Course Introduction
Managerial Accounting Exam Preparation Guide
Managerial Accounting focuses on the use of accounting information for internal decision-making within organizations. The course covers topics such as cost behavior, budgeting, performance evaluation, and strategic planning, emphasizing how managers utilize accounting data to plan operations, control activities, and make informed business decisions. Students will learn techniques for analyzing financial information, preparing meaningful reports, and applying budgetary and cost concepts to real-world scenarios, equipping them with the analytical skills necessary for managerial roles across various industries.
Recommended Textbook
Corporate Financial Accounting 12th Edition by
Carl S. Warren
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15 Chapters
2628 Verified Questions
2628 Flashcards
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Page 2
Chapter 1: Introduction to Accounting and Business
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184 Verified Questions
184 Flashcards
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Sample Questions
Q1) Managerial accounting information is used by external and internal users equally.
A)True
B)False
Answer: False
Q2) Who among the following uses financial reports?
A)management
B)creditors
C)investors
D)all are correct
Answer: D
Q3) Land,originally purchased for $30,000,is sold for $62,000 in cash.What is the effect of the sale on the accounting equation?
A)assets increase $62,000;stockholders' equity increases $62,000
B)assets increase $32,000;stockholders' equity increases $32,000
C)assets increase $62,000;liabilities decrease $30,000;stockholders' equity increases
$32,000
D)assets increase $30,000;no change for liabilities;stockholders' equity increases $62,000
Answer: B
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Page 3
Chapter 2: Analyzing Transactions
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212 Flashcards
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Sample Questions
Q1) Which of the following applications of the rules of debit and credit is true?
A)decrease Prepaid Insurance with a credit and the normal balance is a credit
B)increase Accounts Payable with a credit and the normal balance is a debit
C)increase Supplies Expense with a debit and the normal balance is a debit
D)decrease Cash with a debit and the normal balance is a credit
Answer: C
Q2) In which of the following types of accounts are increases recorded by credits?
A)revenues,liabilities
B)dividends,assets
C)liabilities,dividends
D)expenses,liabilities
Answer: A
Q3) To determine the balance in a prepaid expense account,subtract credits from debits.
A)True
B)False
Answer: False
Q4) Prepare a journal entry on October 12 for the fees earned on account,$14,600. Answer: 11ea906a_d1c4_575a_aec7_59d824a6a683_TB2051_00
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Chapter 3: The Adjusting Process
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168 Flashcards
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Sample Questions
Q1) When preparing an income statement vertical analysis,each revenue and expense is expressed as a percent of net income.
A)True
B)False
Answer: False
Q2) The entry to adjust the accounts for wages accrued at the end of the accounting period is
A)debit Wages Payable;credit Wages Income
B)debit Wages Income;credit Wages Payable
C)debit Wages Payable;credit Wages Expense
D)debit Wages Expense;credit Wages Payable
Answer: D
Q3) The company determines that the interest expense on a note payable for period ending December 31st is $775.This amount is payable on January 1st.Prepare the journal entries required on December 31st and January 1st.
Answer: 11ea906a_d1cd_315d_aec7_a39dacd6c22c_TB2051_00
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Chapter 4: Completing the Accounting Cycle
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192 Flashcards
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Sample Questions
Q1) Cash and other assets that may reasonably be expected to be realized in cash,sold,or consumed through the normal operations of a business,usually longer than one year,are called current assets.
A)True
B)False
Q2) When preparing the retained earnings statement,the beginning retained earnings balance can always be found
A)in the Income Statement columns of the work sheet
B)in the statement of cash flows
C)in the general ledger
D)in the Adjustments columns of the work sheet
Q3) Prior to adjustment at August 31,2014,Salary Expense has a debit balance of $298,500.Salaries owed but not paid as of the same date total $7,200. Present the entries to record the following:
(1)Accrued salaries as of August 31.
(2)Closing of Salary Expense as of August 31.
Q4) The work sheet and the financial statements both require dollar signs.
A)True
B)False
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Chapter 5: Accounting for Merchandising Businesses
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217 Verified Questions
217 Flashcards
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Sample Questions
Q1) Which of the following accounts has a normal debit balance?
A)Accounts Payable
B)Sales Returns and Allowances
C)Sales
D)Interest Revenue
Q2) In many retail businesses,inventory is the largest current asset.
