Financial and Managerial Accounting Question
Bank
Course Introduction
Financial and Managerial Accounting introduces students to the fundamental principles and practices of accounting, focusing on both external financial reporting and internal managerial decision-making. The course covers the preparation and interpretation of financial statements, accounting cycles, and regulatory frameworks that guide financial accounting. Additionally, it explores managerial accounting concepts such as budgeting, cost analysis, performance measurement, and decision support, equipping students with the analytical tools necessary to aid business planning, control, and strategic management. Through case studies and real-world examples, students learn how accounting information supports effective business operations and ethical financial management.
Recommended Textbook
Managerial Accounting 13th Edition by Carl
Warren
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Page 2
Chapter 1: Managerial Accounting Concepts and Principles
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Sample Questions
Q1) Compute conversion costs given the following data: Direct Materials, $347,500; Direct Labor, $196,300; Factory Overhead, $187,900; and Selling Expenses, $45,290.
A)$543,800
B)$187,900
C)$731,700
D)$384,200
Answer: D
Q2) The vice presidents of production and sales and the controller hold line positions in most large organizations.
A)True
B)False
Answer: False
Q3) In most business organizations, the chief accountant is called the treasurer. A)True
B)False
Answer: False
Q4) Differentiate between period and product costs, including examples of each type of cost.
Answer: 11ea855c_6e65_ebc2_9aec_5132a16edb03_TB6237_00
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Chapter 2: Job Order Costing
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Sample Questions
Q1) In a job order cost accounting system for a service business, materials costs are normally included as part of overhead.
A)True
B)False
Answer: True
Q2) A difference in quantity of materials used on two comparable jobs may be caused by
A)inadequately trained employees
B)poor quality materials
C)employee carelessness
D)all of these
Answer: D
Q3) Which of the following costs are not included in finished goods inventory?
A)direct labor
B)factory overhead
C)chief financial officer's salary
D)direct materials
Answer: C
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4
Chapter 3: Process Cost Systems
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Sample Questions
Q1) The cost of production report reports the cost of the goods sold.
A)True
B)False
Answer: False
Q2) the portion of whole units that are complete with respect to materials or conversion costs
A)cost of production report
B)equivalent units of production
C)manufacturing cells
D)yield
E)just-in-time processing
Answer: B
Q3) In a just-in-time system, processing functions are combined into work centers, sometimes called departments.
A)True
B)False
Answer: False
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Page 5
Chapter 4: Cost Behavior and Cost-Volume-Profit Analysis
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Sample Questions
Q1) Which of the following describes the behavior of a variable cost per unit?
A)varies in increasing proportion with changes in the activity level
B)varies in decreasing proportion with changes in the activity level
C)remains constant with changes in the activity level
D)varies in direct proportion with the activity level
Q2) Which of the following conditions would cause the break-even point to decrease?
A)total fixed costs increase
B)unit selling price decreases
C)unit variable cost decreases
D)unit variable cost increases
Q3) What was Rusty Co.'s unit variable cost of E?
A)$52.50
B)$70.00
C)$120.00
D)$50.00
Q4) A rental cost of $20,000 plus $0.70 per machine hour of use is an example of a mixed cost.
A)True
B)False
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Chapter 5: Variable Costing for Management Analysis
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Sample Questions
Q1) In the contribution margin analysis, the effect of a change in the number of units sold, assuming no change in unit sales price or unit cost, is referred to as the:
A)sales factor
B)cost of goods sold factor
C)quantity factor
D)price factor
Q2) Ford's Expedition sport utility vehicle is its most profitable model.Therefore, Ford need not promote its Expedition model anymore.
A)True
B)False
Q3) Service firms can only have one activity base for analyzing changes in costs.
A)True
B)False
Q4) The taxes on the factory superintendent's salary would be included as part of the cost of products manufactured under the variable costing concept.
A)True
B)False
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Chapter 6: Budgeting
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Sample
Questions
Q1) Tara Company's budget shows the following credit sales for the current year: September, $25,000 October, $36,000; November, $30,000; December, $32,000.Experience has shown that payment for credit sales is received as follows: 15% in the month of sale, 60% in the first month after sale, 20% in the second month after sale, and 5% is uncollectible.How much cash will Tara Company expect to collect in November as a result of current and past credit sales?
A)$19,700
B)$28,400
C)$30,000
D)$31,100
Q2) Flexible budgeting builds the effect of changes in level of activity into the budget system.
A)True
B)False
Q3) Budgeted production for product ZZZ during the month is
A)460,000 units
B)475,000 units
C)457,000 units
D)463,000 units
Q4) What is a cash budget? How does management use a cash budget?
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Chapter 7: Performance Evaluation Using Variances From Standard
Costs
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Sample Questions
Q1) A favorable cost variance occurs when
A)actual costs are more than standard costs
B)standard costs are more than actual costs
C)standard costs are less than actual costs
D)actual costs are the same as standard costs
Q2) Calculate the direct labor time variance.
