question

long lived assets

answer

are tangible and intangible resources owned by a business and used in its operations over several years

question

tangible assets

answer

(or fixed assets) have physical substance

question

intangible assets

answer

have special rights but not physical substance

question

acquisition cost

answer

is the net cash equivalent amount paid or to be paid for the asset

question

capitalized interest

answer

refers to interest expenditures included in the cost of a self-constructed asset

question

ordinary repairs and maintenance

answer

are expenditures for normal operating upkeep of long-lived assets

question

revenue expenditures

answer

maintain the productive capacity of the asset during the current accounting period only and are recorded as expenses

question

additions and improvements

answer

are infrequent expenditures that increase an asset's economic usefulness in the future

question

capital expenditures

answer

increase the productive life, operating efficiency, or capacity of the asset and are recorded as increases in asset accounts, not as expenses

question

depreciation

answer

is the process of allocating the cost of buildings and equipment over their productive lives using a systematic and rational method

question

net book (or carrying) value

answer

is the acquisition cost of an asset less accumulated depreciation

question

estimated useful life

answer

is he expected service life of an asset to the present owner

question

residual (or salvage) value

answer

is the estimated amount to be recovered by the company at the end of the asset's estimated useful life

question

straight line depreciation

answer

method allocates the cost of an asset in equal periodic amounts over its useful life

question

units of production depreciation

answer

method allocates the cost of an asset over its useful life based on the relation of its periodic output to its total estimated output

question

declining balance depreciation

answer

method allocates the cost of an asset over its useful life based on a multiple of the straight line rate (often two times)

question

natural resources

answer

are assets that occur in nature, such as mineral deposits, timber tracts, oil, and gas

question

depletion

answer

is the systematic and rational allocation of the cost of a natural resource over the period of its exploitation

question

amortization

answer

is the systematic and rational allocation of the acquisition cost of an intangible asset over its useful life

question

(for accounting purposes) goodwill (cost in excess of net assets acquired)

answer

is the excess of the purchase price of a business over the fair value of the business's assets and liabilities

question

trademark

answer

is an exclusive legal right to use a special name, image, or slogan

question

copyright

answer

is the exclusive right to publish, use, and sell a literary, musical, or artistic work

question

technology

answer

includes costs for computer software and Web development

question

patent

answer

is granted by the federal government for an invention; it is an exclusive right given to the owner to use, manufacture, and sell the subject of the patent

question

franchise

answer

is a contractual right to sell certain products or services, use certain trademarks, or perform activities in a geographical region

question

licenses and operating rights

answer

obtained through agreements with governmental units or agencies, permit owners to use public property in performing their services

question

authorized number of shares

answer

is the maximum number of shares of a corporation's capital stock that can be issued as specified in the charter

question

issued shares

answer

represent the total number of shares of stock that have been sold

question

outstanding shares

answer

refer to the total number of shares of stock that are owned by stockholders on any particular date

question

common stock

answer

is the basic voting stock issued by a corporation

question

par value

answer

is the nominal value per share of capital stock specified in the charter; serves as the basis for legal capital

question

legal capital

answer

is the permanent amount of capital defined by state law that must remain invested in the business; serves as a cushion for creditors

question

no par value stock

answer

is capital stock that has no par value specified in the corporate charter

question

treasury stock

answer

is a corporation's own stock that has been issued but subsequently reacquired and is still being held by that corporation

question

declaration date

answer

is the date on which the board of directors officially approves the dividend

question

record date

answer

is the date on which the corporation prepares the list of current stockholder's as shown on its records; dividends can be paid only to stockholder's who own stock on that date

question

payment date

answer

is the date on which a cash dividend is paid to the stockholders of record

question

stock dividend

answer

is a distribution of additional shares of a corporation's own stock

question

stock split

answer

is an increase in the total number of authorized shares by a specified ratio; it does not decrease retained earnings

question

preferred stock

answer

is stock that has specified rights over common stock

question

current dividend preference

answer

is the feature of preferred stock hat grants priority on preferred dividends over common dividends

question

cumulative dividend preference

answer

is the preferred stock feature that requires specified current dividends not paid in full to accumulate for every year in which they are not paid. These cumulative preferred dividends must be paid before any common dividends can be paid.

