40.Product A requires 5 machine hours per unit to be produced, Product B requires only 3 machine hours per unit, and the company’s productive capacity is limited to 240,000 machine hours. Product A sells for $16 per unit and has variable costs of $6 per unit. Product B sells for $12 per unit and has variable costs of $5 per unit. Assuming the company […]

    107.Betterments are:     A.Expenditures making a plant asset more efficient or productive.   B.Also called ordinary repairs.   C.Always increase an asset’s life.   D.Revenue expenditures.   E.Credited against the asset account when incurred.         108.An asset’s book value is $18,000 on December 31, Year 5. The asset has been depreciated at an annual rate of $3,000 on the straight-line […]

    61. A firm that transfers its receivables in exchange for cash can   A. use its accounts receivable as collateral for a loan from a bank or other financial institution. B. factor its accounts receivable to a bank or other financial institution in exchange for cash. C. transfer the accounts receivable to a legally separate entity that issues debt securities to investors. D. use all of the above. […]

    91.The FASB takes on a responsibility to do the following, except:    A.Set the objectives of financial reporting.   B.Describe the elements of financial statements.   C.Judge disputes between management and the CPA.   D.Determine the criteria for deciding what information to include in financial statements.         92.Which of the following is not recognized as a source of generally accepted accounting […]

    91. The _____ is the private-sector financial accounting standard setter in the U.S., but has no enforcement powers.  A. Financial Accounting Standards Board (FASB) B. Government Accountability Office (GAO) C. International Accounting Standards Board (IASB) D. Public Company Accounting Oversight Board (PCAOB) E. Accounting Standards Board   92. _____ must be used by U.S. Securities and Exchange Commission (SEC) registrants.  A. U.S. GAAP B. International Financial Reporting Standards (IFRS) C. U.S. GAAS D. International […]

  101. In a process costing system, when manufacturing overhead costs are applied to the cost of production, they are debited to:  A. the Finished Goods Inventory account. B. the Cost of Goods Sold account. C. the Goods in Process Inventory account. D. the Manufacturing Overhead account. E. the Raw Materials Inventory account. 102. To compute equivalent units of production, one must be able to reasonably estimate:  A. The percentage of completion. B. Units […]

  Use the information below to answer the following question(s).   Barry operates a shop in a resort in an area known for its high inflation rate. The inflation rate for the last few years has been averaging 3 percent a month. His long-term real rate of return is 12 percent, or 1 percent a month. On April 1 he anticipates that real dollar sales […]

  61) The method that measures the time it will take to recoup, in the form of cash inflows, the total dollars invested in a project is called 61) ______ A) the book-value method. B) payback. C) the accrued accounting rate of return method. D) internal rate of return method. E) the NPV. 62) The net initial investment for a new mainframe computer is $2,000,000. […]

  71. Allowance for Doubtful Accounts is listed on the balance sheet under the caption  A. stockholders’ equity B. investments C. fixed assets D. current assets 72. On the balance sheet, the amount shown for the Allowance for Doubtful Accounts is equal to the  A. Uncollectible accounts expense for the year B. total of the accounts receivables written-off during the year C. total estimated uncollectible accounts as of the end of the year D. sum […]

    105. Using the allowance method, writing off an actual bad debt would include a: a. Debit to Bad Debt Expense. b. Credit to Accounts Receivable. c. Debit to Accounts Receivable. d. Credit to Allowance for Uncollectible Accounts.                   106. On December 31, 2015, Coolwear Inc. had balances in Accounts Receivable and Allowance for Uncollectible Accounts of $48,400 and $940, respectively. During […]