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accounting quiz




Question;1.;Current financial reporting standards assume that users of accounting;information;A) have a reasonably informed knowledge of;business.;B) have only minimal knowledge of business.;C) have an expert's understanding of economic;and financial events and conditions.;D) have widely differing levels of knowledge;about business, and that financial reporting must meet these differing needs.;2.;Financial statement analysis involves forms of comparison including;A) comparing changes in the same item over a;number of periods.;B) comparing key relationships within the same;year.;C) comparing key items to industry averages.;D) all of the above.;3.;Select the incorrect statement regarding horizontal analysis.;A) Percentage analysis involves establishing the;relationship of one amount to another.;B) In doing horizontal analysis, an account is;expressed as a percentage of the previous balance of the same account.;C) Percentage analysis attempts to eliminate the;materiality problem of comparing firms of different sizes.;D) A;horizontal analysis of cost of goods sold on the income statement would involve;dividing cost of goods sold by total sales revenue.;4.;Select the incorrect statement regarding ratio analysis.;A) Ratio analysis is a specific form of;horizontal analysis.;B) Ratio analysis involves making comparisons;between different accounts in the same set of financial statements.;C);There are many different ratios available for evaluating a firm's performance.;D);Some ratios involve an account from the balance sheet and one from the income;statement.;5.;All of the following are considered to be measures of a company's short-term;debt-paying ability except;A);the current ratio.;B) inventory;turnover.;C) earnings per share.;D);the average number of days to collect receivables.;6.;Otteman Company reported net income of $16,700 on gross sales of $80,000. The;company has average total assets of $115,200, of which $100,000 is property;plant and equipment. What is the company's return on investment?;A);69.4%;B) 18.0%;C) 14.5%;D);12.5%;7. The;return on investment measure is also referred to as;A) net margin.;B) return on equity.;C) return on assets.;D) return on debt.;8.;Sliefert Company provided the following information from its financial records;Net;income;$200,000;Total;stockholders' equity;$800,000;Preferred;dividends;$10,000;Common;shares outstanding, 12/31;120,000;Preferred;rights;$150,000;What;is the company's book value per share?;A);$1.67;B)$6.67;C);$5.42;D)$1.58;9.;Which of the following is a potential limitation of financial statement;analysis?;A) Lack of comparability of firms in different;industries;B);The impact of changing economic conditions;C);The impact of having more than one acceptable alternative accounting principle;for accounting for a given transaction or economic event;D);All of the above;10.;You are considering an investment in Ingram Company stock and wish to assess;the company's position in the stock market. All of the following ratios can be;used for this purpose except;A);current ratio.;B) earnings per share.;C);dividend yield.;D);price-earnings ratio.;11.;Choose the answer that is not a distinguishing characteristic of financial;accounting information.;A) It is global information that reflects the;performance of the whole company.;B) Its time horizon is the present and future.;C);It is more concerned with financial data than physical or economic data.;D) It is more highly regulated than managerial;accounting information.;12.;Which of the following most exemplifies the value-added principle?;A);An ongoing process where continuous improvement is the goal;B) A;competitive management program that emphasizes quality;C);Information gathering and reporting activities that are restricted to those;activities that add value in excess of their cost;D);Managerial accounting information is measured in economic, physical, and;financial terms;13.;For a manufacturing company, product costs include all of the following except;A);direct material costs.;B);direct labor costs.;C);research and development costs.;D) overhead costs.;14.;Which of the following should not be recorded as an expense?;A) Paid office salaries;B);Paid factory maintenance costs;C);Paid product advertising costs;D) Paid sales commissions;15.;During its first year of operations, Martin Company paid $4,000 for direct;materials and $8,500 for production workers' wages. Lease payments and;utilities on the production facilities amounted to $7,500 while general;selling, and administrative expenses totaled $3,000. The company produced 5,000;units and sold 4,000 units at a price of $7.50 a unit. What is the amount of;gross margin for the first year?;A);$20,000;B);$12,000;C);$7,500;D) $14,000;16.;Costs such as transportation-out, sales commissions, uncollectible accounts;receivable, and packaging are sometimes called;A) upstream costs.;B) indirect costs.;C);direct costs.;D);downstream costs.;17.;Howard Lumber Company mistakenly classified as an expense a product cost that;totaled $20,000. The company produced 2,000 units of product and sold 1,000 of;them during the year. Management is paid a bonus equal to 2%of net;income. In the year in which the mistake was made;A);product costs were overstated.;B) management bonuses were overstated.;C);the company's income statement portrayed a more favorable position than;actually existed.;D);the company's net income was understated.;18.;Which of following practices is considered an effective means of re-engineering;business systems?;A) Identifying the best practices used by;world-class competitors;B);Improving the accuracy of cost allocations;C);Eliminating non-value added activities;D);All of the above;19.;As a Certified Management Accountant, Zandra is bound by the standards of;ethical conduct issued by the Institute of Management Accountants. During the;course of business, Zandra learned that her company has decided to discontinue;a major product line. If she mentions this fact to her brother, who is a;stockbroker, Zandra could be in violation of the;A);competence standard.;B);confidentiality standard.;C);integrity standard.;D);objectivity standard.;20.;Which of the following is not one of the four Standards of Ethical Conduct for;Management Accountants?;A);competence;B);confidentiality;C);integrity;D) education


Paper#51504 | Written in 18-Jul-2015

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