Accounting for Decision Making Review Questions
Course Introduction
Accounting for Decision Making introduces students to the fundamental principles and techniques of accounting with a focus on their application in managerial decision-making. The course covers topics such as financial statement analysis, budgeting, cost behavior, performance measurement, and relevant costing, providing a comprehensive framework for using accounting information to plan, control, and make informed business decisions. Through real-world case studies and practical exercises, students will develop the critical skills needed to interpret accounting data and apply it in strategic, operational, and tactical contexts within organizations.
Recommended Textbook
Financial and Managerial Accounting 11th Edition by Carl S. Warren
Available Study Resources on Quizplus
15 Chapters
2679 Verified Questions
2679 Flashcards
Source URL: https://quizplus.com/study-set/3939
Page 2
Chapter 1: Introduction to Accounting and Business
Available Study Resources on Quizplus for this Chatper
194 Verified Questions
194 Flashcards
Source URL: https://quizplus.com/quiz/78548
Sample Questions
Q1) An account receivable is typically classified as a revenue.
A)True
B)False
Answer: False
Q2) An example of a general-purpose financial statement would be a report about projected price increases related to transportation costs.
A)True
B)False
Answer: False
Q3) The excess of revenue over the expenses incurred in earning the revenue is called capital stock.
A)True
B)False Answer: False
Q4) The accounting equation may be expressed as
A) Assets = Equities - Liabilities
B) Assets + Liabilities = Owner's Equity
C) Assets = Revenues - Liabilities
D) Assets - Liabilities = Owner's Equity
Answer: D
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Analyzing Transactions
Available Study Resources on Quizplus for this Chatper
222 Verified Questions
222 Flashcards
Source URL: https://quizplus.com/quiz/78541
Sample Questions
Q1) Which of the following entries records the payment of an account payable?
A) debit Cash; credit Accounts Payable
B) debit Accounts Receivable; credit Cash
C) debit Cash; credit Supplies Expense
D) debit Accounts Payable; credit Cash
Answer: D
Q2) In accordance with the rules of debit and credit, which of the following is true?
A) Debits increase assets.
B) Credits increase assets.
C) Debits increase both assets and retained earnings.
D) Credits increase both assets and liabilities.
Answer: A
Q3) Cash was paid by Ari's Alarm Service to creditors on account. Which of the following entries for Ari's Alarm Service records this transaction?
A) Cash, debit; Retained Earnings, credit
B) Accounts Payable, debit; Cash, credit
C) Accounts Receivable, debit; Cash, credit
D) Accounts Payable, debit; Account Receivable, credit
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: The Adjusting Process
Available Study Resources on Quizplus for this Chatper
179 Verified Questions
179 Flashcards
Source URL: https://quizplus.com/quiz/78540
Sample Questions
Q1) The unearned rent account has a balance of $36,000. If $4,000 of the $36,000 is unearned at the end of the accounting period, the amount of the adjusting entry is
A) $4,000
B) $40,000
C) $32,000
D) $36,000
Answer: C
Q2) Which of the following is not true regarding depreciation?
A) Depreciation allocates the cost of a fixed asset over its estimated life.
B) Depreciation expense reflects the decrease in market value each year.
C) Depreciation is an allocation not a valuation method.
D) Depreciation expense does not measure changes in market value.
Answer: B
Q3) A company realizes that the last two day's revenue for the month was billed but not recorded. The adjusting entry on December 31 is debit Accounts Receivable and credit Fees Earned.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: Completing the Accounting Cycle
Available Study Resources on Quizplus for this Chatper
196 Verified Questions
196 Flashcards
Source URL: https://quizplus.com/quiz/78539
Sample Questions
Q1) The amount of the net income for a period appears on both the income statement and the balance sheet for that period.
A)True
B)False
Q2) The accounting cycle begins with preparing an unadjusted trial balance.
