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A200 Final

Beschreibung

A200 Final, IU Spring 2015
Natalie Rook
Quiz von Natalie Rook, aktualisiert more than 1 year ago
Natalie Rook
Erstellt von Natalie Rook vor etwa 9 Jahre
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Zusammenfassung der Ressource

Frage 1

Frage
Which of the following financial statement elements is closed at the end of an accounting cycle?
Antworten
  • Liabilities
  • Equity
  • Revenues
  • Assets

Frage 2

Frage
The recognition of an expense may be accompanied by which of the following?
Antworten
  • an increase in assets
  • a decrease in liabilities
  • a decrease in revenue
  • an increase in liabilities

Frage 3

Frage
Recording accrued salary expense at the end of an accounting period causes an increase in Salaries Expense and
Antworten
  • an increase in a liability
  • a decrease in an asset
  • an increase in an equity account
  • none of these

Frage 4

Frage
Which of the following does not involve a deferral?
Antworten
  • receipt of advance fees from clients
  • recording salaries of employees earned but not yet paid
  • payment of six months rent
  • purchase of supplies on account

Frage 5

Frage
Resources that a business uses to operate the business are called
Antworten
  • assets
  • equity
  • revenues
  • liabilities

Frage 6

Frage
Most assets must be reported on the balance sheet at
Antworten
  • their current replacement cost
  • fair market value
  • an amount estimated by the company's management
  • historic cost

Frage 7

Frage
Paying for a two-year insurance policy in advance will have what impact on a company's account classifications?
Antworten
  • increase assets, increase stockholders' equity
  • increase assets, increase liabilities
  • increase assets, decrease liabilities
  • this transaction will have no impact on major classification totals

Frage 8

Frage
Under accrual basis of accounting
Antworten
  • cash must be received before revenue is recognized
  • net income is calculated by matching cash outflows against cash inflows
  • events that change a company's financial statements are recognized in the period they occur rather than in the period in which cash is paid/received
  • the ledger, accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accountant principles

Frage 9

Frage
Which of the following events involves an accrual?
Antworten
  • interest earned but not received
  • supplies purchased with cash but not yet used
  • a cash payment received from a customer before services provided
  • A and C

Frage 10

Frage
The recognition of an expense may be accompanied by which of the following?
Antworten
  • an increase in assets
  • a decrease in liabilities
  • a decrease in revenue
  • an increase in liabilities
  • none of the above

Frage 11

Frage
Which of the following accounts is a permanent account (an account that is not closed)?
Antworten
  • Rent expense
  • Service revenue
  • Dividends
  • Prepaid Insurance

Frage 12

Frage
Which of the following accounts is a temporary account?
Antworten
  • prepaid insurance
  • unearned subscriptions revenue
  • retained earnings
  • subscription revenue

Frage 13

Frage
The matching concept refers to the "matching" of
Antworten
  • expenses and liabilities
  • expenses and revenues
  • assets and equity
  • assets and liabilities

Frage 14

Frage
Which of the following transactions involve a deferral?
Antworten
  • recording the payment of 3 months rent
  • recording the interest earned (but not received) on a certificate of deposit
  • recording interest accepted on a note payable
  • recording salaries of employees earned but not yet paid

Frage 15

Frage
The accountant for ProTex Painting forgot the following two adjustments at the end of 1997: A) the entry to record depreciation: $750 B) the entry to record the portion of fees received in advance which have now been earned: $750 As a result of these 2 omissions:
Antworten
  • net income for ProTex Painting for 1997 is overstated
  • net income for ProTex Painting for 1997 is understated
  • assets of ProTex Painting are understated at December 31, 1997
  • liabilities of ProTex Painting are overstated at December 31, 1997

Frage 16

Frage
If a company fails to adjust a Prepaid Rent account for rent that has expired, what effect will this have on that month's financial statements?
Antworten
  • failure to make an adjustment does not affect the financial statements
  • expenses will be overstated and net income and owner's equity will be understated
  • assets will be overstated and net income and owner's equity will be understated
  • assets will be overstated and net income and owner's equity will be overstated

Frage 17

Frage
Recognition of revenue may result in which of the following?
Antworten
  • a decrease in a liability
  • an increase in a liability
  • an increase in assets
  • A and C

