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Study Resources (Accounting)

24.1   Learning Objective 24-1 1) A profit center is a unit in which the manager: A) has the responsibility for controlling costs, but not for directly generating revenue. B) is not responsible for controlling costs, but is responsible for generating revenue. C) is responsible for controlling costs and generating revenue. D) None of these answers.
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11) When a department showing a loss is eliminated, other departments will always achieve a greater contribution margin. 12) Direct expenses and indirect expenses are separated in determining contribution margin. 13) Direct expenses are assigned to departments based on the actual expenses incurred. 14) Eliminating one department may increase the sales of another.
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11) Calculate the cost of goods sold when beginning finished goods inventory equals $70,000, ending finished goods inventory $85,000, and cost of goods manufactured $600,000. A) $615,000 B) $445,000 C) $685,000 D) $585,000 12) What inventories are included in determining the cost of goods sold? A) Beginning and ending finished goods B) Beginning and ending raw materials C).
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31) Which of the following sequences of events is in the correct order for a voucher system? A) Recording, preparing, posting, and paying the voucher B) Posting, preparing, paying, and recording the voucher C) Preparing, paying, posting, and recording the voucher D) None of the above is the correct order. 32) Important control features provided.
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78) Selected data for Stick's Design are given as of December 31, Year 1 and Year 2 (rounded to the nearest hundredth). Year 2Year 1 Net Credit Sales$25,000$30,000 Cost of Goods Sold 16,00018,000 Net Income2,0002,800 Cash5,000900 Accounts Receivable3,0002,000 Inventory2,0003,600 Current Liabilities6,0005,000 Required: Compute the following: a. ________ Current ratio for Year 2. b. ________ Acid-test ratio for Year 2. c. ________ Accounts.
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24.3   Learning Objective 24-3 1) When preparing an income statement showing departmental contribution margin: A) indirect expenses are combined with direct expenses. B) indirect departmental expenses are added to contribution margin. C) direct expenses are subtracted from contribution margin on sales. D) None of these answers are correct. 2) Compute the contribution margin for the video.
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11) Brooke's Company purchased $1,500 of merchandise with terms of 2/10, n/30 and paid the invoice within the discount period. If Brooke's uses the net method of recording merchandise purchases, the $30 purchases discount is recorded in: A) the voucher register. B) the check register. C) the general journal. D) None of these answers.
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11) Sales minus cost of goods sold yields: A) operating expenses. B) gross profit. C) income before taxes. D) net income. 12) An example of a cost center is: A) a Holiday Inn. B) the restaurant in a motel. C) the administrative department in a motel. D) the catering department in a motel. 13) Gross profit by department appears on.
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51) The warehouse area for a wholesale club.________ 52) The cosmetic counter of a major retailer________ 53) The repair shop area of an airline.________ 54) The tax offices of a CPA firm.________ 55) The repair center of a car dealership.________ 56) The reservations call center for a hotel chain.________ .
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11) With a beginning Accounts Receivable balance of $20,000, an ending balance of $26,000, and net credit sales of $408,000, compute accounts receivable turnover ratio. A) 0.05 B) 20.4 C) 17.7 D) 68 12) Chuck Company has a beginning Accounts Receivable balance of $65,000 and an ending balance of $60,000. Net credit sales are $250,000..
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31) Finished goods inventory includes the total costs of manufacturing a product. 32) A cost of goods manufactured statement should be prepared before the income statement has been prepared. 33) The balance sheet contains all three manufacturing inventories. 34) The steps of the accounting cycle for a manufacturing company are different from those.
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  25.1   Learning Objective 25-1 1) Nails, depreciation, and foreman salaries are examples of: A) raw materials. B) direct labor. C) manufacturing overhead. D) none of the above. 2) Lumber used in construction of a building is part of: A) raw material costs. B) labor costs. C) manufacturing overhead. D) None of these answers are correct. 3) Direct labor includes the wages.
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61) After paying a voucher, the voucher document is marked paid. 62) Items are listed in the voucher register in the order liabilities are incurred. 63) Unpaid vouchers are arranged by the due date in a tickler file. 64) A schedule of vouchers payable is prepared from the check register. 65) When merchandise is.
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11) If the cosmetic department in the store measures 10,000 square feet and the total building cost is $30,000 for a 40,000 square foot building, the cost that would be allocated to the cosmetic department would be: A) $30,000. B) $10,000. C) $22,500. D) $7,500. 12) If the music department in a department store is.
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41) Finished goods are listed on the statement of cost of goods manufactured. 42) All expenses are listed on the income statement of a manufacturer. 43) Classify each of the following as raw materials, direct labor, or overhead: Item Raw Material Direct Labor Overhead Steel in making of cars Salary of a supervisor Wages of an employee producing desks Lease.
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61) Net income before taxes - preferred dividends divided by common stockholders' equity is the calculation for: A) earnings per share. B) rate of return on stockholders' equity. C) rate of return on total assets. D) return on sales. 62) The net income for the year ended was $300,000. Equity for common stockholders' at the.
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41) Saxon Corporation's beginning inventory was $30,000. The cost of goods sold was $350,000 for the year, with an ending inventory of $40,000. Inventory turnover for the year is: A) 20 times. B) 10 times. C) 11.67 times. D) 8.75 times. 42) What is the inventory turnover if the beginning inventory was $60,000, cost of.
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71) Emerald Corporation uses a voucher system and completed the following transactions: Dec. 31 Prepared voucher #422 to replenish the petty cash fund based on the following receipts:                             supplies $47, postage $48, and cash short $2. 31Issued check #1003 in payment of voucher #422. Required: Prepare general journal entries to record.
