Business Accounting
Exam Materials
Course Introduction
Business Accounting provides an introduction to the principles, concepts, and practices of financial and managerial accounting within a business context. The course covers fundamental topics such as the accounting cycle, preparation and interpretation of financial statements, internal controls, and the regulatory environment. Students learn how to analyze financial information, use accounting data in decision-making, and understand the ethical considerations involved in business accounting. By the end of the course, students gain practical skills essential for managing finances and supporting business operations in a variety of organizational settings.
Recommended Textbook
Introduction to Managerial Accounting 8th Edition by Peter Brewer
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21 Chapters
4046 Verified Questions
4046 Flashcards
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Page 2
Chapter 1: Managerial Accounting and Cost Concepts
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299 Verified Questions
299 Flashcards
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Sample Questions
Q1) Within the relevant range, a change in activity results in a change in variable cost per unit and total fixed cost.
A)True
B)False
Answer: False
Q2) An example of a committed fixed cost would be:
A)taxes on real estate.
B)management development programs.
C)public relations costs.
D)advertising programs.
Answer: A
Q3) If 3,000 units are produced, the total amount of indirect manufacturing cost incurred is closest to:
A)$8,000
B)$11,750
C)$9,750
D)$3,750
Answer: B
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Chapter 2: Job-Order Costing: Calculating Unit Product Costs
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292 Verified Questions
292 Flashcards
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Sample Questions
Q1) The amount of overhead applied in the Machining Department to Job A803 is closest to:
A)$828.00
B)$792.00
C)$171.00
D)$174,800.00
Answer: A
Q2) Kreuzer Corporation is using a predetermined overhead rate of $22.30 per machine-hour that was based on estimated total fixed manufacturing overhead of $446,000 and 20,000 machine-hours for the period.The company incurred actual total fixed manufacturing overhead of $409,000 and 18,200 total machine-hours during the period.The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to:
A)$446,000
B)$37,000
C)$372,190
D)$405,860
Answer: D
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Chapter 3: Job-Order Costing: Cost Flows and External Reporting
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256 Verified Questions
256 Flashcards
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Sample Questions
Q1) The direct labor cost was:
A)$11,600
B)$19,900
C)$8,000
D)$11,000
Answer: C
Q2) Pine Publishing Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs.At the beginning of the year the Corporation estimated its total manufacturing overhead cost at $500,000 and its direct labor-hours at 125,000 hours.The actual overhead cost incurred during the year was $450,000 and the actual direct labor-hours incurred on jobs during the year was 115,000 hours.The manufacturing overhead for the year would be:
A)$10,000 underapplied.
B)$10,000 overapplied.
C)$50,000 underapplied.
D)$50,000 overapplied.
Answer: B
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5
Chapter 4: Activity-Based Costing
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230 Flashcards
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Sample Questions
Q1) The total overhead applied to Product E1 under activity-based costing is closest to:
A)$770,160
B)$472,008
C)$644,128
D)$364,736
Q2) The activity rate for the Production Orders activity cost pool under activity-based costing is closest to:
A)$176.22 per order
B)$61.79 per order
C)$172.70 per order
D)$106.87 per order
Q3) The activity rate for the Labor-Related activity cost pool under activity-based costing is closest to:
A)$118.82 per DLH
B)$368.75 per DLH
C)$178.23 per DLH
D)$41.92 per DLH
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Chapter 5: Process Costing6 Cost-Volume-Profit Relationships
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139 Verified Questions
139 Flashcards
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Sample Questions
Q1) Some companies use process costing and some use job-order costing.Which method a company uses depends on its industry.A number of companies in different industries are listed below:
1.Construction company that builds office buildings
2.Winery that produces a number of varietal wines
3.Cement manufacturer
4.Mushroom farm that produces the standard button mushroom in caves
5.Aluminum refiner that makes aluminum ingots from bauxite ore
Required:
For each company, indicate whether the company is most likely to use job-order costing or process costing.
Q2) Assume there was no beginning work in process inventory and the ending work in process inventory is 70% complete with respect to conversion costs.Under the weighted-average method, the number of equivalent units of production with respect to conversion costs would be:
A)the same as the units completed.