Frage 18

Frage
Depreciation is the process of
Antworten
  • valuing an asset at its fair market value
  • increasing the value of an asset over its useful life in a rational and systematic manner
  • allocating the cost of a productive asset to expense over its useful life in a rational and systematic manner
  • writing down an asset to its real value each accounting period

Frage 19

Frage
The balance sheet item that represents the portion of stockholders' equity resulting from profitable operation of the business is:
Antworten
  • accounts receivable
  • cash
  • capital stock
  • retained earnings

Frage 20

Frage
The purpose of the accrual basis of accounting is to:
Antworten
  • report revenue when received
  • improve the matching of revenue and expense in the proper period
  • report expenses when cash disbursements are made
  • improve the company's earnings per share

Frage 21

Frage
Perry's Puppies needed additional equipment, which was purchased on credit for $600. Which of the following is not true regarding the accounting for this transaction?
Antworten
  • Equipment increased by $600
  • Accounts payable increased by $600
  • Expenses increased by $600
  • All of the above are true

Frage 22

Frage
At the first of the month Max paid a total of $2,400 for six months rent in advance. When he recorded the payment, he entered $2,400 into the Prepaid Rent account. At the end of the month, what adjustment should Max make?
Antworten
  • Increase Prepaid Rent by $400 and increase Rent Expense by $400
  • Decrease Prepaid Rent by $2,400 and decrease Rent Expense by $2,400
  • Decrease Prepaid Rent by $400 and decrease Rent Expense by $400
  • None of the above

Frage 23

Frage
Which of the following adjustments are necessary if a company has earned 1/3 of a customer's prepayment of insurance premium?
Antworten
  • increase unearned revenue
  • increase cash
  • increase insurance revenue
  • increase insurance expense

Frage 24

Frage
Which of the following transactions changes only the mix of assets and does not affect liabilities or stockholders' equity?
Antworten
  • borrowed $40,000 from First National Bank
  • purchased land for cash
  • received $3,800 for fees earned
  • paid $4,000 for office salaries

Frage 25

Frage
On January 24, 2007, Niche Consulting collected $5,700 it had billed its clients for services rendered on December 31, 2006. How would you record the January 24 transaction, using the accrual basis?
Antworten
  • Increase Cash, $5,700; decrease Fees Earned, $5,700
  • Increase Accounts Receivable, $5,700; increase Fees Earned, $5,700
  • Increase Cash, $5,700; decrease Accounts Receivable, $5,700
  • Increase Cash, $5,700; increase Fees Earned, $5,700

Frage 26

Frage
If a company fails to adjust unearned revenue for services that had been performed, what effect will this have on major accounts classifications?
Antworten
  • understate revenues, understate net income, overstate assets, understate stockholders' equity
  • understate revenues, understate net income, overstate liabilities, overstate stockholders' equity
  • understate revenues, understate net income, understate liabilities, understate stockholders' equity
  • understate revenues, understate net income, overstate liabilities understate stockholders' equity

Frage 27

Frage
One purpose of making closing entries is
Antworten
  • to reduce the number of expense accounts
  • to prepare the temporary accounts for the recording of the next period's activities
  • to establish new balances j.n the asset and liability accounts
  • to enable the accountant to prepare financial statements at the end of the accounting period
  • none of the above

Frage 28

Frage
Guy, Inc., pays its employees on the tenth day of each month. If the adjusting entry for accrued wages on December 31 were not made, which of the following would result?
Antworten
  • Assets would be overstated.
  • Stockholders' equity would be understated.
  • Net income for the period would be understated.
  • Liabilities would be understated.
  • Net income for the period would be unaffected.

Frage 29

Frage
Adjusting entries
Antworten
  • assign revenues to the period in which they are earned.
  • help to properly measure the periods net income or net loss.
  • bring asset and liability accounts to correct balances.
  • all of the above.

