Principles of Managerial Accounting Exam Solutions
Course Introduction
Principles of Managerial Accounting introduces students to the fundamental concepts and techniques used by managers to make informed business decisions. The course covers topics such as cost behavior, budgeting, performance evaluation, and decision-making processes within organizations. Emphasis is placed on the use of accounting information for planning, controlling, and evaluating operations, as well as the role of managerial accounting in strategic decision-making. By analyzing real-world scenarios and utilizing various financial tools, students develop skills necessary to interpret and apply accounting data to support managerial functions in diverse business environments.
Recommended Textbook
Horngrens Financial and Managerial Accounting 6th Edition by Tracie L. Nobles
Available Study Resources on Quizplus
27 Chapters
5590 Verified Questions
5590 Flashcards
Source URL: https://quizplus.com/study-set/3574 Page 2
Chapter 1: Accounting and the Business Environment
Available Study Resources on Quizplus for this Chatper
263 Verified Questions
263 Flashcards
Source URL: https://quizplus.com/quiz/70988
Sample Questions
Q1) An accounting firm collected cash on account.As a result of this transaction,total assets,liabilities,and equity are all unchanged.
A)True
B)False
Answer: True
Q2) Dividends are the expenses of a business.
A)True
B)False
Answer: False
Q3) The Securities and Exchange Commission allows U.S.businesses to choose whether they follow U.S.GAAP or International Financial Reporting Standards.
A)True
B)False Answer: False
Q4) Members of a limited-liability company (LLC)are not personally liable for the debts of the business.
A)True
B)False Answer: True
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Recording Business Transactions
Available Study Resources on Quizplus for this Chatper
219 Verified Questions
219 Flashcards
Source URL: https://quizplus.com/quiz/70987
Sample Questions
Q1) A business makes a cash payment of $12,000 to a creditor.Which of the following accounts is credited?
A)Cash
B)Accounts Payable
C)Bank
D)Accounts Receivable
Answer: A
Q2) Which of the following statements is true of a trial balance?
A)A trial balance is the first step in the accounting cycle.
B)A trial balance is also known as a balance sheet.
C)A trial balance is a list of all accounts with their balances.
D)A trial balance is also known as the chart of accounts.
Answer: C
Q3) Posting a transaction means ________.
A)calculating the balance in an account
B)transferring data from the journal to the ledger
C)preparing a summary of account balances
D)finding the account number in the chart of accounts
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: The Adjusting Process
Available Study Resources on Quizplus for this Chatper
225 Verified Questions
225 Flashcards
Source URL: https://quizplus.com/quiz/70986
Sample Questions
Q1) On December 15,2018,Donald Services,Inc.collected revenue of $3,000 in advance from a new client,and agreed to provide services to the client for the period of December 15 through January 15 of the following year.Assume that the company records deferred revenues using the alternative treatment.Prepare the December 15,2018 journal entry.Omit explanation.
Answer: 11ea86ed_2cf8_1b58_8b27_197aadf06dea_TB3056_00
Q2) The revenue recognition principle tells accountants when to record revenue and requires companies to follow a three step process.
A)True
B)False
Answer: False
Q3) In the case of deferred revenue,the cash is received first,and the revenue is earned later.
A)True
B)False
Answer: True
To view all questions and flashcards with answers, click on the resource link above.
Chapter 4: Completing the Accounting Cycle
Available Study Resources on Quizplus for this Chatper
208 Verified Questions
208 Flashcards
Source URL: https://quizplus.com/quiz/70985
Sample Questions
Q1) Which of the following statements is true of the accounting cycle?
A)It takes place only at the end of an accounting period.
B)It involves preparation of adjusting entries after the closing entries.
C)It ignores the beginning balances of accounts.
D)It is a process by which financial statements for a period are produced.
Q2) After closing entries have been posted ________.