B)less than the units completed.
C)the same as the units started during the period.
D)less than the units started during the period.
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Chapter 6: Cost-Volume-Profit Relationships
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260 Verified Questions
260 Flashcards
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Sample Questions
Q1) Bussy Corporation produces and sells a single product whose contribution margin ratio is 54%.The company's monthly fixed expense is $561,600 and the company's monthly target profit is $34,560.
Required:
Determine the dollar sales to attain the company's target profit.Show your work!
Q2) The break-even point for the entire company is closest to:
A)$42,550
B)$71,020
C)$69,754
D)$30,450
Q3) In two companies making the same product and with the same total sales and total expenses, the contribution margin ratio will be lower in the company with a higher proportion of fixed expenses in its cost structure.
A)True
B)False
Q4) The degree of operating leverage is computed by dividing sales by the contribution margin.
A)True
B)False
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Chapter 7: Variable Costing and Segment Reporting: Tools for Management
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291 Verified Questions
291 Flashcards
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Sample Questions
Q1) The net operating income (loss)under absorption costing in Year 2 is closest to:
A)$31,000
B)$26,000
C)$132,000
D)$92,000
Q2) The net operating income (loss)under absorption costing closest to:
A)($4,000)
B)$9,000
C)$117,000
D)$72,000
Q3) Under absorption costing, the unit product cost would be:
A)$8.00 per unit
B)$17.75 per unit
C)$13.00 per unit
D)$10.75 per unit
Q4) The company's overall break-even sales is closest to:
A)$153,526
B)$431,289
C)$526,014
D)$584,815
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Chapter 8: Master Budgeting
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236 Verified Questions
236 Flashcards
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Sample Questions
Q1) The desired ending inventory of Jurislon for September is:
A)$81,720
B)$76,680
C)$191,700
D)$204,300
Q2) The company plans to sell 39,000 units of Product WZ in June.The finished goods inventories on June 1 and June 30 are budgeted to be 200 and 100 units, respectively.Budgeted direct labor costs for June would be:
A)$1,984,325
B)$1,974,175
C)$1,979,250
D)$564,050
Q3) The budgeted accounts receivable balance on September 30 would be:
A)$126,000
B)$148,000
C)$166,000
D)$190,000
Q4) The cash budget is the starting point in preparing the master budget.
A)True
B)False
10
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Chapter 10: Performance Measurement in Decentralized Organizations
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180 Verified Questions
180 Flashcards
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Sample Questions
Q1) A balanced scorecard contains both customer and internal business process performance measures because improvements in internal business process should result in improvements in customer satisfaction.
A)True
B)False
Q2) During the most recent month at Schwab Corporation, queue time was 7.8 days, inspection time was 0.3 day, process time was 1.3 days, wait time was 9.7 days, and move time was 0.7 day.
Required:
a.Compute the throughput time.
b.Compute the manufacturing cycle efficiency (MCE).
c.What percentage of the production time is spent in non-value-added activities?
d.Compute the delivery cycle time.
Q3) The Casket Division of Saal Corporation had average operating assets of $950,000 and net operating income of $135,200 in January.The company uses residual income to evaluate the performance of its divisions, with a minimum required rate of return of 13%.
Required: What was the Casket Division's residual income in January?
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Chapter 11: Differential Analysis: The Key to Decision Making
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203 Verified Questions
203 Flashcards
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Sample Questions
Q1) Hamby Corporation is preparing a bid for a special order that would require 780 liters of material W34C.The company already has 640 liters of this raw material in stock that originally cost $8.30 per liter.Material W34C is used in the company's main product and is replenished on a periodic basis.The resale value of the existing stock of the material is $7.60 per liter.New stocks of the material can be readily purchased for $8.35 per liter.What is the relevant cost of the 780 liters of the raw material when deciding how much to bid on the special order?
