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Questions
Q:
The wages and benefits of the assembly line workers are product costs.
Q:
The total manufacturing costs to account for during the year minus the beginning work in process equals cost of goods manufactured.
Q:
The costs of indirect materials cannot easily be traced to the manufactured product and is therefore a component of manufacturing overhead.
Q:
Selling and administrative expenses are subtracted from cost of goods sold to obtain gross profit.
Q:
A manufacturer's inventory consists of merchandise inventory, work in process inventory, and finished goods inventory.
Q:
Manufacturing overhead includes indirect costs, such as insurance and depreciation on the factory building.
Q:
Manufacturing overhead includes all manufacturing costs, such as direct labor and direct materials.
Q:
Cost of goods manufactured includes direct materials, direct labor, and manufacturing overhead.
Q:
GAAP requires companies to treat product costs such as factory overhead as an asset until the product is sold.
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Q:
Which of the following formulas represents cost of goods sold for a merchandising business?
A) Beginning inventory - ending inventory = cost of goods sold
B) Purchases and freight in - ending inventory = cost of goods sold
C) Ending inventory + purchases and freight in - beginning inventory = cost of goods sold
D) Beginning inventory + purchases and freight in - ending inventory = cost of goods sold
Q:
Barrington Products is a merchandiser that sells a single type of specialized industrial chemical. Barrington reported the following information for the year 2012:
Sales revenue $280,000
Cost of goods sold $126,000
Operating expenses $135,000
Net income $19,000
Number of units sold 90,000
How much was the unit cost per unit of product sold?
(Please round to nearest cent.)
A) $1.40
B) $1.71
C) $3.11
D) $0.21
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Q:
Which of the following is an inventory account for a merchandise company?
A) Work in process inventory
B) Manufacturing overhead inventory
C) Merchandise inventory
D) Finished goods inventory
Q:
Which of the following applies to the raw materials used by a manufacturing company?
A) Materials inventory
B) Work in process inventory
C) Merchandise inventory
D) Finished goods inventory
Q:
Which of the following applies to goods that are partially completed?
A) Materials inventory
B) Work in process inventory
C) Merchandise inventory
D) Finished goods inventory
Q:
Which of the following applies to goods that are produced by a manufacturing company and ready to sell?
A) Materials inventory
B) Work in process inventory
C) Merchandise inventory
D) Finished goods inventory
Q:
Which of the following applies to goods that are purchased from a producer and sold by a merchandising company?
A) Materials inventory
B) Work in process inventory
C) Merchandise inventory
D) Finished goods inventory
Q:
Merchandising businesses resell goods which they purchase from a producer.
Q:
Bainbridge Services reported the following information for the year 2012:
Service revenue $20,000
Operating expenses $15,750
Net income $4,250
Number of service calls for the year 21,000
How much was the unit cost per service call?
A) $0.95
B) $2.20
C) $0.75
D) $0.20
Q:
Which of the following is TRUE for a service company?
A) Expenses are all period costs.
B) Expenses are all product costs.
C) Income statement includes gross profit.
D) Balance sheet includes finished goods inventory.
Q:
Which of the following could be found on the income statement of a service company?
A) Rent expense
B) Cost of goods manufactured
C) Cost of goods sold
D) Manufacturing overhead
Q:
Which of the following is a characteristic of a service company?
A) It transforms raw materials into finished goods.
B) It makes a product.
C) It does not have tangible products intended for sale.
D) It has a single category of inventory.
Q:
Both merchandising and manufacturing businesses produce their own products, but service businesses do not.
Q:
Manufacturing businesses have inventory accounts, but service and merchandising businesses do not.
Q:
A service company's income statement does NOT include cost of goods sold.
Q:
Product costs, such as direct materials, are expensed during the period that they were incurred.
Q:
You did not understand what the term accrual meant and failed to accrue the interest due at the end of the year on the company's bonds. Which IMA guideline has been violated?
A) Integrity
B) Confidentiality
C) Competence
D) Objectivity
Q:
Your company is doing well and you tell your sister that the company will report earnings that are significantly higher than the financial analysts' estimated. Which IMA guideline has been violated?
A) Objectivity
B) Competence
C) Confidentiality
D) Integrity
Q:
Which of the following events would NOT be considered unethical under IMA standards?
A) A bank hired a bookkeeper to review foreclosure documents who had no training or experience in the area.
B) An accountant was supposed to take continuing education courses but fell behind and was not current on important new developments in his industry.
C) An accountant who had no background in internal control or finance was promoted to the position of controller.
D) An accountant who had just successfully completed an in-house training course in management accounting made a large error in the year-end expense reports.
