ACC 561 FINAL EXAM 1 QUESTIONS AND ANSWERS LATEST 2023/2024 RATED A+

ACC 561 FINAL EXAM 1 1. Question 1 The entry to record the acquisition of raw materials on account is: Correct (B) Raw Materials Inventory&... 2. Question 2 Which of the following statements concerning users of accounting information is incorrect? Correct (D) Regulatory authorities ... 3. Question 3 The Mac Company has four plants nationwide that cost $350 million. The current fair value of the plants is $300 million. The plants will be reported as assets at: Correct (A) $350 million 4. Question 4 At September 1, 2017, Baxter Inc. reported Retained Earnings of $423,000. During the month, Baxter generated revenues of $60,000, incurred expenses of $36,000, purchased equipment for $15,000 and paid dividends of $6,000. What is the balance in Retained Earnings at September 30, 2017? Correct (D) $441,000 credit 5. Question 5 Danner Corporation reported net sales of $650,000, $720,000, and $780,000 in the years 2016, 2017, and 2018, respectively. If 2016 is the base year, what percentage do 2018 sales represent of the base? Correct (A) 120 6. Question 6 In performing a vertical analysis, the base for sales revenues on the income statement is: Correct (C) net sales 7. Question 7 It costs Garner Company $12 of variable and $5 of fixed costs to produce one bathroom scale which normally sells for $35. A foreign wholesaler offers to purchase 3,000 scales at $15 each. Garner would incur special shipping costs of $1 per scale if the order were accepted. Garner has sufficient unused capacity to produce the 3,000 scales. If the special order is accepted, what will be the effect on net income? Correct (C) $6,000 increase 8. Question 8 Hollis Industries produces flash drives for computers, which it sells for $20 each. Each flash drive costs $13 of variable costs to make. During April, 1,000 drives were sold. Fixed costs for March were $2 per unit for a total of $1,000 for the month. How much is the contribution margin ratio? Correct (C) 35 9. Question 9 Which of the following statements is not true? Correct (D) When a company’s sales ... 10. Question 10 Based on the following data, what is the amount of working capital? Accounts payable………………………………………………………..$64,000 Accounts receivable……………………………………………………..114,000 Cash………………………………………………………………………. 70,000 Intangible assets…………………………………………………………100,000 Inventory…………………………………………………………………. 138,000 Long-term investments…………………………………………………..160,000 Long-term liabilities……………………………… ……………………...200,000 Short-term investments…………………………………………………...80,000 Notes payable (short-term)………………………………………………..56,000 Property, plant, and equipment………………………………………..1,340,000 Prepaid insurance……………………………………………………….......2,000 Correct (A) $284,000 11. Question 11 The investigation of materials price variance usually begins in the: Correct (B) purchasing department 12. Question 12 If a plant is operating at full capacity and receives a one-time opportunity to accept an order at a special price below its usual price, then: Correct (C) the order will likely be ... 13. Question 13 Scorpion Production Company planned to use 1 yard of plastic per unit budgeted at $81 a yard. However, the plastic actually cost $80 per yard. The company actually made 3,900 units, although it had planned to make only 3,300 units. Total yards used for production were 3,960. How much is the total materials variance? Correct (B) $900 U 14. Question 14 Top management notices a variation from budget and an investigation of the difference reveals that the department manager could not be expected to have controlled the variation. Which of the following statements is applicable? Correct (C) Department managers ... 15. Question 15 Which statement is correct? (B) The use of the cash basis... is correct 1. As long as a company consistently uses the cash basis of accounting, generally accepted accounting principles allow its use. 2. The use of the cash basis of accounting violates both the revenue recognition and expense recognition principles. Correct answer 3. The cash basis of accounting is objective because no one can be certain of the amount of revenue until the cash is received. 4. As long as management is ethical, there are no problems with using the cash basis of accounting. 16. Question 16 Which of the following will not result in an unfavorable controllable margin difference? Correct (C) Sales exceeding budget; ... 17. Question 17 Henson Company began the year with retained earnings of $380,000. During the year, the company recorded revenues of $500,000, expenses of $380,000, and paid dividends of $40,000. What was Henson’s retained earnings at the end of the year? Correct (D) $460,000 18. Question 18 Ben Gordon, Inc. manufactures 2 products, wheels and seats. The company has estimated its overhead in the assembling department to be $660,000. The company produces 300,000 wheels and 600,000 seats each year. Each wheel uses 2 parts, and each seat uses 3 parts. How much of the assembly overhead should be allocated to wheels? Correct (A) $165,000 19. Question 19 What is the primary difference between a static budget and a flexible budget? Correct (A) The static budget is ... 20. Question 20 Which of the following is not an underlying assumption of CVP analysis? (D) Beginning inventory is ... is correct 1. Changes in activity are the only factors that affect costs. 2. Cost classifications are reasonably accurate. 3. Sales mix is constant. 4. Beginning inventory is larger than ending inventory. Correct answer 21. Question 21 If there are no units in process at the beginning of the period, then: Correct (A) the units to be accounted... 22. Question 22 Miller Manufacturing’s degree of operating leverage is 1.5. Warren Corporation’s degree of operating leverage is 3. Warren’s earnings would go up (or down) by ________ as much as Miller’s with an equal increase (or decrease) in sales. Correct (D) 2 times 23. Question 23 Which one of the following is an example of a period cost? Correct (A) A manager's salary for ... 24. Question 24 La More Company had the following transactions during 2016: o Sales of $9,000 on account o Collected $4,000 for services to be performed in 2017 o Paid $3,750 cash in salaries for 2016 o Purchased airline tickets for $500 in December for a trip to take place in 2017 What is La More’s 2016 net income using accrual accounting? Correct (D) $5,250 25. Question 25 Are advanced receipts from customers treated as revenue at the time of receipt? Why or why not? Correct (C) No, revenue cannot be ... 26. Question 26 Which is the last step in developing the master budget? Correct (A) Preparing the budgeted ... 27. Question 27 Differences between a job order cost system and a process cost system include all of the following except the: Correct (C) flow of costs 28. Question 28 An activity-based overhead rate is computed as follows: Correct (D) estimated overhead ... 29. Question 29 Kimble Company applies overhead on the basis of machine hours. Given the following data, compute overhead applied and the under- or over-application of overhead for the period: Estimated annual overhead cost $1,600,000 Actual annual overhead cost $1,575,000 Estimated machine hours 400,000 Actual machine hours 390,000 Correct (A) $1,560,000 applied and $... 30. Question 30 Financial and managerial accounting are similar in that both: Correct (B) deal with the economic ...