Managerial Accounting Exam Materials
Course Introduction
Managerial Accounting focuses on the use of accounting information by managers to inform and support internal decision-making processes. This course covers topics such as cost behavior, budgeting, performance evaluation, and cost-volume-profit analysis, enabling students to analyze financial and non-financial data to plan, control, and evaluate business operations. Emphasis is placed on applying analytical techniques and tools to solve business problems, improve operational efficiency, and support strategic planning. The course prepares students to interpret and communicate accounting information effectively to drive managerial decision-making within organizations.
Recommended Textbook Survey of Accounting 5th Edition by Carl
S. Warren
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15 Chapters
1711 Verified Questions
1711 Flashcards
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Chapter 1: The Role of Accounting in Business
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94 Verified Questions
94 Flashcards
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Sample Questions
Q1) Recording revenue when a sale is made most directly relates to which concept?
A)Going concern concept
B)Periodicity concept
C)Matching concept
D)Adequate disclosure concept
Answer: C
Q2) Governments have an interest in the economic performance of business because of A)tax collections.
B)community involvement from the business.
C)business incentives.
D)all of these.
Answer: A
Q3) Motel 6 is an example of a business using which of the following?
A)Low-cost emphasis
B)Combination emphasis
C)Differentiation strategy
D)Premium-price emphasis
Answer: A
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Chapter 2: Basic Accounting Concepts
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Sample Questions
Q1) Stockholders' Equity will be reduced by all of the following accounts EXCEPT:
A)Revenues
B)Expenses
C)Dividends
D)All of the above reduce Stockholders' Equity. Answer: A
Q2) Any given transaction must affect at least two different parts of the accounting equation.
A)True
B)False Answer: False
Q3) The accounting equation can be expressed: Assets - Liabilities = Revenues.
A)True
B)False Answer: False
Q4) When an accounts payable account is paid in cash,the stockholders' equity in the business increases.
A)True
B)False Answer: False
Page 4
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Chapter 3: Accrual Accounting Concepts
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110 Flashcards
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Sample Questions
Q1) When an entry is made to adjust the supplies account and recognize supplies expense for the period,which section of the statement of cash flows is affected?
A)Cash Flow from Operating Activities
B)Cash Flow from Investing Activities
C)Cash Flow from Financing Activities
D)There is no effect on the statement of cash flows.
Answer: D
Q2) Under the accrual basis of accounting,the accounting records are normally updated after the preparation of the financial statements.
A)True
B)False
Answer: False
Q3) Accrued expenses are expenses that have been incurred and paid. A)True
B)False
Answer: False
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Page 5
Chapter 4: Accounting for Merchandising Businesses
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142 Flashcards
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Sample Questions
Q1) If merchandise costing $2,500,terms FOB destination,2/10,n/30,with prepaid transportation costs of $100,is paid within 10 days,the amount of the purchases discount is $48.
A)True
B)False
Q2) Interest expense is an example of an expense classified under "other expense."
A)True B)False
Q3) ONI,Inc.purchased $60,000 of equipment for cash.How does this transaction impact the statement of cash flows?
A)Decreases operating activities by $60,000
B)Decreases equipment by $60,000
C)Decreases the investing activities section by $60,000
D)This transaction would not affect the statement of cash flows.
Q4) Merchandise inventory shrinkage will increase Merchandise Inventory. A)True B)False
Q5) Net sales is equal to sales plus cost of merchandise sold. A)True B)False
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Chapter 5: Sarbanes-Oxley,internal Control,and Cash
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109 Flashcards
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Sample Questions
Q1) The Sarbanes-Oxley Act of 2002 requires companies to maintain strong and effective internal controls over recording transactions and preparing financial statements.
A)True
B)False
Q2) List and define each of the five elements of internal control.
Q3) Requiring employees to take annual vacations is part of which element of internal control?
A)The control environment
B)Risk assessment
C)Control procedures
D)Monitoring
Q4) On the bank's accounting records,customers' accounts are normally shown as A)revenue.
B)a liability.
C)an asset.
D)expenses.
Q5) The bank reconciles its statement to the depositor's records. A)True
B)False
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Chapter 6: Receivables and Inventories
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Sample Questions
Q1) Of the three widely used inventory costing methods (FIFO,LIFO,and average),the FIFO method of costing inventory is based on the assumption that costs are charged against revenues in the order in which they were incurred.
A)True
B)False
Q2) The person who is to be paid when a note matures is called the payee.
A)True
B)False
Q3) Generally accepted accounting principles do not normally allow the use of the allowance method of accounting for uncollectible accounts.
A)True
B)False
Q4) The estimate based on the sales method violates the matching principle. A)True
B)False
Q5) The due date of a 60-day note dated July 10 is September 9.
A)True
B)False
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Chapter 7: Fixed Assets and Intangible Assets
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Sample Questions
Q1) The acquisition costs of property,plant,and equipment should include all normal,reasonable,and necessary costs to get the asset in place and ready for use.
A)True
B)False
Q2) If a capital expenditure is treated as a revenue expenditure,then
A)expenses are overstated and owners' equity is understated.
B)expenses are overstated and assets are overstated.
C)expenses are understated and owners' equity is overstated.
D)net income is overstated and owners' equity is understated.
Q3) The Drilling Company purchased a mining site for $500,000 on July 1,2010.The company expects to mine ore for the next 10 years and anticipates that a total of 100,000 tons will be recovered.The estimated residual value of the property is $80,000.During 2010 the company extracted 6,500 tons of ore.The depletion expense for 2010 is
A)$37,700.
B)$42,000.
C)$32,500.
D)$27,300.
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Chapter 8: Liabilities and Stockholders Equity
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Sample Questions
Q1) The par value of common stock is rarely equal to its market value on the date the stock is issued.
