Quiz Facts 6/ Business - Accounting And Taxation

An operational audit is designed to

The accounts receivable turnover ratio is computed by dividing __________ by average accounts receivable

The budgetary authority process for a federal agency begins with the Treasury Department issuing a warrant granting the agency the authority to withdraw funds.

4

Which of these is not a correct citation to the Internal Revenue Code?

5

A control is an activity performed to minimize or eliminate risk

6

Cost-based transfer prices are most effective for common high-cost and high-volume standardized services

7

Briefly explain what is meant by "market" in the lower of cost or market (LCM) approach to valuing inventory at the end of a reporting period.

8

A high P/E ratio always indicates that a stock is overpriced by the market

9

If a company uses special journals,

10

Waste on the production line will result in an unfavorable materials price variance.

11

Courtney sells a cottage at the lake that the family had used for their summer vacations. The purchaser paid Courtney $100,000 and assumed the mortgage which had a principal balance of $50,000. Courtney had purchased the cottage five years ago for $170,000. Courtney will recognize

12

What is a quantitative factor? Provide an example

13

City Graphics has the following notes payable transactions. Record these transactions in a general journal.

in Business

July 5
Issued a $3,500 note to Roma Ceramic Inc. The 10%, 60-day note is in full payment of an account payable. 9
Borrowed $5,000 from the bank signing a 6%, 90-day note. 11
Paid $500 cash and issued a $2,000, 8% 30-day note to Design Center in payment of an account payable.Aug. 5
Borrowed $3,600 for 30 days from the bank on a non-interest-bearing note. The discount rate is 10%.Sept. 3
Paid the principal and interest due on the $3,500 note to Roma Ceramic Inc.Oct. 3
Paid the interest due on the $5,000 note to the bank and renewed the principal for 30 days at 7%.
GENERAL JOURNAL
Page 1
Date
Description
PostRef.
Debit
Credit

What will be an ideal response?

14

Determine the missing amount “X” for each of the following: AssetsLiabilitiesStockholders' Equity(a) $78,500$37,600X(b) X$53,280$145,000(c) $49,500X$34,000

15

A(n) ________ is a distinguishable part of a business that is subject to a different set of risks and returns than other parts of the business.

16

The following information has been gathered for the Harrell Manufacturing Company for its fiscal year ending December 31: Actual manufacturing overhead costs$212,500 Actual direct labor hours 54,900 Actual direct labor costs$445,000 Estimated manufacturing overhead costs$210,000 Estimated direct labor$434,000 Estimated direct labor hours 56,000 What is the predetermined manufacturing overhead rate, assuming direct labor cost is used as the activity base?

17

In the cost reconciliation report under the FIFO method, the costs accounted for equals the cost of units transferred out plus the costs added during the period.

18

The cost recovery basis for property converted from personal use to business use may be the fair market value of the property at the time of the conversion

19

Which of the following is the correct formula for calculating return on investment?

20

process in which one party perceives that its interests are being opposed or negatively affected by another party

21

Which of the following is normally considered an accounting estimate?

22

If a company mistakenly counts less items during a physical inventory than actually exist, how will the error affect the cost of goods sold?

23

You can export a report to Excel by selecting:

24

Even though there are no inventories for service companies, ABC systems are of great use for service companies. Explain why and how

25

Claybrooks Corporation has two manufacturing departments-Casting and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: CastingAssemblyTotalEstimated total machine-hours (MHs) 3,000 2,000 5,000Estimated total fixed manufacturing overhead cost$17,700$5,800$23,500Estimated variable manufacturing overhead cost per MH$1.50$2.20 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. That predetermined manufacturing overhead rate is closest to:

26

Refer to the data for Fawnsworth Industries. Based on this information, what is the accounts receivable turnover for the current period?

27

In 2019, Oscar purchases $2,150,000 of equipment. The taxable income of the business before any Section 179 deduction is $20,000. What is Oscar's maximum Section 179 deduction in 2019?

28

In June, one of the processing departments at Furbush Corporation had ending work in process inventory of $14,000. During the month, $424,000 of costs were added to production and the cost of units transferred out from the department was $446,000.In the department's cost reconciliation report for January, the cost of beginning work in process inventory for the department would be:

29

Which of the following sentences uses a verb correctly?

30

Table Corporation transfers one-half of its assets to Chair Corporation in exchange for 100% of Chair Corporation's single class of stock. Following the exchange, Table Corporation distributes the Chair stock ratably to its shareholders. This transaction will constitute a

31

If merchandise sells for $3,500, with terms of 3/15, n/45 and the cost of the inventory sold is $2,100, the amount charged to sales is

32

The Fixed Asset System is similar to the expenditure cycle except

33

Marshall Company sold supplies in the amount of € 25,000 (euros) to a French company when the exchange rate was $1.21 per euro. At the time of payment, the exchange rate decreased to $0.82. Marshall must record a:

34

Avoiding the uncertain sales pitfall may be accomplished by:

35

Joseph Company is preparing to repay a one-year note on May 1, Year 2. The first step in this process is to accrue eight months of interest expense.

36

U.S. accounting standards require organizations to use a two-step process to determine the impairment of goodwill

37

Charles and Camilla got divorced in 2018. Under the terms of the decree Charles pays Camilla $50,000 in cash in each of the next five years (or until Camilla's death or remarriage). In addition, Charles transferred a castle worth $2,000,000 to Camilla in 2018 and will pay $12,000 per year to support their son, Clyde, until he turns 19 years old. What amount (if any) is included in Camilla's gross income in 2019?

38

Use the following information to determine the break-even point in units (rounded to the nearest whole unit): Unit sales50,000 UnitsUnit selling price$14.50Unit variable cost$7.50Fixed costs$186,000

39

The difference in cost between two alternatives is called a(n) ________ cost.

40

Revenues received during an accounting period increase owner's equity

41

If the accounts receivable turnover for the current year has decreased when compared with the ratio for the preceding year, there has been an acceleration in the collection of receivables

42

This organization developed a set of criteria that provide management with a basis to evaluate controls not only over financial reporting, but also over the effectiveness and efficiency of operations and compliance with laws and regulations:

43

Ledford County levied property taxes of $10,000,000, 2% of which is expected to be uncollectible. Prior to this new levy, the county still had $ 350,000 of uncollected taxes from previous years

44

In periods of falling purchase prices and increasing inventory quantities, LIFO results in a _____ than either FIFO or the weighted-average cost-flow assumption

45

Flagstaff Company has budgeted July production of 7,900 units. Variable factory overhead is $1.20 per unit. Budgeted fixed factory overhead is $19,000, which includes $3,000 of factory equipment depreciation. Compute the total budgeted overhead for July.

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Quiz Facts 6/ Business - Accounting And Taxation

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