Frage 30

Frage
Which of the following statements about owner's equity is NOT correct?
Antworten
  • Expenses decrease owner's equity
  • Contributions of owners increase owner's equity
  • Dividends distributed to owners increase owner's equity
  • Revenues increase owner's equity

Frage 31

Frage
On April 20, Iceland Rink agrees to rent the skating rink to the St. Paul Hockey Club four hours every day during May. The total cost of the ice time is $6,000. The Hockey Club pays $2,000 on April 20 and the remaining $4,000 on June 10. Assuming that Iceland prepares monthly financial statements and uses the accrual basis of accounting, it should recognize this $6,000 revenue.
Antworten
  • In April
  • In May
  • $2,000 in April and $4,000 in June
  • In June

Frage 32

Frage
On April 20, Iceland Rink agrees to rent the skating rink to the St. Paul Hockey Club four hours every day during May. The total cost of the ice time is $6,000. The Hockey Club pays $2,000 on April 20 and the remaining $4,000 on June 10. Assume the same facts as in the preceding question, except that Iceland Rink uses the cash basis of accounting. Iceland should recognize the $6,000 revenue
Antworten
  • In April
  • In May
  • $2,000 in April and $4,000 in June
  • In June

Frage 33

Frage
Examples of accruals are
Antworten
  • salaries payable, depreciation of equipment, and prepaid insurance
  • taxes payable, rent received in advance, and office supplies
  • prepaid rent, revenue received in advance, and prepaid salaries
  • salaries payable, interest receivable, and taxes payable

Frage 34

Frage
Which one of the following direct effects on the fundamental accounting model is NOT possible as a result of transaction analysis?
Antworten
  • decrease a liability and decrease an asset
  • increase owner's equity and increase an asset
  • increase an asset and decrease and asset
  • decrease owner's equity and increase an asset

Frage 35

Frage
The bookkeeping failed to accrue interest expense at year end. This will result in an
Antworten
  • understatement of liability, and an overstatement of net income and owner's equity
  • overstatement of liabilities and an understatement of net income and owner's equity
  • overstatement of assets, net income, and owner's equity
  • understatement of assets, net income, and owner's equity

Frage 36

Frage
The 2 major divisions of stockholder's equity are
Antworten
  • revenues and expenses
  • sales and costs of goods sold
  • assets and liabilities
  • contributed capital and retained earnings

Frage 37

Frage
When expenses exceed revenues in a given period (and there are no gains or losses)
Antworten
  • owner's equity will not be impacted
  • owner's equity will be increased
  • owner's equity will be decreased
  • one cannot determine the impact on owner's equity without additional information

Frage 38

Frage
Prepaid expenses are
Antworten
  • paid and recorded in an asset account before they are used or consumed
  • paid and recorded in an asset account after they are used or consumed
  • incurred but not yet paid or recorded
  • incurred and already paid or recorded

Frage 39

Frage
A statement of retained earnings shows
Antworten
  • The changes in the Cash account occunirig during the the accounting period
  • The revenue, expense, and dividends of the accounting period
  • The types of assets which have been purchased with the earnings retained during the accounting period
  • The changed in the retained earnings account occurring during the accounting period

Frage 40

Frage
The terms "risk" and "retun" are related in that
Antworten
  • risky investments always generate low returns
  • when one goes up, the other usually goes up
  • they generally rise and fall somewhat inversely
  • smaller investments usually incur smaller risk but generate higher returns

Frage 41

Frage
The major accounting difference between interest paid to creditors and dividends paid to owners is
Antworten
  • interest paid decreases and dividends paid increases retained earnings
  • interest paid is on the income statement and dividends paid are not
  • interest paid is not on the income statement and dividends paid are
  • Both are treated identically by accountants

Frage 42

Frage
When should a company report the cost of an insurance policy as an expense?
Antworten
  • When the company first signs the policy
  • When the company pays for the policy
  • When the company receives the benefits from the policy over its period of coverage
  • When the company receives payments from the insurance company for its insurance claims

Frage 43

Frage
The fiscal year of a business is usually determined by
Antworten
  • the IRS
  • the lottery
  • the business
  • the SEC

Frage 44

Frage
If a resource has been consumed but a bill has not been received at the end of the accounting period then
Antworten
  • an expense should be recorded when the bill is received
  • an expense should be recorded when the cash is paid out
  • an adjusting entry should be made recognizing the expense
  • it is optional whether to record the expense before the bill is received

