Business Accounting Final Exam
Course Introduction
Business Accounting introduces students to the fundamental principles and practices of accounting within a business context. The course covers essential topics such as recording financial transactions, preparing financial statements, understanding balance sheets, income statements, and cash flow statements, and analyzing accounting information for decision-making. Students will develop skills in applying accounting concepts to real-world business scenarios, including budgeting, cost analysis, and performance evaluation. By the end of the course, learners will have a solid understanding of how accounting functions as a critical tool for managing and evaluating business operations.
Recommended Textbook Cornerstones of Managerial Accounting 3rd Canadian Edition by Maryanne Mowen
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14 Chapters
2190 Verified Questions
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Page 2
Chapter 1: Introduction to Managerial Accounting
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66 Flashcards
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Sample Questions
Q1) The managerial activity of monitoring a plan's implementation and taking corrective action as needed is referred to as decision making.
A)True
B)False Answer: False
Q2) Customer value is the difference between what a customer receives and what they give up when buying a product or service.
A)True
B)False Answer: True
Q3) Managerial accounting is designed primarily for external users.
A)True
B)False Answer: False
Q4) Positions that have direct responsibility for the basic objectives of an organization are referred to as staff positions.
A)True
B)False Answer: False
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Chapter 2: Basic Managerial Accounting Concepts
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222 Verified Questions
222 Flashcards
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Sample Questions
Q1) professor's salary at a college
A)Selling expense
B)Administrative expense
C)Direct materials
D)Direct labour
E)Overhead Answer: D
Q2) Plant manager's salary
A)Period
B)Product Answer: B
Q3) Cost of goods sold is the total product cost of the units sold during a period.
A)True
B)False Answer: True
Q4) Research and development costs would be classified as period costs.
A)True
B)False Answer: True
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Chapter 3: Cost Behaviour
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Sample Questions
Q1) What is an example of a discretionary fixed cost?
A)insurance
B)advertising
C)factory rent
D)direct materials
Answer: B
Q2) May reveal the presence of outliers
A)High-low method
B)Scattergraph method
C)Method of least squares
Answer: B
Q3) Explain the difference between a committed fixed cost and a discretionary fixed cost.
Answer: A committed fixed cost is normally unchangeable by management.A committed fixed cost usually is the result of a long-term contract.An example of a committed fixed cost would be a lease agreement.If output decreases,the lease payments are generally still required.A discretionary fixed cost can easily be changed at management discretion.An example of a discretionary fixed cost would be the cost of advertising.Management may make the decision to cut costs by reducing advertising costs.
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Chapter 4: Costvolumeprofit Analysis: a Managerial Planning Tool
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161 Flashcards
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Sample Questions
Q1) To determine the number of units that must be sold to earn a target operating income,one can use the equation for operating income and replace the operating income term with the target operating income.
A)True
B)False
Q2) Refer to the Figure.What is the overall sales revenue at break-even?
A)$387,200
B)$778,800
C)$968,000
D)$1,288,700
Q3) The break-even point in sales dollars is equal to the break-even units multiplied by the variable cost per unit.
A)True
B)False
Q4) Refer to the Figure.What is the break-even point in sales dollars?
A)$130,000
B)$195,000
C)$252,000
D)$342,000
Page 6
Q5) How can a multi-product firm determine its break-even point?
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Chapter 5: Job-Order Costing
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177 Flashcards
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Sample Questions
Q1) The journal entry for $17 of underapplied overhead is:
\(\begin{array} { | c | l | l | }
\hline \text { Cost of Goods Sold } & 17 & \\
\text { Overhead Control } && 17 \\
\hline \end{array}\)
A)True
B)False
Q2) Which of the following costs is NOT included on a job-order cost sheet?
A)direct material costs
B)applied factory overhead costs
C)direct labour costs
D)actual factory overhead costs
Q3) Schedule of costs of goods sold is prepared
A)Completion of job
B)End of each accounting period
C)Materials are removed from storage into production
D)Product is sold
E)End of year
Q4) Discuss overapplied and underapplied overhead.
Page 7
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Chapter 6: Process Costing
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Sample Questions
Q1) Which of the following is a cost transferred from a prior process to a subsequent process?
A)a work-in-process transfer cost
B)the beginning work-in-process cost
C)a transferred-in cost
D)an added-in cost
Q2) CandyMan Manufacturing uses a process-cost system and computes cost using the weighted average method.During the current period,the beginning work-in-process inventory cost was $15,000.Manufacturing cost added was $65,000.Suppose CandyMan's ending work-in-process inventory was valued at $22,000.What must have been the cost of goods transferred?
A)$43,000
B)$58,000
C)$65,000
D)$80,000
Q3) Costing system used by a vitamin manufacturer
A)Process costing
B)Job order costing
Q4) Describe how process costing for services differs from process costing for manufactured goods.
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Chapter 7: Activity-Based Costing and Management
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154 Verified Questions
154 Flashcards
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Sample Questions
Q1) What is the term for the process of choosing among different sets of activities caused by competing strategies?
A)activity elimination
B)activity reduction
C)activity costing
D)activity selection
Q2) What costs are incurred to determine whether products and services are conforming to their requirements or customer needs?
A)prevention costs
B)appraisal costs
C)internal failure costs
D)external failure costs
Q3) What is the aim of activity-based management?
A)to identify and eliminate all unnecessary activities
B)to decrease the efficiency of necessary activities
C)to add new activities that decrease value
D)to increase non-value-added activities
Q4) Zero defects means that most products conform to specifications.
