Accounting for Decision Making
Final Test Solutions
Course Introduction
Accounting for Decision Making is designed to equip students with the fundamental concepts and techniques of accounting that are essential for effective business decision-making. The course covers the interpretation and analysis of financial statements, budgeting, cost behavior, and performance measurement, with a focus on providing actionable insights for internal management purposes. By integrating case studies and real-world scenarios, students learn how to apply accounting information to plan, control, and evaluate business operations, ultimately enhancing their ability to make informed economic decisions in a dynamic business environment.
Recommended Textbook
Using Financial Accounting Information The Alternative to Debits and Credits 10th Edition by Gary
Available Study Resources on Quizplus
14 Chapters
2617 Verified Questions
2617 Flashcards
Source URL: https://quizplus.com/study-set/3551
Page 2
Chapter 1: Accounting As a Form of Communication
Available Study Resources on Quizplus for this Chatper
196 Verified Questions
196 Flashcards
Source URL: https://quizplus.com/quiz/70531
Sample Questions
Q1) Required: How much of Gallo Factory is financed by creditors at the end of December 2017? Evaluate the change from 2016 to 2017.
Answer: The amount of financing by creditors for 2017 is the amount of liabilities reported on the balance sheet,$58,593.For 2016,the amount was $59,552.Total liabilities decreased by $959,or about 1.6%.The company must be keeping its debt at a steady position as stockholders' equity and assets have increased.The change must be examined relative to the entire financial position.
Q2) Which financial statement would you analyze to determine if a company distributed any of its profits to its shareholders?
A)Balance sheet
B)Statement of retained earnings
C)Income statement
D)Statement of cash flows
Answer: B
Q3) Good quality information should be both _____________ and present a
Answer: relevant,faithful representation
To view all questions and flashcards with answers, click on the resource link above.
3
Chapter 2: Financial Statements and the Annual Report
Available Study Resources on Quizplus for this Chatper
206 Verified Questions
206 Flashcards
Source URL: https://quizplus.com/quiz/70530
Sample Questions
Q1) Which one of the following is an operating activity of a business?
A)Paying for purchases of inventory
B)Issuing stock for cash
C)Borrowing money from a bank
D)Purchasing a manufacturing plant
Answer: A
Q2) Three common categories of long-term assets are: (1)property,plant,and equipment, (2)investments,and (3)intangibles.
A)True
B)False
Answer: True
Q3) Which one of the following items is reported as a current asset on a classified balance sheet?
A)Trucks
B)Accounts receivable
C)Land
D)Common stock
Answer: B
Q4) Equipment is classified as a ____________________ asset on the balance sheet.
Answer: noncurrent
4
To view all questions and flashcards with answers, click on
Chapter 3: Processing Accounting Information
Available Study Resources on Quizplus for this Chatper
180 Verified Questions
180 Flashcards
Source URL: https://quizplus.com/quiz/70529
Sample Questions
Q1) A list of all asset,liability,stockholders' equity,revenue,and expense accounts,along with their assigned account numbers,that are used by a company,is a(n)
A)account.
B)general journal.
C)general ledger.
D)chart of accounts.
Answer: D
Q2) How frequently should entries be posted from the journal to the ledger? How have computers improved the posting process?
Answer: There is no standard rule about the frequency of posting entries from the journal to the ledger.The size of the company and the extent to which the accounting system is computerized will affect how often entries are posted.Computerized systems have improved this process because it is now possible for entries to be posted instantaneously to the ledger at the time they are recorded in the journal.
Q3) Debits are good and credits are bad in financial terms.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Income Measurement and Accrual Accounting
Available Study Resources on Quizplus for this Chatper
219 Verified Questions
219 Flashcards
Source URL: https://quizplus.com/quiz/70528
Sample Questions
Q1) Which one of the following is not a recognized method of recognizing assets as expenses in a particular accounting period?
A)Customers' account balances in accounts receivable are assigned to expense in the period in which each customer pays.
B)Prepaid insurance is assigned to expense as the insurance expires.
C)A building is depreciated and its cost is assigned to the current and future accounting periods in which the building is expected to be used.
D)Merchandise inventory is assigned to cost of goods sold in the period the goods are sold.
Q2) Which of the following statements is true concerning the matching principle?
A)All costs can be directly matched with revenue.
B)All costs can be indirectly matched with periods in which they provide a benefit.
C)The association of assets for a period with the liabilities necessary to generate the assets is known as the matching principle.
D)Cost of goods sold matched with sales revenue is a classic example of direct matching under the matching principle.
To view all questions and flashcards with answers, click on the resource link above.
