Intermediate Accounting Review
Questions
Course Introduction
Intermediate Accounting delves into the detailed principles and standards of financial accounting, focusing on the preparation, presentation, and analysis of financial statements. The course covers topics such as revenue recognition, measurement and valuation of assets and liabilities, equity accounting, and the application of Generally Accepted Accounting Principles (GAAP). Students will develop the analytical skills needed to interpret complex accounting issues and learn the processes essential for accurate and ethical financial reporting. The course provides a critical foundation for advanced accounting studies and professional practice.
Recommended Textbook
Managerial Accounting 13th Edition by Carl Warren
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14 Chapters
2568 Verified Questions
2568 Flashcards
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Page 2
Chapter 1: Managerial Accounting Concepts and Principles
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201 Verified Questions
201 Flashcards
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Sample Questions
Q1) Managers used managerial information for all of the following except
A)to evaluate the company's stock performance
B)to analyze the performance of a company's operations
C)to support long-term planning decisions
D)to determine the cost of manufacturing a product
Answer: A
Q2) The factory supervisor's salary for the bar stool factory
A)Direct
B)Indirect
Answer: B
Q3) Only the value of the inventory that is sold will appear on the income statement.
A)True
B)False Answer: True
Q4) The cost of a manufactured product generally consists of direct materials cost, direct labor cost, and factory overhead cost.
A)True
B)False Answer: True
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Chapter 2: Job Order Costing
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195 Verified Questions
195 Flashcards
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Sample Questions
Q1) The Cavy Company estimates that the factory overhead for the following year will be $1,470,000.The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours.Calculate the predetermined overhead rate to apply factory overhead.
Answer: $1,470,000/40,000 = $36.75 per machine hour
Q2) When Job 117 was completed, direct materials totaled $4,400; direct labor, $5,600; and factory overhead, $2,400.A total of 1,000 units were produced at a per-unit cost of
A)$12,400
B)$1,240
C)$124
D)$12.40
Answer: D
Q3) Recording jobs shipped and customers billed would include a credit to
A)Accounts Payable
B)Cash
C)Finished Goods
D)Cost of Goods Sold
Answer: C
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Chapter 3: Process Cost Systems
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198 Verified Questions
198 Flashcards
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Sample Questions
Q1) The cost of energy consumed in producing good units in the Bottling Department of Mountain Springs Water Company was $36,850 and $39,060 for June and July, respectively.The number of equivalent units produced in June and July was 55,000 and 62,000 liters, respectively.Evaluate the change in the cost of energy between the two months.
Answer: Energy costs per liter, June: $36,850 = $0.67
55,000 liters
Energy costs per liter, July: $39,060 = $0.63
62,000 liters
The cost of energy has decreased by $0.04 $0.67 - $0.63.
Q2) The three categories of manufacturing costs comprising the total cost of work in process are direct labor, direct materials, and
A)selling expenses
B)direct expenses
C)accounting salaries expense
D)factory overhead
Answer: D
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Chapter 4: Cost Behavior and Cost-Volume-Profit Analysis
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225 Verified Questions
225 Flashcards
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Sample Questions
Q1) In a cost-volume-profit chart, the
A)total cost line begins at zero
B)slope of the total cost line is dependent on the fixed cost per unit
C)total cost line begins at the total fixed cost value on the vertical axis
D)total cost line normally ends at the highest sales value
Q2) If the contribution margin ratio for France Company is 45%, sales were $425,000, and fixed costs were $100,000, what was the income from operations?
A)$233,750
B)$91,250
C)$191,250
D)$133,750
Q3) If direct materials cost per unit increases, the break-even point will decrease.
A)True
B)False
Q4) Vary in proportion to changes in activity levels
A) Relevant range
B) Break-even point
C) Contribution margin
D) Fixed costs
E) Variable costs
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Chapter 5: Variable Costing for Management Analysis
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160 Verified Questions
160 Flashcards
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Sample Questions
Q1) In contribution margin analysis, the effect of a difference in unit sales price or unit cost on the number of units sold is termed the quantity factor.
A)True
B)False
Q2) If sales totaled $800,000 for the year 80,000 units at $10.00 each and the planned sales totaled $799,500 78,000 units at $10.25 each, the effect of the quantity factor on the change in sales is:
A)$20,500 increase
B)$20,000 decrease
C)$20,500 decrease
D)$20,000 increase
Q3) On the variable costing income statement, the amounts representing the difference between the contribution margin and income from operations is the fixed manufacturing costs and fixed selling and administrative expenses. A)True
B)False
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Chapter 6: Budgeting
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Sample Questions
Q1) For April, sales revenue is $700,000; sales commissions are 5% of sales; the sales manager's salary is $98,000; advertising expenses are $90,000; shipping expenses total 2% of sales; and miscellaneous selling expenses are $2,100 plus 1/2 of 1% of sales.Total selling expenses for the month of April are
A)$159,100
B)$242,600
C)$186,000
D)$182,100
Q2) When budget goals are set too tight, the budget becomes less effective as a tool for planning and controlling operations.
A)True
B)False
Q3) A formal written statement of management's plans for the future, expressed in financial terms, is a
A)gross profit report
B)responsibility report
C)budget
D)performance report
Q4) What is a capital expenditures budget?
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Chapter 7: Performance Evaluation Using Variances From
Standard Costs
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175 Verified Questions
175 Flashcards
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Sample Questions
Q1) Robin Company purchased and used 520 pounds of direct materials to produce a product with a 510 pound standard direct materials requirement.The standard materials price is $2.10 per pound.The actual materials price was $2.00 per pound. Prepare the journal entries to record 1 the purchase of the materials and 2 the material entering production.
Q2) Calculate the total direct labor variance.
