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Question;Question 1;Which of the following is an advantage of;corporations relative to partnerships and sole proprietorships?;Harder to transfer ownership.;Most common form of organization.;Reduced legal liability for investors.;Lower taxes.;Question 2;The group of users of accounting information charged;with achieving the goals of the business is its;creditors.;investors.;managers.;auditors.;Question 3;Which of the following financial statements is;concerned with the company at a point in time?;Income statement.;Balance sheet.;Retained Earnings statement.;Statement of cash flows.;Question 4;An income statement;reports the changes in assets, liabilities, and;stockholders? equity over a period of time.;reports the assets, liabilities, and stockholders?;equity at a specific date.;presents the revenues and expenses for a specific;period of time.;summarizes the changes in retained earnings for a;specific period of time.;Question 5;The most important information needed to determine;if companies can pay their current obligations is the;relationship between short-term and long-term;liabilities.;net income for this year.;projected net income for next year.;relationship between current assets and current;liabilities.;Question 6;A liquidity ratio measures the;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.;income or operating success of a company over a;period of time.;percentage of total financing provided by creditors.;Question 7;The convention of consistency refers to consistent;use of accounting principles;among firms.;throughout the accounting periods.;among accounting periods.;within industries.;Question 8;Horizontal analysis is also known as;vertical analysis.;trend analysis.;common size analysis.;linear analysis.;Question 9;Horizontal analysis is a technique for evaluating a;series of financial statement data over a period of time;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.;that has been arranged from the highest number to;the lowest number.;Question 10;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.;Question 11;Process costing is used when;the production process is continuous.;production is aimed at filling a specific customer;order.;dissimilar products are involved.;costs are to be assigned to specific jobs.;Question 12;An important feature of a job order cost system is;that each job;must be completed before a new job is accepted.;consists of one unit of output.;must be similar to previous jobs completed.;has its own distinguishing characteristics.;Question 13;In a process cost system, product costs are;summarized;after each unit is produced.;on production cost reports.;when the products are sold.;on job cost sheets.;Question 14;An activity that has a direct cause-effect;relationship with the resources consumed is a(n);cost pool.;product activity.;cost driver.;overhead rate.;Question 15;Activity-based costing;assigns activity cost pools to products and;services, then allocates overhead back to the activity cost pools.;allocates overhead to multiple activity cost pools;and it then assigns the activity cost pools to products and services by means;of cost drivers.;allocates overhead directly to products and services;based on activity levels.;accumulates overhead in one cost pool, then assigns;the overhead to products and services by means of a cost driver.;Question 16;A cost which remains constant per unit at various;levels of activity is a;fixed cost.;variable cost.;mixed cost.;manufacturing cost.;Question 17;The break-even point is where;total variable costs equal total fixed costs.;total sales equal total fixed costs.;contribution margin equals total fixed costs.;total sales equal total variable costs.;Question 18;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;Question 19;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.;variable costing.;operations costing.;absorption costing.;Question 20;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.;variable costing, in order to increase net income.;absorption costing, in order to decrease net income.;variable costing, in order to decrease net income.;Question 21;An unrealistic budget is more likely to result when;it;is developed with performance appraisal usages in;mind.;has been developed in a bottom up fashion.;has been developed in a top down fashion.;has been developed by all levels of management.;Question 22;A major element in budgetary control is;the preparation of long-term plans.;approval of the budget by the stockholders.;the comparison of actual results with planned;objectives.;the valuation of inventories.;Question 23;The purpose of the sales budget report is to;determine whether income objectives are being met.;control selling expenses.;control sales commissions.;determine whether sales goals are being met.;Question 24;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.;static reporting.;master budgeting.;responsibility accounting.;Question 25;Variance reports are;external financial reports.;SEC financial reports.;internal reports for management.;all of these.;Question 26;Internal reports that review the actual impact of;decisions are prepared by;the controller.;department heads.;management accountants.;factory workers.;Question 27;The process of evaluating financial data that change;under alternative courses of action is called;contribution margin analysis.;cost-benefit analysis.;double entry analysis.;incremental analysis.;Question 28;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 increase by $40,000.;Income would increase by $8,000.;Income would decrease by $8,000.;Question 29;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 $30,000;Make and save $10,000;Buy and save $10,000;Question 30;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.


Paper#37596 | Written in 18-Jul-2015

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