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288 True/False questions

  1. 200, 300Suppose that in January, the total overhead of XYZ Co. was $150,000 and that 40% of this overhead is associated with production activity and 60% is general administration, what amount of overhead is considered a product cost? _______

          

  2. FixedSuppose the direct materials used to produce a widget cost $10, and 1/2 hour of direct labor is involved at a rate of $12/hour, and an overhead rate of $8 per direct labor hour is used. What is the cost of the widget recorded as? ___

          

  3. Longterm- _________ assets have a life expectancy over which their value depreciates.

          

  4. working capitalThe difference between current assets and current liabilities is called _______________.

          

  5. revenue recognitionThe ___________________ method that recognizes revenue in the period in which the goods are delivered is called the delivery method.

          

  6. 103430If the total assets of Taylor Inc amount to $206,950 and the liabilities are $103,520, then the total owners' equity is? ________

          

  7. 286000Smith paid $25,000 to Smiling Buddha Co. and received 1,000 shares of $1 par value common stock. How much is credited into the Common Stock account? ______

          

  8. 60000Suppose that in January, the total overhead of XYZ Co. was $150,000 and that 40% of this overhead is associated with production activity and 60% is general administration, what amount of overhead is considered a product cost? _______

          

  9. Trial BalanceBefore preparing financial statements, account balances are figured and a _____________ is prepared.

          

  10. ledgerAn inventory turnover of 6 times is generally ______ than a turnover of 3 times. (Answer is Better or Worse?)

          

  11. Retained EarningsOn January 1, T. Riff invested $5,000 cash into a business as the owner. The cash account is _____________ $5,000.

          

  12. quickThe _____ ratio calculates the ratio of monetary current assets to current liabilities.

          

  13. inventoryJust-in-time inventory systems address the need to eliminate waste through _________ control and production efficiency.

          

  14. paidForeign countries do not necessarily follow the same accounting standards and practices set out by the ____.

          

  15. 0.437The Bagel Company has Net Sales of $28,000, and a Net Income of $12, 240, what is the Profit Margin? _____

          

  16. accounts receivableThe communication of economic events that have taken place in an entity is called __________.

          

  17. 0.161What is the ROA for Gelding Company in 2002? (see figures 2.1 and 2.2) _____

          

  18. 6000Gotcha Co. purchased a truck for $44,000. It has a service life of 100,000 miles and a residual value of $4,000. If it was driven 15,000 miles the first year, what is the depreciation expense for that year using the unit-of-production method? ______

          

  19. net salesA company that obtains a high portion of its capital from debt is said to be highly _________.

          

  20. 300Goody Company manufactures skateboards that retail for $80. Goody recently discover that it has 150 defective skateboards. Each skateboard has $40 of direct material, labor and overhead and the defective boards can be sold for $32 or repaired for $38. If Goody chooses to repair the boards what will its net income for the sale of all 150 boards be? ____

          

  21. creditThe ______ concept refers to the separation of business transactions from those of the business owner(s).

          

  22. yearCurrent assets are cash and assets that are expected to be used up or converted into cash within a ____.

          

  23. Gross Margin__________ paper is a generic term for short-term interest bearing promissory notes issued by large companies.

          

  24. par value________ costs are those costs that correlate with sales or production level.

          

  25. InventoryThe ______ concept refers to the separation of business transactions from those of the business owner(s).

          

  26. investing_________ entries are necessary to modify account balances to fairly reflect the business situation at the end of the period.

          

  27. 1300What is the quick ratio for XYZ company (refer to figure 1)? ____

          

  28. closingThe _______ process involves transferring the balance of the Revenue and Expense accounts (temporary accounts) to the Income Summary account (clearing account).

          

  29. Marketable SecuritiesIf an entity has an excess of cash they often invest in _____________________.

          

  30. stay the sameSkinner Corp has current assets of $78,000 and current liabilities of $75,000. It uses cash to purchase inventory. What is the effect on the current ratio? (increase, decrease, stay the same?) _____________

          

  31. betterThe account names and balances are summarized in the ______.

          

  32. profit marginThe _____________ is derived from Net Income divided by Net Sales.

          

  33. FundamentalA useful way to remember which side an account increases or decreases on is to identify which side of the ___________ accounting equation the account is on.

          

  34. drawingsIn non-corporate entities (proprietorships or partnerships), the paid-in-capital section consists of capital, earnings, and ________.

          

  35. debitsCapital received as an ownership interest in the entity is called ______ capital.

          

  36. MerchandisingA _____________ company is one that converts raw materials into finished goods for sale.

          

  37. Income StatementThe ________________ is a financial report that reports the results of business operations for a specific period of time.

