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112) Management must get employees to accept the budget's goals in order to effectively use the budget as a benchmark for evaluating performance. 113) A budgeted income statement is based on estimated amounts and not actual amounts. 114) A budget focuses primarily on financial information but does not reflect specific business strategies. 115).
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61) Which of the following is NOT a period cost? A) CEO's salary B) Delivery van depreciation C) Sales commissions D) Factory cleaning costs 62) Which of the following properly describes the accounting for indirect labour costs? A) Indirect labour costs are inventoriable product costs and are expensed as incurred. B) Indirect labour costs are period costs.
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21) Which of the following statements is false? A) Reliable data are usually supported by objective evidence. B) An independent valuation is usually considered reliable. C) Reliable data are verifiable. D) Owner opinions are one source of objective evidence. 22) The pair of general principles of reporting that often result in a trade-off are: A) understandability.
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56) Which of the following ratios is used to determine how quickly and easily a company is able to sell its inventory? A) Price/earnings ratio B) Inventory turnover C) Return on net sales D) Current ratio 57) The price/earnings ratio indicates the: A) market price of $1 of earnings. B) ease of selling inventory. C) dividend yield of.
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26) Please refer to the following data:   INCOME STATEMENT         (Dollar amounts in millions) 2017   2016     Amount % of total Amount % of total Sales revenue $6 355 100% $4 920 100% Cost of sales 3 370 53.0% 2 200 44.7% Gross profit 2 985 47.0% 2 720 55.3% Selling and general expenses:         Sales and marketing expenses 675 10.6% 580 11.8% General and administrative expense 410 6.5% 425 8.6% Reserarch and development expense 470 7.4% 390 7.9% Other expense 400 6.3% 695 14.1% Total selling and general expenses $1 955 30.8% $2 090 42.5%           Profit before tax $1 030 16.2% $630 12.8% Income tax expense 230 3.6% 210 4.3% Profit (loss) $800 12.6% 420 8.5%   Which.
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56) Manufacturing overhead includes which of the following? A) Direct materials and direct labour B) Indirect labour and indirect materials C) Delivery costs to ship goods to customers D) Salaries of salesmen 57) All of the following are examples of manufacturing overhead, EXCEPT for: A) electricity and gas incurred in the factory. B) indirect materials. C) wages of.
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21) Please refer to the vertical analysis of a section of a balance sheet, shown below:   (Dollar amounts in millions) 2017   2016     Amount % of total Amount % of total Assets         Current assets:         Cash $10 000 3.7% $7 200 2.9% Accounts receivable, net 15 600 5.7% 16 800 6.7% Inventory 38 000 13.9% 31 000 12.4% Total current assets 63 600 23.2% 55 000 22.0% Property, plant and equipment, net 195 000 71.3% 168 000 67.2% Other non-current assets 15 000 5.5% 27 100 10.8% Total assets $273 600 100.0% $250 100 100.0%   Which of.
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51) Arlington Company has prepared the following common-size income statement to compare its performance with industry averages:     Arlington Co. Industry Revenues 100.0% 100.0% Cost of sales 43.8% 39.7% Gross profit 56.2% 60.3% Selling and general expenses:     Sales and marketing expense 18.1% 21.4% General and administrative expense 12.0% 14.2% Research and development expense 4.1% 4.0% Total selling and general expenses 34.2% 39.6%       Profit before tax 22.0% 20.7% Income tax expense 4.4% 4.2% Profit (loss) 17.6% 16.5%   Based on the above data, an analyst could conclude.
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51) Which of the following costs would appear on the income statements for both a retailer and a manufacturer? A) Electricity and gas B) Direct labour C) Cost of goods manufactured D) Direct materials 52) Which of the following is NOT a part of manufacturing overhead? A) Indirect labour B) Indirect materials C) Depreciation on delivery vehicles D) Factory.
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101) e-Ray Ltd has net sales on account of $1,900,000. The average net accounts receivable are $660,000. Calculate the days' sales in receivables. A) 365 days B) 350.4 days C) 126.7 days D) 2.88 days 102) A company reports total assets of $900,000 and shareholders' equity of $600,000. Calculate the debt ratio. A) 33.33% B) 50% C) 66.67% D).
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46) Which of the following applies to goods that are partially completed? A) Work in process inventory B) Finished goods inventory C) Materials inventory D) Inventory 47) Which of the following applies to the raw materials used by a manufacturing company? A) Work in process inventory B) Inventory C) Finished goods inventory D) Materials inventory 48) Which of the following.
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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 116) Which of the following budgets focuses on the income statement and its supporting schedules? A) Cash budget B) Operating budget C) Sales budget D) Capital expenditures budget 117) The starting point in the budgeting process is the preparation of the: A).
