ACCT 301 Midterm Exam Solution

ACCT 301 Midterm Exam Solution Perfect Score

(TCO 1) Which pair of accounts follows the rules of debit and credit, in relation to increases and decreases, in the same manner?

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(TCO 2) Which of the following is not part of the recording process?

(TCO 3) Two individuals at a retail store work the same cash register. You evaluate this situation as which of the following?

(TCO 4) The retained earnings statement shows all of the following except which one?

(TCO 5) In the annual report, where would a financial statement reader find out if the company’s financial statements give a fair depiction of its financial position and operating results?

(TCO 6) Using the following balance sheet and income statement data, what is the earnings per share?

(TCO 4) A useful measure of solvency is which of the following?

(TCO 11) Managerial accounting does which of the following?

(TCO 11) Which one of the following is not a direct material?

(TCO 11) Which of the following are period costs?

(TCO 11) Ranger Company reported total manufacturing costs of $65,000, manufacturing overhead totaling $13,000, and direct materials totaling $16,000. How much is direct labor cost?

(TCO 11) McNally Manufacturing Company reported the following year-end information:

(TCO 5) Which one of the following is not an assumption of CVP analysis?

(TCO 5) A company has total fixed costs of $210,000 and a contribution margin ratio of 30%. How much sales are necessary to break even?

(TCO 5) How much sales are required to earn a target income of $90,000, if total fixed costs are $100,000 and the contribution margin ratio is 40%?

(TCO 6) Which one of the following is not a benefit of budgeting?

(TCO 6) Under what situation might a budget be most effective?

(TCO 6) What three differences exist between long-range planning and budgeting?

(TCO 6) Which one of the following is a source of information used to prepare the budgeted income statement?

(TCO 7) When is a static budget most appropriate in evaluating a manager’s performance?

(TCO 7) Which type of center is the toy department in a Wal-Mart store?

(TCO 7) The best measure of the performance of the manager of a profit center is which of the following?

(TCO 7) An investment center generated a contribution margin of $200,000, controllable fixed costs of $100,000 and sales of $1,000,000. The center’s average operating assets were $400,000. How much is the return on investment?

(TCO 11) Assume you have just taken a position as controller for a new company that manufactures and sells wrought iron wall hangings. Although the founder of the company, who is the president and CEO, is a great artisan, she has very limited knowledge of accounting.

Instructions

To help your new boss better understand accounting for a manufacturing organization, prepare a response to her in which you: (1) identify, (2) describe, and (3) provide examples of the three manufacturing costs used in accounting for a manufacturing company.

(TCO 4) Are short-term creditors, long-term creditors, and stockholders primarily interested in the same characteristics of a company? Explain.

(TCO 1) Management’s views on the company’s short-term debt paying ability, expansion financing, and results of operations are found in which of the following?

(TCO 3) Joe is a warehouse custodian, and also maintains the accounting record of the inventory held at the warehouse. An assessment of this situation indicates

(TCO 11) Neeley Manufacturing Company reported the following year-end information

(TCO 5) What effect do changes in activity have on fixed costs per unit?