37) Describe job-costing and process-costing systems. Explain when it would be appropriate to use each. 38) In a job-costing system, explain why it is necessary to apply indirect costs to production through the use of a manufacturing overhead cost allocation rate. 4.2 Apply the decision framework in a seven-step method to assign total actual costs to a distinct service. 1) Based on […]
51. On the Income Statement, Sales Returns and Allowances have the effect of A. Increasing total revenue B. Increasing total expenses C. Decreasing total revenue D. Decreasing total expenses 52. Which of the following describes Sales Returns and Allowances? A. A revenue account with a normal credit balance. B. An expense account with a normal debit balance. C. A contra revenue account with a normal debit balance. D. A contra expense account with a […]
11) The Financial Accounting Standards Board is responsible for establishing: A) the code of professional conduct for accountants. B) the Securities and Exchange Commission. C) generally accepted accounting principles. D) international accounting financial standards. 12) The acronym GAAP stands for: A) generally acceptable authorized pronouncements. B) government authorized accountant principles. C) generally accepted accounting principles. D) government audited accounting pronouncements. 13) ________ […]
147. One of the divisions of Phoenix Corporation is the Motor Division. This division currently is designing a new, energy-efficient motor that would require a specialized filter. An outside company has offered to provide the 40,000 filters needed each year at $25 each. Phoenix is considering setting up a separate division, the Filter Division, to make the filters. The variable cost per unit would be […]
71. When a partnership is liquidated: A. Noncash assets are converted to cash. B. Any gain or loss on liquidation is allocated to the partners’ capital accounts using the income and loss sharing ratio. C. Liabilities are paid or settled. D. Any remaining cash is distributed to the partners based on their capital balances. E. All of these. 72. A capital deficiency means that: A. The partnership has a loss. B. The partnership […]
31. An investment that costs $30,000 will produce annual cash flows of $10,000 for a period of 4 years. Given a desired rate of return of 8%, the investment will generate a (round to nearest whole dollar): A. Positive net present value of $33,121. B. Positive net present value of $3,121. C. Negative net present value of $33,121. D. Negative net present value of $3,121. 32. An investment that costs […]
71. Upon review of Mack’s statement of cash flows, the following was noted: Cash flows from operating activities $ 15,000 Cash flows from investing activities 40,000 Cash flows from financing activities (50,000) From this information, the most likely explanation is that Mack is: A. using cash from operations and selling long-term assets to pay back debt.B. using cash from operations and borrowing to purchase long-term […]
76. A company has net sales of $1,200,000 and average accounts receivable of $400,000. What is its accounts receivable turnover for the period? A. 0.20.B. 5.00C. 20.0D. 73.0E. 3.0 77. Pepperdine reported net sales of $8,600 million, net income of $126 million and average accounts receivable of $890 million. Its accounts receivable turnover is: A. 37.8.B. 9.7.C. 68.3.D. 7.1.E. 51.7. 78. Axle Co’s accounts receivable turnover was 9.9 for this year and 11.0 […]
74.The normal balance of an account is the A.increase side of the account. B.decrease side of the account. C.the left side of the account. D.the right side of the account. 75.Identify the accounts below that would ALL appear on the balance sheet. A.Cash, Accounts Payable, Owner’s Capital (ending balance) B.Accounts Receivable, Accounts Payable, Fee Income C.Utility Expense, Salary Expense, Cash D.Owner’s Capital (beginning), Owner’s […]
81. Marcye Co. manufactures office furniture. During the most productive month of the year, 3,500 desks were manufactured at a total cost of $84,400. In its slowest month, the company made 1,100 desks at a cost of $46,000. Using the high-low method of cost estimation, total fixed costs are: A. $56,000B. $28,400C. $17,600D. cannot be determined from the data given 82. Given the following cost and activity observations for […]
41.The adjusting entry required when amounts previously recorded as unearned revenues are earned includes:
A.A debit to a liability.
B.A debit to an asset.
C.A credit to a liability.
D.A credit to an asset.
42.Adjusting entries:
A.Often include the Cash account.
B.Usually are recorded at the beginning of the accounting period.
C.Always involve at least one income statement account and one balance sheet account.
D.Adjust the balance of revenue and expense accounts to zero.
43.The adjusting entry required to record accrued expenses includes:
A.A credit to Cash.
B.A debit to an asset.
C.A credit to an asset.
D.A credit to liability.
44.Yummy Foods purchased a one-year hazard insurance policy on August 1 and recorded the $4,200 premium to prepaid insurance. At its December 31 year-end, Yummy Foods would record which of the following adjusting entries?
A.
B.
C.
D.
45.The employees of Neat Clothes work Monday through Friday. Every other Friday the company issues payroll checks totaling $32,000. The current pay period ends on Friday, January 3. Neat Clothes is now preparing financial statements for the year ended December 31. What is the adjusting entry to record accrued salaries at the end of the year?
A.
B.
C.
D.
46.On April 1, a $4,800 premium on a one-year insurance policy on equipment was paid and charged to Prepaid Insurance. At the end of the year, the financial statements would report:
A.Insurance Expense, $4,800; Prepaid Insurance $0.
B.Insurance Expense, $3,600; Prepaid Insurance $1,200.
C.Insurance Expense, $3,650; Prepaid Insurance $4,800.
D.Insurance Expense, $1,200; Prepaid Insurance $3,600.
47.On September 1, 2012, Gold Magazine sold 400 one-year subscriptions for $90 each. The total amount received was credited to Unearned Revenue. What would be the required adjusting entry at December 31, 2012?
A.
B.
C.
D.
48.During the year, Cheng Company paid salaries of $24,000. In addition, $8,000 in salaries has accrued by the end of the year but has not been paid. The year-end adjusting entry would include which one of the following?
A.Debit to Salaries Expense for $32,000.
B.Credit to Salaries Expense of $8,000.
C.Debit to Salaries Payable for $24,000.
D.Credit to Salaries Payable for $8,000.
49.At the beginning of December, Global Corporation had $2,000 in supplies on hand. During the month, supplies purchased amounted to $3,000, but by the end of the month the supplies balance was only $800. What is the appropriate month-end adjusting entry?
A.Debit Cash $4,200, credit Supplies $4,200.
B.Debit Supplies $4,200, credit Supplies Expense $4,200.
C.Debit Supplies Expense $4,200, credit Supplies $4,200.
D.Debit Cash $800, credit Supplies $800.
50.Eve's Apples opened for business on January 1, 2012, and paid for two insurance policies effective that date. The liability policy was $36,000 for eighteen-months, and the crop damage policy was $12,000 for a two-year term. What was the balance in Eve's Prepaid Insurance account as of December 31, 2012?
A.$9,000.
B.$18,000.
C.$30,000.
D.$48,000.
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