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Wednesday, 29 February 2012

International Trade 33 questions _________________________________________________ 1. Exports account for what percentage of these countries’ g...

Q: International Trade 33 questions _________________________________________________ 1. Exports account for what percentage of these countries’ gross domestic products? a. 50% in the United States and 12% in the Netherlands b. 33% in both the United and Germany c. 25% in the United States and 50% in Japan d. 12% in the United States and 13% in Japan 2. The United States is a major exporter of a. diamonds b. bauxite c. coffee d. corn 3. Autarky means that a. a country’s consumption possibilities are the same as its production possibilities b. equilibrium has been reached with the maximum gains from specialization and trade c. equilibrium has been reached with the maximum amount of international trade d. the nation has such a high standard of living that there are technically no poor people 4. The terms of trade are a. the length of time two individuals or countries have been trading b. the countries’ production possibilities curve c. the autarky equilibrium d. the exchange rates of two goods 5. A nation’s consumption possibilities frontier is a. always the same as its production possibilities frontier b. never the same as its production possibilities frontier c. the same as its production possibilities frontier only if there is advantageous trade d. the same as its production possibilities frontier only if there is no international trade 6. The gains from trade are due primarily to the fact that a. the wealth of large, industrialized nations can be spread throughout the world b. total world output increases when each country specializes c. countries can boost their economies by increasing exports 7. The source of gains from trade is a. tariffs b. self-sufficiency c. autarky equilibrium d. comparative advantage 8. Mutually beneficial trade cannot occur a. when each country has its own comparative advantage b. if one country has absolute advantages in the production of every good c. when the opportunity costs of producing each good are equal for both trading partners d. if total world production equals total world consumption 9.To maximize worldwide gains from trade, the country which should produce a good is the country that a. has the lowest opportunity cost of producing that good b. can produce that good using the fewest resources c. will produce that good using the most expensive resources 10. Comparative advantage a. exists only when one producer can make the product using fewer resources than any other producer b. leads to the most efficient allocation of resources and the greatest combined output c. eliminates specialization, so that each country produces all of its own needs independently 11. Izodians can produce 8 units of food per day or 12 units of clothing per day. Valentians can produce 5 units of food per day or 10 units of clothing per day. Which of the following is true? a. mutually beneficial trade is not possible b. to maximize world production, Izodians should produce only food, Valentians should produce only clothing, and they should trade c. both countries should produce both goods and they should trade 12. Which of the following is not an economic reason for international specialization? a. some countries have educated, trained workers, which other countries have unskilled workers b. tastes and preferences tend to be different in different countries c. the world price of a good is determined by the world supply and demand for the product 13. When the world price of an internationally traded product is greater than a country’s domestic equilibrium price, a. the domestic price will prevail, and the world price is irrelevant b. the country’s import line is horizontal c. the country’s exports of the product will increase 14. The world price is in equilibrium when a. half of the individual countries’ domestic prices are higher and half of the individual countries’ domestic prices are lower b. the desired level of total world exports of the good equal the desired level of total world imports of the good c. each countries’ exports of this good equal its import of this good 15. Producer surplus is the a. excess supply which exists when price is maintained above the world price b. difference between the marginal benefit of a product and the marginal cost producers incur in supplying the product c. difference between the actual revenue a producer receives and the minimum sum they would accept for a quantity of a good 16. Consumer surplus result when a. the the quantity demanded of a product equals the quantity supplied of that product. b. the quantity demand of a product is greater than the quantity supplied of that product. c. a consumer buys a good for less money then he was willing to pay. 17. With international trade a. producer surplus increases in both the exporting and importing countries b. consumer surplus increases in exporting countries and decreases in importing countries c. consumer surplus increases in the importing countries and producer surplus increases in the exporting countries 18. International trade a. benefits countries which export goods and hurts countries which import goods b. benefits poor, undeveloped countries and hurts wealthy, industrialized countries c. increases both producer surplus and consumer surplus throughout the world d. has a net beneficial effect only for countries with an autarky equilibrium 19. Trade restrictions in the real world a. are extremely rare, due to the economic benefits of specialization and trade b. hurt domestic producers and benefit foreign consumers c. hurt domestic producers and benefit domestic consumers d. hurt domestic consumers and benefit domestic producers 20. A tariff is a. a tax on imports only b. a tax on exports only c. a on either imports or exports d. a luxury tax 21. The difference between a specific tariff and an ad valorem tariff is that a specific tariff a. is a set amount of money per unit of a product, while an ad valorem tariff is a set percentage of product price. b. is a set percentage of product price, while an ad valorem tariff is a set total amount c. names a particular good to which the tariff applies, while an ad valorem tariff applies to large classes of products. 22.Which of the following is not an effect of a specific import tariff a. the domestic price is higher after the tariff is imposed b. there is no net welfare loss to society as a whole c. government collects revenue from the tariff d. the country’s imports of the product decline 23. An import quota is a a. legal limit on the quantity of a good that can be imported per year b. legal requirement that a specified percentage of a final good’s value must be produced domestically c. legal requirements that exports to a specific country must exceed a specific value before the country’s product may be imported 24. To be effective, an import quota must a. reduce the price and increase the quantity of imports b. set the price of the imported good higher than the domestic equilibrium price c. restrict imports to less than would be imported under free trade d. restrict imports to less than exports in trade with that particular country 25. An effective import quota a. increases consumer surplus and reduces produces surplus b. increases producer surplus and reduces consumer surplus c. increases both producer surplus and consumer surplus 26. The primary difference between an import tariff and an import quota is that a. tariffs cause prices to rise, but quotas do not b. quotas cause prices to rise, but tariffs do not c. tariff revenues go to government, but quotas benefit those with the right to sell foreign goods domestically 27. Which of the following is not a type of trade restriction? a. low-interest loans to foreign buyers b. export subsidies for domestic firms c. domestic content requirements d. economies of scale 28. The General Agreement on Tariffs and Trade (GATT) was established in a. 1870 to protect U.S. industries and decrease world trade b. 1921 to manage legal and accounting requirements for U.S. tariffs and quotas c. 1947 to reduce trade restrictions among 23 countries 29. The World Trade Organization (WTO) a. became, in 1995, the institutionalized and more comprehensive successor to the General Agreement on Tariffs and Trade (GATT) b. was established in 1947 to reduce trade restrictions among 23 member countries c. was established in 1980 to oppose and counteract the policies of the General Agreement on Tariffs and Trade (GATT) 30. The most-favored nation clause of the World Trade Organization requires that each member must a. offer to all member countries the same trade concessions offered to any member country b. choose one foreign member as its most-favored trading nation, and give that country its most generous trade concessions c. offer some trade concession to any other member country offering it a trade concession 31. Regional trading bloc agreements a. are not considered trade restrictions b. are required by World Trade Organization rules c. exist primarily in Russia, Africa, and South America d. make special trade deals between countries in that region and discriminate against countries outside the region 32. Which of the following is not used as an argument for trade restrictions? a. emerging domestic industries, especially those with economies of scale, could not gain entry in some world markets without protection during the early years b. trade restrictions are required to prevent some countries from exporting a commodity at a price below its cost of production c. consumer surplus is maximized only when strict import tariffs and quotas ensure that exports exceed imports 33. Rent seeking involves a. influencing public policy to redistribute income in one’s favor b. reducing costs and increase profit through greater efficiency c. raising price and increase profit by restricting output d. increasing market demand through advertising

International Trade 33 questions ____________________________________________________________ 1. Exports account for what percentage of these countr...

