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1. Mobile Co. issued a $45,000, 60-day, discounted...

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1. Mobile Co. issued a $45,000, 60-day, discounted note to Guarantee Bank. The discount rate is 6%. At maturity, the borrower will pay: a. $45,450 b. $42,300 c. $45,000 d. $44,550 2. Which of the following forms is typically given to employees at the end of the calendar year so that employees can file their individual income tax forms? a. Employment Withholding Allowance Certificate (W-4) b. Wage and Tax Statement (Form W-2) c. Employer's Quarterly Federal Tax Return (Form 941) d. 401k plans 3. An employee receives an hourly rate of $15, with time and a half for all hours worked in excess of 40 during the week. Payroll data for the current week are as follows: hours worked, 46; federal income tax withheld, $120; cumulative earnings for the year prior to this week, $5,500; Social security tax rate, 6% on maximum of $100,000; and Medicare tax rate, 1.5% on all earnings; state unemployment compensation tax, 3.4% on the first $7,000; federal unemployment compensation tax, .8% on the first $7,000. What is the employer's payroll tax expense? a. $55.13 b. $61.01 c. $86.00 d. $141.13 4. For a current liability to exist, the following two tests must be met. The liability must be due usually within a year and must be paid out of current assets. a. True b. False 5. Internal controls for cash payments also apply to payrolls. a. True b. False 6. During the first year of operations, employees earned vacation pay of $35,000. The vacations will be taken during the second year. The vacation pay expense should be recorded in the second year as the vacations are taken by the employees. a. True b. False 7. Partner A has a capital balance of $20,000 and devotes full time to the partnership. Partner B has a capital balance of $30,000 and devotes half time to the partnership. In what ratio is net income to be divided? a. 3:5 b. 1:1 c. 2:3 d. 1:2 8. Xavier and Yolanda have original investments of $50,000 and $100,000 respectively in a partnership. The articles of partnership include the following provisions regarding the division of net income: interest on original investment at 10%, salary allowances of $27,000 and $18,000 respectively, and the remainder equally. How much of the net loss of $6,000 is allocated to Yolanda? a. $1,000 b. $3,000 c. $5,000 d. $0 9. Soledad and Winston are partners who share income in the ratio of 1:3 and have capital balances of $100,000 and $140,000 at the time they decide to terminate the partnership. After all noncash assets are sold and all liabilities are paid, there is a cash balance of $130,000. What amount of loss on realization should be allocated to Soledad? a. $60,000 b. $27,500 c. $92,500 d. $32,500 10. Partners Ken and Macki each have a $40,000 capital balance and share income and losses in a 3:2. Cash equals $20,000, noncash assets equal $120,000, and liabilities equal $60,000. If the noncash assets are sold for $80,000, the Macki?s capital account will a. decrease by $16,000. b. decrease by $24,000. c. increase by $24,000. d. decrease by $40,000. 11. In a general partnership, each partner is individually liable to creditors for debts incurred by the partnership, to the extent of the partner's capital balance. a. True b. False 12. When a partner withdraws from the partnership by selling his or her interest back to the partnership, the remaining partners must pay the withdrawing partner a specified amount from their personal assets. a. True b. False 13. In a partnership liquidation, if a partner has a debit capital balance in his or her capital account, he or she is responsible for contributing personal assets sufficient to eliminate the deficit. a. True b. False 14. Which of the following is not characteristic of a corporation? a. The financial loss that a stockholder may suffer from owning stock in a public company is limited. b. Cash dividends paid by a corporation are deductible as expenses by the corporation. c. A corporation can own property in its name. d. Corporations are required to file federal income tax returns. 15. Par value a. is the monetary value assigned per share in the corporate charter. b. represents what a share of stock is worth. c. represents the original selling price for a share of stock. d. is established for a share of stock after it is issued. 