Chapters 1-3
Which of these is not a step to developing a business?
a) Creating an idea for a product or service
b) Making investments
c) Obtaining financing
d) Withdrawing money from the business
d) Withdrawing money from the business
Which one of these items is not an adjustment to the bank cash balance in arriving at the true cash balance when preparing a bank reconciliation?
a) deposits in transit
b) outstanding checks
c) banks service fees
d) a check mistakenly withdrawn by the bank
c) bank service fees
Which business structure typically has one owner with personal liability for any obligations of the business?
Sole Proprietorship
Which of these is not a direct cost for a research lab?
a) salaries of researchers
b) equipment used in research
c) rent allocated among multiple departments
d) costs for tests conducted by the lab
c) rent allocated among multiple departments
Asset, Liability, or Equity
Asset
Recording a purchase of inventory on account includes increasing which which two accounts?
Recording an accrued expense (salaries, legal fees, etc.) means that the company would record an increase to expenses and _______________
A payable account
Variable costs are ________ per unit while fixed costs are ____________ per unit
fixed; variable
When you subtract liabilities from assets the result is -
Equity
Would cost of goods sold be lower for a company that uses FIFO under a period of inflation or deflation?
True or false
When a company records sales tax on merchandise they sell, they record an increase to expenses
False
Contribution Margin is ___________ to fixed costs when a company is at the break-even point
equal
Which of these accounts does not have an effect on retained earnings?
a) Revenues
b) Expenses
c) Treasury Stock
d) Dividends
c) Treasury Stock
What is the net realizable value for a company with ending Accounts Receivable of $50,000 and a beginning Allowance for Doubtful Accounts of $2,000. The company recorded $500 of bad debt expense.
$47,500
In a noncumulative arrangement, preferred shareholders are entitled to $10,000 per year. If a company pays $8,000 in dividends in year 1 and $12,000 in dividends in year 2, how much will the preferred shareholders receive?
$10,000
What is the number of units the company needs to sell to reach a target profit of $75,000. The selling price per unit is $50 per unit and the variable expense per unit is $20. Total fixed costs are $30,000.
3,500 units
How much revenue would a company record in 2023 if they were paid $18,000 in November 2023?
$3,000
The entry for recording a write-off involves a decrease to ___________ and a decrease to ____________
Accounts receivable and AFDA
What is the total inflow/outflow for investing activities based on the information below?
1. Provided $20,000 of cash services
2. Purchased equipment for $5,000
3. Borrowed $10,000 from a bank
4. Paid $1,000 in dividends to shareholders
$5,000 outflow
What is the revenue variance given the following information:
Planning Budget: 300 units
Selling Price = $100 per unit
Variable Expense = $60 per unit
Fixed Costs = $5,000
Actual Activity: 500 units
Sales = $45,000
Variable Expense = $38,000
Fixed Costs = $5,000
$5,000 unfavorable