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Cash provided by operating activities:

Question 1 options:

	may be larger than net income.
	equals the change in cash for the year.
	decreases when long-term debt is repaid.
	summarizes cash flows relating to the purchase and disposal of long-lived assets.

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Question 2 (1 point)

Nancy's Cookie Shop reported equipment at $120,000 and $30,000 accumulated depreciation on its December 31, 2013, balance sheet. During 2014, the shop purchased equipment costing $30,000 and sold equipment costing $10,000 (book value $4,000) for $1,000. On December 31, 2014, net equipment was $98,000. Using the indirect method, Samantha's would report depreciation expense on its statement of cash flows for 2014 of:

Question 2 options:

	$14,000.
	$22,000.
	$18,000.
	$30,000.

Question 3 (1 point)

Short-term liquidity ratios include the:

Question 3 options:

	acid-test ratio.
	debt to total assets ratio.
	profit margin ratio.
	payout ratio.

Question 4 (1 point)

Sunshine Paint reported sales of $500,000, total assets of $300,000, total owners' equity of $160,000, current assets of $100,000, current liabilities of $40,000, and cash of $30,000. In a common-size analysis of the balance sheet, cash would be shown as:

Question 4 options:

	10%.
	30%.
	50%.
	6%.

Question 5 (1 point)

The use of common-size analysis financial statements is an example of:

Question 5 options:

	liquidity analysis.
	ratio analysis.
	horizontal analysis.
	vertical analysis.

Question 6 (1 point)

The purchase of an office building by issuing long-term notes payable should be reported as a:

Question 6 options:

	cash outflow in the investing section of the statement of cash flows.
	cash outflow in the financing section of the statement of cash flows.
	noncash investing and financing activity.
	cash outflow in the operating section of the statement of cash flows.

Question 7 (1 point)

Which of the following is a solvency ratio?

Question 7 options:

	Asset turnover ratio.
	Debt to total assets ratio.
	Return on assets ratio.
	Acid-test ratio.

Question 8 (1 point)

Wilson Company had inventory of $660,000 and $540,000 on December 31, 2013, and December 31, 2014, respectively. Cost of goods sold for 2014 was $4,200,000. Average days to sell the inventory is approximately:

Question 8 options:

	46.9.
	52.1.
	57.4.
	6.4.

Question 9 (1 point)

Which of the following statements is true?

Question 9 options:

	The acid-test ratio applies to manufacturing companies but not to service or retailing businesses.
	High asset turnover is a sign of efficient use of assets.
	The current ratio measures the current profitability of the owners' investment.
	The price-earnings ratio is a long-term solvency ratio.

Question 10 (1 point)

In the statement of cash flows, the activities that affect cash flows are listed in the following order:

Question 10 options:

	operating, financing, investing.
	operating, investing, financing.
	financing, operating, investing.
	investing, financing, operating.

Question 11 (1 point)

A transaction involving a loss on the disposal of equipment with the indirect method of presentation affects cash provided (used) by:

Question 11 options:

	financing activities and investing activities.
	operations and financing activities.
	operations, financing activities, and investing activities.
	operations and investing activities.

Question 12 (1 point)

One major purpose of the statement of cash flows is to provide information about:

Question 12 options:

	changes in retained earnings.
	the firm's cash receipts and payments during a period.
	the firm's profitability.
	the firm's resources and claims against those resources.

Question 13 (1 point)

One cost which is part of both manufacturing overhead and total manufacturing costs is:

Question 13 options:

	selling and administrative costs.
	direct materials.
	factory utilities.
	direct labor.

Question 14 (1 point)

Manufacturing costs are typically classified as:

Question 14 options:

	direct materials, direct labor, or manufacturing overhead.
	product costs or period costs.
	direct materials, direct labor, or selling and administrative.
	direct materials or direct labor.

Question 15 (1 point)

A credit balance in the Manufacturing Overhead account at the end of an interim month means that:

Question 15 options:

	corrective action by management is necessary.
	the balance should be reported as a prepaid expense in the monthly balance sheet.
	overhead has been overapplied.
	cost of goods sold should be debited on the monthly income statement.

