Introduction to Managerial Accounting Mock
Exam
Course Introduction
Introduction to Managerial Accounting provides students with foundational knowledge of how accounting information is used by managers to make informed business decisions. The course covers key topics such as cost behavior, budgeting, performance evaluation, and decision-making processes. Students learn how to analyze financial data, prepare internal reports, and apply accounting concepts to planning and controlling operations within an organization. By the end of the course, students will have a clear understanding of the role managerial accounting plays in strategic planning and day-to-day management activities.
Recommended Textbook
Financial And Managerial Accounting Principles International Edition 9th Edition by Crosson
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29 Chapters
4463 Verified Questions
4463 Flashcards
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Page 2
Chapter 1: Uses of Accounting Information and the Financial Statements
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170 Verified Questions
170 Flashcards
Source URL: https://quizplus.com/quiz/72011
Sample Questions
Q1) Which of the following is an example of an investing activity?
A) Purchasing a building
B) Obtaining a bank loan
C) Paying taxes to the government
D) Producing goods and services
Answer: A
Q2) Both public accountants and management accountants are required to adhere to a code of professional conduct.
A)True
B)False
Answer: True
Q3) The intentional preparation of misleading financial statements is referred to as fraudulent financial reporting.
A)True
B)False
Answer: True
Q4) Par value is the minimum amount that can be reported as retained earnings.
A)True
B)False
Answer: False
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Chapter 2: Analyzing Business Transactions
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194 Verified Questions
194 Flashcards
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Sample Questions
Q1) The most generally accepted value used in accounting is market value.
A)True
B)False
Answer: False
Q2) A net income of $10,000 means that the business received $10,000 more in cash from its customers than it spent to run the business.
A)True
B)False Answer: False
Q3) Recording an account with a debit balance as a credit,or vice versa,will cause the trial balance to be out of balance by an amount that is evenly divisible by 2.
A)True
B)False Answer: True
Q4) It is sometimes correct for a compound entry's debit totals and credit totals to be unequal.
A)True
B)False Answer: False
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Chapter 3: Measuring Business Income
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245 Verified Questions
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Sample Questions
Q1) On December 9,A issues a 60-day promissory note to B.The December 31 adjusting entry for A is
A) Interest Payable - Debit; Cash - Credit
B) Interest Receivable - Debit; Interest Income - Credit
C) Interest Expense - Debit; Cash - Credit
D) Interest Expense - Debit; Interest Payable - Credit
Answer: D
Q2) Allowance for depreciation is another term for depreciation expense.
A)True
B)False
Answer: False
Q3) Which of the following sequences of documents or records describes the proper sequence in the accounting cycle?
A) Journal, source documents, ledger, financial statements
B) Source documents, journal, ledger, financial statements
C) Source documents, ledger, journal, financial statements
D) Ledger, source documents, journal, financial statements
Answer: B
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Chapter 3: Supplement - Closing Entries and the Work Sheet
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Sample Questions
Q1) The amount extended to the Retained Earnings line in the Balance Sheet column of the work sheet is the amount to be reflected for Retained Earnings on the balance sheet.
A)True
B)False
Q2) When a company has suffered a net loss,the net loss amount is entered on the work sheet on the
A) credit side of the Income Statement columns and the debit side of the Balance Sheet columns.
B) debit side of both the Income Statement and the Balance Sheet columns.
C) credit side of both the Income Statement and the Balance Sheet columns.
D) debit side of the Income Statement columns and the credit side of the Balance Sheet columns.
Q3) In a manual system which uses a work sheet,the preparation of adjusting entries
A) typically precedes the preparation of the financial statements.
B) typically precedes preparation of the work sheet.
C) is easy because they are simply copied from the work sheet.
D) is difficult, and therefore they must first be entered into the general journal in pencil.
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Page 6
Chapter 4: Financial Reporting and Analysis
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166 Verified Questions
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Sample Questions
Q1) A debt to equity ratio of 1.0 means that half of the company's assets are financed by creditors.
