Variances from standard costs are usually reported to

-suppliers

-stockholders

-management

-creditors

If the actual direct labor hours spent producing a commodity exceed the standard hours, the variance

-unfavorable

-favorable

-avoidable

-variable

The first budget customarily prepared as part of entity's master budget is the

-production budget

-cash budget

-sales budget

-direct materials purchase

Production budgets are used to prepare ______ budgets

-selling and administrators expense

-direct materials purchases, direct labor cost, and factory overhead cost

-sales

-capital expenditure

The budget process does not involve

-establishing specific goals

-executing plans to achieve the goals

-periodically comparing actual results with the goals

-dismissing all managers who fail to achieve operational goals specified in the budget

_______ is a special cash fund used to make small payments that occur frequently

-an operating expenses fund

-a change fund

-a market fund

-a petty cash fund

The amount of the outstanding checks is included on the bank reconciliation as a(n)

-deduction from the balance per depositor's records

-addition to the balance per bank statement

-deduction from the balance per bank statement

-addition to the balance per depositor's records

A bank reconciliation should be prepared periodically because

-the depositor's records and the bank's records are always in agreement

-the bank always records transactions before a depositor

-it is a part of effective controls over cash

-the bank must make sure that its records are correct

Cash does not include

-coins

-checks

-money orders

-commercial paper

A company's retained earnings balance is increased by

-net income

-expenses

-purchases on credit

-paying dividends

When several alternative investment proposals involve different amounts of investment, it is useful to prepare relative ranking of proposals by saying

-an average rate of return

-a consumer price index

-a present value index

-a price level index

Accelerating the collection of receivables will tend to cause the accounts to receivable turnover to

-decrease

-remain the same

-either increase or decrease

-increase

The times interest earned ratio is computed as _____

-net income plus interest expense divided by interest expense

-income before tax plus interest expense divided by interest expense

-net income divided by interest expense

-income before income tax divided by interest expense

______ is NOT used in assessing a company's ability to pay current liabilities

-the quick ratio

-current position anaylsis

-return on equity

-working capital

The ability of a business to repay its debts and to earn income as referred to as

-solvency and leverage

-solvency and profitability

-solvency and liquity

-solvency and equity

An analysis in which all the components of an income statement are expressed as a percentage of net sales is called

-horizontal analysis

-liquidity analysis

-sales analysis

-vertical analysis

For most profitable companies, return on assets will be less than

-return on stockholders' equity

-return on total liabilities and stockholders' equity

-return on sales

-cannot be determined without more information

The times interest earned ratio is compared as

-net income plus interest expense divided by interest expense

-income before tax plus interest expense divided by interest expense

-net income divided by interest expense

-income before income tax divided by interest expense

A credit memorandum from the bank

-always decreases a bank customer's account

-is used to show a bank service charge

-can be used when a company has deposited a customer's NSF check

-can be used when the bank has collected a note receivable for the customer

Statements in which all items are exposed only in relative terms (percentages of common base) are

-horizontal statements

-common-size statements

-percentage statements

-vertical statements