Test 942 ACCOUNTING APPLICATIONS 1
1.One of the purposes of the Uniform Commercial Code is to regulate
A.credit transactions. C.economic policies.
B.business competition. D.product development.
2.Top-Notch Wheels buys mountain bikes from The Great Colorado Mountain Bike Company and sells them to bike shops. Top-Notch Wheels is an example of a(n)
A.agent. C.producer.
B.retailer. D.wholesaler.
3.One way that businesses use technology to move products efficiently through the distribution chain is by
A.developing company web sites to promote product.
B.implementing an automatic identification system.
C.tracking the shipping expenses in a database system.
D.encouraging the use of networked trading communities.
4.Customer satisfaction, employee contentment, and profit can be directly linked to
A.ethical business practices.C.prestigious pricing strategies.
B.paying higher wages than competitors.D.automated distribution centers.
5.Which of the following is a factor that a business should consider when selecting a channel of distribution:
A.Type of product C.Credit policy
B.Return process D.Size of sales force
6.Letters of inquiry that businesses write to other businesses are routine business communication and usually contain only
A.complex instructions. C.confidential data.
B.basic information. D.technical explanations.
7.A characteristic of a simple written report is that it usually is
A.detailed. C.abstract.
B.formal. D.short.
8.Which of the following is an example of a complex written report often used by large businesses to provide general and accounting information to stockholders:
A.Service report C.News report
B.Annual report D.Credit report
9.Accounting department managers can make sure that even an informal staff meeting is an effective use of time if the managers will
A.follow Robert's Rules of Order.C.ask attendees to prepare agendas.
B.distribute minutes before starting.D.stick to a planned agenda.
10.Which of the following is a factor that affects a business's selection of policies to guide its operations:
A.The accounting skills of employees C.The nature of the business
B.The personal preferences of management D.The space available to display policies
11.What type of product do consumers usually need more information about before buying in order to get the best price?
A.Specialty C.Industrial
B.Shopping D.Convenience
12.In a market economic system, who owns most of the means of production of goods and services?
A.Political parties C.Entrepreneurs
B.Businesses and individualsD.Government
13.If a government wants to decrease economic growth, it would use a contractionary fiscal policy that might involve
A.increasing government spending. C.decreasing regulations.
B.increasing taxes. D.decreasing unemployment.
14.Each purchase strengthens the economy by encouraging
A.investment. C.trade.
B.expansion. D.competition.
15.If total cost is $3,000 with zero quantity produced and $6,500 with 1,000 items produced, what is the marginal cost of producing each item?
A.$1.00 C.$6.50
B.$3.00 D.$3.50
16.Price stability, which means that the price levels stay fairly constant, is an example of a(n)
A.business theory. C.industry standard.
B.economic goal. D.monetary law.
17.High levels of inflation often have a negative effect on a business's
A.secondary market. C.import quota.
B.credit rating. D.purchasing power.
18.When the economy takes a downturn that lasts for six months, a state of ______is said to exist.
A.expansion C.depression
B.recessionD.inflation
19.What is human relations?
A.The ability of people to get along with each other
B.The number of people with whom you interact on a daily basis
C.The ways that people form/conduct relationships with one another
D.Activities sponsored by a business to create a positive public image
20.Which of the following is an example of a conflict response mode:
A.Exclusion C.Mediation
B.Frustration D.Avoidance
21.An accounting department manager giving an employee sincere praise, compliments, and positive feedback is an example of providing
A.recognition. C.support.
B.rewards. D.training.
22.An advantage to retailers of offering credit is that credit customers
A.often buy impulse items more freely.C.always pay their accounts promptly.
B.have little effect on store profits.D.spend more time deciding to buy.
23.It is important for an accounting firm's owner to set investment goals that are
A.conservative. C.vague.
B.measurable. D.accurate.
24.A customer's stealing money from an open cash register is an example of ______risk.
A.economic C.natural
B.humanD.personal
25.The Melody Makers Music Company, a privately owned business, brings in $228,000 in sales during the year. Its cost of goods sold totals $68,000, and it has operating expenses of $25,700 for the same year. If the shop wanted to take out a loan to expand, what group of people would be the most interested in this information?
