Solved by verified expert :Question 1
If sales on an
accrual basis are $450,000 and accounts receivable decrease by $45,000, the
cash received from customers would be.
a. Cannot be determined
b. $450,000.
c. $495,000.
d. $405,000.
Question 2
Operating activities
are most closely related to
a. Current assets and current liabilities
b. Dividends and treasury stock.
c. Long-term assets
d. Long-term liabilities and stockholders’
equity.
Question 3
Tony Enterprises had
accounts receivable of $30,000 at the beginning of the year and $81,000 at
year-end. Sales revenue for the year totaled $174,000. How much cash did the
business collect from customers?
a. $79,500
b. $123,000
c. $174,000
d. $93,000
Question 4
The purposes of cash
flow statement are to
a. Determine ability to pay liabilities and
dividends
b. Evaluate management decisions.
c. Predict future cash flows.
d. All of the above
Chapter 17
Question 5
In order for an item
to be reported in the extraordinary items section of the income statement, it
must be
a. Unusual or infrequent
b. Infrequent.
c. Unusual and infrequent
d. Unusual
Use the following
financial information to answer both questions 6 and 7.
Marketable
securities
$96,000
Cash
$204,000
Merchandise
inventory
366,000
Accounts and notes
receivable, net
276,000
Prepaid expenses
18,000
Accounts and notes
payable, short-term
384,000
Accrued liabilities
96,000
Bonds payable,
long-term
600,000
Question 6
The acid-test ratio
is:
a. 2:1
b. 1.2:1
c. 1:2
d. 3:1
Question 7
The current ratio is:
a. 3:1
b. 1:2
c. 2:1
d. 1.2:1
Question 8
Which of the
following ratios should be used in evaluating the effectiveness with which the
company uses its assets?
Receivables turnover Dividend payout ratio
a. Yes
Yes
b. No
No
c. Yes
No
d. No
Yes
Questions 9 through
11 are based on the following selected data of Come & See Inc. for the
calendar year 2012:
Net cash sales
$3,000
Cost of goods sold
18,000
Inventory at
beginning of year
6,000
Purchases
24,000
Accounts receivable
at beginning of year
20,000
Accounts receivable
at end of year
22,000
Question 9
The accounts
receivable turnover for 2012 was 5.0 times. What were Come & See Inc. net
credit sales?
a. $105,000
b. $210,000
c. $107,000
d. $110,000
Question 10
Come & See Inc.
would use which of the following to determine the average days’ sales in
inventory?
Numerator Denominator
a. 365 Average
inventory
b. 365 Inventory
turnover
c. Average
inventory Sales divided by
365
d. Sales
divided by 365 Inventory
turnover
Question 11
What was the
inventory turnover for 2012?
a. 1.5 times
b. 1.2 times
c. 3.0 times
d. 2.0 times
Question 12
The expected level of
activity in a production center is 45,000 machine-hours. Estimated overhead
costs are indirect materials and indirect labor, $540,000; other overhead,
$135,000. Which of the following is the predetermined overhead rate per
machine-hour?
a. $20
b. $3
c. $12
d. $15
Question 13
Which of the
following is not part of manufacturing overhead for producing a computer?
a. Manufacturing plant utilities
b. Depreciation on delivery trucks
c. Manufacturing plant property taxes
d. Insurance on plant and equipment
Question 14
XYZ Company reports
the following costs for the year:
Direct Materials
Used
$240,000
Selling and
Administrative Expenses
$350,000
Manufacturing
Overhead Incurred
$150,000
Direct Labor Incurred
$300,000
How much are XYZ
Company’s period costs?
a. $350,000
b. $240,000
c. $690,000
d. $540,000
Question 15
Which of the
following accounts does a manufacturing company have that a service company
does not have?
a. Retained Earnings
b. Cost of Goods Sold
c. Salaries Payable
d. Advertising Expense
Question 16
Which is not a
characteristic of managerial accounting information?
a. Focuses on the future
b. Provides detailed information about
individual parts of the company
c. Emphasizes the external financial
statements
d. Emphasizes relevance
Question 17
A job cost system is
used:
a. By manufacturers and service companies.
b. When goods are produced to meet a
customer’s particular needs
c. When there are dissimilar products.
d. All of the above
Questions 18 and 19
use the data follow.
A manufacturing
company reports this information:
Beginning Raw
Materials Inventory
$12,000
Ending Raw
Materials Inventory
10,000
Beginning
Work-in-Process Inventory
6,000
Ending
Work-in-Process Inventory
4,000
Beginning Finished
Goods Inventory
8,000
Ending Finished
Goods Inventory
12,000
Direct Labor
58,000
Purchases of Raw
Materials
204,000
Manufacturing
Overhead
40,000
Question 18
What is the cost of
direct materials used?
a. $202,000
b. $206,000
c. $228,000
d. $204,000
Question 19
What is the cost of
goods manufactured?
a. $302,000
b. $306,000
c. $300,000
d. $354,000
Question 20
A manufacturing
company completed work on a job. The cost of the job is transferred into ………..
with a ………..
a. Work-in-Process Inventory; debit
b. Finished Goods Inventory; credit
c. Finished Goods Inventory; debit
d. Cost of Goods Sold, credit
Question 21
Using the following
data, compute the ending inventory cost:
1,000 units are in
the ending inventory in Department Y. The 1,500 units are fully complete as to
materials and 20% complete as to conversion. The unit cost for materials is
$0.075, and conversion unit cost equals $0.90. The unit cost of goods
transferred in from Department X is $1.80.
a. $1,755
b. $2,055
c. $1,980
d. $1,875
Question 22
For which of the
following reasons would a law firm want to know the total costs of a job
(serving a particular client)?
a. To determine the fees to charge clients
b. For external reporting
c. For inventory valuation
d. All of the above
Questions 23, 24 and
25 are based on the following information about Romos Corporation’s
manufacturing of computers. Assume that Romos:
Allocates
manufacturing overhead based on machine hours
Estimated 12,000
machine hours and $93,000 of manufacturing overhead costs
Actually used 16,000
machine hours and incurred the following actual costs:
Indirect labor
$11,000
Depreciation on
plant
48,000
Machinery repair
11,000
Direct labor
75,000
Plant supplies
6,000
Plant utilities
7,000
Advertising
35,000
Sales commissions
27,000
Question 23
What is Romos’s
actual manufacturing overhead cost?
a. $145,000
b. $220,000
c. $83,000
d. $158,000
Question 24
What is Romos’s
predetermined overhead allocation rate?
a. $5.81/machine hour
b. $6.92/machine hour
c. $7.75/machine hour
d. $5.19/machine hour
Question 25
How much
manufacturing overhead would Romos allocate?
a. $124,000
b. $83,000
c. $220,000
d. $93,000