          

  38. Credit (CR)Expense accounts increase on the __________ side.

          

  39. 36350Jones and Co. sells $2500 of inventory that cost $1600. $1200 of the sale is received as cash and the remainder is sold on account. What is the total value of the assets? _______

          

  40. investorsIn periods of _________, LIFO results in lower income than FIFO or average costs.

          

  41. accountThe communication of economic events that have taken place in an entity is called __________.

          

  42. intangible________ costs are those costs that correlate with sales or production level.

          

  43. Period______ costs are those that are associated with the sales and general activities of the accounting period.

          

  44. 154000If an entity has fixed costs of $80,000, variable costs at 48% of sales and sales of $450,000, what is the net income? ________

          

  45. $1,900, $6,300The following transactions took place during April 2003 at Kendrick Co. The opening inventory consisted of 100 units of Product X valued at $10/unit. The following purchases were made during April:

          

  46. gross margin___________ is the total invoice price of goods sold (shipped) or services rendered during a given period.

          

  47. ROI (Return on Investment)__________________________ is broadly defined as net income / investment.

          

  48. 255118LJM's pretax income for January was $1,910 and the tax expense for the matching period was $382. What is the value of the Retained Earnings account at the end of January? ______

          

  49. right_____ costs are the sum of direct labor costs and direct materials cost.

          

  50. capitalA lease for a long period of time (almost the life of the asset) is called a _______ lease and is recorded as an asset.

          

  51. RevenueAn _______ is a cost incurred in the normal course of business to generate revenues.

          

  52. CashOn July 31, Abacus Co. receives their bank statement indicating that $12.80 has been debited from their checking account. What account is credited to record this transaction? ____

          

  53. Adjusting_________ entries are necessary to modify account balances to fairly reflect the business situation at the end of the period.

          

  54. Debit (DR)Expense accounts increase on the __________ side.

          

  55. assetsThe inflow of ______ from selling goods and providing services to customers is called revenue.

          

  56. Periodic InventoryUsing the periodic inventory method, the amount of _________ remaining at the end of a period is subtracted from the total amount of goods available for sale to determine the cost of goods sold for the period.

          

  57. book valueThe difference between __________ and the value actually realized from the sale of a plant asset is called a gain or loss) on the disposition of plant assets.

          

  58. 0.397Suppose Market Price per Share is $56.75, Net Income is $294,000 and there are 100,000 shares outstanding, what is the Earnings per Share? _____

          

  59. 30530Goody Company manufactures skateboards that retail for $80. Goody recently discover that it has 150 defective skateboards. Each skateboard has $40 of direct material, labor and overhead and the defective boards can be sold for $32 or repaired for $38. If Goody chooses to repair the boards what will its net income for the sale of all 150 boards be? ____

          

  60. year____ requires separate disclosure of the original cost of an entity's assets and the depreciation that has accumulated on these assets.

          

  61. Sales Revenue, Income SummaryThe balance in the Sales Revenue account for LJM. Inc at the end of January is $12,200. Using a comma to separate your answer, first indicate what account is debited and then what account is credited? _____________________________

          

  62. corporationA ___________ is a legal entity separate from the owners and it has a charter under which to operate.

          

  63. balancesIf the balance in Accounts _______ increases during a period, the amount of the increase is Added to net income.

          

  64. Debited or DROn January 1, T. Riff invested $5,000 cash into a business as the owner. The cash account is _____________ $5,000.

          

  65. practicesIn non-corporate entities (proprietorships or partnerships), the paid-in-capital section consists of capital, earnings, and ________.

          

  66. intangiblesWhen ___________ (goodwill, trademarks, patents...) are recognized as assets, their cost is written off over their serviceable life by the process of amortization.

          

  67. Depreciation Expense, Accumulated DepreciationIf $1,000 of deprecation expense is recognized for a given period, using a comma to separate your answers, what account is debited and what account is credited? ______________________________________________

          

  68. Cash Flow____ inventory valuation assumes that the most recently acquired goods are sold first.

          

  69. Accounts ReceivableOn January 12, LJM, Inc. makes a $200 sale on credit (customer will pay within a month). What account is debited? ___________________

          

  70. Accounts PayableAt the end of January, various utility bills totaling $450 are received. Utilities Expense is debited $450 and ________________ is credited $450.

          

  71. Accounting CycleThe ________________ refers to the steps that are performed sequentially during an accounting period and that are repeated every subsequent period.

          

  72. unincorporatedA Partnership is an ______________ business owned by two or more persons jointly.