Frage 45

Frage
If expenses are paid in cash then
Antworten
  • assets will increase
  • liabilities will increase
  • owner's equity will increase
  • assets will decrease

Frage 46

Frage
The matching principle means that
Antworten
  • expenses are recorded in the same period as the revenues to which they are related
  • debits are matched with credits in each journal entry so that the entry balances
  • the taxable income of a corporation matches the income reported to shareholder
  • manufacturers of matches use accounting principles that are different from those used by retailers of matches

Frage 47

Frage
The revenue recognition principle means that
Antworten
  • some business persons do not realize how much their income their business is earning
  • expenses may not be recorded until the related revenue is earned
  • revenues are recorded when earned, regardless of the time payment is received
  • revenues cannot occur unless an exchange or performance rakes place

Frage 48

Frage
When a corporation pays a cash dividend it reduces the balance
Antworten
  • of its cash account and retained earnings account
  • of its common stock account and its cash account
  • of its retained earnings account and its capital account
  • of its dividends account and its common stock account

Frage 49

Frage
By examining the income statement of a corporation it is possible to determine the amount of
Antworten
  • money available for the payment of dividends
  • dividends actually paid during the period
  • expenses the company incurred on the last day of the accounting period
  • revenues earned during the accounting period

Frage 50

Frage
Outflows or the using of asset as a result of the major or central operations of a business are termed:
Antworten
  • Liabilities
  • Owner's equity
  • Revenues
  • Expenses
  • Net losses

Frage 51

Frage
Which of the following financial statements presents the financial position of a firm at a particular point in time?
Antworten
  • income statement
  • balance sheet
  • statement of cash flows
  • retained earnings statement

Frage 52

Frage
Income statement accounts are
Antworten
  • assets and liabilities
  • revenues and dividends
  • revenues and expenses
  • assets and dividends

Frage 53

Frage
The total assets of Mr. Brown are greater than the total assets of Mr. Greene. From this one can conclude that
Antworten
  • Mr. Brown is wealthier than Mr. Greene.
  • Mr. Brown' s balance sheet is different from Mr. Greene's
  • Mr. Brown's first name is Charlie
  • Mr. Brown owes more money than Mr. Greene

Frage 54

Frage
The two component of stockholders' equity on a balance sheet for a corporation are
Antworten
  • liabilities and capital stock
  • assets and retained earnings
  • assets and liabilities
  • capital stock and retained earnings

Frage 55

Frage
A transaction was recorded as the purchase of an asset during the period but the adjusting entry required at the end of the period was not made. The most likely result is
Antworten
  • the asset is overstated and income is understated
  • the asset is understated and income is overstated
  • both the asset and income are overstated
  • both the asset and income are understated

Frage 56

Frage
Lida Corporation receives payment of 5200,000 from customers for amounts previously owed to Lida. The recording of this event in Lida's fmancial statement will:
Antworten
  • increase total assets
  • decrease total assets
  • have no effect on total assets
  • decrease total liabilities

Frage 57

Frage
Examples of accruals are
Antworten
  • salaries payable, depreciation of equipment, and prepaid insurance
  • taxes payable, rent received in advance, and office supplies
  • prepaid rent, revenue received in advance, and prepaid salaries
  • salaries payable, interest receivable, and taxes payable

Frage 58

Frage
Which one of the following direct effects on the fundamental accounting model is NOT possible as a result of transaction analysis?
Antworten
  • Decrease a liability and decrease an asset
  • Increase owners' equity and increase an asset
  • Increase an asset and decrease an asset
  • Decrease owners' equity and increase an assett

Frage 59

Frage
Which of the following statements about owners' equity is NOT correct?
Antworten
  • expenses decrease owners' equity
  • contributions of owners' equity increase owners' equity
  • dividends distributed to owners increase owners' equity
  • revenues increase owners' equity

Frage 60

Frage
If the company's volume doubles, the cost per unit will
Antworten
  • stay the same
  • double as well
  • increase, but will not double
  • decrease

Frage 61

Frage
Which of the following appears in the income statement of a merchandising business, but not in the income statement of a business that renders only services?
Antworten
  • interest revenue
  • gross profit
  • advertising expenses
  • income taxes expense

