71. Retained earnings are   A. a source of financing for assets B. cash C. other non-cash assets D. the sum of a firm’s dividend declarations E. the source of net assets generated by the earnings process   72. Retained earnings represent the source of net assets generated by the earnings process that exceed the firm’s dividend declarations. Common practice refers to the process of curtailing dividends to accumulate assets, […]

    111. Using either the FIFO and LIFO cost flow assumption will result in the same cost of goods sold when A. the number of units in beginning and ending inventory are the same.B. two consecutive years are combined.C. the prices of the goods do not change.D. lower-of-cost-or-market is applied.E. none of the above   112. Which of the following cost flow assumptions will report ending inventory closest to current cost? A. LIFO methodB. FIFO […]

  111. When a company discards machinery that is fully depreciated, this transaction would be recorded with the following entry  A. debit Accumulated Depreciation; credit Machinery B. debit Machinery; credit Accumulated Depreciation C. debit Cash; credit Accumulated Depreciation D. debit Depreciation Expense; credit Accumulated Depreciation 112. When a company sells machinery at a price equal to its book value, this transaction would be recorded with an entry that would include the […]

    91. The amount due on the date of maturity for a  $6,000, 60-day, 8%, note receivable is:  A. $6,000 B. $6,480 C. $5,520 D. $6,080 E. $5,920     92. Paoli Pizza bought $5,000 worth of merchandise from TechCom and signed a 90-day, 10% promissory note for the $5,000. TechCom’s journal entry to record the sales portion of the transaction is:  A. Accounts Receivable 5,000   Sales   5,000   […]

  41. Cedar Furniture provided the following information relevant to its sales for December 2009 and the first quarter of 2011    Based on the company’s collection history, 2% of credit sales are uncollectible, 40% are collected in month of sale and the remainder is collected in the following month. Total budgeted cash receipts in February 2010 are expected to be:  A. $30,000. B. $81,200. C. $114,000. D. $173,200. 42. Homer […]

  MULTIPLE CHOICE.  Choose the one alternative that best completes the statement or answers the question. 26)  A variance is considered to be 26)  ______ A)  the difference between an actual result and a budget amount. B)  the gap between an actual result and a benchmark amount. C)  the required number of inputs for one standard output. D)  a standard. E)  the difference between a […]

    101. A key factor in a voucher system includes all of the following except:  A. Only approved departments and individuals are authorized to incur an obligation that will result in the payment of cash. B. Procedures for purchasing, receiving and paying for merchandise are divided among several departments. C. The system limits the individuals that can incur cash payment obligations for a company. D. It isapplied to purchases […]

  11) One way to manage both variable and fixed overhead costs is to eliminate value-adding activities. 12) The planning of fixed overhead costs does NOT differ from the planning of variable overhead costs.   13) Jael Equipment uses a flexible budget for its indirect manufacturing costs. For 20X5, the company anticipated that it would produce 18,000 units with 3,500 machine-hours and 7,200 employee days. […]

    51.The collection of an account receivable is recorded by a debit to Cash and a credit to Accounts Payable. If this error is not corrected:    A.Total liabilities are understated.   B.Total assets are understated.   C.Total liabilities are overstated.   D.Owners’ equity is overstated.         52.If a company purchases equipment for cash:    A.Assets will increase and owners’ equity will also […]

  88. Which of the following statements is true?  A. Interest on bonds is tax deductible. B. Interest on bonds is not tax deductible. C. Dividends to stockholders are tax deductible. D. Bonds do not have to be repaid. E. Bonds always increase return on equity.   89. A bondholder that owns a $1,000, 10%, 10-year bond has:  A. Ownership rights in the issuing company. B. The right to receive $10 per year until […]