Question 16 (1 point)

In a job order cost system, which of the following accounts is not a control account?

Question 16 options:

	Finished Goods Inventory.
	Factory Labor.
	Manufacturing Overhead.
	Raw Materials Inventory.

Question 17 (1 point)

A job order cost system would most likely be used by a(n):

Question 17 options:

	specialty printing company.
	paint manufacturer.
	automobile manufacturer.
	cement manufacturer.

Question 18 (1 point)

The formula for computing a predetermined overhead rate is:

Question 18 options:

	estimated annual overhead costs estimated annual operating activity.
	estimated annual overhead costs actual annual operating activity.
	actual annual overhead costs actual annual operating activity.
	actual annual overhead costs estimated annual operating activity.

Question 19 (1 point)

An example of a period cost, as opposed to a product cost, is:

Question 19 options:

	factory utilities.
	wages of factory workers.
	depreciation on the factory building.
	salesperson's commissions.

Question 20 (1 point)

When there is beginning work in process, units transferred out are computed by subtracting:

Question 20 options:

	ending work in process units from the units started into production.
	beginning work in process units from the units to be accounted for.
	ending work in process units from the units accounted for.
	beginning work in process units from the units started into production.

Question 21 (1 point)

A production cost report contains sections for:

Question 21 options:

	costs accounted for.
	units to be accounted for.
	unit costs.
	All three of the other choices are correct.

Question 22 (1 point)

Which of the following does not describe a characteristic of process costing?

Question 22 options:

	Once production begins, it continues until the finished product emerges.
	All units of production receive precisely the same amount of material, labor, and overhead.
	Job cost sheets must pass from one production department to the next on a daily basis.
	Work in process accounts are maintained for each production department.

Question 23 (1 point)

Given the following data, compute equivalent units of production for conversion costs:

Beginning Work in Process4,000 units, 40% complete

Units Started into Production40,000 units

Ending Work in Process3,000 units, 20% complete.

Question 23 options:

	39,000.
	41,600.
	42,200.
	43,000.

Question 24 (1 point)

Raw materials inventory, January 1	$20,000
Raw materials inventory, December 31	10,000
Work in process inventory, January 1	6,000
Work in process inventory, December 31	9,000
Finished goods inventory, January 1	16,000
Finished goods inventory, December 31	20,000
Raw materials purchases	400,000
Direct labor	200,000
Factory utilities	75,000
Indirect labor	45,000
Factory depreciation	180,000
Selling & administrative expenses	210,000

Direct materials used is:

Question 24 options:

	$430,000.
	$400,000.
	$410,000.
	$390,000.

Question 25 (1 point)

Raw materials inventory, January 1	$20,000
Raw materials inventory, December 31	10,000
Work in process inventory, January 1	6,000
Work in process inventory, December 31	9,000
Finished goods inventory, January 1	16,000
Finished goods inventory, December 31	20,000
Raw materials purchases	400,000
Direct labor	200,000
Factory utilities	75,000
Indirect labor	45,000
Factory depreciation	180,000
Selling & administrative expenses	210,000

Assume direct materials is $400,000. Total manufacturing costs equal:

Question 25 options:

	$780,000.
	$900,000.
	$600,000.
	$700,000.

Question 26 (1 point)

Raw materials inventory, January 1	$20,000
Raw materials inventory, December 31	10,000
Work in process inventory, January 1	6,000
Work in process inventory, December 31	9,000
Finished goods inventory, January 1	16,000
Finished goods inventory, December 31	20,000
Raw materials purchases	400,000
Direct labor	200,000
Factory utilities	75,000
Indirect labor	45,000
Factory depreciation	180,000
Selling & administrative expenses	210,000

Assume manufacturing costs is $850,000. Cost of goods manufactured equals:

Question 26 options:

	$850,000.
	$847,000.
	$853,000.
	$854,000.