Q: International Trade 33 questions ____________________________________________________________ 1. Exports account for what percentage of these countries’ gross domestic products? a. 50% in the United States and 12% in the Netherlands b. 33% in both the United and Germany c. 25% in the United States and 50% in Japan d. 12% in the United States and 13% in Japan 2. The United States is a major exporter of a. diamonds b. bauxite c. coffee d. corn 3. Autarky means that a. a country’s consumption possibilities are the same as its production possibilities b. equilibrium has been reached with the maximum gains from specialization and trade c. equilibrium has been reached with the maximum amount of international trade d. the nation has such a high standard of living that there are technically no poor people 4. The terms of trade are a. the length of time two individuals or countries have been trading b. the countries’ production possibilities curve c. the autarky equilibrium d. the exchange rates of two goods 5. A nation’s consumption possibilities frontier is a. always the same as its production possibilities frontier b. never the same as its production possibilities frontier c. the same as its production possibilities frontier only if there is advantageous trade d. the same as its production possibilities frontier only if there is no international trade 6. The gains from trade are due primarily to the fact that a. the wealth of large, industrialized nations can be spread throughout the world b. total world output increases when each country specializes c. countries can boost their economies by increasing exports 7. The source of gains from trade is a. tariffs b. self-sufficiency c. autarky equilibrium d. comparative advantage 8. Mutually beneficial trade cannot occur a. when each country has its own comparative advantage b. if one country has absolute advantages in the production of every good c. when the opportunity costs of producing each good are equal for both trading partners d. if total world production equals total world consumption 9.To maximize worldwide gains from trade, the country which should produce a good is the country that a. has the lowest opportunity cost of producing that good b. can produce that good using the fewest resources c. will produce that good using the most expensive resources 10. Comparative advantage a. exists only when one producer can make the product using fewer resources than any other producer b. leads to the most efficient allocation of resources and the greatest combined output c. eliminates specialization, so that each country produces all of its own needs independently 11. Izodians can produce 8 units of food per day or 12 units of clothing per day. Valentians can produce 5 units of food per day or 10 units of clothing per day. Which of the following is true? a. mutually beneficial trade is not possible b. to maximize world production, Izodians should produce only food, Valentians should produce only clothing, and they should trade c. both countries should produce both goods and they should trade 12. Which of the following is not an economic reason for international specialization? a. some countries have educated, trained workers, which other countries have unskilled workers b. tastes and preferences tend to be different in different countries c. the world price of a good is determined by the world supply and demand for the product 13. When the world price of an internationally traded product is greater than a country’s domestic equilibrium price, a. the domestic price will prevail, and the world price is irrelevant b. the country’s import line is horizontal c. the country’s exports of the product will increase 14. The world price is in equilibrium when a. half of the individual countries’ domestic prices are higher and half of the individual countries’ domestic prices are lower b. the desired level of total world exports of the good equal the desired level of total world imports of the good c. each countries’ exports of this good equal its import of this good 15. Producer surplus is the a. excess supply which exists when price is maintained above the world price b. difference between the marginal benefit of a product and the marginal cost producers incur in supplying the product c. difference between the actual revenue a producer receives and the minimum sum they would accept for a quantity of a good 16. Consumer surplus result when a. the the quantity demanded of a product equals the quantity supplied of that product. b. the quantity demand of a product is greater than the quantity supplied of that product. c. a consumer buys a good for less money then he was willing to pay. 17. With international trade a. producer surplus increases in both the exporting and importing countries b. consumer surplus increases in exporting countries and decreases in importing countries c. consumer surplus increases in the importing countries and producer surplus increases in the exporting countries 18. International trade a. benefits countries which export goods and hurts countries which import goods b. benefits poor, undeveloped countries and hurts wealthy, industrialized countries c. increases both producer surplus and consumer surplus throughout the world d. has a net beneficial effect only for countries with an autarky equilibrium 19. Trade restrictions in the real world a. are extremely rare, due to the economic benefits of specialization and trade b. hurt domestic producers and benefit foreign consumers c. hurt domestic producers and benefit domestic consumers d. hurt domestic consumers and benefit domestic producers 20. A tariff is a. a tax on imports only b. a tax on exports only c. a on either imports or exports d. a luxury tax 21. The difference between a specific tariff and an ad valorem tariff is that a specific tariff a. is a set amount of money per unit of a product, while an ad valorem tariff is a set percentage of product price. b. is a set percentage of product price, while an ad valorem tariff is a set total amount c. names a particular good to which the tariff applies, while an ad valorem tariff applies to large classes of products. 22.Which of the following is not an effect of a specific import tariff a. the domestic price is higher after the tariff is imposed b. there is no net welfare loss to society as a whole c. government collects revenue from the tariff d. the country’s imports of the product decline 23. An import quota is a a. legal limit on the quantity of a good that can be imported per year b. legal requirement that a specified percentage of a final good’s value must be produced domestically c. legal requirements that exports to a specific country must exceed a specific value before the country’s product may be imported 24. To be effective, an import quota must a. reduce the price and increase the quantity of imports b. set the price of the imported good higher than the domestic equilibrium price c. restrict imports to less than would be imported under free trade d. restrict imports to less than exports in trade with that particular country 25. An effective import quota a. increases consumer surplus and reduces produces surplus b. increases producer surplus and reduces consumer surplus c. increases both producer surplus and consumer surplus 26. The primary difference between an import tariff and an import quota is that a. tariffs cause prices to rise, but quotas do not b. quotas cause prices to rise, but tariffs do not c. tariff revenues go to government, but quotas benefit those with the right to sell foreign goods domestically 27. Which of the following is not a type of trade restriction? a. low-interest loans to foreign buyers b. export subsidies for domestic firms c. domestic content requirements d. economies of scale 28. The General Agreement on Tariffs and Trade (GATT) was established in a. 1870 to protect U.S. industries and decrease world trade b. 1921 to manage legal and accounting requirements for U.S. tariffs and quotas c. 1947 to reduce trade restrictions among 23 countries 29. The World Trade Organization (WTO) a. became, in 1995, the institutionalized and more comprehensive successor to the General Agreement on Tariffs and Trade (GATT) b. was established in 1947 to reduce trade restrictions among 23 member countries c. was established in 1980 to oppose and counteract the policies of the General Agreement on Tariffs and Trade (GATT) 30. The most-favored nation clause of the World Trade Organization requires that each member must a. offer to all member countries the same trade concessions offered to any member country b. choose one foreign member as its most-favored trading nation, and give that country its most generous trade concessions c. offer some trade concession to any other member country offering it a trade concession 31. Regional trading bloc agreements a. are not considered trade restrictions b. are required by World Trade Organization rules c. exist primarily in Russia, Africa, and South America d. make special trade deals between countries in that region and discriminate against countries outside the region 32. Which of the following is not used as an argument for trade restrictions? a. emerging domestic industries, especially those with economies of scale, could not gain entry in some world markets without protection during the early years b. trade restrictions are required to prevent some countries from exporting a commodity at a price below its cost of production c. consumer surplus is maximized only when strict import tariffs and quotas ensure that exports exceed imports 33. Rent seeking involves a. influencing public policy to redistribute income in one’s favor b. reducing costs and increase profit through greater efficiency c. raising price and increase profit by restricting output d. increasing market demand through advertising

Information from the American Institute of Insurance indicates the mean amount of life insurance per household in the United States is $110,000. This ...

Q: Information from the American Institute of Insurance indicates the mean amount of life insurance per household in the United States is $110,000. This distribution follows the normal distribution with a standard deviation of $40,000. If we select a random sample of 50 households, what is the standard error of the mean? What is the expected shape of the distribution of the sample mean? What is the likelihood of selecting a sample with a mean of at least $112,000? What is the likelihood of selecting a sample with a mean of more than $100,000? Find the likelihood of selecting a sample with a mean of more than $100,000 but less than $112,000.

