Accounting 205 Final – Flashcards
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When an entity changes its accounting from one generally accepted method to another generally accepted method:
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the dollar effect of the change on both the balance sheet and income statement must be disclosed.
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The nature and content of disclosures relate to all of the following except:
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management's plans for the future.;(but it does relate to accounting changes, segment information, contingencies and commitments, events subsequent to balance sheet date)
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The term "cost" means:
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All of these (the price paid for a raw material. the wage paid to a worker. the price charged by an entity for its services.)
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An example of a product cost is:
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production line maintenance costs.
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When the cost behavior pattern has been identified as fixed at a certain volume of activity:
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the total cost may change if the volume of activity changes substantially.
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Which of the following activities is not part of the management planning and control cycle:
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providing information to investors and creditors.
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Knowledge about the behavior pattern of a cost is important to understanding the effect on net income of a change in sales volume because as sales volume changes:
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the effect on net income will depend on the behavior pattern of various costs.
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Which of the following statements does not describe a characteristic of management accounting?
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Management accounting must conform to GAAP.
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An income statement organized by cost behavior does not include:
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gross profit.
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The formula for expressing the total of a fixed, variable, or mixed cost at any level of activity is:
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total cost = fixed cost + (variable rate * volume of activity).
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Cost behavior refers to:
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costs that are variable or fixed.
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Management and Control cycle:
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data collection and performance feedback. implementation of plans. revisiting plans.
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Which of the following statements does not describe a characteristic of management accounting?
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Management accounting must conform to GAAP.
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An example of a cost that is likely to have a variable behavior pattern is:
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production labor wages.
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As the total volume of activity changes:
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the total of variable costs changes.
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As the level of activity decreases:
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fixed cost remains constant in total.
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Management accounting is:
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an activity that gets involved with virtually all of the other functional areas of the organization.
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Operating income at a volume of 4,000 units per month is: Selling price per unit- $100 Variable expenses per unit- $40 Fixed expenses per month- $60,000
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$180,000
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The three components of product costs are:
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direct material, direct labor, manufacturing overhead.
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Product costs are inventoried and treated as assets until:
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the period in which the products they relate to are sold.
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The cost formula for monthly customer order processing cost has been established as $100 + $0.15 per order. It is expected that 5,600 orders will be processed in May and 6,400 in June. Total order processing costs for May and June combined will be estimated to be:
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$2,000
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The major difference between the indirect and the direct method of a statement of cash flows appears in which the following activities section(s)?
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The operating activities section only.
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In the statement of cash flows, depreciation and amortization expense is added back to net income because:
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these expenses do not affect cash, but were subtracted in the determination of net income.
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Which of the following is an accurate statement regarding a statement of cash flows?
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All material operating, investing, and financing activities that impact cash are included.
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Significant accounting policies are described in the notes to the financial statements because:
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the reader must be aware of which of the alternative generally accepted accounting practices have been used.
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Corporate governance includes concerns about:
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All of these (business ethics and social responsibility. the responsibilities of the board of directors. equitable treatment of all stakeholders. disclosures and transparency.)
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The nature and content of disclosures relate to all of the following except:
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management's plans for the future.
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The independent auditors' report usually:
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includes an opinion that the financial statements present fairly, in all material respects, financial information about the company.
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An audit conducted in accordance with generally accepted auditing standards includes each of the following except:
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evaluation of the efficiency and effectiveness of management.
