Validate your Accounting-for-Decision-Makers Exam Preparation with Accounting-for-Decision-Makers Practice Test (Online & Offline) [Q37-Q57]

QUESTION 37
How does management accounting differ from financial accounting?

QUESTION 38
What are the costs associated with two or more business units called?

QUESTION 39
A company manufactures and sells widgets. The following information is available:
* Total fixed costs per month are $300,000
* The variable cost per widget is $50
* Each widget sells for $100
How many widgets does the company need to sell each month to break even?

QUESTION 40
A manufacturer produces three products A, B, and C.
The company uses the following information to determine activity rates for each pool.
Cost Pool
Costs
Total Activity
Pool 1
$300,000
20,000 hours
Pool 2
$20,000
500 pounds
Pool 3
$10,000
100 moves
Data concerning the three products appear in the following table.
Cost Driver
Product A
Product B
Product C
Number of hours
10,000
7,500
2,500
Number of pounds
150
250
100
Number of moves
20
40
50
What is the total amount of overhead applied to Product B?

QUESTION 41
Which organization establishes rules U.S. companies use to record and report accounting transactions?

QUESTION 42
Which change occurred if the cost of goods sold moved from 76.8% to 72.6%?

QUESTION 43
What purpose do the notes within financial statements serve to the Financial Accounting Standards Board?

QUESTION 44
Which balance sheet category reflects what a company owns that can be turned into cash or used to generate cash?

QUESTION 45
A company collects 20% of the credit sales in the month of sale and the rest is collected equally in the following two months. The company made the following credit sales:
January = $500,000
February = $420,000
March = $545,000
April = $550,000
May = $555,000
June = $567,000
July = $600,000
Which is the correct amount of cash collection in the month of September?

QUESTION 46
What can be determined when a firm performs an external audit of a company’s financial statements?

QUESTION 47
What is the impact on costs as sales volume decreases?

QUESTION 48
Last year, X Corporation had sales of $500,000 and total expenses of $300,000. A manager of the company is entitled to get a sales commission of 10% of net profit.
What amount of sales commission is to be recognized at year-end?

QUESTION 49
The following list provides partial financial information for a company.
Current assets = $36,543
Total assets = $58,719
Current liabilities = $24,824
Total liabilities = $48,561
Stockholders’ equity = $10,158
Sales = $46,997
Net income = $3,761
Market value of equity = $41,316
What is the current ratio for this company?

QUESTION 50
Which two items increase net income?
Choose 2 answers.

QUESTION 51
Who does Sarbanes-Oxley apply to?

QUESTION 52
What does it mean if a company has a debt ratio of 101.5%?

QUESTION 53
In September, an airline using accrual accounting received cash from a round-trip ticket sold to a customer for
$1,500. The ticket allowed the customer to fly from Denver to Hawaii in October and from Hawaii back to Denver in November.
When should the airline recognize revenue?

QUESTION 54
Which overhead cost is associated with batch-level activities?

QUESTION 55
A company manufactures leather products and has recently switched to the activity-based costing (ABC) method. It needs to determine the cost of its leather wallets. The company is already aware of its DM and DL costs.
What is the first step to calculating the cost of the product?

QUESTION 56
A corporation has liabilities and owners’ equity of $100 million and $40 million respectively. What is the amount of the asset balance in this case?

QUESTION 57
Which act was implemented as a result of the corporate scandals at companies such as Enron and WorldCom?