Acct300 Business Accounting: Week 7 Final (Winter 2015)_Version 2

Acct300 Business Accounting
Week 7 Final (Winter 2015)Question 1 of 40 2.5 Points
In using the total cost concept of applying the cost-plus approach to product pricing, only profit is covered in the markup.
TRUE
FALSEQuestion 2 of 40 2.5 Points
What is the effect of a stock dividend on the balance sheet?
A. Decrease total assets and decrease total stockholders’ equity
B. Decrease total assets and increase total stockholders’ equity
C. Increase total liabilities and decrease total stockholders’ equity
D. No effect on total assets, total liabilities, or total stockholders’ equityQuestion 3 of 40 2.5 Points
Hodges, Inc. had the following assets and liabilities as of September 30, 2013: Assets - $56,327 and Liabilities - $28,416. If assets increased by $3,914 and equity increased by $2,290 during October, what is the increase or decrease in liabilities of Hodges as of October 31, 2013?
A.($1,624)
B.$1,624
C.$6,204
D.($6,204)Question 4 of 40 2.5 Points
In computing the rate earned on total assets, interest expense is added to net income before dividing by average total assets.
A. True
B. FalseQuestion 5 of 40 2.5 Points
Cash dividends are not paid on shares of treasury stock.
A. True
B. FalseQuestion 6 of 40 2.5 Points
Earnings per common share is one factor that influences the decision to use debt financing or equity financing.
A. True
B. FalseQuestion 7 of 40 2.5 Points
Which of the following is a reason to undergo a reverse stock split?
A. To reduce the stock’s market price per share.
B. To increase total stockholders’ equity.
C. To reduce total stockholders’ equity.
D. To increase the market value of the stock per share.Question 8 of 40 2.5 Points
A voucher:
A. is received from customers to explain the purpose of a payment
B. is normally prepared in the Accounting Department
C. system is used to control cash receipts.
D. system is an internal control procedure to verify that the assets in the records are the ones the company owns.Question 9 of 40 2.5 Points
Money market funds, commercial paper, and U.S. Treasury Bills are examples of cash equivalents.
A. True
B. FalseQuestion 10 of 40 2.5 Points
Which of the following accounts is reported in the noncurrent liabilities section of the corporate balance sheet?
A. Bonds Payable
B. Common Stock
C. Dividends Payable
D. CashQuestion 11 of 40 2.5 Points
Which one of the following is not a characteristic generally evaluated in ratio analysis?
A. Liquidity
B. Profitability
C. Solvency
D. MarketabilityQuestion 12 of 40 2.5 Points
Under the accrual basis of accounting, net cash flows from operating activities on the statement of cash flows will normally be the same as net income.
A. True
B. FalseQuestion 13 of 40 2.5 Points
Activity-based costing is a method of accumulating and allocating costs by department.
A. True
B. FalseQuestion 14 of 40 2.5 Points
Inventories of merchandising and manufacturing businesses are reported as current assets on the balance sheet.
A. True
B. FalseQuestion 15 of 40 2.5 Points
The purpose of an audit is to:
A. determine whether or not a company is a good investment.
B. render an opinion on the fairness of the statements.
C. determine whether or not a company complies with income tax regulations.
D. determine whether or not a company has a good credit risk.Question 16 of 40 2.5 Points
In using the total cost concept of applying the cost-plus approach to product pricing, only profit is covered in the markup.
A. True
B. FalseQuestion 17 of 40 2.5 Points
Using the job order cost system, service businesses are able to bill clients on a weekly or monthly basis, even when the job has not been completed.
A. True
B. FalseQuestion 18 of 40 2.5 Points
The __________ is prepared with various sections, subsections, and captions that aid in its interpretation and analysis.
A. accounting equation
B. retained earnings statement
C. intangible asset section
D. classified balance sheetQuestion 19 of 40 2.5 Points
The framework that has become widely accepted as the standard by which companies design, analyze, and evaluate internal controls is the:
A. Internal Control – Integrated Framework by the Committee of Sponsoring Organizations
B. Internal Control – Integrated Framework by the Congress of Special Offerings.
C. Internal Control Localized Structure by the Committee of Sponsoring Organizations.
D. Internal Control Localized Structure by the Congress of Special Offerings.Question 20 of 40 2.5 Points
Fixed assets are reported at their book value on the balance sheet.
