Question1

1outof1points

Managerialaccountingplacesconsiderableweighton:
Selected
Answer:

d.
detailedsegmentreportsaboutdepartments,products,andcustomers

Answer
Feedback:

Yes.Managerialaccountingismoreconcernedwithsegmentsandproductlines
thanfinancialaccounting,whichismoreconcernedwithpresentingfinancial
informationonthewholecompany.

Question2
1outof1points

Asportinggoodsmanufacturerbuyswoodasadirectmaterialforbaseballbats.TheForming
Departmentprocessesthebaseballbats,andthebatsarethentransferredtotheFinishingDepartment
whereasealantisapplied.TherewasnobeginningworkinprocessinventoryintheForming
DepartmentinMay.TheFormingDepartmentbeganmanufacturing10,000CaseySluggerbaseball
batsduringMay.CostsfortheFormingDepartmentforthemonthofMaywereasfollows:Direct
materialswas$33,000andconversioncostswas$17,000.Atotalof8,000batswerecompletedand
transferredtotheFinishingDepartmentduringMay.Theendingworkinprocessinventorywas100%
completewithrespecttodirectmaterialsand25%completewitherespecttoconversioncosts.The
companyusestheweightedaveragemethodofprocesscosting.Thecostoftheunitstransferredtothe
FinishingDepartmentduringMaywas:
Selected
Answer:

d.
$42,400.

Answer
Feedback:

Correct.ThecorrecttotalEUof$5.30ismultipliedbythe8,000unitscompleted
andtransferred,givingcostsof$42,400.

Question3
0outof1points

Purchasingadvertisingonaccountwould:
Selected
Answer:

a.
increaseassetsandincreaseliabilities

Answer

Purchasingadvertisingwouldincreaseadvertisingexpense,andthusreduce

Feedback:

owners'equity.

Question4
1outof1points

Thebeginninginventoryandpurchasesforthismonthare(beginninginventoryunitat$1;purchases1
unitat$5and1unitat$10.)Iftwounitsaresold,thentheendinginventoryunderLIFOis:
Selected
Answer:

a.
$1

Answer
Feedback:

Yes.EndinginventoryforFIFOiscalculatedusingbeginninginventoryplus
purchasesminusmerchandisesoldusingearliestcostofmerchandisepurchased.

Question5
1outof1points

Whichisnotanobjectiveofinternalcontrol?
SelectedAnswer:

d.
externalauditorstestforfraud

AnswerFeedback:

Yes.Thisiscorrectanswerbecausethecontrolisexternal,notinternal.

Question6
1outof1points

Themostcommonwayacompanydiscoversfraudisby
SelectedAnswer:

c.
tipsfromemployees,customers,orsuppliers

AnswerFeedback:

Otherpeoplewillratyououttimeaftertime.

Question7
1outof1points

Equipmentwithabookvalueof$45,000isofferedforsaleat$65,000.Theequipmentisacquiredfor

$10,000incashandanotepayableof$40,000duein30days.Theamountusedinthebuyer's
accountingrecordstorecordthisacquisitionis:
Selected
Answer:

a.
$50,000

Answer
Feedback:

Yes.Thisisthecorrectanswerbecauseequipmentisrecordedatitscost
($10,000+$40,000).

Question8
0outof1points

Theprocessofrewritingtheinformationfromthejournalintotheledgeriscalled
Selected
Answer:

c.
journalizing

Answer
Feedback:

Journalizingreferstheoriginalrecordingofatransactionusingdebitsand
creditsinthejournal.

Question9
1outof1points

Thematurityvalueofaninterestbearingnotepayableisthe:
Selected
Answer:

a.
facevalueplustheinterest

Answer
Feedback:

Yes.Thisiscorrectbecausethematurityvalueofaninterestbearingnoteconsists
oftwocomponents,facevalue(theprincipal)andinterest.

Question10
1outof1points

Thethreephasesofsettingupanaccountingsystemare,inorder:
Selected
Answer:

b.
analysis,design,implementation

Answer
Feedback:

Tosetupandmaintainanefficientaccountingsystem,youmustgothroughthree
phasesinthefollowingorder;Firstyoumustanalyzeforthesystem,onlythencan
youdesignanaccountingsystem,andfinallyyoucanimplementthesystem.

Question11
1outof1points

Whenafirmusesinternalauditors,itisadheringtowhichoneofthefollowinginternalcontrol
elements?
a..riskassessment
Selected
Answer:

a.
monitoring

Answer
Feedback:

Whenafirmusesinternalauditors,itisadheringtothemonitoringelementof
internalcontrolsbecausethisisthegroupprimarilyresponsibleforreviewand
appraisaloftheaccountingsystem.

