Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1.Which of the following items is included in the adjustment of net income to obtain cash flows from operating activities? a. Depreciation expense for the

1.Which of the following items is included in the adjustment of net income to obtain cash flows from operating activities?

a. Depreciation expense for the period.

b. The change in deferred taxes

c. The amount by which equity income recognized exceeds cash received.

d. All of the above

2.Which statement is true for gains and losses from capital asset sales?

a. They do not affect cash and are excluded from the statement of cash flows

b. They are included in cash flows from operating activities

c. They are included in cash flows from investing activities

d. They are included in cash flows from financing activities

3.Which of the following assets is included in the adjustment of next income to obtain cash flow from operating activities?

a. Accounts Receivableb. Inventory

c. Prepaid Expensesd. All of the above

4. Which of the following current liability accounts is included in the adjustment of expenses to obtain cash flow from operating activities?

a. Accounts Payable

b. Notes Payable and Current maturities of long-term debt.

c. Accrued Liabilities

d. Both (a) and (c)

5. How is it responsible for a firm to be profitable and still go bankrupt?

a. Earnings have increased more rapidly than sales

b. The firm has a positive net income but has failed to generate cash from operations

c. Net income has been adjusted for inflation

d. Sales have not improved even though credit policies have been eased.

6.Why has cash flow from operations become increasingly important as an analytical tool?

a. Inflation has distorted the meaningfulness of net income

b. High interest rates can put the cost of borrowing to cover short term cash needs out of reach for many firms.

c. Firms may have uncollected accounts receivable and unstable inventory of the books

d. All of the above

7. Which of the following statement is false?

a. A negative cash flow can occur in a year in which net income is positive

b. An increase in accounts receivable represents accounts not yet collected in cash

c. An increase in accounts payable represents accounts not yet collected in cash

d. To obtain cash flow from operations, the reported next income must be adjusted,

8.Which of the following could lead to cash flow problems?

a. Obsolete inventory, accounts receivable of inferior quality, easing of credit by suppliers.

b. Slow-moving inventory, accounts receivable of inferior quality, tightening of credit by suppliers

c. Obsolete inventory, increasing notes payable, easing of credit of suppliers

d. Obsolete inventory, improved quality of accounts receivable easing of credit by suppliers.

9. Operating decisions primarily deal with

a. the use of scarce resources

b. how to obtain funds to acquire resources

c. acquiring equipment and buildings

d. satisfying shareholders

10.Investing decisions primarily deal with

a. the use of scarce resources

b. how to obtain funds to acquire resources

c. acquiring equipment and buildings

d. preparing financial statements to shareholders

11.A limitation of comparing a company's performance against actual results of last year is that

a. it includes adjustments for future conditions

b. feedback is no longer a possibility

c. past results can obtain inefficiencies of the past year

d. the budgeting time period is set at one year

12.Challenging business plans tend to

a. decrease line-management participation in attaining corporate goals

b. increase failure

c. increase anxiety without motivation

d. motivate improved performance

13.A business plan can help implement

a. strategic planning

b. long-run planning

c. short run planning

d. all of the above

14.To gain the benefits of business planning, _________________ must understand and support the budget

a. management at all levels

b. customers

c. suppliers

d. all of the above

15.The sales forecast should be primarily based on

a. statistical analysis

b. input from sales managers and sales representatives

c. production capacity

d. input from the board of directors

16.The sales forecast is influenced by

a. advertising and sales promotion

b. competition

c. general economic conditions

d. all of the above

17. A sales forecast is

a. often the outcome of elaborate information gathering and discussions among sales managers

b. developed primarily to prepare next year's marketing campaign

c. solely based n sales of the previous year

d. a summary of product costs that influence pricing decisions

18.Budgeted production depends on

a. the direct materials usage budget and direct material purchases budget

b. the direct manufacturing budget

c. budgeted sales and expected changes in inventory levels

d. the manufacturing overhead costs budget

19.Which is NOT an External category in the planning process?

a. Additional competitors furnishing the same goods or services

b. Changes in industry credit policies

c. Financial resources

d. Improvements in machinery and equipment

20.Which is NOT a Management category in the planning process

a. Capabilities of present machinery and equipment

b. Desire to raise the quality of products and services

c. To increase profitability of money invested

d. To move into additional geographic markets

II. Enumeration.

Segments of Business Plan

21.

22.

23.

24.

25.

Profile of the Specific Market

26.

27.

28

29.

30.

`prepare journal entries to record the information given

Prepare T-accounts for manufacturing overhead and work in process. Post the relevant information to each account .compute the ending balance on each account, assuming that work in process has abeginning balance of 42,000

PROBLEM:

The Mayhem Company uses a job-order costing system. The following data relate to October, the first month of the company's fiscal year:

a)Raw materials Purchases on account , 210,000

b)Raw materials issued to production, 190,000 (178,000 direct materials and 12,000 indirect materials)

c)Direct laborcost incurred 90,000 and indirect labor cost incurred 110,000

d)Depreciation recorded on factory equipment, 40,000

e)Other manufacturing overhead cost incurred during October, 70,000 (credits account payable)

f)The company applies manufacturing overheadcost to production on the basis of 8 per machine-hour. There were 30,000 machine-hours recorded for October.

g)Production orders costing 520,000 according to their job cost sheets were completed during October and transferred to Finish Goods

h)Production orders that had cost 480,000 to complete according to their job cost sheets were shipped to customers during the month. These goods were sold at 25% above cost. The goods weresold on account..

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting Principles

Authors: Jerry J Weygandt, Donald E Kieso, Paul D Kimmel

8th Edition

0471980196, 9780471980193

More Books

Students also viewed these Accounting questions

Question

3. An initial value (anchoring).

Answered: 1 week ago

Question

4. Similarity (representativeness).

Answered: 1 week ago