Finance week 4 quiz.____________________________________________ BUS 401 WeeK 4 Quizz 1. Question Flotation costs include the fees paid to the ...

Q: Finance week 4 quiz. ____________________________________________ BUS 401 WeeK 4 Quizz 1. Question Flotation costs include the fees paid to the investment bankers, lawyers, and accountants involved in selling a new security issue. encourage firms to pay large dividends. are encountered whenever a firm fails to pay a dividend. are incurred when investors fail to cash their dividend check. 2. Question Based on the data contained in Table A, what is the break-even point in units produced and sold? TABLE A Average selling price per unit $18.00 Variable cost per unit $13.00 Units sold 400,000 Fixed costs $650,000 Interest expense $ 50,000 130,000 140,000 150,000 180,000 3. Question The break-even model enables the manager of the firm to calculate the minimum price of common stock for certain situations. set appropriate equilibrium thresholds. determine the quantity of output that must be sold to cover all operating costs. determine the optimal amount of debt financing to use. 4. Question Moline Manufacturing Corporation reported the following items Sales = $6,000,000; Variable Costs of Production = $1,500,000; Variable Selling and Administrative Expenses = $550,000; Fixed Costs = $1,350,000; EBIT = $2,600,000; and the Marginal Tax Rate =35%. Moline's break-even point in sales dollars is $2,050,633. $2,197,500. $2,438,750. $2,785,000. 5. Question A firm's optimal capital structure occurs where? EPS are maximized, and WACC is minimized. Stock price is maximized, and EPS are maximized. Stock price is maximized, and WACC is maximized. WACC is minimized, and stock price is maximized. 6. Question Financial leverage is distinct from operating leverage since it accounts for use of debt and preferred stock. variability in fixed operating costs. variability in sales. changes in EBIT. 7. Question Bob's Baked Goods Company reported the following income statement for 2009 Sales $2,500,000 Variable Costs 900,000 Fixed Operating Costs 700,000 EBIT 900,000 Interest Expense 200,000 EBT 700,000 Taxes (30%) 210,000 Net Income $490,000 Earnings Per Share $4.90 If Bob's sales next year increase by 20%, Bob's EBIT will increase 20%, showing no operating leverage. 20%, showing no financial leverage. over 35%, due to operating leverage. over 35%, due to operating leverage and financial leverage. 8. Question Amish Enterprises makes wooden play sets. The company pays annual rent of $400,000 per year and pays administrative salaries totaling $150,000 per year. Each play set requires $400 of wood, ten hours of labor at $70 per hour, and variable overhead costs of $100. Fixed advertising expenses equal $100,000 per year. Each play set sells for $3,200. What is Amish Enterprises' break-even output level? 340 play sets 325 play sets 297 play sets 258 play sets 9. Question A firm that uses large amounts of debt financing in an industry characterized by a high degree of business risk would have ________ earnings per share fluctuations resulting from changes in levels of sales. no constant large small 10. Question The final approval of a dividend payment comes from the controller. the president of the company. the board of directors. It is a joint decision requiring approval from all of the above.

Finance 10 questions. only correct answers ____________________________________________________ 1. Which of the following statements is CORRECT? a...

Final unit 8 all solutions with steps Points Received:4 of 4 1.Question: 1. Blanchford Enterprises is considering a project that has the follow...

Final unit 6 all solutions with steps 1.Question: Magee Company's stock has a beta of 1.20, the risk-free rate is 4.50%, and the market risk pre...

Q: Final unit 6 all solutions with steps 1.Question: Magee Company's stock has a beta of 1.20, the risk-free rate is 4.50%, and the market risk premium is 5.00%. What is Magee's required return? 10.25% 10.50% 10.75% 11.00% 11.25% Points Received:4 of 4 2.Question: Parr Paper's stock has a beta of 1.40, and its required return is 13.00%. Clover Dairy's stock has a beta of 0.80. If the risk-free rate is 4.00%, what is the required rate of return on Clover's stock? (Hint: First find the market risk premium.) 8.55% 8.71% 8.99% 9.14% 9.33% Points Received: 4 of 4 3. Question: Suppose you hold a diversified portfolio consisting of $10,000 invested equally in each of 10 different common stocks. The portfolio’s beta is 1.120. Now suppose you decided to sell one of your stocks that has a beta of 1.000 and to use the proceeds to buy a replacement stock with a beta of 1.750. What would the portfolio’s new beta be? 0.982 1.017 1.195 1.246 1.519 Points Received: 4 of 4 4. Question: A mutual fund manager has a $20.0 million portfolio with a beta of 1.50. The risk-free rate is 4.50%, and the market risk premium is 5.50%. The manager expects to receive an additional $5.0 million which she plans to invest in a number of stocks. After investing the additional funds, she wants the fund’s required return to be 13.00%. What must the average beta of the new stocks added to the portfolio be to achieve the desired required rate of return? 1.12 1.26 1.37 1.59 1.73 Points Received:4 of 4 5. Question: A stock is expected to pay a dividend of $1 at the end of the year. The required rate of return is rs = 11%, and the expected constant growth rate is 5%. What is the current stock price? $16.67 $18.83 $20.00 $21.67 $23.33 Points Received: 4 of 4 6. Question: A stock just paid a dividend of $1. The required rate of return is rs = 11%, and the constant growth rate is 5%. What is the current stock price? $15.00 $17.50 $20.00 $22.50 $25.00 Points Received:4 of 4 7. Question: The Lashgari Company is expected to pay a dividend of $1 per share at the end of the year, and that dividend is expected to grow at a constant rate of 5% per year in the future. The company's beta is 1.2, the market risk premium is 5%, and the risk-free rate is 3%. What is the company's current stock price? $15.00 $20.00 $25.00 $30.00 $35.00 Points Received:4 of 4 8. Question: An increase in a firm’s expected growth rate would normally cause its required rate of return to Increase. Decrease. Fluctuate. Remain constant. Possibly increase, decrease, or have no effect. Points Received:4 of 4 9. Question: Harrison Clothiers' stock currently sells for $20 a share. It just paid a dividend of $1.00 a share (that is D0 = $1.00). The dividend is expected to grow at a constant rate of 6 percent a year. What stock price is expected 1 year from now? What is the required rate of return? Points Received:4 of 4 10. Question: A stock is expected to pay a dividend of $0.50 at the end of the year (that is, D1 = 0.50), and it should continue to grow at a constant rate of 7 percent a year. If its required return is 12 percent, what is the stock's expected price 4 years from today?

Final Exam ACC400 1. A traditional definition of internal control specifically includes all of the following features except a. adherence to ...