Frage 62

Frage
Product costs are also referred to as
Antworten
  • period costs
  • selling and administrative expenses
  • operating expenses
  • inventory costs

Frage 63

Frage
What is the relationship between gross margin and net income?
Antworten
  • gross margin - merchandise inventory at the end of the period = net income
  • gross margin - selling and admin. expenses = net income
  • gross margin + selling and admin. expenses = net income
  • sales revenue * gross margin percentage = net income

Frage 64

Frage
Which of the following is a TRUE statement regarding product and/or period costs?
Antworten
  • period costs never appear in the balance sheet
  • product costs appear on the income statement but never on the balance sheet
  • period costs appear first on the balance sheet and then later on the income statement
  • neither product nor period costs ever appear on the balance sheet
  • neither product nor period costs ever appear on the income statement

Frage 65

Frage
Which of the following is TRUE of fixed costs?
Antworten
  • fixed costs are fixed in total and fixed per unit of the activity base
  • fixed costs are variable in total and fixed per unit of the activity base
  • fixed costs are fixed in total and variable per unit of the activity base
  • fixed costs are variable in the short-run, but are fixed in the long-run

Frage 66

Frage
Work-in-process inventory is composed of:
Antworten
  • direct material and direct labor
  • direct labor and manufacturing overhead
  • direct material only
  • direct material, direct labor, and direct manufacturing overhead

Frage 67

Frage
If prices are rising, which of the following gives us the highest cost of goods sold?
Antworten
  • LIFO
  • FIFO
  • retail method
  • weighted average

Frage 68

Frage
Which of the following is a product cost?
Antworten
  • advertising expenditures
  • insurance on the office buildings
  • depreciation of the salesmen's car
  • depreciation of the production facilities

Frage 69

Frage
How is the balance sheet of a merchandising firm different from the balance sheet of a service business?
Antworten
  • it includes the asset, accounts receivable
  • it reports the cost of goods sold
  • it includes the asset, merchandise inventory
  • it reports various period costs

Frage 70

Frage
The break-even point is that level of activity where total revenue equals:
Antworten
  • total cost
  • fixed cost
  • variable cost
  • product cost

Frage 71

Frage
Management is interested in utilizing the full capacity of production facilities because it
Antworten
  • spreads variable costs over a greater number of units, thereby reducing the variable cost per unit
  • spreads fixed costs over a greater number of units, thereby reducing the fixed cost per unit
  • reduces total variable costs
  • reduces total fixed costs

Frage 72

Frage
The terms on an invoice are 4/15, n/30. This means that
Antworten
  • a discount of 4% will be allowed if payment is made within 15 days from the date of the invoice
  • a discount of 15% will be allowed if payment is made with 4 days grin the date of the invoice
  • a discount of 4% will be allowed if payment is made by the 15th of the month
  • a discount of 15% will be allowed if payment is made by the 4th day after the data of the invoice

Frage 73

Frage
The primary disadvantage of a just-in-time inventory system is
Antworten
  • a reduction in the amount of money tied up in inventory
  • the company must use FIFO inventory method, and forgo the income tax advantages of LIFO
  • smaller inventories may reduce the company's current ratio and working capital
  • the risk is increased of losing sales opportunities or having to shut down manufacturing operations because of inventory shortages

Frage 74

Frage
What costs should be included in the merchandise inventory account of a merchandising firm?
Antworten
  • the purchase price of merchandise only
  • all costs necessary to acquire inventory and prepare it for sale
  • an allocated portion of period costs
  • the purchase price of the merchandise + selling expenses

Frage 75

Frage
Which inventory method results in the lowest income taxes during periods of increasing prices?
Antworten
  • FIFO
  • LIFO
  • weighted average
  • work-in-process

Frage 76

Frage
The inventory valuation method that results in the recognition of the most recent inventory costs on the balance sheet and income statement is
Antworten
  • Balance sheet - FIFO Income statement - LIFO
  • Balance sheet - FIFO Income statement - FIFO
  • Balance sheet - LIFO Income statement - LIFO
  • Balance sheet - LIFO Income statement - FIFO

Frage 77

Frage
When raw materials enter the production process in a traditional manufacturing setting, their costs are transferred to:
Antworten
  • a raw materials account
  • a direct materials account
  • a work in process account
  • a costs of goods sold account

