Accounting II Test Bank
Course Introduction
Accounting II is a continuation of introductory accounting principles, focusing on the development and application of accounting concepts in more complex business environments. The course covers topics such as partnership and corporate accounting, statement of cash flows, financial statement analysis, and an introduction to managerial accounting concepts like budgeting, cost-volume-profit analysis, and internal controls. Students will gain a deeper understanding of how financial information is recorded, analyzed, and used to support business decision-making, preparing them for more advanced accounting coursework and professional applications.
Recommended Textbook
Horngren's Accounting The Managerial Chapters 10th Edition by Tracie L. Miller Nobles
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9 Chapters
1348 Verified Questions
1348 Flashcards
Source URL: https://quizplus.com/study-set/3558
Page 2
Chapter 1: Introduction to Managerial Accounting
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179 Verified Questions
179 Flashcards
Source URL: https://quizplus.com/quiz/70629
Sample Questions
Q1) The Work-in-Process Inventory account includes the:
A) goods that are ready to be sold.
B) goods that are partially completed.
C) goods that have been sold in the market.
D) goods that are damaged during production.
Answer: B
Q2) Management's accountability to its suppliers and vendors is to:
A) provide products to customers that are safe and free of defects.
B) obey laws and pay taxes timely.
C) provide a return on shareholders' investment.
D) make timely payments and comply with contract terms.
Answer: D
Q3) What is the amount of direct labor incurred by Jasper in March?
A) $29,600
B) $39,870
C) $126,970
D) $23,030
Answer: D
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3
Chapter 2: Job Order Costing
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152 Verified Questions
152 Flashcards
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Sample Questions
Q1) The amount of taxes and insurance incurred and paid for the plant of a manufacturing company should be debited to the Manufacturing Overhead account.
A)True
B)False
Answer: True
Q2) Forsyth Company uses estimated direct labor hours of 175,000 and estimated manufacturing overhead costs of $350,000 in establishing its 2014 predetermined overhead allocation rate. Actual results showed: \[\begin{array} { | l | l | }
\hline \text { Actual manufacturing overhead } & \$ 346,500 \\
\hline \text { Allocated manufacturing overhead } & \$ 320,000 \\ \hline
\end{array}\] The number of direct labor hours worked during the period was:
A) 175,000 hours.
B) 160,000 hours.
C) 173,250 hours.
D) 191,406 hours.
Answer: B
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Page 4
Chapter 3: Process Costing
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144 Verified Questions
144 Flashcards
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Sample Questions
Q1) Significant changes in costs are not exposed in a first-in, first-out (FIFO) method.
A)True
B)False
Answer: False
Q2) Which of the following best describes the term equivalent units?
A) partially completed units expressed in terms of fully complete units of output
B) partially completed units of output that will be sold as is
C) substitute of units that are partially completed
D) different types of units that have same selling price
Answer: A
Q3) A process is one of a series of steps in manufacturing production, usually associated with making large quantities of similar items.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Cost-Volume-Profit Analysis
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172 Verified Questions
172 Flashcards
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Sample Questions
Q1) Dorothy Products sells its products for $40 per unit. Additional data for the month of April, 2014, are as follows: \[\begin{array} { | l | r | }
\hline \text { Beginning inventory } & 0 \text { units } \\
\hline \text { Units produced } & 10,000 \\
\hline \text { Units sold } & 8,000 \\
\hline \text { Ending inventory } & 2,000 \\
\hline \text { Direct materials } & \$ 5 \text { per unit } \\
\hline \text { Direct labor } & \$ 4 \text { per unit } \\
\hline \text { Variable manufacturing overhead } & \$ 15,000 \\
\hline \text { Fixed manufacturing overhead } & \$ 20,000 \\
\hline \text { Operating expenses } & \$ 30,000 \\
\hline
\end{array}\] Calculate the product cost per unit produced using absorption costing.
A) $12.50 per unit
B) $10.50 per unit
C) $ 9.00 per unit
D) $ 11.00 per unit
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6
Chapter 5: Master Budgets
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114 Verified Questions
114 Flashcards
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Sample Questions
Q1) How much will the company have to borrow at the end of August?
