ACC 561 Final Exam Study Guide
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Which of the following is an advantage of corporations relative to partnerships and sole proprietorships? Harder to transfer ownership.
Most common form of organization.
Reduced legal liability for investors.
The group of users of accounting information charged with achieving the goals of the business is its creditors.
Which of the following financial statements is concerned with the company at a point in time? Income statement.
Retained Earnings statement.
Statement of cash flows.
An income statement
reports the changes in assets, liabilities, and stockholders’ equity over a period of time. reports the assets, liabilities, and stockholders’ equity at a specific date. presents the revenues and expenses for a specific period of time. summarizes the changes in retained earnings for a specific period of time. Question 5
The most important information needed to determine if companies can pay their current obligations is the relationship between short-term and long-term liabilities.
net income for this year.
projected net income for next year.
relationship between current assets and current liabilities. Question 6
A liquidity ratio measures the
ability of a company to survive over a long period of time.
short-term ability of a company to pay its maturing obligations and to meet unexpected needs for cash. income or operating success of a company over a period of time. percentage of total financing provided by creditors.
The convention of consistency refers to consistent use of accounting principles among firms.
throughout the accounting periods.
among accounting periods.
Horizontal analysis is also known as
common size analysis.
Horizontal analysis is a technique for evaluating a series of financial statement data over a period of time that has been arranged from the lowest number to the highest number. to determine which items are in error.
to determine the amount and/or percentage increase or decrease that has taken place. that has been arranged from the highest number to the lowest number. Question 10
Vertical analysis is a technique that expresses each item in a financial statement in dollars and cents.
as a percent of the item in the previous year.
as a percent of a base amount.
starting with the highest value down to the lowest value.
Process costing is used when
the production process is continuous.
production is aimed at filling a specific customer order.
dissimilar products are involved.
costs are to be assigned to specific jobs.
An important feature of a job order cost system is that each job must be completed before a new job is accepted.
consists of one unit of output.
must be similar to previous jobs completed.
has its own distinguishing characteristics.
In a process cost system, product costs are summarized:
after each unit is produced.
on production cost reports.
when the products are sold.
on job cost sheets.
An activity that has a direct cause-effect relationship with the resources consumed is a(n) cost pool.
assigns activity cost pools to products and services, then allocates overhead back to the activity cost pools. allocates overhead to multiple activity cost pools, and it then assigns the activity cost pools to products and services by means of cost drivers. allocates overhead directly to products and services based on activity levels. accumulates...
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