Business Accounting
Test Questions
Course Introduction
Business Accounting provides an essential introduction to the principles and practices of accounting within a business context. The course covers fundamental topics such as recording financial transactions, preparing financial statements, understanding the accounting cycle, and analyzing financial information for decision-making. Students will learn about the roles of assets, liabilities, owner's equity, revenues, and expenses, and explore basic concepts like double-entry bookkeeping and accrual accounting. Emphasis is placed on applying accounting information to real-world business scenarios, enabling students to interpret financial data, comply with regulatory standards, and support effective management and strategic planning.
Recommended Textbook
Horngren's Financial and Managerial Accounting The Managerial Chapters 6th Edition by Tracie
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2
Chapter 15: Accounting Information Systems
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159 Verified Questions
159 Flashcards
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Sample Questions
Q1) When using a computerized accounting information system,transactions do not need to be recorded in a debit and credit format.
A)True
B)False
Q2) Adjusting entries are recorded in the ________.
A)cash payments journal
B)purchases journal
C)cash receipts journal
D)general journal
Q3) The accounts payable subsidiary ledger lists each vendor along with amounts paid to the vendors and the remaining amounts owed to them.
A)True
B)False
Q4) A subsidiary ledger is a record of accounts that provides supporting details on individual balances,the total of which appears in a general ledger account.
A)True
B)False
Q5) Describe the transactions recorded in the cash payments journal.
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Chapter 16: Introduction to Managerial Accounting
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230 Flashcards
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Sample Questions
Q1) Star Health,Inc.is a fitness center in Oklahoma City.In October,the company earned $550,000 in revenues and incurred the following operating costs from 300 customers: \[\begin{array} {| l | r | }
\hline \text { Manager's Salary } & \$ 5500 \\
\hline \text { Gym Rent } & 1800 \\
\hline \text { Depreciation Expense-Equipment } & 7000 \\
\hline \text { Office Supplies Expense } & 2300 \\
\hline \text { Utilities Expense } & 1600 \\
\hline \text { Trainer's Salary } & 22,500 \\
\hline
\end{array}\] How much is the unit cost per customer? (Round your answer to the nearest cent.)
A)$93.33
B)$19.00
C)$1833.33
D)$135.67
Q2) Define indirect cost.
Q3) How does a manufacturing company calculate unit product cost? Why do managers need to know the unit product cost?
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Page 4
Chapter 17: Job Order Costing
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191 Flashcards
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Sample Questions
Q1) Venus Manufacturing uses a predetermined overhead allocation rate based on direct labor cost.At the beginning of the year,it estimated the manufacturing overhead rate to be 30% of the direct labor cost.In the month of June,Venus completed Job 13C and its details are as follows: \[\begin{array} { | l | r | }
\hline \text { Direct materials cost } & \$ 6820 \\
\hline \text { Direct labor cost } & \$ 26,000 \\
\hline \text { Direct labor hours } & 31 \text { hours } \\
\hline \text { Units of product produced } & 200 \\
\hline
\end{array}\] What is the total cost incurred for Job 13C?
A)$34,866
B)$33,800
C)$14,620
D)$40,620
Q2) The cost of goods manufactured is recorded with a debit to the Work-in-Process Inventory account and a credit to the Cost of Goods Manufactured account.
A)True
B)False
Q3) Why would the manager of a service company need to use job order costing?
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Page 5
Chapter 18: Process Costing
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Sample Questions
Q1) When calculating the cost per equivalent unit in process costing,what is the difference between the weighted-average and FIFO methods?
A)With FIFO,prior period costs are not combined with current period costs.
B)With FIFO,prior period costs are combined with current period costs.
C)With weighted-average,prior period costs are not combined with current period costs.
D)There is no difference between the two methods.
