The building blocks of financial analysis includes:
a. Liquidity and efficiency
b. Solvency
c. Profitability
d. Market prospects
e. All of the above
The ability to meet short-term obligations and to efficiently generate revenues is called:
a. Liquidity and efficiency
b. Solvency
c. Profitability
d. Market prospects
e. Creditworthiness
The measurement of key relations among financial statement items is known as:
a. Financial reporting
b. Horizontal analysis
c. Investment analysis
d. Ratio analysis
e. Risk analysis
Which of the following items is not likely an extraordinary item?
a. Loss from an unexpected union strike
b. Condemnation of property by the city government
c. Loss of use of property due to a new and unexpected environmental regulation
d. Loss due to an earthquake in Florida
e. Expropriation of property by a foreign government
Horizontal analysis:
a. Is a method used to evaluate changes in financial data across time
b. Is also called vertical analysis
c. Is the presentation of financial ratios
d. Is a tool used to evaluate financial statement items relative to industry statistics
e. Evaluates financial data across industries
A company's sales in 2007 were $250,000 and in 2008 were $287,500. Using 2007 as the base year, the sales trend percent for 2008 is:
a. 87%
b. 100%
c. 115%
d. 15%
e. 13%
Current assets minus current liabilities is the:
a. Profit margin
b. Financial leverage
c. Current ratio
d. Working capital
e. Quick assets
Current assets divided by current liabilities is the:
1. Current ratio
2. Quick ratio
3. Debt ratio
4. Liquidity ratio
5. Solvency ratio
Net sales divided by average accounts receivable is the:
a. Days' sales uncollected
b. Average accounts receivable ratio
c. Current ratio
d. Profit margin
e. Accounts receivable turnover ratio.
Dividing ending inventory by cost of goods sold and multiplying the result by 365 is the:
a. Inventory turnover ratio.
b. Profit margin
c. Days' sales in inventory
d. Current ratio
e. Total asset turnover
An approach to managing inventories and production operations such that units of materials and products are obtained and provided only as they are needed is called:
a. Continuous improvement
b. Customer orientation
c. Just-in-time manufacturing
d. Theory of constraints
e. Total quality management
Labor costs that are clearly associated with specific units or batches of product because the labor is used to convert raw materials into finished produces called are:
a. Sunk labor
b. Direct labor
c. Indirect labor
d. Finished labor
e. All of the above
Costs that are incurred as part of the manufacturing process but are not clearly associated with specific units of product or batches of production, including all manufacturing costs other then direct material and direct labor costs, are called:
a. Administrative expenses
b. Nonmanufacturing costs
c. Sunk costs
d. Factory overhead
e. Preproduction costs
Materials that are used in support of the production process but are not clearly identified with units or batches of product are called:
a. Secondary materials
b. General materials
c. Direct materials
d. Indirect materials
e. Materials inventory
The salary paid to the supervisor of an assembly line would normally be classified as:
a. Direct labor
b. Indirect labor
c. A period cost
d. A general cost
e. An assembly cost
Which of the following is never included in direct materials costs?
a. Invoice costs of direct materials
b. Outgoing delivery charges
c. Materials storage costs
d. Materials handling costs
e. All of the above are direct materials costs
Which of the following costs is not included in factory overhead?
a. Payroll taxes on the wages of supervisory factory workers
b. Indirect labor
c. Depreciation of manufacturing equipment
d. Manufacturing supplies used
e. Direct materials
The three major cost components of a manufactured product are:
a. Marketing, selling, and administrative costs
b. Indirect labor, indirect materials, and miscellaneous factory expenses.
c. Direct materials, direct labor, and factory overhead.
d. Differential costs, opportunity costs, and sunk costs.
e. General, selling, and administrative costs
Period costs for a manufacturing company would flow directly to:
a. The current income statement
b. Factory overhead
c. The current balance sheet
d. Job cost sheet
e. The current manufacturing statement
Products that have been completed and are ready to be sold by the manufacturer are called:
a. Finished goods inventory
b. Goods in process inventory
c. Raw materials inventory
d. Costs of goods sold
e. Factory supplies
Products that are in the process of being manufactured but are not yet complete are called:
a. Raw materials inventory
b. Conversion costs
c. Costs of goods sold
d. Goods in process inventory
e. Finished goods inventory
A type of production that yields customized products or services for each customer is called:
a. Customer orientation production
b. Job order production
c. Just-in-time production
d. Job lot production
e. Process production
A document in a job order cost accounting system that is used to record the costs of producing a job is a(n):
a. job cost sheet
b. job lot
c. finished goods summary
d. process cost system
e. units-of-production sheet
The job order cost sheets used by Garza company revealed the following:
Job.No Bal. May 1 May Production Costs
124 $1,700 $---
125 1,200 300
126 ----- 900
Job No. 125 was completed during May and Jobs No. 124 and 125 were shipped to customers in May. What were the company's cost of goods sold for may and the goods in process inventory on May 31?
a. $3,200; $900
b. $2,900; $1,200
c. $1,200; $2,900
d. $1,700; $1,200
e. $4,100; 0
A job cost sheet includes:
a. Direct materials, direct labor, operating costs
b. Direct materials, overhead, administrative costs
c. Direct labor, overhead, selling costs
d. Direct materials, direct labor, overhead
e. Direct materials, direct labor, selling costs
A source document that production managers use to request materials for production and that is used to assign materials costs to specific jobs or to overhead is a:
a. Job cost sheet
b. Production order
c. Materials requisition
d. Materials purchase order
e. Receiving report
The goods in process inventory account for the AB Corp, follows:
Goods in Process Inventory
Beginning balance 4,500
Direct materials 47,100
Direct labor 29,600 ? Finished goods
Applied overhead 15,800
Ending balance 8,900
The costs of units transferred to finished goods is:
a. $97,000
b. $105,900
c. $88,100
d. $95,200
e. $92,500
When factory payroll costs are recorded in a job cost accounting system:
a. Factory payroll is debited and goods in process is credited
b. Goods in process inventory and factory overhead are debited and factory payroll is credited
c. Cost of goods manufactured is debited and factory payroll is credited
d. Direct labor and indirect labor are debited and factory payroll is credited
e. Goods in process is debited and factory payroll is credited
Labor costs in production can be
a. Direct or indirect
b. Indirect or sunk
c. Direct or payroll
d. Indirect or payroll
e. Direct or sunk
A company has an overhead application rate of 125% of direct labor costs. How much overhead would be allocated to a job if it required total labor costing $20,000?
a. $5,000
b. $16,000
c. $25,000
d. $125,000
e. $250,000
The overhead cost applied to a job during a period is recorded with a credit to factory overhead and a debit to:
a. Jobs overhead expense
b. Cost of goods sold
c. Finished goods inventory
d. Indirect labor
e. Goods in process inventory
The rate established prior to the beginning of a period that relates estimated overhead to an allocation factor such as estimated direct labor, and that is used to assign overhead cost to jobs, is the:
a. Predetermined allocation rate
b. Overhead variance rate
c. Estimated labor cost rate
d. Chargeable overhead rate
e. Miscellaneous overhead rate