| C.system is used to control cash receipts.|
| D.system is an internal control procedure to verify that the assets in the records are the ones the company owns.|
|Question 9 of 40||2.5 Points|
Money market funds, commercial paper, and U.S. Treasury Bills are examples of cash equivalents.
|Question 10 of 40||2.5 Points|
Which of the following accounts is reported in the noncurrent liabilities section of the corporate balance sheet?
| A.Bonds Payable|
| B.Common Stock|
| C.Dividends Payable|
|Question 11 of 40||2.5 Points|
Which one of the following is not a characteristic generally evaluated in ratio analysis?
|Question 12 of 40||2.5 Points|
Under the accrual basis of accounting, net cash flows from operating activities on the statement of cash flows will normally be the same as net income.
|Question 13 of 40||2.5 Points|
Activity-based costing is a method of accumulating and allocating costs by department.
|Question 14 of 40||2.5 Points|
Inventories of merchandising and manufacturing businesses are reported as current assets on the balance sheet.
|Question 15 of 40||2.5 Points|
The purpose of an audit is to:
| A.determine whether or not a company is a good investment.|
| B.render an opinion on the fairness of the statements.|
| C.determine whether or not a company complies with income tax regulations.|
| D.determine whether or not a company has a good credit risk.|
|Question 16 of 40||2.5 Points|
In using the total cost concept of applying the cost-plus approach to product pricing, only profit is covered in the markup.
|Question 17 of 40||2.5 Points|
Using the job order cost system, service businesses are able to bill clients on a weekly or monthly basis, even when the job has not been completed.
|Question 18 of 40||2.5 Points|
The __________ is prepared with various sections, subsections, and captions that aid in its interpretation and analysis.
| A.accounting equation|
| B.retained earnings statement|
| C.intangible asset section|
| D.classified balance sheet|
|Question 19 of 40||2.5 Points|
The framework that has become widely accepted as the standard by which companies design, analyze, and evaluate internal controls is the:
| A.Internal Control – Integrated Framework by the Committee of Sponsoring Organizations.|
| B.Internal Control – Integrated Framework by the Congress of Special Offerings.|
| C.Internal Control Localized Structure by the Committee of Sponsoring Organizations.|
| D.Internal Control Localized Structure by the Congress of Special Offerings.|
|Question 20 of 40||2.5 Points|
Fixed assets are reported at their book value on the balance sheet.
|Question 21 of 40||2.5 Points|
If employees accept a wage contract that decreases the unit contribution margin, the break-even point will decrease.
|Question 22 of 40||2.5 Points|
If paid-in capital in excess of par-preferred stock is $80,000, preferred stock is $500,000, paid-in capital in excel of par-common stock is $50,000, common stock is $1,000,000, and retained earnings is $230,000, the total stockholders’ equity is $1,860,000.
|Question 23 of 40||2.5 Points|
The estimated amount that an asset can be sold for at the end of its useful life is called its book value.
|Question 24 of 40||2.5 Points|
The document authorizing the issuance of materials from the storeroom for use in manufacturing is called:
| A.materials requisition.|
| B.purchase requisition.|
| C.receiving report.|
| D.purchase order.|
|Question 25 of 40||2.5 Points|
If a company has current assets totaling $56,000 and current liabilities totaling $40,500, then the company’s working capital totals $15,500.
|Question 26 of 40||2.5 Points|
Under which method of inventory costing is the cost flow assumed to be in the reverse order in which the expenditures were made?
| A.Average cost|
| B.Last-in, first-out|
| C.First-in, first-out|
| D.Specific identification method|
|Question 27 of 40||2.5 Points|
The process of a company selling its accounts receivable to another company is referred as:
|Question 28 of 40||2.5 Points|
Which of the following is a characteristic of the just-in-time philosophy?
| A.Increases inventory to protect against process problems|
| B.Tolerates defects|
| C.Emphasizes push manufacturing|
| D.Emphasizes product-oriented layout|
|Question 29 of 40||2.5 Points|
Reporting under managerial accounting is not restricted by specific rules such as generally accepted accounting principles (GAAP).
|Question 30 of 40||2.5 Points|
Management’s philosophy and operating style would affect which of the following elements of internal control?
| A.Risk assessment|
| C.Control environment|
| D.Information and communication|
|Question 31 of 40||2.5 Points|
The objective of most businesses is to maximize profits.
|Question 32 of 40||2.5 Points|
The payment of a liability:
| A.decreases assets and stockholders’ equity.|
| B.increases assets and decreases liabilities.|
| C.decreases assets and increases liabilities.|
| D.decreases assets and decreases liabilities.|
|Question 33 of 40||2.5 Points|
If the cost of employee wages is not a significant portion of the total product cost, the wages are classified as factory overhead cost.
|Question 34 of 40||2.5 Points|
If the total unit cost of manufacturing Product Y is currently $40 and the total unit cost after modifying the style is estimated to be $48, the differential cost for this situation is $48.
|Question 35 of 40||2.5 Points|
Which of the following information is not provided by job cost sheets?
| A.Cost impact of materials changes|
| B.Cost impact of continuous improvement in the manufacturing process|
| C.Change in materials price or direct labor rate over time|
| D.Utilities, managerial salaries, and depreciation of computers in the corporate office|
|Question 36 of 40||2.5 Points|
What are current liabilities?
| A.Liabilities that are due and payable within two years.|
| B.Liabilities that are due and to be paid out of the current assets within one year.|
| C.Liabilities that are due but not payable for more than one year.|
| D.Liabilities that are payable if a possible subsequent event occurs.|
|Question 37 of 40||2.5 Points|
When a business sells more than one product at varying selling prices, the business’s break-even point can be determined as long as the number of products does not exceed:
| D.there is no limit.|
|Question 38 of 40||2.5 Points|
Under the cash basis of accounting, expenses are recorded when paid.
|Question 39 of 40||2.5 Points|
A practical approach that is frequently used by managers when setting normal selling price is the:
| A.cost-plus approach.|
| B.economic theory approach.|
| C.price graph approach.|
| D.market price approach.|
|Question 40 of 40||2.5 Points|
The revenue recognition concept states that revenue should be recorded in the same period as the cash is received.