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Question
GAAP requires companies to treat product costs such as factory overhead as an asset until the product is sold.
Answer
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Related questions
Q:
Zennick Fashion Products uses standard costs for their manufacturing division. Standards specify 3.0 direct labor hours per unit of product. At the beginning of the year, the static budget for variable overhead costs included the following data:
Production volume: 1,000 units
Estimated variable overhead costs: $120,000
Estimated direct labor hours: 3,000 hours
At the end of the year, actual data were as follows:
Production volume: 1,500 units
Actual variable overhead costs: $174,300
Actual direct labor hours: 4,200 hours
How much is the spending (price) variance for variable overhead?
A) $6,300 Favorable
B) $6,300 Unfavorable
C) $12,000 Favorable
D) $12,000 Unfavorable
Q:
Zygot Biotech Company is budgeting for the 3rd quarter, and provide the following data: Jul
Aug
Sep Cash collections
$50,000
$40,000
$48,000 Cash payments: Purchases of inventory
31,000
22,000
18,000 Operating expenses
12,000
9,000
11,600 Capital expenditures
0
19,000
0 The cash balance at June 30 is projected to be $5,600. There are no financing transactions planned in the 3rd quarter. What is the projected cash balance at the end of September?
A) $21,000
B) $12,600
C) $18,000
D) $2,600
Q:
Berkeley Products has a cash balance of $20,000 at April 1, 2011. They are now preparing the cash budget for the second quarter. Budgeted cash collections and payments are as follows: Apr
May
Jun Cash collections
$12,000
$9,000
$10,500 Cash payments: Purchases of inventory
4,600
4,200
4,000 Operating expenses
5,000
5,200
4,800 There are no budgeted capital expenditures or financing transactions during the quarter. Based on the above data, what is the projected cash balance at the end of June?
A) $22,000
B) $21,900
C) $23,700
D) $22,400
Q:
Alice Li started Li Design Consultants and invested $5,000 into the business. On Dec. 12, she rendered services to three clients "on account" with total revenues earned of $4,500. She then incurred advertising expense on four different websites and promised to pay a total of $1,600 at a later date. On Dec. 15, she purchased $900 of office supplies for cash. On Dec. 20, she received $1,000 in cash payment from her first client and deposited it into the business account. On Dec. 22, she incurred $2,000 for legal expense and paid cash. On Dec. 31, she made a payment of $300 to one of the websites that she owed for advertising provided earlier in the month. No withdrawals were taken in December. Please prepare an income statement for the month of December, a statement of owner's equity for the month of December, and a balance sheet at Dec. 31, 2012.
Q:
Smith Company tries to manage their inventory levels so that they will have just enough to meet customer demand, without keeping an excess of funds tied up in inventory. Given this situation, Smith Company hopes to have a high number of days in inventory.
Q:
Which of the following is subtracted from Net sales revenue to arrive at Gross profit?
A) Cost of goods available for sale
B) Cost of goods sold
C) Sales discounts and Sales returns and allowances
D) Operating expenses
Q:
In a multi-step income statement, Interest revenue and expense are NOT included in Operating income.
Q:
Bartholomew Manufacturing Company is preparing the operating budget for the first quarter of 2012. They forecast sales of $50,000 in January, $60,000 in February, and $70,000 in March. Cost of goods sold is budgeted at 40% of Sales. Variable and fixed expenses are as follows:
Variable: Miscellaneous expenses : 20% of Sales
Fixed: Salary expense: $11,000 per month
Rent expense: $5,000 per month
Depreciation expense: $1,200 per month
Miscellaneous expenses/fixed portion: $3,300 per month
How much is the operating net income/(loss) for February?
