Accounting for Decision Making Solved
Exam Questions
Course Introduction
Accounting for Decision Making focuses on the critical role accounting information plays in managerial decision-making processes. The course explores how financial and managerial accounting data can be analyzed and used to inform strategic and operational decisions within organizations. Topics include budgeting, cost-volume-profit analysis, performance measurement, relevant costing, capital investment analysis, and the ethical implications of accounting choices. Through real-world case studies and practical exercises, students learn to interpret financial statements, assess the financial impact of business decisions, and support effective organizational planning and control.
Recommended Textbook
Introduction to Financial Accounting 11th Edition by Charles T. Horngren
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12 Chapters
1592 Verified Questions
1592 Flashcards
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Page 2
Chapter 1: Accounting: the Language of Business
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127 Verified Questions
127 Flashcards
Source URL: https://quizplus.com/quiz/67924
Sample Questions
Q1) The effects of the form of ownership of a business entity on income taxes may vary significantly.
A)True
B)False
Answer: True
Q2) Typically,a company sells its stock at par value.
A)True
B)False
Answer: False
Q3) Which of the following international public accounting firms is not considered one of the four largest?
A)Deloitte Touche Tohmatsu
B)Ernst & Young
C)KPMG
D)PwC
E)Grant Thornton
Answer: E
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Page 3
Chapter 2: Measuring Income to Assess Performance
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136 Verified Questions
136 Flashcards
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Sample Questions
Q1) Stone,Inc.had 2012 earnings of $1,500,000.Cash dividends per share were $0.50.The company had an average of 1,225,000 shares of common stock outstanding.The market price of the stock at the end of the year was $6.00 per share.What was the price-earnings ratio for Stone,Inc.?
A)6)5
B)4)92
C)3)00
D)12
E)5)20
Answer: B
Q2) Which statement is the major link between two balance sheets?
A)Statement of Retained Earnings
B)Statement of Stockholders Equity
C)Statement of Cash Flows
D)Statement of Balancing Equity
E)Income Statement
Answer: E
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Page 4
Chapter 3: Recording Transactions
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126 Flashcards
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Sample Questions
Q1) The entry to record the cost of merchandise inventory sold involves a A)debit to Merchandise Inventory and a credit to Sales Revenue.
B)debit to Cost of Goods Sold and a credit to Merchandise Inventory.
C)debit to Merchandise Inventory and a credit to Cost of Goods Sold.
D)debit to Cost of Goods Sold and a credit to Sales Revenue.
E)debit to Merchandise Inventory and a credit to Accounts Receivable.
Answer: B
Q2) A trial balance proves the equality of the total debits and total credits of the accounts listed.
A)True
B)False Answer: True
Q3) The normal balance for any account is the side of the account where increases are recorded.
A)True
B)False Answer: True
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Page 5
Chapter 4: Accrual Accounting and Financial Statements
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Sample Questions
Q1) Which of the following is the correct order in the recording process?
A)Journalize and post adjustments,unadjusted trial balance,adjusted trial balance,ledger,financial statements
B)Ledger,journalize and post adjustments,unadjusted trial balance,adjusted trial balance,financial statements
C)Ledger,unadjusted trial balance,journalize and post adjustments,adjusted trial balance,and financial statements
D)Unadjusted trial balance,journalize and post adjustments,ledger,adjusted trial balance,financial statements
E)Journalize and post adjustments,adjusted trial balance,ledger,unadjusted trial balance,financial statements
Q2) The gross profit percentage is calculated as sales divided by gross profit. A)True B)False
Q3) Adjusting entries are journalized after the financial statements are prepared. A)True B)False
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6
Chapter 5: Statement of Cash Flows
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128 Verified Questions
128 Flashcards
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Sample Questions
Q1) The direct method of preparing the statement of cash flows
A)is preferred by IASB and FASB.
B)is the same as the indirect method with the exception of the cash account.
C)is an accumulation of net income accounts so that accountants can locate discrepancies in balances.
D)omits the financing section of the statement.
E)focuses on cash outflows over cash inflows.
Q2) Which of the following transactions do not affect cash?
1)Convert debt to common stock
2)Credit sales
3)Purchase a fixed asset by issuing debt
4)Accept rental deposit
5)Write-off of prepaid expenses
A)1 and 2
B)4 and 5
C)1,2,and 3
D)3,4,and 5
E)1,2,3,and 5
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Chapter 6: Accounting for Sales
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132 Verified Questions
132 Flashcards
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Sample Questions
Q1) Bank service charges not recorded on the books should be added to the balance per books when preparing a bank reconciliation.
A)True
B)False
Q2) The days to collect accounts receivable is calculated by dividing credit sales by the average accounts receivable.
A)True
B)False
Q3) The primary goal of the separation of duties is
A)to provide greater training to employees by allowing them to work on different tasks.
B)to make sure that one person,acting alone,cannot defraud the company.
C)to ensure that no one in management accumulates too much organizational power and control.
D)to provide clear promotion tracks within one's discipline.
E)to provide a work environment where no one person is overloaded with work or does so many things that he or she becomes indispensable to the company.
Q4) Name four internal controls specific to the cash account.
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8
Chapter 7: Inventories and Cost of Goods Sold
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120 Flashcards
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Sample Questions
Q1) Inventory turnover is calculated as cost of goods sold divided by average inventory.
