Principles of Financial and Managerial Accounting Exam Questions With Complete Solutions A+ Pass New Update

Principles of Financial and Managerial Accounting Exam Questions With Complete Solutions A+ Pass New Update Which type of account are accounts payable and notes payable both examples of? - Answers - Liability What is the purpose of the financial accounting cycle? - Answers - To turn information about transactions into financial statements Which item is an expense item? - Answers - Costs of goods sold How is gross profit computed? - Answers - Sales minus cost of goods sold Which type of account is retained earnings? - Answers - Equity How does a classified balance sheet provide useful information to a decision maker? - Answers - It distinguishes between current and long term assests What information does a balance sheet provide to a decision maker? - Answers - Summary of the financial position of a company at a particular date. What is an account payable? - Answers - The amount owed by a company that purchased goods or services from a supplier on credit What does a manager have control over in a cost center? - Answers - Costs What is the current sequence of budgets in a manufacturing business? - Answers - Sales, production, direct materials A retail company purchased inventory costing $100,000. By the end of the year, inventory costing $75,000 had been sold. How is the remaining $25,000 in inventory reported in the financial statements? - Answers - As an asset in the balance sheet How could a period cost be reported in an income statement? - Answers - As manufacturing overhead How are the wages of cashiers classified in a merchandising company? - Answers - Selling expense How are wages of office staff in a company headquarters building classified? - Answers - Administrative expense Which label is given to the cost of electricity in a furniture factory? - Answers - Manufacturing overhead Which cost category is not formally tracked in a company's accounting system? - Answers - Opportunity costs A company reports these data: Price per unit = $25 Variable costs per unit = $15 Fixed costs = $15,000 Given these data, what is the variable cost ratio? - Answers - 60%