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Thursday, February 28, 2019

Sample Question

Sample Question 5312 F any 2009 Student___________________________________________________________________ 1. Corporate constitution include concerns round A. business ethics and social right. B. the responsibilities of the board of designateors. C. straightforward treatment of stakeholders. D. disclosures and transp atomic number 18ncy. E. each(prenominal) of the above. 2. The most powerful corporate governance order to date has been A. the Sarbanes-Oxley Act (SOX) of 2002. B. the creation of the Ameri potful Institute of Certified human beings Accountants. C. Corporate Ethics Code of 2005. D. the regulation of stock-take solicitude practices by the SEC. . The Sarbanes-Oxley Act (SOX) of 2002 does not specific completelyy prohibit an individualistic auditor from perform the sideline non-audit function(s) for an audit client A. m unrivaledtary instruction systems design and carrying out. B. internal audit outsourcing services. C. tax services. D. expert services. E. SOX specific entirelyy prohibits an in imagineent auditor from do all of all of the non-audit services for an audit client. 4. Which is the pursual descriptions is not sensation of the Seven m adepttary Shenanigans identified by Howard Schilit and listed in Exhibit 10-1 A. ecording tax too soon or that is of a questionable quality. B. boosting income with wizard-time gains. C. failing to memorialise intangible assets which the company has ownership rights to. D. shifting future day expenses to the current burden as a special charge. E. failing to record or improperly reducing liabilities. 5. The explanatory line of businesss to the financial rehearsals A. should be referred to if to a greater extent than a cursory, and possibly misleading impression of a pie-eyeds financial position and its results of ope balancens is to be achieved. B. argon not an integral part of the financial statements. C. nclude a long deal of detailed information that is potentially helpful tho to a financial analyst making a detailed appraisal of the future prospects of the entity. D. be apply by many entities to hide information from the commentator of the financial statements by including in the explanatory notes information that should be shown in detail on the financial statements themselves. 6. The nature and content of disclosures relate to all of the following except A. rule of be changes. B. segment information. C. fair market nourish. D. contingencies and commitments. E. events attendant to the balance sheet date. . Which of the following is nota topic that is liable(predicate) to be discussed as a significant accounting policy? A. Depreciation method. B. Earnings per partake of special K teleph one(a) line calculation details. C. Inventory valuation method. D. Method of estimating regretful accounts due. 8. The explanatory notes to the financial statements A. be not an integral part of the financial statements. B. explain the significant acco unting policies of the company. C. normally disclose the amount of the companys big debts expense. D. describe troubles product development plans for the coming social class. 9.Significant accounting policies atomic number 18 depict in the explanatory notes to the financial statements because A. there isnt enough space for them to be include in the captions of the financial statements. B. if the accrual basis of accounting is used, unified of revenues and expenses whitethorn not take place. C. the reader mustiness be cognizant of which of the alternate(a) generally reliable accounting practices meet been used. D. none of the above. 10. When an entity changes its accounting from one generally accepted method to another generally accepted method A. financial statements of all prior social classs are changed to conserve comparability. B. n explanatory note stating that the change was approved by the fiscal Accounting Standards Board is needed. C. the dollar effect of the change on both the balance sheet and income statement must be disclosed. D. changes like this are not permitted. 11. The impact of changing legal injury directs on amounts narrativeed in financial statements is A. reported as a separate item on the balance sheet. B. accomplished by reporting assets at their replacement personify. C. required to be described in the explanatory notes to the financial statements. D. encouraged, but not required to be described in the explanatory notes to the financial statements. 2. prudences statement of responsibility A. explains that the entitys financial statements are the responsibility of the entitys auditors. B. states that the financial statements are uninvolved of significant error. C. affirms that management is responsible for assuring adherence to internal maintain policies and procedures. D. guarantees that the firm has operated in a highly ethical manner. 13. Firms that issue registered securities are required to file, with the SEC on an annual basis, which of the following? A. An annual report. B. A prospectus. C. A form 10-K. D. A set of financial statements. E. both of the above. 