question

dividends in arrears

answer

are dividends on cumulative preferred stock that have not been declared in prior years

question

activity based costing (ABC) systems

answer

follow a two stage procedure to assign overhead costs to products

question

activity cost pool

answer

overhead costs assigned to each activity (ABC systems)

question

unit level activity

answer

this type of activity must be done for each unit of production. the machine-related activity cost pool represents ________________ since every product unit requires machine time

question

batch level activity

answer

these activities must be performed for each batch of products, rather than each unit. patio grill company's __________________ include the set up, purchasing, material handling, quality assurance, and packing/shipping activity cost pools

question

product sustaining level activity

answer

this category includes activities that are needed to support an entire product line but are not performed every time a new unit or batch of products is produced. patio grill company's project team identified engineering design costs as a ___________________ cost pool

question

facility level activities

answer

are required in order for the entire production process to occur. examples of such activity costs include plant management salaries, plant depreciation, property taxes, plant maintenance, and insurance

question

pool rate

answer

is defined as the cost per unit of the cost driver for a particular activity cost pool

question

consumption ratio

answer

is the proportion of an activity consumed by a particular product

question

cost driver

answer

is a characteristic of an event or activity that results in the incurrence of costs

question

storyboarding

answer

is a procedure used to develop a detailed process flowchart, which visually represents activities and the relationships among these activities

question

activity dictionary

answer

a complete listing of the activities identified and used in the ABC analysis

question

bill of activities

answer

a commonly used element in the ABC analysis. For a product or service it is a complete listing of the activities required for the product or service to be produced (chocolate chip cookies analogy - list of ingredients)

question

activity analysis

answer

the detailed identification and description of the activities conducted in the enterprise sometimes referred to as process value analysis (PVA)

question

non value added activities

answer

are operations that are either 1) unnecessary and dispensable, 2) necessary, but inefficient and improvable

question

non value added costs

answer

are the costs of activities that can be eliminated without deterioration of product quality, performance, or perceived value

question

process

answer

set of linked activities

question

customer profitability analysis

answer

uses activity based costing to determine the activities, costs, and profit associated with serving particular customers

question

cost volume profit (CVP) analysis

answer

this technique summarizes the effects of changes in an organization's volume of activity on its costs, revenue, and profit

question

unit contribution margin

answer

the amount ($6) that remains of each _______ (ticket's price), after the variable expenses are covered is called the _______________

question

contribution margin ratio

answer

the unit contribution margin/unit sales price (can also be expressed as a percentage)

question

profit volume graph

answer

highlights amount of profits and loss

question

safety margin

answer

is the difference between the budgeted sales revenue and the break-even sales revenue

question

total contribution margin

answer

is the difference between total sales revenue and total variable expenses (TOTAL KEY WORD)

question

sales mix

answer

the relative proportion of each type of product sold

question

weighted average unit contribution margin

answer

this is the average of the several products' unit contribution margins, weighted by the relative sales proportion of each product

question

sensitivity analysis

answer

using different estimates for (ticket prices, sales mix for regular and box seats, unit variable expenses, and fixed expenses)

question

contribution income statement

answer

highlights the distinction between variable and fixed expenses and cost-volume-profit relationships

question

cost structure

answer

is the relative proportion of [the organization's] fixed and variable costs

question

operating leverage

answer

the extent to which an organization uses fixed costs in its cost structure (greatest in firms with a large proportion of fixed costs, low proportion of variable costs, and the resulting high contribution-margin ratio)

question

operation leverage factor

answer

contribution margin/net income (measures operating leverage, AT A PARTICULAR SALES VOLUME)

