Corporate Accounting Exam Practice Tests
Course Introduction
Corporate Accounting focuses on the accounting principles, standards, and practices applied to business organizations, particularly corporations. The course covers topics such as preparation and analysis of financial statements, accounting for share capital and debentures, amalgamation and liquidation of companies, and the treatment of dividends and reserves. Students will develop an understanding of regulatory frameworks, compliance requirements, and ethical considerations in corporate reporting while learning how to interpret financial information for decision-making. This course provides a foundation for further study in advanced accounting, auditing, and financial management.
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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Chapter 18: Introduction to Managerial Accounting
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210 Verified Questions
210 Flashcards
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Sample Questions
Q1) At the beginning of the year,Swift,Inc.'s Work-in-Process Inventory account had a balance of $123,000.During the year,$250,000 of direct materials were used in production,and $71,000 of direct labor costs were incurred.Manufacturing overhead amounted to $829,000.The cost of goods manufactured was $670,000.What is the balance in the Work-in-Process Inventory account on December 31?
A) $1,150,000
B) $1,340,000
C) $670,000
D) $603,000
Answer: D
Q2) Which of the following correctly describes the accounting for factory depreciation?
A) Factory depreciation is a product cost and is expensed as incurred.
B) Factory depreciation is a period cost and is expensed as incurred.
C) Factory depreciation is a product cost and is expensed when the manufactured product is sold.
D) Factory depreciation is a period cost and is expensed when the manufactured product is sold.
Answer: C
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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) On January 1,Biden,Inc.'s Work-in-Process Inventory account had a balance of $30,600.During the year,$58,300 of direct materials was placed into production.Manufacturing wages incurred amounted to $84,000,of which $64,500 were for direct labor.Manufacturing overhead is allocated on the basis of 120% of direct labor cost.Actual manufacturing overhead was $90,400.Jobs costing $220,500 were completed during the year.What is the December 31 balance of Work-in-Process Inventory?
A) $153,400
B) $30,600
C) $230,800
D) $10,300
Answer: D
Q2) Why would the manager of a service company need to use job order costing?
Answer: Service companies,like manufacturing companies,work on individual,unique jobs and need to know the cost of the jobs.Knowing the full cost of a job allows for better pricing decisions.
Q3) Leonard Manufacturing Systems uses job order costing and a perpetual inventory system.When recording the sale of a job,which account(s)is(are)debited?
Answer: Accounts Receivable and Cost of Goods Sold accounts are debited.
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Page 4
Chapter 20: Process Costing
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167 Verified Questions
167 Flashcards
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Sample Questions
Q1) When finished products are sold,Sales Revenue is debited,and Cost of Goods Sold is credited.
A)True
B)False
Answer: False
Q2) A process is one of a series of steps in manufacturing production,usually associated with making large quantities of similar items.
A)True
B)False
Answer: True
Q3) Cost amounts that are transferred out of one department become the transferred in cost for the next department.
A)True
B)False
Answer: True
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) Roy's Raingear produces a single product and reports the following data:
\(\begin{array}{|l|r|l|}
\hline \text { Price } & \$ 8.84 &\text { per unit } \\
\hline \text { Variable cost } & \$ 6 & \text { per unit } \\
\hline \text { Fixed cost } & \$ 21,000 &\text { per month } \\
\hline \text { Volume } & 13,000 &\text { per month } \\
\hline
\end{array}\) If the company reduces its price to $7.75,it believes that the volume will go up to 15,000 units.
How would this change affect operating income?
A) It will go up by $10,670.
B) It will go up by $15,920.
C) It will go down by $10,670.
D) It will go down by $15,920.
Q2) During the current year,Albee Company incurred $7,000 of fixed and $16,000 variable costs.If the number of units produced is halved next year,the company will incur $3,500 as fixed and $8,000 as variable costs.
A)True
B)False
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Chapter 22: Master Budgets
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172 Verified Questions
172 Flashcards
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Sample Questions
Q1) What is the cornerstone of the master budget for a merchandising company? Why?
