price level and real output in an economy. Answer: TRUE 3) Prices tend […]

1) Entrepreneurship refers to a new college graduate who is looking for a job with a large company. 2) Technological advances have occurred throughout the history of agriculture, resulting in higher productivity but lower incomes to farmers. Answer: TRUE 3) […]

1) In 2008-2009, the U.S. economy lost 8 million jobs and saw the unemployment rate rise from 4.6 percent to as high as 10.1 percent. 2) China’s GDP per person in 2011 was about one-third of U.S. GDP per person […]

1) A decrease in the supply of loanable funds would tend to lower the interest rate. 2) Being a “jack-of-all-trades” implies reducing the reliance on the division of labor. Answer: TRUE 3) In the short run, firms are more likely […]

1) If the newspapers report that there is a shortage of strawberries, it must mean that the current price of strawberries is below the equilibrium price. 2) Corporate income taxes contribute more to Federal tax revenues than do personal income […]

1) Transfer payments that increase as GDP falls are a type of automatic stabilizer in the economy. 2) When QE2 and Operation Twist were implemented, the Fed suspended its policy of forward commitment. Answer: FALSE 3) Recent studies indicate that […]

1) A surplus indicates that the quantity demanded is greater than the quantity supplied at that price. 2) Answer the question on the basis of the following information. Assume that by devoting all its resources to the production of X, […]

1) As long as government officials have to be elected, they are always held accounted for their policy decisions and choices. 2) The “hedonic treadmill” of prospect theory suggests that if people’s incomes rise and stay at the new higher […]

1) If a particular R&D expenditure is expected to be worthwhile, the firm should undertake it because the project will definitely increase the firm’s future profits. 2) The ‘stimulus package” that the government implemented in response to the Great Recession […]

1) In game theory, credible threats can be used to maintain collusive agreements between firms. 2) A budget deficit will require the government to issue bonds to fill in the gap in the budget. Answer: TRUE 3) When U.S. households […]

1) In a natural monopoly case, the socially-optimal pricing policy rule will often yield a higher price than the fair-return pricing rule. 2) When the government bails out large banks when the banks become unstable, it could lead to a […]

1) A decline in the real interest rate will shift the investment demand curve to the right. 2) In a purely competitive labor market, a profit-maximizing firm will hire labor up to the point where the marginal resource cost equals […]

1) The World Trade Organization was established by the United States to force other nations to open their markets to U.S. goods. 2) All illegal immigrants enter the U.S. and arrive here illegally. Answer: FALSE 3) Investment is highly stable; […]

1) A monopsonist faces an upsloping supply curve of labor, but it could face a horizontal demand curve for its product in the output market. 2) U.S. exports to Japan create a supply of dollars and a demand for yen […]

1) The largest factor that raised labor productivity in the U.S. economy since the 1950’s has been the increased amount of capital available. 2) When a nation is experiencing a balance-of-payments deficit, its treasury or central bank will engage in […]

1) The Lorenz curve is a graph that relates income to household spending. 2) Profits are the primary ‘success indicator” for firms in a centrally planned economy. Answer: FALSE 3) When the total product is at its maximum level, the […]

1) Insurance companies are a major category of financial institutions. 2) Official unemployment statistics overstate unemployment because discouraged workers who are not actively seeking work are counted as unemployed. Answer: FALSE 3) The maximum deposit creation that can be made […]

1) A price-discriminating monopolist will set a higher price where demand is more elastic and a lower price where demand is less elastic. 2) Mutually-cancelling advertising by oligopolistic firms tend to improve economic efficiency in the industry. Answer: FALSE 3) […]

1) Consumer surplus is the reason why sometimes a shopper regrets having bought a particular item. 2) One implication of the median-voter model as applied to a vote regarding how much government involvement to have in the economy is that […]

1) The budget line shows the various incomes that an individual can earn from different jobs. 2) One implication of the Laffer Curve in supply-side arguments is that cutting taxes may actually reduce the budget deficit, contrary to what traditional […]

1) Which of the following trade-offs does the production possibilities frontier illustrate? a.If an economy wants to increase efficiency in production, then it must sacrifice equality in consumption. b.Once an economy has reached the efficient points on its production possibilities […]