Frage 78

Frage
Company's goods in transit at December 31 include sales made 1) FOB destination 2) FOB shipping point and purchases made 3) FOB destination 4) FOB shipping point what items should be included in their inventory at December 31?
Antworten
  • 2 and 3
  • 1 and 4
  • 1 and 3
  • 2 and 4

Frage 79

Frage
As an incentive for customers to pay their accounts promptly, a business may offer its customers
Antworten
  • a sales discount
  • free delivery
  • a sales allowance
  • a sales return

Frage 80

Frage
When the cost of a product is matched with its sales price, the result (difference) is
Antworten
  • a cost of goods sold
  • gross profit
  • net income
  • contribution margin

Frage 81

Frage
Two companies report the same costs of goods available for sale but each employ a different inventory costing method. If the price of goods has increased during the period, then the company using
Antworten
  • LIFO will have the highest ending inventory
  • FIFO will have the highest cost of goods sold
  • FIFO will have the highest ending inventory
  • LIFO will have the lowers cost of goods sold

Frage 82

Frage
The LIFO inventory method assumes that the cost of the latest units purchased are
Antworten
  • the last to be allocated to cost of goods sold
  • the first to be allocated to ending inventory
  • the first to be allocated to cost of goods sold
  • not allocated to cost of goods sold or ending inventory

Frage 83

Frage
When the sales price rises, the number of units required to be sold to break even
Antworten
  • increases
  • stays the same
  • decreases
  • the answer cannot be determined from the above information

Frage 84

Frage
Two categories of expenses in merchandising companies are
Antworten
  • cost of goods sold and financing expenses
  • operating expenses and financing expenses
  • cost of goods sold and operating expenses
  • sales and cost of goods sold

Frage 85

Frage
The credit term offered to a customer by a business firm were 2/10, n/30, which means that
Antworten
  • the customer must pay the bill within 10 days
  • the customer can deduct a 2% discount if the bill is paid between the 10th and 30th day of the invoice data
  • the customer can deduct a 2% discount if the bill is paid within the 10 days of the invoice date
  • two sales returns can be made within 10 days of the invoice date and no returns thereafter

Frage 86

Frage
The factor which determines whether or not goods should be included in a physical count of inventory is
Antworten
  • physical possession
  • legal title
  • management's judgements
  • whether or not the purchase price has been paid

Frage 87

Frage
If goods in transit are shipped FOB destination
Antworten
  • the seller has legal title to the goods until they are delivered
  • the buyer has legal title to the goods until they are delivered
  • the transportation company has legal title to the goods while the goods are in transit
  • no one has legal title to the goods until they are delivered

Frage 88

Frage
Tom had 100 thimbles that were completed at the end of the year but not yet been sold. Where would the costs of these items be found?
Antworten
  • raw materials
  • finished goods
  • work in process
  • cost of goods sold

Frage 89

Frage
Which of the following will increase net income?
Antworten
  • decrease sales price
  • decrease fixed costs
  • decrease sales volume
  • increase variable costs

Frage 90

Frage
Which of the following is the difference between the sales revenue per unit and the variable cost per unit?
Antworten
  • profit
  • total contribution margin
  • contribution margin per unit
  • none of the above

Frage 91

Frage
Cost behavior analysis focuses on
Antworten
  • how costs respond to changes in profits
  • how costs change over time
  • how costs change as output changes
  • none of the above

Frage 92

Frage
When the sales volume is above the break-even point, the company's
Antworten
  • total costs exceed total revenues
  • marginal costs exceed marginal revenues
  • total revenues exceed total costs
  • it depends on the facts of the situation

Frage 93

Frage
The excess of a product's selling price over its variable costs is referred to as
Antworten
  • gross profit
  • contribution margin
  • gross margin
  • manufacturing margin

Frage 94

Frage
Which of the following should NOT be recorded as an expense?
Antworten
  • paid office salaries
  • paid factory maintenance costs
  • paid product advertising costs
  • paid sales commissions

