Business Accounting Test
Bank
Course Introduction
Business Accounting is an introductory course that provides students with a foundational understanding of key accounting principles and practices. The course covers essential topics such as the accounting cycle, the preparation and interpretation of financial statements, and the analysis of business transactions. Students will learn how to record, classify, and summarize financial data, as well as apply accounting concepts to decision-making processes in a business context. By the end of the course, students are equipped with the knowledge and skills necessary to manage financial information and support effective business operations.
Recommended Textbook
Fundamental Managerial Accounting Concepts 9th Edition by Thomas P Edmonds
Available Study Resources on Quizplus
14 Chapters
2127 Verified Questions
2127 Flashcards
Source URL: https://quizplus.com/study-set/3705
Page 2
Chapter 1: Management Accounting and Corporate Governance
Available Study Resources on Quizplus for this Chatper
146 Verified Questions
146 Flashcards
Source URL: https://quizplus.com/quiz/73780
Sample Questions
Q1) Which of the following statements concerning manufacturing costs is incorrect?
A) All salaries incurred by the sales department are expensed as incurred.
B) Direct labor costs are recorded initially in an inventory account.
C) Depreciation on manufacturing equipment is a period cost.
D) The cost of direct materials can be readily traced to products.
Answer: C
Q2) What are upstream costs? What upstream costs would be incurred by a company that produces and sells computer software programs?
Answer: Upstream costs are incurred before a company begins manufacturing a product.For a company producing computer software,upstream costs would include research and development for the product itself and market research.
Q3) If a company misclassifies a general,selling and administrative cost as a product cost in a period when production exceeds sales:
A) net income will be overstated.
B) total assets will be understated.
C) gross margin will be understated.
D) both net income will be overstated and gross margin will be understated
Answer: D
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
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/73779
Sample Questions
Q1) Wu Company incurred $40,000 of fixed cost and $50,000 of variable cost when 4,000 units of product were made and sold. If the company's volume doubles,the company's total cost will:
A) stay the same.
B) double as well.
C) increase but will not double.
D) decrease.
Answer: C
Q2) Select the correct statement regarding fixed costs.
A) Because they do not change, fixed costs should be ignored in decision making.
B) The fixed cost per unit decreases when volume increases.
C) The fixed cost per unit increases when volume increases.
D) The fixed cost per unit does not change when volume decreases.
Answer: B
Q3) The contribution margin format income statement is not widely used for external financial reporting,but is allowed by GAAP.
A)True
B)False
Answer: False
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
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/73778
Sample Questions
Q1) Newton Company currently produces and sells 4,000 units of a product that has a contribution margin of $6 per unit.The company sells the product for a sales price of $20 per unit.Fixed costs are $18,000.The company is considering investing in new technology that would decrease the variable cost per unit to $8 per unit and double total fixed costs.The company expects the new technology to increase production and sales to 9,000 units of product.What sales price would have to be charged to earn a $99,000 target profit assuming the investment in technology is made?
A) $22
B) $23
C) $15
D) $13
Answer: B
Q2) When sales price,fixed cost,variable cost,and production volume are changing simultaneously,the best approach to determining profitability is:
A) contribution margin.
B) contribution ratio.
C) sensitivity analysis.
D) equation.
Answer: C
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
158 Verified Questions
158 Flashcards
Source URL: https://quizplus.com/quiz/73777
Sample Questions
Q1) Joint products are:
A) easily traced to products.
B) similar products that result from a common process.
C) different products that result from a common process.
D) different products that are combined to create a single product.
Q2) The direct method of allocating service department costs does not take into account the fact that service departments often provide assistance to other service departments.
A)True
B)False
Q3) Sturbridge Company manufactures fine furniture and grandfather clocks.Sturbridge has an excellent reputation,and each grandfather clock sells for several thousand dollars.Which of the following should not be treated as direct costs,assuming the cost object is individual clocks?
A) The clock face
B) The timing mechanism for each clock
C) Wood
D) Depreciation on clock-making equipment
Q4) What cost driver would you use to allocate indirect materials to products?
Q5) What are cost objects? List examples of cost objects.
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/73776
Sample Questions
Q1) Inspection of products may sometimes be considered a batch-level activity.
A)True
B)False
Q2) Which of the following best describes the impact of undercosting in the allocation of production costs?
A) This is a goal of all companies because undercosting all products allows for larger profit margins.
B) Companies will use target pricing to undercost products.
C) Undercosting some products will lead to overcosting other products, which may then become overpriced and lose market share.