A)$6,481
B)$6,376
C)$6,513
D)$5,928
Q2) Fabri Corporation is considering eliminating a department that has an annual contribution margin of $35,000 and $70,000 in annual fixed costs.Of the fixed costs, $25,000 cannot be avoided.The annual financial advantage (disadvantage)for the company of eliminating this department would be:
A)$10,000
B)($10,000)
C)$35,000
D)($35,000)
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Page 12
Chapter 12: Capital Budgeting Decisions
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179 Flashcards
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Sample Questions
Q1) (Ignore income taxes in this problem.)The management of an amusement park is considering purchasing a new ride for $80,000 that would have a useful life of 10 years and a salvage value of $10,000.The ride would require annual operating costs of $32,000 throughout its useful life.The company's discount rate is 9%.Management is unsure about how much additional ticket revenue the new ride would generate-particularly since customers pay a flat fee when they enter the park that entitles them to unlimited rides.Hopefully, the presence of the ride would attract new customers.
Required: How much additional revenue would the ride have to generate per year to make it an attractive investment?
Q2) (Ignore income taxes in this problem.)The management of Crosson Corporation is investigating the purchase of a new satellite routing system with a useful life of 9 years.The company uses a discount rate of 17% in its capital budgeting.The net present value of the investment, excluding its intangible benefits, is -$173,055.
Required:
How large would the additional cash flow per year from the intangible benefits have to be to make the investment in the automated equipment financially attractive?
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Chapter 9: Flexible Budgets Standard Costs and Variance Analysis
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461 Verified Questions
461 Flashcards
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Sample Questions
Q1) The labor efficiency variance is:
A)$4,000 F
B)$4,125 F
C)$4,125 U
D)$4,000 U
Q2) The net operating income in the planning budget for September would be closest to:
A)$9,500
B)$7,259
C)$10,260
D)$7,503
Q3) The variable overhead efficiency variance does not actually measure how efficiently variable manufacturing overhead resources were used.
A)True
B)False
Q4) The variable overhead rate variance for July is:
A)$191 U
B)$210 U
C)$210 F
D)$191 F
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Chapter 13: Statement of Cash Flows
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132 Verified Questions
132 Flashcards
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Sample Questions
Q1) Paying taxes to governmental bodies is considered a cash outflow in the operating activities section on the statement of cash flows.
A)True
B)False
Q2) Based solely on the information above, the net cash provided by (used in)financing activities on the statement of cash flows would be:
A)$(8,000)
B)$(14,000)
C)$104,000
D)$1,286,000
Q3) Free cash flow is net cash provided by operating activities less capital expenditures. A)True
B)False
Q4) In the statement of cash flows, collecting cash from customers is treated as a cash inflow in the financing activities section.
A)True
B)False
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15
Chapter 14: Financial Statement Analysis
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289 Flashcards
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Sample Questions
Q1) The accounts receivable turnover for Year 2 is closest to:
A)6.62
B)1.10
C)6.32
D)0.91
Q2) Narstad Corporation's debt-to-equity ratio at the end of Year 2 was closest to:
A)0.50
B)0.36
C)0.19
D)0.17
Q3) Windham Corporation has current assets of $400,000 and current liabilities of $500,000.Windham Corporation's current ratio would be increased by:
A)the purchase of $100,000 of inventory on account.
B)the payment of $100,000 of accounts payable.
C)the collection of $100,000 of accounts receivable.
D)refinancing a $100,000 long-term loan with short-term debt.
Q4) Vertical analysis of financial statements is accomplished by preparing common-size statements.
A)True
B)False
Page 16
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Chapter 15: Job-Order Costing: Cost Flows and External Reporting
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28 Verified Questions
28 Flashcards
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Sample Questions
Q1) In the Excel, or spreadsheet, approach to recording financial transactions, expired insurance coverage on factory equipment is recorded as a decrease in the Prepaid Insurance column and as a decrease in the Retained Earnings column.
A)True
B)False
Q2) In the Excel, or spreadsheet, approach to recording financial transactions, indirect labor paid in cash is recorded as a decrease in the Cash column and as an increase in the Work in Process column.
A)True
B)False
Q3) In the Excel, or spreadsheet, approach to recording financial transactions, any transactions involving sales or expenses will be recorded in the Net Income column of the balance sheet.
A)True
B)False
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Chapter 16: Process Costing6 Cost-Volume-Profit Relationships
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100 Verified Questions
100 Flashcards
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Sample Questions
Q1) In the cost reconciliation report under the FIFO method, the costs accounted for equals the cost of units transferred out plus the costs added during the period.