Frage 95

Frage
Which of the following statements is INCORRECT with regard to product costs?
Antworten
  • product costs flow from the balance sheet to the income statement
  • unlike direct material and direct labor costs, overhead costs must be allocated products
  • product costs are expensed in the period incurred
  • depreciation on manufacturing equipment is an indirect product cost

Frage 96

Frage
Which of the following statements concerning product costs versus general, selling, and administrative costs is true?
Antworten
  • product costs incurred during the period will always appear as inventory on the balance sheet
  • general, selling, and administrative costs are always expensed when cash is paid
  • product costs may be divided between the balance sheet and income statement
  • general, selling, and administrative costs sometimes appear as inventory on the balance sheet

Frage 97

Frage
Identify the true statement regarding how product costs in a manufacturing company differ from product costs in a service company
Antworten
  • manufacturing companies incur costs for supplies but service companies do not
  • manufacturing companies accumulate product costs for supplies but service companies do not
  • service companies generally incur less labor costs than manufacturing companies
  • service companies are less competitive than manufacturing companies

Frage 98

Frage
Fixed cost per unit
Antworten
  • decreases as production volume decreases
  • is not affected by changes in the production volume
  • increases as production volume increases
  • decreases as production volume increases

Frage 99

Frage
All of the following could help to reduce variable costs except
Antworten
  • purchase less expensive direct materials
  • reduce direct labor hours necessary for production
  • reduce sales commission percentage
  • reduce advertising costs

Frage 100

Frage
Which of the following will increase contribution margin?
Antworten
  • decrease sales price
  • decrease fixed costs
  • decrease variable costs
  • increase variable costs

Frage 101

Frage
Manufacturing companies
Antworten
  • provide services
  • buy merchandise inventory and then resell it
  • transform raw materials into finished products
  • do none of the above

Frage 102

Frage
To determine the inventory count, a business will count all merchandise that
Antworten
  • is physically present
  • the business owns
  • is physically presents plus merchandise shipped FOB destination
  • is physically presents plus merchandise shipped FOB shipping point

Frage 103

Frage
Which of the following accounts maintained by a manufacturer would be the equivalent of a retailer's merchandise inventory?
Antworten
  • cost of goods sold
  • finished goods inventory
  • materials inventory
  • work in process inventory

Frage 104

Frage
As volume increase, average cost per unit
Antworten
  • increases
  • decreases
  • remains constant
  • increases in proportion to the change in volume

Frage 105

Frage
All else constant, if the selling price falls,
Antworten
  • total variable costs will be lower than expected
  • contribution margin percentage will be higher than expected
  • total contribution margin will be higher than expected
  • per-unit contribution margin will be lower than expected

Frage 106

Frage
A firm would
Antworten
  • prefer to operate above the breakeven point because costs will be lower
  • prefer to operate above the breakeven point as revenue will be less than costs
  • prefer to operate above the breakeven point as revenue will be more than costs
  • prefer to operate at breakeven point because it provided equilibrium

Frage 107

Frage
A physical count of inventory must be taken in order to determine the cost of goods sold under which of the following inventory systems?
Antworten
  • perpetual inventory system
  • periodic inventory system
  • weighted-average system
  • LIFO inventory system

Frage 108

Frage
In a period of recession or declining prices, which of the following inventory pricing methods would result in the smallest income tax expense?
Antworten
  • wighted-average cost
  • LIFO
  • FIFO
  • all of the above

Frage 109

Frage
The inventory method that includes the most recent prices in cost of goods sold is
Antworten
  • average cost
  • FIFO
  • LIFO
  • specific identification

Frage 110

Frage
If a company has a positive contribution margin but net income is low or negative, what are some ways of increasing net income?
Antworten
  • decrease sales price
  • decrease sales volume
  • increase variable costs
  • increase sales volume

Frage 111

Frage
At the break even point, total contribution margin is
Antworten
  • zero
  • equal to total fixed costs
  • equal to total costs
  • equal to total variable costs

Frage 112

Frage
When the sales price decreases, the number of units requires to be sold to break even
Antworten
  • increases
  • stays the same
  • decreases
  • the answer cannot be determined from the information above

Frage 113

Frage
The total contribution margin is calculated as the difference between
Antworten
  • sales price and variable cost per unit
  • sales price and fixed cost per unit
  • total revenue and total fixed cost
  • total revenue and total cost
  • total revenue and total variable cost

