Accounting Principles II
Study Guide Questions
Course Introduction
Accounting Principles II builds upon the foundational concepts introduced in Accounting Principles I, delving deeper into the methods and applications of financial and managerial accounting. The course focuses on topics such as accounting for partnerships, corporations, and cash flows, as well as the analysis and interpretation of financial statements. Students will also explore cost accounting, budgeting, performance evaluation, and the ethical considerations involved in financial decision-making. Emphasis is placed on practical problem-solving and the use of accounting information in planning and controlling business operations, equipping students with skills necessary for more advanced accounting courses and professional environments.
Recommended Textbook
Fundamental Managerial Accounting Concepts 8th Edition by Thomas P Edmonds
Available Study Resources on Quizplus 14 Chapters
2016 Verified Questions
2016 Flashcards
Source URL: https://quizplus.com/study-set/3029
Page 2
Chapter 1: Management Accounting and Corporate Governance
Available Study Resources on Quizplus for this Chatper
143 Verified Questions
143 Flashcards
Source URL: https://quizplus.com/quiz/60238
Sample Questions
Q1) The four Standards of Ethical Conduct for Management Accountants relate to competence,confidentiality,integrity,and objectivity.
A)True
B)False
Answer: True
Q2) During its first year of operations,Silverman Company paid $14,000 for direct materials and $19,000 for production workers' wages.Lease payments and utilities on the production facilities amounted to $17,000 while general,selling,and administrative expenses totaled $8,000.The company produced 5,000 units and sold 3,000 units at a price of $15.00 a unit. What is Silverman's cost of goods sold for the year?
A) $50,000
B) $24,600
C) $30,000
D) $41,000
Answer: C
Q3) Unlike manufacturers,service companies do not have an inventory of products.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Cost Behavior, Operating Leverage, and Profitability Analysis
Available Study Resources on Quizplus for this Chatper
141 Verified Questions
141 Flashcards
Source URL: https://quizplus.com/quiz/60237
Sample Questions
Q1) One reason for computing the average cost for a product rather than the actual cost is that average cost is easier to compute.
A)True
B)False
Answer: True
Q2) The BRC Company is considering the introduction of a new line of high end electronics.Because there is considerable uncertainty with regard to the demand for the products,the company would probably be served better by a variable cost s
A)True
B)False
Answer: True
Q3) Potential problems associated with cost averaging can be reduced by averaging the cost over a shorter span of time.
A)True
B)False
Answer: False
Q4) How does total fixed cost behave when volume increases?
Answer: Answers will vary Total fixed cost is constant (does not change)when volume increases.
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: Analysis of Cost,Volume,and Pricing to Increase Profitability
Available Study Resources on Quizplus for this Chatper
144 Verified Questions
144 Flashcards
Source URL: https://quizplus.com/quiz/60236
Sample Questions
Q1) Phan Company has not reported a profit in five years.This year the company would like to narrow its loss to $7,500.Assuming its selling price is $36.50 per unit and its variable costs per unit are $24,how many units must be sold to achieve its target given that total fixed costs are $60,000?
A) 2,188
B) 1,439
C) 4,200
D) 1,600
Answer: C
Q2) Compare and contrast a cost-plus pricing strategy to a target pricing strategy.
Answer: Answers will vary A cost-plus pricing strategy starts with some measure of cost and adds a markup to achieve a specified profit margin.Cost drives the selling price.If the market doesn't support the selling price as computed,profit suffers.A target pricing strategy starts with the price that the market will support and subtracts out the desired profit.The difference is the target cost.This is the cost at which the company must produce the product.If the company cannot produce the product at the target cost,profit suffers.
To view all questions and flashcards with answers, click on the resource link above.
Page 5
Chapter 4: Cost Accumulation,Tracing,and Allocation
Available Study Resources on Quizplus for this Chatper
156 Verified Questions
156 Flashcards
Source URL: https://quizplus.com/quiz/60235
Sample Questions
Q1) Danforth Manufacturing Company uses a cost-plus pricing strategy.At the beginning of the year,Danforth estimated that total annual fixed overhead costs would amount to $60,000.Further,Danforth estimated that the annual volume of production would be 1,000 units of product.Based on these estimates,Danforth computed a predetermined overhead rate that was used to allocate overhead cost to the products made throughout the year.As predicted,the actual volume of production amounted to 1,000 units of product.However,actual fixed overhead costs amounted to $56,000.Based on this information alone:
A) a lower than appropriate selling price was assigned to products during the year.
B) a higher than appropriate selling price was assigned to products during the year.
C) the correct selling price was assigned to products during the year.
D) the answer cannot be determined from the information provided.
Q2) Each indirect cost should be allocated to products individually to provide the most useful cost information.
