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Accounting 202 Final

The correct order of the sections on a statement of cash flows is
Operating, Investing, Financing.
Which of the following would appear on a statement of cash flows prepared using the direct method?
Collections from customers
Which of the following sections from the statement of cash flows includes purchases and sales of long-term assets?
Investing section
On the statement of cash flows, which of the following sections includes the issuance of stock and the payment of dividends?
Financing section
All of the following are examples of cash outflows from an investing activity except
Purchase of treasury stock.
Cash received from providing services would be considered a
Cash inflow from operating activities.
Only the ________ section differs in a statement of cash flows using the direct method rather than the indirect method.
operating activities
The purchase of inventory would be considered a
cash outflow from operating activities.
On a cash flow statement prepared using the indirect method, which is not reported as an operating activity?
Proceeds from the sale of equipment
An analysis of a financial statement that reveals the relationship of each statement item to a specific base defines
vertical analysis
The study of percentage changes in comparative financial statements is an example of
horizontal analysis
Preparing budgets is an example of the management function of
planning
Which of the following groups are external users of financial information?
All of the above
Which of the following is TRUE?
Managerial accounting reports provide detailed internal information
The primary goal of financial accounting is to provide information for
All of the above
Which of the following is an example of overhead in a factory?
Wages of factory maintenance personnel
Which of the following statements is true regarding the salary of the manager of a fast food hamburger restaurant?
The salary is a fixed cost that is directly traceable to the cost of operating a specific restaurant.
When manufacturing products, which of the following is an example of an inventoriable product cost?
Depreciation on factory equipment
Which of the following represents a sunk cost?
A historical cost that is never relevant
When manufacturing products, direct labor and direct materials are classified as:
product costs and expensed when the goods are sold
) A company has fixed costs of $75,000 per month. If sales double from 5,000 to 10,000
units during the month, fixed costs will
remain the same
Rent on a factory building would be considered to be
a product cost
Which of the following costs would appear on the income statements for both a merchandiser and manufacturer?
cost of goods sold
Manufacturing overhead would include:
all manufacturing costs except direct materials and direct labor.
Which of the following is most likely NOT to use process costing?
Ashley Custom Furnishings
What type of product costing system would a manufacturer of plywood use?
Process costing
If manufacturing overhead has been overallocated during the period, and most of the jobs produced have been sold, then:
cost of goods sold should be decreased
Manufacturing overhead is underallocated if the amount
allocated during the period is less than the actual amount incurred.
The requisition of direct and indirect materials into production:
reduces raw materials inventory
Which of the following represents the flow of costs in a manufacturing firm?
Raw materials inventory, work in process inventory, finished goods inventory
A system that focuses on activities as the fundamental cost object and uses the costs for these activities to compile indirect costs of goods and services is:
activity-based costing
Which of the following describes how, in ABC, the activity allocation rate is computed?
The total estimated activity cost pool is divided by the total estimated activity allocation base.
Which of the following statements is TRUE with respect to total variable costs?
They will decrease as production decreases within the relevant range.
Which of the following equations represents the total mixed cost?
y = vx + f
Using account analysis, what type of cost is the rental of a space at $2,000 per month?
Fixed
Traditional income statements organize costs by:
function.
The contribution margin is equal to:
sales minus variable expenses.
Which of the following statements are FALSE?
The high-low method only utilizes the data at the highest and lowest cost levels.
Which of the following would be considered a committed fixed cost
Depreciation
To compute the unit contribution margin, __________ should be subtracted from the sales price per unit
all variable costs
Managers can quickly forecast the total contribution margin by multiplying the projected:
sales revenue by the contribution margin ratio.
Which of the following statements is TRUE if the fixed costs increase while the sales price per unit and variable costs per unit remain constant?
The contribution margin stays the same and the breakeven point increases.
Which of the following will decrease the breakeven point in units assuming no other changes in the cost-volume-profit relationship?
An increase in the sale price per unit
The higher the operating leverage factor, the:
greater the impact of volume on operating income.
After break-even on a CVP graph, the difference between sales dollars and total costs is the representation of:
operating income.
Which of the following describes a sunk cost?
A historical cost that is always irrelevant
Which of the following pairs are characteristics of price-setters?
Cost-plus pricing and less competition
When deciding whether to outsource a product or service, managers should consider which of the following?
All of the above
Target total cost is defined as:
revenue at market price less desired profit.
The benefit foregone by not choosing an alternative course of action is referred to as a(n):
opportunity cost
A capital asset has which of the following characteristics?
The item will be used for a long period of time.

The item involves a significant sum of money.

Which capital budgeting method uses accrual accounting, rather than net cash flows, as a basis for calculations?
ARR
How does depreciation affect the calculation of a project’s accounting rate of return (ARR)?
Depreciation is deducted from the annual cash inflows
If the discount rate is decreased from 9% to 7%, what will happen to the internal rate of return (IRR) of a project?
The discount rate change will not affect IRR.
If the NPV is of an investment is greater than zero,
the internal rate of return is greater than the discount rate.
The ____________ budget is a major part of the master budget and focuses on the income statement and its supporting schedules.
operating
Which of following budgets is part of the financial budgets?
Budgeted balance sheet
The Cost of Goods Sold, Inventory, and Purchases Budget would most likely be used by
Toys R Us
Strategic planning involves:
setting long-term goals that extend 5-10 years into the future.
A rolling budget is a budget that:
is continuously updated, so that the next 12 months of operations are always budgeted.
Which of the following statements about budgeting is not true?
The operating budget should be prepared by top management, rather than mid-management personnel, because they have the overall objectives of the company in mind.
Which of the following statements regarding static budgets is TRUE?
They are prepared for one level of sales volume.
A flexible budget variance is the difference between:
amounts in the flexible budget and the actual results.
The maintenance department at Continental Airlines is likely to be classified as a(n)
cost center.
The regional sales department for Xerox copiers is most likely treated as a(n)
revenue center
Which of the following is a disadvantage of decentralization?
Unit managers may not understand the big picture of the company.
Management by ________ is the practice of directing executive attention to important deviations from budgeted amounts.
exception
Which type of variance causes operating income to be lower than budgeted?
Unfavorable variance
A company’s purchasing department negotiates all of the purchasing contracts for raw materials. Which variance is most useful in assessing the performance of the purchasing department?
Materials price variance
An unfavorable direct labor price variance and a favorable direct labor efficiency variance might indicate which of the following?
Skilled workers using less actual hours than standard, paid at a higher rate per hour than the standard rate.
If a worker drops the raw material during production and the raw material must be discarded, which variance is directly impacted?
Materials efficiency variance
The type of standard that provides allowances for normal waste and inefficiency in the production process is referred to as a(n)
practical standard
What standard(s) do(es) direct materials and direct labor have when calculating standard costs?
Quantity/Efficiency standard and Price standard

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