A.CreditorsC.Managers
B.Top executives D.Investors
26.Why does a business set up budgets that estimate its income and operating expenses?
A.To increase the business's productionC.To help the business control its spending
B.To increase the business's sales D.To enable the business to offer credit
27.Compute a business's net profit using the following information in its financial statements:
Cost of goods sold, $450,000; Total operating expenses, $298,000; Total revenue, $847,000.
A.$152,000C.$99,000
B.$53,000 D.$397,000
28.What do businesses need to develop and use in order to prepare financial statements?
A.Accounting systems C.Balance sheets
B.Operating budgets D.Depreciation records
29.What do businesses keep to use as evidence of financial transactions?
A.Balance sheets C.Source documents
B.Income statements D.Sales budgets
30.Why is it important for businesses to periodically evaluate cash-handling techniques?
A.To prevent shortages C.To reconcile deposits
B.To audit payments D.To count change funds
31.Before authorizing payment to vendors, businesses usually
A.process checks. C.verify invoices.
B.negotiate terms. D.organize discounts.
32.What do businesses need to monitor to control their accounts payable?
A.Availability of cash C.Amount of credit to extend
B.Value of assets D.Type of raw materials
33.When a business values long-term debt, it is assigning ______to liabilities.
A.income C.operating costs
B.dollar amounts D.profit
34.Which of the following are long-term debts that businesses sell to investors to obtain capital:
A.Stocks C.Shares
B.Bonds D.Loans
35.When preparing a customer statement, a business includes the term 5/15, n30 which tells the customer that the business is
A.offering a discount for prompt payment.
B.giving the customer more than 30 days to pay.
C.charging a 5% penalty for late payment.
D.adding sales tax to the amount of the purchase.
36.In which of the following situations might a business decide that it will be unable to collect certain receivables:
A.Customer relocates C.Customer files bankruptcy
B.Business loses original invoice D.Business eliminates debts
37.Businesses maintain employee earnings records that include information about
A.net worth and liquid assets. C.types and amounts of deductions.
B.job titles and descriptions. D.personal debt and investments.
38.A business deducting the amount of employees' wages and salaries from cash assets is an example of
A.estimating payroll earnings. C.allocating payroll costs.
B.calculating personal expenses. D.determining pay rates.
39.A business that depreciates an asset by an equal amount for each year of the asset's life is using the ______method of depreciation.
A.partial-period C.accelerated-value
B.straight-line D.double-declining
40.A sales policy of offering discounts to customers usually impacts which category of a business's income statement?
A.Cost of goods sold C.Operating expenses
B.Gross profit D.Net sales
41.How might a business in Country A that is buying products from a business in Country B arrange to pay for those products in order to prevent an exchange loss?
A.With a credit memorandum C.In the currency of Country B
B.By certified check D.In the currency of Country A
42.Which of the following do businesses often consider when evaluating the company's liquidity:
A.Credit rating C.Accounts payable
B.Cost of goods sold D.Accounts receivable
43.Which of the following does a business estimate when preparing a sales budget for the year:
A.Amount of inventory it will sell C.Dates of planned deliveries
B.Number of repeat customers D.Cost of purchasing inventory
44.Which of the following is an example of an expense that businesses include in a selling expenses budget:
A.Insurance C.Advertising
B.Inventory D.Maintenance
45.Calculate the return-on-sales ratio if a business has sales of $900,000 and net profit of $135,000.
A.12% C.15%
B.17% D.20%
46.In which of the following situations would a business list a disbursement of funds as a decrease in assets on financial statements:
A.Determining future financing needs C.Estimating value of current acquisitions
B.Allocating funds among projects D.Paying cash dividends to investors
47.In a preliminary screening of job applicants, employers should consider the applicants'
A.pre-employment test results.C.background and/or job experience.
B.personal information. D.list of references.
48.One of the personnel records that businesses are required to maintain for a certain period of time is the ______record.
A.income tax withholding C.flextime work schedule
B.job specification D.pre-retirement counseling
49.Why is it important to the business for accounting department managers/supervisors to receive training and development?
A.They want to be promoted. C.They need to be challenged.
B.Their work affects the business's success. D.Their jobs lack interest and variety.
50.One of the ways in which managing diversity contributes to the business's success is that the business will be able to
A.reduce its productivity levels. C.create a homogeneous workforce.