Q:
Which of the following events would NOT be considered unethical under IMA standards?
A) An accountant told his friends about the bids his company had received from contractors for construction contracts.
B) An accountant provided a list of his company's foreign transactions to an investigative reporter who was working on a story for the paper.
C) An accountant provided a list of his company's qualified suppliers to a small businessman that wanted to set up a similar business on his own.
D) An accountant provided a copy of his company's published financial statements to a relative who owned a business that was directly competing with the accountant's company.
Q:
Which of the following events would NOT be considered unethical under IMA standards?
A) An inventory shipment was received on January 2, but was booked 3 days earlier in order to boost the year-end inventory balance.
B) An accountant coded an expense to a fixed asset account so that the expense budget would not be overrun at year-end.
C) A scheduled maintenance service originally planned for late December was delayed until the following year to reduce expenses recorded in the year just ended.
D) A company shipped products to a customer on January 2, but recorded the transaction on the last day of December to boost revenues in the year just ended.
Q:
Which of the following is NOT one of the key standards of ethical practice published by the IMA?
A) Competence
B) Environmental sensitivity
C) Integrity
D) Confidentiality
Q:
Charleston Company was nearing year-end and the CEO wanted to report a high level of inventory on the balance sheet. An order of raw materials was scheduled for delivery on January 2 of the next year, but the CEO asked the accounting manager to record the shipment as being received on the last day of December. The shipment was actually received on January 2nd, and although the dollar impact of the transaction was not affected in any way, the misrepresentation of facts in the situation would make the behavior unethical.
Q:
Charleston Company was nearing year-end and the CEO wanted to report a high level of inventory on the balance sheet. An order of raw materials was planned for early the next year, but the CEO asked the purchasing manager to accelerate the shipment so that it would arrive before the end of the year. Because this action was taken deliberately to affect the financial results of the company, it would be considered unethical.
Q:
Baker products shipped an order to a customer on the second day of January. Later that day, the sales manager told the accountant to record the sale as if it had taken place on the last day of December. This would allow the company to book the sales revenue in the year just ended and boost year-end profit. Because the transaction was a legitimate sale, the alteration of the date of sale alone would not be considered unethical.
Q:
The sales manager for Baker Products told the shipping department to ship an order to a customer on the last day of December instead of the previously scheduled shipping date of January 2. This would allow the company to book the sales revenue in the year just ended and boost year-end profit. Although done deliberately to boost income, the action did not misrepresent any facts of the situation, and so it would not be considered unethical.
Q:
The accountant for Spiral Supplies deliberately post-dated a check to pay for business expenses in order to record a higher net income for the company. As long as the amount was not material, this would not be considered unethical behavior.
Q:
Maintaining confidentiality of company information is a key element of ethical professional practice.
Q:
The IMA standards of ethical practice provide that accountants should continually develop their knowledge and skills.
Q:
Which of the following BEST describes the value chain?
A) A management information system which tracks the costs of products through the manufacturing process
B) The minimizing of inventory levels to reduce storage, insurance and finance costs
C) All activities that contribute to the continuous improvement of business operations
D) The whole sequence of activities that add value to the goods and services sold to end-users
Q:
Which of the following is a management approach designed to set higher and higher goals in order to make continuous improvement?
A) Supply chain management
B) Just-in-time (JIT)
C) Enterprise resource planning
D) Total quality management
Q:
Which of the following is NOT an advantage of just-in-time inventory management?
A) Surplus inventory is maintained to prevent production shut-down in case of supply interruption
B) Lower inventory levels reduce storage cost
C) Inventory kept for shorter periods of time reduces the amount of goods that become obsolete
D) Reduce the amount of insurance needed for lower levels of inventory
Q:
Which of the following BEST describes just-in-time inventory management?
A) Production system that stores surplus goods at each stage of manufacture
B) Inventory purchasing process that gains purchase discounts by buying in large quantities
C) Production system that focuses on delivering materials and goods in exactly the right quantity when needed
D) Inventory system which stockpiles raw materials to protect against supply interruptions
Q:
What is the name given to software systems that can integrate all of a company's worldwide functions, departments and data into a single system?
A) Total quality management
B) Enterprise resource planning
C) E-Commerce
D) Just-in-time inventory management
Q:
What is total quality management?
A) A philosophy of supplying customers with superior products and services
B) An exchange of information with suppliers and customers to create efficient and effective processes
C) A software system that integrates a company's functions, departments and data into a single system
D) A system which speeds the transformation of raw materials into finished products.