A)True
B)False
Q3) The difference between the totals of the debit and credit columns of the Adjusted Trial Balance columns on a work sheet
A) is the amount of net income or loss
B) indicates there is an error on the work sheet
C) is not unusual when preparing the work sheet
D) is the net difference between revenue, expenses, and dividends
Q4) Unearned revenues that will be earned in a relatively short period of time are listed on the balance sheet as current assets.
A)True
B)False
Q5) Explain how net income or loss is determined by using the work sheet.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Accounting for Merchandising Businesses
Available Study Resources on Quizplus for this Chatper
221 Verified Questions
221 Flashcards
Source URL: https://quizplus.com/quiz/78538
Sample Questions
Q1) A company using the periodic inventory system has the following account balances: Merchandise Inventory at the beginning of the year, $3,600; Freight-In, $650; Purchases, $10,700; Purchases Returns and Allowances, $1,950; Purchases Discounts, $330. The cost of merchandise purchased is equal to
A) $12,670
B) $9,070
C) $8,420
D) $17,230
Q2) Ramone Company had $600,000 in Net Sales for the year 2011. The total assets at the beginning of the year were $240,000 and total assets at the end of the year were $280,000. The ratio of net sales to total assets is (round answer to 2 decimal places):
A) 2.31
B) 1.15
C) .43
D) .87
Q3) Gross profit minus selling expenses equals net income.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Inventories
Available Study Resources on Quizplus for this Chatper
167 Verified Questions
167 Flashcards
Source URL: https://quizplus.com/quiz/78537
Sample Questions
Q1) A physical inventory should be taken at the end of every month.
A)True
B)False
Q2) The lower of cost or market is a method of inventory valuation.
A)True
B)False
Q3) For the year ended December 31, 2011 Depot Max's cost of merchandise sold was $54,350. Inventory at the beginning of the year was $6,540. Ending inventory was $7,250.
Depot Max's number of days sales in inventory is closest to
A) 43
B) 50
C) 8
D) 47
Q4) While taking a physical inventory, a company counts their inventory as less than the actual amount on hand. How will this error affect the income statement?
Q5) One effect of carrying too much inventory is risk that customers will change their buying habits.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Sarbanes-Oxley, Internal Control, and Cash
Available Study Resources on Quizplus for this Chatper
174 Verified Questions
174 Flashcards
Source URL: https://quizplus.com/quiz/78536
Sample Questions
Q1) Cash equivalents
A) are illegal in some states
B) will be converted to cash within two years
C) will be converted to cash within 90 days
D) will be converted to cash within 120 days
Q2) During a bank reconciliation process,
A) Outstanding checks and deposits in transit are added to the bank statement balance.
B) Outstanding checks are subtracted and deposits in transit are added to the bank statement balance.
C) Outstanding checks and deposits in transit are subtracted from the bank statement balance.
D) Outstanding checks are added and deposits in transit are subtracted from the bank statement balance.
Q3) Businesses who have several bank accounts, petty cash, and cash on hand, would maintain a separate ledger account for each type of cash.
A)True
B)False
Q4) Why would a bank require a company to maintain a compensating balance?
To view all questions and flashcards with answers, click on the resource link above.
9
Chapter 8: Receivables
Available Study Resources on Quizplus for this Chatper
147 Verified Questions
147 Flashcards
Source URL: https://quizplus.com/quiz/78535
Sample Questions
Q1) The following are the current assets from Hanes Co. as of December 31, 2011: \(\begin{array}{|l|l|}
\hline 42,000 & \text { Accounts Receivable } \\
\hline 3,000 & \text { Allowance for Doubtful Accounts } \\
\hline 79,000 & \text { Cash } \\\hline 3,500 & \text { Interest Receivable } \\
\hline 104,000 & \text { Merchandise Inventory } \\
\hline 100,000 & \text { Notes Receivable } \\
\hline \end{array}\) Prepare the current asset section of the balance sheet.
Q2) Although Allowance for Doubtful Accounts normally has a credit balance, it may have either a debit or a credit balance before adjusting entries are recorded at the end of the accounting period.