A)$2,362.50 favorable
B)$2,362.50 unfavorable
C)$6,540.00 favorable
D)$6,540.00 unfavorable
Q3) Compute the standard cost for one hat, based on the following standards for each hat:
Standard material quantity: 3/4 yard of fabric at $5.00 per yard
Standard labor: 2 hours at $5.75 per hour
Factory overhead: $3.20 per direct labor hour
Q4) Define nonfinancial performance measures.What are they used for and what are some common examples?
Q5) Nonfinancial performance output measures are used to improve the input measures.
A)True
B)False Page 9
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Page 10
Chapter 8: Performance Evaluation for Decentralized Operations
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Sample Questions
Q1) Controllable expenses are those that can be influenced by the decisions of the profit center management.
A)True
B)False
Q2) Depreciation expense on store equipment for a department store is an indirect expense.
A)True
B)False
Q3) Three measures of investment center performance are income from operations, rate of return on investment, and residual income.
A)True
B)False
Q4) Income from operations for Division L is $250,000, total service department charges are $400,000 and operating expenses are $2,750,000.What are the revenues for Division L?
A)$650,000
B)$3,000,000
C)$3,400,000
D)$2,750,000
11
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Chapter 9: Differential Analysis, Product Pricing, and
Activity-Based Costing
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Sample Questions
Q1) Discontinuing a product or segment is a huge decision that must be carefully analyzed.Which of the following would be a valid reason not to discontinue an operation?
A)losses are minimal
B)variable costs are less than revenues
C)variable costs are more than revenues
D)allocated fixed costs are more than revenues
Q2) Not relevant to future decisions
A)Opportunity cost
B)Sunk cost
C)Theory of constraints
D)Differential analysis
E)Product cost distortion
Q3) Make-or-buy decisions should be made only with related parties.
A)True
B)False
Q4) The differential cost of producing Product P is $13 per pound.
A)True
B)False
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Chapter 10: Capital Investment Analysis
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Sample Questions
Q1) If in evaluating a proposal by use of the net present value method there is an excess of the present value of future cash inflows over the amount to be invested, the rate of return on the proposal is less than the rate used in the analysis.
A)True
B)False
Q2) Methods that ignore present value in capital investment analysis include the average rate of return method.
A)True
B)False
Q3) When several alternative investment proposals of the same amount are being considered, the one with the largest net present value is the most desirable.If the alternative proposals involve different amounts of investment, it is useful to prepare a relative ranking of the proposals by using an
A)average rate of return index
B)consumer price index
C)present value index
D)price-level index
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Page 13
Chapter 11: Cost Allocation and Activity-Based Costing
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Sample Questions
Q1) Determine the overhead from both production departments allocated to each unit of Product A if Blue Ridge Marketing Inc.uses a multiple department rate system.
A)$396.80 per unit
B)$425.60 per unit
C)$320.00 per unit
D)$214.40 per unit
Q2) Product costing consists of only direct materials and direct labor.
A)True
B)False
Q3) Activity rates are computed by dividing the cost budgeted for each activity pool by the estimated activity base for that pool.
A)True
B)False
Q4) Determine the activity rate for production per machine hour.
A)$62.50
B)$150.00
C)$75.00
D)$176.47
Q5) Calculate the cost of services for a highlight.
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Chapter 12: Lean Principles, Lean Accounting, and Activity Analysis
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Sample Questions
Q1) Push manufacturing is also referred to as make-to-order processing.
A)True
B)False
Q2) A lean nonmanufacturing process can be accomplished by consolidating, in one area, all of the services provided to a customer.
A)True
B)False
Q3) Lean manufacturing is also called make-to-stock manufacturing.
A)True
B)False
Q4) Inventory reduction is a principle.
A)lean
B)traditional processing
C)economic
D)wait time
Q5) In a pull manufacturing system, raw materials are released to production based on actual customer orders.
A)True
B)False
Q6) From the above schedule, calculate the a prevention and b appraisal costs. Page 15
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Page 16
Chapter 13: Statement of Cash Flows
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Sample Questions
Q1) On the statement of cash flows prepared by the indirect method, a $50,000 gain on the sale of investments would be
A)deducted from net income in converting the net income reported on the income statement to cash flows from operating activities
B)added to net income in converting the net income reported on the income statement to cash flows from operating activities
C)added to dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends
D)deducted from dividends declared in converting the dividends declared to the cash flows from financing activities related to dividends
Q2) A business issues 20-year bonds payable in exchange for preferred stock.This transaction would be reported on the statement of cash flows in A)a separate schedule
B)the cash flows from financing activities section
C)the cash flows from investing activities section
D)the cash flows from operating activities section
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Chapter 14: Financial Statement Analysis
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Q1) The independent auditor's report
A)describes which financial statements are covered by the audit
B)gives the auditor's opinion regarding the fairness of the financial statements
C)summarizes what the auditor did
D)states that the financial statements were presented on time
Q2) The percent of fixed assets to total assets is an example of
A)vertical analysis
B)solvency analysis
C)profitability analysis
D)horizontal analysis
Q3) an analysis of a company's ability to pay its current liabilities
A)discontinued operations
B)extraordinary items
C)change from one generally accepted accounting principle to another
D)horizontal analysis
E)vertical analysis
F)common-sized financial statements
G)current position analysis
H)profitability analysis
Q4) Define solvency and profitability.How are they alike?
Page 18
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