45 Accounting Questions Assignment (2015)

| June 11, 2016

Question
Top of FormQuestion 1 (1 point)

A responsibility center that incurscosts (and expenses) and generates revenues is classified as a(n):

Question 1 options:

revenue center.

investment center.

cost center.

profit center.

Question 2 (1 point)

The most useful measure forevaluating a manager’s performance in controlling revenues and costs in aprofit center is:

Question 2 options:

controllable margin.

contribution gross profit.

contribution net income.

contribution margin.

Question 3 (1point)

Marley Corporation desires to earntarget net income of $180,000. If the selling price per unit is $30, unitvariable cost is $24, and total fixed costs are $720,000, the number of unitsthat the company must sell to earn its target net income is:

Question 3 options:

150,000.

120,000.

90,000.

60,000.

Question 4 (1point)

Oscar Corporation uses a processcost accounting system. Given the following data, compute the number of unitstransferred out during the current period.

Beginning Work in process

10,000 units (½ complete)

Ending Work in Process

12,500 units (? complete)

Started into Production

75,000 units

Question 4 options:

72,500.

75,000.

62,500.

85,000.

Question 5 (1point)

Pilgrim Companyapplies overhead on the basis of machine hours. Given the following data,compute overhead applied and the under- or overapplication of overhead for theperiod:

Estimated annual overhead cost

$1,200,000

Actual annual overhead cost

$1,150,000

Estimated machine hours

300,000

Actual machine hours

280,000

Question 5 options:

$1,120,000 applied and $30,000 underapplied.

$1,200,000 applied and $30,000 overapplied.

$1,150,000 applied and neither under- nor overapplied.

$1,120,000 applied and $30,000 overapplied.

Question6 (1 point)

The following data has beencollected for use in analyzing the behavior of maintenance costs of SterlingCorporation:

Month

Maintenance Costs

Machine Hours

January

$121,000

20,000

February

125,000

23,000

March

128,000

24,000

April

159,000

34,000

May

168,000

36,000

June

178,000

38,000

July

181,000

40,000

Using the high-low method toseparate the maintenance costs into their variable and fixed cost components,these components are:

Question 6 options:

$5 per hour plus $30,000.

$3 per hour plus $61,000.

$4 per hour plus $41,000.

$5 per hour plus $20,000.

Question 7 (1point)

Given the following data for CarlsonCompany, compute (A) total manufacturing costs and (B) costs of goodsmanufactured:

Direct materials used

$120,000

Beginning work in process

$20,000

Direct labor

50,000

Ending work in process

10,000

Manufacturing overhead

150,000

Beginning finished goods

25,000

Operating expenses

175,000

Ending finished goods

15,000

Question 7 options:

(A)

(B)

$330,000

$340,000

(A)

(B)

$310,000

$330,000

(A)

(B)

$320,000

$330,000

(A)

(B)

$320,000

$310,000

Question 8 (1point)

The production cost report showsboth quantities and costs. Costs are reported in three sections: (1) costsaccounted for, (2) unit costs, and (3) costs charged to department. Thesections are listed in the following order:

Question 8 options:

(1), (3), (2).

(2), (3), (1).

(1), (2), (3).

(2), (1), (3).

Question9 (1 point)

The starting point of a masterbudget is the preparation of the:

Question 9 options:

cash budget.

budgeted balance sheet.

production budget.

sales budget.

Question 10 (1point)

The most useful measure forevaluating the performance of the manager of an investment center is:

Question 10 options:

income from operations.

return on investment.

contribution margin.

controllable margin.

Question 11 (1point)

The costclassification scheme most relevant to responsibility accounting is:

Question 11 options:

controllable vs. uncontrollable.

fixed vs. variable.

direct vs. indirect.

semivariable vs. mixed.

Question 12 (1point)

Carter Company estimates its salesat 30,000 units in the first quarter and that sales will increase by 6,000units each quarter over the year. It has, and desires, a 25% ending inventoryof finished goods. Each unit sells for $25. 40% of the sales are for cash. 70%of the credit customers pay within the quarter. The remainder is received inthe quarter following sale. Cash collections for the third quarter are budgetedat:

Question 12 options:

$508,500.

$886,500.

$1,023,000.

$738,000.

Question 13 (1point)

Carter Company estimates its salesat 30,000 units in the first quarter and that sales will increase by 6,000units each quarter over the year. It has, and desires, a 25% ending inventoryof finished goods. Each unit sells for $25. 40% of the sales are for cash. 70%of the credit customers pay within the quarter. The remainder is received inthe quarter following sale. Production in units for the third quarter should bebudgeted at:

Question 13 options:

36,000.

