Archives: Quiz

A trader who is purchasing a call option on foreign currency should do so before the domestic interest rate rises. Historical volatility is the correct method for the calculation of the option volatility. FALSE Consider the price elasticity of demand. […]

Imports have the potential to lower a country’s inflation rate. In particular, imports of HIGHER-priced goods and services place a limit on what domestic competitors charge for comparable goods and services. Most swap dealers arrange swaps so that each firm […]

One of the elegant beauties of international equity markets is that over the last 100 or so years, the average market risk premium is almost identical across major industrial countries. A country with a managed float that wishes to WEAKEN […]

Comparative advantage in the 21st century is based more on services and their cross border facilitation by telecommunications and the Internet. In recent years the trend has been for markets to increasing focus on the global stakeholders. FALSE If exchange […]

Some of the world’s largest and most financially sound firms may borrow at variable rates less than LIBOR. For purposes of international capital budgeting, parent cash flows often depend on the form of financing. Thus, we cannot clearly separate cash […]

BRICs is a term used in international finance to represent assets that are considered to be inexpensive and sturdy, but fundamentally unsound and and incapable of coping with the upheavals now apparent in international financial markets. Currency risk is a […]

Typically, a firm in its domestic stage of globalization has all financial transactions in its domestic currency. Both covered and uncovered interest arbitrage are risky operations in the sense that even without default in the securities, the returns are unknown […]

Which of the following securities typically pays interest? A) equity securities B) preferred stocks C) corporate bonds D) significant interest investment Manhattan Enterprises manufactures cookware sets and sells the sets to department stores. Manhattan expects to sell 2,400 cookware sets […]

Which of the following decisions will most likely involve the use of activity-based management? A) decisions related to the financing of an investment using equity or debt B) decisions related to the expansion operations in a particular geographic location C) […]

Equipment was acquired for $210,000 and has accumulated depreciation of$93,000. The business exchanges this equipment for new equipment. The new equipment has a market value of $304,000 and the business pays $52,000 cash. Assume the exchange has commercial substance. The […]

The Tarrago Company issues $517,000 of 11%, 10-year bonds at 104 on March 31, 2017. The bond pays interest on March 31 and September 30. Assume that the company uses the straight-line method for amortization. Calculate the net balance that […]

For each of the following, indicate whether the statement relates to managerial accounting (MA) or financial accounting (FA): The management of Vert Lawnmowers has calculated the following variances: AICPA Functional: Reporting PE Question Type: Concept When determining the total production […]

Felix Skateboards Company uses the indirect method to prepare the statement of cash flows. Refer to the following income statement: Felix Company Income Statement Year Ended December 31, 2017 Additional information provided by the company includes the following: 1. Current […]

Which of the following will lower the breakeven point? A) a decrease in the sales price per unit B) an increase in total fixed costs C) an increase in the variable cost per unit D) an increase in the sales […]

The employees of Royal Clothes achieved all of the sales goals for 2017. Royal decides to reward the employees with a bonus of 20% on annual net income, after deducting the bonus. The net income before the calculation of the […]

The date on which the principal amount is repaid to the bondholder is known as the ________. A) issuing date B) interest date C) maturity date D) installment date A(n) ________ is a device that enables members of a local […]

Which of the following would be considered a direct labor cost for a manufacturing company? A) wages of the assembly line staff B) wages of the factory janitors C) wages of the factory manager D) salaries of the internal auditors […]

In a cash receipts journal, ________. A) cash sales are recorded in the Accounts Receivable CR column and the Cash DR column B) collections on account are recorded in the Accounts Receivable DR column and the Cash DR column C) […]

The following details have been extracted from the budget of a merchandising company. Commissions and salaries expenses are paid 50% in the month to which they are incurred and the balance in the next month. Rent and miscellaneous expenses are […]

The purchase of treasury stock ________. A) decreases assets and stockholders’ equity B) increases assets and stockholders’ equity C) increases assets and decreases stockholders’ equity D) decreases assets and increases stockholders’ equity Which of the following is true when the […]

________ is a costing system that starts with output that has been completed and then assigns manufacturing costs to units sold and to inventories. A) Job costing B) Batch costing C) Backflush costing D) Process costing Maize Corporation pays $532,000 […]

When preparing the report to analyze a proposed quality improvement program, which of the following are included in the costs to continue without the quality improvement program? A) prevention and appraisal B) prevention and internal failure C) internal and external […]

Discounted cash flow methods, such as net present value and internal rate of return, ________. A) use simple interest calculations B) use net income amounts rather than cash flows C) focus on the payback period D) consider discounted cash flows […]

Extra compensation items that are not paid directly to an employee are called ________. A) bonuses B) benefits C) wages D) commissions Lightfoot Company sells its product for $55 and has variable cost of $30 per unit. The total fixed […]

When a company is using the direct write-off method, and an account is written off, the journal entry consists of a ________. A) debit to Accounts Receivable and a credit to Cash B) credit to Accounts Receivable and a debit […]

On June 30, Caroline, Inc. finished Job 750 with total job costs of $4,400 and transferred the costs to Finished Goods Inventory. On July 6, Caroline completed the sale of the goods from Job 750 to a customer for $6,000 […]