Q: Final Exam ACC400 1. A traditional definition of internal control specifically includes all of the following features except a. adherence to prescribed managerial policies. b. promotion of operational efficiency. c. reliability of accounting data. d. insistence that employees not take earned vacations. 2. A consequence of separation of duties is that a. theft by employees becomes impossible. b. operations become extremely inefficient because of constant training of employees. c. more employees will need to be bonded. d. theft is still possible when several employees are involved. 3. A very small company would have the most difficulty in implementing which of the following internal control activities? a. Separation of duties b. Limited access to assets c. Periodic independent verification d. Sound personnel procedures 4. The principle of establishing responsibility does not include a. one person being responsible for one task. b. authorization of transactions. c. independent internal verification. d. approval of transactions. 5. The control principle related to not having the same person authorize and pay for goods is known as a. establishment of responsibility. b. independent internal verification. c. separation of duties. d. rotation of duties. 6. Two individuals at a retail store work the same cash register. You evaluate this situation as a. a violation of establishment of responsibility. b. a violation of separation of duties. c. supporting the establishment of responsibility. d. supporting internal independent verification. 7. The receivable that is usually evidenced by a formal instrument of credit is a(n) a. trade receivable. b. note receivable. c. accounts receivable. d. income tax receivable. 8. Which of the following receivables would not be classified as an "other receivable”? a. Advance to an employee b. Refundable income tax c. Notes receivable d. Interest receivable 9. Notes or accounts receivables that result from sales transactions are often called a. sales receivables. b. non-trade receivables. c. trade receivables. d. merchandise receivables. 10. The term "receivables" refers to a. amounts due from individuals or companies. b. merchandise to be collected from individuals or companies. c. cash to be paid to creditors. d. cash to be paid to debtors. 11. Receivables are One of the most liquid assets and thus are always considered current assets. b. Claims that are expected to be collected in cash. Shown on the Income Statement at cash realizable value. Always the result of revenue recognition. 12. Non-trade receivables should be reported separately from trade receivables. Why is this statement either true or false? It is true because trade receivables are current assets and non-trade receivables are long term. It is false because all current receivables must be grouped together in one account. c. It is true because non-trade receivables do no result from business operations and should not be included with accounts receivable. It is false because management can decide how to report receivables. 13. Dee Elle is a corporation that sells breakfast cereal. Based on the accounts listed below, what are Dee Elle’s total trade receivables? Income tax refund due $ 500 Advance due to the company from the company president 300 3-month note due from Dee Elle’s main customer 2,000 Interest due this month on the above note 100 Due and unpaid from this months sales 3,000 Due and unpaid from last months sales 1,000 a. $4,000 b. $6,000 c. $5,000 d. $6,900 14. Which one of the following would be classified as an extraordinary item? a. Expropriation of property by a foreign government b. Losses attributed to a labor strike c. Write-down of inventories d. Gains or losses from sales of equipment 15. When a change in accounting principle occurs a. prior years' financial statements should not be changed to reflect the newly adopted principle. b. the new principle should be used in reporting the results of operations of the current year. c. the cumulative effect of the change in principle should be reflected on the income statement as of the beginning of the next year. d. the cumulative effect of the change in accounting principle should be classified as an extraordinary item on the income statement. 16. If an item meets one (but not both) of the criteria for an extraordinary item, it a. only needs to be disclosed in the footnotes of the financial statements. b. may be treated as sales revenue (if it is a gain) and as an operating expense (if it is a loss). c. is reported as an "other revenue or gain" or "other expense and loss," net of tax. d. is reported at its gross amount as an "other revenue or gain" or "other expense or loss." 17. The order of presentation of items that may appear on the income statement is a. Extraordinary items, Discontinued operations, Income before income taxes. b. Discontinued operations, Extraordinary items, Income before income taxes. c. Income before income taxes, Discontinued operations, Extraordinary items. d. Income before income taxes, Extraordinary items, Discontinued operations. 18. Which of the following items appears on the income statement before income before irregular items? a. Other comprehensive income b. Extraordinary items c. Income tax expense d. Discontinued operations 19. Which of the following items should be classified as an extraordinary item on an income statement? a. Gain on the sale of property, plant or equipment b. Loss due to expropriation of property by a foreign government c. Loss due to discontinued operations d. Excess of the selling price over the cost of treasury stock 20. When a company changes from one acceptable accounting method to another, the cumulative effect of the change is disclosed a. in the retained earnings statement, as a correction to the opening balance. b. as a footnote. c. in the income statement, above income from continuing operations. d. in the income statement, below income from continuing operations. 21. Liabilities are classified on the balance sheet as current or a. deferred. b. unearned. c. long-term. d. accrued. 22. Most companies pay current liabilities a. out of current assets. b. by issuing interest-bearing notes payable. c. by issuing stock. d. by creating long-term liabilities. 23. A current liability is a debt that can reasonably be expected to be paid a. within one year, or the operating cycle, whichever is longer. b. between 6 months and 18 months. c. out of currently recognized revenues. out of cash currently on hand. 24. Which of the following most likely would be classified as a current liability? a. Dividends payable b. Bonds payable in 5 years c. Three-year notes payable d. Mortgage payable as a single payment in 10 years 25. Failure to record a liability will probably a. result in an overstated net income. b. result in overstated total liabilities and owner’s equity. c. have no effect on net income. d. result in understated total assets. 26. Very often, failure to record a liability means failure to record a(n) a. revenue. b. asset conversion. c. footnote. d. expense. 27. The term legal capital is a descriptive term for a. stockholders’ equity. b. par value. c. residual equity. d. market value. 28. A corporation has the following account balances: Common Stock, $1 par value, $40,000; Paid-in Capital in Excess of Par Value, $1,800,000. Based on this information, the a. legal capital is $1,840,000. b. number of shares issued is 40,000. c. number of shares outstanding is 1,840,000. d. average price per share issued is $4.60. 29. The authorized stock of a corporation a. only reflects the initial capital needs of the company. b. is indicated in its by-laws. c. is indicated in its charter. d. must be recorded in a formal accounting entry. 30. The amount of stock that may be issued according to the corporation’s charter is referred to as the a. authorized stock. b. issued stock. c. unissued stock. d. outstanding stock. 31. If Morgan Company issues 2,000 shares of $5 par value common stock for $140,000, the account a. Common Stock will be credited for $140,000. b. Paid-in Capital in Excess of Par Value will be credited for $10,000. c. Paid-in Capital in Excess of Par Value will be credited for $130,000. d. Cash will be debited for $130,000. 32. New Corp. issues 1,000 shares of $10 par value common stock at $14 per share. When the transaction is recorded, credits are made to: a. Common Stock $10,000 and Paid-in Capital in Excess of Stated Value $4,000. b. Common Stock $14,000. c. Common Stock $10,000 and Paid-in Capital in Excess of Par Value $4,000. d. Common Stock $10,000 and Retained Earnings $4,000.

Final unit 9 all solutions with steps Points Received:4 of 4 1. Question: Millman Electronics will produce 60,000 stereos next year. Variabl...

