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Study Resources (Accounting)

19) Which of the following amounts appears on both the income statement and the balance sheet? A) Total assets B) Net income C) Ending retained earnings D) None of the above amounts appear on both 20) Which of the following financial statements shows the changes in retained earnings during a period of time? A) Income statement B).
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11) Martin Supply Co. paid $350 cash to a materials supplier that it owed from the previous month.  What is the effect of the cash payment on the accounts of the company? A) Materials account increases; Retained earnings account decreases. B) Cash account decreases; Accounts payable increases. C) Accounts payable increases; Retained earnings.
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Learning Objective 1-5 1) In an LLC, the business-not the owners-are responsible for the corporation's debts. 2) Corporations are subject to stricter regulation than other forms of businesses, so it is more difficult for corporations to raise large amounts of investment capital. 3) The most an investor in a corporation can lose-in.
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Learning Objective 15-5 1) ________ products or services at market prices generally lead to optimal decisions when the market for the intermediated product is perfectly competitive. A) Creating B) Evaluating C) Comparing D) Determining E) Transferring 2) Which of the following exists when there is a homogeneous product with buying prices equal to selling prices and no.
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11) In Step 2 of the designing accounting-based performance measures, managers ask, "Should performance reports be sent to top management daily, weekly, or monthly?" 12) Hospitality Inns use balanced-scorecard measures to evaluate and reward the performance of its managers. 13) What is the goal of all balanced scorecard implementations? 14) Some performance measures,.
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Learning Objective 15-7 1) In the ________ method, the eventual transfer price results from a bargaining process between the selling and buying subunits. A) negotiated pricing B) negotiated buying C) negotiated purchasing D) negotiated distribution E) negotiated parallelism 2) Under the ________ method, top management does not administer a specific split of the eventual profits across the.
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15) The business collects a $5,000 account receivable from its customer. How is the accounting equation affected? A) Assets increase $5,000; liabilities decrease $5,000. B) One asset increases by $5,000; another asset decreases $5,000. C) Assets increase $5,000; liabilities increase $5,000. D) Assets increase $5,000; stockholders' equity increases $5,000. 16) Total liabilities increase by $7,000..
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29) Which of the following is the correct order of steps to journalize an entry? A) Identify each account affected, determine increase or decrease in each account, record the transaction. B) Identify each account affected, record the transaction, determine increase or decrease in each account. C) Record the transaction, identify each account affected,.
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Learning Objective 15-8 1) Which transfer-pricing method is useful for determining full cost of products and services? A) Cost-based. B) Negotiated. C) Market-based. D) Minimum-based. E) Maximum-based. 2) Which transfer-pricing method preserves subunit autonomy when markets are competitive? A) Cost-based. B) Negotiated. C) Market-based. D) Minimum-based. E) Maximum-based. 3) Which transfer-pricing method's market may not exist, or may be imperfect or in distress? A).
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11) The owner(s) of a business will most likely face "double taxation" if their business is organized as a(n): A) corporation. B) LLC. C) partnership. D) proprietorship. 12) The ability to raise large amounts of capital is a key characteristic of a: A) partnership. B) not-for-profit. C) corporation. D) proprietorship. 13) The separation between the owners and the managers of.
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Learning Objective 15-6 1) Which of the following is not true about cost-based transfer prices? A) Prices are helpful to managers when market prices are unavailable. B) Prices are helpful to managers when market prices are inappropriate. C) Prices are helpful to managers when the product is specialized. D) Prices are helpful to managers when.
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9) Accounting standards are formulated by the: A) SEC. B) AICPA. C) FASB. D) IRS. 10) The Sarbanes-Oxley Act ("SOX") made it a criminal offense to: A) steal shareholders' money. B) default on loans from creditors. C) declare bankruptcy. D) falsify financial information. 11) Which of the following organizations requires publicly owned companies to be audited by independent accountants (CPAs)? A).
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Learning Objective 15-9 1) Which of the following is correct about transfer pricing for tax minimization in global firms? A) Transfer prices affect payroll taxes. B) Transfer prices affect customs duties. C) Transfer prices affect value-added taxes. D) Transfer prices only affect income taxes. E) Transfer prices affect environment-related taxes. 2) Which of the following is not.
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Learning Objective 16-4 1) Managers can use historical-cost ROIs to evaluate current performance by establishing ________ ROIs. A) target B) function C) ambition D) intention E) destination 2) In establishing targets for financial performance measures, companies using the balanced scorecard simultaneously determine targets in the customer, ________, and learning-and-growth perspectives. A) master budget B) peripheral market C) budgeted-sales objective D) internal-business-process E).