Q:
Which of the following describes a system in which suppliers deliver materials at the time they are needed and finished units are completed when customer orders need to be filled?
A) Supply chain management
B) Just-in-time (JIT)
C) Enterprise resource planning
D) Total quality management
Q:
Which of the following is a philosophy of providing customers with superior products and services?
A) Just-in-time (JIT) inventory management
B) Enterprise resource planning (ERP)
C) Supply chain management
D) Total quality management
Q:
Increased global competition has resulted in many companies moving their operations to other countries to be closer to new markets.
Q:
During the past century, many developed economies have shifted their focus from a service economy to a manufacturing economy.
Q:
Which of the following most accurately describes the term cost/benefit analysis?
A) Considering whether employees should be entitled to certain fringe benefits
B) Calculating the cost of holding fundraising benefits for charity
C) Considering whether the cost of products exceeds the market selling price
D) Considering whether the cost of calculating certain types of information provides a commensurate economic benefit
Q:
Q:
Which management function includes breaking tasks into jobs, combining jobs to form departments, and delegating authority?
A) Motivating
B) Staffing
C) Organizing
D) Controlling
E) Planning
Q:
For assets and expenses, a debit increases the account.
Q:
__________ is the minimum inventory necessary to keep a perfect system running.
Q:
____________________ represents the percentage of each sales dollar that remains after all expenses have been subtracted.
Q:
______________ and ____________ are the two major sources of capital.
Q:
_________________ measure the ability of a company to meet its current obligations.
Q:
____________ are fractions or percentages computed by dividing one account or line-item amount by another.
Q:
_____________________ expresses a line item as a percentage of some other line item for the same period.
Q:
_________________ expresses a line item as a percentage of some prior-period amount.
Q:
u200b
Kooper Co.
Income Statement
For the Year Ended December 31, Year 1
Revenues: u200b u200b
Net sales u200b $383,000
Less: Cost of goods sold u200b 121,700
Gross margin u200b $261,300
Less Operating expenses: u200b u200b
Selling expenses $41,500 u200b
Administrative expenses 56,500 u200b
Interest expense 12,000 u200b
Total expenses u200b 100,000
Net income u200b $151,300
Kooper Co.
Balance Sheet
December 31,Year 1
Assets
Current assets: u200b u200b u200b
Cash u200b $53,000 u200b
Accounts receivable u200b 64,300 u200b
Marketable securities u200b 10,500 u200b
Inventory u200b 93,250 u200b
Total current assets u200b u200b $221,050
Property, plant, and equipment: u200b u200b u200b
Store equipment $325,000 u200b u200b
Less Accumulated depreciation 162,100 $162,900 u200b
Office equipment $149,750 u200b u200b
Less Accumulated depreciation 72,750 77,000 u200b
Total property, plant, and equipment u200b u200b 239,900
Total assets u200b u200b $460,950
Liabilities
Current liabilities: u200b u200b u200b
Accounts payable u200b $97,200 u200b
Salaries payable u200b 28,700 u200b
Total current liabilities u200b u200b $125,900
Long-term liabilities: u200b u200b u200b
Note payable (due Year 1) u200b u200b 154,000
Total liabilities u200b u200b $279,900
Stockholders Equity
Total stockholders equity u200b u200b 181,050
Total liabilities and equity u200b u200b $460,950
There were 30,000 shares of common stock outstanding throughout Year 1. Dividends on common stock amounted to $21,000 and dividends on preferred stock amounted to $30,000. The market value of a share of common stock was $36 at the end of Year 1. The income tax rate is 40%. The accounts receivable and inventory accounts had beginning balances of $58,500 and $101,400 respectively. Total assets at the beginning of the year were $430,500.
Required: Calculate the following ratios:
A. Debt ratio
B. Debt-to-equity ratio
State what information each ratio is providing to the company.
Q:
u200b
Kooper Co.
Income Statement
For the Year Ended December 31, Year 1
Revenues: u200b u200b
Net sales u200b $383,000
Less: Cost of goods sold u200b 121,700
Gross margin u200b $261,300
Less Operating expenses: u200b u200b
Selling expenses $41,500 u200b
Administrative expenses 56,500 u200b
Interest expense 12,000 u200b
Total expenses u200b 100,000
Net income u200b $151,300
Kooper Co.
