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Study Resources (Accounting)

29) Responsibility accounting performance reports are prepared by which types of business units? A) Cost centers only B) Investment centers and revenue centers only C) Cost centers, revenue centers, and profit centers D) Investment centers only 30) Zhongfang Consumer Products has a small car division that operates as a profit center. Below is a partially.
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26) The formula for ROI (return on investment) is: A) operating income divided by average total assets. B) operating income minus minimum acceptable operating income. C) after-tax operating income minus the weighted average cost of capital times average total assets excluding current liabilities. D) operating income divided by sales revenue. 27) The formula for EVA.
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19) Rockland Heavy Industries has a sales division that focuses on power cranes.  The sales division is a revenue center.  Below is a partially completed performance report for the month of June. Rockland uses management by exception to investigate flexible budget variances.  On which of the following variances would they.
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26) Which statement about warranties is correct? A) Warranties sold separately are accounted for under IAS37. B) Warranties sold separately are accounted for under IAS18. C) Warranties are financial liabilities and accounted for at fair value. D) Expected value uses a weighted average of possible outcomes. 27) Which statement about warranties is correct? A) Warranties are.
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Learning Objective 23-4 1) For standard costing methodology, good business practices would emphasize using unfavorable variances as a way of assigning blame to the responsible managers, and favorable variances as a way of rewarding managers. 2) When a company is using standard costs, a favorable variance is a definite indication that.
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40) RJ Magazines sells two-year magazine subscriptions for $108 cash each. The cost of producing and delivering each magazine is $2.75 paid in cash at the time of delivery. RJ's sales activity for the year follows: Sales activity •On January 1, 2017, RJ sells 22,000 subscriptions. •On April 1, 2017, RJ sells 5,000.
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16) The EVA calculation and the ROI calculation both use operating income before income tax because the income tax expense is NOT relevant to either the EVA or the ROI measures. 17) Marcia Consumer Products has several divisions, including the Education Division and the Recreation Division.  Data on the two divisions.
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Learning Objective 24-2 1) Performance evaluation systems provide top management with a framework for maintaining control over the organization. 2) Companies benchmark their performance against the performance of their competitors and also against their own past performance. 3) Decentralization increases the difficulty of achieving goal congruence among managers. 4) If a manager's performance.
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17) For the following transaction, provide all of the required journal entries from inception to liquidation. Assume a December 31 year end and that the company does not prepare interim statements. Round all amounts to nearest dollar. Face value of note payable$200,000 Date of issue for noteMarch 1, 2012 Due date for noteMarch.
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32) Tavares Manufactured Homes Company has a sales division which submits a monthly performance report as a revenue center.  Please complete the report using the format and data below. Revenue Center Performance Report - $K 33) Union Company's corporate payroll department is a cost center, and submits monthly performance reports.  In the.
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22) Fill in the following chart. Initial measurement of the liability Subsequent measurement of the liability Non-financial liability Financial liability held for trading 23) Fill in the following chart. Initial measurement of the liability Subsequent measurement of the liability Non-financial liability Financial liability not held for trading .
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7) Explain the meaning of the following terms: current assets, trade payables, expected value, deferred revenue and warranty. 8) Which statement is correct? A) Contingencies arise from future events. B) Financial guarantees arise from contracts previously entered into. C) Current liabilities arise from future events. D) The amount to be paid for financial guarantees is.
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40) Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly skilled labor, and special metallic materials.  Faas uses standard costs to prepare its flexible budget.  For the first quarter of 2011, direct material and direct labor standards for one of their popular products were as follows: Materials:  .
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11.1   Learning Objective 1 1) Which of the following characteristic is required for a "liability" under IFRS Framework? A) A past obligation. B) A present obligation. C) An unknown obligation. D) A future obligation. 2) Which of the following characteristic is required for a "liability" under IFRS Framework? A) Arises from a past transaction. B) Arises from a.
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36) Which of the following statements MOST accurately describes asset turnover? A) How efficiently a division uses its average assets to generate sales B) How much operating income the division earns on every dollar of sales C) How much return a division generates on average assets D) How much extra income does a division.
