Financial Accounting
Final Test Solutions
Course Introduction
Financial Accounting introduces students to the fundamental concepts, principles, and practices of accounting as they apply to the preparation, analysis, and interpretation of financial statements for external users. Topics include the accounting cycle, accrual accounting, financial statement components, measurement of assets and liabilities, and accounting standards. Through real-world examples and practical exercises, students will develop the skills necessary to record transactions, understand regulatory requirements, and analyze the financial health of an organization, providing a critical foundation for further study and professional application in business and finance.
Recommended Textbook
Cornerstones of Cost Accounting 1st Canadian Edition by Don Hansen
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19 Chapters
2309 Verified Questions
2309 Flashcards
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Page 2
Chapter 1: A: Basic Cost Management Concepts
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239 Verified Questions
239 Flashcards
Source URL: https://quizplus.com/quiz/65989
Sample Questions
Q1) Refer to the figure.What is the total product cost?
A)$615,000
B)$764,000
C)$969,000
D)$1,179,000
Answer: C
Q2) The following information pertains to Fry Enterprises: \[\begin{array} { l c } \text { Cost of goods manufactured } & \$ 450,000 \\ \text { Bepinning wark-in-process inventary } & 210,000 \\ \text { Ending work-in-process inventory } & 180,000 \\ \text { Manufacturing overhead } & 150,000 \end{array}\] What are the prime costs for the year?
A)$270,000
B)$300,000
C)$360,000
D)$480,000
Answer: A
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3
Chapter 1: B: Basic Cost Management Concepts
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32 Verified Questions
32 Flashcards
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Sample Questions
Q1) Discuss the three forms of accounting certification.Which form of certification do you believe is best for management accountants? Why?
Answer: The three forms of certification are the Certified Public Accountant (CPA),the Certified Management Accountant (CMA),and the Certified Internal Auditor (CIA).Although each certification can prove to be valuable for management accountants,the CMA is tailored to fit the needs of management accountants.The CPA has a public-accounting orientation,and the CIA has an internal-auditing orientation.Only the CMA specifically addresses the professional requirements of a management accountant.
Q2) Explain what is meant by confidentiality and why it is important.
Answer: Management accountants are entrusted with sensitive information about their companies and their dealings with outside firms.Confidentiality standards require that accountants honour this trust.They cannot disclose confidential information without the permission of the company,unless legally required to do so.They must monitor their subordinates to make sure that they are upholding the confidentiality standard.They may not use or appear to use confidential information acquired in their work for unethical or illegal advantage.
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Page 4
Chapter 2: Cost Behaviour
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122 Verified Questions
122 Flashcards
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Sample Questions
Q1) Assuming costs are represented on the vertical axis and volume of activity on the horizontal axis,which of the following costs would be represented by a line that starts at the origin and reaches a maximum value beyond which the line is parallel to the horizontal axis?
A)total direct material costs
B)a consultant paid $100 per hour with a maximum fee of $2,000
C)employees who are paid $15 per hour and guaranteed a minimum weekly wage of $300
D)rent on exhibit space at a convention
Answer: B
Q2) Refer to the figure.Using the high-low method,what is the estimated variable cost per unit of production?
A)$1.26
B)$1.53
C)$1.65
D)$1.75
Answer: C
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Page 5
Chapter 3: Cost-Volume-Profit Analysis
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107 Verified Questions
107 Flashcards
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Sample Questions
Q1) Refer to the figure.What is the break-even point in units for Kringel?
A)33,334 units
B)40,000 units
C)100,000 units
D)200,000 units
Q2) Sarah Smith,a sole proprietor,has the following projected figures for next year: \(\begin{array}{lr}
\text { Selling price per unit } & \$ 150 .00\\
\text { Contribution margin per unit } & \$ 45.00 \\
\text { Total fixed costs } & \$630,000 \end{array}\)
What is the break-even point in dollars?
A)$189,000
B)$426,000
C)$900,000
D)$2,100,000
Q3) In the cost-volume-profit analysis,what are two ways management can deal with risk and uncertainty?