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Learning Objective 15-4 1) Review the transfer-price methods listed below and choose the best transfer-price method ideal to managers when prices of products and services listed in trade association Web sites are competitive. A) Market-based transfer prices. B) Cost-based transfer prices. C) Hybrid transfer prices. D) Segment-based transfer prices. E) Demographic-based transfer prices. 2) Choose the appropriate.
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5) Assets are $150,000 and total liabilities are $90,000. Total stockholders' equity will be: A) $180,000. B) $300,000. C) $240,000. D) $60,000. 6) Assets are $270,000 and stockholders' equity is $90,000. Liabilities will be: A) $60,000. B) $360,000. C) $270,000. D) $180,000. 7) A business performs services for its customers. Payment is expected to be received next month. How does.
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9) The managerial accountant at International Solutions sells crude oil and it was reported that the company operates in the United States and Mexico. What are some of the tax issues could conflict with other objectives top management hopes to achieve via transfer pricing? 10) How can managers informally adjust transfer.
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Learning Objective 1-10 1) The relative proportion of economic resources and obligations would be shown by the balance sheet. 2) The income statement shows whether or not a company can generate enough cash to pay its liabilities. 3) The balance sheet shows whether or not a company is earning profits. 4) You can.
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Learning Objective 16-2 1) Companies commonly use four measures to evaluate the performance of their subunits. Which of the following options is not one of these four common measures? A) AARR. B) ROI. C) Residual income. D) Economic value added. E) Return on sales. 2) ________ is popular because it blends all ingredients of profitability into one.
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23) A business makes a cash payment for advertising expense. Which account is debited? A) Cash B) Service revenue C) Accounts receivable D) Advertising expense 24) A business makes a cash payment for advertising expense. Which account is credited? A) Cash B) Service revenue C) Accounts receivable D) Advertising expense 25) A business pays out cash dividends to shareholders. Which.
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11) The DuPont method recognizes the two basic ingredients in profit-making: increasing income per dollar of revenues and using assets to generate more revenues. 12) The imputed cost of the investment is a cost recognized in particular situations and it is always recorded in financial accounting systems. 13) Should operating income or.
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24) Alice Li incorporated Li Design Company and invested $5,000 of her own money in exchange for stock on Dec. 1, 2012.   On Dec. 12, she rendered services to three clients "on account" with total revenues earned of $4,500.  She then incurred advertising expense on four different websites and promised.
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3) A business purchases equipment for cash in the amount of $8,000. Which account is debited? A) Cash B) Accounts payable C) Utilities expense D) Equipment 4) A business purchases equipment for cash in the amount of $8,000. Which account is credited? A) Cash B) Accounts payable C) Utilities expense D) Equipment 5) A business makes a cash payment of.
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8) Which of the following accounts increases with a debit? A) Cash B) Interest payable C) Accounts payable D) Common Stock 9) Which of the following accounts decreases with a debit? A) Notes payable B) Prepaid insurance C) Cash D) Land Learning Objective 2-3 1) An account that normally has a debit balance may occasionally have a credit balance. 2) Which.
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11) Which of the following are MOST likely to be users of managerial accounting information? A) Potential investors B) Creditors C) Customers D) Company managers 12) Which of the following are likely to be users of financial accounting information? A) Taxing authorities B) Creditors C) Potential investors D) All of the above Learning Objective 1-3 1) The AICPA's Code of.
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11) The ________ requires detailed disclosures of the compensation arrangements of top-level executives. A) Federal Reserve B) United States Government C) Generally Accepted Accounting Principles (GAAP) D) Federal Accounting Standards Board (FASB) E) Securities and Exchange Commission (SEC) 12) Companies never put the most skillful division managers in charge of the division producing the poorest economic.
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9) The balance sheet, or statement of financial position, is like a snapshot of the entity. Which of the following items are included on the balance sheet? A) Revenues B) Expenses C) Assets D) Dividends paid 10) Each financial statement includes a heading giving three pieces of data. Which of the following items is NOT.
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Learning Objective 16-6 1) Which of the following describes a situation in which an employee exerts less effort than the owner desires because the owner cannot accurately monitor and enforce the employee's effort? A) Moral hazard. B) Employee hazard. C) Situational hazard. D) Professional hazard. E) Occupational hazard. 2) ________ measures are those that are sensitive to.
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21) ABC Delivery Co. had the following transactions in June:  Earned $4,000 cash for services rendered;  collected $2,500 from a customer "on account;"  paid out $200 cash for plumbing services;  received $3,500 of supplies and promised to pay one month later;  paid out $1,000 in cash dividends to shareholders.  What.
