Financial and Managerial Accounting
Textbook Exam Questions
Course Introduction
This course provides a comprehensive introduction to the principles of financial and managerial accounting. Students will explore the fundamentals of financial accounting, including the preparation and analysis of financial statements, understanding accounting cycles, and applying Generally Accepted Accounting Principles (GAAP). The managerial accounting component focuses on the use of accounting data for internal decision-making, including budgeting, cost analysis, performance evaluation, and strategic planning. Through practical examples and case studies, students will develop the skills necessary to interpret financial information and make informed managerial decisions, forming a solid foundation for advanced study or careers in accounting, finance, and business management.
Recommended Textbook
Horngren's Accounting The Managerial Chapters 10th Edition by Tracie L. Miller Nobles
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9 Chapters
1348 Verified Questions
1348 Flashcards
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Page 2
Chapter 1: Introduction to Managerial Accounting
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179 Verified Questions
179 Flashcards
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Sample Questions
Q1) Managerial accounting can be used to calculate costs for service and merchandising companies.
A)True
B)False
Answer: True
Q2) The cost of direct materials cannot easily be traced to the manufactured product, and therefore it is a component of manufacturing overhead.
A)True
B)False
Answer: False
Q3) One of the primary activities of Rex Inc. is to purchase hats from Viva Inc. in Texas and sell them to its customers in Washington for a profit. It is likely that Rex is a:
A) manufacturing company.
B) hybrid company.
C) service company.
D) merchandising company.
Answer: D
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Page 3
Chapter 2: Job Order Costing
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152 Verified Questions
152 Flashcards
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Sample Questions
Q1) Which of the following statements is true?
A) A process costing system would be used by manufacturers of custom-made perfumes.
B) A job order costing system would be used by manufacturers of baking utensils.
C) A construction company would likely use a process costing system.
D) An accounting firm would likely use a job order costing system.
Answer: D
Q2) Which of the following will be debited to the Manufacturing Overhead account of a watch manufacturer?
A) office telephone expenses
B) salaries paid to accountants
C) factory electricity expense
D) cost of printing brochures
Answer: C
Q3) The cost of indirect materials is transferred out of the Manufacturing Overhead account and accumulated in the Raw Materials Inventory account.
A)True
B)False
Answer: False
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Page 4
Chapter 3: Process Costing
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144 Flashcards
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Sample Questions
Q1) The Assembling Department of Mat Liners had 10,000 units in process on December 1 and received 30,000 units from the Sewing Department. During the month, it completed 20,000 units and transferred them to the Packaging Department. Calculate the number of units accounted for by the Assembling Department for December. Prepare the production cost report for the Assembling Department for the whole units for the month of December.
Use the FIFO method.
Answer: 11ea858e_d71e_c6b6_a31f_afc284e26e9d_TB5023_00 Notes:
Ending Work-in-Process Inventory = Beginning Work-in-Process Inventory + Amount transferred in - Amount transferred out
Ending Work-in-Process Inventory = 10,000 + 30,000 - 20,000 = 20,000 units
Accounted for = Beginning balance + Started and completed + In process
Accounted for = 10,000 units + 10,000 + 20,000 = 40,000 units
Started and completed = Completed and transferred - Beginning balance
Started and completed = 20,000 - 10,000 = 10,000 units
Q2) In most organizations, managers are often rewarded based on how well they meet the budget.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Cost-Volume-Profit Analysis
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172 Flashcards
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Sample Questions
Q1) Pep Soda, a local convenience store, sells soft drinks. It sells two large drinks for every small drink. A large drink sells for $1.50 with a variable cost of $0.60. A small drink sells for $1.00 with a variable cost of $0.50. The weighted average contribution margin is: (Round your intermediate calculations and final answer to two decimal places)
A) $1.15 per drink.
B) $2.30 per drink.
C) $0.77 per drink.
D) $0.60 per drink.
Q2) Arturo Company's Model A generator sells for $456 and Model B sells for $390. The variable cost of Model A is $404 and of Model B is $320. If Arturo Company's sales incentives reward sales of the goods with the highest contribution margin, the sales force will be motivated to push sales of Model A more aggressively than Model B.
