65. Hayes Corporation issues 100 shares of its $1 par value common stock for $15 per share. The entry to record the issuance will not include a: a. Debit to Cash $1,500. b. Credit to Additional Paid-In Capital $1,400. c. Credit to Common Stock of $100. d. All of the other options would be included. 66. Preferred stock is called preferred […]
15) Life-cycle costing tracks and accumulates business function costs across the entire value chain from a product’s initial R&D to its final customer service and support. 16) Life-cycle budgeting is particularly important when nonproduction costs are significant. 17) The product life cycle spans the time from initial R&D on a product to when customer service and support is no longer offered for […]
91. The accounts payable turnover ratio uses purchases on account in its computation. Although firms do not disclose their purchases, the analyst can calculate the purchase amount as follows: A. Purchases = Cost of Goods Sold + Ending Inventory + Beginning Inventory B. Purchases = Cost of Goods Sold + Ending Inventory – Beginning Inventory C. Purchases = Cost of Goods Sold – Ending Inventory + Beginning […]
11) Sales mix is the quantities or proportion of various products or services that constitute a company’s total unit sales. 12) If the sales mix shifts toward the lower-contribution-margin product, the breakeven quantity will decrease. 13) In multiproduct situations, when sales mix shifts toward the product with the lowest contribution margin, the operating income will be lower. 14) In multiproduct situations […]
51. _____ means that the information presented is reasonably free from error and bias and faithfully represents what it purports to represent. A. Conservatism B. Realization C. Relevance D. Reliability E. Recognition 52. Historically, _____ has described a preference for financial reporting such “that possible errors in measurement be in the direction of understatement rather than overstatement of net income and net assets.” A. conservatism B. reliability C. realization D. recognition […]
91. A corporation: A. Is a business legally separate from its owners. B. Is controlled by the FASB. C. Has shareholders who have unlimited liability for the acts of the corporation. D. Is the same as a limited liability partnership. E. Is not subject to double taxation. 92. The group that attempts to create more harmony among the accounting practices of different countries is the: A. AICPA. B. IASB. C. CAP. D. SEC. E. FASB. 93. The […]
69.Why are the inventory and cost of goods sold accounts attractive targets for managerial fraud? A. There are few if any procedures that can check for fraud in these accounts. B. These accounts are more significant than most other accounts. C. There are no adequate methods of record keeping for inventory. D. Cost of goods sold and Inventory accounts are not attractive targets of fraud. 70.On December 31, […]
51. The Nite Lite Factory has determined that its budgeted factory overhead budget for the year is $6,750,000 and budgeted direct labor hours are 5,000,000. Using the single plantwide factory overhead rate based on direct labor hours, determine the factory overhead rate for the year. A. $1.35 B. $1.20 C. $.74 D. cannot be determined 52. The Nite Lite Factory has determined that its budgeted factory overhead budget for the […]
31) The entry to record the receipt of $650 on account for services previously rendered and billed would be: A) Accounts Receivable 650 Service Revenue 650 B) Service Revenue 650 Accounts Receivable 650 C) Cash 650 Accounts Receivable 650 D) Cash 650 Accounts Payable 650 32) Which of the following […]
11) Cost accounting ________. A) measures the costs of acquiring or using resources in an organization B) helps managers to develop, communicate, and implement strategies C) coordinates product design, production, and marketing decisions and evaluate a company’s performance D) communicates information to investors, banks, regulators, and other outside parties 12) Which of the following differentiates cost accounting and financial accounting? A) The […]
71) Suppose the change in the government's debt-to-GDP ratio in a given year is 0.026. This figure tells us that the government's debt-to-GDP ratio has
A) fallen by 0.026%.
B) risen by 0.026%.
C) risen by 2.6 percentage points.
D) fallen by 2.6 percentage points.
E) risen by 0.026 percentage points.
72) Suppose the government's debt-to-GDP ratio on January 1 of Year 1 is 32%. The change in the debt-to-GDP ratio during Year 1 is -0.037. On January 1 of Year 2 the government's debt-to-GDP ratio is
A) 31.963%.
B) 32. 037%.
C) 28.3%.
D) 35.7%.
E) Not enough information to determine.
73) Consider the following data about government debt and deficit in a given year:
A) remained unchanged.
B) risen by 50%.
C) fallen by 50%.
D) risen by 0.5 percentage points.
E) fallen by 0.5 percentage points.
74) Consider the following data about government debt and deficit in a given year:
A) 82 percentage points.
B) 8.2 percentage points.
C) 0.82 percentage points.
D) 2.8 percentage points.
E) 0.28 percentage points.
75) Consider the following data about government debt and deficit in a given year:
A) remained unchanged.
B) risen by 0.2 percentage points.
C) fallen by 0.2 percentage points.
D) risen by 2 percentage points.
E) fallen by 2 percentage points.
76) Suppose that the real rate of interest on government bonds is 4% and the growth rate of real GDP is 2%. If the government has a positive stock of outstanding debt and its policy objective is to hold the debt-to-GDP ratio constant at its current level, it must
A) eliminate the overall deficit.
B) run an annually balanced budget.
C) run a cyclically balanced budget.
D) run a primary budget deficit.
E) run a primary budget surplus.
77) Suppose the government's objective is to hold its debt-to-GDP ratio constant at its current level of 30%. If the real interest rate on government bonds is 4% and the growth rate of real GDP is 2%, the government must
A) run a primary budget deficit of 0.6% of GDP.
B) run an overall budget deficit of 6.0% of GDP.
C) run an overall budget surplus of 6.0% of GDP.
D) run a primary budget surplus of 0.6% of GDP.
E) balance the overall budget.
78) Suppose that the real rate of interest is 3% and the growth rate of real GDP is 1%. If the government has a positive stock of outstanding debt and its goal is to hold the debt-to-GDP ratio constant at its current level, then it
A) must run a cyclically balanced budget.
B) must run an annually balanced budget.
C) must run a primary budget deficit.
D) must run a primary budget surplus.
E) must eliminate the overall deficit.
79) Consider a government with an outstanding stock of public debt. If, in any given year, the government has a primary budget surplus and the real interest rate on government bonds is less than the growth rate of real GDP, then
A) debt-service payments will be eliminated.
B) the debt-to-GDP ratio is certainly negative.
C) the debt-to-GDP ratio will certainly rise.
D) the debt-to-GDP ratio will certainly fall.
E) real GDP will certainly rise.
80) Consider a government with an outstanding stock of public debt. If, in any given year, the government has a primary budget surplus and the real interest rate on government bonds is more than the growth rate of real GDP, then
A) the debt-to-GDP ratio will certainly fall.
B) debt-service payments will be eliminated.
C) the debt-to-GDP ratio is certainly negative.
D) the debt-to-GDP ratio will certainly rise.
E) the effect on the debt-to-GDP ratio is uncertain.
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