Managerial Accounting (ACCO 504)

Topics included are: Credit Analysis, Budget, & Responsibility Accounting

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MULTIPLE CHOICE 1. The first budget customarily prepared as part of an entity's master budget is the: a. production budget b. cash budget C. sales budget direct materials purchases 2. The following is a measure of a manager's outcomes working in a profit center. a. budget performance report b. rate of return and residual income measures C. divisional income statements d. balance sheet 3. In a profit center, the manager has responsibility and authority for making decisions that affect: a. revenues b. assets C. costs d. assets, costs and revenues e. cost and revenues 4. The sales budget is used to prepare which of the following budgets? a. factory overhead budget c. direct materials budget b. production budget d. direct labor budget 5. The Budgeted Balance Sheet does not incorporate the financial and operational budgets of a company. a. true b. false 6. The costs charged to a profit center on the basis (activity-based) of its use of those services are called: a. operating charges b. noncontrollable charges c. service department charges d. activity charges 7. Supervisor salaries and indirect factory wages would normally appear in the direct labor cost budget. a. true b. false 8. In an investment center, the manager has responsibility and authority for making decisions that affect: a. revenues b. assets C. costs d. assets, costs and revenues e. cost and revenues 9. Which of the following budgets provides the starting point for the preparation of the production budget? a. direct materials purchases budget b. cash budget C. production budget d. sales budget10. The operating budgets of a company include: a. the cash budget b. the capital expenditures budget c. the financing budget d. the production budget 11. Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment), and uncollectible accounts expense is estimated at 3% of net sales. If net sales are $600,000, the amount of the adjusting entry to record the provision for doubtful accounts is a. $18,500 b. $17,500 C. $18,000 d. none of the above 12. The financial budgets of a company include: a. the cash budget b. the capital expenditures budget c. the sales budget d. all the above and by a formal instrument of credit as to) e. only "a" and "b" are correct 13. Which is the best example of a decentralized operation? a. one owner who prepares plans and makes decisions for the entire company. b. each unit is responsible for their own operations and decision making. C. in a major company, operating decisions are made by top management. d. none of the above. 14. Businesses that are separated into two or more manageable units in which managers have authority and responsibility for operations are said to be: a. decentralized b. consolidated c. diversified d. centralized 15. Which of the following budgets provides the starting point for the preparation of the direct labor cost budget? a. direct materials purchases budget b. cash budget C. production budget d. sales budget 16. Under the allowance method, writing off an uncollectible account a. affects only income statement accounts. b. is not acceptable practice. C . affects only balance sheet accounts. d. affects both balance sheet and income statement accounts. 17. The production budgets are used to prepare which of the following budgets? a. operating expenses b. direct materials purchases, direct labor cost, factory overhead cost C. sales in dollars d. sales in units 18. The budget that summarizes future plans for the acquisition of fixed assets is the: a. purchases budget b. production budget C. sales budget d. capital expenditures budget19. A variant of fiscal-year budgeting whereby a twelve-month projection into the future is maintained at all times is termed: a. flexible budgeting b. continuous or rolling budgeting c. zero-based budgeting d. master budgeting 20. Assembly salaries and cutting department wages would normally appear in the direct labor cost budget. a. true b. false 21. Which of the following budgets is not directly associated with the production budget? a. direct materials purchases budget of Allowance for Doubluit b. factory overhead cost budget c. capital expenditures budget d. direct labor cost budget 22. The receivable that is usually evidenced by a formal instrument of credit is a(n) a. trade receivable. b. note receivable. for Doubtful Accounts must be carefully considered . accounts receivable. jumunit when applying which method? d. income tax receivable. 23. Under the direct write-off method of accounting for uncollectible accounts, Bad Debts Expense is debited a. at the end of each accounting period. b. when a credit sale is past due. bunts, c. whenever a pre-determined amount of credit sales have been made. d. when an account is determined to be uncollectible. 24. Two methods of accounting for uncollectible accounts are the a. direct write-off method and the allowance method. b. allowance method and the accrual method. c. allowance method and the net realizable method. d. direct write-off method and the accrual method. 