A)True
B)False
Q2) Only the chief financial officer and the company's CPAs are responsible for the accuracy of financial statements.The chief executive officer is not expected to understand financial information.
A)True
B)False
Q3) Asset turnover measures how efficiently assets are used to produce sales.
A)True
B)False
Q4) For a merchandising company,the difference between net sales and operating expenses is called gross margin.
A)True B)False
Q5) Operating expenses include cost of goods sold.
A)True
B)False
Q6) State the definition of a current asset.
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Chapter 5: The Operating Cycle and Merchandising Operations
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176 Verified Questions
176 Flashcards
Source URL: https://quizplus.com/quiz/72006
Sample Questions
Q1) Assuming the use of the periodic inventory system,use the data below to calculate the net cost of purchases and the goods available for sale for the year ended December 31,2010.
\(\begin{array}{llr}
\text { Merchandise Inventory, December 31, 2009 } &\$2,307\\
\text { Merchandise Inventory, December 31, 2010} &2,041\\
\text { Cost of Goods Sold } &7,604 \end{array}\)
Q2) Assuming the use of the periodic inventory system,use the data below to calculate the net cost of purchases and the goods available for sale for the year ended December 31,2010.
\(\begin{array}{llr}
\text {Merchandise Inventory, December 31, 2009 } &\$2,830\\
\text {Merchandise Inventory, December 31, 2010 } &3,482\\
\text { Cost of Goods Sold } &18,048 \end{array}\)
Q3) The fee paid by a retailer to a credit card company is considered a contra-revenue account by the retailer.
A)True
B)False
Page 8
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Chapter 6: Inventories
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155 Verified Questions
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Sample Questions
Q1) The specific identification method and the FIFO method produce the same results under both the perpetual and periodic inventory systems.
A)True
B)False
Q2) Winer & Daughters reports income before income taxes of $10,000 during 2010.If beginning inventory was understated by $3,000 and ending inventory was overstated by $1,200,calculate corrected income before income taxes for the year.(Show your work.)
Q3) Which of the following terms best describes the assumption made in applying the four inventory methods?
A) Cost flow
B) Goods flow
C) Asset flow
D) Physical flow
Q4) Manufacturing overhead would not include which of the following costs?
A) Packing materials
B) Supervisory salaries
C) Factory rent
D) Raw materials
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Chapter 7: Cash and Receivables
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179 Verified Questions
179 Flashcards
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Sample Questions
Q1) The account Allowance for Uncollectible Accounts is closed at the end of the accounting period.
A)True
B)False
Q2) The most liquid of all assets is
A) cash.
B) inventory.
C) marketable securities.
D) accounts receivable.
Q3) Bad debts are considered as an expense of selling on credit.
A)True
B)False
Q4) Automated teller machines (ATMs)are used primarily by businesses rather than by consumers.
A)True B)False
Q5) A 60-day note dated December 10 is due on February 10. A)True B)False
Q6) Why do businesses need to keep some currency on hand?
Page 10
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Chapter 8: Current Liabilities and Fair Value Accounting
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184 Verified Questions
184 Flashcards
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Sample Questions
Q1) A contingent liability is not entered into the accounting records under any circumstances.
A)True
B)False
Q2) Assets purchased under a deferred payment plan should be recorded at the future value of the installment payments.
A)True
B)False
Q3) Which of the following most likely is an example of an accrued liability?
A) Salaries payable
B) Accounts payable
C) Current portion of long-term debt
D) Sales tax payable
Q4) When compound interest is used,interest accumulates less quickly than when simple interest is used.
A)True
B)False
Q5) All liabilities involve an obligation of one sort or another.