question

cash budget

answer

a company's expected receipts from sales and planned disbursements to pay bills is usually called a ch 9 (MA)

question

rolling (or continuous) budget

answer

Wilmar Corporation is budgeting its equipment needs on an ongoing basis, with a new quarter being added to the budget as the current quarter is completed. This type of budget is most commonly known as a ch 9 (MA)

question

($)60,000

answer

Quattro began operations in April of this Year. It makes all sales on account, subject to the following collection pattern: 30% are collected in the month of sale; 60% are collected in the first month after sale; and 10% are collected in the second month after sale. If sales for April, May, June were $60,000, $80,000, and $70,000, respectively, what were the firm's budgeted collections for May? ch 9 (MA)

question

budgeted balance sheet

answer

end of period figures for accounts receivable and payables to suppliers would be found on the ch 9 (MA)

question

budgetary stock

answer

the difference between the revenue or cost projection that a person provides, and a realistic estimate of the revenue or cost, is called ch 9 (MA)

question

contribution margin equals fixed cost

answer

the break-even point is that level of activity where ch 7 (MA)

question

the break even point would decrease

answer

which of the following would take place if a company experienced a decrease in fixed costs ch 7 (MA)

question

increase income

answer

assuming NO change in sales volume, an increase in company's per unit contribution margin would ch 7 (MA)

question

90,000 units

answer

Lawson, Inc. sells a single product for $12. Variable costs are $8 per unit and fixed costs total $360,000 (at a volume level of 60,000 units---doesn't matter, they're fixed costs). Assuming the fixed costs do NOT change, Lawson's break-even point would be (360,000/CM$4) ch 7 (MA)

question

($)600,000

answer

Yellow Dot, Inc. sells a single product for $10. Variable costs are $4 per unit and fixed costs total $120,000 (at a volume level of 10,000 units---doesn't matter, they're fixed costs). What dollar sales level would Yellow Dot have to achieve to earn a target profit of $240,000? (60,000 units X 10 = 600k) ch 7 (MA)

question

units sold exceeded units produced

answer

which of the following conditions would cause absorption costing income to be lower than variable costing income? ch 8 (MA)

question

expensed immediately when incurred

answer

under variable costing, fixed manufacturing overhead is ch 8 (MA)

question

fixed administrative salaries

answer

all of the following costs are inventoried under absorption costing except ch 8 (MA)

question

variable selling costs are written off as expenses of the accounting period

answer

which of the following statements pertain to BOTH variable costing and absorption costing? ch 8 (MA)

question

absorption costing

answer

for external reporting purposes, generally accepted accounting principled require that net income be based on ch 8 (MA)

question

actual labor rate, standard labor rate, and actual hours worked

answer

which of the following correctly lists all the information needed to calculate a labor rate variance? ch 10 (MA)

question

all of the above (customer, internal operations, financial)

answer

which of the following balanced-scorecard perspectives is influenced by a company's vision and strategy? ch 10 (MA)

question

devoting management time to investigate significant variances

answer

the term "management by exception" is best defined as ch 10 (MA)

question

task analysis and the analysis of historical data

answer

which of the following are methods for setting standards? ch 10 (MA)

question

the balanced scorecard

answer

an increasingly popular approach that integrates financial and customer performance measures with measures in the areas of internal operations and learning and growth is known as ch 10 (MA)

question

combine widely varying elements of overhead into a single cost pool

answer

many traditional costing systems ch 5 (MA)

question

preparation of allocation matrices

answer

which of the following tasks is NOT normally associated with an activity based costing system? (calculation of pool rates, identification of cost pools, and identification of cost drivers all ARE associated) ch 5 (MA)

question

property taxes

answer

which of the following is LEAST likely to be classified as a batch level activity in an activity-based costing system? ch 5 (MA)