43,500.

34,500.

45,750.

Question 14 (1point)

Kemp Company incurs the following costsin producing 50,000 units of product:

Direct materials

$200,000

Direct labor

100,000

Variable manufacturing overhead

200,000

Fixed manufacturing overhead

600,000

An outside supplier has offered tosupply the 50,000 units at $14.00 each. All of Kemp’s related variable costs,but only $400,000 of the fixed costs would be eliminated if the offer isaccepted. Acceptance will result in a:

Question 14 options:

loss of $200,000.

savings of $200,000.

savings of $400,000.

loss of $400,000.

Question15 (1 point)

To be classified as a short-terminvestment, an investment must meet the following criteria:

Question 15 options:

Readily Marketable

No Loss On Disposal

Intent to Convert within
One Year or Operating
Cycle, whichever is longer

No

Yes

No

Readily Marketable

No Loss On Disposal

Intent to Convert within
One Year or Operating
Cycle, whichever is longer

Yes

Yes

Yes

Readily Marketable

No Loss On Disposal

Intent to Convert within
One Year or Operating
Cycle, whichever is longer

Yes

No

Yes

Readily Marketable

No Loss On Disposal

Intent to Convert within
One Year or Operating
Cycle, whichever is longer

No

No

Yes

Question 16 (1point)

Lyndon Company has a productionprocess where two products result from a joint processing procedure; both canbe sold immediately or processed further. Given the following additional perunit information, determine which of the products should be processed further.

Product

Allocated
Joint Cost

Selling
Price

Additional
Processing Cost

New
Selling Price

A

$50

$100

$90

$200

B

$30

$50

$25

$80

Question 16 options:

Neither A nor B.

Only B.

Only A.

Both A and B.

Question17 (1 point)

A flexible budget:

Question 17 options:

typically uses an activity index different from that used in developing the predetermined overhead rate.

can be prepared for sales or production budgets, but not for an operating expense budget.

is also called a static budget.

can be considered a series of related static budgets.

Question 18 (1point)

Leah Company’s equipment accountincreased $400,000 during the period; the related accumulated depreciationincreased $30,000. New equipment was purchased at a cost of $700,000 and usedequipment was sold at a loss of $20,000. Depreciation expense was $100,000.Proceeds from the sale of the used equipment were:

Question 18 options:

$280,000.

$320,000.

$250,000.

$210,000.

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Question 19 (1point)

Which of the following would not beincluded in the operating activities section of a statement of cash flows?

Question 19 options:

Cash outflows to governments for taxes.

Cash inflows from returns on equity securities (i.e., dividends).

Cash outflows to reacquire treasury stock.

Cash inflows from returns on loans (i.e., interest).

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Question 20 (1point)

The concept of significant influencemust be satisfied before which accounting method can be used by an investor?

Question 20 options:

Consolidated financial statements.

All of these answers are correct.

Cost.

Equity.

Question 21 (1point)

Which of the following pairs ofterms in the area of financial statement analysis are synonymous?

Question 21 options:

Horizontal — Trend

Horizontal — Ratio

Vertical — Ratio

Ratio — Trend

Question 22 (1point)

Which of the following statements istrue?

Question 22 options:

Trading securities are securities that are not intended to be sold in the future.

Trading securities are debt securities that the investor has the intent to hold to maturity.

Trading securities are securities bought and held primarily for sale in the near term.

Trading securities are reported at cost in the balance sheet.

Question 23 (1point)

Dividends received are credited towhat account under the equity method and cost method, respectively?

Question 23 options:

Equity Method

Cost Method

Stock Investments

Stock Investments

Equity Method

Cost Method

Dividend Revenue

Stock Investments

Equity Method

Cost Method

Dividend Revenue

Dividend Revenue

Equity Method

Cost Method

Stock Investments

Dividend Revenue

Question24 (1 point)

In accounting for available-for-salesecurities, the Unrealized Loss on Available-for-Securities account should beclassified as a:

Question 24 options:

deduction in the stockholders’ equity section of the balance sheet.

contra asset on the balance sheet.

loss on the income statement.

liability on the balance sheet.

Question 25 (1 point)

Reporting investments at fair valueis applicable to:

Question 25 options:

available-for-sale securities only.

held-to-maturity securities.

trading securities only.

both available-for-sale and trading securities.

Question 26 (1point)

Sailor Corporation has the followingstock outstanding:

6% Preferred, $100 par

$1,000,000

Common Stock, $50 par

2,000,000

No dividends were paid the previous2 years. If Sailor declares $250,000 of dividends in the current year, how muchwill common stockholders receive if the preferred stock is cumulative?