D) Undercosting some products can lead to overcosting other products, which is acceptable because it all balances out in the long run.
Q3) Compared to a traditional two-stage cost allocation system,activity-based costing systems:
A) Use fewer cost centers.
B) Use more cost drivers.
C) Are less expensive to maintain.
D) All of these answers are correct.
Q4) What is the purpose of target pricing? What are the steps in target pricing?
Page 7
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Relevant Information for Special Decisions
Available Study Resources on Quizplus for this Chatper
151 Verified Questions
151 Flashcards
Source URL: https://quizplus.com/quiz/73775
Sample Questions
Q1) Mary must decide between two alternatives for the weekend: babysitting or yard work.If she babysits,she will receive $40 and will incur $15 in transportation costs.If she does yard work,she will receive $40 and will incur $3 in lawn mower gas and oil costs and $5 in transportation costs.The payment she would receive for the jobs is relevant in deciding which alternative to select.
A)True
B)False
Q2) A manager refuses to replace an existing asset even though an extensive analysis indicates that replacement is desirable.One possible explanation for the manager's action is that:
A) A financial loss may be reported in the current period if the asset is replaced.
B) The manager is concerned that his or her superior may think that the original asset purchase was a mistake on the part of the manager.
C) The manager expects to be promoted or transferred in the near future and is concerned primarily about short-term performance.
D) All of these answers are correct.
Q3) 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
150 Verified Questions
150 Flashcards
Source URL: https://quizplus.com/quiz/73774
Sample Questions
Q1) Stuart's Electronics is a relatively small company that provides computer-assisted technology to manufacturing companies.During the last few years,the company has begun to take budgeting seriously.Each year,the budget is developed during a two-day retreat of the company's top management.Lower-level employees say that the budget reflects unrealistic targets that they cannot meet even with their best efforts.What problems are there with Stuart's budgeting process,and what can be done about them?
Q2) The three major components of the master budget are the financial budgets,the capital budgets,and the pro forma financial statements.
A)True
B)False
Q3) In a participative budgeting system,budget information flows in both directions,from bottom to top and from top to bottom.
A)True B)False
Q4) The cash budget is not the same as the pro forma cash flow statement. A)True
B)False
Q5) How do short-term plans differ from long-term plans?
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
156 Verified Questions
156 Flashcards
Source URL: https://quizplus.com/quiz/73773
Sample Questions
Q1) Which of the following is an incorrect statement regarding variances?
A) A variance is favorable when expected sales are more than actual sales.
B) A variance is a difference between budgeted and actual amounts.
C) A variance can be calculated for both revenues and expenses.
D) A variance can be both favorable and unfavorable.
Q2) The Boyle Company estimated that April sales would be 150,000 units with an average selling price of $6.00.Actual sales for April were 149,000 units,and average selling price was $6.12. The sales revenue flexible budget variance was:
A) $6,120 favorable.
B) $6,000 unfavorable.
C) $17,880 favorable.
D) $17,880 unfavorable.
Q3) A cost variance is unfavorable if actual cost exceeds standard cost.
A)True
B)False
Q4) What aspects of variances should managers consider in deciding which variances to investigate?
Q5) Describe several factors that should be considered in establishing standards for use with a standard costing system.
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
145 Verified Questions
145 Flashcards
Source URL: https://quizplus.com/quiz/73772
Sample Questions
Q1) The New Products Division of Testar Company had operating income of $8,000,000 and operating assets of $44,800,000 during the current year.The New Products Division has developed a potential new product that would require $8,500,000 in operating assets and would be expected to provide $1,400,000 in operating income each year.Testar has set a target return on investment (ROI)of 16% for each of its divisions.Assuming that the new product is put into production,calculate the residual income for the division.
A) $832,000
B) $872,000
C) $528,000
D) $672,000
Q2) In a responsibility reporting system,the reports of a particular manager contain summary information about the revenue and cost items directly under his or her control and detailed data on the activities of the responsibility centers that fall under his or her chain of authority.
A)True
B)False
Q3) What are the different bases that can be used to establish transfer prices? Which would you generally recommend?
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/73771
Sample Questions
Q1) Which of the following statements concerning payback analysis is true?
A) An investment with a shorter payback is preferable to an investment with a longer payback.
B) The payback method ignores the time value of money concept.
C) The payback method and the unadjusted rate of return are different approaches that will not consistently lead to the same conclusion.
D) All of these answers are correct.
