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 network to access the
network while keeping nonmembers out of the network.
A) burglar alarm
B) firewall
C) fireproof vault
D) electronic sensor
The Allowance for Bad Debts has a credit balance of $8,000 before the adjusting entry
for bad debts expense. After analyzing the accounts in the accounts receivable
subsidiary ledger using the aging-of- receivables method, the company’s management
estimates that uncollectible accounts will be $17,000. What will be the amount of Bad
Debts Expense reported on the income statement?
A) $25,000
B) $9,000
C) $17,000
D) $8,000
When preparing the cost of goods sold budget, ________.
A) ignore balances in Finished Goods Inventory
B) start by calculating the projected cost to produce each unit
C) ignore the inventory costing method
D) multiply units produced by the total projected cost per unit
Dessa, Inc. reports the following information for the year ended December 31:
The beginning Finished Goods Inventory costs were $3,500 under absorption costing and
$2,800 under variable costing.
What is the operating income using variable costing?
A) $38,640
B) $40,200
C) $9,840
D) $2,340
Elmore Company uses the direct method to prepare its statement of cash flows. Refer to
the following financial statement information for the year ended December 31, 2017:
Elmore Company
Comparative Balance Sheet
December 31, 2017 and 2016
Elmore Company
Income Statement
December 31, 2017 and 2016
Use the direct method, to compute the total net cash flow from operating activities.
(Accrued Liabilities relate to other operating expense.)
A) $(54,200)
B) $38,200
C) $(38,200)
D) $54,200
Davis Naturals manufactures bulk quantities of cleaning fluids. It currently sells 1,000
containers a month at a sales price of $18 per unit. If a new fragrance is added, $20 per
unit could be charged for the improved product. It would cost a total of $900 per month
to make that alteration. Operating income would ________.
A) decline by $2,000
B) increase by $2,000
C) increase by $1,100
D) decline by $900
Keys Spas, Inc. reports the following information for August:
Calculate the contribution margin for August.
A) $70,000
B) $630,000
C) $550,000
D) $700,000
Planned investments and cash dividends are deducted from ________ to arrive at free
cash flow.
A) net cash provided by operating activities
B) net cash provided by investing activities
C) net cash provided by financing activities
D) net income
A corporation declares a dividend of $0.50 per share on 18,000 shares of common
stock. Which of the following is included in the entry to record the declaration?
A) Cash Dividends is debited for $9,000.
B) Paid-In Capital in Excess of Par—Common is credited for $9,000.
C) Cash Dividends is credited for $9,000.
D) Dividends Payable—Common is debited for $9,000.
Barter, Inc. sold goods for $883,500 on account. The company operates in a state that
imposes a 9% sales tax. What is the amount of the sales tax payable to the state?
A) $79,515
B) $39,758
C) $19,879
D) $159,030
A business makes a payment of $1,400 on a note payable. Which of the following
journal entries would be recorded?
A) Cash is credited and Notes Payable is debited for $1,400.
B) Notes Payable is credited and Cash is debited for $1,400.
C) Cash is credited and Financing Expense is debited for $1,400.
D) Cash is debited and Financing Revenue is credited for $1,400.
The bookkeeper of Fire Steel, Inc. recorded a $1,503 check as $15,030 in payment of
the current month’s rent. Which of the following journal entries is needed to adjust for
this error in the books of the company?
A)
B)
C)
D)
Robyn’s Retail had 400 units of inventory on hand at the end of the year. These were
recorded at a cost of $15 each using the last-in, first-out (LIFO) method. The current
replacement cost is $13 per unit. The selling price charged by Robyn’s Retail for each
finished product is $22. In order to record the adjusting entry needed under the
lower-of-cost-or-market rule, the Merchandise Inventory will be ________.
A) debited by $5,200
B) credited by $5,200
C) debited by $800
D) credited by $800
On December 1, 2017, Summit, Inc. sold machinery to a customer for $24,000. The
customer could not pay at the time of sale but agreed to pay 11 months later and signed
a 11-month note at 11% interest. How much interest revenue was earned during 2018?
(Round your answer to the nearest dollar.)
A) $1,320
B) $2,640
C) $2,420
D) $2,200
Revolve Company is a price-taker and uses a target-pricing approach. Refer to the
following information:
What is the target full product cost in total for the year? Assume all units produced are
sold.
A) $90,300
B) $17,209,000
C) $13,700,000
D) $2,055,000
A common-size statement reports the same percentages that appear in a ________.
A) horizontal analysis
B) financial statement
C) vertical analysis
D) cost statement
When applying the rules of the equity method, the Long-term Investments account is
credited for the receipt of a cash dividend because ________.
A) the dividend decreases the investor’s investment
B) it increases the investor’s investment
C) there is an increase in dividend liability
D) the dividend increases the total assets
Grant, an employee of Fitzgerald, Inc., has gross salary for March of $4,000. The entire
amount is under the OASDI limit of $117,000, and thus subject to FICA. His
year-to-date pay has already exceeded the $7,000 cap for FUTA and SUTA. Which of
the following is a part of the journal entry to record the employer’s payroll taxes?
A) credit to Payroll Tax Expense
B) debit to FICA Taxes Payable
C) credit to FICA—Medicare Taxes Payable
D) debit to Cash
During a period of declining inventory costs, which of the following inventory costing
methods should be used by a company that intends to minimize its income tax
expenses?