16. The date on which a cash dividend becomes a binding legal obligation is on the a. declaration date. b. date of record. c. payment date. d. last day of the fiscal year end. 17. If the dividend amount of preferred stock, $50 par value, is quoted as 8%, then the dividends per share would be $4. a. True b. False 18. Although preferred stockholders have a greater chance of receiving a regular dividend, common stockholders have a greater chance of receiving large dividends. a. True b. False 19. If a corporation is liquidated, preferred stockholders are paid before the creditors and before the common stockholders. a. True b. False 20. A corporation has 12,000 shares of $20 par value stock outstanding that has a current market value of $150. If the corporation issues a 4-for-1 stock split, the market value of the stock will fall to approximately $50. a. True b. False 21. The cash and securities comprising a sinking fund established to redeem bonds at maturity in 2015 should be classified on the balance sheet as a. fixed assets b. current assets c. intangible assets d. investments 22. On the first day of the fiscal year, Hawthorne Company obtained a $ 88,000, seven-year, 5% installment note from Sea Side Bank. The note requires annual payments of $15,208, with the first payment occurring on the last day of the fiscal year. The first payment consists of interest of $4,400 and principal repayment of $10,808. The journal entry Hawthorne would record to make the first annual payment due on the note would include: a. a debit to Cash of $15,208 b. a credit to Notes Payable for $10,808 c. a debit to Interest Expense for $4,400 d. a debit to Notes Payable for $15,208 23. On January 1, 2010, Zero Company obtained a $52,000, four-year, 6.5% installment note from Regional Bank. The note requires annual payments of $15,179, beginning on December 31, 2010. The December 31, 2012 carrying amount in the amortization table for this installment note will be equal to: a. $0 b. $13,000 c. $14,252 d. $16,603 24. The amount of interest expense reported on the income statement will be more than the interest paid to bondholders if the bonds were originally sold at a discount. a. True b. False 25. Interest payments on 12% bonds with a face value of $20,000 and interest paid semiannually would be $2,400 every 6 months. a. True b. False 26. A long-term investment in debt securities is carried at a. cost b. lower of cost or market c. equity d. market 27. Gale Company owns 87% of the outstanding stock of Leonardo Company. Leonardo Company is referred to as the a. parent b. minority interest c. affiliate d. subsidiary 28. An investor purchased 500 shares of common stock, $25 par, for $21,750. Subsequently, 100 shares were sold for $47.50 per share. What is the amount of gain or loss on the sale? a. $4,350 gain b. $400 gain c. $400 loss d. $16,800 loss 29. Ruben Company owns 83% of the outstanding stock of Evans Company. Evans Company is referred to as the a. parent b. minority interest c. affiliate d. subsidiary 30. A company that owns more than 50% of the common stock of another company is known as the a. parent company. b. management company. c. subsidiary company. d. in-charge company. 31. All of the following are disadvantages of fair value use except: a. fair values may not be readily obtainable. b. fair values may cause more fluctuations as change occurs from period to period. c. comparability between companies may be impacted by different fair value measurement. d. fair values can only be used on balance sheet accounts. 32. If the bonds are purchased between interest dates, the purchase price includes accrued interest since the last interest payment. a. True b. False 33. Temporary investments are recorded at their cost which would include broker's commissions. a. True b. False 34. Which of the following should be shown on a statement of cash flows under the financing activity section? a. the purchase of a long-term investment in the common stock of another company b. the payment of cash to retire a long-term note c. the proceeds from the sale of a building d. the issuance of a long-term note to acquire land 35. Cash receipts from interest and dividends are classified as a. financing activities b. operating activities. c. investing activities. d. either financing or investing activities. 36. Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method? a. depreciation expense b. amortization of premium on bonds payable c. a loss on the sale of equipment d. dividends declared and paid 37. Equipment with an original cost of $60,000 and accumulated depreciation of $20,000 was sold at a loss of $7,000. As a result of this transaction, cash would a. increase by $33,000 b. decrease by $7,000 c. increase by $40,000 d. decrease by $27,000 38. The current period statement of cash flows includes the flowing: Cash balance at the beginning of the period $310,000 Cash provided by operating activities 185,000 Cash used in investing activities 43,000 Cash used in financing activities 97,000 The cash balance at the end of the period is a. $45,000 b. $635,000 c. $355,000 d. $125,000 39. Operating expenses other than depreciation for the year were $400,000. Prepaid expenses increased by $17,000 and accrued expenses decreased by $30,000 during the year. Cash payments for operating expenses to be reported on the cash flow statement using the direct method would be a. $353,000 b. $413,000 c. $447,000 d. $383,000 40. If 800 shares of $40 par common stock are sold for $43,000, the $43,000 would be reported in the cash flows from financing activities section of the statement of cash flows. a. True b. False 41. Cash inflows and outflows are not netted in any activity section of the statement of cash flows but are separately disclosed to give the reader full information. a. True b. False 42. If comparative balance sheets indicate no notes receivable on the preceding year and a $48,000 note receivable on the current year, the increase of $48,000 a. can be stated as 0% b. can be stated as 100% increase c. cannot be stated as a percentage d. can be stated as 500% increase 43. A balance sheet that displays only component percentages is called a. trend balance sheet b. comparative balance sheet c. condensed balance sheet d. common-sized balance sheet 44. A company with $60,000 in current assets and $40,000 in current liabilities pays a $1,000 current liability. As a result of this transaction, the current ratio and working capital will a. both decrease. b. both increase. c. increase and remain the same, respectively. d. remain the same and decrease, respectively 45. Short-term creditors are usually most interested in assessing a. marketability. b. profitability. c. operating results. d. solvency. 46. Which of the following should be reported net of the related income tax effect on the income statement? a. Sale of an inventory item at a loss b. Loss due to theft c. Loss due to a discontinued operations of the business d. Sale of a temporary investment at a loss 47. The comparison of the financial data of a single company for two or more years is called horizontal analysis. a. True b. False 48. In a common size income statement, each item is expressed as a percentage of net income. a. True b. False 49. Solvency analysis focuses on the ability of a business to pay its current and noncurrent liabilities. a. True b. False 50. An example of an unusual item affecting the prior period?s income statement is the correction of an error in the financial statements of a previous year. a. True b. False 51. Which of the following is the principle reason for preparing managerial accounting reports? a. Usefulness to management b. Cost of preparation c. Clarity d. GAAP 52. What term is used to refer to the cost of changing direct materials into a finished manufactured product? a. Factory overhead cost b. Period cost c. Conversion cost d. Direct labor cost 53. Prime costs are a. direct materials and factory overhead b. direct materials and direct labor c. direct labor and factory overhead d. period costs and factory overhead 54. One on the following will not be found on the balance sheet of a manufacturing company. a. cost of goods sold b. materials c. work in process d. finished goods 55. In most business organizations, the chief accountant is called the controller. a. True b. False 56. Factory overhead cost is sometimes referred to as factory burden. a. True b. False 57. Indirect costs can be specifically identified to a cost object. a. True b. False 58. Prime costs are the combination of direct labor costs and factory overhead costs. a. True b. False 59. The statement of cost of goods manufactured is an extension of the income statement for a manufacturing company. a. True b. False 60. The document authorizing the issuance of materials from the storeroom is the: a. materials requisition b. purchase requisition c. receiving report d. purchase order 61. The amount of time spent by an employee in the factory is usually recorded on: a. time cards b. job order cost sheets c. employees' earnings records d. statement of owners? equity 62. All of the following are examples of activity bases except: a. salaries of supervisors b. quality inspections of products c. number of machine setups d. raw materials storage 63. Select the proper journal entry to record the movement of 1,450 units of part number 116B to work in process when each unit of PN 116B has a value of $2.00. a. Jan 15 Raw Material Inventory 2,900 WIP 2,900 b. Jan 15 Work in Process 2,900 Factory Overhead 2,900 c. Jan 15 Work in Process 2,900 Raw Material Inventory 2,900 d. Jan 15 Work in Process 2,900 Cash 2,900 64. A separate account for each material is found in a a. general ledger b. materials ledger c. receiving report d. job cost sheet 65. Generally, period costs are classified as either a. selling expenses or production expenses. b. administrative expense or production expenses. c. selling expenses or administrative expenses. d. general expenses or selling expenses. 