Exam #3 ACCT 2101 with answers |\ |\ |\ |\ |\
incremental analysis - CORRECT ANSWERS ✔✔the process |\ |\ |\ |\ |\ |\
used to identify the financial data that change under
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
alternative courses of action |\ |\ |\
data for incremental analysis involves estimates and
|\ |\ |\ |\ |\ |\ |\
uncertainty - CORRECT ANSWERS ✔✔in incremental |\ |\ |\ |\ |\ |\
analysis, both costs and revenues may change
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Relevant Costs and Revenues - CORRECT ANSWERS
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✔✔those costs and revenues that differ across
|\ |\ |\ |\ |\ |\ |\
alternatives
opportunity cost - CORRECT ANSWERS ✔✔a lost benefit |\ |\ |\ |\ |\ |\ |\ |\
as a result of choosing one course of action over another
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
-always relevant |\
sunk cost - CORRECT ANSWERS ✔✔costs that have
|\ |\ |\ |\ |\ |\ |\ |\
already been incurred and cannot be changed or avoided
|\ |\ |\ |\ |\ |\ |\ |\ |\
by any present or future decisions
|\ |\ |\ |\ |\
-never relevant |\
, many companies have shifted to activity based costing
|\ |\ |\ |\ |\ |\ |\ |\
because... - CORRECT ANSWERS ✔✔-results in more |\ |\ |\ |\ |\ |\ |\
accurate OH allocation |\ |\
-is compatible w incremental analysis
|\ |\ |\ |\ |\
-results in improved incremental analysis
|\ |\ |\ |\
simple interest - CORRECT ANSWERS ✔✔(computed on
|\ |\ |\ |\ |\ |\ |\
principal amount only) |\ |\
the return on the principle for one period
|\ |\ |\ |\ |\ |\ |\
=principle x i rate x time |\ |\ |\ |\ |\
compound interest - CORRECT ANSWERS ✔✔(computed |\ |\ |\ |\ |\ |\
on principal and any interest earned that has not been
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
paid or withdrawn)
|\ |\
the return on (or growth of) the principle for 2 or more
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
periods
future value of a single amount - CORRECT ANSWERS
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✔✔the value at a future date of a given amount invested,
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
assuming compound interest |\ |\
FV= p x (1+i)^n
|\ |\ |\
(n=# of periods) |\ |\
incremental analysis - CORRECT ANSWERS ✔✔the process |\ |\ |\ |\ |\ |\
used to identify the financial data that change under
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
alternative courses of action |\ |\ |\
data for incremental analysis involves estimates and
|\ |\ |\ |\ |\ |\ |\
uncertainty - CORRECT ANSWERS ✔✔in incremental |\ |\ |\ |\ |\ |\
analysis, both costs and revenues may change
|\ |\ |\ |\ |\ |\
Relevant Costs and Revenues - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\
✔✔those costs and revenues that differ across
|\ |\ |\ |\ |\ |\ |\
alternatives
opportunity cost - CORRECT ANSWERS ✔✔a lost benefit |\ |\ |\ |\ |\ |\ |\ |\
as a result of choosing one course of action over another
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
-always relevant |\
sunk cost - CORRECT ANSWERS ✔✔costs that have
|\ |\ |\ |\ |\ |\ |\ |\
already been incurred and cannot be changed or avoided
|\ |\ |\ |\ |\ |\ |\ |\ |\
by any present or future decisions
|\ |\ |\ |\ |\
-never relevant |\
, many companies have shifted to activity based costing
|\ |\ |\ |\ |\ |\ |\ |\
because... - CORRECT ANSWERS ✔✔-results in more |\ |\ |\ |\ |\ |\ |\
accurate OH allocation |\ |\
-is compatible w incremental analysis
|\ |\ |\ |\ |\
-results in improved incremental analysis
|\ |\ |\ |\
simple interest - CORRECT ANSWERS ✔✔(computed on
|\ |\ |\ |\ |\ |\ |\
principal amount only) |\ |\
the return on the principle for one period
|\ |\ |\ |\ |\ |\ |\
=principle x i rate x time |\ |\ |\ |\ |\
compound interest - CORRECT ANSWERS ✔✔(computed |\ |\ |\ |\ |\ |\
on principal and any interest earned that has not been
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\
paid or withdrawn)
|\ |\
the return on (or growth of) the principle for 2 or more
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
periods
future value of a single amount - CORRECT ANSWERS
|\ |\ |\ |\ |\ |\ |\ |\ |\
✔✔the value at a future date of a given amount invested,
|\ |\ |\ |\ |\ |\ |\ |\ |\ |\ |\
assuming compound interest |\ |\
FV= p x (1+i)^n
|\ |\ |\
(n=# of periods) |\ |\
