Principles of Accounting II
Midterm Exam
Course Introduction
Principles of Accounting II builds upon the foundational concepts introduced in the first accounting course, focusing on the application of accounting principles to partnerships, corporations, and other complex business organizations. The course emphasizes the preparation and analysis of financial statements, understanding managerial accounting concepts, and the use of accounting data for planning, control, and decision-making.
Topics include inventory valuation, long-term assets, liabilities, stockholders' equity, the statement of cash flows, and an introduction to financial statement analysis. This course prepares students to interpret financial information and understand its role in business strategy and operations.
Recommended Textbook
MANAGERIAL ACCOUNTING Version 1.0 by
Kurt Heisinger and Joe Hoyle
Available Study Resources on Quizplus
13 Chapters
878 Verified Questions
878 Flashcards
Source URL: https://quizplus.com/study-set/3571 Page 2
Chapter 1: What Is Managerial Accounting
Available Study Resources on Quizplus for this Chatper
83 Verified Questions
83 Flashcards
Source URL: https://quizplus.com/quiz/70918
Sample Questions
Q1) Before purchasing an Enterprise Resource Planning (ERP)system,companies must confirm that the benefits of an ERP system will outweigh the costs of implementation.
A)True
B)False
Answer: True
Q2) Managerial accounting focuses on providing historical financial information to outside users including shareholders and creditors.
A)True
B)False
Answer: False
Q3) The term "factory burden" is synonymous with manufacturing overhead.
A)True
B)False
Answer: True
Q4) Nonmanufacturing costs include direct labor and indirect labor.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above.
Page 3
Chapter 2: How Is Job Costing Used to Track Production Costs
Available Study Resources on Quizplus for this Chatper
44 Verified Questions
44 Flashcards
Source URL: https://quizplus.com/quiz/70917
Sample Questions
Q1) If the Manufacturing Overhead account has a credit balance after overhead has been applied to products,manufacturing overhead:
A)has been closed.
B)has been applied incorrectly.
C)is underapplied.
D)is overapplied.
E)None of the answer choices is correct.
Answer: D
Q2) Service organizations often use a predetermined overhead rate similar to manufacturing companies.
A)True
B)False
Answer: True
Q3) The journal entry for recording timesheet submissions by employees working on various jobs will include a debit to the Direct Labor account.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 4
Chapter 3: How Does an Organization Use Activity-Based
Costing to Allocate Overhead Costs
Available Study Resources on Quizplus for this Chatper
71 Verified Questions
71 Flashcards
Source URL: https://quizplus.com/quiz/70916
Sample Questions
Q1) Flannery Inc.produces identical tables in large batches.Which of the following would most likely be a product-level cost for Flannery?
A)Quality control costs.
B)Salaries for purchasing and receiving personnel.
C)Research and development for a new line of tables.
D)Electricity costs for plant machinery.
E)None of the answer choices is correct.
Answer: C
Q2) Which of the following would be the best allocation base for a product designed for a specific customer?
A)Quantity of materials used.
B)Hours of design time.
C)Square feet of space occupied.
D)Number of new products.
E)None of the answer choices is correct.
Answer: B
Q3) Indirect manufacturing costs are easily traceable to products.
A)True
B)False
Answer: False
To view all questions and flashcards with answers, click on the resource link above. Page 5
Chapter 4: How Is Process Costing Used to Track
Production Costs
Available Study Resources on Quizplus for this Chatper
58 Verified Questions
58 Flashcards
Source URL: https://quizplus.com/quiz/70915
Sample Questions
Q1) Diaz Company uses process costing in its two processing departments-Assembly and Finishing.If the direct labor costs incurred for the Assembly Department totaling $15,000 are to be paid next month,which one of the following journal entries would be made to record this transaction?
A)Wages Payable 15,000
Wages Expense 15,000
B)WIP Inventory - Assembly 15,000
Wages Payable 15,000
C)Wages Payable 15,000
WIP Inventory - Assembly 15,000
D)Wages Expense 15,000
WIP Inventory - Assembly 15,000
E)None of the answer choices is correct.
Q2) Refer to Exhibit 4-2.What is the cost per gallon for the packaging process?
