Managerial Accounting Exam Questions
Course Introduction
Managerial Accounting focuses on the use of accounting information by managers within organizations for decision-making, planning, and control. The course covers key topics such as cost behavior, budgeting, performance evaluation, activity-based costing, and the analysis of financial data to support strategic and operational decisions. Students will learn how to prepare and interpret internal financial reports, analyze variances, and utilize accounting tools to assess business efficiency and profitability, equipping them with the skills necessary to contribute effectively to organizational management and strategy.
Recommended Textbook
Accounting 9th Canadian Edition Volumer II by Charles T. Horngren
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13 Chapters
2103 Verified Questions
2103 Flashcards
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Page 2
Chapter 12: Corporations: Paid-In Capital and the Balance Sheet
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167 Verified Questions
167 Flashcards
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Sample Questions
Q1) Which of the following would be included in the entry to record the issuance of 5,000 shares of $10 par value common stock at $13 per share cash?
A) Cash would be debited for $65,000.
B) Common stock would be debited for $50,000.
C) Common stock would be credited for $65,000.
D) Paid-in capital in excess of par-common would be debited for $5,000.
Q2) A company's income tax expense is calculated on the basis of book income, but the income tax payable amount is based on the:
A) sales tax rate applied to sales revenues.
B) amount of payroll tax that has not been paid yet.
C) amount of taxable income, as calculated on the income tax return.
D) amount of dividends paid to shareholders.
Q3) Which of the following is a TRUE statement about no-par stock?
A) No-par stock has zero value.
B) No-par stock has been purchased by the corporation for investment purposes.
C) No-par stock is a form of common stock that does not carry par value.
D) No-par stock is a form of preferred stock without voting rights.
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Page 3
Chapter 13: Corporations: Effects on Retained Earnings and the Income Statement
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164 Verified Questions
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Sample Questions
Q1) At December 31, 2014, how much is the earnings per share for income (loss) from continuing operations?
(Please round all calculations to the nearest cent.)
A) $(1.20)
B) $7.85
C) $10.65
D) $11.85
Q2) Which of the following would occur if the corporation purchased 15,000 shares of its common stock for $9.50 per share?
A) Stockholders' equity would increase by $142,500.
B) Stockholders' equity would decrease by $75,000.
C) Stockholders' equity would decrease by $142,500.
D) Stockholders' equity would neither increase nor decrease.
Q3) Preferred Products started business on March 1, 2012, and issued 100,000 shares of $2 par value common stock at a market price of $50 per share. One year later, the share price had soared to $120. If Preferred Products does a 3-for-1 stock split, the market value of the stock will drop to $60 per share.
A)True
B)False
Page 4
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Chapter 14: The Statement of Cash Flows
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157 Verified Questions
157 Flashcards
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Sample Questions
Q1) A statement of cash flows is generated to show:
A) the revenues the company has earned.
B) the expenses the company incurred during the time period.
C) the inflow and outflow of cash during the time period.
D) how profits were generated.
Q2) Operating activities include activities that affect long-term liabilities and stockholders' equity.
A)True
B)False
Q3) Which of the following sections from the statement of cash flows includes borrowing money and paying off loans?
A) The investing section
B) The operating section
C) The financing section
D) The noncash investing and financing section
Q4) The financing section of the statement of cash flows reflects transactions in the equity accounts and the long-term liability accounts.
A)True
B)False
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Chapter 15: Financial Statement Analysis
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161 Verified Questions
161 Flashcards
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Sample Questions
Q1) The debt ratio is the ratio of total debt divided by total equity.
A)True
B)False
Q2) Perform a horizontal analysis of the following company's balance sheet. Include both the amount and the percentage of change for each account.
\[\begin{array} { | l | r | r | r | r | }
\hline \text { Account } &{ \mathbf { 2 0 1 1 } } & { \mathbf { 2 0 1 0 } } & \text { Change Amount } & \text { Change Percent } \\
\hline \text { Current assets } & \$ 121,000 & \$ 100,000 & & \\
\hline \text { Accounts receivable } & 117,000 & 125,000 & & \\
\hline \text { Merchandise inventory } & 70,000 & 85,000 & & \\
\hline \text { Current liabilities } & 63,500 & 50,000 & & \\
\hline \text { Long-term liabilities } & 100,000 & 100,000 & & \\
\hline \text { Common stock } & 50,000 & 50,000 & & \\
\hline \text { Retained earnings } & 94,500 & 110,000 & & \\
\hline
\end{array}\]
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Page 6
Chapter 16: Introduction to Management Accounting
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161 Flashcards
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Sample Questions
Q1) Which of the following is an inventory account for a merchandise company?
A) Work in process inventory
B) Manufacturing overhead inventory
C) Merchandise inventory
D) Finished goods inventory
Q2) Based on the data shown here, what was the amount of the cost of goods sold?
A) $598,500
B) $591,000
C) $42,000
D) $7,500
Q3) The wages and benefits of the factory manager are product costs.
A)True
B)False
Q4) Which of the following is NOT a part of manufacturing overhead?
A) Indirect materials
B) Indirect labor
C) Factory insurance
D) Depreciation on delivery vehicles
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Chapter 17: Job Order and Process Costing
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Sample Questions
Q1) At year-end, what was the balance in Finished goods?
A) $90,500
B) $19,500
C) $42,500
D) $45,000
Q2) How much was the cost per unit (cost per crate) of finished product? (Please round to the nearest cent.)
A) $374.38
B) $202.50
C) $254.50
D) $283.75
Q3) A job order costing system is useful in which of the following circumstances?
