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HW-873 BUS475 Question 1-25
1) One of Astro Company's activity cost pools is machine setups, with estimated overhead of $150,000. Astro produces sparklers (400 setups) and lighters (600 setups). How much of the machine setup cost pool should be assigned to sparklers?
A. $90,000
B. $75,000
C. $150,000
D. $60,000
2) 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. $950,000
B. $1,600,000
C. $1,300,000
D. $1,100,000
3) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________.
A. have been approved for use by the managements of business firms
B. have been approved by the Internal Revenue Service
C. are proven theories of accounting
D. have substantial authoritative support
4) The standards and rules that are recognized as a general guide for financial reporting are called __________.
A. standards of financial reporting
B. operating guidelines
C. generally accepted accounting standards
D. generally accepted accounting principles
5) The conceptual framework developed by the Financial Accounting Standards Board __________.
A. is legally binding on all accountants
B. is viewed as providing a constitution for setting accounting standards for financial reporting
C. was approved by a vote of all accountants
D. are rules that all accountants must follow
6) The cost of an asset and its fair market value are __________.
A. the same on the date of acquisition
B. irrelevant when the asset is used by the business in its operations
C. never the same
D. the same when the asset is sold
7) Which one of the following items is not generally used in preparing a statement of cash flows?
A. Additional information
B. Current income statement
C. Adjusted trial balance
D. Comparative balance sheets
8) In what situations will a static budget be most effective in evaluating a manager's effectiveness?
A. The company has no fixed costs.
B. The planned activity levels match actual activity levels.
C. The company has substantial fixed costs.
D. The company has substantial variable costs.
9) Managerial accounting __________.
A. places emphasis on special-purpose information
B. pertains to the entity as a whole and is highly aggregated
C. is concerned with costing products
D. is governed by generally accepted accounting principles
10) What exists when budgeted costs exceed actual results?
A. An excess profit
B. An unfavorable difference
C. A budgeting error
D. A favorable difference
11) 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. Factory janitor
D. General corporate liability insurance
12) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?
A. $750
B. $8,250
C. $5,250
D. $4,500
13) A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $80; Second purchase $95; Third purchase $85. If the company sold two units for a total of $240 and used FIFO costing, the gross profit for the period would be _____.
A. $60
B. $50
C. $65
D. $75
14) If a company reports a net loss, it __________.
A. will not be able to get a loan
B. will not be able to make capital expenditures
C. may still have a net increase in cash
D. will not be able to pay cash dividends
15) For a college student who wishes to calculate the true costs of going to college, the costs of room and board __________.
A. usually exceed the opportunity cost of going to college
B. plus the cost of tuition, equals the opportunity cost of going to college
C. should be counted in full, regardless of the costs of eating and sleeping elsewhere
D. should be counted only to the extent that they are more expensive at college than elsewhere
16) Without trade, __________.
A. a country can still benefit from international specialization
B. interdependence is more extensive than it would be with trade
C. a country is better off because it will have to learn to be self-sufficient without trade
D. a country's production possibilities frontier is also its consumption possibilities frontier
17) The general term for market structures that fall somewhere in-between monopoly and perfect competition is __________.
A. oligopoly markets
B. monopolistically competitive markets
C. incomplete markets
D. imperfectly competitive markets
18) When, in a particular market, the law of demand and the law of supply both apply, the imposition of a binding price ceiling in that market causes quantity demanded to be __________.
A. equal to quantity supplied
B. double the quantity supplied
C. greater than quantity supplied
D. less than quantity supplied
19) The price of a good that prevails in a world market is called the
A. comparative price.
B. world price.
C. absolute price.
D. relative price.
20) One characteristic of an oligopoly market structure is:
A. products typically sell at a price that reflects their marginal cost of production.
B. the actions of one seller have no impact on the profitability of other sellers.
C. firms in the industry are typically characterized by very diverse product lines.
D. firms in the industry have some degree of market power.
21) What you give up to obtain an item is called your __________.
A. true cost
B. direct cost
C. opportunity cost
D. explicit cost
22) The part of the balance of payments account that lists all long-term flows of payments is called the:
A. current account.
B. financial and capital account.
C. balance of trade.
D. government financial account.
23) President George W. Bush and congress cut taxes and raised government expenditures in 2003. Which of the following is notcorrect?
A. At the time the economy was just moving into a recession.
B. While there was subsequent improvement in economic performance, it’s not entirely clear that this was due to the policy.
C. In general it is easier to reverse monetary policy than to reverse fiscal policy.
D. In general monetary policy can be implemented faster than fiscal policy.
24) Most economists use the aggregate demand and aggregate supply model primarily to analyze __________.
A. short-run fluctuations in the economy
B. the effects of macroeconomic policy on the prices of individual goods
C. productivity and economic growth
D. the long-run effects of international trade policies
25) The political business cycle refers to __________.
A. the fact that about every four years some politician advocates greater government control of the Fed
B. the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-elected
C. changes in output created by the monetary rule the Fed must follow
D. the part of the business cycle caused by the reluctance of politicians to smooth the business cycle
Answer will be sent by email as attachment.
