Final exam ACCT 510 2014-15 MASTER LM ACCT510 Sp-Sum15 SE2 1

Final exam ACCT 510 2014-15 MASTER LM ACCT510 Sp-Sum15 SE2 1

  1. Accounts receivable occur from credit sales to customers.
  2. Credit sales are recorded by crediting an Accounts Receivable.
  3. As long as a company accurately records total credit sales information, it is not necessary to have separate accounts for specific customers
  4. If a customer owes interest on accounts receivable, Interest Revenue is debited and Accounts Receivable is credited
  5. If a credit card sale is made, the seller can either debit Cash or debit Accounts receivable at the time of the sale depending on the type of credit card.
  6. Accounts receivable information for specific customers is important because it reveals
  7. A credit sale of $3,275 to a customer would result in
  8. Sellers allow customers to use credit cards
  9. A promissory note received from a customer in exchange for an account receivable
  10. The person who signs a note receivable and promises to pay the principal and interest is the
  11. A corporation is a legal entity separate from its owners
  12. c orporations are subject to substantially fewer regulations and laws than are proprietorships and partnerships
  13. Organization expenses of a corporation often include legal fees and promoter fees.
  14. The only way that a shareholder can affect the management of a corporation is to get elected to the corporation’s board of directors.
  15. Common shareholders always share equally with all other shareholders in all dividends
  16. The costs of bringing a corporation into existence, including legal fees, promoter fees, and amounts paid to obtain a charter are called:
  17. The right of common shareholders to protect their proportionate interest in a corporation by having the first opportunity to buy additional proportionate shares of common stock issued by the corporation is called a
  18. The board of directors of a corporation
  19. The number of shares that a corporation’s charter allows it to sell is referred to as
  20. Par value of a stock refers to the
  21. Long-term investments are usually held as an investment of cash for use in current operations
  22. Long-term investments can include funds earmarked for special purposes such as bond sinking funds.
  23. Bond sinking funds are examples of short-term investments
  24. Equity securities reflect a creditor relationship such as investments in notes, bonds, and certificates of deposit.
  25. Short-term investments are intended to be converted into cash within the longer of one year or the current operating cycle of the business, and are readily convertible to cash
  26. Long-term investments
  27. Short-term investments
  28. Long-term investments are reported in the
  29. NSC Corporation has invested in 10% of the outstanding stock of VC Corporation. NSC intends to actively manage this investment for profit. This investment is classified as
  30. Debt securities:
  31. The primary purpose of the statement of cash flows is to report all major cash receipts (inflows) and cash payments (outflows) during a period
  32. The statement of cash flows reports and proves the net change in cash for a reporting period
  33. To be classified as a cash equivalent, the only criterion an item must meet is that it must be readily convertible to a known amount of cash.
  34. The statement of cash flows explains the difference between the beginning and ending balances of cash and cash equivalents.
  35. Internal users of the statement of cash flows often use cash flow information to plan day-to-day operating activities and make long-term investment and financing decisions.
  36. A cash equivalent is an investment that.
  37. An investment that is readily convertible to a known amount of cash and that is sufficiently close to its maturity date so that its market value is relatively insensitive to interest rate changes is a(n)
  38. Activities that involve the production or purchase of merchandise and the sale of goods and services to customers, including expenditures related to administering the business, are classified as
  39. The appropriate section in the statement of cash flows for reporting the purchase of equipment for cash is.
  40. Which of the following items is reported on the statement of cash flows under financing activities?
  41. Financial statement analysis is the application of analytical tools to general-purpose financial statements and related data for making business decisions
  42. Financial statement analysis lessens the need for expert judgment.
  43. One purpose of financial statement analysis for internal users is to provide information helpful in improving the company’s efficiency and effectiveness in providing products and services.
  44. A company’s board of directors analyzes financial statements to assess future company prospects for making operating decisions.
  45. Evaluation of company performance can include comparison and/or assessment of:
  46. External users of financial information.
  47. Internal users of financial information.
  48. The building blocks of financial statement analysis include
  49. Financial reporting refers to:
  50. The ability to generate future revenues and meet long-term obligations is referred to as