A)True
B)False
Q2) For proper matching of revenues and expenses,the estimated cost of fringe benefits must be recognized as an expense of the period during which the employee earns the benefits.
A)True
B)False
Q3) Preferred stockholders must receive their current-year dividends before the common stockholders can receive any dividends.
A)True
B)False
Q4) What is one reason to undergo a REVERSE stock split?
A)To reduce the stock's market price per share.
B)To increase total stockholders' equity.
C)To reduce total stockholders' equity.
D)To increase the market value of the stock per share.
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Chapter 9: Financial Statement Analysis
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Sample Questions
Q1) The purpose of an audit is to
A)determine whether or not a company is a good investment.
B)render an opinion on the fairness of the statements.
C)determine whether or not a company complies with income tax regulations.
D)determine whether or not a company is a good credit risk.
Q2) A balance sheet shows cash,$75,000;marketable securities,$110,000;receivables,$90,000;and $225,000 of inventories.Current liabilities are $200,000.The current ratio is 1.375 to 1.
A)True
B)False
Q3) Which additional report is required of independent auditors since the passage of the Sarbanes-Oxley Act in 2002?
A)A report assessing the probability that the company will remain in business
B)A report attesting to management's assessment of internal control
C)A report assessing the market value of the company's current stock price
D)A report assessing the competency of the company's board of directors
Q4) The relationship of each asset item as a percent of total assets is an example of horizontal analysis.
A)True
B)False
11
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Chapter 10: Accounting Systems for Manufacturing Businesses
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116 Verified Questions
116 Flashcards
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Sample Questions
Q1) Conversion cost is the combination of direct labor cost and factory overhead cost.
A)True
B)False
Q2) Which of the following is an example of direct labor cost for an airplane manufacturer?
A)Cost of oil lubricants for factory machinery
B)Cost of wages of assembly worker
C)Salary of plant supervisor
D)Cost of jet engines
Q3) Which of the following would most likely use a job order costing system?
A)A paper mill
B)A swimming pool installer
C)A company that manufactures chlorine for swimming pools
D)An oil refinery
Q4) Recording direct labor costs in a job order cost accounting system
A)increases Factory Overhead,decreases Work in Process.
B)increases Finished Goods,increases Wages Payable.
C)increases Work in Process,increases Wages Payable.
D)increases Factory Overhead,increases Wages Payable.
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Chapter 11: Cost Behavior and Cost-Volume-Profit Analysis
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139 Verified Questions
139 Flashcards
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Sample Questions
Q1) Because variable costs are assumed to change in constant proportion with changes in the activity level,the graph of the variable costs when plotted against the activity level appears as a circle.
A)True
B)False
Q2) The relevant range is useful for analyzing cost behavior for management decision-making purposes.
A)True
B)False
Q3) If direct materials cost per unit increases,the break-even point will increase.
A)True
B)False
Q4) A production supervisor's salary that does NOT vary with the number of units produced is an example of a fixed cost.
A)True
B)False
Q5) A mixed cost has characteristics of both a variable cost and a fixed cost. A)True
B)False
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Chapter 12: Differential Analysis and Product Pricing
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Sample Questions
Q1) A business is considering a cash outlay of $250,000 for the purchase of land,which it intends to lease for $40,000 per year.If alternative investments are available that yield an 16% return,the opportunity cost of the purchase of the land is
A)$45,000.
B)$37,800.
C)$47,200.
D)$40,000.
Q2) A practical approach that is frequently used by managers when setting normal long-run prices is the cost-plus approach.
A)True B)False
Q3) Hill Co.can further process Product O to produce Product P.Product O is currently selling for $65 per pound and costs $42 per pound to produce.Product P would sell for $82 per pound and would require an additional cost of $13 per pound to produce. The differential cost of producing Product P is $56 per pound.
A)True B)False
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Chapter 13: Budgeting and Standard Cost Systems
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170 Flashcards
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Sample Questions
Q1) If the wage rate paid per hour differs from the standard wage rate per hour for direct labor,the variance is termed
A)variable variance.
B)rate variance.
C)quantity variance.
D)volume variance.
Q2) The budget process involves doing all the following EXCEPT
A)establishing specific goals.
B)executing plans to achieve the goals.
C)periodically comparing actual results with the goals.
D)dismissing all managers who fail to achieve operational goals specified in the budget.
Q3) If the actual quantity of direct materials used in producing a commodity differs from the standard quantity,the variance is termed
A)controllable variance.
B)price variance.
C)quantity variance.
D)rate variance.
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Chapter 14: Performance Evaluation for Decentralized Operations
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Sample Questions
Q1) How much would Division 3's income from operations increase?
A)$150,000
B)$50,000
C)$100,000
D)$25,000
Q2) Sales commissions expense for a department store is an example of a direct expense.
A)True
B)False
Q3) What is a strength of the balanced scorecard?
A)The overall emphasis is on the financial measures of the company,which keeps management abreast of the company's financial position.
B)It has the ability to reveal the underlying nonfinancial drivers of financial performance.
C)It provides a method for departmental managers to evaluate top management.
D)All of these are strengths of the balanced scorecard.
Q4) The ratio of sales to invested assets is termed investment turnover. A)True B)False
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Chapter 15: Capital Investment Analysis
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Sample Questions
Q1) Which method of evaluating capital investment proposals uses present value concepts to compute the rate of return from the net cash flows expected from capital investment proposals?
A)Internal rate of return
B)Cash payback
C)Net present value
D)Average rate of return
Q2) The average rate of return method of capital investment analysis gives consideration to the present value of future cash flows.
A)True
B)False
Q3) All of the following qualitative considerations may impact upon capital investments analysis EXCEPT
A)time value of money.
B)employee morale.
C)the impact on product quality.
D)manufacturing flexibility.
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