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6) The following is a summary of information presented on the financial statements of a company on 31 December 2017.   Account 2017 2016 Current assets $82,000 $70,000 Accounts receivable 63,000 71,000 Inventory 62,000 55,000 Current liabilities 56,000 47,000 Non-current liabilities 42,000 55,000 Share capital 75,000 54,000 Retained earnings 66,000 44,000   What would a horizontal analysis report show with respect to Non-current liabilities? A) Non-current liabilities decreased by $21,000 B) Non-current liabilities decreased by 38.89% C) Non-current liabilities decreased.
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91) The debt-to-equity ratio is used for which kind of evaluation? A) Evaluating shares in a company from an investor's perspective B) The overall profitability of a company C) The ability of a company to pay its current liabilities D) The ability of a company to pay its non-current liabilities 92) The rate of return.
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85) Amoeba Manufacturing Company provided the following information for the year 2017:   Purchases—raw materials $89,000 Plant electricity, gas & insurance 67,000 Indirect materials 11,050 Indirect labour 4900 Direct materials used in production 98,000 Direct labour 119,500 Depreciation on factory plant & equipment 5000 Cost of goods manufactured 291,500   The inventory account balances as of 1 January 2017 are given below.   Raw materials inventory $46,000 Work in process inventory 1300 Finished goods inventory 48,000   What.
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46) The common-size statement percentages are the same percentages that appear in horizontal analysis. 47) Benchmarking is the comparison of a company's current year results with an earlier year's performance. 48) Common-size statements allow the comparison of two or more companies with different amounts of net sales and assets. 49) The Arlington Company.
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76) When comparing two companies, what kind of information does a company's rate of return on total assets provide? A) How effectively each company uses leverage to finance its business B) How much profit each company generates with each dollar of sales C) How effectively a company collects cash on credit sales D) How.
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36) Information is regarded as material if its omission or misstatement could influence the economic decisions made by users of financial reports. 37) The materiality principle requires that financial statements should tend to understate rather than overstate net assets in the face of uncertainty. 38) The Global Reporting Initiative (GRI) is a.
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96) The price/earnings ratio is used for which kind of evaluation? A) Evaluating shares in a company from an investor's perspective B) The overall profitability of a company C) The ability of a company to pay its non-current liabilities D) The ability of a company to pay its current liabilities 97) The dividend yield is.
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66) Peartree Company provides the following data:   BALANCE SHEET 31 Dec 2017 31 Dec 2016 Cash $21 000 $18 000 Accounts receivable, net 31 000 35 000 Inventory 53 000 25 000 PP&E, net 120 000 90 000 Total assets $225 000 $168 000       Accounts payable $4 000 $6 000 Accrued liabilities 2 000 1 000 Long-term loans payable 84 000 90 000 Total liabilities $90 000 $97 000       Share capital $30 000 $2 000 Retained earnings 105 000 69 000 Total shareholders’ equity $135 000 $71 000 Total liabilities.
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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 103) Which of the following is NOT a characteristic of the budgeting process? A) The budget process helps coordinate the activities of the organisation. B) The budget process ensures that the business will make a profit. C) The budget.
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41) The Arlington Company prepared a common-size income statement to compare its results with its key competitor, Bardo Company. Please refer to the following data:     Arlington Co. Bardo Co. Revenues 100.0% 100.0% Cost of sales 42.1% 47.8% Gross profit 57.9% 52.2% Selling and general expenses:     Sales and marketing expense 26.3% 8.6% General and administrative expense 12.0% 10.8% Research and development expense 4.1% 10.2% Total selling and general expenses 42.4% 29.6%       Profit before tax 15.5% 22.6% Income tax expense 3.3% 5.8% Profit.
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75) A specific exception to the use of historical cost to value assets is if the net realisable value of inventories falls below cost. In this case, the justification for the use of market value rather than cost relies on the: A) comparability principle. B) cost versus benefit principle. C) materiality principle. D) conservatism.
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31) Olivera Ltd provides the following data for the year 2016:   Sales revenue $629,000 Sales returns and allowances 20,000 Sales discounts 6000 Net sales revenue $603,000 Cost of sales $390,000   On a vertical analysis report, the gross profit as a percentage of net sales will be: A) 35.32% B) 33.86% C) 36.32% D) 64.68% TRUE/FALSE. Write 'T' if the statement is true and 'F' if the.
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16) Which of the following is the base amount when performing vertical analysis of an income statement? A) Sales revenue B) Gross profit C) Net sales D) Total expenses 17) Which of the following is the base amount when performing vertical analysis of a balance sheet? A) Gross profit B) Profit C) Total cash and cash equivalents D) Total.
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  99) Accounting, legal and administrative costs are included in manufacturing overhead. 100) Repair and maintenance costs for factory equipment are inventoriable product costs. 101) Repair and maintenance costs of vehicles used to deliver products to the customers are inventoriable product costs. 102) Repair and maintenance costs of vehicles used to deliver products to.
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111) The price/earnings ratio is a measure that is valuable to investors when making investment decisions. 112) The dividend yield will tell a shareholder how much of his investment will be returned in dividends. 113) The dividend payout ratio indicates the amount of the dividend as a proportion of a share's market.