Q2) On September 30,the Drying Department of Jamoca,Inc.had ending Work-in-Process Inventory that was 28% complete for materials and 23% complete for conversion costs.The company uses the FIFO method.This means that for the ending Work-in-Process inventory,________% of materials and ________% of the conversion costs were added during September.
A)77; 72
B)72; 77
C)23; 28
D)28; 23
Q3) List the four steps,in the order of occurrence,that are used in preparing a production cost report.
Q4) How is a production cost report prepared using the FIFO method?
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Page 6
Chapter 19: Cost Management Systems: Activity-Based, just-In-Time, and Quality Management Systems
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181 Flashcards
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Sample Questions
Q1) Revenues decrease and costs increase when companies produce poor-quality products.
A)True B)False
Q2) Hernandez Company has the following activities in its manufacturing process: \[\begin{array} { | l | l | l | l | }
\hline \text { Activity } & \text { Annual Overhead Cost } & \text { Expected Annual Use } & \text { Overhead Rate } \\
\hline \text { Materials handling } & \$ 60,000 & 600 \text { purchase orders } & \\ \hline \text { Machine set-ups } & \$ 15,000 & 60 \text { batches } & \\
\hline \text { Product testing } & \$ 28,000 & 875 \text { tests } & \\ \hline \end{array}\] Calculate the overhead rate for each activity.
Q3) When a manufacturer changes from using a single plantwide predetermined overhead rate to multiple predetermined overhead allocation rates,the product unit cost may be more accurate.
A)True B)False
Q4) Define target cost.How is target cost determined?
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Chapter 20: Cost-Volume-Profit Analysis
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Sample Questions
Q1) Complete the table below for contribution margin per unit,total contribution margin and contribution margin ratio.
\[\begin{array} { | l | r | r | }
\hline & { \text { Alpha } } & { \text { Beta } } \\
\hline \text { Number of units } & 2,460 & 12,800 \\
\hline \text { Sales price per unit } & \$ 21 & \$ 78 \\
\hline \text { Variable costs per unit } & \$ 10 & \$ 32 \\
\hline \textbf { Calculate: } & & \\
\hline \textbf { Contribution margin per unit } & & \\
\hline \textbf { Total contribution margin } & & \\
\hline \textbf { Contribution margin ratio } & & \\
\hline \end{array}\]
Q2) An increase in the contribution margin can be achieved by ________.
A)an increase in the sales price of a unit
B)a decrease in variable costs per unit
C)a combination of an increase in the sales price per unit and a decrease in variable costs per unit
D)all of the above
Q3) How is the contribution margin calculated?
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Chapter 21: Variable Costing
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Sample Questions
Q1) Iagan,Inc.has collected the following data.(There are no beginning inventories.)
\(\begin{array}{|l|r|l|}
\hline \text { Units produced } & 600 &\text { units } \\
\hline \text { Sales price } & \$ 120 &\text { per unit } \\
\hline \text { Direct materials } & { \$30}& \text{ per unit } \\
\hline \text { Direct labor } & { \$10}&\text { per unit } \\
\hline \text { Variable manufacturing overhead } & \$ 7 &\text { per unit } \\
\hline \text { Fixed manufacturing overhead } & \$ 17,900& \text { per year } \\
\hline \text { Variable selling and administrative costs } & { \$4 }& \text{per unit } \\
\hline \text { Fixed selling and administrative costs } & \$ 10,600 &\text {per year } \\
\hline
\end{array}\) What is the ending balance in Finished Goods Inventory using variable costing if 500 units are sold?
A)$4000
B)$4700
C)$1700
D)$3000
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Chapter 22: Master Budgets
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Sample Questions
Q1) Budgeting software is often designed as a component of the company's Enterprise Resource Planning (ERP)system.
A)True
B)False
Q2) In preparing the master budget,the manufacturing overhead is the last period cost to consider.
A)True
B)False
Q3) An intentional understatement of expected revenues or overstatement of expected expenses by managers in order to have a favorable performance evaluation is known as
A)benchmarking
B)appropriation
C)budgetary slack
D)variance analysis
Q4) For a manufacturer,the budgeted multi-step income statement shows operating income and net income.