A) $3,500
B) $1,450
C) ($500)
D) $7,500
Q:
Dahl Manufacturing is making its operating budget for the 4th quarter of 2012. Sales are forecast at $60,000 in October, $65,000 in November, and $70,000 in December. Cost of goods sold it 40% of sales. Expenses are budgeted as follows:
Variable: Miscellaneous: 5% of sales
Fixed: Salary expense: $12,600 per month
Rent expense: $5,200 per month
Depreciation expense: $4,000 per month
Admin expense: $5,000 per month
How much are the total operating expenses in December?
A) $29,800
B) $30,300
C) $30,050
D) $29,990
Q:
Both purchase discounts and sales discounts appear on the income statement of a company that uses the perpetual inventory method.
Q:
Please refer to the following partially completed worksheet:How much was the Net income or Net loss?A) Net income of $1,400B) Net income of $27,000C) Net loss of $1,400D) Net loss of $28,400
Q:
Please refer to the partially completed worksheet below:How much was the Net income?A) $42,000B) $13,600C) $22,020D) $28,400
Q:
Which of the following is TRUE of a completed worksheet?
A) The total debits in the trial balance column equal the total debits in the adjusted trial balance column.
B) The total debits in the income statement column equal the dividends paid.
C) The total debits in the income statement column equal the total debits in the balance sheet column.
D) The total debits equal the total credits in each column.
Q:
The current ratio and the debt ratio are shown on the income statement.
Q:
Below is a list of various balance sheet accounts and their balances. Debit
Credit Building
$100,000 Cash
2,000 Supplies
800 Furniture
2,600 Prepaid insurance
150 Accumulated depreciation-furniture $900 Inventory Land
25,000 Accumulated depreciation-building 4,800 Accounts receivable
1,500 What are the total long-term assets that would be shown on the balance sheet?
A) $127,600
B) $121,900
C) $128,400
D) $96,900
Q:
Buildings, land, and equipment would be classified as:
A) current assets.
B) long-term assets.
C) current liabilities.
D) long-term liabilities.
Q:
A balance sheet that has the assets listed above the liabilities and equity sections is a(n):
A) report form balance sheet.
B) classified form balance sheet.
C) account form balance sheet.
D) audited form balance sheet.
Q:
Below is a list of various balance sheet accounts and their balances.
Debit Credit Notes payable-short term $800 Salary payable 3,600 Notes payable-long term 20,000 Accounts payable 2,200 Unearned revenue 1,000 Interest payable 2,200 What are the total long-term liabilities that would be shown on the balance sheet?
A) $29,800
B) $9,000
C) $9,800
D) $20,000
Q:
Under which of the following categories would Land appear?
A) Long-term assets
B) Current assets
C) Long-term liabilities
D) Current liabilities
Q:
Only temporary accounts appear on the post-closing trial balance.
Q:
Only permanent accounts appear on the post-closing trial balance.
Q:
The post-closing trial balance is an optional step.
Q:
When a business makes a cash payment, the cash account is always debited.
Q:
The accounting process of copying a transaction from the journal to the ledger is called:
A) journalizing.
B) posting.
C) proofing.
D) footing.
Q:
A) chart of accounts.
B) ledger.
C) trial balance.
D) journal.
Answer: B
Q:
Which of the following statements about revenue is CORRECT?
A) Revenues decrease owner's equity, so a revenue account's normal balance is a credit balance.
B) Revenues decrease owner's equity, so a revenue account's normal balance is a debit balance.
C) Revenues increase owner's equity, so a revenue account's normal balance is a debit balance.
D) Revenues increase owner's equity, so a revenue account's normal balance is a credit balance.
Q:
The balance of an account is the:
A) amount remaining in an account.
B) account number, as shown in the chart of accounts.
C) sum of the debits only.
D) sum of the credits only.
Q:
Journalizing a transaction means:
A) calculating the balance in an account.
B) finding the account number in the chart of accounts.
C) recording the transaction, including a brief explanation.
D) copying the information from the journal to the ledger.
Q:
In the accounting system, the first place that transactions are recorded is the ledger.
Q:
For liabilities and revenues, a debit increases the account.