acc349 final exams.doc

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1) The cost principle requires that when assets are acquired, they be recorded at

__________.

A. list price

B. selling price

C. exchange price paid

D. appraisal value

2) "Generally accepted" in the phrase generally accepted accounting principles

means that the principles __________.

A. have been approved for use by the managements of business firms

B. have been approved by the Internal Revenue Service

C. have substantial authoritative support

D. are proven theories of accounting

3) The standards and rules that are recognized as a general guide for financial

reporting are called __________.

A. standards of financial reporting

B. operating guidelines

C. generally accepted accounting principles

D. generally accepted accounting standards

4) Sam's Used Cars uses the specific identification method of costing inventory.

During March, Sam purchased three cars for $6,000, $7,500, and $9,750,

respectively. During March, two cars are sold for $9,000 each. Sam determines that

at March 31, the $9,750 car is still on hand. What is Sam’s gross profit for March?

A. $8,250

B. $750

C. $4,500

D. $5,250

5) Hess, Inc. sells a single product with a contribution margin of $12 per unit and

fixed costs of $74,400 and sales for the current year of $100,000. How much is

Hess’s break even point?

A. 2,133 units

B. 6,200 units

C. $25,600

D. 4,600 units

6) As Plant Controller, you are trying to determine which costs over which you have

the most control on a day to day basis. Your goal is to achieve better profitability.

The Plant Operations Manager suggests that overhead is the easiest area to directly

reduce costs. Which of the following items would be classified as manufacturing

overhead?

A. The western division’s vice president’s salary

B. Cost of landscaping the corporate office

C. General corporate liability insurance

D. Factory janitor

7) What is the preparation of reports for each level of responsibility in the

company’s organization chart called?

A. Master budgeting analysis

B. Exception reporting

C. Responsibility reporting

D. Static reporting

8) Disney’s variable costs are 30% of sales. The company is contemplating an

advertising campaign that will cost $22,000. If sales are expected to increase

$40,000, by how much will the company's net income increase?

A. $6,000

B. $12,000

C. $28,000

D. $18,000

9) The cost of an asset and its fair market value are __________.

A. never the same

B. irrelevant when the asset is used by the business in its operations

C. the same on the date of acquisition

D. the same when the asset is sold

10) Which one of the following is a product cost?

A. Indirect labor

B. Sales person’s salaries

C. Advertising costs

D. Office salaries

11) What exists when budgeted costs exceed actual results?

A. A budgeting error

B. An unfavorable difference

C. An excess profit

D. A favorable difference

12) The income statement and balance sheet columns of Pine Company's worksheet

reflects the following totals:

Income Statement Balance Sheet

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1) The cost principle requires that when assets are acquired, they be recorded at __________. A. list price B. selling price C. exchange price paid D. appraisal value 2) "Generally accepted" in the phrase generally accepted accounting principles means that the principles __________. A. have been approved for use by the managements of business firms B. have been approved by the Internal Revenue Service C. have substantial authoritative support D. are proven theories of accounting 3) The standards and rules that are recognized as a general guide for financial reporting are called __________. A. standards of financial reporting B. operating guidelines C. generally accepted accounting principles D. generally accepted accounting standards 4) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sam purchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are sold for $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam's gross profit for March? A. $8,250 B. $750 C. $4,500 D. $5,250 5) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess's break even point? A. 2,133 units B. 6,200 units C. $25,600 D. 4,600 units 6) As Plant Controller, you are trying to determine which costs over which you have the most control on a ...
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