A)the ending balance of Retained Earnings has been properly updated
B)only permanent accounts carry balances
C)dividends have been closed into Retained Earnings
D)All of the statements are correct.
Q3) The permanent accounts-assets,liabilities,and stockholders' equity-are closed to the Common Stock account.
A)True
B)False
Q4) The balance sheet is the first financial statement that is prepared at the end of the period.
A)True
B)False
Q5) Why are temporary accounts not included in the post-closing trial balance?
Page 6
Q6) List the steps of the accounting cycle that take place at the end of the period.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 5: Merchandising Operations
Available Study Resources on Quizplus for this Chatper
277 Verified Questions
277 Flashcards
Source URL: https://quizplus.com/quiz/70984
Sample Questions
Q1) The entry to close Sales Revenue includes a debit to Income Summary.
A)True
B)False
Q2) On the income statement,a service company reports the cost of merchandise inventory that has been sold to customers.
A)True
B)False
Q3) The last step of the closing process of a merchandiser is to make the expense accounts equal zero via the Income Summary account.
A)True
B)False
Q4) Under the periodic inventory system,which of the following statements is correct?
A)During the period,the business records the cost of all inventory bought in the Merchandise Inventory account.
B)Purchase Returns and Allowances and Purchase Discounts are contra expense accounts.
C)Freight in is debited to the Purchases account.
D)Purchase discounts are recorded as credits to the Purchases account.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Merchandise Inventory
Available Study Resources on Quizplus for this Chatper
199 Verified Questions
199 Flashcards
Source URL: https://quizplus.com/quiz/70983
Sample Questions
Q1) A high rate of inventory turnover indicates difficulty in selling inventory.
A)True
B)False
Q2) The tracking of inventory shrinkage due to theft,damage,or errors is done with the help of a(n)________ of inventory.
A)authorization
B)sale
C)physical count
D)delivery
Q3) Companies try to manage their inventory levels such that they will have just enough inventory to meet customer demand without investing large amounts of money in inventory or having it sit on the shelves gathering dust.
A)True
B)False
Q4) What does inventory turnover measure? What does a low rate of inventory turnover indicate?
Q5) What does inventory turnover measure? What does a high rate of inventory turnover indicate?
To view all questions and flashcards with answers, click on the resource link above. Page 8
Chapter 7: Internal Control and Cash
Available Study Resources on Quizplus for this Chatper
258 Verified Questions
258 Flashcards
Source URL: https://quizplus.com/quiz/70982
Sample Questions
Q1) An electronic funds transfers system ________.
A)does not include debit card transactions
B)is seldom used by businesses
C)transfers cash by electronic communication rather than by paper documents
D)uses forms such as checks and deposit tickets to transfer cash
Q2) Which of the following is NOT an internal control over the petty cash fund?
A)Petty cash tickets are sequentially numbered.
B)A specific amount of cash is designated to be kept in the petty cash fund.
C)Petty cash tickets serve as the authorization voucher and explanation.
D)Two custodians should be assigned responsibility for the petty cash fund.
Q3) A way to account for petty cash by maintaining a constant balance in the petty cash account and which at any time requires that cash plus petty cash tickets must total the amount allocated to the petty cash fund,is known as the ________.
A)control system
B)voucher system
C)balanced system
D)imprest system
Q4) Discuss the roles of the internal auditors and the external auditors.
Q5) List the four steps,the proper order,of the purchasing and payment process.
Page 9
Q6) Fifth National Bank requires mandatory vacations and job rotation.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 8: Receivables
Available Study Resources on Quizplus for this Chatper
234 Verified Questions
234 Flashcards
Source URL: https://quizplus.com/quiz/70981
Sample Questions
Q1) At the beginning of 2019,Patriots,Inc.has the following account balances: Accounts Receivable $45,000 (Debit) Allowance for Bad Debts $8,000 (Credit)
Bad Debts Expense $0
During the year,credit sales amounted to $810,000.Cash collected on credit sales amounted to $770,000,and $18,000 has been written off.At the end of the year,the company adjusted for bad debts expense using the percent-of-sales method and applied a rate,based on past history,of 3.5%.The amount of bad debts expense for 2019 is
A)$28,350
B)$56,875
C)$18,000
D)$18,350
Q2) The three major types of receivables are accounts receivable,notes receivable,and other receivables.
