This document provides 30 multiple choice questions from an ACC 561 Final Exam. The questions cover topics such as performance reports, budgets, management accounting, financial accounting, cost accounting, break-even analysis, and activity based costing.
ACC 545 Final Exam 100% Correct Answer
Description:
1) A company changes from percentage-of-completion to completed-contract, which is the method used for tax purposes. The entry to record this change should include a
A. debit to Retained Earnings in the amount of the difference on prior years, net of tax.
B. debit to Loss on Long-Term Contracts in the amount of the difference on prior years, net of tax.
C. credit to Deferred Tax Liability.
D. debit to Construction in Process.
2) Which of the following is accounted for as a change in accounting principle?
A. A change from expensing immaterial expenditures to deferring and amortizing them as they become material
B. A change from the cash basis of accounting to the accrual basis of accounting
C. A change in inventory valuation from average cost to FIFO
D. A change in the estimated useful life of plant assets
3) A company changes from straight-line to an accelerated method of calculating depreciation, which will be similar to the method used for tax purposes. The entry to record this change should include a
A. debit to Deferred Tax Asset.
B. debit to Retained Earnings in the amount of the difference on prior years.
C. credit to Deferred Tax Liability.
D. credit to Accumulated Depreciation.
4) Presenting consolidated financial statements this year when statements of individual companies were presented last year is
A. an accounting change that should be reported by restating the financial statements of all prior periods presented.
B. an accounting change that should be reported prospectively.
C. NOT an accounting change.
D. a correction of an error.
5) During 2008, a construction company changed from the completed-contract method to the percentage-of-completion method for accounting purposes but not for tax purposes. The following lists include gross profit figures under both methods for the past 3 years:
Completed-Contract
Percentage-of-Completion
2006
$ 475,000
$ 800,000
2007
625,000
950,000
2008
700,000
1,050,000
$1,800,000
$2,800,000
Assuming an income tax rate of 40% for all years, the affect of this accounting change on prior periods should be reported by a credit of what?
A. $390,000 on the 2008 income statement
B. $600,000 on the 2008 income statement
C. $390,000 on the 2008 retained earnings statement
D. $600,000 on the 2008 retained earnings statement
6) On January 1, 2005, Baden Co. purchased a machine, which was its only depreciable asset, for $300,000. The machine has a 5-year life, and no salvage value. Sum-of-the-years’-digits depreciation has been used for financial statement reporting and the elective straight-line method for income tax reporting. Effective January 1, 2008, for financial statement reporting, Baden decided to change to the straight-line method for depreciation of the machine. Assume that Baden can justify the change.
Baden’s income before depreciation, before inc
John Kivit - Shareforce - Trema - Social, Local, MobileShareforce
Presentation about social, local and mobile (SOLOMO) with plenty of stats and cases. The SOLOMO concept is important for marketeers that want to reach consumers in a modern society. This presentation was created for the Trema network on November 19, 2013. Trema is a network of marketeers in foodservice. http://www.trema-netwerk.nl/
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
ACC 545 Final Exam 100% Correct Answer
Description:
1) A company changes from percentage-of-completion to completed-contract, which is the method used for tax purposes. The entry to record this change should include a
A. debit to Retained Earnings in the amount of the difference on prior years, net of tax.
B. debit to Loss on Long-Term Contracts in the amount of the difference on prior years, net of tax.
C. credit to Deferred Tax Liability.
D. debit to Construction in Process.
2) Which of the following is accounted for as a change in accounting principle?
A. A change from expensing immaterial expenditures to deferring and amortizing them as they become material
B. A change from the cash basis of accounting to the accrual basis of accounting
C. A change in inventory valuation from average cost to FIFO
D. A change in the estimated useful life of plant assets
3) A company changes from straight-line to an accelerated method of calculating depreciation, which will be similar to the method used for tax purposes. The entry to record this change should include a
A. debit to Deferred Tax Asset.
B. debit to Retained Earnings in the amount of the difference on prior years.
C. credit to Deferred Tax Liability.
D. credit to Accumulated Depreciation.
4) Presenting consolidated financial statements this year when statements of individual companies were presented last year is
A. an accounting change that should be reported by restating the financial statements of all prior periods presented.
B. an accounting change that should be reported prospectively.
C. NOT an accounting change.
D. a correction of an error.
5) During 2008, a construction company changed from the completed-contract method to the percentage-of-completion method for accounting purposes but not for tax purposes. The following lists include gross profit figures under both methods for the past 3 years:
Completed-Contract
Percentage-of-Completion
2006
$ 475,000
$ 800,000
2007
625,000
950,000
2008
700,000
1,050,000
$1,800,000
$2,800,000
Assuming an income tax rate of 40% for all years, the affect of this accounting change on prior periods should be reported by a credit of what?