6
Chapter 5: Inventories and Cost of Goods Sold
Available Study Resources on Quizplus for this Chatper
222 Verified Questions
222 Flashcards
Source URL: https://quizplus.com/quiz/70527
Sample Questions
Q1) Whether LIFO costing is applied at the time each sale is made or only at the end of the period,both the periodic and perpetual systems will yield the same ending inventory under LIFO.
A)True
B)False
Q2) What is LIFO inventory liquidation? Why is it important to disclose the effects of a LIFO inventory liquidation?
Q3) Describe how the inventories of manufacturers differ from the inventories of retailers.
Q4) An error in assigning the proper amount to inventory on the balance sheet will affect the amount recognized as __________ on the income statement
Q5) Explain the relationship between the valuation of inventory and income measurement as it relates to the balance sheet and the income statement.
Q6) It important that the proper amount be assigned to inventory because the amount assigned to inventory will affect the amount eventually recorded as net sales.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Cash and Internal Control
Available Study Resources on Quizplus for this Chatper
184 Verified Questions
184 Flashcards
Source URL: https://quizplus.com/quiz/70526
Sample Questions
Q1) The key to the classification of an amount as cash is that it be available to pay debts within a three-month period of time.
A)True
B)False
Q2) If a company has internal auditors,it does not need to have external auditors.
A)True
B)False
Q3) Which of the following documents is used in the control of cash receipts?
A)Purchase requisitions
B)Receiving reports
C)Canceled checks from customers
D)Bank deposit slips
Q4) Each of the following documents is used in the control of cash receipts except A)cash register tapes.
B)prenumbered customer receipts.
C)canceled checks from customers.
D)bank deposit slips.
Q5) The __________ is a subset of the board of directors that acts as a direct contact between the stockholders and the independent accounting firm.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Receivables and Investments
Available Study Resources on Quizplus for this Chatper
192 Verified Questions
192 Flashcards
Source URL: https://quizplus.com/quiz/70525
Sample Questions
Q1) The mechanism that keeps track of the balances owed by individual customers is called a(n)__________.
Q2) See the data for Lynx Corp. If Lynx Corp.uses the aging of accounts receivable approach to estimate its bad debts,what amount will be reported as bad debts expense for 2017?
A)$12,700
B)$13,700
C)$14,000
D)$15,300
Q3) Bad Debts Expense is a contra account that is used to reduce accounts receivable to its net realizable value.
A)True
B)False
Q4) Which one of the approaches for the allowance method of accounting for bad debts emphasizes matching bad debts expense with revenue on the income statement?
A)The percentage of accounts receivable approach
B)The percentage of net credit sales approach
C)The direct write-off method
D)The uncollectible approach
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Operating Assets: Property, Plant, and Equipment, and Intangibles
Available Study Resources on Quizplus for this Chatper
207 Verified Questions
207 Flashcards
Source URL: https://quizplus.com/quiz/70524
Sample Questions
Q1) Which of the following statements is not true?
A)International accounting standards are more flexible in allowing the use of fair market values for intangible assets.
B)FASB standards require all research and development costs to be expensed.
C)IFRS require all research and development costs to be expensed.
D)Under IFRS,fair market values for intangibles require an active market.
Q2) A company purchased an asset on January 1,2015,for $10,000.The asset was expected to have a ten-year life and a $1,000 salvage value.The company uses the straight-line method of depreciation.On January 1,2017,the company made a major repair to the asset of $5,000,extending its life.The asset is expected to last ten years from January 1,2017. ?
Calculate the amount of depreciation for 2017.
Q3) Depreciation has no effect on income taxes,since it only reduces a plant asset's book value.
A)True
B)False
Q4) Why do many companies use one method to calculate depreciation for the income statement developed for stockholders and another method for income tax purposes?
Page 10
To view all questions and flashcards with answers, click on the resource link above.
Chapter 9: Current Liabilities, Contingencies, and the Time Value of Money
Available Study Resources on Quizplus for this Chatper
176 Verified Questions
176 Flashcards
Source URL: https://quizplus.com/quiz/70523
Sample Questions
Q1) Review the note disclosure of legal matters.
Required
(1)If you were to make an entry for the lawsuit against the company,what monetary amount should be recorded? On what did you base your decision with regard to the amount?
(2)Does the disclosure imply that the company is involved in only this litigation at this time?
(3)Why did this lawsuit arise? Do you believe it to be a reasonable one,or do you think that the plaintiff,has little grounds for this lawsuit?
Q2) Carrington,Inc.recorded $97,000 in salary expense for January 2017.Its beginning balance in salaries payable was $3,000,and its ending balance was $4,000.How much was paid in cash for salaries during January 2017?