Question12
1outof1points

Whenthesellingdivisioninaninternaltransferhasunsatisfieddemandfromoutsidecustomersfor
theproductthatisbeingtransferred,thenthelowestacceptabletransferpriceasfarastheselling
divisionisconcernedis:
Selected
Answer:

c.
themarketpricechargedtooutsidecustomers,lesscostssavedbytransferring
internally.

Answer
Feedback:

Outsidecustomerswouldhavecoveredfixedcostsandaportionoftheprofits,and
theseamountsmustbereplacedwhenthereisunsatisfiedoutsidedemand.

Question13
0outof1points

Thebeginninginventoryandpurchasesforthismonthare(beginninginventoryunitat$1;purchases1
unitat$5and1unitat$10.)Iftwounitsaresold,thenthecostofgoodssoldunderFIFOis:
SelectedAnswer:

c.
$10

AnswerFeedback:

No.thisrepresentsendinginventoryunderFIFO.

Question14
1outof1points

PadreeCompanyplanstosell12,000unitsduringthemonthofAugust.Ifthecompanyhas2,500
unitsonhandatthestartofthemonth,andplanstohave2,000unitsonhandattheendofthemonth,
howmanyunitsmustbeproducedduringthemonth?
SelectedAnswer:

a.
11,500.

AnswerFeedback:

2,500beginning+??produced12,000sold=2,000attheend.

Question15
1outof1points

Theformulaforcontributionmarginis:
Selected
Answer:

c.
salesvariablecosts

Answer
Feedback:

Salesminusvariablecosts=contributionmargin,ortheamounteachunitsold
contributestothebottomline.

Question16
1outof1points

Thetotalcontributionmargindecreasesifsalesvolumeremainsthesameand:
Selected
Answer:

c.
variableexpenseperunitincreases

Answer
Feedback:

Yes.Contributionmarginequalssellingpriceperunitminusvariablecostperunit.
Soifthevariablecostincreases,thenthecontributionmargindecreases(aslongas
therevenueremainsconstant).

Question17
1outof1points

Testingisaprototypeofanewproductisanexampleofa:
SelectedAnswer:

c.
Productlevelactivity.

AnswerFeedback:

Aproducttestisaproductlevelactivity.

Question18
1outof1points

CompanyAissuescommonstockthisperiod.Thistransactionwouldshowonthestatementofcash
flowsas:
Selected
Answer:

c.
cashto/fromfinancing

Answer
Feedback:

Yes.Thisisthecorrectanswerbecausethecashinflowsforfinancingactivities
arisefromissuingbonds,notespayableandpreferredandcommonstock.

Question19
1outof1points

CurtisCompanyanticipatesselling10,000unitsnextyear.Thecompanywantstoearnanetincome
equalto10%ofsales.Ifvariableexpensesare$12perunitandfixedexpensestotal$78,000peryear,
whatsellingpricemustbeestablishedtoachievethedesiredlevelofnetincome?
Selected
Answer:

d.
$22.00perunit.

Answer
Feedback:

Sellingtheproductat$22.00perunitwouldmakeaprofitof$22,000.This
amountis10%ofsales,afteraccountingforthetotalcostof$198,000.

Question20
0outof1points

Thefollowinglaborstandardshavebeenestablishedforaparticularproduct:Standardlaborhoursper
unitofoutput1.7hoursandstandardlaborrate$14.05perhour.Thefollowingdatapertainto
operationsconcerningtheprodutforthelastmonth:Actualhoursworked3,700hours,actualtotal
laborcost$50,690,andactualoutput2,300units.Whatisthelaborratevarianceforthemonth?
Selected
Answer:

c.
$4,246F.

Answer
Feedback:

Thelaborvarianceformulais(AH*AR)(AH*SR.)Theproblemdoesnot
providetheAR,butdoesgivetheinformationtofindit.50,690/3,700=13.70.

Question1

0outof1points

Theinterestrateusedtofindthepresentvalueofafutureamountisknownasthe
SelectedAnswer:
ResponseFeedback:

c.
discountrate.
interestratemeaningthepriceyoupaytoborrowthemoney

Question2
1outof1points

Riskisusedinterchangeablywith____________torefertothevariabilityofreturns.
SelectedAnswer:

b.
uncertainty

Question3
1outof1points

Themorefixedcostdebtafirmuses,
SelectedAnswer:

a.
thegreateritsfinancialleverage.

Question4
1outof1points

Thechancethatrateswillchangeandtherebychangetherequiredrateofreturnisknownas
_________________.
SelectedAnswer:

Question5
1outof1points

c.
interestraterisk

ThedecisionruleforIRRis:
SelectedAnswer:

c.
AcceptiftheIRRisgreaterthantherequiredrateofreturn.