A)True
B)False
Q3) Sales to customers who use bank credit cards,such as MasterCard and VISA,are generally treated as credit sales.
A)True
B)False
Q4) The ending merchandise inventory for 2010 is the same as the beginning merchandise inventory for 2011.
A)True
B)False
Q5) One of the most important differences between a service business and a retail business is in what is sold.
A)True
B)False
Page 7
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Chapter 6: Inventories
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163 Flashcards
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Sample
Questions
Q1) During the taking of its physical inventory on December 31,2014,Barry's Bike Shop incorrectly counted its inventory as $350,000 instead of the correct amount of $280,000.The effect on the balance sheet and income statement would be as follows:
A)assets overstated by $70,000;retained earnings understated by $70,000;net income statement understated by $70,000.
B)assets overstated by $70,000;retained earnings understated by $70,000;no effect on the income statement.
C)assets and retained earnings overstated by $70,000;net income overstated by $70,000.
D)assets and retained earnings overstated by $70,000;net income understated by $70,000.
Q2) Merchandise inventory at the end of the year was understated.Which of the following statements correctly states the effect of the error?
A)net income is understated
B)net income is overstated
C)cost of merchandise sold is understated
D)merchandise inventory reported on the balance sheet is overstated
Q3) List three different security measures taken by stores to safeguard inventory.
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8
Chapter 7: Sarbanes-Oxley, internal Control, and Cash
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175 Verified Questions
175 Flashcards
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Sample Questions
Q1) In the normal operation of business you receive a check from a customer and deposit it into your checking account.With your bank statement you are advised that this check for $775 is "NSF".The bank also informs you that due to the amount of activity on your business account the monthly service charge is $75.During a bank reconciliation,you will:
A)subtract both values from balance according to bank.
B)add both values from balance according to books.
C)add both values from balance according to bank.
D)subtract both values from balance according to books.
Q2) Procedures designed to protect cash from theft and misuse from the time it is received until it can be deposited in a bank are called
A)accounting controls
B)cash controls
C)preventive controls
D)detective controls
Q3) A voucher is a written authorization to make a cash payment.
A)True
B)False
Q4) List and define each of the five elements of internal control.
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Chapter 8: Receivables
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Sample Questions
Q1) Discount Mart utilizes the allowance method of accounting for uncollectible receivables.On December 12th the company receives a $550 check from Chad Thomas in settlement of Thomas' $1,100 outstanding accounts receivable.Due to Thomas' failing health he is closing his company and is expecting to make no further payments to Discount Mart.Journalize this declaration.
Q2) When accounting for uncollectible receivables and using the percentage of sales method,the matching principle is violated.
A)True
B)False
Q3) When an account receivable that has been written off is subsequently collected,the account receivable is said to be reinstated.
A)True
B)False
Q4) When the allowance method for accounting for uncollectible receivables is used,net income is reduced when a specific receivable is written off.
A)True
B)False
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10
Chapter 9: Fixed Assets and Intangible Assets
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Sample Questions
Q1) Expenditures that add to the utility of fixed assets for more than one accounting period are
A)committed expenditures
B)revenue expenditures
C)utility expenditures
D)capital expenditures
Q2) The entry to record the disposal of fixed assets will include a credit to accumulated depreciation.
A)True
B)False
Q3) The term applied to the amount of cost to transfer to expense resulting from a decline in the utility of intangible assets is
A)amortization
B)depletion
C)depreciation
D)allocation
Q4) Comment on the validity of the following statements."As an asset loses its ability to provide services,cash needs to be set aside to replace it.Depreciation accomplishes this goal."
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Chapter 10: Current Liabilities and Payroll
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171 Flashcards
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Sample Questions
Q1) An unfunded pension liability is reported on the balance sheet as
A)current liability
B)owner's equity
C)long-term liability
D)current liability or long-term liability,depending upon when the pension liability is to be paid
Q2) Research Company sells merchandise with a one year warranty.In 2012,sales consisted of 2,500 units.It is estimated that warranty repairs will average $10 per unit sold,and 30% of the repairs will be made in 2012 and 70% in 2013.In the 2012 income statement,Research should show warranty expense of
A)$25,000
B)$7,500
C)$17,500
D)$0
Q3) Payroll entries are made with data from the A)wage and tax statement
B)employee's earning record
C)employer's quarterly federal tax return
D)payroll register
Q4) List five internal controls that relate directly to payroll.
