Accounting Principles II
Final Exam Questions
Course Introduction
Accounting Principles II is an intermediate course that builds upon the foundational concepts introduced in Accounting Principles I, focusing on the more advanced aspects of financial accounting. The course covers topics such as long-term liabilities, equity transactions, cash flow statements, and financial statement analysis. Students learn how to apply accounting standards to partnerships, corporations, and analyze financial data for decision-making. Emphasis is placed on the interpretation and use of financial information to support business planning and control. By the end of the course, students will have a deeper understanding of the accounting cycle, regulatory environments, and the role of ethics in financial reporting.
Recommended Textbook
Accounting 9th Canadian Edition Volumer II by Charles T. Horngren
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13 Chapters
2103 Verified Questions
2103 Flashcards
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Chapter 12: Corporations: Paid-In Capital and the Balance Sheet
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167 Verified Questions
167 Flashcards
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Sample Questions
Q1) Most preferred stock is sold at a price higher than its par value.
A)True
B)False
Q2) Which of the following types of stock are considered to be LEAST risky for investors?
A) Common stock
B) Par value stock
C) No-par stock
D) Preferred stock
Q3) What is the amount of dividend which will be paid for each share of common stock?
A) $0.80
B) $400.00
C) $4.00
D) $1.00
Q4) Stockholders of a corporation have unlimited liability for the corporation's debt.
A)True
B)False
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Page 3
Chapter 13: Corporations: Effects on Retained Earnings and the Income Statement
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164 Verified Questions
164 Flashcards
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Sample Questions
Q1) What would the balance in Paid-in capital in excess of par be after a 2-for-1 stock split?
A) $580,000
B) $460,000
C) $380,000
D) $120,000
Q2) Which of the following is a TRUE statement?
A) Both a stock split and a stock dividend will decrease total assets.
B) Both a stock split and a stock dividend will increase total liabilities.
C) A stock split will increase total assets, but a stock dividend will not.
D) Neither a stock split nor a stock dividend will affect total assets or total liabilities.
Q3) If Peartree resold 1,000 shares of treasury stock for $24 per share, what amounts would be shown for number of shares issued and outstanding?
A) 100,000 issued; 96,000 outstanding
B) 100,000 issued; 94,000 outstanding
C) 101,000 issued; 96,000 outstanding
D) 95,000 issued; 94,000 outstanding
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Page 4
Chapter 14: The Statement of Cash Flows
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Sample Questions
Q1) Partisan Services purchased 10 delivery vehicles by issuing a 10-year installment note payable for $320,000. This transaction would be shown in the investment section of the statement of cash flows.
A)True
B)False
Q2) On the statement of cash flows, what amount will be shown for payments to suppliers for inventory purchases? (Please assume that accounts payable are for purchases of inventory only.)
A) $185,000
B) $194,000
C) $181,000
D) $191,000
Q3) Arturo Sales purchased some equipment for $12,000 by issuing a 6-month note payable. How would this transaction be shown on the statement of cash flows?
A) In the noncash financing and investing activities section
B) In the investing activities section
C) In the operating activities section
D) In the financing activities section
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Chapter 15: Financial Statement Analysis
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161 Flashcards
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Sample Questions
Q1) Partridge Company provides the following information for the year 2014: \[\begin{array} { l l }
\text { Earnings per share } & \$ 0.24 / \text { share } \\
\text { Market price of common stock: } & \$ 12.00 / \text { share } \\
\text { Dividends paid: } & \$ 0.80 / \text { share } \\
\text { (No preferred stock issued) } & \end{array}\]
How much was the dividend payout for one share of common stock?
A) 1.67
B) 3.33
C) 0.30
D) 3.95
Q2) The accounts receivable turnover is an indicator of the ability of a company to collect cash from its credit customers.
A)True
B)False
Q3) This is an example of benchmarking.
A)True
B)False
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Chapter 16: Introduction to Management Accounting
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161 Flashcards
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Sample Questions
Q1) Transportation costs to ship products to customers are product costs.
