1 Indirect costs include food and beverages , wages , and operating supplies . Select one : True O False

2 The balance sheet indicates the net income or profit , or net loss , for a company for a period of time . Select one : True False

3 Financing activities section of the statement of cash flows contains:

Increase in accounts receivable

Investing activities

Depreciation expenses

Changes in preferred and common shares

4 An advantage of the high-low method is that it is a quick and easy way to factor out the fixed costs and the variable costs per unit of production (sales).

Select one:

True

False

5 If the average sales revenue per server increases but the number of servers remains the same, what could that indicate?

That labour costs were lower

There was a price increase to the menu items

An increase in food and beverage sales to room rental revenue

The number of guests served was higher

6 On an income statement, what is a gain?

An increase in the days' sales

An increase in the value of a long-term assets

An increase in the return on equity

An increase in working capital

7 Accrual accounting:

Recognizes transactions on a day-to-day basis

Recognizes transactions when they happen

Recognizes transactions when investing and financing activities occur

Recognizes transactions when cash is exchanged

8 Gross profit margin tells us how much profit remains after deducting cost of sales from net sales.

Select one:

True

False

9 The two main sets of standards acceptable under Generally Accepted Accounting Principles (GAAP) in Canada are Private Enterprises (ASPE) and Capital Expenditures (CapEx).

Select one:

True

False

10 Overhead costs include rent, telephone, internet, electricity, gas, marketing, and supervisor or manager salaries.

Select one:

True

False

11 Management accountants benefit from cost-volume-profit (CVP) analysis by:

Understanding the difference between step variable costs and step fixed costs

Understanding relative quantities of the types of products that are produced in a company

Understanding how fixed costs are affected by the volume of production (sales)

Understanding how the production volume affects the company's profits and costs

12 Contribution margin is calculated by dividing the operating leverage by the operating profit.

Select one:

True

False

13 Horizontal analysis compares information from one line item to a total base figure.

Select one:

True

False

14 A positive free cash flow indicates that the company has cash available to pay for financing.

Select one:

True

False

15 What does the occupancy rate indicate?

How many rooms are booked and occupied during a given period

Variable costs per occupied room during a given period

Total number of guests per room during a given period

Revenue per available room during a given period

16 The balance sheet indicates the net income or profit, or net loss, for a company for a period of time.

Select one:

True

False

17 An ingredient for a menu item in a restaurant and a single task performed by a housekeeper in a hotel room can be considered cost objects.

Select one:

True

False

18 What does financial accounting (FA) do?

Forecasts future sales and cash flows

Ensures that statements and reports do not require independent examination

Uses very detailed reports that provide a wealth of information

Collects data of a historical nature

19 Fixed costs:

Are relative to the quantities and types of products that are produced in a company

Decrease dependent on the company's volume of production (sales)

Represent the amount of money available to cover costs and generate profits

Do not change in relation to the volume of products (services) produced (sold)

20 How is the contribution margin ratio (CM ratio) calculated?

By dividing the contribution margin by the operating profit

By dividing the volume of products by the number of units sold

By dividing the contribution margin by total revenue

By dividing the company's fixed costs by the contribution margin per unit

21 Financial accounting statements must follow ASPE or IFRS, but management accounting statements do not.

Select one:

True

False