A)True
B)False
11
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Chapter 9: Long Term Assets
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242 Verified Questions
242 Flashcards
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Sample Questions
Q1) On October 1,2008,Racie's Auto Repair purchased diagnostic equipment for $13,600.The equipment had an estimated residual value of $4,000 and an eight-year life and was sold on April 1,2010.Assuming that the company depreciates the asset on a straight-line basis and reports on a calendar-year basis,journalize the following independent transactions in the journal provided.(Omit explanations.)
a. The entry to update depreciation to April 1, 2010
b. The entry to record the sale for $12,000
c. The entry to record the sale instead for $8,600
d. The entry to record the sale instead for $11,800
Q2) A natural resource is subject to a process called depletion.
A)True
B)False
Q3) An expenditure for which of the following items would be considered a revenue expenditure?
A) Plant assets
B) Ordinary repair
C) Addition
D) Betterment
Q4) Present two arguments in favor of the use of accelerated depreciation.
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Chapter 10: Long-Term Liabilities
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Sample Questions
Q1) The carrying amount always approaches the face value over the life of the bond.
A)True
B)False
Q2) Boris Corporation had income before income taxes of $4,000,000 and interest expense of $450,000.Calculate Boris's interest coverage ratio,rounded to one decimal place.
Q3) When a bond issue is converted into common stock,total contributed capital is increased by the carrying value of the bonds converted.
A)True
B)False
Q4) Accounting for capital leases can be thought of as similar to accounting for mortgage payments.
A)True
B)False
Q5) Financial leverage is also known as trading on the equity.
A)True
B)False
Q6) When bonds are converted to stock,no gain or loss is recognized.
A)True
B)False
Page 13
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Chapter 11: Contributed Capital
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Sample Questions
Q1) The par value of the common stock represents the A) amount entered into the corporation's Common Stock account when a share is issued.
B) liquidation value of the stock.
C) market value of a share of stock.
D) amount the corporation received when the stock was issued.
Q2) Underwriters typically charge 5 percent of the selling price to guarantee the sale of initial public offerings of stock.
A)True
B)False
Q3) Use the following information to obtain the ratios requested below.Where necessary,carry answers to one decimal place. Dividends per share: $.54
Market price per share: $30
Net income: $88,000
Average stockholders' equity: $625,000
Earnings per share: $1.25
A) Dividends yield = _____________%
B) Return on equity = _____________%
C) Price/earnings (P/E) ratio = __________times
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Page 14
Chapter 12: Investments
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163 Verified Questions
163 Flashcards
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Sample Questions
Q1) The year-end adjusting entry to reflect an increase in the value of trading securities includes a
A) debit to Unrealized Gain on Investments.
B) debit to Short-Term Investments.
C) debit to Allowance to Adjust Short-Term Investments to Market.
D) credit to Realized Gain on Investments.
Q2) At any given balance sheet date,the balance of the Unrealized Gain on Long-Term Investments account is equal in amount to the balance of the Allowance to Adjust Long-Term Investments to Market account.
A)True
B)False
Q3) Trading securities are valued on the balance sheet at market value.
A)True B)False
Q4) Only sales to outsiders and purchases from outsiders are reflected in a consolidated income statement because all intercompany transactions are eliminated in preparing the consolidated statement.
A)True B)False
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Chapter 13: The Corporate Income Statement and the Statement of Stockholders Equity
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175 Verified Questions
175 Flashcards
Source URL: https://quizplus.com/quiz/71998
Sample Questions
Q1) A gain on the sale of an asset is a component of income from operations.
A)True
B)False
Q2) Extraordinary gains and losses must be shown in the financial statements "net of tax."
A)True
B)False
Q3) Gains and losses caused by the passage of a new law should be classified as extraordinary on the income statement.
A)True
B)False
Q4) Which of the following is not true about a 35 percent stock dividend?
A) The market value of the stock is needed to record the stock dividend.
B) Retained earnings decreases.
C) Contributed capital increases.
D) Par value per share remains the same.
Q5) A liability arises when the board of directors declares a stock dividend.
A)True
B)False
Page 16
Q6) Distinguish between cash and retained earnings.
