Business Accounting Exam Preparation Guide
Course Introduction
Business Accounting provides students with a foundational understanding of key accounting principles and practices essential for effective business management. The course covers topics such as the accounting cycle, preparation and analysis of financial statements, asset and liability management, and interpretation of financial information for decision-making purposes. Students will also explore budgeting, internal controls, and the role of accounting in regulatory compliance, equipping them with practical skills to analyze financial data and support organizational goals.
Recommended Textbook
Horngren's Accounting The Managerial Chapters 11th Edition by Tracie L. Miller Nobles
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9 Chapters
1673 Verified Questions
1673 Flashcards
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Page 2
Chapter 18: Introduction to Managerial Accounting
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210 Verified Questions
210 Flashcards
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Sample Questions
Q1) Goods that are produced by a manufacturing company and are ready to sell are recorded in the _______ account.
A) Raw Materials Inventory
B) Work-in-Process Inventory
C) Manufacturing Overhead
D) Finished Goods Inventory
Answer: D
Q2) Which of the following is an example of direct labor cost in a factory?
A) wages of assembly line personnel
B) salary of vice president of production
C) wages of factory security guard
D) salary of production manager
Answer: A
Q3) For decision-making purposes,________ costs are often divided into prime costs and conversion costs.
A) fixed costs
B) product costs
C) period costs
D) sunk costs
Answer: B
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Chapter 19: Job Order Costing
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170 Verified Questions
170 Flashcards
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Sample Questions
Q1) What causes manufacturing overhead to be underallocated? When manufacturing overhead is underallocated,will the Manufacturing Overhead account have a debit or a credit balance?
Answer: Manufacturing overhead is underallocated when the manufacturing overhead allocated to Work-in-Process Inventory was less than the actual overhead cost.Manufacturing Overhead will have a debit balance.
Q2) Jeremy Corporation estimated manufacturing overhead costs for the year to be $490,000.Jeremy also estimated 7,000 machine hours and 1,000 direct labor hours for the year.It bases the predetermined overhead allocation rate on machine hours.On January 31,Job 25 was completed.It required 4 machine hours and 6 direct labor hours.What is the amount of manufacturing overhead allocated to the completed job? (Round your answer to the nearest dollar.)
A) $70
B) $700
C) $280
D) $1,960
Answer: C
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4
Chapter 20: Process Costing
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167 Verified Questions
167 Flashcards
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Sample Questions
Q1) Direct labor costs are accumulated in the Manufacturing Overhead account.
A)True
B)False
Answer: False
Q2) Which of the following is a step in the preparation of a production cost report?
A) assignment of costs to units completed and units in process
B) summarization of the flow of physical units to the suppliers
C) computation of expected units of production
D) computation of amount of materials required for production
Answer: A
Q3) The weighted-average method determines the cost of equivalent units of production by accounting for beginning inventory costs separately from current period costs.
A)True
B)False
Answer: False
Q4) Provide the formula for (1)To account for and (2)Accounted for.
Answer: (1)To account for = Beginning balance + Amount started or added
(2)Accounted for = Completed and transferred out + In process
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Chapter 21: Cost-Volume-Profit Analysis
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238 Verified Questions
238 Flashcards
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Sample Questions
Q1) Answer the following absorption costing questions:
\[\begin{array} { | l | l | }
\hline \text { Question } & \text { Absorption Costing } \\
\hline \text { Which costs are included as } & \\
\text { product costs? } & \\
\hline \text { Which costs are included as } & \\
\text { period costs? } & \\
\hline
\end{array}\]
Q2) Keys Spas,Inc.reports the following information for August: \[\begin{array} { | l | r | }
\hline \text { Sales Revenue } & \$ 740,000 \\
\hline \text { Variable Costs } & 230,000 \\
\hline \text { Fixed Costs } & 100,000 \\
\hline
\end{array}\] Calculate the contribution margin for August.
A) $130,000
B) $510,000
C) $410,000
D) $640,000
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Page 6
Chapter 22: Master Budgets
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172 Flashcards
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Sample Questions
Q1) List the three sections of the cash budget.