Q: Final unit 9 all solutions with steps Points Received:4 of 4 1. Question: Millman Electronics will produce 60,000 stereos next year. Variable costs will equal 50% of sales, while fixed costs will total $120,000. At what price must each stereo be sold for the company to achieve an EBIT of $95,000? $6.57 $6.87 $7.17 $7.47 $7.77 Points Received:4 of 4 2. Question: Firms A and B are identical except for their level of debt and the interest rates they pay on debt. Each has $2 million in assets, $400,000 of EBIT, and has a 40% tax rate. However, firm A has a debt-to-assets ratio of 50% and pays 12% interest on its debt, while Firm B has a 30% debt ratio and pays only 10% interest on its debt. What is the difference between the two firms' ROEs? 1.25% 1.91% 2.23% 2.64% 2.86% Points Received: 4 of 4 3. Question: The firm’s target capital structure is consistent with which of the following? Maximum earnings per share (EPS). Minimum cost of debt (rd). Highest bond rating. Minimum cost of equity (rs). Minimum weighted average cost of capital (WACC). Points Received:4 of 4 4.Question: Jones Co. currently is 100% equity financed. The company is considering changing its capital structure. More specifically, Jones’ CFO is considering a recapitalization plan in which the firm would issue long-term debt with a yield of 9% and use the proceeds to repurchase common stock. The recapitalization would not change the company’s total assets nor would it affect the company’s basic earning power, which is currently 15%. The CFO estimates that the recapitalization will reduce the company’s WACC and increase its stock price. Which of the following is also likely to occur if the company goes ahead with the planned recapitalization? The company’s net income will increase. The company’s earnings per share will decrease. The company’s cost of equity will increase. The company’s ROA will increase. The company’s ROE will decrease. Points Received:4 of 4 5.Question: Tapley Inc. currently has assets of $5 million, zero debt, is in the 40% federal-plus-state tax bracket, has a net income of $1 million, and pays out 40% of its earnings as dividends. Net income is expected to grow at a constant rate of 5 percent per year, 200,000 shares of stock are outstanding, and the current WACC is 13.40%. The company is considering a recapitalization where it will issue $1 million in debt and use the proceeds to repurchase stock. Investment bankers have estimated that if the company goes through with the recapitalization, its before-tax cost of debt will be 11%, and its cost of equity will rise to 14.5%. What is the stock's current price per share (before the recapitalization)? Points Received:4 of 4 6.Question: Tapley Inc. currently has assets of $5 million, zero debt, is in the 40% federal-plus-state tax bracket, has a net income of $1 million, and pays out 40% of its earnings as dividends. Net income is expected to grow at a constant rate of 5 percent per year, 200,000 shares of stock are outstanding, and the current WACC is 13.40%. The company is considering a recapitalization where it will issue $1 million in debt and use the proceeds to repurchase stock. Investment bankers have estimated that if the company goes through with the recapitalization, its before-tax cost of debt will be 11%, and its cost of equity will rise to 14.5%. Assuming the company maintains the same payout ratio, what will be its stock price following the recapitalization? Points Received:8 of 8 7.Question: Fletcher Corp. has a capital budget of $1,000,000, but it wants to maintain a target capital structure of 60% debt and 40% equity. The company forecasts this year’s net income to be $600,000. If the company follows a residual dividend policy, what will be its dividend paid? $120,000 $140,000 $160,000 $180,000 $200,000 Points Received:4 of 4 8.Question: Rooney Inc. recently completed a 3-for-2 stock split. Prior to the split, its stock price was $90 per share. The firm's total market value was unchanged by the split. What was the price of the company’s stock following the stock split? $ 45.00 $ 50.00 $ 60.00 $ 90.00 $135.00 Points Received:4 of 4 9.Question: Which of the following should not influence a firm’s dividend policy decision? The firm’s ability to accelerate or delay investment projects. A strong preference by most shareholders in the economy for current cash income versus capital gains. Constraints imposed by the firm’s bond indenture. The fact that much of the firm’s equipment has been leased rather than bought and owned. The fact that Congress is considering tax law changes regarding the taxation of dividends versus capital gains.

FIN 534 – Homework Chapter 5 only answers. correct 100% 1 . Three $1,000 face value bonds that mature in 10 years have the same level of ris...

Q: FIN 534 – Homework Chapter 5 only answers. correct 100% 1 . Three $1,000 face value bonds that mature in 10 years have the same level of risk, hence their YTMs are equal. Bond A has an 8% annual coupon, Bond B has a 10% annual coupon, and Bond C has a 12% annual coupon. Bond B sells at par. Assuming interest rates remain constant for the next 10 years, which of the following statements is CORRECT? a. Bond A’s current yield will increase each year. b. Since the bonds have the same YTM, they should all have the same price, and since interest rates are not expected to change, their prices should all remain at their current levels until maturity. c. Bond C sells at a premium (its price is greater than par), and its price is expected to increase over the next year. d. Bond A sells at a discount (its price is less than par), and its price is expected to increase over the next year. e. Over the next year, Bond A’s price is expected to decrease, Bond B’s price is expected to stay the same, and Bond C’s price is expected to increase. 2. Which of the following statements is CORRECT? a. Two bonds have the same maturity and the same coupon rate. However, one is callable and the other is not. The difference in prices between the bonds will be greater if the current market interest rate is below the coupon rate than if it is above the coupon rate. b. A callable 10-year, 10% bond should sell at a higher price than an otherwise similar noncallable bond. c. Corporate treasurers dislike issuing callable bonds because these bonds may require the company to raise additional funds earlier than would be true if noncallable bonds with the same maturity were used. d. Two bonds have the same maturity and the same coupon rate. However, one is callable and the other is not. The difference in prices between the bonds will be greater if the current market interest rate is above the coupon rate than if it is below the coupon rate. e. The actual life of a callable bond will always be equal to or less than the actual life of a noncallable bond with the same maturity. Therefore, if the yield curve is upward sloping, the required rate of return will be lower on the callable bond. 3. Which of the following statements is CORRECT? a. Assume that two bonds have equal maturities and are of equal risk, but one bond sells at par while the other sells at a premium above par. The premium bond must have a lower current yield and a higher capital gains yield than the par bond. b. A bond’s current yield must always be either equal to its yield to maturity or between its yield to maturity and its coupon rate. c. If a bond sells at par, then its current yield will be less than its yield to maturity. d. If a bond sells for less than par, then its yield to maturity is less than its coupon rate. e. A discount bond’s price declines each year until it matures, when its value equals its par value. 4. Suppose a new company decides to raise a total of $200 million, with $100 million as common equity and $100 million as long-term debt. The debt can be mortgage bonds or debentures, but by an iron-clad provision in its charter, the company can never raise any additional debt beyond the original $100 million. Given these conditions, which of the following statements is CORRECT? a. The higher the percentage of debt represented by mortgage bonds, the riskier both types of bonds will be and, consequently, the higher the firm’s total dollar interest charges will be. b. If the debt were raised by issuing $50 million of debentures and $50 million of first mortgage bonds, we could be certain that the firm’s total interest expense would be lower than if the debt were raised by issuing $100 million of debentures. c. In this situation, we cannot tell for sure how, or whether, the firm’s total interest expense on the $100 million of debt would be affected by the mix of debentures versus first mortgage bonds. The interest rate on each of the two types of bonds would increase as the percentage of mortgage bonds used was increased, but the result might well be such that the firm’s total interest charges would not be affected materially by the mix between the two. d. The higher the percentage of debentures, the greater the risk borne by each debenture, and thus the higher the required rate of return on the debentures. e. If the debt were raised by issuing $50 million of debentures and $50 million of first mortgage bonds, we could be certain that the firm’s total interest expense would be lower than if the debt were raised by issuing $100 million of first mortgage bonds. 5. Cosmic Communications Inc. is planning two new issues of 25-year bonds. Bond Par will be sold at its $1,000 par value, and it will have a 10% semiannual coupon. Bond OID will be an Original Issue Discount bond, and it will also have a 25-year maturity and a $1,000 par value, but its semiannual coupon will be only 6.25%. If both bonds are to provide investors with the same effective yield, how many of the OID bonds must Cosmic issue to raise $3,000,000? Disregard flotation costs, and round your final answer up to a whole number of bonds. a. 4,228 b. 4,337 c. 4,448 d. 4,562 e. 4,676

FIN 534 – Homework Chapter 16 Swim Suits Unlimited is in a highly seasonal business, and the following summary balance sheet data show its asse...

Q: FIN 534 – Homework Chapter 16 Swim Suits Unlimited is in a highly seasonal business, and the following summary balance sheet data show its assets and liabilities at peak and off-peak seasons (in thousands of dollars): Peak Off-Peak Cash $ 50 $ 30 Marketable securities 0 20 Accounts receivable 40 20 Inventories 100 50 Net fixed assets 500 500 Total assets $690 $620 Payables and accruals $ 30 $ 10 Short-term bank debt 50 0 Long-term debt 300 300 Common equity 310 310 Total claims $690 $620 From this data we may conclude that a. Swim Suits' current asset financing policy calls for exactly matching asset and liability maturities. b. Swim Suits' current asset financing policy is relatively aggressive; that is, the company finances some of its permanent assets with short-term discretionary debt. c. Swim Suits follows a relatively conservative approach to current asset financing; that is, some of its short-term needs are met by permanent capital. d. Without income statement data, we cannot determine the aggressiveness or conservatism of the company's current asset financing policy. e. Without cash flow data, we cannot determine the aggressiveness or conservatism of the company's current asset financing policy.