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Page 17
Chapter 14: The Statement of Cash Flows
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149 Verified Questions
149 Flashcards
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Sample Questions
Q1) Use the following information to obtain the ratios below.Round amounts to one decimal place.
\(\begin{array}{lr}
\text { Net cash flows from operating activities } & \$ 837 \text { million } \\
\text { Net income } & 465 \text { million } \\
\text { Sales } & 6,750 \text { million }\\
\text { Average total assets } & 7,150 \text { million } \\
\text { Dividends } & 105 \text { million} \\
\text { Purchases of plant assets } & 170 \text { million } \\
\text { Sales of plant assets } & 380 \text { million }
\end{array}\)
a. Cash flow yield = _______________ times
b. Cash flows to sales = _______________ %
c. Cash flows to assets = _______________ %
d. Free cash flow = $ ________________
Q2) Cash equivalents include money market accounts,commercial paper,U.S.Treasury bills,and other short-term investments or marketable securities.
A)True
B)False
Q3) On the lines below,provide the components for the calculation of free cash flow.
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Chapter 15: The Changing Business Environment - a Managers Perspective
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131 Verified Questions
131 Flashcards
Source URL: https://quizplus.com/quiz/71996
Sample Questions
Q1) The ethical standards for management accountants state that accountants are obligated to maintain professional competence at all times when dealing with A) people outside the company.
B) regulatory bodies.
C) the world marketplace.
D) people and resources of one's own company, outside entities, and the world marketplace.
Q2) Assume you are the president of the business club at your school.You are thinking about creating a fundraising project to generate money for next year's operations.Develop an outline of your ideas using the various stages of the management process.
Q3) Give two examples of nonfinancial performance measures.
Q4) JIT,TQM,and ABM all seek continuous improvement in operations. A)True B)False
Q5) Identify and explain the important questions a manager must address before preparing a managerial report.(Hint: Think "w's.")
Page 19
Q6) Identify three uses of the costs of quality information.
Q7) What steps would a company using TQM take to improve product or service quality?
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Chapter 16: Cost Concepts and Cost Allocation
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Sample Questions
Q1) Total estimated overhead costs should be divided by actual direct labor hours to compute an overhead rate per direct labor hour.
A)True
B)False
Q2) An example of a period cost is
A) advertising costs.
B) indirect materials.
C) product design costs.
D) direct materials.
Q3) Depreciation expense could be
A) a period cost.
B) a product cost.
C) a fixed cost.
D) all of these.
Q4) The amount computed for cost of goods manufactured should be the same as the amount transferred from the materials inventory,direct labor,and overhead accounts into the Work in Process Inventory account.
A)True
B)False
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Chapter 17: Costing Systems- Job Order Costing
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Sample Questions
Q1) Which of the following is not an objective of product costing systems?
A) To provide information for cost planning
B) To assist in the preparation of the income statement
C) To determine the optimal amount of products to manufacture
D) To provide information for product pricing
Q2) Which of the following could not be learned by analyzing job order cost cards?
A) The balance of Work in Process Inventory at the end of the period
B) The cost of all jobs done for a particular customer
C) The completion time of jobs yet to be completed
D) The type of products ordered by a particular customer
Q3) As related to a job order costing system,answer the following short questions:
a. What is a job order costing system? Identify three kinds of companies that would use such as system.
b. What is a job order?
c. What is the purpose of a job order cost card? Identify the kinds of information recorded on it.
Q4) In cost-plus contracts,the "plus" is the sales price.
A)True
B)False
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Chapter 18: Costing Systems- Process Costing
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Sample Questions
Q1) During March,Department A started 300,000 units of product in a particular production process.The beginning work in process inventory was 50,000 units,and the ending inventory was 40,000 units.Direct materials are introduced at the start of processing,and beginning and ending inventories are considered to be 40 percent complete with respect to conversion costs.Department A uses the FIFO costing method. The number of units started and completed during March was A) 300,000.
B) 260,000.