A. $390,000 on the 2008 income statement
B. $600,000 on the 2008 income statement
C. $390,000 on the 2008 retained earnings statement
D. $600,000 on the 2008 retained earnings statement
6) On January 1, 2005, Baden Co. purchased a machine, which was its only depreciable asset, for $300,000. The machine has a 5-year life, and no salvage value. Sum-of-the-years’-digits depreciation has been used for financial statement reporting and the elective straight-line method for income tax reporting. Effective January 1, 2008, for financial statement reporting, Baden decided to change to the straight-line method for depreciation of the machine. Assume that Baden can justify the change.
Baden’s income before depreciation, before inc
John Kivit - Shareforce - Trema - Social, Local, MobileShareforce
Presentation about social, local and mobile (SOLOMO) with plenty of stats and cases. The SOLOMO concept is important for marketeers that want to reach consumers in a modern society. This presentation was created for the Trema network on November 19, 2013. Trema is a network of marketeers in foodservice. http://www.trema-netwerk.nl/
Swedbank was founded in 1820, as Sweden’s first savings bank was established. Today, our heritage is visible in that we truly are a bank for each and every one and in that we still strive to contribute to a sustainable development of society and our environment. We are strongly committed to society as a whole and keen to help bring about a sustainable form of societal development. Our Swedish operations hold an ISO 14001 environmental certification, and environmental work is an integral part of our business activities.
Cost Management Accounting and Control 6th Edition Hansen Test Bankwypize
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Cost Management Accounting and Control 6th Edition Hansen Test Bank
Accounting1) As Plant Controller, you are trying to determine .docxannetnash8266
Accounting
1) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?
A. Cost of landscaping the corporate office
B. The western division’s vice president’s salary
C. General corporate liability insurance
D. Factory janitor
2) The income statement and balance sheet columns of Pine Company's worksheet reflects the following totals:
Income Statement
Balance Sheet
Dr.
Cr.
Dr.
Cr.
Totals
$58,000
$48,000
$34,000
$44,000
Closing entries are necessary for __________.
A. both permanent and temporary accounts
B. permanent or real accounts only
C. permanent accounts only
D. temporary accounts only
3) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess’s break even point?
A. 6,200 units
B. 2,133 units
C. 4,600 units
D. $25,600
4) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company's net income increase?
A. $12,000
B. $6,000
C. $18,000
D. $28,000
5) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________.
A. have been approved by the Internal Revenue Service
B. have been approved for use by the managements of business firms
C. are proven theories of accounting
D. have substantial authoritative support
6) What is value chain management best defined as?
A. The incremental value of costs associated with hiring a new production floor leader
B. All activities associated with providing a product or service
C. A large chain that keeps the machines from falling on the production floor
D. Management decisions that affect how quickly the production run occurs
7) The major reporting standard for management accounts is __________.
A. relevance to decisions
B. generally accepted accounting principles
C. the Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management
D. the Sarbanes-Oxley Act of 2002
8) These are selected account balances on December 31, 2008.
Land (location of the corporation's office building)
$100,000
Land (held for future use)
150,000
Corporate Office Building
600,000
Inventory
200,000
Equipment
450,000
Office Furniture
100,000
Accumulated Depreciation
300,000
What is the net amount of property, plant, and equipment that will appear on the balance sheet?
A. $1,600,000
B. $950,000
C. $1,300,000
D. $1,100,000
9) The cost principle is the basis for preparing financial statements because it is __________.
A. an intern.
1. ANSWERS ARE HERE!!!
ACC 561 Final EXAM
1) Performance reports _____.
A. ignore areas that are presumed to be running smoothly
B. provide feedback by comparing results with plans and by highlighting deviations from plans
C. are deviations from a plan
D. are quantitative expressions of action plans
2) Budgets _____.
A. ignore areas that are presumed to be running smoothly
B. are deviations from a plan
C. are quantitative expressions of action plans
D. provide feedback by comparing results with plans and by highlighting deviations from plans
3) According to the Financial Executives Institute, one function of the treasurer is _____.
A. government reporting
B. reporting and interpreting financial information
C. Short term financing
D. tax administration
4) Which of the following is not a major factor causing changes in management accounting
today?
A. E-commerce is not a major factor.
B. Declining work ethic is not a major factor.
C. Increased global competition is not a major factor.
D. Increasing importance of the service sector of the economy is not a major factor.
5) Below is a statement from theInstitute ofManagement Accountants’ Statement of Ethical
Professional Practice. “Refrain from disclosing confidential information acquired in the course of
their work except when authorized, unless legally obligated to do so.” It is an example of _____.
A. integrity
B. competence
C. confidentiality
D. objectivity
6) Ethical accountants are important to society because _____.
A. none of these answers is correct
B. they pay their taxes
C. the information produced is reliable
D. they will not go to prison and waste taxpayers' money
7) _____ refers to accounting information developed for managers within an organization.
A. Tax accounting
B. Financial accounting
2. C. Managerial accounting
D. Internal auditing
8) The primary users of management accounting information are _____.
A. suppliers
B. internal decision makers
C. governmental regulatory authorities
D. bankers
9) _____ is the field of accounting that develops information for external decision makers such
as stockholders, suppliers, banks, and government regulatory agencies.