          

  73. rightIn accounting, debit means left and credit means _____.

          

  74. shareholdersStock is issued with a specific amount printed on the face of the certificate and this amount is called the _________.

          

  75. monetaryMoney (cash) or claims to receive a fixed sum of money (accounts receivable, notes receivable...) are called ________ assets.

          

  76. income summaryGoods that are being held for sale or needed to produce a saleable item or service are called _________.

          

  77. Accounts ReceivableOn January 15, LJM, Inc receives a check for $200 payment on account. ___________________ is credited $200 and Cash is debited $200.

          

  78. 114546Suppose Jones and Co. sells merchandise for $1200 cash that originally cost $750. What is the total Owner's Equity after this transaction? _______

          

  79. ledgerterm- Equipment is purchased for $7,200 cash. The equipment is expected to last 10 years. Cash is credited $7,200 and the _________ asset Equipment is debited $7,200.

          

  80. investsWhen an entity _______ in additional property, plant or equipment (PPE), the amount involved is a cash outflow.

          

  81. Bad Debt ExpenseIf the variable cost increases, then the contribution per unit will ________, with the result being that more items will have to be sold in order to reach the breakeven point.

          

  82. liabilitiesAccounting principles are based on a set of concepts that underlie accounting _________.

          

  83. Balance SheetThe amounts of assets, liabilities and equity change from day to day, therefore the amounts shown on the _____________ change also.

          

  84. 10000Mayberry Inc. has sales of $14,000 and $10,000 of that is collected in cash. If the Net Income for Mayberry Inc. is $4,000, what are the total expenses? _______

          

  85. Cost of Goods SoldGoods that have been manufactured but not yet sold are called ______________ inventory.

          

  86. ProductAn _______ is the device used in accounting to record balance changes per item on the financial statements.

          

  87. acceleratedWhen Assets are listed on the left-hand side and Liabilities and Owner's Equity are listed on the right-hand side, this is called the _______ form of the balance sheet.

          

  88. sellActivities that involve spending cash are called ____ of cash.

          

  89. Owners' EquityCapital received as an ownership interest in the entity is called ______ capital.

          

  90. addingNatural resources such as oil, coal, timber are called _______ assets and when the supply of such a resource is reduced it is called depletion.

          

  91. manufacturingItems of material that are to become part of the goods for sale after _____________ are called materials inventory.

          

  92. inventoryUsing the periodic inventory method, the amount of _________ remaining at the end of a period is subtracted from the total amount of goods available for sale to determine the cost of goods sold for the period.

          

  93. oppositeWhen an account has a balance on the side ________ the one where increases are recorded, then it has a deficit balance and it is recorded as a negative number or in parenthesis.

          

  94. owner's equityThe claim against an entity's assets that the owner(s) has is called ______________.

          

  95. longterm- The liabilities that are not expected to be paid within one year are called _________ liabilities.

          

  96. inventoryGoods that are being held for sale or needed to produce a saleable item or service are called _________.

          

  97. providedRevenue that has been collected for goods or services not yet ________ is called unearned revenue.

          

  98. 20Goody Company manufactures skateboards that retail for $80. Goody recently discover that it has 150 defective skateboards. Each skateboard has $40 of direct material, labor and overhead and the defective boards can be sold for $32 or repaired for $38. If Goody chooses to repair the boards what will its net income for the sale of all 150 boards be? ____

          

  99. Additional Paid_________ entries are necessary to modify account balances to fairly reflect the business situation at the end of the period.

          

  100. expenseActivities that involve spending cash are called ____ of cash.

          

  101. DebtCurrent assets are cash and assets that are expected to be used up or converted into cash within a ____.

          

  102. 1.07Smith paid $25,000 to Smiling Buddha Co. and received 1,000 shares of $1 par value common stock. How much is credited into the Common Stock account? ______

          

  103. liquidityThe current ratio is a common measure of _________ that calculates the ratio of current assets to current liabilities.

          

  104. 850If Smiling Buddha has assets of $1,800,000, liabilities of $780,000, and 1200 shares outstanding with a par value of $250 each, what is the book value per share? ____

          

  105. equal toTrading Securities are debt and ______ securities that are held for resale.

          

  106. Breakeven- __________ analysis is used to help decide whether or not to engage in a given business activity.

          

  107. Inventory, Accounts PayableAn initial inventory of supplies is purchased on credit for $800. Using a comma to separate the answer, first give the account that is debited and then give the account that is credited (for example Answers1,Answer2). ___________________________.