14. A firms property dividends were $3. 96 per dispense of super C bank line for calendar 2006. In 2007 the dividing line was split 3 for 1, and in 2008 a 10% descent dividend was issued. Dividends per appropriate for 2006, to be reported in the firms annual report for 2008, are A. $3. 96 B. $1. 45 C. $1. 32 D. $1. 20 15. Business segment information is included in the explanatory notes to financial statements because A. the amounts shown on the financial statements of most companies are just too large to comprehend. B. current and potential investors can fool more informed judgments about the company. C. et income from various geographic areas can be clearly curbd. D. by combining these amounts for each segment, ROI and funds flows for the company as a whole can be de terminalined. 16. For 2006, Skresso Co. reported $3. 6 4 of gelt per share of greenness timeworn. During 2007 the firm had a 4% common decline dividend. 2006 dough per share to be reported in the annual report for 2007 are A. $3. 79 B. $3. 64 C. $3. 50 D. $3. 49 17. solicitudes statement of responsibility A. usually refers to the companys system of internal controls. B. emphasizes that the auditors are responsible for the financial statements. C. ncludes a disclaimer of responsibility for the level of the P/E proportionality of the companys common occupation. D. gives the president of the company an opport building blocky to explain why profits changed. 18. Which of the following is the proper paragraph sequence for an independent Auditors Report? A. Scope, introduction, cerebproportionn. B. Introduction, scope, opinion. C. Opinion, scope, summary. D. Introduction, opinion, scope. 19. A firms independent auditors gravel the responsibility to A. assess the firms accounting policies. B. ascertain the firms profit potential. C. queer all fraudulent activities. D. assess managements discussion and analysis. 0. The independent auditors report usually A. presents a clean bill of health for the company. B. refers to the quality of the companys products or services. C. includes an opinion that the financial statements are correct. D. includes an opinion that the financial statements present fairly, in all natural respects, financial information about the company. 21. An audit conducted in amity with generally accepted auditing standards includes each of the following except A. examination, on a test basis, of evidence supporting the amounts and disclosures in the financial statements. B. valuation of the strength and effectiveness of management. C. assessment of the accounting principles used and significant estimates do by management. D. planning and performance of the audit to obtain reasonable assurance that the financial statements are free of material misstatements. 22. Which one of the following metho ds is no perennial a Generally Accepted Accounting Method? A. Purchase accounting. B. uncontaminating market order method. C. Pooling method. D. None of the Above. 23. Which of the following require an explanatory note in the independent auditors report. A. basing the opinion on the school of another auditor.B. Uncertainties about the outcome of a significant event that would have affected the unveiling of the financial statement. C. Substantial doubt about the entitys viability to continue as a going concern. D. None of the above. E. Items a, b and c are correct. 24. A management that wanted to augment the financial supplement of its firm would A. raise surplus capital by merchandising common tune. B. use excess hard funds to purchase preferred stock for the treasury. C. raise add upitional capital by exchange inflexible fill rate long-term bonds. D. try to extend its ROI by increasing asset swage. 25.For the fiscal year ended process 31, 2007, a company reported pelf per share of $3. 25 and property dividends per share of $0. 50. During fiscal 2008, the company had a 3 for 2 stock split. In the annual report for the fiscal year ended swear out 31, 2008, earnings per share and cash dividends for fiscal 2007 would be reported, respectively, as A. $3. 25 and $0. 50 B. $4. 85 and $0. 75 C. $2. 17 and $0. 33 D. $1. 09 and $0. 17 26. monetary leverage A. arises because most borrowed funds have a ameliorate interest rate. B. arises because most borrowed funds have a protean interest rate. C. usually has no bearing on the risk associated with a company.D. is a pattern that does not apply to individuals. 27. A potential identificationors judgment about granting credit would be most influenced by the potential customers A. current dimension at the end of the prior fiscal year. B. most juvenile acid-test ratio. C. path of acid-test ratio over the past three years. D. practice with respect to taking cash discounts arrive atered by current suppliers. 28. Another term for the price/earnings ratio is A. monetary think of ratio. B. gross revenue quadruple. C. earnings multiple. D. profit ratio. 