Acc/561 Sample Final Examination

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ACC/561 Sample Final Examination

Week One: Decision Making

Objective: Explain the role of budgets and performance reports in the management decision-making process.

1. The Hola Company held a Christmas party. The company expected attendance of 100 persons and prepared the following budget:

Hotel room rental $600

Totals $2,200

After all bills for the party were paid, the total came to $2,315. Details are $575 for hotel room rental, $640 for food, $750 for entertainment, and $350 for decorations. 100 persons attended the party. What is the main reason for the unfavorable total budget variance? a. Hotel room rental is the main reason.

b. Food is the main reason.
c. Entertainment is the main reason.
d. Decorations are the main reason.

Objective: Explain the role of budgets and performance reports in the management decision-making process.

2.Below is a statement from the Institute of Management Accountants’ Statement of Ethical Professional Practice.

“Communicate information fairly and objectively.”

It is an example of __________.
a. competence
b. confidentiality
c. integrity
d. objectivity

Objective: Evaluate relevant accounting information for business decision making.

3. All of the following companies had significantly faulty accounting information in the past 10 years except __________. a. Enron
b. Tyco
c. Xerox®
d. Microsoft®

Week Two: Financial Statements

Objective: Apply the concepts, techniques, and conventions of basic financial accounting.

4. Upland Company purchased $4,000 of inventory, paying cash for 25% of the purchase, with the remainder on account. Upland Company should debit__________. a. Cash for $1,000, debit Accounts Payable for $3,000, and credit Inventory for $4,000 b. Cash for $1,000, debit Note Payable for $3,000, and credit Inventory for $4,000 c. Inventory for $4,000, credit Cash for $1,000, and credit Note Payable for $3,000 d. Inventory for $4,000, credit Cash for $1,000, and credit Accounts Payable for $3,000

Objective: Identify how measurement conventions affect financial reporting.

5. The use of acquisition cost less depreciation in valuing an asset on the balance sheet is the logical result of the __________ accounting convention. a. continuity
b. conservatism
c. cost-benefit
d. materiality

Objective: Determine the relationships between the elements of the four financial statements.

6. Which of the following statements is false?
a. The statement of cash flows reports the cash receipts and cash payments of an entity over a period of time. b. Both the statement of cash flows and the income statement determine the net income for a company. c. Transactions affecting the sale and the purchase or production of goods and services are reported in the operating activities section of the statement of cash flows. d. Investing activities in the statement of cash flows include acquiring and selling long-term assets.

Week Three: Cost Behavior

Objective: Evaluate how cost behavior affects selection of cost drivers and management decisions.

7. Which of the following would be a good cost driver for salaries of product and supervisory salaries? a. Number of hours worked
b. Number of people supervised
c. Number of department transactions
d. Number of customers served

Objective: Analyze the cost-volume-profit relationships to predict effects of changes in sales or costs, including the break-even sales volume.

8. Zachary Company wishes to earn after-tax net income of $18,000. Total fixed costs are $84,000, and the contribution margin per unit is $6. Zachary’s tax rate is 40%. The number of units that must be sold to break even is __________. a. 14,000 units

b. 17,000 units
c. 19,000 units
d. 21,500 units

Objective: Compare and contrast the different methods of measuring cost...
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