A)True
B)False
Q3) The acid-test ratio is also known as the quick ratio.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: Plant Assets, natural Resources, and Intangibles
Available Study Resources on Quizplus for this Chatper
212 Verified Questions
212 Flashcards
Source URL: https://quizplus.com/quiz/70980
Sample Questions
Q1) A truck was acquired for $100,000 and has accumulated depreciation of $70,000.The business exchanges the truck for a new one.The new truck has a market value of $120,000 and the business pays $100,000 cash.Assume the exchange has commercial substance.Prepare the journal entry to record this transaction.Omit explanation.
Q2) All plant assets are depreciated.
A)True
B)False
Q3) A company's accountant capitalized a payment that should have been recorded as a revenue expenditure.How will this error affect the company's financial statements?
A)Net income will be overstated.
B)Revenues will be understated.
C)Assets will be understated.
D)Liabilities will be understated.
Q4) Intangible assets ________.
A)always have a definite life
B)are recorded at cost when purchased externally
C)are always expensed through amortization
D)do not include goodwill
To view all questions and flashcards with answers, click on the resource link above. Page 11
Chapter 10: Investments
Available Study Resources on Quizplus for this Chatper
193 Verified Questions
193 Flashcards
Source URL: https://quizplus.com/quiz/70979
Sample Questions
Q1) On the maturity date of a bond investment,the journal entry includes ________.
A)a debit to Cash and a credit to Held-to-Maturity Debt Investments
B)a debit to Long-term Investments and a credit to Cash
C)a debit to the Interest Revenue and a credit to Cash
D)recording a gain or loss on disposition at maturity
Q2) Realized gains or losses on available-for-sale debt investments represent the difference between the ________.
A)historical cost and the average market value of the investment
B)fair value and the current market value of the investment
C)cash received at time of disposition and the fair value of the investment
D)cash received at time of disposition and the cost of the investment
Q3) Depending on the maturity date,held-to-maturity debt investments are categorized as current assets or long-term assets on the balance sheet.
A)True
B)False
Q4) A parent company is a company that is controlled by another corporation.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: Current Liabilities and Payroll
Available Study Resources on Quizplus for this Chatper
225 Verified Questions
225 Flashcards
Source URL: https://quizplus.com/quiz/70978
Sample Questions
Q1) Which of the following is required to be deducted from employees' paychecks?
A)federal income tax
B)SUTA
C)FUTA
D)charitable contributions
Q2) If the likelihood of a future event is remote,how should the company report the contingency?
Q3) Unearned revenues are current liabilities until they are earned.
A)True
B)False
Q4) Extra compensation items that are not paid directly to an employee are called
A)bonuses
B)benefits
C)wages
D)commissions
Q5) Any portion of a long-term liability that is due with the next year is reported as a current liability.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Long-Term Liabilities
Available Study Resources on Quizplus for this Chatper
207 Verified Questions
207 Flashcards
Source URL: https://quizplus.com/quiz/70977
Sample Questions
Q1) The interest rate that investors demand to earn for loaning their money is known as the ________.
A)stated interest rate
B)coupon rate
C)differential rate
D)market interest rate
Q2) The main reason companies retire bonds prior to their maturity date is to relieve the pressure of paying interest payments.
A)True
B)False
Q3) Adventure Travel signed a 14%,10-year note for $152,000.The company paid an installment of $2200 for the first month.After the first payment,what is the principal balance? (Do not round any intermediate calculations,and round your final answer to the nearest dollar. )
A)$149,800
B)$150,227
C)$151,573
D)$154,200
Q4) When computing the present value of a bond,which interest rate is used? Why?