Question 26 options:

$60,000.

$70,000.

$180,000.

$190,000.

Question27 (1 point)

The statement of cash flows is a(n):

Question 27 options:

required basic financial statement.

required supplemental financial statement.

optional basic financial statement.

optional supplementary statement.

Question 28 (1point)

The directors of Bennett Corp. aretrying to decide whether they should issue par or no par stock. They areconsidering three alternatives for their new stock, which they are assumingwill be issued at $8 per share. The alternatives are: (A) $5 par value, (B) nopar with a $1 stated value, and (C) no par, no stated value. If 60,000 sharesare issued, what amount will be credited to the common stock account in each ofthese cases?

Question 28 options:

(A)

(B)

(C)

$300,000

$60,000

$480,000

(A)

(B)

(C)

$480,000

$480,000

$480,000

(A)

(B)

(C)

$60,000

$300,000

$480,000

(A)

(B)

(C)

$60,000

$480,000

$480,000

Question29 (1 point)

Victor Corp. reacquired, but did notretire, 20,000 shares of its $2 par common stock at a cost of $13 per share onApril 30, 2014. The stock was originally issued at $11 per share. On January10, 2015, the 20,000 shares were sold at $16 per share. The sales entry shouldinclude a credit to Paid-in Capital from Treasury Stock for:

Question 29 options:

$180,000.

$100,000.

$280,000.

$60,000.

Question 30 (1point)

What is the effect on total paid-incapital of a stock dividend and a stock split, respectively?

Question 30 options:

Stock Dividend

Stock Split

Increase

No effect

Stock Dividend

Stock Split

Decrease

No effect

Stock Dividend

Stock Split

No effect

No effect

Stock Dividend

Stock Split

Decrease

Decrease

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Question 31 (1 point)

Which of the following is reported in the retained earningsstatement as an adjustment to the beginning balance?

Question 31 options:

Extraordinary items.

Discontinued operations.

Other revenues and expenses.

Prior period adjustments.

Question 32 (1point)

Which of the following should be classified as anextraordinary item?

Question 32 options:

Effects of major casualties not infrequent in the area.

Write-off of a significant amount of receivables.

Losses due to a bitter, lengthy labor strike.

Loss from the expropriation of facilities by a foreign government.

Question 33 (1point)

Bonds that mature in installments are called:

Question 33 options:

callable bonds.

serial bonds.

registered bonds.

term bonds.

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Question 34 (1point)

A Discount on Bonds Payable account:

Question 34 options:

is an adjunct account to Bonds Payable.

will cause interest expense to be less than cash interest payable.

is increased over the life of the bond until it equals the bond’s face value.

is a contra account to Bonds Payable.

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Question 35 (1point)

Dina Corp. had 500,000 shares of common stock outstandingthroughout the year. Dina reported net income of $2,400,000 and declaredpreferred stock dividends of $400,000 during the year. Dina should presentearnings per share of:

Question 35 options:

$0.80.

$4.00.

$4.80.

$6.00.

Question36 (1 point)

In order to be considered extraordinary, an item must be:

Question 36 options:

infrequent and unusual.

unusual and uninsured.

uninsured and infrequent.

infrequent and uninsured.

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Question 37 (1point)

If the market rate of interest is lower than the statedrate, bonds will sell at an amount:

Question 37 options:

equal to face value.

not determinable from the given information.

higher than face value.

lower than face value.

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Question38 (1 point)

Which of the following combinationspresents correct examples of liquidity, profitability, and solvency ratios,respectively?

Question 38 options:

Liquidity

Profitability

Solvency

Receivables turnover

Return on operating assets

Times interest earned

Liquidity

Profitability

Solvency

Quick ratio

Payout ratio

Return on operating assets

Liquidity

Profitability

Solvency

Inventory turnover

Inventory turnover

Times interested earned

Liquidity

Profitability

Solvency

Current ratio

Inventory turnover

Debt to equity

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Question39 (16 points)

Match the term that best representsthe definition or statement given below. No term should be used more than once,and not all terms will be used.

Question 39 options:

1234567891011121314151617181920212223242526272829303132

Costs that vary in total directly and proportionately with changes in the activity level.

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The differences between actual costs and standard costs.

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The difference between actual overhead and budgeted overhead at actual production level.

1234567891011121314151617181920212223242526272829303132

The amount of revenue remaining after deducting variable costs.

1234567891011121314151617181920212223242526272829303132

A pro rata distribution of the corporation’s own stock to stockholders.

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Costs that a manager has the authority to incur within a given period of time.

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An accounting method in which the investment in stock is initially recorded at cost and cash dividends are credited to Dividend Revenue.