          

  108. conservatismThe ____________ concept requires that revenues are recognized only when they are reasonable certain, and expenses are recognized as soon as they are reasonably possible.

          

  109. units of productionThe ___________________ method to calculate depreciation multiples the unit cost by the number of units that asset produced in a period to determine the depreciation expense for that period.

          

  110. Finished GoodsGoods that have been manufactured but not yet sold are called ______________ inventory.

          

  111. depreciationThe ____________ concept requires that revenues are recognized only when they are reasonable certain, and expenses are recognized as soon as they are reasonably possible.

          

  112. TRUEThe type of inventory valuation method chosen will affect the Balance Sheet and Income Statement. True or False? ____

          

  113. DR,CRThe ______ method of presenting cash flows from operations involves summarizing the inflows and outflows related to operations and arriving at a net cash flow from operations.

          

  114. sales revenueStock is issued with a specific amount printed on the face of the certificate and this amount is called the _________.

          

  115. Income Summary, Cost of SalesThe balance in the Cost of Sales account for LJM. Inc. is $6,000. Using a comma to separate your answer, first indicate what account is debited and then what account is credited? _____________________________

          

  116. inflationGoods that are being held for sale or needed to produce a saleable item or service are called _________.

          

  117. assetsIncreases or decreases in account balances are recorded as either ______ or credits.

          

  118. OwnersThe type of inventory valuation method chosen will affect the Balance Sheet and Income Statement. True or False? ____

          

  119. equalCapital received as an ownership interest in the entity is called ______ capital.

          

  120. ROA (Return on Assets)______________________ reflects how much the firm has earned on the investment in all the financial resources committed to the firm.

          

  121. suppliersCreditors have a direct claim on an entity's assets, whereas ______ have a residual claim.

          

  122. Retained EarningsThe end product of financial accounting is the preparation of financial __________.

          

  123. 7025The net loss of Lander Corp. is $10,280 and the total expenses are $17,305. What is the total revenue for the same period? ______

          

  124. individualThe method of maintaining a record of each inventory item is called the _________ inventory method.

          

  125. Simple PaybackThe ______________ period method of capital budgeting consists of determining the number of years required to recover the initial cash investment.

          

  126. Retained EarningsOn January 1, T. Riff invested $5,000 cash into a business as the owner. The cash account is _____________ $5,000.

          

  127. expensesAn _______ is a cost incurred in the normal course of business to generate revenues.

          

  128. Preferred_________ stock provides the owner a preferential claim on the assets if the corporation is liquidated.

          

  129. GeneralIf an entity expects to ____ an asset at the end of its service life, the amount it expects to receive for the asset is called the residual value.

          

  130. Percentage of CompletionThe ___________________ method to calculate depreciation multiples the unit cost by the number of units that asset produced in a period to determine the depreciation expense for that period.

          

  131. contraasset- A ____________ account is subtracted from another asset account.

          

  132. equityA lease for a long period of time (almost the life of the asset) is called a _______ lease and is recorded as an asset.

          

  133. IndirectThe ________ method of preparing a Cash Flow Statement involves reconciling the net income amount to a cash amount.

          

  134. net assetsDividing the Gross Margin by the _________ gives the Gross Margin Percentage.

          

  135. 35000Gotcha Co. purchased a truck for $44,000. It has a service life of 100,000 miles and a residual value of $4,000. If it was driven 15,000 miles the first year, what is the depreciation expense for that year using the unit-of-production method? ______

          

  136. shareholdersOwners of a corporation are called ____________.

          

  137. activitiesThe difference between current assets and current ___________ is called working capital.

          

  138. 13000CLEP Co. paid dividends of $10,000 and its Mortgage Bonds payable increased from $34,000 in 2002 to $$40,000 in 2003. What is the net increase or decrease in cash flow at the end of 2003? _______

          

  139. Commercial__________ paper is a generic term for short-term interest bearing promissory notes issued by large companies.

          

  140. year____ requires separate disclosure of the original cost of an entity's assets and the depreciation that has accumulated on these assets.

          

  141. Income SummaryThe ________________ is a financial report that reports the results of business operations for a specific period of time.

          

  142. Transactions_________ entries are necessary to modify account balances to fairly reflect the business situation at the end of the period.

          

  143. going concernIf fixed costs ________ (increase or decrease?) then more units have to be sold in order to reach the breakeven point.

          

  144. LiabilitiesIf White Co. issues 10 year bonds with a face value (issued amount) of $100,000, then white co. has a _________ account called Bonds Payable of $100,000.