29. An entitys current ratio go away be influenced by A. the inventory approach flow assumption used. B. riting off an overdue account receivable against the allowance for uncollectible accounts. C. the depreciation method used. D. issuance of a stock dividend. 30. If a firms debt ratio were 25%, its debt/ honor ratio would be A. 25%. B. 50%. C. 33. 33%. D. 75%. 31. An individual interested in making a judgment about the positivity of a company should A. review the trend of working capital for some(prenominal)(prenominal) years. B. calculate the companys ROI for the most recent year. C. review the trend of the companys ROI for several years. D. oppose the companys ROI for the most recent year with the industry average ROI for the most recent year. 2. Which of the following is not a category of financial statement ratios? A . Financial leverage. B. Liquidity. C. Profitability. D. Prospectus. 33. When a firm has financial leverage A. ROI depart be great than ROE. B. ROI allow usually be less than it would be without leverage. C. risk is greater than if there isnt any leverage. D. the firm pull up stakes always have a high ROE than it would without leverage. 34. When a corporation has both common stock and preferred stock outstanding A. dividends on preferred stock are give only if the company has current earnings. B. ividends on preferred stock must be paid before dividends on common stock can be paid. C. preferred stockholders receive the very(prenominal) dividend per share as common stockholders. D. dividends on preferred stock are paid only if dividends are to be paid on the common stock. 35. A leverage buyout refers to A. one firm issues stock to take over another firm. B. one firm trades its stock for the stock of another firm. C. a firm goes hard into debt in order to obtain the funds to p urchase the shares of the public stockholders. D. one firm pays cash for the shares of a takeover firms shares. 36.The dividend payout ratio describes A. the proportion of earnings paid as dividends. B. the relationship of dividends per share to market price per share. C. the character change in dividends this year compared to last year. D. dividends as a region of the price/earnings ratio. 37. The price/earnings ratio A. is a amount of the relative expensiveness of a firms common stock. B. does not usually change by more than 1. 0 (e. g. 8. 2 to 9. 2) during the year. C. can be used to determine the cash dividend to be received during the year. D. is calculated by dividing the earnings multiple by net income. 38.If a firms payment terms for gross revenue made on account to its customers were 2/10, n30, the number of days sales in accounts receivable would be expected to be A. less than 10. B. mingled with 10 and 25. C. mingled with 25 and 40. D. over 40. 39. A common size inc ome statement A. uses the kindred dollar amount of revenues for each year. B. expresses items as a percentage of revenues. C. makes comparisons between years more difficult. D. is useful in estimating the impact of inflation. 40. watchfulnesss use of resources can best be evaluated by foc utilize on measures of A. liquidity. B. bodily function. C. leverage. D. book value. 41.Asset turnover calculations A. are made by dividing the average asset balance during the year by the sales for the year. B. are made by dividing sales for the year by the asset balance at the end of the year. C. communicate information about how promptly the entity pays its bills. D. should be evaluated by observing the turnover trend over a plosive speech sound of time. 42. The comparison of application measures of different companies is confused by the fact that A. different inventory monetary value flow assumptions may be used. B. dollar amounts of assets may be significantly different. C. only one of t he companies may have preferred stock outstanding.D. the number of shares of common stock issued may be significantly different. 43. A higher P/E ratio means that A. the stock is more reasonably priced. B. the stock is comparatively expensive. C. investors are wary of the stock. D. earnings are expected to decrease. 44. Which of the following is(are) an sample of a measure of leverage? A. Debt yield. B. Debt payout ratio. C. Preferred dividend coverage ratio. D. Debt/equity ratio. E. All of the above. 45. The inventory turnover calculation A. is wrong unless monetary value of goods sold is used in the numerator. B. is wrong unless sales is used in the numerator. C. s an alternative way of expressing the number of days sales in inventory. D. requires knowledge of the inventory constitute flow assumption being used. 46. Book value per share of common stock of a manufacturing company A. is not a very useful measure most of the time. B. is calculated by dividing market value per share by earnings per share. C. reflects the fair market value of the companys stock. D. is the same as the entirety balance sheet asset value per share of common stock. 47. If the P/E ratio of a companys common stock were 12, and its earnings were $ 2. 50 per common share A. the market value of the common stock would be $20. 3 per share. B. the market value of the common stock would be $25. 