Question 27 (1 point)

Raw materials inventory, January 1	$20,000
Raw materials inventory, December 31	10,000
Work in process inventory, January 1	6,000
Work in process inventory, December 31	9,000
Finished goods inventory, January 1	16,000
Finished goods inventory, December 31	20,000
Raw materials purchases	400,000
Direct labor	200,000
Factory utilities	75,000
Indirect labor	45,000
Factory depreciation	180,000
Selling & administrative expenses	210,000

Assume goods manufactured is $870,000. The cost of goods sold is:

Question 27 options:

	$874,000.
	$870,000.
	$867,000.
	$866,000.

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Cash provided by operating activities: Question 1 options: may be larger than net income. equals the change in cash for the year. decreases when long-term debt is repaid. summarizes cash flows relating to the purchase and disposal of long-lived assets. Question 2 (1 point) Nancy's Cookie Shop reported equipment at $120,000 and $30,000 accumulated depreciation on its December 31, 2013, balance sheet. During 2014, the shop purchased equipment costing $30,000 and sold equipment costing $10,000 (book value $4,000) for $1,000. On December 31, 2014, net equipment was $98,000. Using the indirect method, Samantha's would report depreciation expense on its statement of cash flows for 2014 of: Question 2 options: $14,000. $22,000. $18,000. $30,000. Question 3 (1 point) Short-term liquidity ratios include the: Question 3 options: acid-test ratio. debt to total assets ratio. profit margin ratio. payout ratio. Question 4 (1 point) Sunshine Paint reported sales of $500,000, total assets of $300,000, total owners' equity of $160,000, current assets of $100,000, current liabilities of $40,000, and cash of $30,000. In a common-size analysis of the balance sheet, cash would be shown as: Question 4 options: 10%. 30%. 50%. 6%. Question 5 (1 point) The use of common-size analysis financial statements is an example of: Question 5 options: liquidity analysis. ratio analysis. horizontal analysis. vertical analysis. Question 6 (1 point) The purchase of an office building by issuing long-term notes payable should be reported as a: Question 6 options: cash outflow in the investing section of the statement of cash flows. cash outflow in the financing section of the statement of cash flows. noncash investing and financing activity. cash outflow in the operating section of the statement of cash flows. Question 7 (1 point) Which of the following is a solvency ratio? Question 7 options: Asset turnover ratio. Debt to total assets ratio. Return on assets ratio. Acid-test ratio. Question 8 (1 point) Wilson Company had inventory of $660,000 and $540,000 on December 31, 2013, and December 31, 2014, respectively. Cost of goods sold for 2014 was $4,200,000. Average days to sell the inventory is approximately: Question 8 options: 46.9. 52.1. 57.4. 6.4. Question 9 (1 point) Which of the following statements is true? Question 9 options: The acid-test ratio applies to manufacturing companies but not to service or retailing businesses. High asset turnover is a sign of efficient use of assets. The current ratio measures the current profitability of the owners' investment. The price-earnings ratio is a long-term solvency ratio. Question 10 (1 point) In the statement of cash flows, the activities that affect cash flows are listed in the following order: Question 10 options: operating, financing, investing. operating, investing, financing. financing, operating, investing. investing, financing, operating. Question 11 (1 point) A transaction involving a loss on the disposal of equipment with the indirect method of presentation affects cash provided (used) by: Question 11 options: financing activities and investing activities. operations and financing activities. operations, financing activities, and investing activities. operations and investing activities. Question 12 (1 point) One major purpose of the statement of cash flows is to provide information about: Question 12 options: changes in retained earnings. the firm's cash receipts and payments during a period. the firm's profitability. the firm's resources and claims against those resources. Question 13 (1 point) One cost which is part of both manufacturing overhead and total manufacturing costs is: Question 13 options: selling and administrative costs. direct materials. factory utilities. direct labor. Question 14 (1 point) Manufacturing costs are typically classified as: Question 14 options: direct materials, direct labor, or manufacturing overhead. product costs or period costs. direct materials, direct labor, or selling and administrative. direct materials or direct labor. Question 15 (1 point) A credit balance in the Manufacturing Overhead account at the end of an interim month means that: Question 15 options: corrective action