          

  145. Doubtful AccountsThe asset account associated with Bad Debt Expense is the Allowance for _________________.

          

  146. Day's InventoryThe claim against an entity's assets that the owner(s) has is called ______________.

          

  147. DirectThe ______ method of presenting cash flows from operations involves summarizing the inflows and outflows related to operations and arriving at a net cash flow from operations.

          

  148. TurnoverIn practice, accounts are not debited and credited to T-accounts, rather the entries are made in a _______.

          

  149. EquitiesA Balance Sheet with Assets listed at the top and ________ listed underneath is called the report form of a balance sheet.

          

  150. retained earningsAn entity's equity increases when the owners provide capital (buy shares or invest directly) and when profits increase the _________________.

          

  151. Full disclosureThe __________ of common stock is the total shareholders' equity as reported on the balance sheet.

          

  152. 40000Gotcha Co. purchased a truck for $44,000. It has a service life of 100,000 miles and a residual value of $4,000. What is the depreciable cost? _______

          

  153. CR, $40,000An asset that cost $40,000, has accumulated depreciation of $30,000 and is sold for $12,000. What is the entry for the cash account? (dr or cr , Amount) ___________

          

  154. CostA Bank Reconciliation is performed to determine the correct amount of the ____ balance.

          

  155. expenseAn increase in an _______ is recorded on which side of the account? Debit (DR) or left-hand side

          

  156. 41200An entity has the capacity to produce 100,000 medallions per year with total fixed expenses of $180,000 and variable expenses of $3 per medallion. The medallions can be sold for $6.50 each. The company purchases a machine for $24,000 that has a service life of 3 years and that will reduce the variable cost to $1.75 per medallion. If the company produces and sells at 85% capacity for a one-year period, what is the net income at the end of the period? ________

          

  157. $2,200, CRIf Abacus Corp has Net Sales of $28,460, a Gross Margin of 28%, and Net Income of $4,550; what is the total Cost of Goods Sold? __________

          

  158. finished goodsWhen an entity _______ in additional property, plant or equipment (PPE), the amount involved is a cash outflow.

          

  159. +, $2,000If CLEP Co's Accrued Wages were $6,000 in 2002 and $10,000 in 2003, what entry is made on the Cash flow Statement to adjust net income to a cash basis? (write your answer as: + or - , $ amount) _________

          

  160. outstandingNatural resources such as oil, coal, timber are called _______ assets and when the supply of such a resource is reduced it is called depletion.

          

  161. DR, $12,000Smith paid $25,000 to Smiling Buddha Co. and received 1,000 shares of $1 par value common stock. How much is credited into the Common Stock account? ______

          

  162. 11000Roar Inc. has net purchases of $70,000 and the merchandise inventory at the beginning of the period was $22,000. If their sales were $135,000 and their gross margin was 40% of sales, what was the value of the inventory at the end of the period? _______

          

  163. FASBForeign countries do not necessarily follow the same accounting standards and practices set out by the ____.

          

  164. Price per Earnings (P/E)Equity accounts increase on the ___________ side.

          

  165. perpetualThe method of maintaining a record of each inventory item is called the _________ inventory method.

          

  166. 24000Smith paid $25,000 to Smiling Buddha Co. and received 1,000 shares of $1 par value common stock. How much is credited into the Common Stock account? ______

          

  167. CR, $2,000An asset that cost $40,000, has accumulated depreciation of $30,000 and is sold for $12,000. What is the entry for the Gain on the Sale of Plant Asset account? (dr or cr , Amount) __________

          

  168. LIFO____ inventory valuation assumes that the most recently acquired goods are sold first.

          

  169. interrelatedA company that obtains a high portion of its capital from debt is said to be highly _________.

          

  170. Cash____ capital refers to long term liabilities: they come due sometime after one year.

          

  171. taxes payableThe amount an entity owes the government for taxes is called _____________.

          

  172. 4000If an entity borrows $100,000 on August 1, 2002 from First Financial Bank and agrees to 8% interest on the 1-year note, what is the accrued interest on January 31, 2003? ______

          

  173. 19 timesSuppose Market Price per Share is $56.75, Net Income is $294,000 and there are 100,000 shares outstanding, what is the P/E ratio? ________

          

  174. account_______ revenue is revenue that has been earned by the entity but not yet paid to the entity.

          

  175. equityBreak-even Analysis assesses the point at which there are no profits; at that point total revenue is _____ to total costs.

          

  176. short termThe ratio of COGS to Inventory is called the Inventory ________.

          

  177. cashA Bank Reconciliation is performed to determine the correct amount of the ____ balance.

