Principles of Accounting II
Mock Exam
Course Introduction
Principles of Accounting II builds upon the foundational concepts introduced in the first Accounting course, focusing on more advanced topics essential for business decision-making. Key areas explored include managerial accounting, cost behavior and analysis, budgeting, performance evaluation, and responsibility accounting. Students will learn how to analyze financial statements, apply accounting techniques to internal operations, and make informed management decisions. This course emphasizes the use of accounting information in planning, controlling, and evaluating business activities, preparing students for careers in accounting, finance, and business administration.
Recommended Textbook
Horngren's Accounting The Managerial Chapters 11th Edition by Tracie L. Miller Nobles
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9 Chapters
1673 Verified Questions
1673 Flashcards
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Chapter 18: Introduction to Managerial Accounting
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210 Verified Questions
210 Flashcards
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Sample Questions
Q1) ERP systems can integrate all of a company's functions,departments,and data into a single system.
A)True
B)False
Answer: True
Q2) How does a merchandise company calculate unit cost per item? Why do managers need to know the unit cost per item?
Answer: Unit cost per item is calculated by dividing total cost of goods sold by total number of items sold.The unit cost per item helps managers know which products are most profitable.The unit cost per item also helps managers set appropriate selling prices.
Q3) Which of the following would be classified as a prime cost?
A) cost of direct materials used
B) depreciation on factory equipment
C) salary of sales personnel
D) depreciation on office furniture
Answer: A
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Chapter 19: Job Order Costing
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170 Verified Questions
170 Flashcards
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Sample Questions
Q1) For each of the following types of business,indicate why the manager needs to know the unit cost information.
\[\begin{array} { | l | l | }
\hline \text { Managers of a } & \text { Need to know the cost to } \\
\hline \text { Bakery } & \\
\hline \text { Computer } & \\
\text { manufacturer } & \\
\hline \text { Bank } & \\
\hline \text { Seamstress } & \\
\hline
\end{array}\]
Answer: \[\begin{array} { | l | l | }
\hline \text { Managers of a } & \text { Need to know the cost to } \\
\hline \text { Bakery } & \text { Make a cake } \\
\hline \text { Computer } & \\
\text { manufacturer } & \text { Make a computer } \\
\hline \text { Bank } & \text { Service a customer's account } \\
\hline \text { Seamstress } & \text { Make a garment } \\
\hline
\end{array}\]
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Page 4
Chapter 20: Process Costing
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167 Verified Questions
167 Flashcards
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Sample Questions
Q1) Muses Manufacturing produces plastic toys and uses process costing.There are three processing departments-Assembling,Finishing,and Packaging.On January 1,the Finishing Department had 2,000 units of partially processed product in production.During January,31,000 units were transferred in from the Assembling Department and 30,000 units were completed and transferred out.At the end of the month,3,000 units of partially processed products remained in the Finishing Department.See additional details below. Finishing Department,ending balance at January 31
Percent completed for materials cost: \( 94 \% \)
Percent completed for conversion cost: \( 70 \% \)
What was the number of equivalent units for the month of January,with respect to direct materials,for the Finishing Department?
A) 32,820 units
B) 33,000 units
C) 30,000 units
D) 2,820 units
Answer: A
Q2) Provide the formula for (1)To account for and (2)Accounted for.
Answer: (1)To account for = Beginning balance + Amount started or added (2)Accounted for = Completed and transferred out + In process
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Page 5
Chapter 21: Cost-Volume-Profit Analysis
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238 Flashcards
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Sample Questions
Q1) Indiana Hot Tubs,Inc.reports the following information for August: \[\begin{array} { | l | r | }
\hline \text { Sales Revenue } & \$ 770,000 \\
\hline \text { Variable Costs } & 220,000 \\
\hline \text { Fixed Costs } & 73,000 \\
\hline
\end{array}\] Calculate the operating income for August using variable costing.
A) $550,000
B) $697,000
C) $477,000
D) $770,000
Q2) Total variable costs change in direct proportion to a change in volume.
A)True
B)False
Q3) ________ is a "what if" technique that estimates profit or loss results if selling price,costs,volume,or underlying assumptions change.
