Accounting Final
cara_m
acc_561_final.doc.docx|
|
|
The group of users of accounting information charged with achieving the goals of the business is its
|
|
auditors. |
|
|
investors. |
|
|
managers. |
|
|
creditors. |
Which of the following financial statements is concerned with the company at a point in time?
|
|
Income statement. |
|
|
Retained Earnings statement. |
|
|
Statement of cash flows. |
|
|
Balance sheet. |
||||||||||||
|
|
|
||||||||||||
|
|
|||||||||||||
|
|
The most important information needed to determine if companies can pay their current obligations is the
|
|
relationship between current assets and current liabilities. |
|
|
net income for this year. |
|
|
projected net income for next year. |
|
|
relationship between short-term and long-term liabilities. |
|
|
A liquidity ratio measures the
|
|
percentage of total financing provided by creditors. |
|
|
income or operating success of a company over a period of time. |
|
|
ability of a company to survive over a long period of time. |
|
|
short-term ability of a company to pay its maturing obligations and to meet unexpected needs for cash. |
Warning
|
Don't show me this message again for the assignment |
|
|
|
|
The convention of consistency refers to consistent use of accounting principles
|
|
among accounting periods. |
|
|
within industries. |
|
|
among firms. |
|
|
throughout the accounting periods. |
Horizontal analysis is also known as
|
|
common size analysis. |
|
|
linear analysis. |
|
|
vertical analysis. |
|
|
trend analysis. |
Warning
|
Don't show me this message again for the assignment |
|
|
Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time
|
|
that has been arranged from the highest number to the lowest number. |
|
|
that has been arranged from the lowest number to the highest number. |
|
|
to determine which items are in error. |
|
|
to determine the amount and/or percentage increase or decrease that has taken place. |
|
|
Vertical analysis is a technique that expresses each item in a financial statement
|
|
in dollars and cents. |
|
|
as a percent of the item in the previous year. |
|
|
as a percent of a base amount. |
|
|
starting with the highest value down to the lowest value. |
Process costing is used when
|
|
the production process is continuous. |
|
|
production is aimed at filling a specific customer order. |
|
|
costs are to be assigned to specific jobs. |
|
|
|
|
An important feature of a job order cost system is that each job
|
|
must be similar to previous jobs completed. |
|
|
has its own distinguishing characteristics. |
|
|
must be completed before a new job is accepted. |
|
|
consists of one unit of output. |
||||||||||||
|
|
|
||||||||||||
|
|
|||||||||||||
|
|
An activity that has a direct cause-effect relationship with the resources consumed is a(n)
|
|
overhead rate. |
|
|
cost pool. |
|
|
product activity. |
|
|
cost driver. |
Warning
|
|
|
|
|
|
Activity-based costing
|
|
allocates overhead to multiple activity cost pools, and it then assigns the activity cost pools to products and services by means of cost drivers. |
|
|
accumulates overhead in one cost pool, then assigns the overhead to products and services by means of a cost driver. |
|
|
assigns activity cost pools to products and services, then allocates overhead back to the activity cost pools. |
|
|
allocates overhead directly to products and services based on |
|
|
A cost which remains constant per unit at various levels of activity is a
|
|
mixed cost. |
|
|
variable cost. |
|
|
manufacturing cost. |
|
|
fixed cost. |
|
|
The break-even point is where
|
|
contribution margin equals total fixed costs. |
|
|
total variable costs equal total fixed costs. |
|
|
total sales equal total fixed costs. |
|
|
total sales equal total variable costs. |
Warning
|
|
|
|
|
|
Fixed costs are $600,000 and the contribution margin per unit is $150. What is the break-even point?
|
|
4,000 units |
|
|
$1,500,000 |
|
|
$4,000,000 |
|
|
1,500 units |
When a company assigns the costs of direct materials, direct labor, and both variable and fixed manufacturing overhead to products, that company is using
|
|
product costing. |
|
|
operations costing. |
|
|
absorption costing. |
|
|
variable costing. |
If a division manager's compensation is based upon the division's net income, the manager may decide to meet the net income targets by increasing production when using
|
|
absorption costing, in order to increase net income. |
|
|
absorption costing, in order to decrease net income. |
|
|
variable costing, in order to increase net income. |
|
|
variable costing, in order to decrease net income. |
Warning
|
Don't show me this message again for the assignment |
|
|
An unrealistic budget is more likely to result when it
|
|
has been developed in a bottom up fashion. |
|
|
has been developed in a top down fashion. |
|
|
has been developed by all levels of management. |
|
|
is developed with performance appraisal usages in mind. |
||||||||||||||
|
|
|
The purpose of the sales budget report is to
|
|
control selling expenses. |
|
|
determine whether sales goals are being met. |
|
|
determine whether income objectives are being met. |
|
|
The accumulation of accounting data on the basis of the individual manager who has the authority to make day-to-day decisions about activities in an area is called
|
|
flexible accounting. |
|
|
master budgeting. |
|
|
responsibility accounting. |
|
|
static reporting. |
Warning
|
|
|
|
Variance reports are
|
|
(a) external financial reports. |
|
|
(b) SEC financial reports. |
|
|
(c) internal reports for management. |
|
|
(d) all of these. |
Warning
|
|
|
|
Internal reports that review the actual impact of decisions are prepared by
|
|
the controller. |
|
|
management accountants. |
|
|
factory workers. |
|
|
department heads. |
Warning
The process of evaluating financial data that change under alternative courses of action is called
|
|
incremental analysis. |
|
|
cost-benefit analysis. |
|
|
double entry analysis. |
|
|
contribution margin analysis. |
|
|
Seasons Manufacturing manufactures a product with a unit variable cost of $100 and a unit sales price of $176. Fixed manufacturing costs were $480,000 when 10,000 units were produced and sold. The company has a one-time opportunity to sell an additional 1,000 units at $140 each in a foreign market which would not affect its present sales. If the company has sufficient capacity to produce the additional units, acceptance of the special order would affect net income as follows:
|
|
Income would increase by $140,000. |
|
|
Income would decrease by $8,000. |
|
|
Income would increase by $8,000. |
|
|
Income would increase by $40,000. |
Warning
|
Don't show me this message again for the assignment |
|
|
|
|
Carter, Inc. can make 100 units of a necessary component part with the following costs:
|
Direct Materials |
$120,000 |
|
Direct Labor |
20,000 |
|
Variable Overhead |
60,000 |
|
Fixed Overhead |
40,000 |
If Carter can purchase the component externally for $220,000 and only $10,000 of the fixed costs can be avoided, what is the correct make-or-buy decision?
|
|
Make and save $30,000 |
|
|
Buy and save $10,000 |
|
|
Buy and save $30,000 |
|
|
Make and save $10,000 |
A company has a process that results in 15,000 pounds of Product A that can be sold for $16 per pound. An alternative would be to process Product A further at a cost of $200,000 and then sell it for $28 per pound. Should management sell Product A now or should Product A be processed further and then sold? What is the effect of the action?
|
|
Sell now, the company will be better off by $200,000. |
|
|
Process further, the company will be better off by $20,000. |
|
|
Sell now, the company will be better off by $20,000. |
|
|
Process further, the company will be better off by $180,000. |
Warning