FIN 534 – Homework Chapter 16 correct 100%. 4 and 5 STEP BY STEP Swim Suits Unlimited is in a highly seasonal business, and the following summ...

Q: FIN 534 – Homework Chapter 16 correct 100%. 4 and 5 STEP BY STEP Swim Suits Unlimited is in a highly seasonal business, and the following summary balance sheet data show its assets and liabilities at peak and off-peak seasons (in thousands of dollars): Peak Off-Peak Cash $ 50 $ 30 Marketable securities 0 20 Accounts receivable 40 20 Inventories 100 50 Net fixed assets 500 500 Total assets $690 $620 Payables and accruals $ 30 $ 10 Short-term bank debt 50 0 Long-term debt 300 300 Common equity 310 310 Total claims $690 $620 From this data we may conclude that a. Swim Suits' current asset financing policy calls for exactly matching asset and liability maturities. b. Swim Suits' current asset financing policy is relatively aggressive; that is, the company finances some of its permanent assets with short-term discretionary debt. c. Swim Suits follows a relatively conservative approach to current asset financing; that is, some of its short-term needs are met by permanent capital. d. Without income statement data, we cannot determine the aggressiveness or conservatism of the company's current asset financing policy. e. Without cash flow data, we cannot determine the aggressiveness or conservatism of the company's current asset financing policy. 2. Which of the following statements is CORRECT? a. A firm that makes 90% of its sales on credit and 10% for cash is growing at a constant rate of 10% annually. Such a firm will be able to keep its accounts receivable at the current level, since the 10% cash sales can be used to finance the 10% growth rate. b. In managing a firm's accounts receivable, it is possible to increase credit sales per day yet still keep accounts receivable fairly steady, provided the firm can shorten the length of its collection period (its DSO) sufficiently. c. Because of the costs of granting credit, it is not possible for credit sales to be more profitable than cash sales. d. Since receivables and payables both result from sales transactions, a firm with a high receivables-to-sales ratio must also have a high payables-to-sales ratio. e. Other things held constant, if a firm can shorten its DSO, this will lead to a higher current ratio. 3. Halka Company is a no-growth firm. Its sales fluctuate seasonally, causing total assets to vary from $320,000 to $410,000, but fixed assets remain constant at $260,000. If the firm follows a maturity matching (or moderate) working capital financing policy, what is the most likely total of long-term debt plus equity capital? a. $260,642 b. $274,360 c. $288,800 d. $304,000 e. $320,000 4. Your consulting firm was recently hired to improve the performance of Shin-Soenen Inc, which is highly profitable but has been experiencing cash shortages due to its high growth rate. As one part of your analysis, you want to determine the firm’s cash conversion cycle. Using the following information and a 365-day year, what is the firm’s present cash conversion cycle? Average inventory = $75,000 Annual sales = $600,000 Annual cost of goods sold = $360,000 Average accounts receivable = $160,000 Average accounts payable = $25,000 a. 120.6 days b. 126.9 days c. 133.6 days d. 140.6 days e. 148.0 days 5. Affleck Inc.'s business is booming, and it needs to raise more capital. The company purchases supplies on terms of 1/10 net 20, and it currently takes the discount. One way of getting the needed funds would be to forgo the discount, and the firm's owner believes she could delay payment to 40 days without adverse effects. What would be the effective annual percentage cost of funds raised by this action? (Assume a 365-day year.) a. 10.59% b. 11.15% c. 11.74% d. 12.36% e. 13.01%

FIN 3320 with steps 1. Heino Inc. hired you as a consultant to help them estimate their cost of capital. You have been provided with the followin...

ECON 2301 Principles of Macroeconomics 1. Aggregate demand curves are a. downward sloping. b. upward sloping. c. horizontal. d. vertical. 2....

Q: ECON 2301 Principles of Macroeconomics 1. Aggregate demand curves are a. downward sloping. b. upward sloping. c. horizontal. d. vertical. 2. As the price level falls, ceteris paribus, people holding some of their wealth in monetary form become a. less wealthy and they buy less. b. more wealthy and they buy more. c. less wealthy and they buy more. d. more wealthy and they buy less. 3. Suppose consumption decreases at each price level. As a result, a. aggregate demand increases, and the AD curve shifts leftward. b. aggregate demand decreases, and the AD curve shifts leftward. c. aggregate demand increases, and the AD curve shifts rightward. d. aggregate demand decreases, and the AD curve shifts rightward. 4. If we derive the Aggregate Demand curve from the equation of exchange and if the Money supply and the Velocity of money are held constant while the Price Level falls, then what happens to the Quantity of RGDP demanded? a. It increases as the AD shifts to the right. b. It increases as there is a movement downward along the AD. c. It decreases as the AD shifts to the left. d. It decreases as there is a movement upward along the AD. 5. If we derive the Aggregate Demand curve from the equation of exchange and hold the Velocity of Money constant, what is the only thing that can make the AD shift? a. An increase in Government spending. b. A change in Taxes. c. A change in the Price Level. d. A change in the Money Supply. 6. A short-run aggregate supply curve shows a. the amount of a particular good producers are willing and able to buy at a particular price, ceteris paribus. b. the real output (Real GDP) producers are willing and able to sell at different price levels, ceteris paribus. c. the real output (Real GDP) people are willing and able to buy and to sell at different price levels, ceteris paribus. d. the real output (Real GDP) people are willing and able to buy at different price levels, ceteris paribus. 7. Changes in which of the following will not cause the AS curve to shift? a. the wage rate b. prices of nonlabor inputs c. the price level d. productivity e. All of the above will cause the AS curve to shift. 8. If foreign input prices, for a good such as oil, increase and the United States purchases those inputs, then a. the U.S. AD curve will shift leftward and U.S. prices will fall. b. the U.S. AD curve will shift rightward and U.S. prices will rise. c. the U.S. AS curve will shift leftward and U.S. prices will rise. d. the U.S. AS curve will shift rightward and U.S. prices will fall. 9. The intersection of the Short Run Aggregate Supply curve and the Long Run Aggregate Supply curve indicates a. long run equilibrium. b. the end result of Say's Law. c. the expected price level. d. that a recession is about to start. 10. The short-run aggregate supply curve slopes upward because an increase in the price level leads to a. an increase in profit in the short run that causes firms to produce more. b. a decrease in profits in the short run that causes firms to produce more. c. an increase in profits in the short run that causes firms to produce less. d. a decrease in profits in the short run that causes firms to produce less. 11. Natural Real GDP is a. less than full-employment Real GDP. b. equal to full-employment Real GDP. c. greater than full-employment Real GDP. d. independent of full-employment Real GDP. 12. A recessionary gap exists when AD and SRAS a. fail to intersect. b. intersect to the right of Natural Real GDP. c. intersect to the left of Natural Real GDP. d. both have a positive slope. 13. In a self-regulating economy, inflationary and recessionary gaps produce shifts of the ________ curve that ________. a. AD, maintain the short-run equilibrium point b. AD, move the economy to a long-run equilibrium point c. SRAS, maintain the short-run equilibrium point d. SRAS, move the economy to a long-run equilibrium point 14. The Natural Level of Real GDP will increase (i.e., LRAS will shift right) because of a. an increase in capital equipment. b. an improvement in technology. c. an increase in the working age population. d. all of the above. 15. The LRAS curve shows the Real GDP the economy is prepared to a. demand at a single price level, assuming wage rates and all other input costs have fully adjusted to eliminate a recessionary or inflationary gap. b. demand at different price levels, assuming wage rates and all other input costs have fully adjusted to eliminate a recessionary or inflationary gap. c. supply at different price levels, assuming wage rates and all other input costs have fully adjusted to eliminate a recessionary or inflationary gap. d. supply at a single price level, assuming wage rates and all other input costs have fully adjusted to eliminate a recessionary or inflationary gap. 16. Which of the following is most nearly consistent with Say’s law? a. When a person produces one good, he plans to demand other goods. b. When a person produces a good, he plans to sell it. c. When a person buys a good, he plans to pay for it with money. d. When a person goes to work, he plans to produce. 17. According to Say’s law, there can be a. neither a general overproduction nor a general underproduction of goods. b. a general overproduction but not a general underproduction of goods. c. a general underproduction but not a general overproduction of goods. d. both a general overproduction and a general underproduction of goods. 18. The classical economists felt that wages and prices were flexible in a. neither the upward direction nor the downward direction. b. the upward direction but not in the downward direction. c. the downward direction but not in the upward direction. d. both the upward and downward directions. 19. In the classical view of the credit market, a rise in saving produces a rise in investment via a a. rising interest rate. b. falling interest rate. c. rising price level. d. falling price level. 20. Keynes most likely believed that investment a. is largely insensitive to changes in interest rates. b. is largely sensitive to changes in interest rates. c. is unrelated to business expectations. d. is related to business expectations only during recessionary periods. 21. Keynes believed that a. Say’s law would hold in a laissez-faire economy. b. the economy would always be near or on its production possibilities frontier. c. wages and prices are often inflexible in the downward direction. d. the equilibrium level of output will always be at the full-employment level of output. 22. Which statement is consistent with what Keynes believed about consumption and disposable income? a. Consumption depends upon disposable income and falls as disposable income rises. b. Consumption rises by the same amount as disposable income rises. c. Consumption rises by less than disposable income rises. d. Disposable income depends upon consumption. 23. The ratio of the change in consumption to the change in income is called the a. marginal utility of consumption. b. average utility of consumption. c. marginal propensity to consume. d. average propensity to consume. 24. If autonomous government spendingfr rises by $60 and, as a result, Real GDP rises by $300, then the marginal propensity to consume is ________. a. .60 b. .70 c. .80 d. .90 e. none of the above 25. Which of the following is NOT an aspect of Keynesian economics? a. Wages and prices tend to be inflexible downward. b. Supply does not necessarily generate its own demand. c. A weak direct relationship exists between saving and the interest rate. d. Unemployment above natural unemployment is always a temporary phenomenon. 26. In the TE-TP (Keynesian) model, we assume the price level is ________, and this ________ the effect of the multiplier on Real GDP. a. fixed, maximizes b. fixed, minimizes c. perfectly flexible, maximizes d. perfectly flexible, minimizes 27. A balanced budget occurs when a. the national debt is reduced to zero dollars. b. a budget deficit during one year is matched by a budget surplus in the next year. c. transfer payments equal tax receipts. d. government expenditures equal tax receipts. e. the deficit-GDP ratio equals one. 28. Suppose aggregate demand is too low to bring about the Natural Real GDP level. A Keynesian policy prescription would call for a. an increase in taxes to close this recessionary gap. b. a decrease in taxes to close this recessionary gap. c. an increase in taxes to close this inflationary gap. d. a decrease in taxes to close this inflationary gap. 29. Which of the following is an example of crowding out? a. A decrease in the rate of growth of the stock of money decreases GDP. b. A deficit causes an increase in interest rates that causes a decrease in investment spending. c. An increase in tariffs causes a decrease in imports. d. A decrease in government housing subsidies causes an increase in private spending on housing. 30. Which of the following is not an example of a "lag" that diminishes the potential impact of fiscal policy? a. the data lag b. the recessionary lag c. the legislative lag d. the transmission lag e. none of the above, i.e., all are examples of such lags