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Stockholders Equity
Available Study Resources on Quizplus for this Chatper
277 Verified Questions
277 Flashcards
Source URL: https://quizplus.com/quiz/70976
Sample Questions
Q1) The journal entry to record the purchase of treasury stock includes a debit to Treasury Stock - Common for the shares purchased multiplied by the par or stated value of the stock.
A)True
B)False
Q2) Pumpkin Corporation issued 10,000 shares of common stock on January 1,2018.The stock has no par value and was issued at $17 per share.The journal entry for this transaction includes a ________.
A)debit to Cash for $170,000 and a credit to Common Stock-No-Par Value for $170,000
B)debit to Cash for $170,000 and a credit to Paid-In Capital in Excess of Par-Common for $170,000
C)credit to Cash for $170,000 and a debit to Common Stock-No-Par Value for $170,000
D)credit to Cash for $170,000,a debit to Paid-In Capital in Excess of Par-Common for $10,000,and a debit to Common Stock-No-Par Value for $160,000
Q3) Retired shares of treasury stock may later be reissued.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above.
Page 15
Chapter 14: The Statement of Cash Flows
Available Study Resources on Quizplus for this Chatper
183 Verified Questions
183 Flashcards
Source URL: https://quizplus.com/quiz/70975
Sample Questions
Q1) Which of the following describes the operating activities section of the statement of cash flows?
A)It reports cash receipts and cash payments that increase or decrease long-term assets.
B)It includes cash inflows and outflows related to long-term liabilities and equity.
C)It reports on activities that create revenue or expenses for the entity's business.
D)It reports on how cash flows affect the total assets and total liabilities.
Q2) Which of the following is a cash outflow for a financing activity on the statement of cash flows?
A)payment of interest on a loan
B)payment for purchasing Merchandise Inventory
C)payment of dividends
D)payments to the government for taxes
Q3) The three major categories included on the statement of cash flows are ________.
A)investing,operating,and financing activities
B)investing,capital,and financing activities
C)investing,operating,and contracting activities
D)financial,operating,and internal control activities
To view all questions and flashcards with answers, click on the resource link above.
Page 16
Chapter 15: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
161 Verified Questions
161 Flashcards
Source URL: https://quizplus.com/quiz/70974
Sample Questions
Q1) Grand Office Supply reported the following gross profit percentages: 2017: 37.5%;2018: 36.2%;2019: 20.8%.The industry average is 35%.What are some possible reasons for the decline in 2019?
Q2) In a vertical analysis of the balance sheet,each line item is shown as a percentage of stockholders' equity.
A)True
B)False
Q3) To accurately determine the financial performance of a company,it is necessary to compare the company's performance ________.
A)with a competing company
B)to the budget
C)with companies in different industries
D)only with profitable companies
Q4) Trend analysis is a form of horizontal analysis.
A)True
B)False
Q5) The price/earnings ratio shows the market price of $1 of earnings.
A)True
B)False
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Introduction to Managerial Accounting
Available Study Resources on Quizplus for this Chatper
245 Verified Questions
245 Flashcards
Source URL: https://quizplus.com/quiz/70973
Sample Questions
Q1) Unlike merchandising companies,income statements of service companies include cost of goods sold as a line item.
A)True
B)False
Q2) The income statement of a service company will most likely include ________.
A)salaries expense
B)factory overhead
C)cost of goods sold
D)direct materials
Q3) The wages of factory janitors are considered to be direct labor costs because they are directly related to the manufacturing process.
A)True
B)False
Q4) At the end of the year,Mary's supervisor asked her to record sales transactions for products that would not ship until the following year,and she complied.Mary has violated IMA ethical standards.
A)True
B)False
Q5) Define indirect cost.
