Archives: Quiz

1) For analysis purposes, the high-low method usually produces a(n) a.reasonable estimate b.precise estimate c.overstated estimate d.understated estimate 2) The following data are taken from the financial statements of Dands Company: 2015 2014 Monthly average accounts receivable$ 565,000$ 700,000 Net […]

1) Suarez Company paid $700 cash in advance for insurance coverage which will begin in the following month. As a result of this event, a.owners equity decreased by $700 b.total assets decreased by $700 c.total assets remained the same d.liabilities […]

1) A customer charges a treadmill at Annie’s Sport Shop. The price is $4,000 and the financing charge is 9% per annum if the bill is not paid in 30 days. The customer fails to pay the bill within 30 […]

1) Which of the following is not a common cost flow assumption used in costing inventory? a.First-in, first-out b.Middle-in, first-out c.Last-in, first-out d.Average cost 2) (a)Identify several alternatives for presenting significant noncash activities in financial statements. (b)Give three examples of […]

1) A post-closing trial balance will show a.only permanent account balances b.only temporary account balances c.zero balances for all accounts d.the amount of net income (or loss) for the period 2) If the present value of lease payments equals or […]

1) Differences between a job order cost system and a process cost system include all of the following except the a.documents used to track costs b.point at which costs are totaled c.unit cost computations d.flow of costs 2) Henson Company […]

1) A job order cost system would most likely be used by a(n): a.cement manufacturer b.paint manufacturer c.automobile manufacturer d.specialty printing company 2) On the costs of goods manufactured schedule, the item raw materials inventory (ending) appears as a(n) a.addition […]

1) A bank reconciliation should be prepared a.whenever the bank refuses to lend the company money b.when an employee is suspected of fraud c.to explain any difference between the depositor’s balance per books and the balance per bank d.by the […]

1) U.S. standards are developed by the a.IFRS b.GAAP c.IASB d.FASB 2) As of December 31, 2014, Millen Industries had $1,600 of raw materials inventory. At the beginning of 2014, there was $2,000 of materials on hand. During the year, […]

1) Internal control is defined, in part, as a plan that safeguards a.all balance sheet accounts b.assets c.liabilities d.capital stock 2) The per share amount normally assigned by the board of directors to a small stock dividend is a.the market […]

1) Pare Company reported a net loss of $30,000 for the year ended December 31, 2014 . During the year, accounts receivable decreased $15,000, merchandise inventory increased $25,000, accounts payable increased by $30,000, and depreciation expense of $20,000 was recorded. […]

1) The balances that appear on the post-closing trial balance will match the a.income statement account balances after adjustments b.balance sheet account balances after closing entries c.income statement account balances after closing entries d.balance sheet account balances after adjustments 2) […]

1) Robert Tingle is studying for the next accounting mid-term examination. What should Robert know about (a) departing from the cost basis of accounting for inventories and (b) the meaning of “market” in the lower-of-cost-or-market method? 2) During August, 2014, […]

1) Which of the following steps in the accounting cycle may be performed most frequently? a.Prepare a post-closing trial balance b.Journalize closing entries c.Post closing entries d.Prepare a trial balance 2) The largest companies in the United States are primarily […]

1) A manufacturing process requires small amounts of glue. The glue used in the production process is classified as a(n) a.period cost b.indirect material c.direct material d.miscellaneous expense 2) Which one of the following should be equal to the balance […]

1) On January 1, 2014, Cat Power Company reported owners equity of $705,000. During the year, the owner withdrew cash of $30,000. At December 31, 2014, the balance in owners equity was $825,000. What amount of net income or net […]

1) An account consists of a.one part b.two parts c.three parts d.four parts 2) Companies cannot use the a.periodic inventory system under GAAP b.periodic inventory system under IFRS c.perpetual system under IFRS d.both periodic and perpetual can be used under […]

1) The specific identification method of inventory costing a.always maximizes a company’s net income b.always minimizes a company’s net income c.has no effect on a company’s net income d.may enable management to manipulate net income 2) The following totals for […]

1) Westcoast Sporting Goods Company manufactures aluminum baseball bats that it sells to university athletic departments. It has developed the following per unit standard costs for 2014 for each baseball bat: Manufacturing Direct MaterialsDirect Labor Overhead Standard Quantity2 Pounds (Aluminum)1/2 […]

1) Incremental analysis is synonymous with a.difficult analysis b.differential analysis c.gross profit analysis d.derivative analysis 2) The functions of management in an organization are: a.planning, directing, and controlling b.planning, controlling, and decision making c.directing, controlling, and decision making d.directing, planning, […]

1) A cost is considered controllable at a given level of managerial responsibility if a.the manager has the power to incur the cost within a given time period b.the cost has not exceeded the budget amount in the master budget […]

1) Owner’s capital at the end of the period is equal to a.owner’s capital at the beginning of the period plus net income minus liabilities b.owner’s capital at the beginning of the period plus net income minus drawings c.net income […]

1) The following costs and inventory data were taken from the accounts of Garfunkle Company for 2014: January 1, 2014December 31, 2014 Inventories: Raw materials$ 9,000$ 6,000 Work in process16,00014,000 Finished goods15,00010,000 Costs incurred: Raw materials purchases$94,000 Direct labor40,000 Factory […]

1) Specific Identification must be used for inventory valuation where the inventory items are not interchangeable under GAAPIFRS a.YesNo b.YesYes c.NoNo d.NoYes 2) Under management by exception, which differences between planned and actual results should be investigated? a.Material and noncontrollable […]