A)True
B)False
Q3) Under variable costing, fixed manufacturing overhead costs are treated as a product cost.
A)True
B)False
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Chapter 5: Master Budgets
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114 Flashcards
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Sample Questions
Q1) While preparing the budgeted income statement of a merchandiser, the amount of cost of goods sold can be taken from:
A) the budgeted balance sheet.
B) the budgeted cash flow statement.
C) the inventory, purchases and COGS budget.
D) the payment for cost of goods sold.
Q2) Farmerlands Enterprises has budgeted sales for the months of September and October at $300,000 and $280,000, respectively. Monthly sales are 80% credit and 20% cash. Of the credit sales, 50% are collected in the month of sale and 50% are collected in the following month. Calculate cash collections for the month of October.
A) $168,000
B) $232,000
C) $288,000
D) $290,000
Q3) Calculate the cash balance at the end of April.
A) $50,000
B) $40,200
C) $39,600
D) $51,800
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Page 7
Chapter 6: Flexible Budgets and Standard Cost Systems
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174 Verified Questions
174 Flashcards
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Sample Questions
Q1) Only unfavorable variances should be investigated, if substantial, to determine their causes.
A)True
B)False
Q2) Which of the following statements is true of cost variances and efficiency variances?
A) They pertain to the difference between the static budget and actual results.
B) They pertain to the difference between the flexible budget and actual results.
C) They pertain to the difference between the flexible budget and the static budget.
D) They pertain to the difference between the static budget and the previous year's actual results.
Q3) The exceptions under management by exception can be expressed as a percentage of a budgeted amount or a dollar amount.
A)True
B)False
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8
Chapter 7: Cost Allocation and Responsibility Accounting
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130 Flashcards
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Sample Questions
Q1) In many cases, the amount of the transfer price does not affect the overall company profits.
A)True
B)False
Q2) Huntswell Corporation has two major divisions: Agricultural Products and Industrial Products. It provides the following information for the year 2014. \[\begin{array} { | l | c |
c | }
\hline & \text { Agriculture Division } & \text { Industrial Division } \\
\hline \text { Sales revenue } & \$ 140,000 & \$ 1,040,000 \\
\hline \text { Operating income } & \$ 16,400 & \$ 218,400 \\
\hline \text { Average assets } & \$ 300,000 & \$ 5,540,000 \\ \hline
\end{array}\] Calculate the profit margin ratio for the Industrial Division of the company.
A) 10.5%
B) 11.1%
C) 21.0%
D) 11.7%
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Page 9
Chapter 8: Short-Term Business Decisions
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Sample Questions
Q1) Smith Industries is considering replacing a machine that is presently used in its production process. The following information is available: \(\begin{array}{|l|r|r|}
\hline & \text { Old Machine } & \begin{array} { l }
\text { Replacement } \\
\text { Machine }
\end{array} \\
\hline \text { Original cost } & \$ 55,000 & \$ 45,000 \\
\hline \text { Remaining useful life in years } & 3 & 3 \\
\hline \text { Current age in years } & 3 & 0 \\
\hline \text { Book value } & \$ 33,000 & \\
\hline \text { Current disposal value in cash } & \$ 9,000 & \\
\hline \text { Future disposal value in cash (in 5 years) } & \$ 0 & \$ 0 \\
\hline \text { Annual cash operating costs } & 8,500 & \$ 3,500 \\
\hline
\end{array}\) Which of the following amounts represent a sunk cost?
A) $55,000
B) $33,000
C) $9,000
D) $45,000
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Chapter 9: Capital Investment Decisions
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Sample Questions
Q1) Most capital budgeting methods focus on cash flows rather than book income.
A)True
B)False
Q2) Flip Flop company is considering investing in production-management software that costs $600,000, has $60,000 residual value, and should lead to cost savings of $150,000 per year for its five-year life. Calculate the average amount invested in the asset that should be used for calculating the accounting rate of return?
A) $660,000
B) $600,000
C) $330,000
D) $60,000
Q3) What is the profitability index for Project B?
A) 1.98
B) 1.38
C) 1.26
D) 1.90
Q4) An annuity refers to a series of equal cash flows received or paid annually.
A)True
B)False
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