FINACIAL ACOOUNTING ACCOUNTING 101 Exam Multiple Choices and correct answers

FINACIAL ACOOUNTING ACCOUNTING 101 Exam Multiple Choices FINACIAL ACOOUNTING ACCOUNTING 101 Exam Multiple Choices 1) What exists when budgeted costs exceed actual results? A. A budgeting error B. A favorable difference C. An unfavorable difference D. An excess profit 2) The conceptual framework developed by the Financial Accounting Standards Board __________. A. was approved by a vote of all accountants B. are rules that all accountants must follow C. is viewed as providing a constitution for setting accounting standards for financial reporting D. is legally binding on all accountants 3) In what situations will a static budget be most effective in evaluating a manager's effectiveness? A. The company has substantial fixed costs. B. The company has substantial variable costs. C. The planned activity levels match actual activity levels. D. The company has no fixed costs. 4) A well-designed activity-based costing system starts with __________. A. identifying the activity-cost pools B. computing the activity-based overhead rate C. assigning manufacturing overhead costs for each activity cost pool to products D. analyzing the activities performed to manufacture a product 5) 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. Factory janitor B. General corporate liability insurance C. Cost of landscaping the corporate office D. The western division's vice president's salary 6) Balance sheet accounts are considered to be __________. A. temporary stockholders' accounts B. permanent accounts C. capital accounts D. nominal accounts 7) 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? A. $150,000 B. $60,000 C. $75,000 D. $90,000 8) 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 The net income (or loss) for the period is __________. A. not determinable B. $48,000 income C. $10,000 income D. $10,000 loss 9) The major reporting standard for management accounts is __________. A. generally accepted accounting principles B. the Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management C. the Sarbanes-Oxley Act of 2002 D. relevance to decisions 10) Which list below best describes the major services performed by public accountants? A. Cost accounting, production scheduling, recruiting B. Bookkeeping, mergers, budgets C. Employee training, auditing, bookkeeping D. Auditing, taxation, management consulting 11) Multinational corporations __________. A. are U.S. companies that trade their securities on the exchanges in other countries B. are required to use international accounting standards C. are U.S. companies that sell goods and services in other countries D. are firms that conduct their operations in more than one country through subsidiaries, divisions, or branches in foreign countries 12) The cost of an asset and its fair market value are __________. A. the same on the date of acquisition B. never the same C. the same when the asset is sold D. irrelevant when the asset is used by the business in its operations 13) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of $74,400 and sales for the current year of $100,000. How much is Hess's break even point? A. 2,133 units B. 4,600 units C. $25,600 D. 6,200 units 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? A. $6,000 B. $18,000 C. $28,000 D. $12,000