  51. Cost accounting systems accumulate costs and then assign them to products or services.
  52. Cost accounting information is helpful to management in controlling costs but has no effect on pricing decisions.
  53. A company that produces a large number of standardized units would normally use a job order cost accounting system.
  54. Job order production systems would be appropriate for companies that produce compact disks or disposable cameras.
  55. A system of accounting for production operations that produces timely information about inventories and manufacturing costs per unit of product is a.
  56. In comparison to a general accounting system for a manufacturing company, a cost accounting system places an emphasis on:
  57. The two basic types of cost accounting systems are:
  58. A job order cost accounting system would best fit the needs of a company that makes:
  59. Dell Builders manufactures each house to customer specifications. It most likely would use:
  60. Target cost is calculated as:
  61. Process manufacturing usually reflects a manufacturer that produces large quantities of identical products.
  62. Equivalent units of production refer to the number of units that would be completed if all effort during a period had been applied only to those units that were started and completed in a period.
  63. Equivalent units of production are always the same as the total number of physical units finished during the period.
  64. Equivalent units of production is an engineering term used to describe the process by which one company attempts to manufacture units of a product that are equivalent to the product manufactured by a competitor.
  65. The process cost summary is an important managerial accounting report produced by a process cost accounting system.
  66. Which of the following characteristics does not usually apply to process manufacturing systems?
  67. Which of the following characteristics applies to process cost accounting but not to job order cost accounting?
  68. Equivalent units of production are equal to:
  69. Which of the following is the best explanation for why it is necessary to calculate equivalent units of production in a process costing environment?
  70. Which of the following isnotone of the four steps in accounting for production activity and assigning costs during a period under a process cost system?
  71. External users include lenders, shareholders, customers, and regulators.
  72. Internal users include lenders, shareholders, brokers and managers.
  73. The area of accounting aimed at serving the decision making needs of internal users is:
  74. All of the following regarding a Certified Public Accountant are except:
  75. The first step in the processing of a transaction is to analyze the transaction and source documents.
  76. Source documents provide evidence of business transactions and are the basis for accounting entries.
  77. An account is a record of increases and decreases in a specific asset, liability, equity, revenue, or expense item.
  78. Land and buildings are generally recorded in the same ledger account
  79. A fiscal year refers to an organization’s accounting period that spans twelve consecutive months or 52 weeks.
  80. Two main accounting principles used in accrual accounting are matching and full closure.
  81. Adjusting entries are necessary so that asset, liability, revenue, and expense account balances are correctly recorded.
  82. The matching principle does not aim to record expenses in the same accounting period as the revenue earned as a result of these expenses.
  83. Accounts that appear in the balance sheet are often called temporary (nominal) accounts.
  84. Closing revenue and expense accounts at the end of the accounting period serves to make the revenue and expense accounts ready for use in the next period.
  85. The first five steps in the accounting cycle include analyzing transactions, journalizing, posting, preparing an unadjusted trial balance, and recording adjusting entries.
  86. Current assets and current liabilities are expected to be used up or come due within one year or the company’s operating cycle whichever is longer.
  87. A merchandising company:.
  88. Cost of goods sold:.
  89. The following statements regarding gross profit are except:
  90. The following statements are regarding the operating cycle of a merchandising companyexcept
  91. Regardless of the inventory costing system used, cost of goods available for sale must be allocated at the end of the period between
  92. Costs included in the Merchandise Inventory account can include all of the followingexcept:
  93. Physical counts of inventory:.
  94. During a period of steadily rising costs, the inventory valuation method that yields the lowest reported net income is:
  95. The five fundamental principles of accounting information systems are.
  96. The basic components of an accounting information system include all of the followingexcept: Warehouses
  97. Source documents:
  98. An internal control system consists of all of the following policies and proceduresexceptones designed to:
  99. The principles of internal control include:

100.A properly designed internal control system:

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