Question6
1outof1points

Thefinancialsituationwhereafirmhasonlyafixednumberofdollarsavailableforcapital
expendituresisknownas________________.
SelectedAnswer:

b.
capitalrationing

Question7
1outof1points

Thebookvalueofanassetisequaltothe
SelectedAnswer:

b.
originalpurchasepriceminusaccumulateddepreciation.

Question8
1outof1points

Betaofthemarketis_____bydefault,andthebetaofaRisklessassetis_____.
SelectedAnswer:

b.
1.0;0.0

Question9
0outof1points

The__________isthecashflowreceivedfromaninvestmentoveragivenperiod,andthe
______________isthepositivechangeinvalueoverthetimeperiod.
SelectedAnswer:

b.
return;capitalgain

Response
Feedback:

Iyoureceiveapaymentinthemailtoday,itisspendableincome,butifthestock
goesupinvalue,yourgainsarenotmeasureduntilyousellifever.Capitalrefersto
youroriginalinvestment.Alossisareductioninvalue,areturnisthetotalprofit
fromallsources.

Question10
1outof1points

Youutilizethefollowingtradingruletoinvestinstocks:buywhenthepricefallsbyatleast7%,and
sellwhenthepricerisesbyatleast7%.Ifyoucanusethisruletoearnexcessreturnconsistently,you
havediscoveredaviolationof________marketefficiency.
SelectedAnswer:

d.
weakform

Question11
1outof1points

Aninvestorcouldchoosetodiversifyinternationallyby
SelectedAnswer:

d.
alloftheabove.

Question12
1outof1points

Anapproachtodividendvaluationthatassumesaconstantnongrowingdividendstreammostclosely
describes
SelectedAnswer:

b.
thezerogrowthmodel.

Question13
1outof1points

______________poolfundsfromsaversandmakethemavailabletobusinessandgovernment
demanders.Theyobtainfundsthroughthesaleofsharesandusetheproceedstoacquirebondsand

stocks.
SelectedAnswer:

b.
Mutualfunds

Question14
0outof1points

Whichfinancialinstrumentmightfirmsuseasanalternativetoorasubstituteforashorttermbank
loan?
SelectedAnswer:
Response
Feedback:

[NoneGiven]

Corporationscanborrowfrombanks,butbankshavehighoverheadcosts,thus
chargehigherintereststoabusinessthanifthebusinessissueditsowndocuments
andsoldthemdirectly,ineffectissuingapaperthatrepresentstheirpromisetorepay
theshorttermdebt.ThegovernmentissesTreasuries,banksissueCDs,andmutual
fundsarefinancialinstitutions.

Question15
0outof1points

Activityratiostendtodealwithmattersof
SelectedAnswer:
Response
Feedback:

[NoneGiven]
activityasinpayingbillsandsellinginventoryorcollectingaccounts
receivables

Question16
0outof1points

Onacommonsizeincomestatementeachitemisexpressedasapercentageof
SelectedAnswer:
Response
Feedback:

[NoneGiven]

Commonsizingisdividingthrubylargestnumber.Revenueisonanincome
statement,assetsareonthebalancesheet.Thesearethelargestfiguresontheir
respectivefinancialstatements

Question17

0outof1points

Assumingapositiveinterestrateandotherthingsbeingequal,morefrequentcompoundingwillcause
thefuturevalueto____________________.
SelectedAnswer:
ResponseFeedback:

[NoneGiven]
morefrequentcompoundinginayearraisestheeffectivereturn

Question18
0outof1points

Shorttermfinancingthathasspecificassetspledgedascollateralis
SelectedAnswer:
Response
Feedback:

[NoneGiven]

collateralistheitemthatsecurestheloanandisrepossessedfornonpayment.A
creditcardisanunsecuredtransactionmeaningtheitemsboughtcannotbe
repossessed.

Question19
0outof1points

Acustomersendspaymenttoapostofficeboxthatisemptiedbythefirm'sbankdaily.Thebankthen
processesthepaymentsandnotifiesthefirmoftheday'scollections.Thiscollectiontechniqueis
knownas
SelectedAnswer:
Response
Feedback:

[NoneGiven]

Thepostofficeboxwhereabankcollectsyourmailtofindcheckstoprocessto
cutoutcheckfloatandsaveyouthetimevalueofthemoneyyouweresent.

Question20
0outof1points

Thefollowingstatementdescribesbesttheroleof____________.Theyusefinancialstatementsto
understandthefirm'sfinancialactivitiesandassesswhethertopurchaseorsellthefirm'ssecurities.
SelectedAnswer:
ResponseFeedback:

[NoneGiven]
whatindividualsdoisbeingreferredtohere