A)$1.66
B)$1.78
C)$1.70
D)$1.56
E)None of the answer choices is correct.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: How Do Organizations Identify Cost Behavior
Patterns
Available Study Resources on Quizplus for this Chatper
69 Verified Questions
69 Flashcards
Source URL: https://quizplus.com/quiz/70914
Sample Questions
Q1) All costs behave in a linear manner.
A)True
B)False
Q2) Regression analysis is one of the most accurate methods for estimating costs,because its estimates are based on the data set as a whole.
A)True
B)False
Q3) Refer to Exhibit 5-5.What is Tyler's cost equation used to estimate total monthly costs?
A)Y = $3,000 + $1.25X
B)Y = $3,000 - $1.25X
C)Y = $3,000 / $1.25X
D)Y = $3,000 + $1.25 + 5,000X
E)None of the answer choices is correct.
Q4) Examples of variable costs include factory building insurance and wages for hourly workers.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 7
Chapter 6: How Is Cost-Volume-Profit Analysis Used for Decision Making
Available Study Resources on Quizplus for this Chatper
79 Verified Questions
79 Flashcards
Source URL: https://quizplus.com/quiz/70913
Sample Questions
Q1) Refer to Exhibit 6-7.What is the unit product cost using variable costing?
A)$4.00
B)$6.07
C)$8.57
D)$6.50
E)None of the answer choices is correct.
Q2) Refer to Exhibit 6-1.What is the break-even point in units?
A)3,600
B)6,000
C)4,500
D)18,000
E)None of the answer choices is correct.
Q3) Refer to Exhibit 6-2.What would be the operating profit if the unit sales price increases 10 percent?
A)$312,500
B)$212,500
C)$362,500
D)$262,500
E)None of the answer choices is correct.
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: How Are Relevant Revenues and Costs Used to
Make Decisions
Available Study Resources on Quizplus for this Chatper
76 Verified Questions
76 Flashcards
Source URL: https://quizplus.com/quiz/70912
Sample Questions
Q1) Refer to Exhibit 7-3.What are the total production costs if the hats are outsourced?
A)$130,000
B)$145,000
C)$100,000
D)$60,000
E)None of the answer choices is correct.
Q2) Refer to Exhibit 7-4.If allocated fixed costs are based on sales revenue for each product line as a proportion of total sales revenue,what is the amount of allocated fixed costs for Color?
A)$18,000
B)$22,500
C)$15,000
D)$31,000
E)None of the answer choices is correct.
Q3) Differential revenues and costs are also called incremental revenues and costs. A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 9
Chapter 8: How Is Capital Budgeting Used to Make Decisions
Available Study Resources on Quizplus for this Chatper
71 Verified Questions
71 Flashcards
Source URL: https://quizplus.com/quiz/70911
Sample Questions
Q1) Refer to Exhibit 8-2.Calculate the net present value for each investment.If the company can only invest in one project,which one should it be?
A)This cannot be determined because they both have the same net present value.
B)Neither Investment A nor B because they both have negative net present values.
C)Investment B.
D)Investment A.
E)None of the answer choices is correct.
Q2) Lockwood Company would like to purchase a production machine for $900,000.The machine is expected to have a life of five years,and a salvage value of $100,000.Annual maintenance costs will total $40,000.Annual savings are predicted to be $350,000.The company only accepts projects that have a payback period of less than three years.
(1)Calculate the payback period for this project rounded to the nearest month.Show your work.
(2)Should the company accept this proposal? Explain.
Q3) The hurdle rate used to evaluate an investment is also called the discount rate. A)True B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 10
Chapter 9: How Are Operating Budgets Created
Available Study Resources on Quizplus for this Chatper
68 Verified Questions
68 Flashcards
Source URL: https://quizplus.com/quiz/70910
Sample Questions
Q1) All of the following appear on the manufacturing overhead budget except:
A)units to be produced.
B)direct labor cost per unit.
C)indirect labor cost per unit.
D)total fixed overhead costs.
E)None of the answer choices is correct.
Q2) Budgeted manufacturing overhead costs include all of the following except:
A)direct materials used in production.
B)depreciation of manufacturing equipment.
C)indirect materials used in production.
D)indirect labor such as the salary of a factory supervisor.
E)None of the answer choices is correct.
Q3) An operating budget is similar to a capital budget in that both are long-term budgets.