A. Financial accounting
B. Management accounting
C. Tax accounting
D. Auditing
10) The _____ is also called the statement of financial position.
A. balance sheet
B. income statement
C. statement of retained earnings
D. statement of cash flows
11) Any event that affects the financial position of an organization and requires recording is
called a(n)_____.
A. account
B. transaction
C. posting
D. accounting change
12) _____ would not appear on the financial statements for a sole proprietorship.
A. Cost of Goods Sold
B. Paid-in Capital
C. Accumulated Depreciation
D. Unearned Sales Revenues
13) The accounting convention of _____ guides the relative sophistication of the accounting
system.
A. cost benefit
B. objectivity
C. Conservatism
D. materiality
14) Mr. Bryant invested $50,000 cash in a new corporation. The new corporation will record this
transaction with a debit to_____.
A. Cash and a credit to Retained Income for $50,000
B. Cash and a credit to Paid-in Capital for $50,000
C. Retained Earnings and a credit to Cash for $50,000
D. Paid-in Capital and a credit to Retained Earnings for $50,000
3. 15) The accounting convention of _____ means selecting the method of measurement that
yields the gloomiest immediate results.
A. objectivity
B. conservatism
C. cost benefit
D. materiality
16) The statement of cash flows is used for all of the following except_____.
A. determining a company's ability to pay its debts when they are due
B. evaluating the creditworthiness of the organization
C. showing the relationship of net income to changes in cash
D. revealing commitments that may restrict future courses of action
17) The Rebecca Company acquired merchandise inventory costing $10,000 on September 1.
The company will not pay for the inventory until October 1. This transaction will affect the
Rebecca Company by increasing the Merchandise Inventory account by $10,000 and _____.
A. decreasing the Accounts Payable account by $10,000
B. decreasing the Capital account by $10,000
C. increasing the Accounts Payable account by $10,000
D. increasing the Capital account by $10,000
18) Nonoperating items on the income statement_____.
A. reflect the effects of financial management decisions
B. appear on the income statement immediately after gross profit
C. are revenues and expenses arising from adjusting entries
D. appear only on corporate income statements
19) Which value chain function would include depreciation on transportation cost?
A. The customer service function would include depreciation on transportation cost.
B. The marketing function would include depreciation on transportation cost
C. The distribution function would include depreciation on transportation cost.
D. The production function would include depreciation on transportation cost.
20) Which value chain function would include advertising costs?
A. The customer service function would include advertising costs.
B. The production function would include advertising costs.
C. The distribution function would include advertising costs.
D. The marketing function would include advertising costs.
21) Which of the following is not a cost driver of customer services costs?
A. Travel costs are not a cost driver of customer services costs.
B. Number of service calls is not a cost driver of customer services costs.
C. Hours spent servicing products are not a cost driver of customer services costs.
D. All of these answers are correct
22) Hug Me Company produces dolls. Each doll sells for $20.00. Variable costs per unit total
$14.00, of which $6.25 is for direct materials and $5.25 is for direct labor. If total fixed costs are
$435,000, then the break even volume in dollars is _____.
A. $1,023,529
B. $621,429
4. C. $1,450,000
D. $435,000
23) If the sales price per unit is $100, the unit variable cost is $75, and total fixed costs are
$150,000, then the break even volume in dollar sales rounded to the nearest whole dollar is
_____.
A. $600,000
B. $150,000
C. $200,000
D. $1,500
24) Knothole Company sells desks at $480 per desk. The costs associated with each desk are
as follows:
Direct materials $195
Direct labor 126
Variable factory overhead 51
Total fixed costs for the period are $456,840. The break-even volume in dollars is _____.
A. $1,573,560
B. $2,030,400
C. $456,840
D. none of these answers is correct
25) _____ of approximating cost functions does not involve the analysis of past costs.
A. Visual fit analysis
B. Engineering analysis
C. High low analysis
D. least-squares regression
26) Managers should apply two principles to obtain accurate and useful cost functions. These
principles are ____.
A. plausibility and reliability
B. reliability and validity
C. plausibility and believability
D. believability and validity
27) In relation to a cost function, the term reliability means_____.
A. whether the cost function conforms to a given mathematical model
B. how well the cost function predicts future costs
C. whether the costs and activities can be easily observed
D. how well the cost function explains past cost behavior
28) _____ is a name for a system that first accumulates overhead costs for each of the activities
of an organization, and then assigns the costs of activities to the products, services, or other
cost objects that caused that activity.
A. Cost driver accounting
B. Activity based costing
C. Transaction costing
D. Transaction based accounting
5. 29) _____ need cost accounting systems.
A. Service organizations and nonprofit organizations
B. Manufacturing firms and service organizations
C. Manufacturing firms, service organizations, and nonprofit organizations
D. Manufacturing firms and nonprofit organizations
30) _____ is an example of the external financial reporting purpose of the cost management
systems.
A. The product mix to optimize profitability
B. The cost of a manufacturing process
C. Budget reporting
D. The amount of inventory that should appear on the balance sheet