          

  178. Gross salesIf management thinks that ____________ should reflect the difference between selling price and the cost of goods actually sold, then they should use the FIFO method of inventory valuation.

          

  179. Financial StatementThe ________________ is a financial report that reports the results of business operations for a specific period of time.

          

  180. OperationsThe difference between revenues and ________ in called net income.

          

  181. Dual AffectTransaction analysis is the process whereby the concept of ___________ is applied to determine what effect the transaction had on the entity's accounts.

          

  182. accountsA ledger is a group of ________ that is either bound together in a book or kept together in a computer file.

          

  183. Variable________ costs are those costs that correlate with sales or production level.

          

  184. PPEin-capital- The amount shareholders have paid in exchange for their stock is called _______________.

          

  185. 7350If a company has assets of $25,750 and liabilities of $18,400, what is the total of its Owner's Equity? $_____

          

  186. AccumulatedMarketable __________ are current assets.

          

  187. DebitAccount balances are recorded on the same side as an entry that increases the account; therefore Asset accounts have _____ balance.

          

  188. wastingNatural resources such as oil, coal, timber are called _______ assets and when the supply of such a resource is reduced it is called depletion.

          

  189. Expense, $30At the end of January, LJM, Inc. has accrued one month's interest on the $4,000 loan it received from the bank at a yearly interest rate of 9%. Using a comma to separate the two answers, what type of account is debited and for how much? ____________

          

  190. SafetyCapital received as an ownership interest in the entity is called ______ capital.

          

  191. Net SalesResearch and Development is a _______ expense.

          

  192. liabilitiesA corporation whose shares are traded on securities exchanges is called a ______ corporation.

          

  193. adjustingSales Returns and Allowances are another source of _________ entries to the Accounts Receivable account.

          

  194. 2700The equipment that LJM, Inc paid $7,200 for has a life expectancy of 10 years. At the end of January, one month's benefit has been used and the value of the equipment has depreciated. The Depreciation Expense account is debited what amount? ___

          

  195. Accounts Payable, CashDuring January, the $4,800 of Accounts Payable is paid. Using a comma to separate your answers, first give the account that is debited and then give the account that is credited. ______________________

          

  196. Straight LineSkinner Corp has current assets of $78,000 and current liabilities of $75,000. It uses cash to purchase inventory. What is the effect on the current ratio? (increase, decrease, stay the same?) _____________

          

  197. stay the sameBrown Co. has current assets of $62,000 and current liabilities of $50,000. It uses cash to purchase inventory. Will the working capital increase, decrease, stay the same? _____________

          

  198. book value___________ is the total invoice price of goods sold (shipped) or services rendered during a given period.

          

  199. manufacturedThe cost of goods ____________ is the amount of goods completed and transferred to the Finished Goods inventory.

          

  200. 11.4 daysSuppose Market Price per Share is $56.75, Net Income is $294,000 and there are 100,000 shares outstanding, what is the P/E ratio? ________

          

  201. TreasuryBreak-even Analysis assesses the point at which there are no profits; at that point total revenue is _____ to total costs.

          

  202. Book valueWhen preparing financial statements, the account ________ must be determined.

          

  203. Balance SheetThe financial position of an entity at a specific point in time is called a _____________.

          

  204. maximumA plant's capacity is measured by the _______ number of units it can produce.

          

  205. 130000If XYZ company spends $10,000 on production overhead, $100,000 on direct labor, and $20,000 on direct materials, and if no product was sold, the Inventory account would be increased by what amount? ________

          

  206. sameIf an entity expects to ____ an asset at the end of its service life, the amount it expects to receive for the asset is called the residual value.

          

  207. manufacturingA _____________ company is one that converts raw materials into finished goods for sale.

          

  208. Specific IdentificationAngle of _________ is the angle made by the intersection of the sales line & the variable costs line.

          

  209. 50 unitsA market trader rents a stall at a fixed price of $200 for a day and sells souvenirs. These cost the trader $5 each to buy and have a selling price of $9 each. How many souvenirs must be sold to break even? ________

          

  210. Heldto-maturity- Securities that an entity intends to hold until maturity are called ________________ securities.

          

  211. uncertainA contingent liability is an obligation to pay an amount in the future, if and when an _________ event occurs.

          

  212. Net Sales___________ is the total invoice price of goods sold (shipped) or services rendered during a given period.

          

  213. 20491.2Gotcha Co. purchased a truck for $44,000. It has a service life of 100,000 miles and a residual value of $4,000. What is the depreciable cost? _______

          

  214. sourcesActivities that involve spending cash are called ____ of cash.

