Solved by verified expert :Which of
the following is an advantage of corporations relative to partnerships and sole
proprietorships?
Harder
to transfer ownership.
Lower
taxes.
Most
common form of organization.
Reduced
legal liability for investors.
Multiple
Choice Question 64
The group
of users of accounting information charged with achieving the goals of the
business is its
creditors.
investors.
managers.
auditors.
Multiple
Choice Question 110
Which of
the following financial statements is concerned with the company at a point in
time?
Balance
sheet.
Income
statement.
Retained
Earnings statement.
Statement
of cash flows.
Multiple
Choice Question 112
An income
statement
presents
the revenues and expenses for a specific period of time.
summarizes
the changes in retained earnings for a specific period of time.
reports
the assets, liabilities, and stockholders’ equity at a specific date.
reports
the changes in assets, liabilities, and stockholders’ equity over a period of
time.
Multiple
Choice Question 118
The most
important information needed to determine if companies can pay their current
obligations is the
projected
net income for next year.
net
income for this year.
relationship
between current assets and current liabilities.
relationship
between short-term and long-term liabilities.
Multiple
Choice Question 124
A
liquidity ratio measures the
income
or operating success of a company over a period of time.
percentage
of total financing provided by creditors.
ability
of a company to survive over a long period of time.
short-term
ability of a company to pay its maturing obligations and to meet unexpected
needs for cash.
Multiple
Choice Question 165
The
convention of consistency refers to consistent use of accounting principles
throughout
the accounting periods.
within
industries.
among
accounting periods.
among
firms.
Multiple
Choice Question 90
Horizontal
analysis is also known as
vertical
analysis.
trend
analysis.
common
size analysis.
linear
analysis
Multiple
Choice Question 92
Horizontal
analysis is a technique for evaluating a series of financial statement data
over a period of time
that
has been arranged from the highest number to the lowest number.
to
determine the amount and/or percentage increase or decrease that has taken
place.
to
determine which items are in error.
that
has been arranged from the lowest number to the highest number.
Multiple
Choice Question 111
Vertical
analysis is a technique that expresses each item in a financial statement
as
a percent of the item in the previous year.
in
dollars and cents.
as
a percent of a base amount.
starting
with the highest value down to the lowest value.
Multiple
Choice Question 41
Process
costing is used when
production
is aimed at filling a specific customer order.
costs
are to be assigned to specific jobs.
the
production process is continuous.
dissimilar
products are involved.
Multiple
Choice Question 43
An
important feature of a job order cost system is that each job
has
its own distinguishing characteristics.
must
be similar to previous jobs completed.
consists
of one unit of output.
must
be completed before a new job is accepted.
Multiple
Choice Question 49
In a
process cost system, product costs are summarized:
after
each unit is produced.
on
production cost reports.
when
the products are sold.
on
job cost sheets.
Multiple
Choice Question 33
An
activity that has a direct cause-effect relationship with the resources
consumed is a(n)
cost
pool.
cost
driver.
overhead
rate.
product
activity.
Multiple
Choice Question 40
Activity-based
costing
accumulates
overhead in one cost pool, then assigns the overhead to products and services
by means of a cost driver.
allocates
overhead directly to products and services based on activity levels.
assigns
activity cost pools to products and services, then allocates overhead back to
the activity cost pools.
allocates
overhead to multiple activity cost pools, and it then assigns the activity cost
pools to products and services by means of cost drivers.
Multiple
Choice Question 40
A cost
which remains constant per unit at various levels of activity is a
mixed
cost.
variable
cost.
fixed
cost.
manufacturing
cost.
Multiple
Choice Question 105
The
break-even point is where
total
variable costs equal total fixed costs.
total
sales equal total variable costs.
contribution
margin equals total fixed costs.
total
sales equal total fixed costs.
Multiple
Choice Question 109
Fixed
costs are $600,000 and the contribution margin per unit is $150. What is the
break-even point?
4,000
units
$1,500,000
$4,000,000
1,500
units
Multiple
Choice Question 94
When a
company assigns the costs of direct materials, direct labor, and both variable
and fixed manufacturing overhead to products, that company is using
product
costing.
operations
costing.
absorption
costing.
variable
costing.
Multiple
Choice Question 122
If a
division manager’s compensation is based upon the division’s net income, the
manager may decide to meet the net income targets by increasing production when
using
absorption
costing, in order to increase net income.
variable
costing, in order to decrease net income.
absorption
costing, in order to decrease net income.
variable
costing, in order to increase net income.
Multiple
Choice Question 50
An
unrealistic budget is more likely to result when it
has
been developed by all levels of management.
is
developed with performance appraisal usages in mind.
has
been developed in a top down fashion.
has
been developed in a bottom up fashion.
Multiple
Choice Question 39
A major
element in budgetary control is
the
comparison of actual results with planned objectives.
the
valuation of inventories.
approval
of the budget by the stockholders.
the
preparation of long-term plans.
Multiple Choice
Question 43
The
purpose of the sales budget report is to
control
sales commissions.
control
selling expenses.
determine
whether sales goals are being met.
determine
whether income objectives are being met.
Multiple
Choice Question 89
The
accumulation of accounting data on the basis of the individual manager who has
the authority to make day-to-day decisions about activities in an area is
called
static
reporting.
master
budgeting.
flexible
accounting.
responsibility
accounting
Multiple
Choice Question 142
Variance
reports are
(a)
external financial reports.
(b)
SEC financial reports.
(c)
internal reports for management.
(d)
all of these.
Multiple
Choice Question 40
Internal
reports that review the actual impact of decisions are prepared by
factory
workers.
the
controller.
management
accountants.
department
heads.
Multiple
Choice Question 42
The
process of evaluating financial data that change under alternative courses of
action is called
cost-benefit
analysis.
double
entry analysis.
contribution
margin analysis.
incremental
analysis.
Multiple
Choice Question 54
Seasons
Manufacturing manufactures a product with a unit variable cost of $100 and a
unit sales price of $176. Fixed manufacturing costs were $480,000 when 10,000
units were produced and sold. The company has a one-time opportunity to sell an
additional 1,000 units at $140 each in a foreign market which would not affect
its present sales. If the company has sufficient capacity to produce the
additional units, acceptance of the special order would affect net income as
follows:
Income
would decrease by $8,000.
Income
would increase by $8,000.
Income
would increase by $140,000.
Income
would increase by $40,000.
Multiple
Choice Question 70
Carter,
Inc. can make 100 units of a necessary component part with the following costs:
Direct
Materials $120,000
Direct
Labor 20,000
Variable
Overhead 60,000
Fixed
Overhead 40,000
If Carter
can purchase the component externally for $220,000 and only $10,000 of the
fixed costs can be avoided, what is the correct make-or-buy decision?
Buy
and save $10,000
Make
and save $30,000
Make
and save $10,000
Buy
and save $30,000
Multiple
Choice Question 84
A company
has a process that results in 15,000 pounds of Product A that can be sold for
$16 per pound. An alternative would be to process Product A further at a cost
of $200,000 and then sell it for $28 per pound. Should management sell Product
A now or should Product A be processed further and then sold? What is the
effect of the action?
Sell
now, the company will be better off by $200,000.
Process
further, the company will be better off by $180,000.
Sell
now, the company will be better off by $20,000.
Process
further, the company will be better off by $20,000.