66. The direct labor and overhead costs of providing services to clients are accumulated in: a. finished services expense b. work in process c. administrative salaries expense d. overhead 67. The job order costing system is used by service firms to determine revenues, expenses, and ultimately profit. a. True b. False 68. Materials are transferred from the storeroom to the factory in response to materials requisitions. a. True b. False 69. If factory overhead applied exceeds the actual costs, overhead is said to be underapplied. a. True b. False 70. Each account in the cost ledger in a job order system is called a job cost sheet. a. True b. False 71. Job cost sheets can provide information to managers on unit cost trends, the cost impact of continuous improvement in the manufacturing process, the cost impact of materials changes, and the cost impact of direct materials price or direct labor rate changes over time. a. True b. False 72. Using the job order cost system, service organizations are able to bill customers on a weekly or monthly basis, even when the job has not been completed. a. True b. False 73. Department G had 3,600 units, 25% completed at the beginning of the period, 15,000 units were completed during the period, 3,000 units were one-fifth completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period: Work in process, beginning of period $40,000 Costs added during period: Direct materials (10,400 at $8) 83,200 Direct labor 63,000 Factory overhead 25,000 Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, what is the total cost of the departmental work in process inventory at the end of the period (round unit cost calculations to four decimal places)? a. $16,163 b. $21,432 c. $35,670 d. $20,925 74. In the manufacture of 10,000 units of a product, direct materials cost incurred was $145,800, direct labor cost incurred was $82,000, and applied factory overhead was $45,500. What is the total conversion cost? a. $127,500 b. $145,800 c. $272,200 d. $273,300 75. Department A had 4,000 units in work in process that were 60% completed as to labor and overhead at the beginning of the period, 29,000 units of direct materials were added during the period, 31,000 units were completed during the period, and 2,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories. The number of equivalent units of production for conversion costs for the period was: a. 30,200 b. 29,800 c. 33,800 d. 33,000 76. Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000. The journal entry to record the flow of costs into Department 1 during the period for direct materials is: a. Work in Process--Department 1 100,000 Materials 100,000 b. Work in Process--Department 1 50,000 Materials 50,000 c. Materials 100,000 Work in Process--Department 1 100,000 d. Materials 50,000 Work in Process--Department 1 50,000 77. Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 3 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at the beginning of the period for Department 3 totaled $75,000, and work in process at the end of the period totaled $60,000. The journal entry to record the flow of costs into Department 3 during the period for direct materials is: a. Work in Process--Department 3 100,000 Materials 100,000 b. Work in Process--Department 3 125,000 Materials 125,000 c. Work in Process--Department 3 50,000 Materials 50,000 d. Work in Process--Department 3 70,000 Materials 70,000 78. Which of the following measures would not help managers to control and improve operations? a. Units produced per time period b. Cost trends of a product c. Yield trends d. Commissions paid per time period 79. The debits to Work in Process--Assembly Department for April, together with data concerning production, are as follows: April 1, work in process: Materials cost, 3,000 units $ 7,500 Conversion costs, 3,000 units, 80% completed 6,000 Materials added during April, 10,000 units 29,000 Conversion costs during April 35,000 Goods finished during April, 11,500 units --- April 30 work in process, 1,500 units, 60% completed --- All direct materials are placed in process at the beginning of the process and the average cost method is used to cost inventories. The conversion cost per equivalent unit (to the nearest cent) for April is: a. $2.70 b. $2.53 c. $3.31 d. $5.60 80. Department E had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $12,500. 