Accounting Principles II
Exam Materials
Course Introduction
Accounting Principles II builds upon the foundational concepts introduced in Accounting Principles I, delving deeper into the accounting cycle with a focus on partnerships, corporations, and more complex transactions. This course explores topics such as inventory valuation, long-term assets, liabilities, equity transactions, and the preparation and analysis of financial statements. Emphasis is placed on the interpretation of accounting information for decision-making, internal controls, and the regulatory environment governing financial reporting. Through practical exercises and real-world scenarios, students gain a comprehensive understanding of how advanced accounting principles are applied in business operations.
Recommended Textbook
Horngren's Financial and Managerial Accounting The Managerial Chapters 6th Edition by Tracie
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12 Chapters
2214 Verified Questions
2214 Flashcards
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Chapter 15: Accounting Information Systems
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159 Verified Questions
159 Flashcards
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Sample Questions
Q1) When using QuickBooks,the Vendors tab is used to record a bill that has been received.
A)True
B)False
Q2) Which of the following is a benefit of using a computerized accounting information system?
A)The software can accurately measure the intrinsic value of the firm using the built-in simulation techniques.
B)There is no need to review the financial statements for accuracy.
C)The software is easy to use and thus no training or financial statement review is necessary.
D)The software automatically transfers the amounts from the general ledger to the financial statements.
Q3) Describe the transactions recorded in the purchases journal.
Q4) Sales on account are recorded in a cash receipts journal.
A)True B)False
Q5) List and briefly discuss the three basic components of an accounting information system.
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Chapter 16: Introduction to Managerial Accounting
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230 Flashcards
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Sample Questions
Q1) Managerial accounting provides financial statements that report results of operations,financial position,and cash flows both to managers and to external stockholders.
A)True
B)False
Q2) How does a service company calculate unit cost per service? Why do managers need to know the unit cost per service?
Q3) Unit product costs can be used to measure operating income and determine the cost of Finished Goods Inventory.
A)True
B)False
Q4) A diagram that shows the relationships between departments and divisions,and the managers that are responsible for each section is called a(n)________.
A)departmentalization chart
B)work specialization chart
C)organizational chart
D)chain of command chart
Q5) Define indirect labor and give two examples of indirect labor for a manufacturing company.
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Chapter 17: Job Order Costing
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191 Verified Questions
191 Flashcards
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Sample Questions
Q1) The predetermined overhead rate is calculated ________.
A)after actual overhead costs have been determined
B)at the end of the accounting period
C)before the accounting period begins
D)after indirect materials and labor have been used in production
Q2) The journal entry to record indirect labor costs incurred involves a debit to the ________.
A)Manufacturing Overhead account
B)Wages Payable account
C)Finished Goods Inventory account
D)Work-in-Process Inventory account
Q3) Kalliste,Inc.completed Job C50.Job C50 required $3,000 of direct materials cost,$2,000 of direct labor cost,and $600 of allocated manufacturing overhead.Provide the journal entry needed to record completion and transfer of the job.Omit explanation.
Q4) A process costing system is used when a company produces identical units through a series of production steps.
A)True
B)False
Q5) Why would the manager of a service company need to use job order costing?
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Chapter 18: Process Costing
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173 Flashcards
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Sample Questions
Q1) The production cost report for Department 2 shows that $452,000 was assigned to the 59,000 units transferred to Finished Goods Inventory.This cost assigned to Finished Goods Inventory is recorded with a debit to Work-in-Process-Department 2.Process costing is used.
A)True
B)False
Q2) The direct labor costs and manufacturing overhead costs required to produce finished goods from raw materials are called ________.
A)transferred in costs
B)cost of sales
C)finished goods costs
D)conversion costs
Q3) The Polishing Department of Silverworks,Inc.had 15,000 units in process on June 1 and received 25,000 units from the Machining Department.During the month,it completed 32,000 units and transferred them to the Packaging Department.Prepare the production cost report for the Polishing Department for the units for the month of June.(Use the first-in,first-out method.)
Q4) How is a production cost report prepared using the FIFO method?
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Page 6
Chapter 19: Cost Management Systems: Activity-Based, just-In-Time, and Quality Management Systems
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181 Flashcards
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Sample Questions
Q1) The activity-based costing system improves the allocation of ________.
A)indirect manufacturing costs
B)direct labor
C)direct materials
D)sales commissions
Q2) Which of the following statements is true of the just-in-time costing system?
A)It increases the need for suppliers to deliver raw materials on time.
B)It records summary journal entries before the units are purchased.
C)It results in increased inventory storage costs.
D)It increases the risk of the inventory becoming obsolete or unsalable.
Q3) Revenues decrease and costs increase when companies produce poor-quality products.
A)True
B)False
Q4) All of the following are the result of producing poor-quality products except ________.
A)decreased costs
B)decreased revenues
C)customer awareness of quality problems
D)increased product repairs
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Chapter 20: Cost-Volume-Profit Analysis
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197 Flashcards
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Sample Questions
Q1) The breakeven point is the point where the sales revenues are equal to the total variable costs plus the total fixed costs.