1234567891011121314151617181920212223242526272829303132

Debt securities that the investor has the intent and ability to hold to maturity.

1234567891011121314151617181920212223242526272829303132

The portion of retained earnings that is currently unavailable for dividend declarations.

1234567891011121314151617181920212223242526272829303132

Events and transactions that are unusual in nature and infrequent in occurrence.

1234567891011121314151617181920212223242526272829303132

Standards based on optimum levels of performance under perfect operating conditions.

1234567891011121314151617181920212223242526272829303132

Measures of the short-term ability of an enterprise to pay its maturing obligations and to meet unexpected needs for cash.

1234567891011121314151617181920212223242526272829303132

Measures the ability of the company to survive over a long period of time.

1234567891011121314151617181920212223242526272829303132

The correction of an error in previously issued financial statements.

1234567891011121314151617181920212223242526272829303132

The disposal of a significant segment of a business.

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The net income earned by each share of outstanding common stock.

1.

Accounts receivable

2.

Book value per share

3.

Capital lease

4.

Contribution margin

5.

Contribution margin ratio

6.

Controllable costs

7.

Cost accounting

8.

Cost method

9.

Discontinued operations

10.

Earnings per share

11.

Equity method

12.

Extraordinary items

13.

Fixed costs

14.

Held-to-maturity securities

15.

Horizontal analysis

16.

Ideal standards

17.

Liquidity ratios

18.

Noncontrollable costs

19.

Normal standards

20.

Operating lease

21.

Overhead budget variance

22.

Overhead volume variance

23.

Parent company

24.

Period costs

25.

Prior period adjustment

26.

Product costs

27.

Retained earnings appropriation

28.

Solvency ratios

29.

Stock dividend

30.

Stock split

31.

Variable costs

32.

Variances

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Question40 (1 point)

Matthew Corporation manufacturespaper shredding equipment. Each paper shredder has a standard materials cost of20 pounds at $7.50 per pound or $150.00 in total. 40,000 pounds of materialswere purchased for $320,000 during the period and 39,000 pounds were used inthe production of 2,000 good units. What is the direct materials pricevariance?

Use “U” or “F”to indicate whether the variance is unfavorable or favorable. Do not show yourwork or include any additional text with your answer. For example, if youranswer is $100,000 unfavorable, you should enter $100,000 U.

Question 40 options:

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Question41 (1 point)

Matthew Corporation manufacturespaper shredding equipment. Each paper shredder has a standard materials cost of20 pounds at $7.50 per pound or $150.00 in total. 40,000 pounds of materialswere purchased for $320,000 during the period and 39,000 pounds were used inthe production of 2,000 good units. What is the direct materials usagevariance?

Use “U” or “F”to indicate whether the variance is unfavorable or favorable. Do not show yourwork or include any additional text with your answer. For example, if youranswer is $100,000 unfavorable, you should enter $100,000 U.

Question 41 options:

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Question42 (1 point)

Matthew Corporation manufacturespaper shredding equipment and uses a process costing system. 2,000 units werein process at the beginning of the period, 60% complete. 20,000 units werestarted into production during the period; 1,000 were in process at the end ofthe period, 60% complete. What are the equivalent units for conversion costs?

Do not show your work or include anyadditional text with your answer. For example, if your answer is 10,000, youshould enter 10,000.

Question 42 options:

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Question43 (1 point)

Matthew Corporation manufacturespaper shredding equipment and sells each unit for $500. Variable costs per unitequal $300. Total fixed costs equal $800,000. Matthew is currently selling5,000 units per period and would like to earn net income of $400,000. What isthe breakeven point in dollars?

Do not show your work or include anyadditional text with your answer. For example, if your answer is $10,000, youshould enter $10,000.

Question 43 options:

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Question44 (1 point)

Matthew Corporation manufacturespaper shredding equipment and sells each unit for $500. Variable costs per unitequal $300. Total fixed costs equal $800,000. Matthew is currently selling5,000 units per period and would like to earn net income of $400,000. How manysales units are necessary to attain the desired income?

Do not show your work or include anyadditional text with your answer. For example, if your answer is 10,000, youshould enter 10,000.

Question 44 options:

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Question45 (1 point)

Matthew Corporation manufacturespaper shredding equipment and sells each unit for $500. Variable costs per unitequal $300. Total fixed costs equal $800,000. Matthew is currently selling5,000 units per period and would like to earn net income of $400,000. What isthe margin of safety ratio for current operations?

Express your answer as a percentage,and do not show your work or include any additional text with your answer. Forexample, if your answer is 60%, you should enter 60%.

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