Q2) Janeway,Inc.has a cash balance of $22,000 on April 1.The company is now preparing the cash budget for the second quarter.Budgeted cash collections and payments are as follows: \[\begin{array} { | l | r | r | r | }
\hline & \text { Apr } & \text { May } & \text { Jun } \\
\hline \text { Cash collections } & \$ 26,000 & \$ 26,000 & \$ 24,000 \\
\hline \text { Cash payments: } & & & \\
\hline \text { Purchases of direct materials } & 4,000 & 5,300 & 6,200 \\
\hline \text { Operating expenses } & 4,600 & 5,000 & 6,000 \\
\hline
\end{array}\] There are no budgeted capital expenditures or financing transactions during the quarter.Based on the above data,calculate the projected cash balance at the end of June.
A) $39,400
B) $48,000
C) $55,100
D) $66,900
Q3) The production manager projects direct labor costs.
A)True
B)False
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Chapter 23: Flexible Budgets and Standard Cost Systems
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204 Flashcards
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Sample Questions
Q1) What do cost variances measure?
A) the difference between the cost the company pays and the cost its competitors pay
B) the change in costs over time
C) how well the business keeps unit costs of material and labor inputs within standards
D) the volume discounts companies receive when ordering direct materials in large quantities
Q2) A static budget presents financial data at multiple levels of sales volume.
A)True
B)False
Q3) Which of the following is the correct formula for measuring the efficiency variance?
A) Efficiency Variance = (Actual Quantity + Standard Quantity) - Standard Cost
B) Efficiency Variance = (Actual Quantity × Standard Quantity) / Standard Cost
C) Efficiency Variance = (Actual Quantity / Standard Quantity) × Standard Cost
D) Efficiency Variance = (Actual Quantity - Standard Quantity) × Standard Cost
Q4) List three ways in which using a standard cost system helps managers.
Q5) List the direct materials variances,and briefly describe each.
Q6) List the direct labor variances and briefly describe each.
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Page 8
Chapter 24: Cost Allocation and Responsibility Accounting
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189 Flashcards
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Sample Questions
Q1) To evaluate the financial performance of an investment center,a business needs key performance indicators that measure ________.
A) manufacturing efficiency and product defect rate
B) operating income and the use of the center's assets
C) customer satisfaction and market share
D) generation of sales revenues and control of operating expenses
Q2) The number of inspections,number of service calls and number of batches are all examples of ________.
A) direct labor costs
B) service costs
C) cost drivers
D) allocable costs
Q3) The manager of a revenue center is responsible for generating profits.
A)True
B)False
Q4) Manufacturing overhead costs,which are also known as indirect costs,cannot be cost-effectively traced to products.
A)True
B)False
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Chapter 25: Short-Term Business Decisions
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181 Verified Questions
181 Flashcards
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Sample Questions
Q1) Special pricing orders increase operating income if the special price exceeds the differential costs of filling the special order.
A)True
B)False
Q2) Superior Containers produces restaurant storage containers .The company makes two sizes of containers: regular (55 gallon)and large (100 gallon).Demand for the products is so high that Superior can sell as many of each size as it can produce.The company uses the same machinery to produce both sizes.The machinery can be run for only 2,500 hours per period.Superior can produce 20 regular containers every hour,whereas it can produce 8 large containers in the same amount of time.Fixed costs amount to $250,000 per period.Sales prices and variable costs are as follows:
\[\begin{array} { | l | r | r | }
\hline \text { Per Unit } &{ \text { Regular } } &{ \text { Large } } \\
\hline \text { Sales price } & \$ 105 & \$ 225 \\
\hline \text { Variable costs } & 28 & 42 \\
\hline
\end{array}\] To maximize profits,how many of each size container should Superior produce?
Given this product mix,what will the company's operating income be?
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Chapter 26: Capital Investment Decisions
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142 Flashcards
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Sample Questions
Q1) Joanne,Inc.is evaluating two possible investments in depreciable plant assets.The company uses the straight-line method of depreciation.The following information is available: \[\begin{array} { | l | r | r | }
\hline & \text { Investment A } & \text { Investment B } \\
\hline \text { Initial capital investment } & \$ 110,000 & \$ 153,000 \\
\hline \text { Estimated useful life } & 10 \text { years } & 10 \text { years } \\
\hline \text { Estimated residual value } & 0 & \$ 30,000 \\
\hline \text { Estimated annual net cash inflow for 10 years } & \$ 21,000 & \$ 46,000 \\
\hline \text { Required rate of return } & 12 \% & 14 \% \\
\hline
\end{array}\] Calculate the payback period for Investment B.(Round your answer to two decimal places.)
A) 3.33 years
B) 1.83 years
C) 3.81 years
D) 5.24 years
Q2) What are the strengths of the net present value capital budgeting method?
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