A)True
B)False
Q3) Of the two methods of accounting for uncollectible receivables, the allowance method provides in advance for uncollectible receivables.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 10
Chapter 9: Fixed Assets and Intangible Assets
Available Study Resources on Quizplus for this Chatper
175 Verified Questions
175 Flashcards
Source URL: https://quizplus.com/quiz/78534
Sample Questions
Q1) XYZ Co. incurred the following costs related to the office building used in operating its sports supply company:
a.Replaced a broken window.
b.Replaced the rof that had been on the building 23 years.
c.Serviced all the air conclitioners before sumuner started.
d.Replaced the air conditionerswith refrigerated air conditioners in the customer service areas.
e.Added a warehouse to the back of the building.
f.Repainted the interior walls.
g.Installed window shutters on all windows. Classify each of the costs as a capital expenditure or a revenue expenditure. For those costs identified as capital expenditures, classify each as an additional or replacement component.
Q2) During construction of a building, the cost of interest on a construction loan should be charged to an expense account.
A)True
B)False
Q3) An operating lease is accounted for as if the lessee has purchased the asset.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 11
Chapter 10: Current Liabilities and Payroll
Available Study Resources on Quizplus for this Chatper
172 Verified Questions
172 Flashcards
Source URL: https://quizplus.com/quiz/78547
Sample Questions
Q1) On June 8, Alton Co. issued an $80,000, 6%, 120-day note payable on an overdue account payable to Seller Co. Assume that the fiscal year of Alton Co. ends June 30. Which of the following relationships is true?
A) Alton is the creditor and credits Accounts Receivable
B) Seller is the creditor and debits Accounts Receivable
C) Seller is the borrower and credits Accounts Payable
D) Alton is the borrower and debits Accounts Payable
Q2) FICA tax is a payroll tax that is paid only by employers.
A)True
B)False
Q3) Florida Keys Construction installs swimming pools. They calculate that warranty obligations are 3% of gross sales. For the year just ending Florida Keys' gross sales were $1,450,000. Due to previous quarter recognitions, the Warranty Liability account has a credit balance of $28,700. Determine the year's total warranty liability and journalize any necessary value to establish the year's liability at December 31st.
Q4) The proceeds from discounting a $20,000, 60-day, note payable at 6% is $20,200. A)True B)False
Q5) List five internal controls that relate directly to payroll.
To view all questions and flashcards with answers, click on the resource link above. Page 12
Chapter 11: Corporations: Organization, Stock Transactions, and Dividends
Available Study Resources on Quizplus for this Chatper
168 Verified Questions
168 Flashcards
Source URL: https://quizplus.com/quiz/78546
Sample Questions
Q1) Samuels, Inc. reported net income for 2011 is $105,000. During 2011 the company had 5,000 shares of $100 par, 5% preferred stock and 20,000 of $5 par common stock outstanding. Samuels' earnings per share for 2011 is
A) $4.00
B) $5.25
C) $6.50
D) $5.00
Q2) On April 10, a company acquired land in exchange for 1,000 shares of $20 par common stock with a current market price of $73. Journalize this transaction.
Q3) Miriah Inc. has 6,000 shares of 5%, $100 par value, cumulative preferred stock and 50,000 shares of $1 par value common stock outstanding at December 31, 2012. What is the annual dividend on the preferred stock?
A) $50 per share
B) $30,000 in total
C) $300 in total
D) $0.50 per share
To view all questions and flashcards with answers, click on the resource link above.
Page 13
Chapter 12: Long-Term Liabilities: Bonds and Notes
Available Study Resources on Quizplus for this Chatper
181 Verified Questions
181 Flashcards
Source URL: https://quizplus.com/quiz/78545
Sample Questions
Q1) A $500,000 bond issue on which there is an unamortized discount of $20,000 is redeemed for $475,000. Journalize the redemption of the bonds.
Q2) On the first day of the fiscal year, a company issues a $500,000, 8%, 10 year bond that pays semi-annual interest of $20,000 ($500,000 x 8% x 1/2), receiving cash of $437,740. Journalize the entry to record the issuance of the bonds.