A)True
B)False
Q3) Indicate whether each of the following statements is
Q4) Indicate whether each of the following statements is
To view all questions and flashcards with answers, click on the resource link above.
Page 6
Chapter 5: Cost Management in an Automated Business
Environment: ABC, ABM, and TQM
Available Study Resources on Quizplus for this Chatper
153 Verified Questions
153 Flashcards
Source URL: https://quizplus.com/quiz/60234
Sample Questions
Q1) Which of the following is the most appropriate cost driver for maintaining parts inventory?
A) Number of parts for a product
B) Direct labor hours
C) Sales dollars
D) Number of setups
Q2) A modern cost allocation process that employs multiple cost drivers is:
A) activity-based costing.
B) contribution costing.
C) process costing.
D) job order costing.
Q3) Which type of cost drivers is most appropriate for most automated processes?
A) Volume-based drivers
B) Activity-based drivers
C) Direct labor-based drivers
D) All of these answers are correct.
Q4) To reduce its total batch-level costs,a company should produce its products in large batches.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: Relevant Information for Special Decisions
Available Study Resources on Quizplus for this Chatper
139 Verified Questions
139 Flashcards
Source URL: https://quizplus.com/quiz/60233
Sample Questions
Q1) Select the correct statement regarding relevant revenues.
A) Relevant revenues must not differ between the alternatives being considered.
B) Past or future revenues may be relevant.
C) Relevant revenues must make a difference in the decision under consideration.
D) Revenues are not considered relevant in the same way as relevant costs.
Q2) A constraint is a factor that restricts sales of a company's products or services.
A)True
B)False
Q3) Qualitative information is relevant when:
A) it makes a difference in the decision and it differs between the alternatives.
B) it differs between the alternatives only.
C) it makes a difference in the decision only.
D) None of the above.
Q4) Outsourcing reduces the extent of a company's vertical integration.
A)True B)False
Q5) What are constraints? Provide an example.
Q6) How can managers manage (that is,reduce the impact of)constraints?
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Planning for Profit and Cost Control
Available Study Resources on Quizplus for this Chatper
142 Verified Questions
142 Flashcards
Source URL: https://quizplus.com/quiz/60232
Sample Questions
Q1) With regards to financial statements,"pro forma" means:
A) Budgeted.
B) Prepared in advance.
C) Financial condition or position that can be expected if planning assumptions prove correct.
D) All of the answers are correct.
Q2) Which of the following budgets needs to be prepared prior to preparing an inventory purchases budget?
A) Selling and administrative expense budget
B) Sales budget
C) Cash budget
D) All of the answers are correct.
Q3) Which of the following would represent the order in which most master budgets are prepared?
A) Sales,Income Statement,Cash,Purchases
B) Purchases,Cash,Sales,Income Statement
C) Purchases,Sales,Cash,Income Statement
D) Sales,Purchases,Cash,Income Statement
Q4) How do budget expectations influence a company's employees?
Q5) Why is cash management important to a business?
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Performance Evaluation
Available Study Resources on Quizplus for this Chatper
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/60231
Sample Questions
Q1) Management by exception means that only unfavorable cost variances are investigated.
A)True
B)False
Q2) Which of the following income statement formats is most commonly used with flexible budgeting?
A) Sales - Variable costs = Contribution margin;Contribution margin - Fixed costs = Net income
B) Sales - Cost of goods sold = Gross margin;Gross margin - Operating expenses = Net income
C) Sales - Manufacturing costs - Selling and administrative costs = Net income
D) None of these answers is correct.
Q3) A static budget is one that shows estimated revenues and costs at multiple activity levels.
A)True
B)False
Q4) Indicate whether each of the following statements is
Q5) What steps or activities are involved in developing standards for the materials that are used in making a product?
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Responsibility Accounting
Available Study Resources on Quizplus for this Chatper
118 Verified Questions
118 Flashcards
Source URL: https://quizplus.com/quiz/60230
Sample
Questions
Q1) The manager of Pearless Company's Toy Division is not satisfied with the level of return on investment that the division achieved this year.What can be done to improve return on investment?
A) Decrease the investment in assets
B) Increase operating expenses
C) Increase sales
D) Decrease the investment in assets and/or increase sales.
Q2) Management recently instituted a new training program for upper level managers.They budgeted the cost of the new program at $1,000 per employee trained but actual costs were $1,250 per employee trained.The difference between the budgeted cost for training and the actual cost of training is called a:
A) Period cost.
B) Loss.
C) Variance.
D) Controllable cost.
Q3) How should a responsibility report be prepared to support the practice of management by exception?