Page 12
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Chapter 11: Corporations: Organization, stock Transactions, and Dividends
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Sample Questions
Q1) Characteristics of a corporation include
A)shareholders who are mutual agents
B)direct management by the shareholders (owners)
C)its inability to own property
D)shareholders who have limited liability
Q2) When common stock is issued in exchange for land,the land should be recorded in the accounts at the par amount of the stock issued.
A)True
B)False
Q3) The excess of issue price over par of common stock is termed a(n)
A)discount
B)income
C)deficit
D)premium
Q4) The declaration of a cash dividend decreases a corporation's stockholders equity and decreases its assets.
A)True
B)False
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Chapter 12: Long-Term Liabilities: Bonds and Notes
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Sample Questions
Q1) The face value of bonds is quoted as a percentage of the bonds' market value.
A)True
B)False
Q2) Numbers of times interest charges earned is computed as
A)Income before income taxes plus Interest Expense divided by Interest Expense
B)Income before income taxes less Interest Expense divided by Interest Expense
C)Income before income taxes divided by Interest Expense
D)Income before income taxes plus Interest Expense divided by Interest Revenue
Q3) On January 1,2011,Zero Company obtained a $52,000,four-year,6.5% installment note from Regional Bank.The note requires annual payments of $15,179,beginning on December 31,2011.The December 31,2013 carrying amount in the amortization table for this installment note will be equal to:
A)$0
B)$13,000
C)$14,252
D)$16,603
Q4) (a) Prepare the journal entry to issue $500,000 bonds which sold for $490,000 (b) Prepare the journal entry to issue $500.000 bonds which sold for $515,000
Q5) (a) Prepare the journal entry to issue $100,000 bonds which sold for $94,000. (b) Prepare the journal entry to issue $100,000 bonds which sold for $104,000
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Chapter 13: Investments and Fair Value Accounting
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Sample Questions
Q1) Blanton Corporation purchased 35% of the outstanding shares of common stock of Worton Corporation as a long-term investment.Subsequently,Worton Corporation reported net income and declared and paid cash dividends.What journal entry would Blanton Corporation use to record the dividends it receives from Worton Corporation?
A)debit Investment in Worton Corporation;credit Cash
B)debit Cash;credit Dividend Revenue
C)debit Investment in Worton Corporation;credit Income of Worton Corporation
D)debit Cash;credit Investment in Worton Corporation
Q2) The financial statements resulting from combining parent and subsidiary statements are called consolidated statements.
A)True
B)False
Q3) The company whose more than 50% stock is owned by the another company is called the
A)controlling company.
B)investee company.
C)subsidiary company.
D)sibling company.
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15
Chapter 14: Statement of Cash Flows
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Sample Questions
Q1) Cash flows from investing activities,as part of the statement of cash flows,include payments for the acquisition of fixed assets.
A)True
B)False
Q2) Durrand Corporation's accumulated depreciation increased by $12,000,while patents decreased by $2,200 between consecutive balance sheet dates.There were no purchases or sales of depreciable or intangible assets during the year.In addition,the income statement showed a gain of $4,300 from sale of land.Reconcile a net income of $65,000 to net cash flow from operating activities.
Q3) If accounts payable have increased during a period
A)revenues on an accrual basis are less than revenues on a cash basis.
B)expenses on an accrual basis are less than expenses on a cash basis.
C)expenses on an accrual basis are the same as expenses on a cash basis.
D)expenses on an accrual basis are greater than expenses on a cash basis.
Q4) Cash paid to acquire treasury stock should be shown on the statement of cash flows from investing activities.
A)True
B)False
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Page 16
Chapter 15: Financial Statement Analysis
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Sample Questions
Q1) Corporate annual reports typically do not contain which of the following?
A)management discussion and analysis
B)SEC statement expressing an opinion
C)accompanying foot notes
D)auditor's report
Q2) Assuming that the quantities of inventory on hand during the current year were sufficient to meet all demands for sales,a decrease in the inventory turnover for the current year when compared with the turnover for the preceding year indicates an improvement in inventory management.
A)True
B)False
Q3) 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 corporate social responsibility.
D)determine whether or not a company is a good credit risk.
Q4) A clean audit opinion is the same as a qualified audit opinion.
A)True
B)False
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