To view all questions and flashcards with answers, click on the resource link above. Page 18
Chapter 17: Job Order Costing
Available Study Resources on Quizplus for this Chatper
191 Verified Questions
191 Flashcards
Source URL: https://quizplus.com/quiz/70972
Sample Questions
Q1) Which of the following accounts would be debited in the journal entry to record the issuance of direct materials?
A)Cost of Goods Sold
B)Work-in-Process Inventory
C)Finished Goods Inventory
D)Raw Materials Inventory
Q2) Fogelin Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances.Fogelin has four public relations specialists and office staff.At the beginning of the year,Fogelin estimated the total cost of salaries and benefits for the public relations specialists at $403,300 and a total of 7200 billable hours for the year.The office and administrative costs were estimated at $676,000.What direct labor rate would Fogelin use for the cost of its specialists? (Round your answer to the nearest cent. )
A)$93.89 per hour
B)$149.90 per hour
C)$37.88 per hour
D)$56.01 per hour
Q3) Define a job order costing system and list two types of businesses that would use a job order costing system.
To view all questions and flashcards with answers, click on the resource link above.
Page 19
Chapter 18: Process Costing
Available Study Resources on Quizplus for this Chatper
173 Verified Questions
173 Flashcards
Source URL: https://quizplus.com/quiz/70971
Sample Questions
Q1) Garcia Manufacturing has two processes-Coloring and Mixing.The company assigned $390,000 to the 6000 gallons of paint transferred from Mixing Department to Finished Goods Inventory.The journal entry to record this assignment of cost is
A)debit Work-in-Process Inventory-Mixing,$390,000;credit Finished Goods Inventory,$390,000
B)debit Finished Goods Inventory,$390,000;credit Cost of Goods Sold,$390,000
C)debit Cost of Goods Sold,$390,000;credit Finished Goods Inventory,$390,000
D)debit Finished Goods Inventory,$390,000;credit Work-in-Process Inventory-Mixing,$390,000
Q2) Under process costing,a single Work-in-Process Inventory account is maintained for all processes,with a subsidiary ledger containing individual production cost reports for each process.
A)True B)False
Q3) The equivalent units of production for transferred in units are always 100%.
A)True B)False
Q4) What does the concept of equivalent units of production allow businesses to measure?
Page 20
To view all questions and flashcards with answers, click on the resource link above.
Chapter 19: Cost Management Systems:
Available Study Resources on Quizplus for this Chatper
189 Verified Questions
189 Flashcards
Source URL: https://quizplus.com/quiz/70970
Sample Questions
Q1) Target pricing starts with the full product cost,and it then adds the desired profit to arrive at the sales price.
A)True
B)False
Q2) An activity-based costing system is developed in four steps:
A.Compute the predetermined overhead allocation rate for each activity.
B.Identify activities and estimate their total indirect costs.
C.Identify the allocation base for each activity and estimate the total quantity of each allocation base.
D.Allocate indirect costs to the cost object.
Which of the following is the correct order for performing these steps?
A)a,b,c,d
B)c,a,b,d
C)b,c,a,d
D)b,a,c,d
Q3) Use of a single plantwide overhead rate assumes that there is a direct relationship between the allocation base and overhead costs in all plant activities.
A)True
B)False
Page 21
To view all questions and flashcards with answers, click on the resource link above.
Chapter 20: Cost-Volume-Profit Analysis
Available Study Resources on Quizplus for this Chatper
195 Verified Questions
195 Flashcards
Source URL: https://quizplus.com/quiz/70969
Sample Questions
Q1) Costs that have both variable and fixed components are called ________.
A)fixed costs
B)variable costs
C)mixed costs
D)contribution costs
Q2) A(n)________ groups cost by behavior;costs are classified as either variable costs or fixed costs.