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51) Electricity for the stove in a restaurant.________ 52) Paint for the restaurant dining room.________ 53) Rent paid for the building.________ 54) Wages paid to the restaurant wait staff.________ 55) Electricity for the general lighting in a store._______ 56) Paint sold by the hobby department.________ 57) General employee insurance.________ 58) Rent paid for the freezers in the.
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48) From the following, calculate income by departments. Dept. 1Dept. 2 Net Sales$8,000$6,500 Cost of Goods Sold5,0003,200 Delivery Expense570420 Advertising Expense390310 Depreciation Expense620530 49) From the following partial data, prepare a departmental income statement showing income before tax along with net income for Mason Corporation for the month ended December 31. Net Sales-Sporting Goods$3,000 Net Sales-Shoes1,500 Cost of Goods Sold-Sporting.
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11) Supporting documents for a voucher system are: A) filed in a tickler file. B) attached to the invoice. C) attached to the purchase order. D) attached to the voucher. 12) When a purchase is made, the business will: A) credit Vouchers Payable. B) enter a voucher in the voucher register. C) debit Purchases. D) All of the above. 13).
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51) Vouchers are recorded in the voucher register as they are paid. 52) A schedule of vouchers payable can be prepared from the tickler file at the end of the month. 53) In a voucher system, the source documents include the invoice, receiving report, purchase order, and purchase requisition. 54) To maintain good.
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18) Crane Printing purchased $5,000 of supplies from Paper Wholesale, terms 2/10, n/30 on July 25, and prepared voucher #611. Crane paid the voucher on July 31. Required: Prepare journal entries to record the above transactions assuming Crane uses the net approach method for recording purchases. 19) On October 1, Oak Company.
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41) A voucher register could contain which of the following columns? A) Debit to Vouchers Payable B) Credit to Purchases C) Debit or credit to sundry accounts D) A credit to an expense account 42) Martin Corporation used the gross method of recording purchases. A purchase of $5,600, 3/10, n30 would be recorded as: A) debit.
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21) Why would it be advisable for a company to keep separate accounting records for various departments? 22) Prepare an income statement showing departmental contribution margin based on the following: Dept. XDept. YRent Expense Space (square feet)17,50035,000 Net Sales$60,000$ 40,000 Cost of Goods Sold18,00016,000 Rent Expense (allocated based on square feet)$2,700 23) Hawkeye Golf is considering dropping.
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21) Which of the following business documents would not originate with the purchasing company? A) Purchase requisition B) Check for payment C) Sales invoice D) Receiving report 22) The company receiving a purchase order prepares a: A) purchase requisition. B) voucher. C) bill of lading. D) sales invoice. 23) On the balance sheet, Vouchers Payable would be: A) a special liability.
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  23.1   Learning Objective 23-1 1) A voucher system is designed to control a company's: A) cash receipts. B) cash payments. C) stock sales. D) internal finances. 2) A voucher is made for every: A) cash receipt. B) cash payment. C) accounts payable transaction. D) accounts receivable transaction. 3) A voucher register is: A) a replacement for the purchases journal. B) a special journal.
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51) The net sales for James, Inc. were $4,000,000; net income was $510,000; and gross profit was $1,300,000. The return on sales ratio would be: A) 12.75%. B) 32.50%. C) 45.25%. D) 39.23%. 52) A company has cash of $215,000; short-term investments of $35,000; net receivables of $75,000; and inventory of $150,000. Current liabilities total.
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24.2   Learning Objective 24-2 1) The difference between a department's gross profit and its operating expenses is known as the: A) departmental operating margin. B) departmental operating cost. C) departmental operating income. D) departmental gross profit. 2) Indirect expenses are allocated to departments based on: A) decisions of the stockholders. B) directives from the board of directors. C) some.
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82) Liquidity Asset Management Debt Profitability Acid test ratio 83) Liquidity Asset Management Debt Profitability Times interest earned 84) Liquidity Asset Management Debt Profitability Accounts receivable turnover 85) Liquidity Asset Management Debt Profitability Gross profit rate 86) Liquidity Asset Management Debt Profitability Asset turnover .
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28) From the following, complete the common-size income statement for Isaiah's Sporting Goods using net sales as the base. (Round to nearest tenth of a percent.) Amount Percent Net Sales$750,000________ Cost of Goods Sold650,000________ Gross Profit on Sales100,000________ Operating Expenses60,000________ Net Income40,000________ 29) From the following balance sheet for Bricks Corporation, compute the common-size balance sheet amounts..
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31) Departmental accounting requires: A) measuring departmental gross profit. B) allocating direct costs to departments. C) allocating indirect costs to departments. D) None of these answers is correct. 32) Which of the following expenses is the most difficult to allocate to departments? A) Cost of goods sold B) Use of general supplies by everyone C) Salaries and wages D).
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23.3   Learning Objective 23-3 1) What is the internal control advantage of using the net method of accounting for merchandise purchases? A) It highlights the inefficiency of losing purchase discounts. B) It guarantees that all purchase discounts will be taken. C) It automatically increases a firm's cash balance. D) It results in a higher quality.
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22.3   Learning Objective 22-3 1) Liquidity ratios measure: A) how effectively a company is using its equity. B) how effectively a company is using its liabilities. C) a company's ability to pay shareholders. D) a company's ability to pay off short-term debts. 2) Debt management ratios measure: A) how effectively a company is using its cash. B) how.
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