25. If the direct write-off method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer's account as uncollectible? a. Uncollectible Accounts Expense b. Accounts Receivable C. Allowance for Doubtful Accounts d. Interest Expense 26. An estimate based on an analysis of receivables shows that $790 of accounts receivables are uncollectible. The Allowance for Doubtful Accounts has a debit balance of $120. The adjusting entry at the end of the year will include a credit to Allowance for Doubtful Accounts in the amount of: a. $120 b. $790 C. $670 d. $91027. If the allowance method of accounting for uncollectible receivables is used, what general ledger account is credited to write off a customer's account as uncollectible? a. Uncollectible Accounts Expense b. Accounts Receivable C. Allowance for Doubtful Accounts d. Interest Expense 28. Allowance for Doubtful Accounts is listed on the balance sheet under the caption a. owner's equity b. investments C. fixed assets d. current assets 29. What is the type of account and normal balance of Allowance for Doubtful Accounts? a. Contra asset, credit b. Asset, debit Product EZ C. Asset, credit 30:000 units 115,000 unity d. Contra asset, debit 060 units 15,000 en 180 080 30. The balance in Allowance for Doubtful Accounts must be carefully considered prior to the end of the year adjustment when applying which method? a. direct write-off method b. estimate based on sales c. estimate based on an analysis of receivables d. both (b) and (c) 31. When the allowance method is used to account for uncollectible accounts, Bad Debts Expense is debited when a. a customer's account becomes past due. b. an account becomes bad and is written off. Estimate c. a sale is made. 16,001 Dedred d. management estimates the amount of uncollectibles. 18,400 32. A debit balance in the Allowance for Doubtful Accounts a. is the normal balance for that account. b. indicates that actual bad debt write-offs have been less than what was estimated. c. cannot occur if the percentage of receivables method of estimating bad debts is used. d. indicates that actual bad debt write-offs have exceeded previous provisions for bad debts. 33. The amount of a promissory note is called the a. realizable value b. maturity value c. face value d. proceeds 34. The journal entry to record a note received from a customer to apply on account is a. debit Notes Receivable; credit Accounts Receivable b. debit Accounts Receivable; credit Notes Receivable c. debit Cash; credit Notes Receivable d. debit Notes Receivable; credit Notes Payable 35. A 90-day, 12% note for $20,000, dated September 10, is received from a customer on account. If the note is discounted at 15% on October 10, the due date is a. December 9 b . December 10 C. December 11 d. December 836. The profit margin is the: a. ratio of income from operations to sales b. ratio of income from operations to invested assets C. ratio of assets to liabilities d. ratio of sales to invested assets 37. Investment centers differ from profit centers in that they a. are responsible for net income only. b. are able to invest in assets. C. have less responsibilities than cost centers and profit centers. d. are only responsible for revenues. The following information is for answering question #38. Below is budgeted production and sales information for Bluebird Company for the month of December: Product XXX Product ZZZ Estimated beginning inventory 30,000 units 18,000 units Desired ending inventory 32,000 units 15,000 units Anticipated sales 520,000 units 460,000 units The unit selling price for product XXX is $5 and for product ZZZ is $14. 38. Budgeted production for product XXX during the month is: a. 522,000 units b. 552,000 units C. 518,000 units d. 520,000 units 39. Production and sales estimates for June are as follows: Estimated inventory (units), June 1 16,000 Desired inventory (units), June 30 18,000 Expected sales volume (units): Area X 4,000 Area Y 6,000 Area Z 5,500 Unit sales price $20 The number of units expected to be produced in June is: a. 15,500 b. 17,500 C . 16,500 d. 13,500Pareo 1 Interes A Surgen por la venta de servicios o mercancia a credito y la evidencea principal es una factura 2 Direct Write-Off Method B Documento formal escrito que representa la cantidad pendiente de cobrar de los clientes 3 Factorizacion C Otro termino que se utiliza para identificar la venta de las cuentas por cobrar 4 Allowance for Bad Debts D Cantidad que se cobra por el uso del dinero de otra persona 5 Aging Report E Accounts Receivable - Allowance for Bad Debts 2 ? 6 Accounts Receivable F Note Receivable + Interest Revenue i ? 7 Allowance method basado en G Listado de las cuentas por cobrar de acuerdo un analisis de las cuentas por a su fecha de vencimiento en contraste con la cobrar fecha en que se prepara el documento 8 Allowance method basado en H Registra un gasto de cuenta incobrable un porciento de las ventas cuando se identifica como incobrable una cuenta especifica 9 Maturity Value I Representa la cantidad estimada como incobrable del total de las cuentas por cobrar 10 Note Receivable J No toma en cuenta el balance previo en la cuenta de Allowance for Bad Debts 11 Net Realizable Value K Si toma en cuenta el balance previo en la cuenta de Allowance for Bad Debts