A) first-in, first-out
B) last-in, first-out
C) weighted-average
D) specific identification
At the beginning of the year, Conway Manufacturing had the following account
balances:
Work-in-Process Inventory
Finished Goods Inventory
Manufacturing Overhead
Cost of Goods Sold
Sales Revenue
The following additional details are provided for the year:
The ending balance in the Work-in-Process Inventory account is a ________.
A) credit of $69,300
B) debit of $2,000
C) credit of $2,000
D) debit of $69,300
Managerial accounting includes the planning function. Which of the following items
would be part of the planning function of a business’s managerial accounting?
A) comparing actual performance to previously budgeted amounts
B) creating detailed budgets
C) implementing operational plans
D) evaluating results of operations
In a production cost report, ________ includes the number of units completed and
transferred out of a process and the number of units remaining in ending WIP. The
weighted-average method is used.
A) total units estimated for
B) total units budgeted for
C) total units accounted for
D) total units to account for
Monument Corp. is preparing its budget for the first quarter of 2018. The following data
is provided:
April’s cost of goods sold is 32,000. The amount of Merchandise Inventory to be shown on
the budgeted balance sheet at March 31 would be ________.
A) $10,625
B) $11,750
C) $34,000
D) $13,000
Clement Marine Stores Company manufactures special metallic materials and
decorative fittings for luxury yachts that require highly skilled labor. Clement uses
standard costs to prepare its flexible budget. For the first quarter of the year, direct
materials and direct labor standards for one of their popular products were as follows:
Direct materials: 4 pounds per unit; $4 per pound
Direct labor: 4 hours per unit; $17 per hour
Clement produced 5,000 units during the quarter. At the end of the quarter, an
examination of the labor costs records showed that the company used 23,000 direct
labor hours and actual total direct labor costs were $390,000. The direct labor efficiency
variance was $51,000 U. Which of the following is a logical explanation for this
variance?
A) The company used more labor hours than allowed by the standards.
B) The company paid a higher cost per hour for labor than allowed by the standards.
C) The company used a higher quantity of direct materials than allowed by the
standards.
D) The company paid a higher cost for the direct materials than allowed by the
standards.
Shield Company needs to purchase a property to build their headquarters. An investor is
willing to exchange land worth $700,000 for shares of common stock. On the statement
of cash flows, this transaction would be shown as ________.
A) investing activities
B) non-cash investing and financing activities
C) operating activities
D) financing activities
The bank charged a service fee of $55. How would this information be included on the
bank reconciliation?
A) a deduction on the bank side
B) an addition on the book side
C) a deduction on the book side
D) an addition on the bank side
What are the two basic components of a computerized accounting information system?
A) sales journal and purchase journal
B) hardware and software
C) cash payments journal and cash receipts journal
D) network and cloud computing
Which of the following is the correct order of subtotals that appear on a multi-step
income statement?
A) Operating income, Gross profit, Net income
B) Gross profit, Net sales revenue, Net income
C) Net income, Operating income, Net income
D) Gross profit, Operating income, Net income
Briar Company provides cleaning services to commercial and residential customers.
The commercial business segment provided services to 270 customers and the
residential business segment provided services to 595 customers.
State which segment has the higher average variable cost per unit and provide the amount
of the average variable cost per unit for that segment. (Round the answer to the nearest
dollar.)
A) Residential, $124
B) Commercial, $86
C) Residential, $86
D) Commercial, $124
Which of the following statements is true of the flow of product and period costs for a
manufacturer?
A) When the manufacturing process is completed, the costs are transferred to the
Work-in-Process Inventory account.
B) The cost of the finished goods that the manufacturer sells becomes its Cost of Goods
Sold on the income statement.
C) Period costs remain in inventory accounts on the balance sheet until the product is
sold.
D) All product costs that have been paid are expensed and reported on the income
statement at the end of the accounting period.
Which of the following best describes the profitability index?
A) an index of projects based on their net income
B) the ratio of present value of net cash inflows to initial investment
C) the ratio of total cash inflows to initial investment
D) an array of possible investment outcomes at different discount rates
The time period concept states that ________.
A) financial statements can be prepared for specific periods
B) all expenses should be recorded when they are incurred during the period
C) companies should record revenue when it has been earned
D) expenses incurred during a period should be matched against the revenues of the
period
McDaniel Corporation had net income for 2016 of $75,000. McDaniel had 6,000 shares
of common stock outstanding at the beginning of the year and 22,000 shares of
common stock outstanding at the end of the year. There were 8,000 shares of preferred
stock outstanding all year. During 2016, McDaniel declared and paid preferred
dividends of $26,000. On December 31, 2106, the market price of McDaniel’s common
stock is $45 per share and the market price of its preferred stock is $73 per share. What
is McDaniel’s price/earnings ratio? (Round the answer to two decimal places.)
A) 12.86
B) 20.86
C) 13.20
D) 13.63
Effects Manufacturing produces a pesticide chemical and uses process costing. There
are three processing departments—Mixing, Refining, and Packaging. On January 1, the
Refining Department had 4,000 gallons of partially processed product in production.
During January, 30,000 gallons were transferred in from the Mixing Department, and
30,000 gallons were completed and transferred out. At the end of the month, 4,000
gallons of partially processed product remained in the Refining Department. See
additional details below.
Refining Department, ending balance at January 31
Percent completed for materials cost: 94%
Percent completed for conversion cost: 76%
What was the total number of equivalent units of production for conversion costs for
the month of January for the Refining Department?
A) 3,040 units
B) 33,040 units
C) 30,000 units
D) 3,760 units