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36) Which of the following is the definition of benchmarking? A) Benchmarking is the analysis of a financial statement that shows each item as a percentage of net sales or total assets. B) Benchmarking is the comparison of two companies using horizontal analysis. C) Benchmarking is the study of percentage changes in financial.
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26) The principle that accountants do not have to account for every last item in strict accordance with the accounting rules is known as the: A) relevance principle. B) cost principle. C) materiality principle. D) going-concern principle. 27) All of the following accounting practices are examples of conservatism, except: A) completed contract method. B) lower-of-cost-and-net-realisable-value inventory method. C).
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  81) The following information has been provided by Squash Company:   Direct labour $6500 Direct materials used 2000 Raw materials purchased 8000 Cost of goods manufactured 17,000 Ending work in process inventory 1500 Corporate headquarters' property rates 300 Manufacturing overhead incurred 420   The beginning balance of the Work in process inventory account was ________. A) $24,420 B) $9580 C) $8920 D) $9700 82) Barricades Company provided the following information for the.
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  66) Damsel Ltd is a large manufacturer of car tyres. Damsel has provided the following information: Sales revenue $50,000 Beginning finished goods inventory 19,000 Cost of sales 36,000 Cost of goods manufactured 45,500   Calculate the amount of ending finished goods inventory reported in Damsel's balance sheet. A) $64,500 B) $9500 C) $4500 D) $28,500 67) Crystal Ltd is a retailer of stone ornaments. It.
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  71) The following information was obtained from Fizz Company:   Advertising costs $10,800 Indirect labour 7000 CEO's salary 47,000 Direct labour 60,000 Indirect materials 6500 Direct materials used 41,000 Factory utilities 540 Factory janitorial costs 3000 Manufacturing equipment depreciation 2000 Delivery vehicle depreciation 1120 Administrative wages and salaries 31,900   How much were Fizz's period costs? A) $89,700 B) $90,820 C) $11,920 D) $120,040 72) The following information was obtained from Fizz Company:   Advertising costs $9100 Indirect labour 5600 CEO's salary 61,000 Direct labour 40,000 Indirect materials 5000 Direct materials used 60,000 Factory.
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1) Which of the following BEST describes horizontal analysis? A) Showing each figure as a percentage of some other amount, such as total assets B) Comparing a company's financial figures with other companies that are leaders C) Comparing figures year to year D) Calculating key ratios to evaluate performance 2) Which of the following BEST.
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  76) Jasper Ltd reports the following cost information for March:   Cost of goods manufactured $74,000 Manufacturing overhead 19,000 Finished goods inventory, 1 March 6000 Finished goods inventory, 31 March 3000 Work in process inventory, 1 March 9620 Work in process inventory, 31 March 1180 Direct materials used 25,250   What is the amount of direct labour incurred by Jasper in March? A) $65,560 B) $74,000 C) $21,310 D) $6250 77) A.
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1) Which of the following is NOT an objective of management accounting? A) To provide information to business managers to assist them in planning for their business B) To provide information to business managers to assist them in controlling their business C) To assist business managers with respect to providing a return to.
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  94) Indirect materials costs like lubricants and cleaning fluids are included in manufacturing overhead. 95) Factory rent, taxes and insurance are included in manufacturing overhead. 96) Transportation costs to ship products to customers are inventoriable product costs. 97) Sales commissions are included in manufacturing overhead. 98) Advertising and marketing costs are included in manufacturing.
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106) Peartree Ltd provides the following income statement for the year 2016:     2016 Net sales $240 000 Cost of sale 110 000 Gross profit $130 000 Operating expenses:   Selling expenses 45 000 Administrative expenses 12 000 Total expenses 57 000 Profit $73 000 Other revenues and (expenses):   Loss on sale of capital assets (26,000) Interest expense (1000) Total other revenues and (expenses) (27,000) Profit before taxes $46,000 Income tax expense 6000 Net profit $40,000   Calculate the times-interest-earned ratio. A) 46 times B).
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16) The basic accounting concepts and principles: A) explain the difference between managerial and financial accounting. B) provide financial information about the reporting entity that is useful to existing and potential investors, lenders and other creditors in making decisions about providing resources to the entity. C) are an important way in which management.
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41) Period costs are costs that are expensed in the period in which they are incurred. 42) Inventoriable product costs are expensed in the period in which they are incurred. 43) Inventoriable product costs only include the costs to get the inventory in the warehouse. 44) Accounting standards require companies to treat inventoriable.
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31) A business decides to expense the cost of minor repair tools rather than capitalise them. This is an example of which principle? A) materiality B) understandability C) relevance D) matching 32) The presumption is that a material item is one that is ________ of an appropriate base amount. A) greater than 20% B) greater than 10% C).
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TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 6) The Financial Reporting Council (FRC) was established by the federal government to oversee the Australian standard-setting process. 7) AASB stands for Australian Accounting Standards Board. 8) Due process in standard setting involves public consultation with all interested.
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