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Chapter 4: Job-Order Costing Systems
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102 Verified Questions
102 Flashcards
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Sample Questions
Q1) What type of costing system would manufacturers that produce unique or customized products employ?
A)a process costing system
B)a job-costing system
C)a homogeneous costing system
D)a job process system
Q2) In the long run,for any product to be viable,its price must cover which type of costs?
A)full cost
B)variable cost
C)fixed cost
D)mixed costs
Q3) Refer to the figure.If the rework is considered abnormal spoilage,what is the cost of job 492?
A)$3,140
B)$5,500
C)$5,640
D)$5,760
Q4) Explain why actual costing systems are rarely used in practice.
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Chapter 5: Process Costing
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132 Flashcards
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Sample Questions
Q1) Refer to the figure.If a total of $11,050 in production costs were incurred,how much cost would be assigned to the units completed?
A)$3.250
B)$8,287.50
C)$9,750
D)$11,050
Q2) Refer to the figure.What are the conversion costs in the Finishing Department?
A)$35,000
B)$37,500
C)$40,000
D)$57,500
Q3) Refer to the figure.What is Department A's cost per unit for materials using the weighted average method?
A)$2.16
B)$2.88
C)$3.43
D)$3.60
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8
Chapter 6: Activity-Based Costing
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164 Verified Questions
164 Flashcards
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Sample Questions
Q1) Which of the following statements is characteristic of ABC?
A)A vital attribute of an ABC database is the cost of individual departments.
B)The ultimate objective of activity classification is to build heterogeneous cost pools.
C)When unbundling general ledger costs to an ABC database,we are more concerned about "How are the dollars spent?" than "What is spent?"
D)ABC costs are calculated once used until the product is discontinued.
Q2) Refer to the figure.What are the departmental overhead rates for the moulding and finishing department,respectively?
A)$8.33; $2
B)$12.50; $2.50
C)$25; $10
D)$25; $2.50
Q3) Refer to the figure.How much purchasing overhead cost will be assigned to Product X using the number of purchase orders?
A)$50,000
B)$100,000
C)$133,500
D)$80,000,000
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9
Chapter 7: Allocating Costs of Support Departments and Joint Products
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137 Verified Questions
137 Flashcards
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Sample Questions
Q1) Refer to the figure.What are the total costs to be allocated from Department S1?
A)$800
B)$9,500
C)$15,000
D)$15,573
Q2) What is the term for products with substantial value that are produced simultaneously by the same process up to a split-off point?
A)by-products
B)joint products
C)minor products
D)major products
Q3) Which of the following methods allocates support department costs?
A)direct allocation method
B)reciprocal allocation method
C)sequential allocation method
D)multi-step allocation method
Q4) Describe the differences between the direct,sequential,and reciprocal methods of allocating support department costs to production departments.
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Q5) Compare and contrast the various methods of accounting for joint product costs.
Chapter 8: Budgeting for Planning and Control
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154 Verified Questions
154 Flashcards
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Sample Questions
Q1) The static budget variance for materials is $200 F and the budgeted cost for materials is $52,000.If the budgeted volume is 13,000 and the actual volume is 13,500,what is the flexible budget variance?
A)$1,800 F
B)$2,000 F
C)$2,200 F
D)$3,000 F
Q2) If the static budget variance for materials is $200 F and the budgeted cost for materials is $52,000,what is the actual cost of materials?
A)$51,200
B)$51,800
C)$52,000
D)$52,200
Q3) What differences do volume variances examine?
A)the differences between static budget and actual costs
B)the differences between flexible budget and static budget
C)the differences between static budget and the rolling budget
D)the differences between flexible budget and rolling budget
Q4) Compare and contrast static budgets,flexible budgets,and activity-based budgets.