A)True
B)False
Q2) The wages and benefits of the assembly line workers are included in manufacturing overhead.
A)True
B)False
Q3) Which of the following is a characteristic of a service company?
A) It transforms raw materials into finished goods.
B) It makes a product.
C) It does not have tangible products intended for sale.
D) It has a single category of inventory.
Q4) The wages and benefits of the factory manager are included in manufacturing overhead.
A)True B)False
Q5) The IMA standards of ethical practice provide that accountants should continually develop their knowledge and skills.
A)True
B)False
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Chapter 17: Job Order and Process Costing
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Sample Questions
Q1) Gardner Machine Shop uses a predetermined manufacturing overhead rate of $63.20 per direct labor hour. In January, Gardener completed job number A33, which included 15 direct labor hours. Which of the following correctly describes the journal entry needed to allocate overhead to the job?
A) Debit Finished goods for $948, credit Manufacturing overhead for $948
B) Debit Manufacturing overhead for $948, credit Work in process for $948
C) Debit Work in process for $948, credit Manufacturing overhead for $948
D) Debit Cost of goods sold for $948, credit Finished goods for $948
Q2) Which of the following would be included in the journal entry to record the requisition of indirect materials?
A) Debit to Manufacturing overhead
B) Debit to Work in process inventory
C) Debit to Materials inventory
D) Debit to Finished goods inventory
Q3) What was the final balance in the Cost of goods sold account?
A) $308,000 debit balance
B) $332,000 debit balance
C) $320,000 debit balance
D) $12,000 credit balance
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Page 8
Chapter 18: Activity-Based Costing and Other Cost Management Tools
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160 Verified Questions
160 Flashcards
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Sample Questions
Q1) Johnson Production Company uses just-in-time production and accounting methods. On June 1, Johnson paid $6,000 for factory repair and maintenance costs in cash. Please provide the journal entry.
\[\begin{array} { | l | l | l | }
\hline \quad
\quad
\quad
\quad
\quad
\quad
\quad
\quad &\quad
\quad &\quad
\quad \\
\hline & & \\
\hline
\end{array}\]
Page 9
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Chapter 19: Cost-Volume-Profit Analysis
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Sample Questions
Q1) Taizhong Semiconductor Company mass produces several common computer chips. Type A sells for $1.20 per unit. Variable cost was $0.95 per unit and the fixed costs were $32,000 per month. Taizhong currently sells 140,000 units per month. Because of volatility in the precious metals market, the variable cost per unit has just gone up by $0.05, but the company does not believe it can pass the extra cost on to the customer. To offset higher variable costs, the production manager has developed a plan which will reduce fixed costs by 20%. How will these combined changes affect net operating income?
A) It will go up 10%.
B) It will go down 20%.
C) It will go up 12%.
D) It will go down 110%.
Q2) Olympus Company sells 1,400 units per month at a price of $28.00 per unit. The variable cost is $22.50 per unit. Fixed costs are $6,900 per month. How much is the operating income?
A) $9,500
B) $32,300
C) $800
D) $750
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Page 10
Chapter 20: Short-Term Business Decisions
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Sample Questions
Q1) The sales manager says he has an opportunity to pitch a special sale to a new Canadian fishing company that is outfitting new boats. He proposes a sale of 30 units at a special price of $140 per unit. He says it will not cannibalize the company's regular sales and is a one-time transaction. It will require the normal amount of variable costs, both marketing and manufacturing, but will not impact fixed costs in any way. The president of the company has some reservations, but finally agrees to make the deal if and only if it adds a minimum of $1,000 to operating income. Based on the president's criteria, Potlatch will decline the offer.
A)True
B)False
Q2) The effect of a plant closing on employee morale is an example of which of the following?
