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What does accounting focus on? - correct answer The impact a business's activities have on its overall financial performance Which report summarizes cash collections and cash expenditures from operating, investing, and financing activities over a period of time? - correct answer Statement of cash flows Which users would have a primary concern with an organization's ability to provide healthcare benefits? - correct answer Employees Which benefit does a corporation gain by following Generally Accepted Accounting Principles (GAAP)? - correct answer An increase in its comparability to other companies Which body regulates a certified public accounting firm's audit practices when the firm is auditing a large publicly traded company? - correct answer The Public Company Accounting Oversight Board (PCAOB) What has had the most significant impact on accounting practices? - correct answer Information technology What two items of information are revealed on the balance sheet? - correct answer Ownership and Debt Which term is defined as the residual interest in the net assets of a company? - correct answer Owners' equity A corporation has total liabilities of $300 million, total owners' equity of $ million, and current assets of $50 million.What is the value of the firm's long-term assets? - correct answer $350 million
Which situation should result in revenue recognition on the income statement for the year ending 12/31/14 if the firm is using accrual-basis accounting? - correct answer In 2014, a company provides services to a customer for which cash will be collected the next year (2015). Which category on the statement of cash flows summarizes cash receipts and payments to owners and creditors of the company? - correct answer Cash flows from financing activities Where would an investor find a summary of a company's significant accounting policies? - correct answer In the notes to financial statements Which assurance does an external audit report provide for its readers? - correct answer The company's financial statements fairly reflect its financial position Reliable - correct answer verified Relevant - correct answer Information having to do with the matter at hand Material - correct answer Information that is important enough to make a difference Conservatism - correct answer Information related to recognizing losses as they occur Order the steps in the decision cycle from first (1) to last (5). - correct answer
- Prepare financial statements
- Analyze financial statements
- Gather information
- Make decision
- Implement decision
Ordinary gains and losses Which two items' subtotals are included in a multi-step income statement? - correct answer Gross profit Income from operations A furniture company using accrual accounting purchased 20 sofas in November
- In December 2011, 8 of the 20 sofas were sold to customers. The customers all signed contracts agreeing to pay half the amount owed in February 2012 and the remaining half in March 2012. At the time of sale, the company was reasonably sure the customers would pay the amount owed. The furniture company pays its salespeople a commission on each sofa sold, with commissions for December 2011 sales paid in January 2012. The furniture company paid $3,000 for advertising that ran in the local newspaper in November 2011. In which month should advertising costs be expensed? - correct answer November 2011 On May 1, 2011, a company using accrual accounting purchased equipment costing $500,000. It expects the equipment to have a useful life of five years. At the time of purchase, the company also purchased a one-year insurance policy on this equipment, which cost $6,000.How much insurance expense should the company have recognized for the year ending in 2011? - correct answer $4, What was the 2012 net profit amount if the 2013 pro-forma net profit of $187, was based on a 22% increase? - correct answer $153, What is a common category in a statement of cash flows? - correct answer Cash from investing activities Which cash flow category would include "cash received from investors"? - correct answer Cash from financing activities Which item is an investing activity? - correct answer Cash payments for purchase of plant assets
What impact does the sale of equipment have on the statement of cash flows? - correct answer Increase in cash from investing activities What is known about the direct and indirect methods of preparing statements of cash flow? - correct answer The indirect method is more popular among large U.S. companies A company's statement of cash flows includes the following cash transactions: Sales 1,250, Inventory Purchase -750, Property and Equipment Purchase -270, Interest Payment on Long-Term Debt -25, Payment of Wages -315, Payment of Rent -40, Borrowing Long-Term Debt 200, Payment of Cash Dividends -15, Repurchase of Treasury Stock -40, Total Cash Flows -5, Assuming the company uses US GAAP standards, what is the total cash flow from financing activities? - correct answer $145, Which two examples represent financial statement errors? - correct answer The accounting department miscalculates the payroll tax due at year-end, resulting in an inaccurate liability The accountant unintentionally records amounts as revenue that were prepaid by customers but not yet earned Which internal control is intended to ensure that a company does not mistakenly pay a supplier for an invoice that includes more items than were actually received? -
How does management accounting differ from financial accounting? - correct answer Management accounting is used primarily for internal planning, control, and evaluation. Which account is seen on the balance sheet of a manufacturing company but not on the balance sheet of a service-oriented company? - correct answer Inventory What is a cost that will change in the future based upon the decision made? - correct answer Differential cost Which two examples are period costs? - correct answer Administrative expenses Selling expenses A company manufactures custom-built wooden bookshelves.Which two costs would the company classify as period costs? - correct answer Salary cost of the receptionist Advertising cost What role do ethical standards have in management accounting? - correct answer To guide the resolution to possible ethical dilemmas that the managerial accountant may encounter During its first month of operations, a manufacturer incurs the following costs in dollars related to activities within its factory: Direct materials costs $5, Indirect materials $2, Direct labor $15, Indirect labor $3, Factory rent $10, Depreciation on factory equipment $8,
What are the manufacturer's total product costs for the month? - correct answer $43, During its first month of operations, a manufacturer incurs the following costs (in dollars) related to activities within its factory: Direct materials $15, Direct labor $30, Manufacturing overhead $40, What amount should be reported as cost of goods sold on the income statement if 5,000 units are produced and 4,000 are sold? - correct answer $68, Which two costs are included when calculating inventory costs? - correct answer Direct labor Overhead In which scenario would activity-based costing be more appropriate than traditional costing? - correct answer A company produces five different products. The products are highly differentiated and have significantly different demands for their use of overhead costs. Which category of ABC activities are machine setup and material movement costs associated with? - correct answer Batch-level activities The director of a marathon race wants to assign the cost of having police officers along the race route to manage crowd control. Which consideration is an appropriate cost driver? - correct answer The number of race participants and spectators Which two concepts are studied in cost-volume-profit analysis? - correct answer Profits Levels of activity