Q4) Indicate whether each of the following statements about transfer pricing is
Q5) Indicate whether each of the following statements is
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Planning for Capital Investments
Available Study Resources on Quizplus for this Chatper
155 Verified Questions
155 Flashcards
Source URL: https://quizplus.com/quiz/60229
Sample Questions
Q1) Jiminez Company has two investment opportunities.Both investments cost $5,000 and will provide the following net cash flows: \(\begin{array}{|l|r|r|}
\hline \text { Year } & \text { Investment } \mathrm{A} & \text { Investment } \mathrm{B} \\
\hline 1 & \$ 3,000 & \$ 3,000 \\
\hline 2 & 3,000 & 4,000 \\
\hline 3 & 3,000 & 2,000 \\
\hline 4 & 3,000 & 1,000 \\ \hline
\end{array}\) What is the total present value of Investment A's cash flows assuming an 8% minimum rate of return? (Do not round your intermediate calculations.Round your answer to the nearest whole dollar. )
A) $14,936.
B) $4,936.
C) $7,000.
D) $12,000.
Q2) Capital investment decisions involve investments in current assets. A)True B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: Product Costing in Service and Manufacturing
Entities
Available Study Resources on Quizplus for this Chatper
139 Verified Questions
139 Flashcards
Source URL: https://quizplus.com/quiz/60228
Sample Questions
Q1) The absorption costing approach uses the contribution margin income statement format.
A)True
B)False
Q2) Estimated overhead costs are applied to work in process at the time the goods are sold.
A)True
B)False
Q3) Warren Company applies overhead based on direct labor cost.Warren Company estimated that it would incur $180,000 in manufacturing overhead costs and $120,000 of direct labor costs during the current year.Actual manufacturing overhead cost totaled $150,000 and actual direct labor costs totaled $110,000 during the current year.If total manufacturing costs were $320,000,what amount of direct materials was used during the year?
A) $60,000
B) $30,000
C) $45,000
D) None of these.
Q4) Describe the schedule of cost of goods manufactured and sold.What information does it include,and how is it used?
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Job-Order, Process, and Hybrid Costing Systems
Available Study Resources on Quizplus for this Chatper
144 Verified Questions
144 Flashcards
Source URL: https://quizplus.com/quiz/60227
Sample Questions
Q1) Oregon Company started the month of August with 4,000 units in beginning work in process;these units were 60 percent complete on August 1.During the month,16,000 units were completed and transferred to Finished Goods.The ending work in process was 2,000 units that were 20% complete.
Required:
Calculate Oregon's equivalent whole units for the month of August.
Q2) Job-order and process cost systems are two different costing systems that a company chooses between based on the preference of management.
A)True
B)False
Q3) The use of raw materials in production is:
A) An asset source transaction.
B) An asset use transaction.
C) An asset exchange transaction.
D) A claims exchange transaction.
Q4) Indicate whether each of the following statements about process costing systems is
Q5) Indicate whether each of the following statements is
Page 14
Q6) Indicate whether each of the following statements is
To view all questions and flashcards with answers, click on the resource link above.
Chapter 13: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/60226
Sample Questions
Q1) Current financial reporting standards assume that users of accounting information:
A) Have an expert's understanding of economic and financial events and conditions.
B) Have a reasonably informed knowledge of business.
C) Have widely differing levels of knowledge about business,and that financial reporting must meet these differing needs.
D) Have only minimal knowledge of business.
Q2) Crawford Company's current ratio for Year 2 was 1.42,which was slightly above the current ratio for similar companies in its industry.Crawford's quick ratio for Year 2 was 0.68,which is substantially lower than for similar companies in its industry.What conclusion would you draw based on this information?
Q3) The accounting profession assumes that financial statement users have an expert knowledge of business.
A)True
B)False
Q4) Indicate whether each of the following statements about financial statement analysis is
Q5) The following information applies to Acorn Cons
To view all questions and flashcards with answers, click on the resource link above.
15
Chapter 14: Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
140 Verified Questions
140 Flashcards
Source URL: https://quizplus.com/quiz/60225
Sample Questions
Q1) When the indirect method is used to prepare the statement of cash flows,what is the starting point of the operating activities section?
A) Net income as reported on the income statement
B) Total assets as reported on the balance sheet
C) Sales as reported on the income statement
D) Cash collections from customers
Q2) All of the following are deducted from net income when preparing the statement of cash flows under the indirect method except:
A) an increase in accounts payableAccounts Payable.
B) a decrease in Accrued Liabilities.
C) an increase in accounts receivableAccounts Receivable.
D) an increase in Iinventory.
Q3) Would issuing a mortgage to purchase a building be reported on the statement of cash flows? If so,where would it be reported? If not,why not?
Q4) All cash exchanges between a company and its owners are reported as investing activities in the statement of cash flows.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 16