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11) Manufacturing companies that use standard costs do NOT need to compute inventory cost based on LIFO, FIFO, or weighted average. 12) Price Variance = (Actual Price x Actual Quantity) - (Standard Price x Standard Quantity). 13) Efficiency Variance = (Standard Price x Actual Quantity) - (Standard Price x Standard Quantity). 14) The.
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6) Profit margin is defined as operating income divided by sales. 7) Asset turnover is defined as the average total assets divided by the sales revenue. 8) The formula for ROI can be broken down as follows:  ROI = profit margin x asset turnover. 9) Huntswell Corporation has two major division?Agricultural Products and.
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37) When measuring a company's performance, which of the following is NOT a lag indicator? A) Operating income for the last month B) Ratio analysis C) Variance analysis D) The expected growth in future demand for a company's products 38) Which of the following is a lagging indicator? A) Operational performance B) Customer satisfaction C) Financial performance D) Employee.
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11) The performance measurement system should provide incentives for coordinating activities of the subunits and focusing them toward the overall company objectives.  This statement reflects which of the following performance measurement goals? A) Motivating unit managers B) Promoting goal congruence C) Providing feedback D) Benchmarking 12) The performance measurement system should compare the company's performance.
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24) A company purchases inventory on credit for $80,000. Inventory costing $30,000 is sold on credit for $40,000. The applicable HST rate is 10%. Sales taxes are remitted on a monthly basis. Prepare the necessary journal entries for this transaction. 25) A company purchases inventory on credit for $40,000. Inventory costing.
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27) In a balanced scorecard system, if employee excellence was one of the critical factors, which of the following would be a relevant KPI? A) Revenue growth B) Production yield rate C) Market share D) Employee training hours 28) In a balanced scorecard system, if financial profitability was one of the critical factors, which of.
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46) Huntswell Corporation has two major divisions: Agricultural Products and Industrial Products.  Data for the year just finished is as follows:   Agriculture Division Industrial Division Sales revenue $140,000 $1,040,000 Operating income $16,400 $220,000 Average assets $300,000 $5,540,000 Target rate of return 4.0% 4.0% For the Industrial Division, how much is the residual income? A) $2,400 B) $1,650 C) ($200) D) ($1,600) 47) Which of.
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11.2   Learning Objective 2 1) Which statement is correct? A) Contingencies arise from future events. B) The amount to be paid for contingencies is known or reasonably estimable. C) Current liabilities arise from future events. D) The amount to be paid for current liabilities is known or reasonably estimable. 2) Which statement is correct? A) Supplier discounts.
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7) One part of the balanced scorecard helps management answer the question: "How do we look to shareholders?"  Which of the four perspectives is being described here? A) Financial perspective B) Customer perspective C) Internal business perspective D) Learning and growth perspective 8) One part of the balanced scorecard helps management answer the question: "How.
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34) Select transactions and other information pertaining to the Best Place in the World Inc. (BPW) are detailed below. Facts: a. BPW is domiciled in Vancouver, British Columbia and all purchases and sales are made in BC. b. The HST rate in British Columbia is 12%. c. The balances in BPWs HST recoverable account.
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11) A product line at Coca-Cola is most likely treated as a(n): A) cost center. B) revenue center. C) profit center. D) investment center. 12) Which of the following is a cost center? A) A company's legal department B) A company's sales department C) A product line of a particular company D) A company's individual stores 13) Which of the.
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21) The following information describes a company's usage of direct labor in a recent period: Actual direct labor hours used 44,000 Actual rate per hour $20 Standard rate per hour $18 Standard hours for units produced 42,000 How much is the direct labor efficiency variance? A) $40,000 unfavorable B) $40,000 favorable C) $36,000 favorable D) $36,000 unfavorable 22) The following information describes a company's.