          

  215. DiscountsIncreases or decreases in account balances are recorded as either ______ or credits.

          

  216. InventoryPaid-in-capital is the amount of capital supplied by equity _________.

          

  217. 60What is the quick ratio for XYZ company (refer to figure 1)? ____

          

  218. TRUE_____ costs are the sum of direct labor costs and direct materials cost.

          

  219. expenseThe difference between revenues and ________ in called net income.

          

  220. 1528CLEP Co. paid dividends of $10,000 and its Mortgage Bonds payable increased from $34,000 in 2002 to $$40,000 in 2003. What is the net increase or decrease in cash flow at the end of 2003? _______

          

  221. Does notAccount balances are recorded on the same side as an entry that increases the account; therefore Asset accounts have _____ balance.

          

  222. Debited or DRA common way of measuring the relative amount of debt and equity capital is the __________.

          

  223. unrecoverableA Partnership is an ______________ business owned by two or more persons jointly.

          

  224. Moving AverageThe ______________ method of determining inventory costs involves calculating an average cost of goods and applying that average cost to both ending inventory and COGS.

          

  225. 20450If the total assets of Taylor Inc amount to $206,950 and the liabilities are $103,520, then the total owners' equity is? ________

          

  226. 2.5The partnership agreement between Abdul and Cowell provided that Cowell work part-time and receive a salary of $75,000, Abdul would work full time with $150,000 salary. They would each receive 9% interest on their invested capital and the remaining net income would be shared equally. On average Abdul's capital account was $100,000 and Cowell's was $90,000. If the net income before salaries was $280,000, by what amount was Cowell's capital account increased? _______

          

  227. originalAn increase in revenue is recorded on which side of the account? Credit (CR), or _____-hand side.

          

  228. publicin-capital- The amount shareholders have paid in exchange for their stock is called _______________.

          

  229. decreaseIf the variable cost increases, then the contribution per unit will ________, with the result being that more items will have to be sold in order to reach the breakeven point.

          

  230. securitiesMarketable __________ are current assets.

          

  231. Cash FlowThe _________ Statement reports the flow of cash during an accounting period.

          

  232. dual aspectThe ___________ concept refers to the double sided nature of all accounting transactions.

          

  233. paidThe matching concept states that when a given event affects both revenues and expenses, the effect on each should be recorded in the ____ accounting period.

          

  234. TurnoverActivities that generate cash are called _______ of cash.

          

  235. exchangeA stock split occurs when a corporation decides to ________ the outstanding shares for other shares (often 2 or 3 times the existing number).

          

  236. shareholdersto-maturity- Securities that an entity intends to hold until maturity are called ________________ securities.

          

  237. Credited or CREquity accounts increase on the ___________ side.

          

  238. PreLand does not depreciate. True or False? ____

          

  239. IncidenceIf fixed costs ________ (increase or decrease?) then more units have to be sold in order to reach the breakeven point.

          

  240. Work in ProgessGoods that have started the manufacturing process but are not yet finished are called _______________ inventory.

          

  241. longThe account names and balances are summarized in the ______.

          

  242. 2.94What is the current ratio for XYZ company (refer to figure 1)? ___

          

  243. Prime_____ costs are the sum of direct labor costs and direct materials cost.

          

  244. CR, $1,800If an entity's Account Receivable increased from $64,000 to $78,000 and sales remained constant at $300,000, how much cash did the entity collect from its customers during the year? ________

          

  245. Debited or DRIncreases or decreases in account balances are recorded as either ______ or credits.

          

  246. FIFO_____ costs are those costs that do not vary with sales or production level.

          

  247. PayableIf the balance in Accounts _______ increases during a period, the amount of the increase is Added to net income.

          

  248. debt ratioExpense accounts increase on the __________ side.

          

  249. cashWhen dividends are paid in the form of stocks rather than ____, they are called stock dividends.

          

  250. DecreaseA Bank Reconciliation is performed to determine the correct amount of the ____ balance.

          

  251. dividendsPayment of _________ is a financing activity that is a use of cash.

          

  252. 35000Suppose that in January, the total overhead of XYZ Co. was $150,000 and that 40% of this overhead is associated with production activity and 60% is general administration, what amount of overhead is considered a product cost? _______

          

  253. materialityThe ___________ concept refers to the practice of accountants to use Generally Accepted Accounting Principles (GAAP) except when to do so would be expensive or difficult, and where it makes no real difference if the rules are ignored.

          

  254. leveragedA company that obtains a high portion of its capital from debt is said to be highly _________.

          

  255. limitedAssets like property, plant and equipment have a _______ life, thus their value depreciates over time.