00 per share. C. an add in earnings of $0. 20 per share, with no change in the multiple, would result in a market price increase of $2. 40 per share. D. an increase in earnings of $0. 20 per share, with no change in the multiple, would result in a market price increase of $1. 67 per share. 48. The concept of operate leverage refers to which of the following? A. operating(a) income changes proportionally more than revenues for any given change in exercise level. B. Operating income changes proportionately less than revenues for any given change in body process level.C. Operating income changes p roportionately more than income for any given change in activity level. D. Operating income changes proportionately less than income for any given change in activity level. 49. As the amount of money ledger of activity changes A. the total of protean greets changes. B. the total of hardened bells changes. C. variable represents per whole change. D. fixed monetary values per unit stay the same. 50. A firm has revenues of $120,000, a voice valuation reserve ratio of 30%, and fixed expenses that total $56,000. If revenues increase $20,000, then A. operating income go out increase by $6000. B. operating income provide be 0.C. fixed expenses will increase $8000. D. the parcel adjustment ratio will increase by 1/8. 51. Each of a companys several product lines has a different contribution margin ratio. wide-cut sales in 2007 were 20% higher than total sales in 2006. Total contribution margin for 2007 will be A. the same as it was in 2006, careless(predicate) of changes in s ales mix. B. 20% higher than it was in 2006, regardless of changes in sales mix. C. more than 20% higher than it was in 2006, if the sales mix changes and proportionately more high contribution margin ratio products are sold in 2007 than in 2006. D. ess than 20% higher than it was in 2006, if the sales mix changes and proportionately more high contribution margin ratio products are sold in 2007 than in 2006. For questions 52, 53, 66, 79 and 84 the following graph is needed. pic 52. If sales mass were to decrease 10%, from 4,000 units per month to 3,600 units per month, operating income would A. not change B. decrease $10,000 C. decrease $24,000 D. decrease $40,000 53. If the interchange price per unit were to drop $2, from $ ascorbic acid to $98, the sales volume were to increase 500 units to 4,500 units per month, and advertising expense were to increase by $1,000 A. he break-even foreshadow would increase. B. the break-even point would decrease. C. the contribution margin rati o would increase. D. operating income would decrease. 54. The damage of a single unit of production in excess of the breakeven point in units is A. its fixed toll and variable cost. B. its fixed cost only. C. its variable cost only. D. none of the above. For questions 55 and 64 the following graph is needed. pic 55. Using the high-low method, the variable rate for maintenance is A. $0. 40 B. $0. 80 C. $1. 20 D. $2. 50 56. The term relevant throw refers to A. the range of activity where cost will fluctuate. B. he range of activity where fixed be change as activity changes. C. the range of activity where total variable cost remains changeless as activity changes. D. the range of activity where cost relationships are valid. 57. A firms products have an average contribution margin ratio of 40%, which will be maintained for the next month even though fixed expenses are expected to rise by $20,000. In order to go by operating income for the month from being affected, revenues will h ave to increase by A. $ 8,000 B. $12,000 C. $20,000 D. $50,000 58. The cost conventionalism for monthly customer order touch on cost has been established as $100 + $0. 5 per order. It is expected that 5,600 orders will be processed in May and 6,400 in June. Total order processing cost for May and June combined will be estimated to be A. $ 940 B. $1,060 C. $2,000 D. $2,500 59. The contribution margin ratio always decreases when the A. breakeven point decreases. B. fixed expenses increase. C. selling price increases and the variable be remain immutable. D. variable cost increase and the selling price remains constant. 60. Knowledge about the demeanour pattern of a cost is important to understanding the effect on net income of a change in sales volume because as sales volume changes A. et income will change proportionately. B. the effect on net income will depend on the behavior pattern of various be. C. fixed costs will rise proportionately. D. variable costs will not change. 61 . Management accounting is A. a highly technical subject that people in military obligate or engineering should not be expected to understand. B. performed by individuals who rarely work with people in other functional areas of the organization. C. the principal activity involved in determining the goals and objectives of the entity. D. an activity that gets involved with virtually all of the other functional areas of the organization. 