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BUS 475 100 Questions with ANSWERS 4 Set.doc

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1) The income statement and balance sheet columns of Pine Company's worksheet
reflects the following totals:
Income Statement Balance Sheet
Dr. Cr. Dr. Cr.
Totals $58,000 $48,000 $34,000 $44,000
Closing entries are necessary for __________.
A. temporary accounts only
B. permanent accounts only
C. permanent or real accounts only
D. both permanent and temporary accounts
Read more: http://blog.accountingcoach.com/closing-entries-2/
2) 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. General corporate liability insurance
B. Factory janitor
C. The western division’s vice president’s salary
D. Cost of landscaping the corporate office
Read more: http://www.investorwords.com/2942/manufacturing_overhead.html
3) Which list below best describes the major services performed by public
accountants?
A. Employee training, auditing, bookkeeping
B. Bookkeeping, mergers, budgets
C. Cost accounting, production scheduling, recruiting
D. Auditing, taxation, management consulting
Read more:
http://www.collegeboard.com/csearch/majors_careers/profiles/careers/106541.html
4) The conceptual framework developed by the Financial Accounting Standards
Board __________.
A. are rules that all accountants must follow
B. was approved by a vote of all accountants
C. is legally binding on all accountants
D. is viewed as providing a constitution for setting accounting standards for
financial reporting
Read more: http://www.investopedia.com/terms/f/fasb.asp

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5) In what situations will a static budget be most effective in evaluating a manager's
effectiveness?
A. The company has substantial variable costs.
B. The company has substantial fixed costs.
C. The company has no fixed costs.
D. The planned activity levels match actual activity levels.
Read more: http://blog.accountingcoach.com/what-is-a-static-budget/
http://businessmanagement.suite101.com/article.cfm/what_is_management_effectiv
eness
6) Which one of the following items is not generally used in preparing a statement
of cash flows?
A. Comparative balance sheets
B. Adjusted trial balance
C. Additional information
D. Current income statement
Read more: http://www.accountingcoach.com/online-accounting-
course/06Xpg01.html
7) These are selected account balances on December 31, 2008.
Land (location of the corporation’s office building) $150,000
Land (held for future use) 225,000
Corporate Office Building 900,000
Inventory 300,000
Equipment 675,000
Office Furniture 150,000
Accumulated Depreciation 450,000
What is the net amount of property, plant, and equipment that will appear on the
balance sheet?
A .$1,425,000
B. $1,650,000
C. $2,400,000
D. $1,950,000
8) A well-designed activity-based costing system starts with __________.
A. analyzing the activities performed to manufacture a product
B. computing the activity-based overhead rate
C. assigning manufacturing overhead costs for each activity cost pool to products
D. identifying the activity-cost pools
Read more: http://www.valuebasedmanagement.net/methods_abc.html

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9) The cost principle is the basis for preparing financial statements because it is
__________.
A. the most accurate measure of purchasing power
B. relevant and objectively measured, and verifiable
C. an international accounting standard
D. a conservative value
Read more: http://www.accountingcoach.com/terms/C/cost-principle.html
10) Which one of the following is a product cost?
A. Advertising costs
B. Office salaries
C. Sales person’s salaries
D. Indirect labor
Read more:
http://www.ider.herts.ac.uk/school/courseware/costs/product_costs.html
11) If a company reports a net loss, it __________.
A. will not be able to make capital expenditures
B. will not be able to pay cash dividends
C. will not be able to get a loan
D. may still have a net increase in cash
Read more: http://www.wisegeek.com/what-is-net-loss.htm
12) The primary purpose of the statement of cash flows is to __________.
A. prove that revenues exceed expenses if there is a net income
B. provide information about the investing and financing activities during a period
C. facilitate banking relationships
D. provide information about the cash receipts and cash payments during a period
13) The major reporting standard for management accounts is __________.
A. the Sarbanes-Oxley Act of 2002
B. the Standards of Ethical Conduct for Practitioners of Management Accounting
and Financial Management
C. generally accepted accounting principles
D. relevance to decisions
Read more: http://www.investopedia.com/articles/04/033104.asp
14) 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?

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