Q2) The final step in the process of creating the master budget is the preparation of the
A) operating budget
B) budgeted balance sheet
C) budgeted statement of cash flows
D) cash budget
Q3) Components of the master budget are the operating budget,the capital expenditures budget,and the financial budget.
A)True
B)False
Q4) To calculate budgeted direct labor costs,multiply the number of units to be produced by the number of projected direct labor hours.Next,multiply that total by the average direct cost per hour.
A)True
B)False
Q5) A master budget is a financial plan for a specific segment of an organization. A)True B)False
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Chapter 23: Flexible Budgets and Standard Cost Systems
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204 Verified Questions
204 Flashcards
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Sample Questions
Q1) The efficiency variance measures ________.
A) the difference between the quantity used by the company and the quantity used by its competitors
B) the change in quantities used over time
C) how well the business uses its materials or human resources
D) how quickly direct materials are processed into finished goods
Q2) The sales volume variance is the difference between the ________.
A) actual results and the expected results in the flexible budget for the actual units sold
B) expected results in the flexible budget for the actual units sold and the static budget
C) static budget and actual amounts due to differences in sales price
D) flexible budget and static budget due to differences in fixed costs
Q3) The fixed overhead cost variance measures the difference between actual fixed overhead and budgeted fixed overhead to determine the controllable portion of total fixed overhead variance.
A)True
B)False
Q4) What does the variable overhead cost variance measure?
Q5) List three ways in which using a standard cost system helps managers.
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Page 8
Chapter 24: Cost Allocation and Responsibility Accounting
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189 Verified Questions
189 Flashcards
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Sample Questions
Q1) Which of the following is the correct formula for calculating residual income?
A) Weighted average cost of capital - Net operating profit after tax
B) Operating income - Minimum acceptable operating income
C) Historical cost of assets - Accumulated depreciation
D) Operating income / Average assets
Q2) When using financial performance measures,which of the following statements is incorrect?
A) Most companies use a weighted-average to determine the amount of average inventory.
B) Average total assets are used for both ROI and RI computations.
C) The limitations of financial performance measures reinforce the importance of the balanced scorecard.
D) In general, calculating ROI based on the net book value of assets gives managers an incentive to continue using old, outdated equipment because its low net book value results in a higher ROI.
Q3) Activity-based costing (ABC)focuses on the costs of activities when allocating indirect costs to products and services.
A)True
B)False
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Page 9
Chapter 25: Short-Term Business Decisions
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181 Verified Questions
181 Flashcards
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Sample Questions
Q1) Marlow Company makes bulk quantities of cleaning fluids.They currently sell 1,400 containers a month at a sales price of $25 per unit.If they add a new scent,they could charge $30 per unit for the improved product.It would cost them a total of $1,000 per month to make that alteration.If they decide to process further,it will improve their operating income.
A)True
B)False
Q2) When considering whether to replace the building roof,the total amount paid for previous roof repairs is relevant to the business decision.
A)True
B)False
Q3) If a business is considering whether to replace old equipment with newer equipment,the cost of operating the old equipment,compared to the cost of operating the new equipment,is relevant to the business decision.
A)True
B)False
Q4) Define joint cost.Should joint costs be considered in the decision to sell or further process the product? Explain your answer.
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Page 10
Chapter 26: Capital Investment Decisions
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142 Verified Questions
142 Flashcards
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Sample Questions
Q1) When computing the present value,the interest rate will vary depending on the amount of risk.Riskier investments,such as FDIC-insured bank deposits,command higher interest rates.
A)True
B)False
Q2) Which of the following is the rate of return,based on discounted cash flows,a company can expect to earn by investing in a capital asset?
A) accounting rate of return
B) bank interest rate
C) internal rate of return
D) return on investment
Q3) Which capital budgeting method uses accrual accounting,rather than net cash flows,as a basis for calculations?
A) payback
B) accounting rate of return
C) net present value
D) internal rate of return
Q4) If net cash inflows are unequal,how is the payback period (in years)of an investment is calculated?
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