by management is necessary. the balance should be reported as a prepaid expense in the monthly balance sheet. overhead has been overapplied. cost of goods sold should be debited on the monthly income statement. Question 16 (1 point) In a job order cost system, which of the following accounts is not a control account? Question 16 options: Finished Goods Inventory. Factory Labor. Manufacturing Overhead. Raw Materials Inventory. Question 17 (1 point) A job order cost system would most likely be used by a(n): Question 17 options: specialty printing company. paint manufacturer. automobile manufacturer. cement manufacturer. Question 18 (1 point) The formula for computing a predetermined overhead rate is: Question 18 options: estimated annual overhead costs estimated annual operating activity. estimated annual overhead costs actual annual operating activity. actual annual overhead costs actual annual operating activity. actual annual overhead costs estimated annual operating activity. Question 19 (1 point) An example of a period cost, as opposed to a product cost, is: Question 19 options: factory utilities. wages of factory workers. depreciation on the factory building. salesperson's commissions. Question 20 (1 point) When there is beginning work in process, units transferred out are computed by subtracting: Question 20 options: ending work in process units from the units started into production. beginning work in process units from the units to be accounted for. ending work in process units from the units accounted for. beginning work in process units from the units started into production. Question 21 (1 point) A production cost report contains sections for: Question 21 options: costs accounted for. units to be accounted for. unit costs. All three of the other choices are correct. Question 22 (1 point) Which of the following does not describe a characteristic of process costing? Question 22 options: Once production begins, it continues until the finished product emerges. All units of production receive precisely the same amount of material, labor, and overhead. Job cost sheets must pass from one production department to the next on a daily basis. Work in process accounts are maintained for each production department. Question 23 (1 point) Given the following data, compute equivalent units of production for conversion costs: Beginning Work in Process4,000 units, 40% complete Units Started into Production40,000 units Ending Work in Process3,000 units, 20% complete. Question 23 options: 39,000. 41,600. 42,200. 43,000. Question 24 (1 point) Raw materials inventory, January 1 Raw materials inventory, December 31 $20,000 10,000 Work in process inventory, January 1 6,000 Work in process inventory, December 31 9,000 Finished goods inventory, January 1 16,000 Finished goods inventory, December 31 20,000 Raw materials purchases 400,000 Direct labor 200,000 Factory utilities 75,000 Indirect labor 45,000 Factory depreciation 180,000 Selling & administrative expenses 210,000 Direct materials used is: Question 24 options: $430,000. $400,000. $410,000. $390,000. Question 25 (1 point) Raw materials inventory, January 1 Raw materials inventory, December 31 $20,000 10,000 Work in process inventory, January 1 6,000 Work in process inventory, December 31 9,000 Finished goods inventory, January 1 16,000 Finished goods inventory, December 31 20,000 Raw materials purchases 400,000 Direct labor 200,000 Factory utilities 75,000 Indirect labor 45,000 Factory depreciation 180,000 Selling & administrative expenses 210,000 Assume direct materials is $400,000. Total manufacturing costs equal: Question 25 options: $780,000. $900,000. $600,000. $700,000. Question 26 (1 point) Raw materials inventory, January 1 Raw materials inventory, December 31 $20,000 10,000 Work in process inventory, January 1 6,000 Work in process inventory, December 31 9,000 Finished goods inventory, January 1 16,000 Finished goods inventory, December 31 20,000 Raw materials purchases 400,000 Direct labor 200,000 Factory utilities 75,000 Indirect labor 45,000 Factory depreciation 180,000 Selling & administrative expenses 210,000 Assume manufacturing costs is $850,000. Cost of goods manufactured equals: Question 26 options: $850,000. $847,000. $853,000. $854,000. Question 27 (1 point) Raw materials inventory, January 1 Raw materials inventory, December 31 $20,000 10,000 Work in process inventory, January 1 6,000 Work in process inventory, December 31 9,000 Finished goods inventory, January 1 16,000 Finished goods inventory, December 31 20,000 Raw materials purchases 400,000 Direct labor 200,000 Factory utilities 75,000 Indirect labor 45,000 Factory depreciation 180,000 Selling & administrative expenses 210,000 Assume goods manufactured is $870,000. The cost of goods sold is: Question 27 options: $874,000. $870,000. $867,000. $866,000