A. $90,000
B. $75,000
C. $150,000
D. $60,000
2) 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. $950,000
B. $1,600,000
C. $1,300,000
D. $1,100,000
3) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________.
A. have been approved for use by the managements of business firms
B. have been approved by the Internal Revenue Service
C. are proven theories of accounting
D. have substantial authoritative support
4) The standards and rules that are recognized as a general guide for financial reporting are called __________.
A. standards of financial reporting
B. operating guidelines
C. generally accepted accounting standards
D. generally accepted accounting principles
5) The conceptual framework developed by the Financial Accounting Standards Board __________.
A. is legally binding on all accountants
B. is viewed as providing a constitution for setting accounting standards for financial reporting
C. was approved by a vote of all accountants
D. are rules that all accountants must follow
6) The cost of an asset and its fair market value are __________.
A. the same on the date of acquisition
B. irrelevant when the asset is used by the business in its operations
C. never the same
D. the same when the asset is sold
7) Which one of the following items is not generally used in preparing a statement of cash flows?
A. Additional information
B. Current income statement
C. Adjusted trial balance
D. Comparative balance sheets
8) In what situations will a static budget be most effective in evaluating a manager's effectiveness?
A. The company has no fixed costs.
B. The planned activity levels match actual activity levels.
C. The company has substantial fixed costs.
D. The company has substantial variable costs.
9) Managerial accounting __________.
A. places emphasis on special-purpose information
B. pertains to the entity as a whole and is highly aggregated
C. is concerned with costing products
D. is governed by generally accepted accounting principles
10) What exists when budgeted costs exceed actual results?
A. An excess profit
B. An unfavorable difference
C. A budgeting error
D. A favorable difference
11) 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. Factory janitor
D. General corporate liability insurance
12) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?
A. $750
B. $8,250
C. $5,250
D. $4,500
13) A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $80; Second purchase $95; Third purchase $85. If the company sold two units for a total of $240 and used FIFO costing, the gross profit for the period would be _____.
A. $60
B. $50
C. $65
D. $75
14) If a company reports a net loss, it __________.
A. will not be able to get a loan
B. will not be able to make capital expenditures
C. may still have a net increase in cash
D. will not be able to pay cash dividends
15) For a college student who wishes to calculate the true costs of going to college, the costs of room and board __________.
A. usually exceed the opportunity cost of going to college
B. plus the cost of tuition, equals the opportunity cost of going to college
C. should be counted in full, regardless of the costs of eating and sleeping elsewhere
D. should be counted only to the extent that they are more expensive at college than elsewhere
16) Without trade, __________.
A. a country can still benefit from international specialization
B. interdependence is more extensive than it would be with trade
C. a country is better off because it will have to learn to be self-sufficient without trade
D. a country's production possibilities frontier is also its consumption possibilities frontier
17) The general term for market structures that fall somewhere in-between monopoly and perfect competition is __________.
A. oligopoly markets
B. monopolistically competitive markets
C. incomplete markets
D. imperfectly competitive markets
18) When, in a particular market, the law of demand and the law of supply both apply, the imposition of a binding price ceiling in that market causes quantity demanded to be __________.
A. equal to quantity supplied
B. double the quantity supplied
C. greater than quantity supplied
D. less than quantity supplied
19) The price of a good that prevails in a world market is called the
A. comparative price.
B. world price.
C. absolute price.
D. relative price.
20) One characteristic of an oligopoly market structure is:
A. products typically sell at a price that reflects their marginal cost of production.
B. the actions of one seller have no impact on the profitability of other sellers.
C. firms in the industry are typically characterized by very diverse product lines.
D. firms in the industry have some degree of market power.
21) What you give up to obtain an item is called your __________.
A. true cost
B. direct cost
C. opportunity cost
D. explicit cost
22) The part of the balance of payments account that lists all long-term flows of payments is called the:
A. current account.
B. financial and capital account.
C. balance of trade.
D. government financial account.
23) President George W. Bush and congress cut taxes and raised government expenditures in 2003. Which of the following is notcorrect?
A. At the time the economy was just moving into a recession.
B. While there was subsequent improvement in economic performance, it’s not entirely clear that this was due to the policy.
C. In general it is easier to reverse monetary policy than to reverse fiscal policy.
D. In general monetary policy can be implemented faster than fiscal policy.
24) Most economists use the aggregate demand and aggregate supply model primarily to analyze __________.
A. short-run fluctuations in the economy
B. the effects of macroeconomic policy on the prices of individual goods
C. productivity and economic growth
D. the long-run effects of international trade policies
25) The political business cycle refers to __________.
A. the fact that about every four years some politician advocates greater government control of the Fed
B. the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-elected
C. changes in output created by the monetary rule the Fed must follow
D. the part of the business cycle caused by the reluctance of politicians to smooth the business cycle
Answer will be sent by email as attachment.
