ACC 280 Final Exam 7

ACC 280 Final Exam 7 1) Balance sheet accounts are considered to be . 2) The major reporting standard for management accounts is . 3) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and wine has a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25 percent contribution margin. If other factors are equal, which product should H55 push to customers? 4) What is the preparation of reports for each level of responsibility in the company’s organization chart called? 5) These are selected account balances on December 31, 2008. Land (location of the corporation’s office building) $100,000 Land (held for future use) 150,000 Corporate Office Building 600,000 Inventory 200,000 Equipment 450,000 Office Furniture 100,000 Accumulated Depreciation 300,000 What is the net amount of property, plant, and equipment that will appear on the balance sheet? 6) Of the following companies, which one would not likely employ the specific identification method for inventory costing? 7) The cost of an asset and its fair market value are 8) A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $80; Second purchase $95; Third purchase $85. If the company sold two units for a total of $240 and used FIFO costing, the gross profit for the period would be . 9) The primary purpose of the statement of cash flows is to . 10) Which list below best describes the major services performed by public accountants? 11) The standards and rules that are recognized as a general guide for financial reporting are called 12) If a company reports a net loss, it . 13) What exists when budgeted costs exceed actual results? 14) One of Astro Company's activity cost pools is machine setups, with estimated overhead of $150,000. Astro produces sparklers (400 setups) and lighters (600 setups). How much of the machine setup cost pool should be assigned to sparklers? 15) For a college student who wishes to calculate the true costs of going to college, the costs of room and board . 16) If a binding price ceiling were imposed in the computer market, . 17) Which of the following statements about GDP is correct? 1. The statement of cash flows is a not a required statement, but may be prepared to supplement the income statement, balance sheet, and retained earnings statement. 2. For external reporting, a company must prepare either an income statement or a statement of cash flows, but not both. 5. In preparing a statement of cash flows, cash equivalents are subtracted from cash in order to compute the net change in cash during a period. 6. Cash equivalents are highly-liquid investments that have maturities of less than three months. 7. The use of cash to purchase highly liquid short-term investments (cash equivalents) would be reported on the statement of cash flows as an investing activity. 8. In preparing a statement of cash flows, the issuance of debt as a cash inflow in the financing section. 9. Non-cash investing and financing activities must be reported in the body of a statement of cash flows. 10. The statement of cash flows classifies cash receipts and payments as operating, non- operating, financial, and extraordinary activities. 12. The primary purpose of the statement of cash flows is to 13. If a company reports a net loss, it 14. The order of presentation of activities on the statement of cash flows is 15. Meyer Company reported net income of $30,000 for the year. During the year, accounts receivable increased by $7,000, accounts payable decreased by $3,000 and depreciation expense of $5,000 was recorded. Net cash provided by operating activities for the year is 16. Flynn Company reported a net loss of $10,000 for the year ended December 31, 2005. During the year, accounts receivable decreased $5,000, merchandise inventory increased $8,000, accounts payable increased by $10,000, and depreciation expense of $5,000 was recorded. During 2005, operating activities 17. Which of the following would be subtracted from net income using the indirect method? 18. Which of the following would be added to net income using the indirect method? 19. Stone Company had a cost of purchases of $250,000. The comparative balance sheet analysis revealed a $10,000 decrease in inventory and a $20,000 increase in accounts payable. What were Stone's cash payments to suppliers? 20. The information in a statement of cash flows will not help investors to assess the entity's ability to