A. True
B. FalseQuestion 21 of 40 2.5 Points
If employees accept a wage contract that decreases the unit contribution margin, the break-even point will decrease.
A. True
B. FalseQuestion 22 of 40 2.5 Points
If paid-in capital in excess of par-preferred stock is $80,000, preferred stock is $500,000, paid-in capital in excel of par-common stock is $50,000, common stock is $1,000,000, and retained earnings is $230,000, the total stockholders’ equity is $1,860,000.
A. True
B. FalseQuestion 23 of 40 2.5 Points
The estimated amount that an asset can be sold for at the end of its useful life is called its book value.
A. True
B. FalseQuestion 24 of 40 2.5 Points
The document authorizing the issuance of materials from the storeroom for use in manufacturing is called:
A. materials requisition.
B. purchase requisition.
C. receiving report.
D. purchase order.Question 25 of 40 2.5 Points
If a company has current assets totaling $56,000 and current liabilities totaling $40,500, then the company’s working capital totals $15,500.
A. True
B. FalseQuestion 26 of 40 2.5 Points
Under which method of inventory costing is the cost flow assumed to be in the reverse order in which the expenditures were made?
A. Average cost
B. Last-in, first-out
C. First-in, first-out
D. Specific identification methodQuestion 27 of 40 2.5 Points
The process of a company selling its accounts receivable to another company is referred as:
A. discounting.
B. adjusting.
C. assignment.
D. factoring.Question 28 of 40 2.5 Points
Which of the following is a characteristic of the just-in-time philosophy?
A. Increases inventory to protect against process problems
B. Tolerates defects
C. Emphasizes push manufacturing
D. Emphasizes product-oriented layoutQuestion 29 of 40 2.5 Points
Reporting under managerial accounting is not restricted by specific rules such as generally accepted accounting principles (GAAP).
A. True
B. FalseQuestion 30 of 40 2.5 Points
Management’s philosophy and operating style would affect which of the following elements of internal control?
A. Risk assessment
B. Monitoring
C. Control environment
D. Information and communicationQuestion 31 of 40 2.5 Points
The objective of most businesses is to maximize profits.
A. True
B. FalseQuestion 32 of 40 2.5 Points
The payment of a liability:
A. decreases assets and stockholders’ equity.
B. increases assets and decreases liabilities.
C. decreases assets and increases liabilities.
D. decreases assets and decreases liabilities.Question 33 of 40 2.5 Points
If the cost of employee wages is not a significant portion of the total product cost, the wages are classified as factory overhead cost.
A. True
B. FalseQuestion 34 of 40 2.5 Points
If the total unit cost of manufacturing Product Y is currently $40 and the total unit cost after modifying the style is estimated to be $48, the differential cost for this situation is $48.
A. True
B. FalseQuestion 35 of 40 2.5 Points
Which of the following information is not provided by job cost sheets?
A. Cost impact of materials changes
B. Cost impact of continuous improvement in the manufacturing process
C. Change in materials price or direct labor rate over time
D. Utilities, managerial salaries, and depreciation of computers in the corporate officeQuestion 36 of 40 2.5 Points
What are current liabilities?
A. Liabilities that are due and payable within two years.
B. Liabilities that are due and to be paid out of the current assets within one year.
C. Liabilities that are due but not payable for more than one year.
D. Liabilities that are payable if a possible subsequent event occurs.Question 37 of 40 2.5 Points
When a business sells more than one product at varying selling prices, the business’s break-even point can be determined as long as the number of products does not exceed:
A. two.
B. three.
C. fifteen.
D. there is no limit.Question 38 of 40 2.5 Points
Under the cash basis of accounting, expenses are recorded when paid.
A. True
B. FalseQuestion 39 of 40 2.5 Points
A practical approach which is frequently used by managers when setting normal long-run prices is the:
A. cost-plus approach.
B. economic theory approach.
C. price graph approach.
D. market price approach.Question 40 of 40 2.5 Points
The revenue recognition concept states that revenue should be recorded in the same period as the cash is received.
A. True
B. False
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