acct221 exam mcq and essays latest 2015

A $100,000 mortgage note was created, and the note entailed equal monthly payments of $2,500. The interest rate is 1% per month. How much interest expense is associated with the second month?A. $985.B. $1,000.C. $1,515.D. $2,500.E. None of these.” A2. “(Multiple Choice)The effective interest method of amortization:A. is required, even if it achieves results similar to the straight-line method.B. results in a level amount of interest expense over the life of a bond.C. causes interest expense to be a constant percent of the carrying value of a bond.D. will never produce results similar to the straight-line method.E. None of these.” C3. “(Essay)On January 1, 20X6, Brogden Corporation issued at 97 plus accrued interest, two hundred of its ten-year, 8%, $1,000 bonds. The bonds are dated October 1, 20X5. Interest is payable semi-annually on April 1 and October 1. Accrued interest for the period October 1, 20X5 to January 1, 20X6 amounted to $4,000. What amount should Brogden record for bonds payable (net of related discount) on January 1, 20X6?” 194000 (Hint: the answer is a number)4. “(Multiple Choice)Which of the following statements is true?A. Preemptive rights make it easy for a corporation to issue additional shares.B. One purpose of a corporation is to avoid “”double taxation.””C. A corporate entity is typically of unlimited duration.D. A corporation can issue common or preferred stock, but not both.E. None of these.” C5. “(Multiple Choice)Which of the following statements about treasury stock is true?A. Excess of the sales price over cost should be credited to retained earnings.B. Gains are not recorded on treasury stock transactions but losses are.C. Losses on treasury stock transactions are recorded in income.D. Reacquiring treasury stock causes stockholders equity to decrease.E. None of these.” D6. “(Essay)Garnet Corporation was organized by issuing 100,000 shares of $1 par value common stock at a price of $50 cash per share. During the first year, Garnet had net income of $250,000 and paid $50,000 dividends. What is the balance sheet amount for common stock at year-end?” 100000 (Hint: the answer is a number)7. “(Multiple Choice)In an effort to concentrate its resources in more profitable areas, Southern Steel Corporation recently sold its family pizza restaurant segment. The disposal constitutes:A. an extraodinary item.B. a discontinued operation which should be treated as a prior period adjustment.C. a discontinued operation which should be disclosed net-of-tax effects.D. a portion of income from continuing operations.E. None of these.” C8. “(Multiple Choice)At calendar year end, Logan Corporation had total stockholders’ equity of $10,000,000. The calendar year began with 100,000 shares outstanding, and 20,000 additional shares were issued on July 1. There is no preferred stock. At year end, book value is:A. $100 per share.B. $90.91 per share.C. $83.33 per share.D. The answer cannot be determined without knowing beginning equity.E. None of these.” B9. “(Essay)During all of 20X6, Swanson, Inc. had outstanding 100,000 shares of common stock and 5,000 shares of noncumulative, $100 par value, 7% preferred stock. For 20X6, Swanson had $230,000 income from operations and $575,000 extraordinary losses; dividends were paid only to preferred shareholders. How much should Swanson report for 20X6 basic earnings (loss) per share for income (loss) before extraordinary items?” 1.95 (Hint: the answer is a number)10. “(Multiple Choice)Financial statement ratio analysis may be undertaken to study liquidity, turnover, profitability, and other measures. What type of ratio is the return on equity ratio?A. Liquidity.B. Turnover.C. Profitability.D. Other.E. None of these.” C11. “(Multiple Choice)Which of the following items represents a potential use of cash?A. Depreciation.B. Sale of fixed assets at a loss.C. Net loss from operations.D. Declaration of a stock dividend.E. None of these.” E12. “(Essay)The following financial information is available for Masters Corporation for 20X5:Current Assets (end of year / beginning of year) $96,000 / $60,000Current Liabilities (end of year / beginning of year) $76,000 / $42,000Inventory (average / end of year) $26,000 / $30,000Accounts Receivable (average / end of year) $45,000 / $40,000Sales ($10,000 cash sales included) $400,000Cost of Goods Sold $260,000Cash (end of year) $26,000What is the quick ratio?” 0.921052632 (Hint: the answer is a number)13. “(Multiple Choice)Managerial decision making is supported by accounting information related to:A. planning.B. directing.C. controlling.D. All of these.E. None of these.” D14. “(Multiple Choice)Of the following items, which would not be included in factory overhead?A. Indirect labor.B. Minor items, such as nails, glue, etc.C. Ordinary maintenance on machinery.D. Insurance on the corporate offices.E. None of these.” D15. “(Essay)Total manufacturing costs are $520,000 and the cost of goods manufactured is $475,000. If ending Work-in-Process Inventory is $60,000, what was the beginning Work-in-Process Inventory?” 