A)True
B)False
Q4) Depreciation is deducted at the bottom of a manufacturing overhead budget to determine cash payments for overhead.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: How Do Managers Evaluate Performance Using Cost Variance Analysis
Available Study Resources on Quizplus for this Chatper
69 Verified Questions
69 Flashcards
Source URL: https://quizplus.com/quiz/70909
Sample Questions
Q1) When establishing ideal standards,several factors are considered including machine downtime,electricity outages,and materials waste.
A)True
B)False
Q2) A flexible budget is a revised master budget based on the actual activity level.
A)True
B)False
Q3) Jake's cheese Company produces gourmet cheese for resale at local grocery stores.Jake's expected to use 0.50 direct labor hours to produce one unit (batch)of product,and the variable overhead rate is $5.00 per hour.Actual results are in for last year,which indicates 45,000 batches of cheese were produced and sold.The company's direct labor workforce worked 27,500 hours,and variable overhead costs totaled $144,000.
(1)Calculate the variable overhead spending variance.
(2)Calculate the variable overhead efficiency variance.
(3)Suggest several possible reasons for the variable overhead spending and efficiency variances.
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: How Do Managers Evaluate Performance in
Decentralized Organizations
Available Study Resources on Quizplus for this Chatper
63 Verified Questions
63 Flashcards
Source URL: https://quizplus.com/quiz/70908
Sample Questions
Q1) Refer to Exhibit 11-1.Assume the Trikes Division has average operating assets totaling $400,000 for the year and the company's cost of capital rate is ten percent.What is the residual income for the Trikes division?
A)$585,000
B)$1,380,000
C)$24,000
D)$120,000
E)None of the answer choices is correct.
Q2) Residual income is the dollar amount of division operating profit in excess of the division's cost of acquiring capital to purchase operating assets.
A)True
B)False
Q3) Refer to Exhibit 11-4.What is the ROI for the Couch Division (rounded to the nearest tenth of a percent)?
A)22.0%
B)9.0%
C)5.5%
D)12.5%
E)None of the answer choices is correct.
Page 13
To view all questions and flashcards with answers, click on the resource link above.
Chapter 12: How Is the Statement of Cash Flows Prepared and Used
Available Study Resources on Quizplus for this Chatper
65 Verified Questions
65 Flashcards
Source URL: https://quizplus.com/quiz/70907
Sample Questions
Q1) Refer to Exhibit 12-4.How will the change in inventory be reported in the operating activities
A)The decrease of $105,000 will be subtracted from net income.
B)The decrease of $105,000 will be subtracted from cost of goods sold.
C)The decrease of $105,000 will be added to cost of goods sold.
D)The decrease of $105,000 will be added to net income.
E)None of the answer choices is correct.
Q2) Significant noncash financing and investing activities are reported in:
A)a note below the statement of cash flows.
B)the investing activities
C)the financing activities
D)the operating activities
E)None of the answer choices is correct.
Q3) Refer to Exhibit 12-5.How will the change in accounts receivable be reported in the operating activities
A)The decrease of $60,000 will be added to sales revenue.
B)The decrease of $60,000 will be subtracted from sales revenue.
C)The decrease of $60,000 will be subtracted from net income.
D)The decrease of $60,000 will be added to net income.
E)None of the answer choices is correct.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: How Do Managers Use Financial and
Nonfinancial Performance Measures
Available Study Resources on Quizplus for this Chatper
62 Verified Questions
62 Flashcards
Source URL: https://quizplus.com/quiz/70906
Sample Questions
Q1) Refer to Exhibit 13-1.What is the return on assets for 2013 (rounded to the nearest tenth of a percent)?
A)19.4%
B)51.7%
C)19.8%
D)197.8%
E)None of the answer choices is correct.
Q2) In general,managers prefer the profit margin ratio to decrease over time.
A)True
B)False
Q3) Which of the following is the best explanation of a company's inventory turnover of 12.0 for the year 2013?
A)the company averages about 12 months' sales in inventory.
B)The company averages about 12 days' sales in inventory.
C)The company averages about one month's sales in inventory.
D)The company averages about 12 days from the time an item is sold until the cash is collected.
E)None of the answer choices is correct.
To view all questions and flashcards with answers, click on the resource link above. Page 15