A)balance sheet
B)contribution margin income statement
C)traditional income statement
D)absorption costing income statement
Q3) Advantage,Inc. ,a tennis equipment manufacturer,has variable costs of $0.60 per unit of product.In August,the volume of production was 27,000 units,and units sold were 21,800.The total production costs incurred were $30,600.What are the fixed costs per month?
A)$14,400
B)$17,520
C)$3600
D)$16,200
Q4) How is the contribution margin ratio calculated?
To view all questions and flashcards with answers, click on the resource link above. Page 22
Chapter 21: Variable Costing
Available Study Resources on Quizplus for this Chatper
148 Verified Questions
148 Flashcards
Source URL: https://quizplus.com/quiz/70968
Sample Questions
Q1) For short-term pricing decisions,variable costing is an appropriate costing method to use.
A)True
B)False
Q2) Palmer's Plant Food Company sells two products,Quo-Eco and Quo-Pre,with a sales mix of 65% and 35%,respectively.Quo-Eco has a contribution margin per unit of $10,and Quo-Pre has a contribution margin per unit of $15.The company sold 1,000 total units in March.
Requirements:
a)Calculate the total contribution margin for the company.
b)Assume the sales mix shifted to 50% for each product,and calculate the total contribution margin for the company.
Q3) Gross profit is calculated by deducting ________ from sales revenue.
A)total fixed costs
B)cost of goods sold
C)total variable costs
D)selling and administrative costs
Q4) When units produced are less than units sold,how does operating income differ between variable costing and absorption costing? Explain your answer.
To view all questions and flashcards with answers, click on the resource link above. Page 23
Chapter 22: Master Budgets
Available Study Resources on Quizplus for this Chatper
181 Verified Questions
181 Flashcards
Source URL: https://quizplus.com/quiz/70967
Sample Questions
Q1) To calculate budgeted direct labor costs,multiply the number of units to be produced by the number of projected direct labor hours.Next,multiply that total by the actual direct labor cost per hour.
A)True
B)False
Q2) When a manufacturing company prepares the budgeted balance sheet,the balance of the Accounts Payable account is taken from the cash budget.
A)True
B)False
Q3) In a company with different business units,individual managers make decisions by changing various assumptions of its budget in order to determine how the modifications would affect the operational and financial results.This is an example of ________.
A)financial statement analysis
B)responsibility accounting
C)sensitivity analysis
D)zero-based budgeting
Q4) List the three sections of the cash budget for a manufacturer.
Q5) What is the cornerstone of the master budget for a merchandising company? Why?
To view all questions and flashcards with answers, click on the resource link above. Page 24
Chapter 23: Flexible Budgets and Standard Cost Systems
Available Study Resources on Quizplus for this Chatper
223 Verified Questions
223 Flashcards
Source URL: https://quizplus.com/quiz/70966
Sample Questions
Q1) Aunt Emily's Food Products is famous for its frosted fruit cake.The main ingredient of the cake is dried fruit,which Aunt Emily's purchases by the pound.In addition,the production requires a certain amount of direct labor.Aunt Emily's uses a standard cost system,and at the end of the first quarter,there was a favorable direct materials cost variance.Which of the following is a logical explanation for that variance?
A)The production manager negotiated a lower wage package for production staff,bringing direct labor costs down.
B)The factory lost two experienced workers at the beginning of the quarter,and their replacements worked at a much slower pace during their training period.
C)The purchasing manager was able to secure a volume discount on dried fruit,purchasing the fruit for less than the amount set by standard.
D)The production staff changed the work flow process so that there was less wastage of direct materials during production.
Q2) What does the fixed overhead cost variance measure?
Q3) List the direct labor variances and briefly describe each.
Q4) What does the fixed overhead volume variance measure?
Q5) List the direct materials variances,and briefly describe each.
To view all questions and flashcards with answers, click on the resource link above. Page 25
Chapter 24: Responsibility Accounting and Performance Evaluation
Available Study Resources on Quizplus for this Chatper
188 Verified Questions
188 Flashcards
Source URL: https://quizplus.com/quiz/70965
Sample Questions
Q1) Residual income compares the division's actual operating income with the minimum operating income expected by top management for the given size of the division's average total assets.