Q3) The present value of the periodic bond interest payments is the value today of the amount of interest to be received at the at the end of each interest period.
A)True
B)False
Q4) Bonds with a face amount $1,000,000, are sold at 98. The entry to record the issuance is
A) Cash 1,000,000 Premium on Bonds Payable 20,000
Bonds Payable 980,000
B) Cash 980,000 Premium on Bonds Payable 20,000
Bonds Payable 1,000,000
C) Cash 980,000 Discount on Bonds Payable 20,000
Bonds Payable 1,000,000
D) Cash 980,000 Bonds Payable 980,000
To view all questions and flashcards with answers, click on the resource link above.
Page 14
Chapter 13: Investments and Fair Value Accounting
Available Study Resources on Quizplus for this Chatper
137 Verified Questions
137 Flashcards
Source URL: https://quizplus.com/quiz/78544
Sample Questions
Q1) On May 1, 2011, Stanton Company purchased $50,000 of Harris Company's 12% bonds at 100 plus accrued interest of $2,000. On June 30, 2011, Stanton received its first semiannual interest. On February 1, 2012, Stanton sold $40,000 of the bonds at 103 plus accrued interest. What are the total proceeds from the February 1, 2012 sale?
A) $42,000
B) $41,700
C) $40,600
D) $41,600
Q2) When a bond is purchased for an investment, the purchase price, minus the brokerage commission, plus any accrued interest is recorded.
A)True
B)False
Q3) On January 1, 2012, Valuation Allowance for Available-for-Sale Investments had a zero balance. On December 31, 2012, the cost of the available-for-sale securities was $48,700, and the fair value was $39,200. Prepare the adjusting entry to record the unrealized gain or loss for available-for-sale investments on December 31, 2012.
Q4) (1) Discuss factors contributing to the trend to fair value accounting. (2) What are some of the disadvantages associated with using fair value?
To view all questions and flashcards with answers, click on the resource link above.
Page 15
Chapter 14: Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
162 Verified Questions
162 Flashcards
Source URL: https://quizplus.com/quiz/78543
Sample Questions
Q1) To determine cash payments for merchandise for the cash flow statement using the direct method, a decrease in accounts payable is added to the cost of merchandise sold.
A)True
B)False
Q2) The cost of merchandise sold during the year was $45,000. Merchandise inventories were $13,500 and $10,500 at the beginning and end of the year, respectively. Accounts payable were $7,000 and $5,000 at the beginning and end of the year, respectively. Using the direct method of reporting cash flows from operating activities, cash payments for merchandise total
A) $46,000
B) $44,000
C) $50,000
D) $40,000
Q3) The board of directors declared cash dividends totaling $242,000 during the current year. The comparative balance sheet indicates dividends payable of $48,000 at the beginning of the year and $63,000 at the end of the year. What was the amount of cash payments to stockholders during the year?
To view all questions and flashcards with answers, click on the resource link above.
16
Chapter 15: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
184 Verified Questions
184 Flashcards
Source URL: https://quizplus.com/quiz/78542
Sample Questions
Q1) The number of days' sales in receivables is one means of expressing the relationship between average daily sales and accounts receivable.
A)True
B)False
Q2) Which of the following ratios provides a solvency measure that shows the margin of safety of noteholders or bondholders and also gives an indication of the potential ability of the business to borrow additional funds on a long-term basis?
A) ratio of fixed assets to long-term liabilities
B) ratio of net sales to assets
C) number of days' sales in receivables
D) rate earned on stockholders' equity
Q3) The independent auditor's report does which of the following?
A) describes which financial statements are covered by the audit
B) gives the auditor's opinion regarding the fairness of the financial statements
C) summarizes what the auditor did
D) states that the financial statements are truthful
Q4) Define solvency and profitability. How are they alike?
To view all questions and flashcards with answers, click on the resource link above. Page 17