14,000 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 3,000 units were 75% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710. The number of equivalent units of production for the period for materials if the average cost method is used to cost inventories was: a. 15,650 b. 18,000 c. 17,250 d. 17,700 81. Both process and job order cost systems maintain perpetual inventory accounts with subsidiary ledgers. a. True b. False 82. If the costs for direct materials, direct labor, and factory overhead were $522,200, $82,700, and $45,300, respectively, for 16,000 equivalent units of production, the conversion cost per equivalent unit was $8.00. a. True b. False 83. The cost of production report reports the cost of the goods sold. a. True b. False 84. In a just-in-time system, processing functions are combined into work centers, sometimes called departments. a. True b. False 85. What ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to provide a profit? a. Margin of safety ratio b. Contribution margin ratio c. Costs and expenses ratio d. Profit ratio 86. If fixed costs are $200,000 and the unit contribution margin is $20, what amount of units must be sold in order to have a zero profit? a. 25,000 b. 20,000 c. 200,000 d. 10,000 87. If fixed costs are $600,000 and the unit contribution margin is $40, what is the break-even point if fixed costs are increased by $90,000? a. 17,250 b. 15,000 c. 8,333 d. 9,667 88. If fixed costs are $490,000, the unit selling price is $35, and the unit variable costs are $20, what is the break-even sales (units) if fixed costs are reduced by $40,000? a. 32,667 units b. 14,000 units c. 30,000 units d. 24,500 units 89. If fixed costs are $39,600, the unit selling price is $42, and the variable costs are $24, what is the break-even sales (units)? a. 2,500 b. 943 c. 1,650 d. 2,200 90. With the aid of computer software, managers can vary assumptions regarding selling prices, costs, and volume and can immediately see the effects of each change on the break-even point and profit. Such an analysis is called: a. "What if" or sensitivity analysis b. vary the data analysis c. computer aided analysis d. data gathering 91. Safari Co. sells two products, Orks and Zins. Last year Safari sold 21,000 units of Orks and 14,000 units of Zins. Related data are: Product Unit Selling Price Unit Variable Cost Unit Contribution Margin Orks $120 $80 $40 Zins 80 60 20 What was Safari?s Co.?s weighted average unit selling price? a. $200 b. $104 c. $120 d. $80 92. Safari Co. sells two products, Orks and Zins. Last year Safari sold 21,000 units of Orks and 14,000 units of Zins. Related data are: Product Unit Selling Price Unit Variable Cost Unit Contribution Margin Orks $120 $80 $40 Zins 80 60 20 What was Safari?s Co.?s weighted average unit contribution margin? a. $20 b. $40 c. $32 d. $24 93. If a business had a capacity of $8,000,000 of sales, actual sales of $5,000,000, break-even sales of $3,500,000, fixed costs of $1,400,000, and variable costs of 60% of sales, what is the margin of safety expressed as a percentage of sales? a. 25% b. 18% c. 28% d. 30% 94. A mixed cost has characteristics of both a variable and a fixed cost. a. True b. False 95. If fixed costs are $850,000 and the unit contribution margin is $50, profit is zero when 15,000 units are sold. a. True b. False 96. If employees accept a wage contract that increases the unit contribution margin, the break-even point will decrease. a. True b. False 97. Only a single line, which represents the difference between total sales revenues and total costs, is plotted on the profit-volume chart. a. True b. False 98. If the unit selling price is $40, the volume of sales is $3,000,000, sales at the break-even point amount to $2,500,000, and the maximum possible sales are $3,300,000, the margin of safety is 11,500 units. a. True b. False 99. If the unit selling price is $40, the volume of sales is $3,000,000, sales at the break-even point amount to $2,500,000, and the maximum possible sales are $3,300,000, the margin of safety is 14,500 units. a. True b. False 100. Assuming no other changes, operating income will be the same under both the variable and absorption costing methods when the number of units manufactured equals the number of units sold. a. True b. False,please help final coming up soon

 

Paper#6481 | Written in 18-Jul-2015

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