A) High-low method of analysis
B) Sensitivity analysis
C) Contribution margin
D) Operating leverage
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Chapter 22: Master Budgets
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172 Flashcards
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Sample Questions
Q1) The most important part of a budgeting system is getting managers and employees to accept the budget.
A)True
B)False
Q2) When preparing the budgeted balance sheet,the balance of the Accounts Payable account is taken from the cash budget.
A)True
B)False
Q3) Budgeted financial statements are financial statements based on budgeted amounts rather than actual amounts.
A)True
B)False
Q4) Sensitivity analysis is a what-if technique.
A)True
B)False
Q5) Developing a budget reduces coordination and communication at different levels in an organization.
A)True
B)False
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Chapter 23: Flexible Budgets and Standard Cost Systems
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204 Flashcards
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Sample Questions
Q1) Under a standard cost system,the journal entry to record direct labor includes
A) a debit for standard direct labor quantity for actual production times standard direct labor cost per hour
B) a credit for standard quantity usage for actual production times actual cost per hour
C) a debit for actual quantity times standard cost per hour
D) a credit for standard quantity for actual production times standard cost per hour
Q2) The flexible budget variance is the difference between expected results in the flexible budget for the actual units sold and the static budget.
A)True
B)False
Q3) Which of the following is not a flexible budget variance?
A) total fixed overhead variance
B) total variable overhead variance
C) total direct materials variance
D) total direct labor variance
Q4) What does the fixed overhead volume variance measure?
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8
Chapter 24: Cost Allocation and Responsibility Accounting
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Sample Questions
Q1) Which of the following internal business perspective key performance indicators (KPIs)is commonly used to assess the innovation process?
A) number of new products developed
B) number of warranty claims
C) employee turnover rate
D) rate of on-time deliveries
Q2) Discuss the difference between a centralized company and a decentralized company.
Q3) Net income is used in the numerator of the return on investment formula.
A)True
B)False
Q4) Define market-based transfer price.When should market-based transfer pricing be used? Explain your answer.
Q5) To create goal congruence,some firms prefer calculating ROI based on the gross book value of asset.
A)True
B)False
Q6) List two objectives in setting transfer prices.
Q7) Explain the difference between a controllable and a noncontrollable cost.
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Chapter 25: Short-Term Business Decisions
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Sample Questions
Q1) Rice Corporation manufactures two styles of lamps-a Bedford Lamp and a Lowell Lamp.The following per unit data are available: \[\begin{array} { | l | r | r | }
\hline & \text { Bedford Lamp } & \text { Lowell Lamp } \\
\hline \text { Sales price } & \$ 25 & \$ 35 \\
\hline \text { Variable costs } & \$ 17 & \$ 23 \\
\hline \text { Machine hours required for one lamp } & 2 & 4 \\
\hline
\end{array}\] Total fixed costs are $50,000.Machine hour capacity is 25,000 hours per year.Assuming that the company can sell as many products as it can make,which product mix would deliver the highest operating income?
A) 6,250 Bedford Lamps and 12,500 Lowell Lamps
B) 0 Bedford Lamps and 6,250 Lowell Lamps
C) 12,500 Bedford Lamps and 0 Lowell Lamps
D) 12,500 Bedford Lamps and 12,500 Lowell Lamps
Q2) Special pricing orders increase operating income if the special price exceeds the differential costs of filling the special order.
A)True
B)False
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Chapter 26: Capital Investment Decisions
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Sample Questions
Q1) The fact that invested cash earns income over time is called the time value of money.
A)True
B)False
Q2) A post-audit in capital budgeting is a comparison of the actual results of capital investments with the projected results.
A)True
B)False
Q3) You have just won the lottery and have three payout options:
1.$1,000,000 now
2.$150,000 at the end of each year for the next ten years
3.$2,000,000 at the end of ten years.
What is a common basis for comparison that you can use to decide which option to choose? Explain your answer.
Q4) When the internal rate of return is the same as the required rate of return,the net present value of an investment will be positive.
A)True
B)False
Q5) What are the strengths of the net present value capital budgeting method?
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