A)True
B)False
Q2) An investment center manager is responsible for generating profits and managing invested capital.
A)True
B)False
Q3) The production line of a manufacturing company is most likely to be considered to be a(n)________.
A)cost center
B)profit center
C)revenue center
D)investment center
Q4) How is the use of a balanced scorecard as a performance evaluation system helpful to companies?
Q5) Define cost-based transfer price.When should cost-based transfer pricing be used? Explain your answer.
To view all questions and flashcards with answers, click on the resource link above. Page 26
Chapter 25: Short-Term Business Decisions
Available Study Resources on Quizplus for this Chatper
200 Verified Questions
200 Flashcards
Source URL: https://quizplus.com/quiz/70964
Sample Questions
Q1) Voyage Boat Company manufactures 100 luxury yachts per month.A compact media center is included in each yacht.Voyage Boat manufactures the media center in-house but is considering the possibility of outsourcing this function.At present,the variable cost per unit is $280,and the fixed costs are $38,000 per month.Aaron Dalton,the CEO,wishes to increase operating income by $2000.He has an offer from a foreign producer to provide the media centers at a contract cost of $350 per unit.The required savings in fixed costs in order to achieve his objective would be ________.
A)$2000
B)$7000
C)$9000
D)$28,000
Q2) Identify the four steps in the decision-making process.
Q3) Qualitative information that a manager might evaluate in making a decision would include all of the following except ________.
A)calculating the breakeven point under two different alternatives
B)the effect of layoffs on employee morale
C)the reduction in control over delivery time due to subcontracting
D)upsetting regular customers by offering discounts to selected customers
Q4) Define the terms "Relevant Cost" and "Sunk Cost."
To view all questions and flashcards with answers, click on the resource link above. Page 27
Chapter 26: Capital Investment Decisions
Available Study Resources on Quizplus for this Chatper
152 Verified Questions
152 Flashcards
Source URL: https://quizplus.com/quiz/70963
Sample Questions
Q1) Two methods of analyzing potential capital investments-payback and accounting rate of return-ignore the time value of money.
A)True
B)False
Q2) Which of the following best describes the internal rate of return?
A)interest rate that makes the net present value of the investment equal to zero
B)discount rate that is used to evaluate funds borrowed from a lender for profitability
C)the ratio of average annual income to average amount invested
D)the rate at which the profitability of an investment increases
Q3) The payback method is a screening device and is rarely used as the sole method for deciding whether to invest in an asset.
A)True
B)False
Q4) Under what circumstances is the investment with the shortest payback the best choice? How should managers use the payback method?
Q5) When using the accounting rate of return,what is the rule for making the decision to make the investment?
To view all questions and flashcards with answers, click on the resource link above.
Chapter 27: Accounting Information Systems
Available Study Resources on Quizplus for this Chatper
164 Verified Questions
164 Flashcards
Source URL: https://quizplus.com/quiz/70989
Sample Questions
Q1) Cash purchases are recorded in the purchases journal.
A)True
B)False
Q2) If there is cash involved in a business transaction,the transaction should be recorded in either the ________.
A)cash payments journal or cash receipts journal
B)cash payments journal or general journal
C)cash payments journal or cash receipts journal and in general journal
D)sales journal or purchases journal
Q3) The purchases journal is a special journal that ________.
A)has special columns for credits to merchandise inventory
B)is used to record all purchases of merchandise inventory
C)has a special column for debits to accounts payable
D)is used to record merchandise inventory,office supplies,and other assets purchased on account
Q4) The sale of merchandise inventory for cash is recorded in the ________.
A)general journal
B)cash receipts journal
C)sales journal
D)accounts receivable journal
To view all questions and flashcards with answers, click on the resource link above. Page 29