Indicate whether each of the following statements is true or false.Cost accumulation refers to identifying whether a particular cost is fixed or variable. Cost objects may be departments, sales territories, or individual products. Cost accumulation is not useful in a service-type business. An allocation rate has a cause-and-effect relationship with a cost object. Timeliness of managerial accounting information is more important than its precision.
What will be an ideal response?
| Cost accumulation refers to identifying whether a particular cost is fixed or variable. | False |
| Cost objects may be departments, sales territories, or individual products. | True |
| Cost accumulation is not useful in a service-type business. | False |
| An allocation rate has a cause-and-effect relationship with a cost object. | False |
| Timeliness of managerial accounting information is more important than its precision. | True |
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Refer to the following selected financial information from Gomez Electronics. Compute the company's debt-to-equity ratio for Year 2. Year 2 Year 1 Net sales$487,000? $427,950? Cost of goods sold 278,000? 251,820? Interest expense 11,400? 12,400? Net income before tax 68,950? 54,380? Net income after tax 47,750? 41,600? Total assets 320,500? 298,200? Total liabilities 172,900? 169,000? Total equity 147,600? 129,200?
A. 2.17. B. 1.85. C. 0.85. D. 3.30. E. 1.17.
Factory Overhead has a zero balance after all adjustments, so it is not necessary to close the account at the end of the accounting period
a. True b. False Indicate whether the statement is true or false
If a company sells its bonds at more than face value, the effective interest rate is
A) less than the contract interest rate. B) more than the contract interest rate. C) less than the yield rate. D) more than the yield rate.
Hussain, Inc.'s income statement and other financial information for the current year is presented below.Hussain, Inc.Income StatementFor the year ended December 31Sales revenue $159,131Cost of goods sold 64,360Gross profit 94,771Selling, general, and administrative expenses 11,385Operating income 83,386Interest expense 2,847Income before taxes 80,539Income tax expense 3,414Net income$ 77,125Balance sheet information:Current assets$250,000Noncurrent assets 500,000Current liabilities50,000Long-term debt100,000Required:Part a. Perform vertical analysis of the income statement. (Round to the nearest whole percentage.)Part b. Calculate the debt-to-assets ratio. (Round to two decimal places.)Part c. Calculate the times interest earned ratio. (Round to two decimal places.)Part
d. Evaluate the company's solvency. What will be an ideal response?