15000 (Hint: the answer is a number)16. “(Multiple Choice)Within a “”relevant range,”” which of the following statements about fixed costs is true?A. Fixed costs are constant per unit of production.B. Fixed costs per unit will fall as production rises.C. Total fixed costs change as production volume changes.D. Fixed costs are costs which are paid uniformly over a year.E. None of these.” B17. “(Multiple Choice)Moon Company sells product Q at $6 a unit. In 20X5, fixed costs are expected to be $200,000 and variable costs are estimated at $4 a unit. How many units of product Q must Moon sell to generate operating income of $40,000?A. 50,000B. 60,000C. 100,000D. 120,000E. None of these.” D18. “(Essay)Southwest Air Conditioning & Heating Company performs air conditioner repair service. During July, its busiest month, Southwest had repair labor hours of 60,000 and total costs of $840,000. During November, its slowest month, Southwest had labor hours of 20,000 and total costs or $480,000. How much is Southwest’s variable repair cost per labor hour?” 9 (Hint: the answer is a number)19. “(Multiple Choice)In job order costing, the basic document to accumulate the cost of each order is the:A. invoice.B. purchase order.C. requisition sheet.D. job cost sheet.E. None of these.” D20. “(Multiple Choice)Assume that actual overhead consisted of $40,000 for indirect labor, $20,000 for indirect material, and $10,000 for depreciation of factory equipment. Based on the preset rates, $65,000 of overhead was applied to work in process.A. Overhead is underapplied.B. This is viewed as an unfavorable situation.C. There will be a $5,000 debit balance in Factory Overhead.D. All of the above.E. None of these.” D21. “(Essay)A company has three employees (A, B, and C). Employee A worked 8 hours, divided equally between two jobs (#1 and #2). Employee B worked 6 hours, divided equally between three jobs (#2, #3, and #4). Employee C worked 8 hours, divided equally between two jobs (#3 and #4). Employee A is paid $10 per hour, Employee B is paid $12 per hour, and Employee C is paid $15 per hour. How much direct labor cost is assigned to Job #2?” 64 (Hint: the answer is a number)22. “(Multiple Choice)An equivalent unit of material is equal to:A. the amount of material necessary to complete one unit of production.B. a unit of work in process inventory.C. the amount of material necessary to start a unit of production into work in process.D. fifty percent of the material cost of a unit of finished goods.E. None of these.” A23. “(Multiple Choice)Using weighted-average, total cost to account for in a process is $100,000, evenly divided between materials and conversion. Conversion consists of 75,000 equivalent units, divided one-fourth to work in process, and three-fourths to completed units, then:A. conversion costs included in ending work in process are $10,000.B. conversion costs included in ending work in process are $12,500.C. conversion costs included in ending work in process are $25,000.D. conversion costs included in ending work in process are $50,000.E. None of these.” B24. “(Essay)Basham Company uses a process cost system. During 20X6, Basham had no beginning work in process inventory. During 20X6, Basham started and finished 500 units. Also, Basham had 200 units in process at the end of 20X6. These units were 50% complete with respect to materials. What are the equivalent units for direct materials?” 600 (Hint: the answer is a number)25. “(Multiple Choice)The top-down budget development approach the budget:A. is imposed on lower-level personnel who rarely are involved in budget construction.B. centers on lower-level employee participation.C. process begins with the issuance of general guidelines by top management.D. Both B and C.E. None of these.” A chapter2126. “(Multiple Choice)Z makes units that each requires 2 pounds of material at $3 per pound. 500 and 700 units will be built in May and June, respectively. Z keeps material on hand at 20% of the next month’s production needs. How much is the material cost for May’s output?A. $2,400B. $3,000C. $3,240D. $4,200E. None of these.” 3240 chapter2127. “(Essay)Assume that March’s budgeted sales are 10,000 units. Beginning finished goods inventory contained 1,000 units, and 1,500 units are desired to be on hand at month end. Conversely, beginning direct materials inventory consisted of 1,500 units, but only 1,000 units are desired to be on hand at month end. Each finished unit requires 2 units of raw materials and 1 hour of direct labor. Raw materials cost $6 per unit, direct labor costs $9 per hour, factory overhead is applied at $7 per hour, and the company has no work in process. How much will the cost of goods manufactured amount to for March?” 291000 chapter21 (Hint: the answer is a number)28. “(Multiple Choice)The formula for calculating return on investment (ROI) can be reduced to:A. margin divided by turnover.B. sales divided by assets.C. income divided by sales.D. assets divided by income.E. None of these.” A chapter2229. “(Multiple Choice)Which of the following describes the labor costs that should be incurred under forthcoming efficient operating conditions?A. AchievableB. IdealC. PerfectD. ZenE. None of these.” A chapter2230. “(Essay)Kolton uses a single raw material in its production process. The material has a standard price of $10 per pound. During November the company purchased and used 15,000 pounds of material. The actual price paid for this material was $9.90 per pound. The standard quantity required per finished product is 8 pounds. Kolton produced 1,900 finished units of the final product in November. How much was the material price variance for November?” “Material price variance = (10-9.9)*15000 = $1,500Favorable” chapter22 (Hint: the answer is a number, then specify favorable or unfavorable.)31. “(Multiple Choice)Which of the following is not a “”product cost”” under absorption costing?A. Direct materialsB. Direct laborC. Variable manufacturing overheadD. Fixed manufacturing overheadE. None of these.” E chapter2332. “(Multiple Choice)Which of the following is not a feature of a contribution income statement?A. The contribution margin is disclosed.B. Variable selling expenses are not subtracted in calculating contribution margin.C. Arbitrary cost allocations are disregarded.D. Fixed costs for a segment are divided into controllable and uncontrollable amounts.E. None of these.” B chapter2333. “(Essay)Vaswani Company provides the following information for their first year of operations:Sales, 5,000 units @ $10 each; total production, 7,500 unitsSelling and administrative costs:Fixed, $1,000; Variable, $1 per unitProduction costs per unit:Direct materials, $2; Direct labor, $2; Variable overhead, $1Fixed manufacturing overhead, $7,500

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