A)True
B)False
Q2) In the department's cost reconciliation report for February, the costs added to production in the department would be:
A)$243,000
B)$255,000
C)$225,000
D)$231,000
Q3) The cost per equivalent unit for conversion costs for the first department for the month is closest to:
A)$15.20
B)$18.33
C)$15.96
D)$16.14
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Chapter 17: Cost-Volume-Profit Relationships
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Sample Questions
Q1) Using the high-low method, the variable cost per machine hour would be:
A)$0.67
B)$0.64
C)$0.40
D)$0.60
Q2) Using the least-squares regression method of analysis, the estimated variable lubrication cost per machine hour is closest to:
A)$0.80
B)$1.56
C)$1.40
D)$1.28
Q3) Using the high-low method, the estimate of the fixed component of office expense per month is closest to:
A)$7,685
B)$7,182
C)$6,678
D)$5,182
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19
Chapter 18:Flexible Budgets, Standard Costs, and Variance Analysis
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177 Flashcards
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Sample Questions
Q1) The Marlow Corporation uses a standard cost system and applies manufacturing overhead to products on the basis of standard direct labor-hours.The denominator activity is set at 40,000 direct labor-hours per year.Budgeted fixed manufacturing overhead cost is $40,000 per year, and 0.5 direct labor-hours are required to manufacture one unit.The standard cost card would indicate fixed manufacturing overhead cost per unit to be:
A)$1.00
B)$2.00
C)$1.50
D)$0.50
Q2) The predetermined fixed manufacturing overhead rate is closest to:
A)$10.15 per MH
B)$9.56 per MH
C)$9.65 per MH
D)$10.06 per MH
Q3) The fixed manufacturing overhead budget variance for the period is closest to:
A)$3,595 U
B)$550 F
C)$2,763 U
D)$784 F
Page 20
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Chapter 19: Flexible Budgets, Standard Costs, and Variance Analysis
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140 Flashcards
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Sample Questions
Q1) When the direct labor cost is recorded, which of the following entries will be made?
A)$1,800 in the Labor Efficiency Variance column
B)($1,800)in the Labor Rate Variance column
C)$1,800 in the Labor Rate Variance column
D)($1,800)in the Labor Efficiency Variance column
Q2) When applying fixed manufacturing overhead to production, the Work in Process inventory account will increase (decrease)by:
A)($147,700)
B)($145,920)
C)$147,700
D)$145,920
Q3) When recording the direct labor costs, the Cash account will increase (decrease)by:
A)($286,740)
B)($292,855)
C)$286,740
D)$292,855
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21
Chapter 20: A Capital Budgeting Decisions
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Sample Questions
Q1) An increase in the discount rate:
A)will increase the present value of future cash flows.
B)will have no effect on net present value.
C)will reduce the present value of future cash flows.
D)is one method of compensating for reduced risk.
Q2) (Ignore income taxes in this problem.)How much would you have to invest today in the bank at an interest rate of 8% to have an annuity of $4,800 per year for 7 years, with nothing left in the bank at the end of the 7 years? Select the amount below that is closest to your answer.
A)$33,600
B)$2,798
C)$24,989
D)$31,111
Q3) The present value of a cash flow increases as it moves further into the future.
A)True
B)False
Q4) The present value of a given future cash flow will decrease as the discount rate decreases.
A)True
B)False
Page 22
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Chapter 21: A Statement of Cash Flows
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Sample Questions
Q1) Sales reported on the income statement totaled $750,000.The beginning balance in accounts receivable was $70,000.The ending balance in accounts receivable was $80,000.Under the direct method of determining the net cash provided by (used in)operating activities on the statement of cash flows, sales adjusted to a cash basis are:
A)$760,000
B)$740,000
C)$680,000
D)$830,000
Q2) On the statement of cash flows, the selling and administrative expense adjusted to a cash basis would be:
A)$201,000
B)$166,000
C)$254,000
D)$210,000
Q3) The net cash provided by (used in)investing activities for the year was:
A)$(127)
B)$(138)
C)$138
D)$127
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