A)$2,051.25 favorable
B)$2,051.25 unfavorable
C)$2,362.50 unfavorable
D)$2,362.50 favorable
Q3) The following data relate to direct labor costs for August: Actual costs: 5,500 hours at $24.00 per hour.Standard costs: 5,000 hours at $23.70 per hour. What is the direct labor time variance?
A)$1,650 favorable
B)$1,650 unfavorable
C)$1,500 favorable
D)$1,500 unfavorable
Q4) Define nonfinancial performance measures.What are they used for and what are some common examples?
Page 9
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Chapter 8: Performance Evaluation for Decentralized Operations
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Sample Questions
Q1) The ratio of income from operations to sales is termed the profit margin component of the rate of return on investment.
A)True
B)False
Q2) The ratio of sales to invested assets is termed the investment turnover component of the rate of return on investment.
A)True
B)False
Q3) The ratio of income from operations to sales, which is also a factor in the DuPont formula for determining the rate of return on investment, is called
A)profit margin
B)indirect expenses
C)investment turnover
D)cost
Q4) Depreciation expense on store equipment for a department store is an indirect expense.
A)True
B)False
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Chapter 9: Differential Analysis, Product Pricing, and
Activity-Based Costing
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175 Verified Questions
175 Flashcards
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Sample Questions
Q1) The differential cost of producing Product P is $55 per pound.
A)True
B)False
Q2) An unfinished desk is produced for $36.00 and sold for $65.00.A finished desk can be sold for $75.00.The additional processing cost to complete the finished desk is $5.95.Provide a differential analysis for further processing.
Q3) Differential analysis only considers the short-term one-year effects of discontinuing a product.
A)True
B)False
Q4) Delaney Company is considering replacing equipment which originally cost $600,000 and which has $420,000 accumulated depreciation to date.A new machine will cost $790,000 and the old equipment can be sold for $8,000.What is the sunk cost in this situation?
A)$172,000
B)$180,000
C)$188,000
D)$290,000
Page 11
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Chapter 10: Capital Investment Analysis
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190 Flashcards
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Sample Questions
Q1) If in evaluating a proposal by use of the net present value method there is a deficiency of the present value of future cash inflows over the amount to be invested, the proposal should be rejected.
A)True
B)False
Q2) A company is considering the purchase of a new piece of equipment for $90,000.Predicted annual net cash inflows from the investment are $36,000 Year 1, $30,000 Year 2, $18,000 Year 3, $12,000 Year 4, and $6,000 Year 5.The average income from operations over the 5-year life is $20,400.The payback period is 3.5 years.
A)True
B)False
Q3) For Years 1-5, a proposed expenditure of $500,000 for a fixed asset with a 5-year life has expected net income of $40,000, $35,000, $25,000, $25,000, and $25,000, respectively, and net cash flows of $90,000, $85,000, $75,000, $75,000, and $75,000, respectively.The cash payback period is 5 years.
A)True B)False
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Page 12
Chapter 11: Cost Allocation and Activity-Based Costing
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110 Verified Questions
110 Flashcards
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Sample Questions
Q1) All of the following can be used as an allocation base for calculating factory overhead rates except:
A)direct labor dollars
B)direct labor hours
C)machine hours
D)total units produced
Q2) A plantwide factory overhead rate is computed by dividing total budgeted factory overhead costs by the plantwide allocation base.
A)True
B)False
Q3) Service companies can effectively use activity-based costing to compute product service costs.
A)True
B)False
Q4) What is the overhead cost per unit for Rings?
A)$65.25
B)$23.25
C)$44.10
D)$64.50
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Chapter 12: Lean Principles, Lean Accounting, and Activity Analysis
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Sample Questions
Q1) From the above schedule, calculate the a value-added and b non-value-added costs.
Q2) From the above schedule of activity costs, determine the appraisal costs.
A)$50,000
B)$23,000
C)$73,000
D)$104,000
Q3) In a lean environment, process problems are less visible than they are in a traditional environment.
A)True
B)False
Q4) From the above schedule of activity costs, determine the external failure costs.
A)$39,000
B)$19,000
C)$12,000
D)$31,000
Q5) A backflush accounting system uses work in process inventories as control points between each process step.
A)True
B)False
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Chapter 13: Statement of Cash Flows
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189 Flashcards
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Sample Questions
Q1) Accounts receivable from sales to customers amounted to $40,000 and $32,000 at the beginning and end of the year, respectively.Income reported on the income statement for the year was $110,000.Exclusive of the effect of other adjustments, the net cash flows from operating activities to be reported on the statement of cash flows using the indirect method is
A)$118,000
B)$110,000
C)$102,000
D)$150,000
Q2) decrease in accounts payable balance
A)increase cash from operating activities
B)decrease cash from operating activities
C)increase cash from investing activities
D)decrease cash from investing activities
E)increase cash from financing activities
F)decrease cash from financing activities
G)noncash investing and financing supplement
Q3) The statement of cash flows is not one of the basic financial statements.
A)True
B)False
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Chapter 14: Financial Statement Analysis
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198 Flashcards
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Sample Questions
Q1) A firm selling food should have higher inventory turnover rate than a firm selling office furniture.
A)True
B)False
Q2) An acceleration in the collection of receivables will tend to cause the accounts receivable turnover to
A)decrease
B)remain the same
C)either increase or decrease
D)increase
Q3) ratio of liabilities to stockholders' equity
A)assess the profitability of the assets
B)assess the effectiveness in the use of assets
C)indicate the ability to meet currently maturing obligations
D)indicate the margin of safety to creditors
E)indicate instant debt-paying ability
F)assess the profitability of the investment by common stockholders
G)indicate future earnings prospects
H)indicate the extent to which earnings are being distributed to common stockholders
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Page 16