correct answer + steps to problems 1) Performance reports _____. A. ignore areas that are presumed to be running smoothly B. provide feedback by ...

Q: correct answer + steps to problems 1) Performance reports _____. A. ignore areas that are presumed to be running smoothly B. provide feedback by comparing results with plans and by highlighting deviations from plans C. are deviations from a plan D. are quantitative expressions of action plans 2) Budgets _____. A. ignore areas that are presumed to be running smoothly B. are deviations from a plan C. are quantitative expressions of action plans D. provide feedback by comparing results with plans and by highlighting deviations from plans 3) According to the Financial Executives Institute, one function of the treasurer is _____. A. government reporting B. reporting and interpreting financial information C. Short term financing D. tax administration 4) Which of the following is not a major factor causing changes in management accounting today? A. E-commerce is not a major factor. B. Declining work ethic is not a major factor. C. Increased global competition is not a major factor. D. Increasing importance of the service sector of the economy is not a major factor. 5) Below is a statement from the Institute of Management Accountants’ Statement of Ethical Professional Practice. “Refrain from disclosing confidential information acquired in the course of their work except when authorized, unless legally obligated to do so.” It is an example of _____. A. integrity B. competence C. confidentiality D. objectivity 6) Ethical accountants are important to society because _____. A. none of these answers is correct B. they pay their taxes C. the information produced is reliable D. they will not go to prison and waste taxpayers' money 7) _____ refers to accounting information developed for managers within an organization. A. Tax accounting B. Financial accounting C. Managerial accounting D. Internal auditing 8) The primary users of management accounting information are _____. A. suppliers B. internal decision makers C. governmental regulatory authorities D. bankers 9) _____ is the field of accounting that develops information for external decision makers such as stockholders, suppliers, banks, and government regulatory agencies. A. Financial accounting B. Management accounting C. Tax accounting D. Auditing 10) The _____ is also called the statement of financial position. A. balance sheet B. income statement C. statement of retained earnings D. statement of cash flows 11) Any event that affects the financial position of an organization and requires recording is called a(n)_____. A. account B. transaction C. posting D. accounting change 12) _____ would not appear on the financial statements for a sole proprietorship. A. Cost of Goods Sold B. Paid-in Capital C. Accumulated Depreciation D. Unearned Sales Revenues 13) The accounting convention of _____ guides the relative sophistication of the accounting system. A. cost benefit B. objectivity C. Conservatism D. materiality 14) Mr. Bryant invested $50,000 cash in a new corporation. The new corporation will record this transaction with a debit to_____. A. Cash and a credit to Retained Income for $50,000 B. Cash and a credit to Paid-in Capital for $50,000 C. Retained Earnings and a credit to Cash for $50,000 D. Paid-in Capital and a credit to Retained Earnings for $50,000 15) The accounting convention of _____ means selecting the method of measurement that yields the gloomiest immediate results. A. objectivity B. conservatism C. cost benefit D. materiality 16) The statement of cash flows is used for all of the following except_____. A. determining a company's ability to pay its debts when they are due B. evaluating the creditworthiness of the organization C. showing the relationship of net income to changes in cash D. revealing commitments that may restrict future courses of action 17) The Rebecca Company acquired merchandise inventory costing $10,000 on September 1. The company will not pay for the inventory until October 1. This transaction will affect the Rebecca Company by increasing the Merchandise Inventory account by $10,000 and _____. A. decreasing the Accounts Payable account by $10,000 B. decreasing the Capital account by $10,000 C. increasing the Accounts Payable account by $10,000 D. increasing the Capital account by $10,000 18) Nonoperating items on the income statement_____. A. reflect the effects of financial management decisions B. appear on the income statement immediately after gross profit C. are revenues and expenses arising from adjusting entries D. appear only on corporate income statements 19) Which value chain function would include depreciation on transportation cost? A. The customer service function would include depreciation on transportation cost. B. The marketing function would include depreciation on transportation cost C. The distribution function would include depreciation on transportation cost. D. The production function would include depreciation on transportation cost. 20) Which value chain function would include advertising costs? A. The customer service function would include advertising costs. B. The production function would include advertising costs. C. The distribution function would include advertising costs. D. The marketing function would include advertising costs. 21) Which of the following is not a cost driver of customer services costs? A. Travel costs are not a cost driver of customer services costs. B. Number of service calls is not a cost driver of customer services costs. C. Hours spent servicing products are not a cost driver of customer services costs. D. All of these answers are correct 22) Hug Me Company produces dolls. Each doll sells for $20.00. Variable costs per unit total $14.00, of which $6.25 is for direct materials and $5.25 is for direct labor. If total fixed costs are $435,000, then the break even volume in dollars is _____. A. $1,023,529 B. $621,429 C. $1,450,000 D. $435,000 23) If the sales price per unit is $100, the unit variable cost is $75, and total fixed costs are $150,000, then the break even volume in dollar sales rounded to the nearest whole dollar is _____. A. $600,000 B. $150,000 C. $200,000 D. $1,500 24) Knothole Company sells desks at $480 per desk. The costs associated with each desk are as follows: Direct materials $195 Direct labor 126 Variable factory overhead 51 Total fixed costs for the period are $456,840. The break-even volume in dollars is _____. A. $1,573,560 B. $2,030,400 C. $456,840 D. none of these answers is correct 25) _____ of approximating cost functions does not involve the analysis of past costs. A. Visual fit analysis B. Engineering analysis C. High low analysis D. least-squares regression 26) Managers should apply two principles to obtain accurate and useful cost functions. These principles are ____. A. plausibility and reliability B. reliability and validity C. plausibility and believability D. believability and validity 27) In relation to a cost function, the term reliability means_____. A. whether the cost function conforms to a given mathematical model B. how well the cost function predicts future costs C. whether the costs and activities can be easily observed D. how well the cost function explains past cost behavior 28) _____ is a name for a system that