41. Activity-based costing provides more accurate and useful cost data.   42. Activity-based costing should only be implemented if the benefit of the Activity-based costing system is less than the cost to implement the system.   43. Activity-based costing is determined by charging products for only the services (activities) they used during production.   44. The amount of increase or decrease in revenue that is expected from a particular course of […]

  21) Rocket, Corporation reports a $17,000 increase in Inventory and a $30,000 increase in Accounts Payable for the year. If the cost of purchases totaled $400,000 for the year, the cash paid to Rocket’s suppliers is: A) $447,000. B) $430,000. C) $370,000. D) $353,000. 22) Under the direct method of preparing the statement of cash flows, which statement is correct regarding the method of […]

    69.Partnership net income of $66,000 is to be divided between two partners, Julia Hood and Brian Duffy, according to the following arrangement: There will be salary allowances of $40,000 for Hood and $20,000 for Duffy, with the remainder divided equally. How much of the net income will be distributed to Hood and Duffy, respectively?    A. $33,000 and $33,000   B. $42,000 and $24,000   C. $43,000 […]

    51. Max’s Tire Center CompanySelected data from the financial statements of Max’s Tire Center are provided below.    2012 2011 Inventory $  55,000 $  46,000 Cost of sales 120,000 110,000 Total assets 500,000 490,000 Cash flow from operations 320,000 289,000 Net sales 390,000 360,000 Capital expenditures 15,000 13,000       Refer to the selected data provided for Max’s Tire Center. Which of the […]

  51.Garrison Corporation has the following transactions: 1.Dividends are paid to the shareholders. 2.A utility bill for July is paid in August. 3.A new warehouse facility is purchased 4.Principal payments on outstanding debt are paid. 5.Employees wages are paid. 6.Forty-five units of inventory are sold for $100 each 7.Common stock is issued for $230,000 in cash. 8.A delivery van used for 5-years is sold for […]

  136.Division X makes a part that it sells to customers outside of the company. Data concerning this part appear below:  Selling price to outside customers$50 Variable cost per unit$30 Total fixed costs$400,000 Capacity in units$25,000 Division Y of the same company would like to use the part manufactured by Division X in one of its products. Division Y currently purchases a similar part made […]

  21.On the income statement, unusual OR infrequent income events are found in a. operating revenues and expenses. b. other revenues or expenses. c. disposal of a business segment. d. extraordinary gains or losses. e. cumulative effects. 22.Which one of the following is true about earnings per share? a.Must be calculated as earnings per ‘preferred’ share b.Must be calculated as earnings per ‘common’ share c.May […]

  91. The following transactions occurred during July: Received $900 cash for services provided to a customer during July. 2. Received $2,200 cash investment from Barbara Hanson, the owner of the business. 3. Received $750 from a customer in partial payment of his account receivable which arose from sales in June. 4. Provided services to a customer on credit, $375. 5. Borrowed $6,000 from the bank […]

  73.The expected amount of time to recover the initial amount of an investment is called the:     A.Amortization period. B.Payback period. C.Interest period. D.Budgeting period. E.Discounted cash flow period. 74.A company is considering purchasing a machine for $21,000. The machine will generate an after-tax net income of $2,000 per year. Annual depreciation expense would be $1,500. What is the payback period for the new […]

  121. All of the following statements regarding FICA taxes are True except:  A. FICA taxes are deducted from the employee. B. Employers must pay withheld FICA taxes to the IRS. C. The amount of FICA deducted from the employee is credited to a liability account. D. A self-employed person is exempt from FICA taxes. E. An employer must pay FICA taxes equal to the amount withheld from the employee. 122. Arena […]