Balance Sheet
December 31,Year 1
Assets
Current assets: u200b u200b u200b
Cash u200b $53,000 u200b
Accounts receivable u200b 64,300 u200b
Marketable securities u200b 10,500 u200b
Inventory u200b 93,250 u200b
Total current assets u200b u200b $221,050
Property, plant, and equipment: u200b u200b u200b
Store equipment $325,000 u200b u200b
Less Accumulated depreciation 162,100 $162,900 u200b
Office equipment $149,750 u200b u200b
Less Accumulated depreciation 72,750 77,000 u200b
Total property, plant, and equipment u200b u200b 239,900
Total assets u200b u200b $460,950
Liabilities
Current liabilities: u200b u200b u200b
Accounts payable u200b $97,200 u200b
Salaries payable u200b 28,700 u200b
Total current liabilities u200b u200b $125,900
Long-term liabilities: u200b u200b u200b
Note payable (due Year 1) u200b u200b 154,000
Total liabilities u200b u200b $279,900
Stockholders Equity
Total stockholders equity u200b u200b 181,050
Total liabilities and equity u200b u200b $460,950u200b
There were 30,000 shares of common stock outstanding throughout Year 1. Dividends on common stock amounted to $21,000 and dividends on preferred stock amounted to $30,000. The market value of a share of common stock was $36 at the end of Year 1. The income tax rate is 40%. The accounts receivable and inventory accounts had beginning balances of $58,500 and $101,400 respectively. Total assets at the beginning of the year were $430,500.
Required: Calculate the following ratios:
A. return on sales
B. return on total assets
C. earnings per share
D. price-earnings ratio
Q:
u200b
Kooper Co.
Income Statement
For the Year Ended December 31, Year 1
Revenues: u200b u200b
Net sales u200b $383,000
Less: Cost of goods sold u200b 121,700
Gross margin u200b $261,300
Less Operating expenses: u200b u200b
Selling expenses $41,500 u200b
Administrative expenses 56,500 u200b
Interest expense 12,000 u200b
Total expenses u200b 100,000
Net income u200b $151,300
Kooper Co.
Balance Sheet
December 31, Year 1
Assets
Current assets: u200b u200b u200b
Cash u200b $53,000 u200b
Accounts receivable u200b 64,300 u200b
Marketable securities u200b 10,500 u200b
Inventory u200b 93,250 u200b
Total current assets u200b u200b $221,050
Property, plant, and equipment: u200b u200b u200b
Store equipment $325,000 u200b u200b
Less Accumulated depreciation 162,100 $162,900 u200b
Office equipment $149,750 u200b u200b
Less Accumulated depreciation 72,750 77,000 u200b
Total property, plant, and equipment u200b u200b 239,900
Total assets u200b u200b $460,950
Liabilities
Current liabilities: u200b u200b u200b
Accounts payable u200b $97,200 u200b
Salaries payable u200b 28,700 u200b
Total current liabilities u200b u200b $125,900
Long-term liabilities: u200b u200b u200b
Note payable (due Year 1) u200b u200b 154,000
Total liabilities u200b u200b $279,900
Stockholders Equity
Total stockholders equity u200b u200b 181,050
Total liabilities and equity u200b u200b $460,950
There were 30,000 shares of common stock outstanding throughout Year 1. Dividends on common stock amounted to $21,000 and dividends on preferred stock amounted to $30,000. The market value of a share of common stock was $36 at the end of Year 1. The income tax rate is 40%. The accounts receivable and inventory accounts had beginning balances of $58,500 and $101,400 respectively. Total assets at the beginning of the year were $430,500.
Required: Calculate the following ratios:
A. Current ratio
B. Quick ratio
C. Accounts receivable turnover ratio and accounts receivable turnover in days
D. Inventory turnover ratio and inventory turnover in days
Q:
________________ are the ongoing, day-to-day, revenue-generating activities of an organization.
Q:
u200b_____ is a premier credential for a forensic accountant.
a. u200bCertified Public Accountant
b. u200bCertified Financial Analyst
c. u200bCertified Management Accountant
d. u200bCertified Fraud Examiner
Q:
u200b_____ is the time that a unit of product spends in the value stream, from start to finish.u200bu200b
a. u200bLead time
b. u200bWait time
c. u200bCycle time
d. u200bMove time
Q:
u200b_____ are incurred to determine whether products and services are conforming to their requirements.
a. u200bPrevention costs
b. u200bAppraisal costs
c. u200bOpportunity costs
d. u200bSunk costs
Q:
_____ are costs incurred because products or services are produced that do not conform to specifications.
a. u200bControl costs
b. u200bFailure costs
c. u200bDetection costs
d. u200bAppraisal costs
Q:
u200b_____ immediately follows performance measurement within the business sustainability cycle.
a. u200bSustainability reporting
b. u200bSustainability assurance
c. u200bStakeholder engagement
d. u200bRisk management