first accumulates overhead costs for each of the activities of an organization, and then assigns the costs of activities to the products, services, or other cost objects that caused that activity. A. Cost driver accounting B. Activity based costing C. Transaction costing D. Transaction based accounting 29) _____ need cost accounting systems. A. Service organizations and nonprofit organizations B. Manufacturing firms and service organizations C. Manufacturing firms, service organizations, and nonprofit organizations D. Manufacturing firms and nonprofit organizations 30) _____ is an example of the external financial reporting purpose of the cost management systems. A. The product mix to optimize profitability B. The cost of a manufacturing process C. Budget reporting D. The amount of inventory that should appear on the balance sheet 31) A sales forecast is _____. A. the result of decisions to create conditions B. a prediction of sales under a given set of conditions C. all of these answers are correct D. the same as a sales budget that will generate a desired level of sales 32) _____ budgeting is when budgets are formulated with the active participation of all affected employees A. Team B. Financial C. Shared D. Participative 33) A _____ gives the expected sales under a given set of conditions. A. sales budget B. sales prediction C. sales forecast D. budget forecast 34) Unit sales of Product A are currently 10,000, while unit sales of Product B are double those of Product A. The com¬pany's sales forecast will be _____, assuming sales of Product A increase by 10% and those of Product B increase by 4,000 units. A. 11,000 and 22,000 units, respectively B. none of these answers is correct C. 11,000 and 24,000 units, respectively D. 10,000 and 20,000 units, respectively 35) The master budget includes forecasts for all of the following except _____. A. number of employees B. cash disbursements C. balance sheets D. sales 36) A sales forecast is _____. A. the result of decisions to create conditions B. all of these answers are correct C. the same as a sales budget that will generate a desired level of sales D. a prediction of sales under a given set of conditions 37) _____ are components of a master budget. A. An operating budget and a financial budget B. A cash budget and an activity budget C. A continuous budget and a static budget D. A strategic plan and an operating budget 38) statements is false? A. Flexible budgets are not based on the same revenue and cost behavior assumptions as the static budget. B. Flexible budgets are automatically matched to changes in activity levels C. Flexible budgets are prepared for a range of activity. D. Flexible budgets help provide a basis for management by exception. 39) The master budget quantifies targets for all of the following except _____. A. production B. cost driver activity C. markets D. sales 40) Cost allocation base refers to the _____. A. total costs to be allocated B. total allocated costs C. cost objectives D. cost driver 41) The preferred guidelines for allocating service department costs include _____. A. evaluating performance using allocated costs for each service department B. establishing part or all of the details regarding cost allocation in advance of rendering the service C. allocating variable- and fixed-cost pools simultaneously D. identifying the direct and indirect costs 42) _____ is not a type of cost allocation. A. Reallocation of costs from service departments to production departments B. Allocation of costs of a particular organizational unit to products or services C. Reallocation of costs from production departments to service departments D. Allocation of costs to the appropriate organizational unit 43) Kevin Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: Maintenance Personnel Mixing Finishing Direct dept. costs $126,000 $84,000 $105,000 $175,000 Square footage 800 400 1,600 1,200 Number of employees 8 12 24 32 If the step-down method of allocating costs is used and the Personnel Department is allocated first, then the amount of overhead that would be allocated from Personnel to Finishing is _____. A. $72,000 B. $31,500 C. $105,000 D. $42,000 44) Murphy Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: Maintenance Personnel Mixing Finishing Direct dept. costs $126,000 $84,000 $105,000 $175,000 Square footage 800 400 1,600 1,200 Number of employees 8 12 24 32 If the step-down method of allocating costs is used and the Personnel Department is allocated first, then the amount of overhead that would be allocated from Personnel to Mixing is _____. A. $58,500 B. $63,000 C. $78,000 D. $31,500 45) Serena Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year: Maintenance Personnel Mixing Finishing Direct dept. costs $126,000 $84,000 $105,000 $175,000 Square footage 800 400 1,600 1,200 Number of employees 8 12 24 32 If the step-down method is used to allocate costs and the Maintenance Department is allocated first, then the amount of overhead that would be allocated from Maintenance to Finishing is _____. A. $31,500 B. $57,000 C. $47,250 D. $42,750 46) When the variable costing method is used, fixed factory overhead appears on the income statement as a_____. A. fixed expense B. production-volume variance C. component of cost of goods sold and as a production-volume variance D. component of cost of goods sold 47) _____ is (are) used for external reporting. A. Absorption costing B. Variable costing C. Absorption costing and variable costing D. Direct costing 48) In absorption costing, costs are separated into the major categories of_____. A. manufacturing and nonmanufacturing B. manufacturing and fixed C. variable and nonmanufacturing D. fixed and variable 49) _____ is the first step in designing a management control system. A. Evaluating management's performance B. Establishing organizational goals C. Distinguishing between profit centers and cost centers D. Preparing financial statements 50) _____ is (are) the most basic component of a management control system. A.The organization's long-range budget B.The organization's goals C.Top management's preferences D.The stockholder's preferences 51) Identify which of the following is not a characteristic of a management control system. A.A management control system aids and coordinates the process of making decisions. B.A management control system encourages short term profitability. C.A management control system coordinates forecasting sales and cost driver activities, budgeting, and measuring and evaluating performance. D.A management control system motivates individuals throughout the organization to act in concert. 52) Jewel Company's revenues are $300 and invested capital is $240. Expenses are currently 60% of sales. Jewel Company's current return on investment is _____. A. 50% B. 100% C. none of these answers are correct D. 80% 53) The following information is available for the Peter Company: Sales $500,000 Invested Capital 312,500 ROI 10% The return on sales is _____. A. 10.000% B. none of these answers is correct C. 6.250% D. 1.000% 54) The following information is available for the Peter Company: Sales $150,000 Invested Capital 156,250 ROI 10% The return on sales is _____. A. 10.00% B. none of these answers is correct C. 10.42% D. 62.50%

Wednesday, 29 February 2012

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