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9) Waycross Construction Company has a pipeyard operation which is run as a cost center.  They are preparing a performance report for the month of March and have provided the data below: Cost Center   Flexible Flexible Budget       Performance Report Actual Budget Variance U/F % variance U/F Wages & benefits $81,200 $80,000 Office lease expense 42,060 45,000 Depreciation expense 39,600 42,000 Insurance expense 33,490 30,000 Other.
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Learning Objective 23-5 1) When completing a standard costing income statement, favorable variances for direct materials or direct labor will go to reduce the "cost of goods sold at standard cost." 2) When completing a standard costing income statement, unfavorable variances for direct materials or direct labor will go to reduce.
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13) How are "purchase discounts lost" reported in the financial statements? A) As a reduction of sales. B) As an increase in liability. C) As an increase in inventory. D) As an expense item. 14) Which statement is correct? A) Trade payables are supported by a written promise to pay. B) Trade payables with no stated interest.
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19) Which statement about sales taxes is correct? A) The consumer is responsible for remitting the tax to the government. B) Taxes are uniformly applied to all sale transactions. C) Businesses can deduct the GST paid from GST collected. D) The same products that are exempt from GST are exempt from PST. 20) Which statement.
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11) Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly skilled labor, and special metallic materials.  Faas uses standard costs to prepare its flexible budget.  For the first quarter of 2011, direct material and direct labor standards for one of their popular products were as follows: Materials:  .
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Learning Objective 23-6 1) Atlantic Manufacturing Company uses standard costing methodology in their journal entries and accounts.  Standards for direct materials are as follows: Pounds per unit2.0Price per pound$5.00 Atlantic plans to produce 3,000 units of product, and has just purchased 10,000 pounds of raw materials for a net cost of $48,000. .
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34) Westhaven Company has a warehousing unit which operates as a cost center.  They prepare monthly performance reports.  Actual and budget data for February are shown here: Cost Center   Flexible Performance Report Actual Budget Salary & benefits $119,000 $120,000 Rent expense 94,500 90,000 Depreciation expense 23,200 24,000 Supply expense 11,890 12,000 Miscellaneous expense 8,120 8,000 $256,710 $254,000 Using the report format.
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17) Many companies use a balanced scorecard for performance evaluation.  The balanced scorecard has four business perspectives, and utilizes KPIs to evaluate performance in various areas.  Which of the following KPIs would relate to the financial perspective? A) Hours of employee training B) Number of warranty claims C) Percentage of market share D) Return.
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56) Assume Division 1 of the XYZ Company had the following results last year. Sales $5,000,000 Operating income 1,000,000 Total assets (average) 10,000,000 Current liabilities 500,000 Management's required rate of return is 8% and the weighted average cost of capital is 6%.  Its effective tax rate is 30%.What is the division's return on investment? A) 5% B) 10% C) 20% D) 50% 57) Assume.
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11) Alpine Productions uses a standard costing system for recording transactions; they also prepare an internal-use income statement using standard cost methodology.  At the end of 2011, Alpine reported the following data: Sales revenues:$500,000 Cost of goods sold (standard costing)$382,500 Marketing & admin expenses$105,000 Variances: Sales revenue $4,000 F Direct materials price variance 20 U Direct materials efficiency variance 300.
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19) Which is a non-current liability? A) HST payable. B) 45 day accounts payable. C) Five year loan that matures four months after year end reporting date. D) The creditor has granted a 15-month grace period on a loan in default. 20) Which of the following is not correct? A) Financial liabilities held for trading are.
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11) Allbrand Company uses standard costs for their manufacturing division. Standards specify 0.1 direct labor hours per unit of product.  At the beginning of the year, the static budget for variable overhead costs included the following data: Production volume:  5,000 units Estimated variable overhead costs:$12,500 Estimated direct labor hours:500 hours At the end of.
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41) Faas Marine Stores Company manufactures decorative fittings for luxury yachts which require highly skilled labor, and special metallic materials.  Faas uses standard costs to prepare its flexible budget.  For the first quarter of 2011, direct material and direct labor standards for one of their popular products were as follows: Materials:  .
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