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Chapter 9: Standard Costing: a Functional-Based Control Approach
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86 Flashcards
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Sample Questions
Q1) Dubuque Company uses three materials in the production of their product.The materials,A,B,and C,have the following standards: \(\begin{array}{llll}
\text { Material } & \text { Standard Mix } & \text { Standard Unit Price } & \text { Standard Cost }\\
\hline\text { A } & 5,000 \text { units } & \$ 2.00 \text { per unit } & \$ 10,000 \\
\text { B } & 3,000 \text { units } & 4.00 \text { per unit } & \$ 12,000 \\
\text { C } & 2,000 \text { units } & 3.00 \text { per unit } & \$ 6,000\\
\\
\text { Yield }& 9,000 \text { units }
\end{array}\) During April,the following actual production information was provided: \[\begin{array} { c c }
\text { Materal } & \text { Actual Mix } \\
\text { A } & \text { 40,000 units } \\
\text { B } & 20,000 \text { units } \\
\text { C } & 10,000 \text { units }
\end{array}\] Yield 60,000 units
Calculate the materials usage,mix,and yield variances.
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Page 12
Chapter 10: Responsibility Accounting,performance
Evaluation,and Transfer Pricing
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) Which are examples of perquisites?
A)nice office and salary
B)use of a company jet and nice office
C)salary and country club memberships
D)use of company jet and wages
Q2) Which department is likely to be an investment centre?
A)machining department
B)food products division
C)personnel department
D)accounting department
Q3) Under what conditions are multiple measures of performance beneficial?
A)if they are all financial measures
B)if they include nonfinancial operating measures
C)if they focus only on short-run factors
D)if they focus only on continuous improvement
Q4) Refer to the figure.What is the operating asset turnover for A?
A)0.10
B)0.15
C)2.50
D)4.00
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Chapter 11: Tactical Decision Making
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) Which costs are important when making a decision between two alternatives?
A)Variable costs may not be relevant when the decision alternatives have the same activity levels.
B)Variable costs are not relevant when the decision alternatives have different activity levels.
C)Sunk costs are always relevant.
D)Fixed costs are never relevant.
Q2) Listed below are the steps in the tactical decision-making process. I. Comparing relevant costs and relating to stratepre goals
II. Identifying feasible alternatives
III. Identifying costs and benefits and elininating irrelevant costs
IV. Selecting best alternative
V. Defining the problem What is the proper sequence of steps?
A)I,II,V,III,IV
B)II,I,V,III,IV
C)V,II,III,I,IV
D)V,III,II,IV,I
Q3) What are relevant costs? How do they relate to decision making?
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Chapter 12: Pricing and Profitability Analysis
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102 Flashcards
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Sample Questions
Q1) Which of the following markets is characterized by the following: a single firm in the industry,a unique product,and difficult entry into the industry?
A)perfectly competitive market
B)monopolistic competition
C)monopoly
D)oligopoly
Q2) Refer to the figure.What is Taylor's price volume variance?
A)$8,000 (U)
B)$68,000 (U)
C)$160,000 (U)
D)$168,000 (U)
Q3) Refer to the figure.What is the net income for Eastwood using the variable costing method?
A)$412,000
B)$480,000
C)$600,000
D)$1,200,000
Q4) What are some of the pricing practices regulated by law?
Q5) Discuss the limitation of profit measurement.
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Chapter 13: Strategic Cost Management
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120 Verified Questions
120 Flashcards
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Sample Questions
Q1) Refer to the figure.What is the target price per unit?
A)$318
B)$378
C)$390
D)$450
Q2) Bill Jones has decided to purchase a printer.He has narrowed the choice to two: Brand A and Brand B.Both brands have the same speed and use the same type of paper.Both come from companies with good reputations.The selling price for each is identical.After some review,Bill discovers that the cost of operating and maintaining Brand A over a three-year period is estimated to be $300.For Brand B,the operating and maintenance cost is $150.The sales agent for Brand B emphasizes the lower operating and maintenance cost.She claims that it is lower than any other printer.In addition,she provides Bill with a copy of an article appearing in a PC magazine that rates service performance of various printers.Brand B is rated number one.
a.Which brand should Bill buy? Why?
b.What is the total product purchased by Bill?
c.What does it mean to obtain a competitive advantage? What role does the cost management system play in helping to achieve this goal?