B.attract and to retain talented workers. D.make managers' jobs easier for them.
51.Which of the following may result if a grievance with an accounting department employee is poorly handled:
A.Employee productivity will probably increase.C.Employee morale will probably decrease.
B.Employee hostility will probably decrease.D.Employee loyalty will probably increase.
52.A marketing-information management system can help businesses to
A.discover employee potential.C.motivate accounting department employees.
B.discover new markets.D.practice good business ethics.
53.Businesses maintain information about inventory levels, the types of products that customers are buying, and the reasons for any returns in order to
A.contact new vendors. C.develop display ideas.
B.make marketing decisions. D.update promotional materials.
54.One of the benefits to a business of tabulating the information contained in a marketing survey is to determine if some
A.people did not answer all of the questions. C.people did not provide their names.
B.questions were difficult to understand. D.questions required lengthy answers.
55.Which of the following is a factor that might make it necessary for a business to change its marketing strategy:
A.Economy remains stable. C.Competition is limited.
B.Consumers are satisfied. D.Technology is advancing.
56.Mass marketing is not as precise as ______marketing.
A.promotionalC.event
B.direct D.segment
57.Company XYZ has developed a new flavor of ice cream called Hunky Chunky and has selected a target market that consists of boys, ages 7-15, who are living at home with their parents in a household that earns between $30,000 and $60,000 a year. This method of target market selection is based on
A.psychographics. C.geographics.
B.demographics. D.socioeconomics.
58.Businesses often conduct a situational analysis during the marketing-planning process to identify possible threats in the marketplace in order to turn those threats into
A.opportunities. C.objectives.
B.sales strategies. D.accounting tactics.
59.Which of the following is a factor that new businesses consider when conducting an analysis of competitors in a specific market:
A.Product quality and price C.Cost of supplies and equipment
B.Size and availability of space D.Industry research and training
60.Why do businesses usually prepare short-term sales forecasts?
A.Businesses know that market conditions will remain the same for a year.
B.Forecasting methods are only appropriate for one year.
C.The shorter the forecast, the more accurate the prediction.
D.Businesses can obtain the results from longitudinal studies conducted during the year.
61.An objective of a business's marketing plan is to increase sales by increasing the amount spent on promotion. If current sales are $2,350,750 and the business spends 7% of that on promotion, how much more will it spend if it increases the promotional budget to 9%?
A.$47,015 C.$48,975
B.$46,350 D.$49,230
62.An important reason for evaluating the performance of marketing plans is to
A.take corrective action.C.analyze market price.
B.gather accounting data. D.schedule each task.
63.One important way that accounting information is used in business is to prepare
A.pricing systems. C.inventory controls.
B.operating procedures. D.financial reports.
64.When Roger retrieved a client's information and dialed the phone number listed, he discovered the information was incorrect. This is an example of the importance of ______records.
A.quality C.digital
B.archived D.required
65.Judy fell from a display platform and tore the ligaments in her ankle. Her injury is considered a(n)
A.sprain. C.hernia.
B.open wound. D.strain.
66.A type of security problem that involves deceiving or cheating a business out of money or property is
A.fraud. C.robbery.
B.burglary. D.pilferage.
67.Businesses that provide training to accounting department employees so they will understand their jobs and be able to perform effectively are often able to create a
A.growth opportunity. C.friendly atmosphere.
B.secure environment. D.quality culture.
68.What might stockholders do if a corporation was unable to pay dividends because of excessive expenses?
A.Invest elsewhere.C.Reduce earnings.
B.Organize a takeover. D.Buy additional shares.
69.Determine whether the following statement is true or false: A budget may be used as a tool for controlling expenses.
A.False, budgets are of no use in controlling expenses.
B.False, budgets only project expenses.
C.True, budgets project exact income.
D.True, budgets provide standards for spending in various categories.
70.Which of the following is an example of a maintenance function:
A.Straightening merchandiseC.Restocking merchandise
B.Repairing fixtures and equipmentD.Assembling displays
71.Following an accounting department employee for a few days to obtain information about that particular career is an example of
A.job shadowing. C.serving an internship.
B.volunteering. D.personal interviewing.
72.Licenses, certificates, awards, and honors should be included in the ______section of a résumé.