A) Mass production of a commodity
B) Manufacturing multiple products in separate batches
C) Continuous flow production of a single product
D) Manufacturing a product in a multi-step flow of production
Q4) When manufacturing overhead is allocated, the amount is recorded as a debit to Finished goods and a credit to Work in process.
A)True
B)False
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Chapter 18: Activity-Based Costing and Other Cost Management Tools
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160 Verified Questions
160 Flashcards
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Sample Questions
Q1) Use the T-accounts shown above to record the transactions, and then answer the following question:
After transaction number 5, what was the balance in the Conversion costs account?
A) $28,600
B) $19,600
C) $24,900
D) $16,400
Q2) Johnson Production Company uses just-in-time production and accounting methods. On June 1, Johnson purchased $4,000 of raw materials on account. Which of the following journal entries correctly records this transaction?
A) Debit accounts payable for $4,000, credit Raw and in-process inventory for $4,000.
B) Debit $4,000 to Materials inventory, credit $4,000 to Accounts payable.
C) Debit $4,000 to Work in process inventory, credit $4,000 to Accounts payable.
D) Debit $4,000 to Raw and in-process inventory, credit $4,000 to Accounts payable.
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Chapter 19: Cost-Volume-Profit Analysis
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Sample Questions
Q1) Breakeven is the point where the sales revenues are exactly equal to the total variable costs plus the total fixed costs.
A)True
B)False
Q2) Gray Company sells two products, X and Y. For the coming year, Gray predicts the sale of 5,000 units of X and 10,000 units of Y. The contribution margins of the two products are $2 and $3, respectively. The weighted-average contribution margin would be $2.50.
A)True
B)False
Q3) Chambers Company sells glass vases at a wholesale price of $2.50 per unit. Variable cost is $1.75 per unit. Chambers' fixed costs are $6,500 per month. If Chambers wishes to make operating income of $2,500, how many units must be sold?
A) 11,500
B) 11,750
C) 12,000
D) 12,500
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Chapter 20: Short-Term Business Decisions
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Sample Questions
Q1) All of the following are relevant to the decision to replace equipment EXCEPT the:
A) cost of new equipment.
B) selling price of old equipment.
C) future maintenance costs of old equipment.
D) original cost of old equipment.
Q2) Custom Furniture manufactures a small table and a large table. The small table sells for $800, has variable costs of $520 per table, and takes eight direct labor hours to manufacture. The large table sells for $1,200, has variable costs of $720, and takes sixteen direct labor hours to manufacture. The company has a maximum of 4,800 direct labor hours per month when operating at full capacity. If there are no constraints on sales of either product, and the company could choose any proportions of product mix that they wanted, what is the maximum contribution margin the company could earn?
A) $122,000
B) $176,000
C) $154,500
D) $168,000
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11
Chapter 21: Capital Investment Decisions and the Time
Value of Money
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152 Flashcards
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Sample Questions
Q1) Capital rationing is when a company has limited resources, and it must find ways to reduce operating expenses in all of its divisions and units.
A)True
B)False
Q2) The rate of return method and the payback method are often used as preliminary screening measures, but are insufficient to fully evaluate a capital investment.
A)True
B)False
Q3) Which of the following BEST describes the term capital rationing?
A) When a company's resources are limited, it is choosing between alternative investment opportunities.
B) When a company has unlimited resources, it is finding the most number of profitable investment opportunities.
C) When a company is encountering cash flow shortages, it is finding ways of increasing revenues.
D) When a company has limited resources, it is finding ways to cut operating costs.
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Chapter 22: The Master Budget and Responsibility Accounting
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Sample Questions
Q1) What is the projected cash balance at the end of September?
A) $21,000
B) $12,600
C) $18,000
D) $2,600
Q2) How much is the operating net income/(loss) for March?
A) $3,500
B) $1,450
C) ($500)
D) $7,500
Q3) Which of the following describes the cash budget?
A) It aids in planning to ensure the company has adequate inventory on hand.
B) It captures the variable and fixed expenses of the business.
C) It depicts the breakdown of sales based on terms of collection.
D) It helps in planning to ensure the business has adequate cash.
Q4) How much are the total operating expenses in October?
A) $29,800
B) $30,300
C) $30,050
D) $29,990
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Chapter 23: Flexible Budgets and Standard Costs
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Sample Questions
Q1) Based on the above data, how much was the flexible budget variance for operating income?
A) $4,500 U
B) $4,500 F
C) $380 U
D) $5,490 F
Q2) What do price variances measure?
A) The difference between the price the company pays and the price its competitors pay
B) The change in prices over time
C) The difference between actual and standard price
D) The volume discounts companies receive when ordering materials in large quantities
Q3) Based on the above data, which of the following statements would be a correct interpretation of the flexible budget variance for sales revenue?
A) Decrease in price per unit
B) Increase in variable cost per unit
C) Increase in sales volume
D) Increase in fixed costs
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14
Chapter 24: Performance Evaluation and the Balanced Scorecard
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Sample Questions
Q1) In a balanced scorecard system, which of the following KPIs would relate to the customer perspective?
A) Defect rate
B) Employee satisfaction
C) Gross margin growth
D) Number of repeat customers
Q2) If a manager's performance is evaluated solely on the ability to control costs, he or she may sacrifice quality for savings, thus endangering customer satisfaction.
A)True
B)False
Q3) How much is the sales volume variance for the 32 inch pipe?
A) $1,000 F
B) $1,000 U
C) $8,000 U
D) $8,000 F
Q4) Financial performance metrics are considered to be a lead indicator, providing signs of future performance.
A)True
B)False
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