A) $15,000
B) $5,000
C) $10,000
D) $20,000
Q2) A budget represents the plans that a company has in place to achieve its goals.
A)True
B)False
Q3) The output of a cash budget is input for an operating budget.
A)True
B)False
Q4) Which of the following is true of the sales budget?
A) It provides sales values that are used to prepare financial statements for external reporting purposes.
B) It captures the variable and fixed expenses of the business.
C) It is used in the production budget.
D) It shows the value of expected production in a period.
Q5) The cash budget is the prerequisite for the master budget.
A)True
B)False
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Chapter 6: Flexible Budgets and Standard Cost Systems
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174 Verified Questions
174 Flashcards
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Sample Questions
Q1) What do cost variances measure?
A) the difference between the price the company pays and the price its competitors pay
B) the change in costs over time
C) the difference between actual and standard cost
D) the volume discounts companies receive when ordering materials in large quantities
Q2) A favorable sales volume variance in variable expenses suggests a(n):
A) increase in number of actual units sold.
B) decrease in number of actual units sold when compared to the expected number of units sold.
C) increase in variable expenses per unit.
D) decrease in fixed costs.
Q3) A standard cost system is an accounting system that uses standards for product costs.
A)True
B)False
Q4) The fixed overhead volume variance is a volume variance, not a cost variance.
A)True
B)False
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Chapter 7: Cost Allocation and Responsibility Accounting
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130 Verified Questions
130 Flashcards
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Sample Questions
Q1) The flexible budget uses budgeted costs at the actual level of activity.
A)True
B)False
Q2) Which of the following is the correct formula for profit margin ratio?
A) Net profit ÷ Sales
B) Net sales ÷ Average total assets
C) Net profit × Capital invested
D) Operating income ÷ Net sales
Q3) Which of the following statements is true of performance reporting?
A) Responsibility reports should focus on the person responsible for unfavorable variances, rather than information.
B) Managers should not be held accountable for uncontrollable variances.
C) Only unfavorable variances should be explained in the reports.
D) Every variance, regardless of magnitude, must be investigated by the managers.
Q4) Managers of investment centers are responsible not only for generating profits, but also for ensuring efficient use of assets of the investment center.
A)True
B)False
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9
Chapter 8: Short-Term Business Decisions
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161 Verified Questions
161 Flashcards
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Sample Questions
Q1) Seven Seas Company manufactures 100 luxury yachts per month. Included in each yacht is a compact media center. Seven Seas manufactures media center in-house, but is considering the possibility of outsourcing that function, in order to close down some of their facilities and reduce the administrative costs. At present, the variable cost per unit is $275 and the fixed costs are $39,000 per month. Assuming that if they outsource, and the fixed costs could be eliminated entirely, at what contract rate would outsourcing pay off for Seven Seas? Round to nearest whole dollar.
A) at any rate lower than $844 per unit
B) at any rate lower than $796 per unit
C) at any rate lower than $775 per unit
D) at any rate lower than $665 per unit
Q2) Assuming fixed costs are unavoidable, if Macaulay Company drops product line F and does not replace it, what effect will this have on operating income?
A) Operating income will increase $5,000.
B) Operating income will increase $20,000.
C) Operating income will increase $25,000.
D) Operating income will decrease $20,000.
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Page 10
Chapter 9: Capital Investment Decisions
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122 Verified Questions
122 Flashcards
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Sample Questions
Q1) Dartis Company is considering investing in a specialized equipment costing $600,000. The equipment has a useful life of 5 years and a residual value of $60,000. Depreciation is calculated using the straight-line method. The expected net cash inflows from the investment are given below. \[\begin{array} { | c | r | }
\hline \text { Year 1 } & \$ 200,000 \\
\hline 2 & 150,000 \\
\hline 3 & 160,000 \\
\hline 4 & 95,000 \\
\hline 5 & 75,000 \\
\hline & \$ 680,000 \\
\hline
\end{array}\] What is the accounting rate of return on the investment?
A) 7.95%
B) 8.78%
C) 8.48%
D) 9.25%
Q2) Compound interest means that interest is calculated only on the principal amount. A)True B)False
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Page 11