A)True
B)False
Q2) Artisan Works is owned and operated by a craftsman who makes replicas of historic firearms for museums,sportsmen,and collectors.The data are as follows: \[\begin{array}
{ | l | r | }
\hline \text { Sales price per unit } & \$ 780 \\
\hline \text { Variable cost per unit } & 470 \\
\hline \text { Fixed costs per month } & 8370 \\
\hline
\end{array}\] If Artisan expects to sell 60 units per month,what is his margin of safety expressed in units per month?
A)33 units
B)60 units
C)87 units
D)31 units
Q3) Explain the meaning of the operating loss and operating income areas on a cost-volume-profit (CVP)graph.
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Page 8
Chapter 21: Variable Costing
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148 Verified Questions
148 Flashcards
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Sample Questions
Q1) For decisions that affect controlling costs,consider the following decision focuses.State the appropriate costing method and the reason for your answer.
\[\begin{array} { | l | c | l | }
\hline{ \begin{array} { c }
\textbf { Decision } \\
\textbf { Focus } \end{array} } & \begin{array} { c }
\textbf { Appropriate Costing } \\
\textbf { Method }
\end{array} & \textbf { Reason } \\
\hline \textbf { Upper } \\
\textbf { management } & & \\
\hline \textbf { Lower } \\
\textbf { management } & & \\
\hline \end{array}\]
Q2) Variable costing cannot be used in service companies.
A)True
B)False
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Chapter 22: Master Budgets
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181 Flashcards
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Sample Questions
Q1) The Raw Materials Inventory account must be considered when calculating the amount of direct materials to be purchased.
A)True
B)False
Q2) When a merchandiser calculates the budgeted cash payments for selling and administrative expenses,noncash expenses like depreciation are also considered.
A)True
B)False
Q3) In preparing the master budget,the manufacturing overhead is the last period cost to consider.
A)True
B)False
Q4) Unlike a manufacturing company,the sales budget is the cornerstone for the master budget of a merchandising company.
A)True
B)False
Q5) List the three sections of the cash budget for a merchandising company.
Q6) For a merchandising company,what is the final step in the master budget process?
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Chapter 23: Flexible Budgets and Standard Cost Systems
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Sample Questions
Q1) Companies conduct time-and-motion studies and use benchmarks from other companies when developing standards.
A)True
B)False
Q2) Which of the following amounts of a flexible budget changes,within the specified relevant range,with changes in sales volume?
A)sales price per unit
B)total fixed costs
C)variable cost per unit
D)total contribution margin
Q3) A company is analyzing its month-end results by comparing it to both static and flexible budgets.During the month,the actual sales volume was lower than the expected sales volume as per the static budget.This difference results in an unfavorable
A)flexible budget variance for variable costs
B)sales volume variance for variable costs
C)flexible budget variance for sales revenue
D)sales volume variance for sales revenue
Q4) List the direct labor variances and briefly describe each.
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Chapter 24: Responsibility Accounting and Performance Evaluation
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182 Flashcards
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Sample Questions
Q1) The primary objective in setting transfer prices is to
A)maximize profits for the company as a whole.
B)maximize profits for the selling division.
C)minimize the cost to the purchasing division.
D)maximize profits for the purchasing division.
Q2) The transfer price is the transaction amount of one unit of goods when the transaction occurs between the company and its customers.
A)True
B)False
Q3) Performance evaluation systems provide top management with a framework for maintaining control over the entire organization.
A)True
B)False
Q4) An investment center manager is responsible for generating profits and managing invested capital.
A)True
B)False
Q5) List and briefly discuss the two limitations of financial performance measures.
Q6) List two objectives in setting transfer prices.
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Chapter 25: Short-Term Business Decisions
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200 Flashcards
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Sample Questions
Q1) Gnome Company is deciding whether to continue to manufacture a component or to buy the component from a supplier.Which of the following is relevant to this decision?
A)the potential uses of the facilities that are currently used to manufacture the component
B)the insurance on the manufacturing facility that will continue regardless of the decision
C)fixed costs that do not differ between the alternatives
D)the cost of the equipment that is currently being used to manufacture the component
Q2) Homewood Furniture manufactures a small table and a large table.The small table sells for $1000,has variable costs of $560 per table,and takes 10 direct labor hours to manufacture.The large table sells for $1500,has variable costs of $980,and takes eight direct labor hours to manufacture.Calculate the contribution margin per direct labor hour for the large table.(Round your answer to the nearest cent.)
A)$65.00 per direct labor hour
B)$55.00 per direct labor hour
C)$44.00 per direct labor hour
D)$52.00 per direct labor hour
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Page 13
Chapter 26: Capital Investment Decisions
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152 Flashcards
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Sample Questions
Q1) When computing the present value,the interest rate will vary depending on the amount of risk.Safer investments,such as FDIC-insured bank deposits,yield lower interest rates.
A)True
B)False
Q2) Managers generally use payback as the sole method for deciding whether to invest in an asset.
A)True
B)False
Q3) Capital budgeting is the ________.
A)process of planning for investments in long-term assets
B)preparation of the budget for operating expenses
C)process of evaluating the profitability of a business
D)process of making pricing decisions for products
Q4) The present value of future cash inflows received in earlier years is higher than future cash inflows received in later years.
A)True
B)False
Q5) What are the strengths of the net present value capital budgeting method?
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