The accounting equation can be expressed as (Points : 1) Owners Equity = Assets + Liabilities.

Assets = Liabilities + Owners Equity Assets = Liabilities - Owners Equity. Liabilities = Assets + Owners Equity. 2. Liabilities are defined as (Points : 1) Owners claims on assets. Outsiders claims on assets. Increases in cash. Future economic benefits. 3. Assets are reported on the (Points : 1) Consolidated Income Sheet. Statement of Cash Flows and Other Economic Benefits. Balance Sheet. Income Statement of Continuing Operations. 4. When determining whether to record an asset as a fixed asset, what two criteria must be met? (Points : 1) Must be an investment and must be long-lived. Must be long-lived and must use the asset in a productive manner. Must be long-lived and must be a tangible asset. Must be a tangible asset and must be an investment. 5. Depreciation is (Points : 1) The loss in market value of an asset. The allocation of a long-term assets cost to an expense account over the assets life. An increase in an assets value over time. Writing the asset up or down to market value. 6. Current liabilities are liabilities that (Points : 1) Must be paid in the current operating cycle. Must be paid from revenues. Must be of a definite amount. Are due when the company can pay. 7. Net accounts receivable are (Points : 1) Accounts receivable plus the allowance for doubtful accounts. Accounts receivable less the allowance for doubtful accounts. Accounts receivable less bad debt expense. Sales collections for the period. 8. When a bond sells at a discount, the stated rate of interest is (Points : 1) Equal to the market rate of interest. Unimportant to the purchaser. Less than the market rate of interest. Determined by the government. 9. Stock that has been sold and then repurchased by the issuing corporation is called (Points : 1) Authorized. Issued. Outstanding. Treasury stock.

10. The statement of cash flows reports cash flows for (Points : 1) Investing activities. Operating activities. Financing activities. All of the above. 11. Which of the following costs do NOT change with the level of business activity? (Points : 1) Total fixed costs. Total variable costs. Total direct materials costs. Fixed costs per unit. 12. Opportunity costs are (Points : 1) Considered to be fixed in the short term. Equivalent to sunk costs. Able to be controlled by most effective managers. The value of benefits foregone when one decision is selected over another. 13. Manufacturing overhead costs include (Points : 1) Opportunity costs. Direct materials and direct labor. Indirect materials and direct materials. Indirect labor and indirect materials. 14. A job-order costing system is likely to be used by a(n) (Points : 1) Oil refinery. Breakfast cereal manufacturer. Paint manufacturer. Ship builder. 15. Assuming all other factors are held constant, the break-even point will be decreased by (Points : 1) Increasing the fixed costs. Decreasing the contribution margin. Increasing the selling price. Increasing the variable cost per unit. 16. In managerial accounting, ABC stands for (Points : 1) Actual Based Constraints. Asset-Based Contribution. Activity-Based Costing. Achievement Budget Constraint. 17. If accepting a Not be accepted. Be accepted if the Be accepted if the Be accepted if the special order will cause fixed costs to increase, the order should (Points : 1) incremental revenue exceeds the associated variable costs. incremental revenue exceeds the increase in fixed costs. incremental revenue exceeds the total incremental costs.

18. Cantwell Company is considering an investment in new machinery costing $360,000. The machinery will be depreciated on a straight-line basis over a five-year life and is expected to generate net cash inflows of $70,000 the first year, $80,000 the second year, and $120,000 every year thereafter. The payback period for this investment is (Points : 1)

3.75 years. 3.25 years. 3 years. 4 years. 19. A favorable direct materials efficiency variance indicates that the (Points : 1) Actual quantity of direct materials used was less than the standard quantity for actual output. Actual cost of direct materials was less than the standard cost of direct materials. Standard quantity of direct materials for actual output was less than the actual quantity of direct materials used. Actual quantity of direct materials used was greater than the standard quantity for budgeted output. 20. Responsibility accounting holds that managers should be held responsible for (Points : 1) Only the costs they have personally authorized. All costs charged to their subunit. All costs incurred by their subunit plus a share of company-wide fixed costs. Only the costs which they can control. 21. A machine with a cost of $80,000 has an estimated residual value of $5,000 and an estimated life of 5 years or 15,000 hours. It is to be depreciated by the units-of-production method. What is the amount of depreciation for the second full year, during which the machine was used 5,000 hours? (Points : 1) $5,000 $25,000 $15,000 $26,667 22. Which of the following best describes accounting? (Points : 1) records economic data but does not communicate the data to users according to any specific rules is an information system that provides reports to users is of no use by individuals outside of the business is used only for filling out tax returns and for financial statements for various types of governmental reporting requirements 23. Which of the following entries records the acquisition of office supplies on account? (Points : 1) Office Supplies, debit; Cash, credit Cash, debit; Office Supplies, credit Office Supplies, debit; Accounts Payable, credit Accounts Receivable, debit; Office Supplies, credit 24. The revenue recognition concept (Points : 1) is not in conflict with the cash method of accounting. determines when revenue is credited to a revenue account. states that revenue is not recorded until the cash is received. controls all revenue reporting for the cash basis of accounting. 25. There are four closing entries. The first one is to close ____, the second one is to close ____, the third one is to close ____, and the last one is to close ____. (Points : 1) Revenues, expenses, income summary, drawing account Expenses, assets, income summary, capital account Capital account, drawing account, income summary, assets Drawing account, income summary, expenses, revenues 26. A company, using the periodic inventory system, has merchandise inventory costing $175 on hand at the beginning of the period. During the period, merchandise costing $635 is purchased. At year-end,

merchandise inventory costing $160 is on hand. The cost of merchandise sold for the year is (Points : 1) $970 $650 $300 $620 27. The inventory method that assigns the most recent costs to cost of goods sold is (Points : 1) FIFO. LIFO. average. specific identification. 28. Harris Company had checks outstanding totaling $15,400 on its May bank reconciliation. In June, Harris Company issued checks totaling $64,900. The June bank statement shows that $37,600 in checks cleared the bank in June. A check from one of Harris Company's customers in the amount of $300 was also returned marked "NSF." The amount of outstanding checks on Harris Company's June bank reconciliation should be (Points : 1) $49,500. $53,000. $37,600. $42,700. 29. Dorman Co. sold merchandise to Smith Co. on account, $18,000, terms 2/15, net 45. The cost of the merchandise sold is $15,500. Dorman Co. issued a credit memo for $1,750 for merchandise returned that originally cost $1,400. The Smith Co. paid the invoice within the discount period. What is amount of net sales from the above transactions? (Points : 1) $16,250 $14,100 $15,925 $13,818 30. The currency in which a company presents its financial statements is known as the: (Points : 1) Multinational currency. Price-level-adjusted currency. Specific currency. Reporting currency.