Q2) Cash outflows generated by capital investments include all of the following except:
A) annual depreciation of the capital asset.
B) initial investment in the capital asset.
C) increase in operating expenses.
D) increase in the amount of required working capital.
Q3) Cash outflows generated by capital investments include all of the following except:
A) depreciation expense.
B) transportation costs.
C) increased operating expenses.
D) increase in the required amount of working capital.
Q4) Describe what is meant by the time value of money.
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
148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/73770
Sample Questions
Q1) The reporting method that includes in the cost of inventory (and cost of goods sold)all product costs,including both fixed and variable costs,is known as:
A) variable costing.
B) total costing.
C) direct costing.
D) absorption costing.
Q2) All of the following costs are accumulated in the Work in Process Inventory account except:
A) depreciation on factory equipment.
B) direct labor costs.
C) manufacturing overhead costs.
D) direct material costs.
Q3) Select the incorrect statement regarding service companies.
A) Service companies do not maintain a Finished Goods Inventory account.
B) Service companies accumulate their service costs in a Work in Process Inventory account similar to manufacturers.
C) Service companies may have raw material costs.
D) Understanding the cost of providing a service is just as important as knowing the cost of making a product.
Page 13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: Job-Order, process, and Hybrid Costing Systems
Available Study Resources on Quizplus for this Chatper
147 Verified Questions
147 Flashcards
Source URL: https://quizplus.com/quiz/73769
Sample Questions
Q1) In a process costing system,a transferred-in cost is the same thing as raw materials cost.
A)True
B)False
Q2) Cooper Manufacturing is currently working on two jobs.The job order cost sheets for Job 101 and Job 102 showed the following information: \[\begin{array} { l r r } & \text { Job } 101 & \text { Job } 102 \\
\text { Direct Materials } & \$ 1 2 , 0 0 0 & \$ 15,000 \\ \text { Direct labor } & 2 4 , 0 0 0 & 45,000 \end{array}\] If overhead is applied to jobs at $0.80 per direct labor dollar,the overhead applied to the two jobs would be:
A) $96,000.
B) $55,200.
C) $151,200.
D) $162,000.
Q3) Why does a company that uses a process costing system need to calculate equivalent units?
Q4) How should a company choose between a job-order costing system and a process costing system?
Page 14
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
153 Verified Questions
153 Flashcards
Source URL: https://quizplus.com/quiz/73768
Sample Questions
Q1) Comparative income statements for Chicago Company are provided below:
\(\begin{array}{c}\text { Chicago Company}\\
\text { Comparative Income Statement}\\
\text { Years Ended December 31,}\\
\begin{array}{lrr}
&\text { Year } 2 &\text { Year } 1\\
\text { Sales } & \$ 288,000 & \$ 302,190 \\
\text { Less cost of goods sold } & 101,350 & 115,400\\
\text { Gross margin } & 186,650& 186,790 \\
\text { Less operating expenses } & 89,970 & 99,770 \\
\text { Income before taxes } & 96,680 & 87,020 \\
\text { Income taxes } & 38,672 & 34,808 \\
\text { Net income } & \$ 58,008 & \$ 52,212
\end{array}\end{array}\)
Required:
Perform a horizontal analysis of Chicago Company's income statement by computing horizontal percentages for each item.Round your answer to one decimal place (i.e.,22.5%).
Q2) Describe the factors involved in communicating useful financial information.
To view all questions and flashcards with answers, click on the resource link above.
Page 15
Chapter 14: Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
149 Verified Questions
149 Flashcards
Source URL: https://quizplus.com/quiz/73767
Sample Questions
Q1) The Valz Corporation had a balance in its Equipment account at the beginning of the year of $650,000.During the year,equipment that originally cost $170,000 and had accumulated depreciation of $40,000 was sold for $134,000.The ending balance of the Equipment account was $550,000.What was the cost of the additional equipment purchased during the year?
A) $70,000
B) $40,000
C) $170,000
D) $174,000
Q2) Use the reconciliation approach to determine cash received from customers for the Boyd Company for the year.Beginning and ending balances of accounts receivable were $6,500 and 5,900,respectively.Sales (all on account)amounted to $127,000.
Q3) Which of the following would be shown as a deduction from net income when calculating net cash flow from operating activities using the indirect method?
A) Decrease in accounts payable for inventory purchases
B) Loss on the sale of equipment
C) Decrease in accounts receivable
D) Increase in salaries payable
To view all questions and flashcards with answers, click on the resource link above. Page 16