          

  256. AccruedThe type of inventory valuation method chosen will affect the Balance Sheet and Income Statement. True or False? ____

          

  257. 215750If a plant asset is purchased for $30,000 and it has an expected residual value of $3,000 at the end of its 10 year life, what is the amount of depreciation expense charged each year? ______

          

  258. usesin-capital- The amount shareholders have paid in exchange for their stock is called _______________.

          

  259. DebitIncreases or decreases in account balances are recorded as either ______ or credits.

          

  260. subsidiariesThe amount of equity that has been earned by the __________ of the entity is called Retained Earnings.

          

  261. Current liabilities___________________ are those obligations that are expected to be paid within one year.

          

  262. Retained Earnings, CashWhen ___________ (goodwill, trademarks, patents...) are recognized as assets, their cost is written off over their serviceable life by the process of amortization.

          

  263. subtractingIf the balance in Accounts Receivable increased during the period, total cash collected (collections) can be determined by ___________ the increase in receivables from the sales revenue.

          

  264. AcceptedThe process of transferring the individual debits and credits from the journal to the ______ is called posting.

          

  265. JournalIn practice, accounts are not debited and credited to T-accounts, rather the entries are made in a _______.

          

  266. accountingSales Returns and Allowances are another source of _________ entries to the Accounts Receivable account.

          

  267. 29000CLEP Company has a net income of $24,000 for the period ending 2003 and on the Income Statement for the period ended 2003 it reported a depreciation expense of $6,000. What is the total cash flow from operations after this is adjusted for? _______

          

  268. increaseAn increase in an _______ is recorded on which side of the account? Debit (DR) or left-hand side

          

  269. #EANF#in-capital- In a Corporation, _______________ is listed as common stock.

          

  270. LossThe area below the fixed cost line and to the left of the BE point (grey shade) represents the area of ____.

          

  271. Will notIf the selling price of cleaning a coat rises to $15, then the contribution per unit will rise to $5, and that will require cleaning only 120 coats to break even. This will or will not improve the drycleaner's profitability? ________

          

  272. 27050If a company has assets of $25,750 and liabilities of $18,400, what is the total of its Owner's Equity? $_____

          

  273. $3,000, $7,400The following transactions took place during April 2003 at Kendrick Co. The opening inventory consisted of 100 units of Product X valued at $10/unit. The following purchases were made during April:

          

  274. +, $4,000If CLEP Co's Accrued Wages were $6,000 in 2002 and $10,000 in 2003, what entry is made on the Cash flow Statement to adjust net income to a cash basis? (write your answer as: + or - , $ amount) _________

          

  275. DR, $30,000An asset that cost $40,000, has accumulated depreciation of $30,000 and is sold for $12,000. What is the entry for the accumulated depreciation account? (dr or cr , Amount) ___________

          

  276. Rent ExpenseXYZ. Corp is assumed to have a total of $7,132 in its Allowance for Doubtful Account. To record this transaction, what account is debited? ________________

          

  277. liabilityIf White Co. issues 10 year bonds with a face value (issued amount) of $100,000, then white co. has a _________ account called Bonds Payable of $100,000.

          

  278. revenueThe realization concept states that the amount recognized as _______ is the amount that is reasonably certain to be realized.

          

  279. statementsIn non-corporate entities (proprietorships or partnerships), the paid-in-capital section consists of capital, earnings, and ________.

          

  280. amountsThe _______ credited to each partner depends on the partnership agreement.

          

  281. GAAPin-capital- In a Corporation, _______________ is listed as common stock.

          

  282. entityThe ______ concept refers to the separation of business transactions from those of the business owner(s).

          

  283. Taxes Payable, $382The amount an entity owes the government for taxes is called _____________.

          

  284. moneyCreditors have a direct claim on an entity's assets, whereas ______ have a residual claim.

          

  285. Credit (CR)A lease for a long period of time (almost the life of the asset) is called a _______ lease and is recorded as an asset.

          

  286. 1000A dry-cleaning shop takes two types of clothing. Jackets cost $6 to clean and the customer is charged $9 per garment. Coats cost $10 to clean and the customer is charged $12 per garment. The monthly fixed costs are $600 for each garment (representing the rental costs of two different types of machine). The shop expects to take in 500 jackets and 500 coats in the month. What is the total profit for the month? ______

          

  287. Cash FlowIf an entity expects to ____ an asset at the end of its service life, the amount it expects to receive for the asset is called the residual value.

          

  288. liabilitiesThe part of the current asset not financed by the current ___________ is called working capital.