1) Budgets _____. A. ignore areas that are presumed to be running smoothly B. are deviations from a plan C. provide feedback by comparing results with plans and by highlighting deviations from plans
2) Ethical accountants are important to society because _____. A. none of these answers is correct B. they will not go to prison and waste taxpayers’ money C. the information produced is reliable
3) _____ refers to accounting information developed for managers within an organization. A. Managerial accounting B. Tax accounting C. Financial accounting D. Internal auditing
4) Any event that affects the financial position of an organization and requires recording is called a(n)_____. A. account B. accounting change C. posting D. transaction
5) _____ would not appear on the financial statements for a sole proprietorship. A. Cost of Goods Sold B. Unearned Sales Revenues C. Accumulated Depreciation D. Paid-in Capital
6) Valuing assets at replacement cost to facilitate the measurement of “economic income” violates the _____ accounting convention. A. objectivity B. cost benefit C. conservatism D. materiality
7) The statement of cash flows is used for all of the following except_____. A. determining a company’s ability to pay its debts when they are due B. evaluating the creditworthiness of the organization C. revealing commitments that may restrict future courses of action D. showing the relationship of net income to changes in cash
8) Nonoperating items on the income statement_____. A. reflect the effects of financial management decisions B. appear on the income statement immediately after gross profit C. appear only on corporate income statements D. are revenues and expenses arising from adjusting entries
9) Which of the following is not a cost driver of customer services costs? A. All of these answers are correct B. Number of service calls is not a cost driver of customer services costs. C. Hours spent servicing products are not a cost driver of customer services costs. D. Travel costs are not a cost driver of customer services costs.
10) Which value chain function would include depreciation on transportation cost? A. The marketing function would include depreciation on transportation cost B. The production function would include depreciation on transportation cost. C. The distribution function would include depreciation on transportation cost. D. The customer service function would include depreciation on transportation cost.
11) Walnut Corporation sells desks at $480 per desk. The costs associated with each desk are as follows: Direct materials $195 Direct labor 126 Variable factory overhead 51 Total fixed costs for the period are $456,840. The contribution margin per desk is _____. A. $12