A)True
B)False
Q5) For a merchandising company,what is the final step in the master budget process?
Page 10
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Chapter 23: Flexible Budgets and Standard Cost Systems
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Sample Questions
Q1) An unfavorable flexible budget variance in operating income might be due to a(n)________.
A)increase in sales price per unit
B)decrease in sales volume
C)increase in variable cost per unit
D)decrease in fixed costs
Q2) Under a standard cost system,the journal entry to record direct labor includes ________.
A)a debit for standard direct labor quantity for actual production times standard direct labor cost per hour
B)a credit for standard quantity usage for actual production times actual cost per hour
C)a debit for actual quantity times standard cost per hour
D)a credit for standard quantity for actual production times standard cost per hour
Q3) The total fixed overhead variance is the total of the variable overhead cost variance and fixed overhead volume variance.
A)True
B)False
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11
Chapter 24: Responsibility Accounting and Performance Evaluation
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Sample Questions
Q1) For each of the following responsibility centers,state the typical focus of the responsibility report and briefly discuss the focus.
\[\begin{array} { | l | l | l | }
\hline { \begin{array} { c }
\text { Responsibility } \\
\text { Center }
\end{array} } & \begin{array} { c }
\text { Focus of the } \\
\text { ResponsibilityReport }
\end{array} & \text { Brief Discussion of the Focus } \\
\hline \text { Cost } & & \\
\hline \text { Revenue } & & \\
\hline \text { Profit } & & \\
\hline
\end{array}\]
Q2) The primary objective in setting transfer prices is to
A)maximize profits for the company as a whole.
B)maximize profits for the selling division.
C)minimize the cost to the purchasing division.
D)maximize profits for the purchasing division.
Page 12
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Chapter 25: Short-Term Business Decisions
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Sample Questions
Q1) Aguilar Company is a price-taker and uses target pricing.Refer to the following information: \(\begin{array}{|l|r|l|}
\hline \text { Production volume } & 600,000 & \text { units per year } \\
\hline \text { Market price } & \$ 30 & \text { per unit } \\
\hline \text { Desired operating income } & 15 \% & \text { of total assets } \\\hline \text { Total assets } & \$ 13,800,000 & \\
\hline \text { Variable cost per unit } & \$ 20 & \text { per unit } \\
\hline \text { Fixed cost per year } & \$ 5,400,000 & \text { per year }\\
\hline
\end{array}\) With the current cost structure,Aguilar cannot achieve its profit goals.It will have to reduce either the fixed costs or the variable costs.Assuming that fixed costs cannot be reduced,what are the target variable costs per unit per year? Assume all units produced are sold.(Round your answer to the nearest cent.)
A)$4.50
B)$10.00
C)$17.55
D)$20.00
Q2) Explain the difference between price-takers and price-setters.
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Chapter 26: Capital Investment Decisions
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Sample Questions
Q1) Odeletta Corporation is considering an investment of $518,000 in a land development project.The investment will yield cash inflows of $220,000 per year for five years.The company uses a discount rate of 9%.What is the net present value of the investment? Present value of an ordinary annuity of $1: \[\begin{array} { | r | r | r | r | }
\hline & 8 \% & 9 \% & 10 \% \\
\hline 1 & 0.926 & 0.917 & 0.909 \\
\hline 2 & 1.783 & 1.759 & 1.736 \\
\hline 3 & 2.577 & 2.531 & 2.487 \\
\hline 4 & 3.312 & 3.24 & 3.17 \\
\hline 5 & 3.993 & 3.89 & 3.791 \\
\hline \end{array}\]
A)$238,280
B)$337,800
C)$341,880
D)$220,000
Q2) An operational asset used for a long period of time is known as a capital asset.
A)True
B)False
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Page 14