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8) Which of the following concepts (principles) would require that an item be recorded at the amount actually paid rather than at estimated market value? A) Going-concern concept B) Entity concept C) Cost principle D) Stable monetary unit concept 9) Which of the following concepts (principles) require an assumption that the entity will remain in.
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Learning Objective 1-1 1) Accounting is the information system that measures business activity, processes the data into reports, and communicates the results to decision makers. 2) Accounting is "the language of business." 3) A debt that a corporation owes to an outside party is called: A) an asset. B) a liability. C) stockholders' equity. D).
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19) For Retained earnings, the category of account, and its normal balance are: A) Stockholders' equity and a credit balance. B) Assets and a debit balance. C) Liabilities and a credit balance. D) Assets and a credit balance. 20) For Dividends, the category of account and its normal balance are: A) Stockholders' equity and a credit.
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11) Which of the following accounts is a stockholders' equity account? A) Accrued liability B) Accounts payable C) Prepaid expense D) Retained earnings 12) Prepaid expenses are recorded as: A) assets. B) liabilities. C) debits and credits. D) retained earnings. 13) In a typical chart of accounts, liabilities appear before assets. 14) In a typical chart of accounts, what information is.
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Learning Objective 16-7 1) To prevent unethical and outright fraudulent behavior, companies need to balance the push for performance resulting from ________, the first of four levers of control, with three other levers. A) strategic goals B) belief systems C) boundary systems D) diagnostic control systems E) interactive control systems 2) Which of the following systems describes.
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54) The following entries were made by the accountant of Patel Pastries, Inc. during its first month of operation. 1.  James Patel, the sole shareholder, deposited $3,000 in the company's new checking account in exchange for stock. 2.  Patel Pastries, Inc. paid the first month's rent of $400 in cash. 3.  Patel Pastries,.
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Learning Objective 1-2 1) Managerial accounting focuses on information for decision makers outside the company, such as creditors and taxing authorities. 2) Business owners use accounting information to set goals, evaluate progress toward those goals, and take corrective action when needed. 3) Outside investors would ordinarily use financial accounting information to decide.
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Learning Objective 16-5 1) Operating a division in a/an ________ economy like Singapore is very different from navigating a closed economy such as Venezuela. A) open B) closed C) cultural D) controlled prices E) threat of nationalization 2) Some countries in Asia, Latin America, and Eastern Europe impose ________ and custom duties to restrict imports of certain.
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Learning Objective 16-1 1) Many organizations are increasingly presenting financial and nonfinancial performance measures for their subunits in a single report referred to as the ________. A) balance sheet B) balanced scorecard C) resource statement D) fixed cost flexible-budget E) variable unfixed cost flexible-budget 2) Different organizations stress different measures in their scorecards, but the measures are.
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13) A business buys $500 of supplies on account. Which account is debited? A) Cash B) Accounts payable C) Supplies D) Service revenue 14) A business buys $500 of supplies on account. Which account is credited? A) Cash B) Accounts payable C) Supplies D) Service revenue 15) A business makes a cash payment to a supplier "on account" (for supplies.
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34) Which of the following journal entries would be recorded if a business renders service and receives cash of $400 from the customer? A) Service revenue 400      Cash 400 B) Service revenue 400      Accounts payable 400 C) Cash 400      Service revenue 400 D) Service revenue 400      Accounts receivable 400 35) Which of the following journal entries would be recorded if a business makes a cash payment to.
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Learning Objective 16-3 1) Which of the following is the alternative definition of all assets, regardless of their intended purpose used in the construction of accounting-based performance measures? A) The minimum ROS. B) Stockholders equity. C) Total assets available. D) Total assets employed. E) Total assets employed minus current liabilities. 2) Which of the following is the.
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9) For liabilities and revenues, a debit increases the account. 10) The balance of an account is the: A) amount remaining in an account. B) account number as shown in the chart of Accounts. C) sum of the debits only. D) sum of the credits only. 11) For Accounts receivable, the category of account and its.
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25) Sharon Samson starts a plumbing service, Reliable Waterworks, Inc. Selected transactions are described as follows: A) Sharon deposits $7,000 into a new checking account for the company, receiving stock in exchange. B) Reliable pays $4,000 cash for equipment to be used for plumbing repairs. C) Reliable borrows $15,000 from a local bank.
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11) The following data was compiled for Infer-Tech PC Company in order to assess the effect of a $500,000 initial investment with a $70,000 operating cost increase per year over a five year period. The company factored in a 15% required rate of return. YEAR       YEAR 0   YEAR 1   YEAR 2   YEAR 3   YEAR 4  YEAR 5.
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