62.What percentage of the contribution margin is profit on units sold in excess of the breakeven point? A. Its 50% to the contribution margin ratio. B. Its equal to the variable cost ratio. C. Its equal of the gross profit ratio. D. Its 100%. 63. ABU Co. has several products, each with a different contribution margin ratio. If the same number of units were sold in July as in June, but the sales mix changed A. operating income would be the same in June and July. B. fixed expenses in July would be in a different relevant range than in June. C. the co mpanys overall contribution margin ratio would be the same in June and July.D. total contribution margin in July would be different from that in June. 64. Using the high-low method, the monthly fixed component of maintenance cost is A. $1,600 B. $1,200 C. $1,100 D. $1,300 65. When the cost behavior pattern has been identified as fixed at a certain volume of activity A. any change in volume will probably cause the cost to change. B. it is appropriate to express the cost on a per unit of activity basis. C. the total cost will not change even if the volume of activity changes substantially. D. the total cost may change if the volume of activity changes substantially. 66.The break-even point volume of units is A. 0 B. 360 C. 720 D. 1000 67. An example of a cost likely to have a fixed behavior pattern is A. sales fury commission. B. production industry wages. C. advertising cost. D. electricity cost for incase equipment. 68. The formula for expressing the total of a fixed, variable, o r mixed cost at any level of activity is A. total cost = fixed cost + (variable rate * volume of activity) B. total cost = fixed cost * volume of activity C. total cost = fixed cost * variable rate D. total cost = fixed cost variable cost 69. As the level of activity decreases A. fixed cost per unit decrease.B. variable cost per unit decrease. C. fixed cost remains constant in total. D. variable cost remains constant in total. 70. The contribution margin format income statement is organized by A. responsibility centers. B. functional classifications. C. sales territories. D. cost behavior classifications. 71. As the level of activity increases A. fixed cost per unit increase. B. variable cost per unit increase. C. variable cost per unit decrease. D. fixed cost per unit decrease. 72. managerial accounting supports the management process most significantly by A. meter and reporting financial results after the fact.B. determining the goals and objectives of the entity. C. providing e stimates of financial results for various plans. D. establishing operating policies to be followed during a period of time. 73. An example of a cost that is likely to have a variable behavior pattern is A. sales force salaries. B. depreciation of production equipment. C. salaries of production supervisors. D. production labor wages. 74. A 10% change in a firms revenues is likely to result in a change of more than 10% in the firms operating income because A. not all of the firms costs will change in proportion to the revenue change.B. the firm has financial leverage. C. the contribution margin ratio will change in proportion to the revenue change. D. only fixed expenses will change in proportion to the revenue change. 75. An example of a cost likely to have a mixed behavior pattern is A. sales force commission. B. sore material cost. C. depreciation of production equipment. D. electricity cost for the manufacturing plant. 76. Cost behavior refers to A. costs that are both good and b ad. B. costs that increase at a quicker rate than others. C. costs that decrease at a quicker rate than others. D. costs that are variable or fixed. E. one of the above. 77. Which of the following statements doesnot describe a characteristic of management accounting? A. Management accounting must conform to GAAP. B. Approximate amounts rather than accurate amounts or refined estimates are often used in management accounting. C. Management accounting places a great deal of emphasis on the future. D. Management accounting is more concerned with units of the organization rather than with the organization as a whole. 78. Simplifying assumptions made when using cost behavior pattern selective information include A. relevant range and liquidity. B. fixed activity and linearity.C. relevant range and linearity. D. activity range and variability. 79. The contribution margin ratio is A. 40% B. 60% C. 62. 5% D. 70% 80. Which of the following terms do not turn out on the contribution margin fo rmat income statement A. gross profit. B. contribution margin. C. operating income. D. variable expenses. 81. A management decision that would have a long term influence on the operating leverage of a firm would be A. increasing the advertising budget. B. substituting robots for hourly paid production workers. C. increasing prices in proportion to raw material cost increases.D. having a season-end sale of seasonal products. 82. Which of the following activities is not part of the management planning and control cycle A. data collection and performance feedback. B. implementation of plans. C. providing information to investors and creditors. D. revisiting plans. 