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Page 16
Chapter 14: Activity-Based Management
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116 Verified Questions
116 Flashcards
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Sample Questions
Q1) Which of the following is the order of the elements of responsibility accounting?
A)establish performance measures,define responsibility,measure performance,and reward based on performance.
B)define responsibility,establish performance measures,measure performance,and reward based on performance.
C)define responsibility,measure performance,establish performance measures,and reward based on performance
D)define responsibility,establish performance measures,measure performance,and reward based on performance
Q2) What does activity-based management attempt to do?
A)identify and eliminate all unnecessary activities
B)decrease the efficiency of necessary activities
C)add new activities that decrease value
D)use a single overhead pool to allocate shared costs
Q3) What is responsibility accounting? Compare and contrast financial-based responsibility accounting with activity-based responsibility accounting.
Q4) What is process value analysis?
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Chapter 15: The Balanced Scorecard: Strategic-Based Control
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Sample Questions
Q1) Which feature is related solely to strategic-based responsibility and not to activity-based responsibility?
A)financial perspective
B)process perspective
C)team accountability
D)customer perspective
Q2) Which is a major difference between activity-based measures and strategic-based measures?
A)Strategic-based measures are linked to strategy.
B)Strategic-based measures are used to align objectives.
C)Strategic-based measures are balanced measures.
D)Strategic-based measures include long term focus of the financial perspective.
Q3) What are stretch targets?
A)aimed at stretching the firm's resources.
B)aimed at static standards.
C)aimed at transforming the organization within three to five years if achieved.
D)aimed at transforming the organization immediately.
Q4) Compare and contrast activity-based measures and strategic-based measures.
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Q5) Strategic-based performance measures are balanced measures.Give examples of four types of balanced measures.
Chapter 16: Quality and Environmental Cost Management
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153 Flashcards
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Sample Questions
Q1) Refer to the figure.What is the change in environmental costs from 20X2 to 20X3?
A)$12,000
B)$37,000
C)$41,000
D)$672,000
Q2) Which of the following is an example of a quality performance report?
A)quality design report
B)interim standard report
C)multiple-period cost report
D)long-range price report
Q3) Refer to the figure.As a result of quality improvements,by how much have profits increased?
A)$15,000
B)$22,500
C)$61,500
D)$97,500
Q4) What does quality mean and how has improving quality increased firm value?
Q5) Within the robust view of strategy,describe the management strategy to reduce quality costs recommended by the American Society for Quality Control.
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Chapter 17: Lean Accounting and Productivity Measurement
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138 Flashcards
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Sample Questions
Q1) Which of the following is an example of an financial performance measure on a box scorecard?
A)dock-to-dock days
B)on-time delivery
C)first time through D)weekly sales
Q2) What is the JIT solution?
A)It requires carrying materials inventory to lower the cost of inventory without production delays.
B)It requires selection of vendors based on lowest cost alone.
C)It negotiates long-term contracts with involved suppliers located closest to the production facility
D)It requires a solid forecast to push production.
Q3) Refer to the figure.What is the partial operational measure for power for 20X1? A)4.00
Q4) Discuss the linkage between quality and productivity.
Q5) Explain the difference between partial and total measures of productivity.
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Chapter 18: Inventory Management: Economic Order
Quantity,jit,and the Theory of Constraints
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Sample Questions
Q1) Refer to the figure.If there is a delay in shipping the item,approximately how many days can be covered by the safety stock?
A)4 days
B)25 days
C)30 days
D)100 days
Q2) Refer to the figure.What is the economic order quantity for this item?
A)16 units
B)400 units
C)500 units
D)160,000 units
Q3) Waterhouse Company decreased the size of inventory order quantities that had previously been determined using the EOQ model.If demand remains the same,what is the impact on the number of orders made during the year?
A)increase
B)no change
C)decrease
D)substantial decrease
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