A)$96,000
B)$97,000
C)$98,000
D)$99,000
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Long-Term Liabilities
Available Study Resources on Quizplus for this Chatper
185 Verified Questions
185 Flashcards
Source URL: https://quizplus.com/quiz/70522
Sample Questions
Q1) The amortization of bond discount increases the effective interest expense incurred each period for the issuer while amortization of bond premium decreases it.
A)True
B)False
Q2) Irwin,Inc.issued $41,000,000 of bonds.Assuming the most common denomination of bonds,the number of bonds sold was
A)41,000,000.
B)410,000.
C)4,100,000.
D)41,000.
Q3) Long-term liabilities are a component of the "capital structure" of a company.
A)True
B)False
Q4) When the market rate of interest is less than the face rate,then the bond issue will be sold at a discount.
A)True B)False
Q5) The denomination or principal amount of the bond is usually referred to as the
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Stockholders Equity
Available Study Resources on Quizplus for this Chatper
203 Verified Questions
203 Flashcards
Source URL: https://quizplus.com/quiz/70521
Sample Questions
Q1) Vegas Finance Company reported the following: Common stock,$10 par,100,000 shares authorized,80,000 shares issued and outstanding
What is the effect of issuing 1,000 shares of common stock at $15 per share?
A)Cash increases $10,000.
B)Common Stock increases $15,000.
C)Additional Paid-In Capital increases $5,000.
D)Retained Earnings increases $5,000.
Q2) Fowler Company opened business as a sole proprietorship on January 1,2017.The owner contributed $525,000 cash on that date.During the year,the company had a net income of $20,000.The company purchased equipment of $120,000 during the year.The owner also withdrew $75,000 to pay for personal expenses during 2017.
Required
Determine the company's owner's equity at December 31,2017.
Q3) Which accounts are used by a sole proprietorship that are not used by a corporation?
Q4) Shares sold or distributed to stockholder are __________.
Q5) What is meant by the balance in the Retained Earnings account?
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: The Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
192 Verified Questions
192 Flashcards
Source URL: https://quizplus.com/quiz/70520
Sample Questions
Q1) A work sheet is an alternative method to help in the preparation of a statement of cash flows.
A)True
B)False
Q2) When using the indirect method,how is the issuance of stock to retire a long-term debt shown on a statement of cash flows?
A)As an operating activity
B)As an investing activity
C)As a financing activity
D)As a noncash investing or financing activity
Q3) Net income was $61,000 for the year.The accumulated depreciation balance increased by $14,000 over the year.There were no sales of fixed assets or changes in noncash current assets or liabilities.Under the indirect method,the cash flow from operations is $47,000.
A)True
B)False
Q4) A decrease in retained earnings represents dividends that were __________ during the period,not necessarily those that were paid.
Q5) The term cash on the statement of cash flows includes __________.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
199 Verified Questions
199 Flashcards
Source URL: https://quizplus.com/quiz/70519
Sample Questions
Q1) Which of the following statements is true regarding horizontal analysis?
A)Horizontal analysis can only be used with balance sheet accounts.
B)Horizontal analysis can only be used with income statement accounts.
C)Horizontal analysis can only be used with retained earnings accounts.
D)Time series analysis is an advanced statistical technique for horizontal analysis.
Q2) Refer to the data for Fawnsworth Industries.
Based on this information,what is Fawnsworth's number of days' sales in inventory (assuming a 360-day year)?
A)132 days
B)216 days
C)1,091 days
D)120 days
Q3) Three measures of liquidity are working capital,the acid-test ratio,and the debt-to-equity ratio.
A)True
B)False
Q4) What is meant by a company's "long-term financial health"? Which side of the balance sheet is more informative for this issue? Explain.
To view all questions and flashcards with answers, click on the resource link above.
Page 15
Chapter 14: International Financial Reporting Standards
Available Study Resources on Quizplus for this Chatper
54 Verified Questions
54 Flashcards
Source URL: https://quizplus.com/quiz/70532
Sample Questions
Q1) Ultimately,it will be the responsibility of the FASB in the United States to decide if the advantages of IFRS's outweigh the disadvantages.
A)True
B)False
Q2) What is the name of the formalized commitment of the IASB and the FASB to converge U.S.and international accounting standards?
A)Sarbanes-Oxley Act
B)Norwalk Agreement
C)IFRS Foundation
D)Conceptual Framework
Q3) The U.S.accounting standards are more principle-based than IFRS.
A)True
B)False
Q4) Japan has a greater number of differences than the United States between the amount of income reported to stockholders and that reported to the taxing authorities.
A)True
B)False
Q5) Summarize some of the common differences between U.S.GAAP and IFRS.
To view all questions and flashcards with answers, click on the resource link above. Page 16