Frage 114

Frage
The contribution income statement differs from the traditional income statement in which of the following ways?
Antworten
  • the traditional income statement separates costs into their fixed and variable components
  • the traditional income statement subtracts all variable expenses from sales to obtain the contribution margin
  • cost-volume-profit relationship can be analyzed from the contribution income statement
  • the effect of sales volume changes on profit is readily apparent on the traditional income statement

Frage 115

Frage
Firm A and Firm B are competitors within the same industry. Firm A produces its products using large amounts of direct labor. Firm B has replaced direct labor with investment in machinery. Projected sales for both firms are 15% LESS than in the prior year. Which statement regarding projected profits are TRUE?
Antworten
  • Firm A will lose more profit than Firm B
  • Firm B will lose more profit than Firm A
  • Firm A and Firm B will lose the same amount of profit
  • Neither Firm A or Firm B will lose profit

Frage 116

Frage
Costs that are expensed as incurred are
Antworten
  • direct costs
  • indirect costs
  • product costs
  • period costs

Frage 117

Frage
Goods that are ready for sale are classified as
Antworten
  • raw materials inventory
  • work in process
  • finished goods inventory
  • cost of goods sold

Frage 118

Frage
Product costs are expensed when the product is
Antworten
  • purchased
  • manufactured
  • inventoried
  • sold

Frage 119

Frage
Goods that have been started but are not completed are considered
Antworten
  • raw material inventory
  • work in process
  • finished goods inventory
  • cost of goods sold

Frage 120

Frage
If prices are rising, which of the following gives the lowest ending inventory value?
Antworten
  • weighted average
  • retail inventory method
  • FIFO
  • LIFO

Frage 121

Frage
The FIFO inventory cost method differs from the LIFO method in that the
Antworten
  • LIFO method more clearly matches current inventory cost with sales revenue
  • FIFO method more clearly matches current inventory cost with sales revenue
  • LIFO method assumes the oldest purchases are stored in the rear of the storage areas
  • FIFO method is more acceptable accounting method

Frage 122

Frage
Contribution margin can be defined as
Antworten
  • the amount of sales revenue necessary to cover variable costs
  • sales revenue minus fixed costs
  • the amount of sales revenue necessary to cover fixed and variable costs
  • sales revenue minus variable costs

Frage 123

Frage
If prices were declining and you wanted to minimize tax payments, which inventory method would you use?
Antworten
  • LIFO
  • FIFO
  • weighted average
  • specific identification

Frage 124

Frage
Gerrard Company is determining ending merchandise inventory. Which of the following items should be included?
Antworten
  • an inventory of office supplies such as pens and paper clips
  • goods purchased FOB destination for resale and not yet arrived yet
  • goods sold to customers FOB destination and now enroute to customers
  • a group of used cash registers no longer used by the store and awaiting sale

Frage 125

Frage
Which of the following would cause the breakeven point to change?
Antworten
  • sales increased
  • total production decreased
  • total variable costs increased as a function of higher production
  • fixed costs increased due to addition to physical plant

Frage 126

Frage
If all other factors remain the same, a 20% increase in both the selling price and variable expense of a product will
Antworten
  • lower the company's breakeven point in units
  • raise the company's breakeven point in units
  • have no effect on the company's breakeven point in units
  • cannot be determined without more information

Frage 127

Frage
Which of the following effects occur when inventory is sold?
Antworten
  • a liability and an asset both increase
  • a revenue and liability both decrease
  • an asset increases and a liability decreases
  • an expense increases and a liability decreases
  • an asset and a revenue both increase

Frage 128

Frage
Advertising expense is a
Antworten
  • product cost - yes period cost - yes
  • product cost - yes period cost - no
  • product cost - no period cost - yes
  • product cost - no period cost - no

Frage 129

Frage
Product costs
Antworten
  • never appear on the income statement
  • include direct costs only
  • can appear on the balance sheet
  • never appear on the balance sheet

Frage 130

Frage
Which of the following strategies would lower a company's breakeven point?
Antworten
  • raise the sale price
  • lower the variable costs
  • lower the fixed costs
  • all of the above
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