51. Which of the following does not correctly describe the cash basis of accounting?  A. It is not accepted for external reporting purposes. B. Revenues are recognized when cash is collected from customers. C. Expenses are recognized when they are paid for. D. Cash payments for long-term assets are recognized as an expense at the time of payment. 52. A landlord collected $5,000 cash from a tenant for December 2011’s […]

    81.In its first year of operations, a company has sales of $100,000, ending finished goods inventory of $9,000, variable manufacturing costs of $50,000, and fixed manufacturing costs of $28,000 for the year. Assuming the company uses direct costing, the manufacturing margin for the year is    A. $22,000.   B. $31,000.   C. $59,000.   D. $13,000.       82.In its first year of operations, a company […]

    101.Sinking funds usually appear on the balance sheet as:    A.Current asset.   B.Long-term investment.   C.Current liability.   D.Appropriation of retained earnings.         102.A company issues $50 million of bonds at par on January 1, 2015. The bonds pay 10% interest semi-annually on 12/31 and 6/30 and mature in 20 years. The journal entry when the bonds are sold is:    […]

  21) If a dual-rate cost-allocation method is used, what amount of cost will be allocated to the Night Light Division? Assume budgeted usage is used to allocate fixed operating costs and actual usage is used to allocate variable operating costs. A) $375,000 B) $435,000 C) $390,000 D) $450,000 22) The dual cost-allocation method classifies costs into two pools, a budgeted cost pool and an […]

    71.Which of the following cost amounts can be found in a firm’s accounting records?    A. opportunity costs   B. differential costs   C. incremental costs   D. sunk costs         72.A segment of a business probably should be discontinued if    A. its common costs exceed its contribution margin.   B. its contribution margin exceeds its controllable fixed costs and its common costs.   C. it cannot produce […]

130.An example of a monetary asset is   a. Retained Earnings. b. Accounts Receivable. c. Land. d. Copyright.       131.Stockholders’ equity of a corporation would not show   a. additional paid-in capital on stock issued. b. the par value of stock issued. c. retained earnings. d. revenues and expenses.       132.All of the following will affect retained earnings, except   a. […]

    65. The payment of wages to factory employees who work directly on the goods being manufactured is recorded by an entry crediting:  A. Wages Expense. B. Direct Labor. C. Work in Process Inventory. D. Cash.     66. Since production employees work directly on the goods being manufactured, the related labor costs are recorded by debiting:  A. Wages Expense. B. Direct Labor. C. Work in Process Inventory. D. Manufacturing Overhead.     67. It […]

    61.O’Hare Company, is a manufacturing firm that uses a job-order cost system to determine the costs of its products. During 2014, O’Hare paid $2,100 to production employees who worked on job #132. The entry to record these wages would include an increase to:    A. Cost of goods sold.   B. Work in process inventory.   C. Finished goods inventory.   D. Wage expense.     62.O’Hare Company, […]

  47) Following a strategy of product differentiation, Sting Corporation makes a high-end computer monitor, CM7. Sting Corporation presents the following data for the years 2012 and 2013:   20122013 Units of CM 7 produced and sold5,0005,500 Selling price$400$440 Direct materials (pounds)15,00015,375 Direct materials costs per pound$40$44 Manufacturing capacity for CM7 (units)10,00010,000 Conversion costs$1,000,000$1,100,000 Conversion costs per unit of capacity$100$110 Selling and customer-service capacity (customers)6058 […]

  16) The seller of product A has idle capacity and has no alternative use for the excess capacity. The seller can sell each unit at $10. Outlay cost is $2. What is the opportunity cost of selling internally? A) $0 B) $8 C) $10 D) $12 E) $16   17) The general guideline for determining the minimum transfer price is A) cover all employee […]