A) A quantitative factor
B) A qualitative factor
C) A sunk cost
D) A variable cost
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Chapter 21: Capital Investment Decisions and the Time
Value of Money
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152 Verified Questions
152 Flashcards
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Sample Questions
Q1) What is the profitability index for Project A?
A) 0.98
B) 1.08
C) 1.36
D) 1.66
Q2) When calculating the net present value of future cash streams, dollars that are received sooner are worth more than dollars received later.
A)True
B)False
Q3) Which of the following best describes the profitability index?
A) An index of projects in order of which has the most net income
B) The ratio of present value of cash flows to initial investment
C) The ratio of total cash flows to initial investment
D) An array of possible investment outcomes at different discount rates
Q4) Which of the following describes the purpose of a post-audit?
A) To screen initial investment alternatives
B) To determine whether investments are going as planned, or whether they should be abandoned
C) To determine the amount of the initial investment outlay
D) To evaluate the company's internal controls
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Chapter 22: The Master Budget and Responsibility Accounting
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155 Verified Questions
155 Flashcards
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Sample Questions
Q1) A department store has budgeted cost of sales of $36,000 for its men's suits in March. Management also wants to have $15,000 of men's suits in inventory at the end of March to prepare for the summer season. Beginning inventory of men's suits for March is expected to be $9,000. What dollar amount of men's suits should be purchased in March?
A) $42,000
B) $45,000
C) $51,000
D) $60,000
Q2) What are the total cash payments made in August for purchases?
A) $72,630
B) $70,680
C) $70,520
D) $63,500
Q3) Which of the following describes the operating expenses budget?
A) It aids in planning to ensure the company has adequate inventory on hand.
B) It captures the variable and fixed expenses of the business.
C) It depicts the breakdown of sales based on terms of collection.
D) It helps in planning to ensure the business has adequate cash.
Page 13
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Chapter 23: Flexible Budgets and Standard Costs
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165 Flashcards
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Sample Questions
Q1) If a flexible budget was prepared at a volume of 13,000 units, how much would the operating income be?
A) $22,000
B) $17,500
C) $24,000
D) $13,000
Q2) Discount Brand Products uses standard costing to manage their direct costs and their overhead costs. Overhead costs are allocated based on direct labor hours. In the first quarter, Discount Brand had a favorable price variance for their variable overhead costs. Which of the following scenarios would be a reasonable explanation for that variance?
A) The actual number of direct labor hours was lower than budgeted.
B) The actual costs were higher than budgeted.
C) The actual costs were lower than budgeted.
D) The actual number of direct labor hours was higher than budgeted.
Q3) Which of the following BEST describes standard costs?
A) Costs used as a budget for a single unit of product
B) Costs incurred to produce the standard model of a product
C) Costs based on the average of current market values
D) Costs used to compare with competitors' prices
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Chapter 24: Performance Evaluation and the Balanced Scorecard
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166 Flashcards
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Sample Questions
Q1) Union Company's corporate payroll department is a cost center, and submits monthly performance reports. In the report below, there are both budgeted and actual data. Please use the format below and complete the report. The percentage amounts should be rounded to the nearest one-tenth of a percent. \[\begin{array} { | l | r | r | c | l | l | l | }
\hline{ \text { Cost Center } } & & { \text { Flexible } } & \text { Flexible Budget } & & & \\
\hline { \text { Performance Report } } & { \text { Actual } } & { \text { Budget } } & \text { Variance } & \text { U/F } & \text { \% variance } & \text { U/F } \\
\hline \text { Salary \& benefits } & \$ 46,000 & \$ 44,500 & & & & \\
\hline \text { Rent expense } & 12,750 & 11,900 & & & & \\
\hline \text { Depreciation expense } & 8,900 & 9,080 & & & & \\
\hline \text { Supply expense } & 1,890 & 2,200 & & & & \\
\hline \text { Miscellaneous expense } & 4,320 & 4,120 & & & & \\
\hline & \$ 73,860 & \$ 71,800 & & & & \\
\hline \end{array}\]
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