C) 324,000.
D) 276,000.
Q2) The FIFO costing method is a costing method in which the cost flow follows the logical product flow.
A)True
B)False
Q3) In process costing,all costs incurred by a department or production process are divided by the equivalent units produced during the period to determine the average cost per unit produced.
A)True
B)False
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Page 22
Chapter 19: Value-Based Systems- Abm and Lean
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Sample Questions
Q1) You have been invited to address the Students In Free Enterprise (SIFE)team of your alma mater.The topic the team has chosen is the just-in-time philosophy in terms that beginning business students can readily comprehend.The meeting is taking place in the college cafeteria.Reservations and menu choices have been made in advance.It has been suggested that you use that setting as an example of the implementation of a JIT operating system.It will also be beneficial if you indicate in your talk some instances where JIT would be less suitable in the college food services situation.What will you say?
Q2) Activity-based management focuses on identifying product costs as either value-adding or nonvalue-adding activities.
A)True
B)False
Q3) A supply chain is a related sequence of value-creating activities within an organization.
A)True
B)False
Q4) Activity-based costing applies only to production-related activities.
A)True
B)False
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Page 23
Chapter 20: Cost Behavior Analysis
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Sample Questions
Q1) If fixed costs are $80,000,the contribution margin is $25 per unit,and the targeted profit is $30,000,then the required unit sales are
A) 4,400 units.
B) 2,000 units.
C) 4,500 units.
D) 2,500 units.
Q2) Contribution margin (CM)is the amount that remains after all fixed costs are subtracted from sales.
A)True
B)False
Q3) Breakeven analysis adjusted for a profit factor
A) is a difficult computation that is not normally employed.
B) will not necessarily increase the number of required units.
C) is often adapted for different sales levels to aid in determining the possible levels of potential profit.
D) is a poor basis for evaluating the profitability of a venture.
Q4) An increase in the unit sales price will cause the breakeven point to increase.
A)True
B)False
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Chapter 21: The Budgeting Process
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Sample Questions
Q1) Which of the following is not true about the direct materials purchases budget?
A) It is determined by the anticipated change in the direct materials inventory level and the production budget.
B) The direct materials purchases budget does not affect the forecasted balance sheet.
C) The direct materials purchases budget is expressed in units and dollars.
D) It is used in preparing the budgeted income statement.
Q2) Selling and administrative expenses are billed and paid the month after they occur.Selling and administrative expenses have both a fixed and a variable component.The fixed component is a constant $8,000 a month.The variable component equals 5 percent of revenues.Given revenues of $300,000 for January,$350,000 for February,and $400,000 for March,what would be the budgeted selling and administrative expenses that would be paid in March?
A) $8,000
B) $16,500
C) $25,500
D) $23,000
Q3) A budget can contain nonfinancial information.
A)True
B)False
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Page 25
Chapter 22: Performance Management and Evaluation
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Sample Questions
Q1) Compute the current liabilities for the Yi Yo investment center as shown below. \(\begin{array}{lr}
&\text { Yi Yo Subsidiary }\\
\text { Total sales } & \$ 18,000 \\
\text { After-tax operating income } & \$ 1,000 \\
\text { Total assets } & \$ 15,000 \\
\text { Current liabilities } & \$ ? \\
\text { Total assets - current liabilities } &3,500 \\
\text { Cost of capital } & 15 \%\\
\text { Economic value added } & \$ ?
\end{array}\)
A) $475
B) $525
C) $1,000
D) $11,500
Q2) Like ROI,residual income is a performance measure displayed as a ratio.
A)True
B)False
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Chapter 23: Standard Costing and Variance Analysis
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Sample Questions
Q1) The total fixed overhead variance is comprised of the
A) variable overhead efficiency and fixed variances.
B) fixed overhead budget and volume variances.
C) labor efficiency and rate variances.
D) variable overhead spending and efficiency variances.
Q2) Standard costing is typically a sophisticated and inexpensive component to add to a company's existing cost accounting system.