The sales revenue of a merchandiser amounted to $25,000, sales returns and allowances amounted to $2,400, and sales discounts amounted to $600. The merchandiser uses a perpetual inventory system. The first entry in the closing process would include ________. A) […]

Accountants record ________. A) economic recessions B) estimated future transactions C) a transaction or any event that affects the financial position of the business and can be measured with faithful representation D) the $20,000 increase in value of a building […]

The California Fitness Company completed the flexible budget analysis for the second quarter, which is given below. Which of the following statements would be a correct analysis of the flexible budget variance for variable costs? A) decrease in sales price […]

Which of the following items should be amortized? A) natural resources B) goodwill C) patents, copyrights, trademarks D) tangible property, plant, and equipment, other than land Which of the following taxes has a ceiling on the amount of annual earnings […]

On July 7, Smithview Bank lent $430,000 to Andrews Retail Shop on a 90 day, 6% note. What is the maturity date of the note? A) October 7 B) October 5 C) October 6 D) October 8 Princeton Avionics makes […]

Federal Furniture manufactures a small table and a large table. The small table sells for $1,000, has variable costs of $560 per table, and takes 10 direct labor hours to manufacture. The large table sells for $1,700, has variable costs […]

First Buy Television Antenna Company provided the following manufacturing costs for the month of June. From the above information, calculate First Buy’s total fixed costs. A) $298,800 B) $40,200 C) $60,200 D) $64,200 In 2017, a corporation purchased a small […]

Marketable securities are also known as ________. A) short-term investments B) held-to-maturity investments C) debt investments D) long-term investments Deal Corporation sells a product for $500 on account to Liza Masters. This transaction will be recorded in the ________. A) […]

Spirit Company makes special equipment used in cell towers. Each unit sells for $400. Spirit produces and sells 12,500 units per year. They have provided the following income statement data: A foreign company has offered to buy 85 units for […]

Which of the following is true of internal control? A) A company’s outside auditor is responsible for the company’s internal control system. B) One of the major purposes of internal control is to ensure that the assets are safeguarded. C) […]

Dillani, Inc. is a consulting firm that offers optimal legal solutions. It allocates indirect costs using a single predetermined overhead allocation rate with direct labor hours as the allocation base. The estimated indirect costs for this year amount to $200,000. […]

Weller, Inc. provided the following particulars for 2017: Calculate the average number of days that inventory was held by Weller, Inc. during 2017. (Assume 365 days in a year. Round your intermediate calculations and final answer to two decimal places.) […]

Eliasen, Inc. invests its excess cash in Creative Technologies, Inc. and acquires 3,300 shares for $32.50 per share. Eliasen, Inc. owns less than 2% of Creative’s voting stock and plans to hold the stock for two years. Which of the […]

On January 1, 2015, the Accounts Receivable of Linda, Inc. had a debit balance of $180,000. During January, the company provided services for $700,000 on account. The company collected $230,000 from its customers on account in January. What was the […]

The Frozen Lake Company issues $503,000 of 10%, 10-year bonds at 107 on March 31, 2017. The bond pays interest on March 31 and September 30. Assume that the company uses the straight-line method for amortization. The journal entry to […]

Saturn Corporation has 13,000 shares of 14%, $84 par noncumulative preferred stock outstanding and 20,000 shares of no-par common stock outstanding. At the end of the current year, the corporation declares a dividend of $180,000. How is the dividend allocated […]

Jewel Tone Paints Company uses the direct method for preparing its statement of cash flow. Jewel Tone reports the following information regarding 2017: From the income statement: Sales Revenues, $267,000 Cost of Goods Sold, $213,000 Operating Expenses, $33,000 From the […]

Regarding the separation of corporate ownership and management, which of the following is a true statement? A) The corporate officers elect the board of directors. B) The corporation runs better with day-to-day input from stockholders. C) None of the stockholders […]

From the graph given below, identify the sales revenue line. A) OB B) AC C) AD D) AE Black Hills Manufacturing has two processing departments, Department I and Department II. During the year, direct materials worth $38,000 purchased on account […]

Which of the following statements is true of the just-in-time costing system? A) It increases the need for suppliers to deliver raw materials on time. B) It records summary journal entries before the units are purchased. C) It results in […]

Bacon Financial Advisors provides accounting and finance assistance to customers in the retail business. Bacon has four professionals on staff and an office with six clerical staff. Total compensation, including benefits, for the professional staff runs about $573,000 per year, […]

Benchmarking is the practice of comparing a company with other leading companies. A security is a share or interest representing financial value. TRUE AICPA Functional: Measurement PE Question Type: Concept H2 : Debt Securities Versus Equity Securities Under absorption costing, […]

The beginning balance in the Retained Earnings account of a company was $11,000. The revenues and expenses were $220,000 and $170,000, respectively. During the year, the company paid dividends of $4,000. The ending balance in Retained Earnings was $61,000. On […]

Ending inventory equals the cost of goods available for sale less beginning inventory. The two major types of receivables are interest receivable and taxes receivable. FALSE AICPA Functional: Measurement PE Question Type: Concept H2 : Types of Receivables A manufacturer […]