1) The income statement for the year 2014 of Fugazi Co. contains the following information: Revenues$70,000 Expenses: Salaries and Wages Expense$45,000 Rent Expense12,000 Advertising Expense10,000 Supplies Expense6,000 Utilities Expense2,500 Insurance Expense 2,000 Total expenses 77,500 Net income (loss)$ (7,500) After […]

1) Gardaner Company had the following department information about physical units and percentage of completion: Physical Units Work in process, May 1 (60%)60,000 Completed and transferred out150,000 Work in process, May 31 (40%)40,000 If materials are added at the beginning […]

1) At the beginning of the year, Franklen Company estimates annual overhead costs to be $1,050,000 and that 200,000 machine hours will be operated. Using machine hours as a base, the amount of overhead applied during the year if actual […]

1) How much sales are required to earn a target net income of $160,000 if total fixed costs are $300,000 and the contribution margin ratio is 40%? a.$766,667 b.$750,000 c.$1,150,000 d.$500,000 2) Match each of the principles and phases in […]

1) If an actual cost exceeds the standard cost, the result is: a.credited to a variance account b.an unfavorable variance c.carried as a liability on the balance sheet d.carried as an asset on the balance sheet 2) Quasar Corporation had […]

1) Which one of the following best describes a job cost sheet? a.It is a form used to record the costs chargeable to a specific job and to determine the total and unit costs of the completed job b.It is […]

1) Malay Corporation issued $2 million, 10-year, 6% bonds on January 1, 2014 . Instructions Prepare the entry to record the sale of these bonds, assuming they were issued at (a)98 (b)103 2) Niles Manufacturing estimates its sales at 220,000 […]

1) Instructions: Match the cash expenditures given below with the appropriate accounting treatment. An individual classification may be used more than once, or not at all. Treatments A.Record the expenditure as an asset and depreciate it. B.Record the expenditure as […]

1) Mehring Company reported net sales of $540,000, net income of $72,000, beginning total assets of $240,000, and ending total assets of $360,000. What was the company’s asset turnover? a.2.3 times b.0.6 times c.1.8 times d.1.5 times 2) Bish Company […]

1) In applying the high-low method, what is the unit variable cost? Month MilesTotal Cost January80,000$144,000 February50,000120,000 March70,000141,000 April90,000$180,000 a.$2.00 b.$1.50 c.$2.40 d.Cannot be determined from the information given 2) The White Stripes Animal Encounters operates a drive through tourist […]

1) The first step in solving an ethical dilemma is to a.identify and analyze the principal elements in the situation b.identify the alternatives c.recognize an ethical situation and the ethical issues involved d.weigh the impact of each alternative on various […]

1) If an account is collected after having been previously written off, a.the allowance account should be debited b.only the control account needs to be credited c.both income statement and balance sheet accounts will be affected d.there will be both […]

1) Marley Jeans utilizes the retail inventory method to estimate its inventories. It calculated its cost to retail ratio during the period at 80%. Goods available for sale at retail amounted to $600,000 and goods were sold during the period […]

1) The dominant form of business organization in the United States in terms of dollar sales volume, earnings, and employees is a.the sole proprietorship b.the partnership c.the corporation d.not known 2) Financial statements combining the operations of Target and Walmart […]

1) The most important element of the fraud triangle is a.financial pressure b.incompatible duties c.opportunity d.rationalization 2) Under IFRS, the components of other comprehensive income can be reported in each of the following ways except a.the one-statement approach b.the two-statement […]

1) A process with no beginning work in process, completed and transferred out 28,000 units during a period and had 12,000 units in the ending work in process that were 50% complete. How much is equivalent units of production for […]

1) In the liquidation of a partnership, any gain or loss on the realization of noncash assets should be allocated a.first to creditors and the remainder to partners b.to the partners on the basis of their capital balances c.to the […]

1) Gonzo Company reports a $25,000 increase in inventory and a $12,000 decrease in accounts payable during the year. Cost of Goods Sold for the year was $185,000. Using the direct method of reporting cash flows from operating activities, cash […]

1) Sebastiani Inc. declared a $80,000 cash dividend. It currently has 3,000 shares of 7%, $100 par value cumulative preferred stock outstanding. It is one year in arrears on its preferred stock. How much cash will Sebastiani distribute to the […]

1) Contribution margin is the amount of revenue remaining after deducting cost of goods sold. 2) Freight costs incurred by the seller on outgoing merchandise are an operating expense to the seller. Answer: T 3) An advantage of the return […]

1) The balanced scorecard approach attempts to maintain as little inventory on hand as possible. 2) Accountants believe that the write down from cost to market should not be made in the period in which the price decline occurs. Answer: […]

1) The higher the sales tax rate, the more profit a retailer can earn. 2) Premium on Bonds Payable is a contra account to Bonds Payable. Answer: F 3) If volume increases, all costs will increase. Answer: F 4) Once […]

1) Each general ledger control account balance must equal the composite balance of the individual accounts in the related subsidiary ledger at the end of an accounting period. 2) Unit material cost is computed by taking total material costs charged […]

1) The responsibility for keeping the records for an asset should be separate from the physical custody of that asset. 2) A contingent liability is a liability that may occur if some future event takes place. Answer: T 3) Two […]

1) The double-entry system is a logical method for recording transactions and results in equal debits and credits for each transaction. 2) Standard costs may be incorporated into the accounts in the general ledger. Answer: T 3) A credit balance […]

1) The budget itself and the administration of the budget are entirely accounting responsibilities. 2) Financial statements are the major means of communicating accounting information to interested parties. Answer: T 3) A flexible budget is prepared before the master budget. […]