DeVry NY ACCT 301 Week 4 Midterm Exam Set 2

1. Question : (TCO 1) The retained earnings statement shows all of the following except which one?
 Student Answer:   The amounts of changes in retained earnings during the period
    The causes of changes in retained earnings during the period
     The time period following the one shown for the income statement
    Beginning retained earnings on the first line of the statement

2. Question : (TCO 1) Management’s views on the company’s short-term debt paying ability, expansion financing, and results of operations are found in which of the following?
 Student Answer:   auditor’s report

     management discussion and analysis section

    notes to the financial statements

    president’s state of the company report

  
3. Question : (TCO 4) For 2010, Fielder Corporation reported net income of $30,000; net sales $400,000; and average share outstanding 6,000. There were no preferred stock dividends. What was the 2010 earnings per share?
 Student Answer:   $4.66

    $0.20

    $66.67

     $5.00

4. Question : (TCO 4) A useful measure of solvency is which of the following?
 Student Answer:   current ratio

    earnings per share

    return on assets ratio

     debt to total assets ratio

  
5. Question : (TCO 2) Which pair of accounts follows the rules of debit and credit, in relation to increases and decreases, in the same manner?
 Student Answer:   Accounts Payable and Rent Expense

    Repair Expense and Notes Payable

     Prepaid Insurance and Advertising Expense

    Service Revenues and Equipment

  
6. Question : (TCO 2) The principle purpose of posting is which of the following?
 Student Answer:   help identify errors made in the journal

     accumulate the effects of journalized transactions in the individual accounts
    enter transactions directly into the ledger

    help determine if the financial statements are ready to be prepared

7. Question : (TCO 3) Joe is a warehouse custodian, and also maintains the accounting record of the inventory held at the warehouse. An assessment of this situation indicates ______________________ .
 Student Answer:   documentation procedures are violated

    independent internal verification is violated

     segregation of duties is violated

    establishment of responsibility is violated

8. Question : (TCO 3) The following information was taken from Hurlbert Company cash budget for the month of June:
Beginning cash balance $23,000
Cash receipts 31,000
Cash disbursements 39,000
If the company has a policy of maintaining end of the month cash balance of $20,000, the amount the company would have to borrow is which of the following?
 Student Answer:   $12,000

     $5,000

    $15,000

    $0

9. Question : (TCO 11) Managerial accounting information does which of the following?
 Student Answer:   pertains to the entity as a whole and is highly aggregated

    must be prepared according to generally accepted accounting principles
     pertains to subunits of the entity and may be very detailed

    is prepared only once a year

10. Question : (TCO 11) Which one of the following is not a direct material?
 Student Answer:   A tire used for a lawn mower

    Plastic used in the covered case for a home PC

    Steel used in the manufacturing of steel-radial tires

     Lubricant for a ball-bearing joint for a large crane

  
11. Question : (TCO 11) Sales commissions are classified as which of the following?
 Student Answer:   overhead costs

     period costs

    product costs

    indirect labor

12. Question : (TCO 11) Manufacturing costs include which of the following?
 Student Answer:   direct materials and direct labor only

    direct materials and manufacturing overhead only

    direct labor and manufacturing overhead only

     direct materials, direct labor, and manufacturing overhead

13. Question : (TCO 11) Neeley Manufacturing Company reported the following year-end information:
Beginning work in process inventory $1,080,000
Beginning raw materials inventory 300,000
Ending work in process inventory 900,000
Ending raw materials inventory 480,000
Raw materials purchased 960,000
Direct labor 900,000
Manufacturing overhead 600,000
Neeley Manufacturing Company's cost of goods manufactured for the year is which of the following?
 Student Answer:   $2,280,000

     $2,460,000

    $2,100,000

    $2,640,000

  
14. Question : (TCO 5) What effect do changes in activity have on fixed costs per unit?
 Student Answer:   No effect. Fixed costs per unit stay the same at every activity level.
     An inverse effect.

    A directly proportional effect.

    It depends on the particular level of activity.

15. Question : (TCO 5) Which one of the following is not an assumption of CVP analysis?
 Student Answer:   All units produced are sold.

    Cost classifications are reasonably accurate.

     Factors other than changes in activity may affect costs.

    The sales mix remains constant.