A)True
B)False
Q2) Dexter Warehouse had inventory of $200 on June 1.The company had the following transactions during June.
June 2 Turchmeded inventory on account for \(\$ 2,000\), terms \(2 / 10 , n/ 30 .\)
June 3 Returned \(\$ 350\) worth of inventcay from the june 2 purchese.
June 9 Paid the appropriate amount for the inventory purchased on June 2 Prepare the appropriate journal entry for each of the above transactions assuming Dexter Warehouse uses a perpetual inventory system.
Q3) Compared with a pure cost method,the lower-of-cost-or-market method reports less net income in the period of decline in the market value of the inventory and more net income in the period of sale.
A)True
B)False
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Chapter 8: Long-Lived Assets
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Sample Questions
Q1) All of the following are included in the acquisition cost of equipment except
A)maintenance costs one year after purchase.
B)installation costs.
C)transportation costs.
D)sales tax.
E)cost to unbox and repair prior to use.
Q2) Goodwill occurs when the purchase price of a company exceeds the fair value of all identifiable individual assets less total liabilities.
A)True
B)False
Q3) Compatibility Services acquired an $80,000 machine on January 1,20X3.The machine is estimated to have a useful life of 8 years,and a residual value of $4,000.For units-of-production depreciation purposes,the machine is expected to produce 400,000 units.What is the depreciable value of the machine acquired by Compatibility Services?
A)$4,000
B)$76,000
C)$80,000
D)$8,000
E)Cannot be determined without additional data
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Page 10
Chapter 9: Liabilities and Interest
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Sample Questions
Q1) In a defined contribution pension plan,
A)the government pays employees a fixed pension amount upon retirement.
B)the government pays employees a variable pension amount upon retirement.
C)the employer makes annual contributions into a fund belonging to employees and the retirement benefit depends on the amount in the fund at retirement.
D)the employer guarantees the employee a specific amount of retirement pay based on the pay earned during the final years of employment and the numbers of years of service.
E)the SEC pays employees a fixed pension amount upon retirement.
Q2) The market interest rate that equates the proceeds from a loan with the present value of the loan payments is called
A)implicit interest rate.
B)nominal interest rate.
C)imputed interest rate.
D)coupon interest.
E)both A and C.
Q3) Discount rates are the interest rates used in determining present values.
A)True
B)False
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Chapter 10: Stockholders Equity
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Sample Questions
Q1) Prepare the appropriate journal entry for Chowder Soups for each of the events below.Each event relies on some or all of the events preceding it.
a.On January 1,20X3,Chowder Soups began operations.The company issued 20,000 shares of its $1.00 par value common stock.The shares were sold for $11 per share.
b.On November 1,20X3,Chowder Soups declared a $1.20 per share common stock dividend.
c.The record date for the common stock cash dividend was November 15,20X3.
d.On November 20,20X3,Chowder Soups paid the $1.20 per share common stock dividend.
Q2) Net income must be greater than zero in order to pay dividends.
A)True
B)False
Q3) Restricted stock has the benefit of
A)increasing in value when stock prices fall.
B)decreasing in value when stock prices fall.
C)retaining some value even if stock prices fall.
D)being retained for three additional years past the original purchase date.
E)being used as treasury stock.
Q4) In general,what are the principal rights of shareholders?
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Chapter 11: Intercorporate Investments and Consolidations
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110 Flashcards
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Sample Questions
Q1) A spin-off is when
A)a company buys a security for a very short period of time and then sells it.
B)a bond is retired through the issuance of another bond.
C)part of a company which is usually a distinct business unit is separated from the parent company and shares of the divested company are distributed to the parent's stockholders.
D)a company acquires another company in a different industry.
E)a company acquires another company in the same industry.
Q2) On September 1,2X12,Yelter Oil purchased trading securities consisting of common and preferred stocks.The portfolio consists of:
\(\begin{array} { l l l l }
\text { Company } & \# \text { of shares } & \text { purchase price/Share } & \text { market value (9/30/2X12) } \\
\text { Haring } & 400 & \$ 24 & \$ 20 \\
\text { jacker } & 200 & \$ 16 & \$ 19
\end{array}\) What will be the net gain or loss recorded on Yelter Oil's income statement for the quarter ended September 30,2X12?
Q3) Describe spin-offs including the benefits to spinning off a segment.
Q4) Describe reasons and benefits to corporate mergers.
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Chapter 12: Financial Statement Analysis
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Sample Questions
Q1) Tulsa Company has the following data available: \(\begin{array}{llll} &2X13&2X12&2X11\\
\text { Sales (all credit sales) } & \$ 800 & \$ 740 & \$ 675 \\
\text { Less Cost of Goods Sold } & \underline{525} & \underline{490} &450\\
\text { Gross Profit }& \$ 275 &\$ 250 &\$ 225\\ \end{array}\)
What is the gross profit rate for Tulsa Company in 2X13? Has the gross profit rate improved or not improved since 2X12?
A)23.3%,improved
B)34.4%,improved
C)34.4%,not improved
D)52.4%,improved
E)52.4%,not improved
Q2) The loss from discontinued operations is reported in the income statement after the tax effect.
A)True B)False
Q3) Each element on a common-size balance sheet is compared to total liabilities. A)True B)False
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