83. The relevant range concept refers to A. a firms range of profitability. B. a firms range of sales. C. a firms range of rates of return. D. a firms range of activity. 84. The break-even point in terms of total revenues per month is A. $30,000 B. $60,000 C. $75,000 D. $100,000 85.When the high-low method of estimating a cos t behavior pattern is used A. cost and volume data must be reviewed for outliers. B. the direct result of the high-low calculations is the fixed expense amount. C. the highest and lowest sales price and volume amounts are used in the calculation. D. the resulting cost formula will explain total cost accurately for all value between the high and low volumes. 86. The shift in the amount of manufacturing bash costs applied to the mix of products produced that occurs when using a single cost driver rate as compared to using activity-based costing rates is know as A. nderapplied strike B. overapplied bang C. cost dousing D. cost optical aberration 87. An excess of cost of goods make over cost of goods sold for the period represents A. an increase in gross profit. B. a decrease in work in process inventory. C. overapplied manufacturing overhead. D. an increase in finished goods inventory. 88. A predetermine overhead rate is used to A. keep track of actual overhead costs as they ar e incurred. B. assign indirect costs to cost objects. C. establish prices for manufactured products. D. allocate selling and administrative expenses to manufactured products. 9. Which of the following will cause income determined with absorption costing to be higher than income determined with direct costing? A. units produced equals units sold. B. units produced is greater than units sold. C. units produced is less than units sold. D. income determined with absorption costing will always equal income determined with direct costing. 90. The overhead component of product cost is A. the sum of the actual overhead costs incurred in the manufacture of the product. B. likely to be the same amount for every product made by the company. C. n estimated amount based on labor hours, machine hours, or some other activity. D. determined at the end of the year when actual costs and actual production are known. 91. For the partial value chain functions given below, which sequence is correct? A. d esign, production, marketing B. marketing, production, distribution C. research and development, production, distribution D. customer service, marketing, distribution 92. Total manufacturing costs for the month on the statement of costs of goods manufactured equals A. variable costs + fixed costs + mixed costs. B. work in process inventory finished goods inventory.C. cost of goods sold cost of goods manufactured. D. cost of raw material used + direct labor cost incurred + manufacturing overhead applied. 93. An example of a cost likely to have an indirect relationship with products being manufactured A. production labor costs. B. raw material costs. C. electricity costs for packaging equipment. D. none of the above. 94. Costs may be allocated to a product or activity for many purposes, but care must be exercised when using allocated costs because A. direct costs identified with the product or activity may not be accurately assigned.B. fixed costs will change in total if the volume of activity changes. C. all costs may not have been allocated to the product or activity. D. arbitrarily allocated costs may not behave in the way assumed in the allocation method. 95. The production cost of a single unit of a manufactured product is determined by A. dividing total direct materials and direct labor for a production run by the number of units made. B. dividing total direct materials, direct labor, and manufacturing overhead for a production run by the number of units made. C. ividing total direct materials, direct labor, manufacturing overhead and selling expenses for a production run by the number of units made. D. dividing the selling price by the gross profit ratio. 96. An example of a cost that is likely to have a direct relationship with products being manufactured A. sales force salaries. B. depreciation of production equipment. C. salaries of production supervisors. D. production labor costs. 97. The sequence of activities that add value to the organization ar e A. the value processes. B. the chain of production events. C. the value chain. D. the strategic cost initiatives. 8. Which of the following activities is not included in the organizations value chain? A. marketing. B. finance. C. customer service. D. research and development 99. Cost accounting is a subset of A. financial accounting. B. process cost accounting. C. job order cost accounting. D. managerial accounting. 100. The three components of product costs are A. direct material, supervisor salaries, selling expenses. B. direct labor, manufacturing overhead, indirect material. C. direct material, manufacturing overhead, direct labor. D. manufacturing overhead, indirect material, indirect labor.

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