A)True
B)False
Q3) The direct labor rate variance is the difference between actual hours worked and standard hours allowed for good units produced,multiplied by the standard labor rate.
A)True
B)False
Q4) When actual capacity exceeds expected capacity,the result is a(n)
A) favorable fixed overhead volume variance.
B) favorable materials quantity variance.
C) unfavorable overhead variance.
D) unfavorable materials quantity variance.
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Chapter 24: Short Run Decision Analysis
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Sample Questions
Q1) Which of the following techniques is most useful for a special order decision?
A) Payback method
B) Present value method
C) Accounting rate-of-return method
D) Incremental analysis
Q2) Cost information for short-run decision making focuses on
A) what happened.
B) what is happening.
C) what will happen.
D) why it happened.
Q3) Competition,social issues,and timeliness are examples of qualitative factors.
A)True
B)False
Q4) What are the two steps in the analysis for a sales mix decision?
Q5) While performing an incremental analysis for outsourcing decision,information such as depreciation and other fixed costs are not relevant.
A)True
B)False
Q6) Discuss the qualitative factors that should be considered in short-run decision making.
Page 28
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Chapter 25: Capital Investment Analysis
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Sample Questions
Q1) The financing structure of Taylor communications is as follows: \(\begin{array} { l c c c }
\text { Source of Capital } & \text { Proportion of capital } & \text { Cost of Capital } \\
\text { Debt financing, } \$ 300,000 & 30 \% & 6 \% \\
\text { Preferred stock, } \$ 100,000 & 10 \% & 8 \% \\
\text { Common stock, } \$ 400,000 & 40 \% & 12 \% \\
\text { Retained earnings, } \$ 200,000 & 20 \% & 12 \% \end{array}\)
A) .8%
B) 4.8%
C) 2.4%
D) 9.8%
Q2) Capital facilities and projects are not expensive.
A)True B)False
Q3) Cost of capital of a company will be determined in four steps. A)True B)False
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Chapter 26: Pricing Decisions, incltarget Costing and Transfer Pricing
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Sample Questions
Q1) Target costing is a useful pricing tool because it allows the company to critically analyze the potential for success of a product before committing resources to its production.
A)True
B)False
Q2) Target costing is a variation of cost-based pricing models that reverses the normal procedure for a cost-based pricing model.
A)True
B)False
Q3) Negotiation between managers is not appropriate in determining an appropriate transfer price.
A)True
B)False
Q4) Auction-based pricing is a pricing method used primarily on the Internet where price is determined by willing buyers and sellers.
A)True
B)False
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Chapter 27: Quality Management and Measurement
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Sample Questions
Q1) The term given to the act of a company comparing its processes to similar processes in a successful company is called
A) process mapping.
B) TQM.
C) benchmarking.
D) return on quality.
Q2) Cost control concerns have largely been replaced with concern for nonfinancial measures in JIT settings.
A)True
B)False
Q3) Service businesses cannot measure the quality of their work.
A)True
B)False
Q4) Reducing the costs of quality and increasing overall product quality can be achieved simultaneously.
A)True
B)False
Q5) Identify and describe three traits that differentiate management information systems (MIS)from traditional management accounting techniques.
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Chapter 28: Financial Analysis of Performance
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Sample Questions
Q1) Dun & Bradstreet publishes
A) data on average ratios and relationships.
B) credit ratings of companies.
C) data on industry norms.
D) all of these.
Q2) Return on assets is most closely related to
A) interest coverage and the debt to equity ratios.
B) profit margin and the debt to equity ratio.
C) profit margin and asset turnover.
D) inventory turnover and profit margin.
Q3) The use of rule-of-thumb measures is not an exact science and should be used with great care.
A)True
B)False
Q4) Both profit margin and asset turnover affect a company's return on assets. A)True B)False
Q5) Market strength is the ability to increase the wealth of stockholders. A)True
B)False
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