A)True
B)False
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Chapter 8: Absorption and Variable Costing, and Inventory Management
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Sample Questions
Q1) Variable selling expense
A)Variable costing income statement
B)Absorption costing income statement
C)Both types of income statements
Q2) Refer to the Figure.What is the cost of ending inventory for Westwood using the variable costing method?
A)$80,000
B)$120,000
C)$180,000
D)$320,000
Q3) Variable overhead for units sold
A)Variable costing income statement
B)Absorption costing income statement
C)Both types of income statements
Q4) Inventory under absorption costing includes direct materials,direct labour,variable factory overhead,and fixed factory overhead.
A)True
B)False
Q5) What are the traditional reasons for carrying inventory?
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Chapter 9: Budgeting, production, cash, and Master Budget
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165 Flashcards
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Sample Questions
Q1) Refer to the Figure.What is Bingimton cost of goods sold per unit?
A)$12.60
B)$14.60
C)$16.60
D)$18.00
Q2) In which order are budgets prepared?
A)production budget, sales budget, direct labour budget
B)production budget, cost of goods sold budget, direct labour budget
C)sales budget, cash budget, production budget
D)sales budget, production budget, direct materials purchases budget
Q3) What are the advantages of budgeting?
Q4) What does the selling and administrative expenses budget include?
A)cost of goods sold
B)overhead
C)fixed production expense
D)variable cost of commissions
Q5) One use of budgets is for planning.
A)True
B)False
Q6) Does a not-for-profit agency need to budget? Why or why not?
Page 11
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Chapter 10: Standard Costing: a Managerial Control Tool
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Sample Questions
Q1) Refer to the Figure.What are the labour rate variance and the labour efficiency variance,respectively?
A)$2,250 U and $4,000 U
B)$2,250 F and $4,000 F
C)$2,500 U and $3,750 U
D)$2,500 F and $3,750 F
Q2) Which of the following statements is characteristic of currently attainable standards?
A)They can be achieved under efficient operating conditions.
B)No allowance is made for normal breakdowns, interruptions, etc.
C)They are challenging and not achievable.
D)They tend to achieve lower performance levels from personnel.
Q3) Refer to the Figure.What are Fantastic's standard hours allowed for a volume of 100,000 blades?
A)189,000 hours
B)190,000 hours
C)210,000 hours
D)211,000 hours
Q4) How are standards developed?
Q5) Explain the kaizen approach to costing.
Page 12
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Chapter 11: Flexible Budgets and Overhead Analysis
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149 Flashcards
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Sample Questions
Q1) What is the fixed overhead volume variance? Suppose that the fixed overhead volume variance is unfavourable; what does that mean?
Q2) Refer to the Figure.What is the flexible budget for August?
A)$142,000
B)$159,000
C)$165,000
D)$171,000
Q3) Flexible budget
A)(Actual hours standard hours)SVOR
B)Prediction of what activity costs will be as activity output changes
C)A measure of capacity utilization
D)Actual variable overhead (SVOR × actual hours)
E)Difference between the actual amount and the flexible budget amount
F)A budget that specifies costs for a range of activity
G)A budget for a particular level of activity
H)Estimating activity output and then assessing the cost of resources to produce this output
I)A report that compares actual with planned costs
J)Difference between actual and budgeted fixed overhead
Q4) Define static budget and flexible budget.What is each type used for?
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Chapter 12: Performance Evaluation and Decentralization
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Sample Questions
Q1) Ding Company had operating income of $140,000,sales of $437,500,and turnover of 0.5.What is Ding's ROI?
A)16%
B)32%
C)50%
D)64%
Q2) What is the best transfer price when the transferred product has a competitive outside market?
A)the cost-based price
B)the negotiated price
C)the market price
D)the price set by central management
Q3) Residual income is sometimes used to overcome the tendency of ROI to discourage investments that are profitable for the company but that lower the division's ROI.
A)True
B)False
Q4) How is EVA (economic value added)different from standard residual income calculations?
Q5) Describe the four perspectives of the Balanced Scorecard.
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Chapter 13: Short-Run Decision Making: Relevant Costing
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Sample Questions
Q1) Refer to the Figure.Assume that the cost of logs falls by half.Should Donder sell the sawdust at split-off or process it further,and what is the effect on income?
A)Process further; the reduction in the cost of logs makes that option more profitable than it was before.
B)Sell at split-off; the decrease in the cost of the logs makes that option more profitable than it was before.
C)Sell at split-off; the reduction in the cost of the logs is irrelevant.
D)Process further; the reduction in the cost of the logs will lower further processing costs.
Q2) In deciding the optimal mix of products that use a constrained resource,it is important to determine the contribution margin per unit of scarce resource.
A)True
B)False
Q3) In keep-or-drop decisions,both the segment's contribution margin and its segment margin are useful in evaluating the performance of the segment.
A)True
B)False
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Chapter 14: Capital Investment Decisions
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153 Flashcards
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Sample Questions
Q1) Interest rate used to discount future cash flows
A)Payback period
B)Accounting rate of return
C)Net present value
D)Internal rate of return
E)Discount rate
F)Annuity
G)Postaudit
H)Compounding of interest
I)CCA Tax Shield
J)Future Value
K)Discounted cash flows
Q2) What is the term for the earning of interest on interest?
A)the present value of interest
B)the future value of interest
C)the discount rate of interest
D)the compounding of interest
Q3) What are some reasons why firms use the payback period model in capital investment decision making?
Q4) What is a postaudit? What are the advantages and disadvantages of the postaudit?
Page 16
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