A.experienceC.education
B.career goals D.personal data
73.Carrie is frequently upset because she tries to get her job done, spend time with her family, and have some time for herself. Which of the following benefits of time management will be most meaningful to Carrie:
A.Enhanced self-esteem C.Increased organization
B.Increased productivity D.Reduced stress and frustration
74.Which of the following statements about pricing is true:
A.Once prices are set, businesses should not adjust them.
B.The selling price can never be set too low.
C.The cost of the product determines its selling price.
D.The price must satisfy both buyers and sellers.
75.Technology allows manufacturers to pre-print product packaging with Universal Product Codes (UPCs) which contain ______information.
A.operating C.pricing
B.tracking D.selling
76.If the total costs of a product decrease, a business's prices may ______to increase sales volume.
A.be raised C.jump sharply
B.be lowered D.remain the same
77.What is the break-even point in units for a business whose total fixed costs are $325,500, selling price per unit is $18, and variable cost per unit is $15.50?
A.120,250 C.150,500
B.130,200 D.180,550
78.The stages of the product life cycle influence which ______marketers will use.
A.marketing-information management systemC.government regulations
B.product characteristics D.marketing strategies
79.When a business reduces its use of natural resources to create new products, the business is exhibiting a(n) ______attitude.
A.authentic C.ethical
B.logical D.conservative
80.Which of the following is an example of internal resources that businesses often use to generate product ideas:
A.Competitors C.Customers
B.Employees D.Agencies
81.One way that a business is often able to recognize product opportunities in the marketplace is by monitoring
A.trends. C.finances.
B.personnel. D.plans.
82.Which of the following benefits of warranties and guarantees do not apply to consumers:
A.Reduced anxietyC.Free repairs
B.Legal recourse D.Increased profits
83.Which of the following is an example of a company's using brand extension:
A.Coca-Cola adding Caffeine-Free Diet Coke
B.Winn-Dixie installing an ATM machine in its stores
C.Tyson packaging smaller portions of chicken for the elderly
D.Kroger adding Blue Bell ice cream to its frozen foods section
84.Fisher Industries wanted to protect its new CD player for automobiles by listing it with the appropriate government agency. What kind of protection is this?
A.Descriptive nameC.Brand licensing
B.Brand positioning D.Registered trademark
85.How is a business positioning its product when it places emphasis on the item's safety?
A.Class C.Attributes
B.Price D.Competition
86.To determine if an existing brand is conveying the desired image, a business needs to
A.evaluate its effectiveness. C.select a catchy name.
B.describe its personality. D.develop a brand promise.
87.If investment costs are high but the turnover rate is low, a business might decide to
A.eliminate personnel. C.add shelf space.
B.increase inventory. D.drop a product.
88.What is one way that promotion benefits the economy?
A.Creates images C.Provides jobs
B.Offers information D.Builds confidence
89.All of the following would be institutional advertisements except an ad
A.announcing a back-to-school sale. C.featuring conservation efforts.
B.speaking out against drugs.D.encouraging citizens to vote.
90.When a business develops an advertisement that presents a woman in a traditional female role, it is reinforcing the concept of
A.stereotypes. C.age discrimination.
B.equity labels. D.socialization.
91.Which of the following examples is a promotional activity that a government regulates in order to maintain a fair environment among competitors in the marketplace:
A.Telemarketing sales C.Direct mail
B.Bait-and-switch contestsD.Comparison advertising
92.Which of the following elements of a print advertisement often is noticed first:
A.Testimonial C.Subheadline
B.Identification D.Illustration
93.An effective technique for coordinating promotional activities is to create displays that ______advertisements.
A.contrast with C.compete with
B.carry out the theme of D.take the place of
94.A business employee who helps a customer decide what type of product to order is involved in the process of
A.planning.C.coaching.
B.directing. D.selling.
95.The financial success of a business often depends on its ability to
A.build a clientele.C.plan advertising.
B.offer free delivery service.D.sell a few product lines.
96.What type of computer software do businesses often use to analyze numerical sales information?
A.PresentationC.Spreadsheet
B.Word processing D.Graphic and design
97.A salesperson who stays up to date on the information provided in company promotional materials usually is able to effectively handle customers'