Accounting II Practice Questions
Course Introduction
Accounting II builds upon the fundamental principles introduced in Accounting I, delving deeper into topics such as corporate accounting, managerial practices, budgeting, and financial statement analysis. This course emphasizes the application of accounting processes in complex business scenarios, covering areas like inventory valuation, receivables and payables management, long-term assets, and the preparation of cash flow statements. Students also explore the ethical considerations and regulatory requirements in accounting, enhancing their ability to interpret and utilize financial information for decision-making in both corporate and managerial contexts.
Recommended Textbook
Horngren's Accounting The Managerial Chapters 10th Edition by Tracie L. Miller Nobles
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9 Chapters
1348 Verified Questions
1348 Flashcards
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Page 2
Chapter 1: Introduction to Managerial Accounting
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179 Verified Questions
179 Flashcards
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Sample Questions
Q1) In a manufacturing firm, advertising and marketing costs are included in manufacturing overhead.
A)True
B)False
Answer: False
Q2) Which of the following is most likely a service company?
A) a law firm
B) a car manufacturer
C) a fruit seller
D) a baker
Answer: A
Q3) ERP systems can integrate all of a company's functions, departments, and data into a single system.
A)True
B)False
Answer: True
Q4) Repair and maintenance costs for factory equipment are product costs.
A)True
B)False
Answer: True
Page 3
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Chapter 2: Job Order Costing
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152 Verified Questions
152 Flashcards
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Sample Questions
Q1) Manufacturing overhead is allocated by debiting the Finished Goods Inventory account.
A)True
B)False
Answer: False
Q2) The cost of goods manufactured is recorded with a debit to the Finished Goods Inventory account and a credit to the Work-in-Process Inventory account.
A)True
B)False
Answer: True
Q3) Overallocated manufacturing overhead occurs when the manufacturing overhead allocated to Work-in-Process Inventory is less than the amount actually incurred.
A)True
B)False
Answer: False
Q4) Job order costing is well suited for the service industry.
A)True
B)False Answer: True
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Chapter 3: Process Costing
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144 Flashcards
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Sample Questions
Q1) The cost of units sold is recorded by debiting Cost of Goods Sold and crediting:
A) Finished Goods Inventory.
B) Sales Revenue.
C) Work-in-Process Inventory.
D) Wages Payable.
Answer: A
Q2) During August, the Filtering Department of Olive Company had beginning transferred in units of 200 with costs of $50,000. 500 units were started in production during the month. It had 100 units in ending Work-in-Process Inventory. Under the first-in, first-out (FIFO) method, current-period equivalent units of production for transferred in units in beginning Work-in-Process Inventory of the Filtering Department is:
A) 0 units.
B) 500 units.
C) 200 units.
D) 100 units.
Answer: A
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Chapter 4: Cost-Volume-Profit Analysis
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172 Verified Questions
172 Flashcards
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Sample Questions
Q1) A(n) ________ groups cost by behavior; that is, costs are classified as either variable costs or fixed costs.
A) balance sheet
B) contribution margin income statement
C) traditional income statement
D) absorption costing income statement
Q2) Porterhouse Company incurs both fixed and variable production costs. Assuming the production is within the relevant range, if volume goes up by 20%, then the total fixed costs would:
A) increase by 20%.
B) remain the same.
C) increase by an amount less than 20%.
D) decrease by 20%.
Q3) The type of information provided by managerial accounting differs from the information provided by financial accounting.
A)True
B)False
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Chapter 5: Master Budgets
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114 Verified Questions
114 Flashcards
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Sample Questions
Q1) The budget assumes that 60% of commission expenses are paid in the month they were incurred and the remaining 40% are paid one month later. In addition, 50% of salary expenses are paid in the month incurred and the remaining 50% are paid one month later. Miscellaneous expenses, rent expense and utility expenses are assumed to be paid in the same month in which they are incurred. Insurance was prepaid for the year on January 1.
How much is the total of the budgeted cash payments for selling and administrative expenses for the month of May?
A) $54,200
B) $53,250
C) $54,400
D) $53,900
Q2) Based on the above data, calculate the projected cash balance at the end of June.
A) $35,700
B) $21,900
C) $46,100
D) $54,600
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Chapter 6: Flexible Budgets and Standard Cost Systems
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174 Verified Questions
174 Flashcards
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Sample Questions
Q1) Melissa Company has collected the following data for one of its products: \(\begin{array}{|l|r|}
\hline\text { Direct materials standard (5 pounds @ } \$ 1 / \mathrm{lb} \text {.) } & \$ 5 \text { per finished good } \\ \hline \text { Direct materials flexible budget variance-unfavorable } & \$ 14,000 \\ \hline \text { Actual direct materials used } & 100,000 \text { pounds } \\ \hline \text { Actual finished goods produced } & 18,000 \text { units }\\\hline \end{array}\) How much is the direct materials efficiency variance?
A) $18,000 U
B) $10,000 F
C) $10,000 U
D) $18,000 F
Q2) A material cost variance measures the difference in quantities of actual input used and the standard quantity of input allowed for the actual number of units produced. A)True
B)False
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Chapter 7: Cost Allocation and Responsibility Accounting
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Sample Questions
Q1) WAX-D Inc. has a division that manufactures a component that sells for $150 and has a variable cost of $45. Another division of the company wants to purchase the component. Fixed cost per unit of component is $25. What is the minimum transfer price if the division is operating below its capacity?
A) $50
B) $45
C) $30
D) $40
Q2) If a company allows division managers to negotiate a cost-based transfer price, it is better to use actual costs rather than standard costs. Otherwise, the selling division has no motivation to control costs.
A)True
B)False
Q3) The company uses management by exception to address flexible budget variances. On which variance would the company focus first?
A) 40 inch
B) 36 inch long
C) 36 inch short
D) 32 inch
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Page 9
Chapter 8: Short-Term Business Decisions
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Sample Questions
Q1) A company produces 100 microwave ovens per month, each of which includes one electrical circuit. The company currently manufactures circuit in-house but is considering outsourcing the circuits at a contract price of $28 each. Currently, the cost of producing circuits in-house includes variable costs of $26 per circuit and fixed costs of $5,000 per month. Assume the company could eliminate all fixed costs by outsourcing, and that there is no alternative use for the facilities presently being used to make circuits. How will it affect monthly operating income, if the company outsources?
A) Operating income will go up by $2,300.
B) Operating income will go down by $2,800.
C) Operating income will go down by $200.
D) Operating income will go up by $4,800.
Q2) If a special sales order is accepted for 5,500 sails at a price of $150 per unit, fixed costs remain unchanged, and there are no variable marketing and administrative costs for this order, what is the change in operating income?
A) Operating income decreases by $385,000.
B) Operating income decreases by $495,000.
C) Operating income increases by $385,000.
D) Operating income increases by $495,000.
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Chapter 9: Capital Investment Decisions
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122 Flashcards
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Sample Questions
Q1) When the internal rate of return is the same as the required rate of return, the net present value of an investment will be positive.
A)True
B)False
Q2) Which project has the highest profitability index?
A) Project A
B) Project B
C) Project C
D) Project D
Q3) A post-audit in capital budgeting is a comparison of actual results of capital investments with the projected results.
A)True
B)False
Q4) Which of the following best describes a post-audit in capital budgeting?
A) an audit of an operating unit of a company
B) an audit performed after financial statements have been issued
C) an analysis of an investment's cash flows prior to committing to the initial investment
D) a comparison of actual results of capital investments with projected results
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