question

storage of the vehicle in the sales area

answer

airstream builds recreational motor homes. All of the following activities add value to the finished product EXCEPT (installation of carpet, assembly of the frame to the chassis, and the addition of exterior lights all DO) ch 5 (MA)

question

request normal delivery times

answer

generally speaking, companies prefer doing business with customers who (ordering small quantities vs large, changing orders, and special packaging/handling all cost money) ch 5 (MA)

question

reduce variable costs

answer

a company that desires to lower its break-even point should strive to (quiz 2)

question

identification of cost pools, identification of cost drivers, calculation of pool rates, assignment of cost to products

answer

which of the following is the proper sequence of events in an activity-based costing system? (quiz 2)

question

all of the above (number of required sales contacts, special shipping instructions, purchase-order changes)

answer

which of the following can have a negative impact on a sales profitability? (quiz 2)

question

often reveal products that were under- or over-costed by traditional costing systems

answer

activity-based costing systems (quiz 2)

question

total revenue equals total cost

answer

the break-even point is that level of activity where (quiz 2)

question

the break even point would increase

answer

which of the following would take place if a company experienced an increase in fixed costs? (quiz 2)

question

selling price and variable cost per unit

answer

the unit contribution margin is calculated as the difference between (quiz 2)

question

????

answer

at a volume of 20,000 units, Dries reported sales revenues of $1,000,000, variable costs of $300,000, and fixed costs of $260,000. The company's contribution margin per unit is (quiz 2)

question

($)100,000

answer

Irish Corporation issued (sold) 10,000 shares of its no par common stock for $70 per share. The bylaws established a stated value of $10 per share. The transaction would increase the common stock account on the balance sheet by how much? (quiz 2)

question

it decreases when the number of shares of common stock authorized increases (it increases when treasury stock is acquired, in increases when net income increases, and it decreases when additional shares of common stock are issued are ALL TRUE)

answer

which of the following statements regarding earnings per share (EPS) is false? (quiz 2)

question

authorized shares

answer

which of the following represents the maximum number of shares of stock issuable to the public? (quiz 2)

question

a debit to accumulated depreciation for the depreciation accumulated to the date of disposal (a debit to a gain account, a credit to the equipment account for the asset's book value, and a decrease in total assets occurs are ALL INCORRECT)

answer

which of the following is CORRECT when recording the disposal of equipment for a gain? (quiz 2)

question

net income decreases and total assets decrease

answer

which of the following describes the effect of recording depreciation expense at year end? (quiz 2)

question

research and development costs (goodwill, patents, and trademarks ALL intangible assets)

answer

which of the following accounts would NOT be considered an intangible asset? (quiz 2)

question

patents (buildings, equipment, and land ALL tangible assets)

answer

which of the following accounts would NOT be considered a tangible asset? (quiz 2)

question

400,000

answer

Watson Company has provided the following data about its common stock: par value per share, $1; authorized shares, 10,000,000; outstanding shares, 4,300,000; and issued shares, 4,700,000. How many shares of treasury stock are there? (quiz 2)

question

(C) combine widely varying elements of overhead into a single cost pool

answer

Many traditional costing systems: (practice final)

question

(C) storage of the vehicle in the sales area

answer

Airstream builds recreational motor homes. All of the following activities add value to the finished product except: (practice final)

question

(D) request normal delivery times

answer

Generally speaking, companies prefer doing business with customers who: (practice final)

question

(A) increase income

answer

Assuming no change in sales volume, an increase in company's per-unit contribution margin would: (practice final)

question

(B) contribution margin equals fixed cost

answer

The break-even point is that level of activity where: (practice final)

question

(B) The break-even point would decrease

answer

Which of the following would take place if a company experienced a decrease in fixed costs? (practice final)

question

(A) Units sold exceeded units produced

answer

Which of the following conditions would cause absorption-costing income to be lower than variable-costing income? (practice final)

question

(A) expensed immediately when incurred

answer

Under variable costing, fixed manufacturing overhead is: (practice final)

