Term
01. Depreciation expense is necessary to
A. allocate the cost of an asset over its useful life.
B. show the asset at its market value on the balance sheet.
C. keep track of an asset’s useful life in years.
D. record how often an asset is actually used. |
|
Definition
| A. allocate the cost of an asset over its useful life. |
|
|
Term
02. Closing entries are needed because
A. assets, liabilities and equity accounts should “start over” at zero at the beginning of each year.
B. revenues and expenses should “start over” at zero at the beginning of each year.
C. all accounts should “start over” at zero at the beginning of each year.
D. certain accounts are no longer needed and should be “shut down”
E. the cash account must be closed and counted at year-end. |
|
Definition
| B. revenues and expenses should “start over” at zero at the beginning of each year. |
|
|
Term
03. After amounts are entered into the journal, they are then used to prepare the
A. transactions
B. ledger accounts
C. financial statements
D. journal entries |
|
Definition
|
|
Term
08. If capacity had to be expanded in order to accept a special order then the
A. order must be rejected.
B. cost to expand capacity should be considered.
C. cost to expand capacity can be ignored.
D. special order sales price should be lowered. |
|
Definition
| B. cost to expand capacity should be considered. |
|
|
Term
09. Credits:
A. Increase both assets and liabilities
B. Increase assets and decrease liabilities
C. Decrease both assets and liabilities
D. Decrease assets and increase liabilities |
|
Definition
| D. Decrease assets and increase liabilities |
|
|
Term
11. Which of the following accounts are not closed at year-end?
A. Retained Earnings
B. Revenues
C. Expenses
D. All of the above
E. Both B and C |
|
Definition
|
|
Term
12. Which of the following interest rates will produce the largest present value?
A. 10%
B. 5%
C. 4%
D. 12%
E. unable to determine without more information |
|
Definition
|
|
Term
13. Heisenberg Café sells a variety of sandwiches and snacks. In a recent flexible budget performance report, there was a variance related to bread. All of the following may help explain that variance except:
A. More sandwiches were sold than originally planned.
B. Bread was purchased from a different supplier than the one normally used.
C. Several packages of bread were accidentally allowed to spoil.
D. A crate of bread was stolen from the refrigerator.
E. All of the above could help explain the variance |
|
Definition
| A. More sandwiches were sold than originally planned. |
|
|
Term
15. The W. White Company purchased $400 of supplies during the month, had supplies on hand of $200 at the beginning of the month and had $100 worth of supplies on hand at the end of the month. The related adjusting entry at the end of the month would record supplies expense of
A. 0
B. 100
C. 300
D. 400
E. 500 |
|
Definition
|
|
Term
17. Which of the following is not a component of a balanced scorecard?
A. Customer Perspective
B. Improvement Perspective
C. Financial Perspective
D. Learning and Growth Perspective
E. Internal Process Perspective |
|
Definition
| B. Improvement Perspective |
|
|
Term
23. The factory at Pollos Hermanos, Inc. is currently producing 120,000 units which is 80% of its capacity; what is the maximum number of units that could be produced?
A. 96,000
B. 150,000
C. 72,000
D. 200,000
E. None of the above |
|
Definition
|
|
Term
25. A flexible budget would not be needed for
A. production costs
B. sales
C. variable costs
D. fixed costs
E. Both B and D |
|
Definition
|
|
Term
27. Which of the following statements is true?
A. Lower level employees should not have direct input into the development of their performance measures.
B. Performance reports should include every cost that is related to the employee’s job.
C. Employees should be allowed to respond to every item on a performance report.
D. A performance report should include only bad performance results. |
|
Definition
| C. Employees should be allowed to respond to every item on a performance report. |
|
|
Term
28. Which of the following statements is false?
A. An annuity is a series of unequal payments.
B. Money grows in value over time.
C. Present value can be found if the interest rate, the number of periods and the future value are known.
D. Interest is the payment to the owner of an asset for its use by a borrower. |
|
Definition
| A. An annuity is a series of unequal payments. |
|
|
Term
30. As compared to the original budget, fixed costs in a flexible budget
A. usually change since the level of activity usually changes.
B. should remain the same even if the level of activity changes.
C. should never change unless the level of activity increases.
D. will always remain the same unless a significant error has occurred. |
|
Definition
| B. should remain the same even if the level of activity changes. |
|
|