question

(D) fixed administrative salaries

answer

All of the following costs are inventoried under absorption costing except: (practice final)

question

(A) absorption costing

answer

For external-reporting purposes, generally accepted accounting principles require that net income be based on: (practice final)

question

(D) cash budget

answer

A company's expected receipts from sales and planned disbursements to pay bills is commonly called a: (practice final)

question

(B) budgetary slack

answer

The difference between the revenue or cost projection that a person provides, and a realistic estimate of the revenue or cost, is called: (practice final)

question

(B) rolling budget

answer

Wilmar Corporation is budgeting its equipment needs on an on-going basis, with a new quarter being added to the budget as the current quarter is completed. This type of budget is most commonly known as a: (practice final)

question

(D) Actual labor rate, standard labor rate, and actual hours worked

answer

Which of the following correctly lists all the information needed to calculate a labor rate variance? (practice final)

question

(D) devoting management time to investigate significant variances

answer

The term "management by exception" is best defined as: (practice final)

question

(D) Stockholders' equity increases $10,000

answer

The CHS Company paid $30,000 cash to its landlord on November 1, 2011 for rent covering the six-month period from November 1, 2011 through April 30, 2012. Which of the following doesn't correctly describe the effect of the December 31, 2011 adjusting entry on CHS Company's financial statements? (Assume that no adjusting entries have been made during the year.) (practice final)

question

(D) Adjustment of the prepaid rent account for rent which expired during the period

answer

Which of the following transactions results in a decrease in both total assets and net income? (practice final)

question

(C) A net loss does not affect the ending retained earnings balance

answer

Which of the following statements does not correctly describe the relationship between the income statement and the ending retained earnings balance? (practice final)

question

(A) Land, buildings and natural resources

answer

Which of the following includes only tangible assets? (practice finals)

question

(B) Preferred shareholders are guaranteed to receive dividends

answer

Which of the following doesn't correctly describe preferred stock? (practice final)

question

(D) It attempts to determine an asset's market value

answer

Which of the following doesn't properly describe the depreciation process? (practice final)

question

(C) Net income decreases and total assets decrease

answer

Which of the following describes the effect of recording depreciation expense at year-end? (practice final)

question

(C) 5 years

answer

A machine, acquired for a cash cost of $15,000, is being depreciated on a straight-line basis of $2,700 per year. The residual value was estimated to be 10% of cost. The estimated useful life is (practice final)

question

(A) $2,667

answer

On September 1, 2010, Donna Equipment signed a one-year, 8% interest-bearing note payable for $50,000. Assuming that Donna Equipment maintains its books on a calendar year basis, how much interest expense that should be reported in the 2011 income statement? (practice final)

question

(D) Corporations are governed by their stockholders

answer

Which of the following statements is false? (practice final)

question

(D) It decreases when the number of shares of common stock authorized increases

answer

Which of the following statements regarding earnings per share (EPS) is false? (practice final)

question

(C) Income from operations will decrease

answer

Which of the following is correct when bad debt expense is recorded at year-end? (practice final)

question

(D) Allowance for doubtful accounts

answer

Which of the following accounts is not a contra-revenue? (practice final)

question

(D) have no effect on the net realizable value of the accounts receivable

answer

When using the allowance method for accounting for bad debts, accounts receivable is reported on the balance sheet at the expected net realizable value. When a particular receivable from a customer ultimately is determined to be uncollectible and is written off, the recording of this event will (practice final)

question

(C) Inventory related selling costs

answer

Which of the following costs will not affect cost of goods sold? (practice final)

question

(D) FIFO will result in higher net income and a higher inventory valuation than will LIFO

answer

Which of the following statements is correct when inventory prices are increasing? (practice final)

question

(B) $64,000

answer

A corporation has provided the following information about one of their products: During the year, 400 units were sold. What is cost of goods sold using the average cost method? (practice final)

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