1.  Which financial statement is prepared first
Balance sheet
Income statement
Retained earnings statement
Statement of cash flows

2.  Management s views on the company s short-term debt paying ability, expansion financing, and results of operations are found in which of the following?
auditor s report
management discussion and analysis section
notes to the financial statements
president s state of the company report

3.  Using the following balance sheet and income statement data, what is the earnings per share?
Current assets $ 9,000 Net income $ 12,000
Current liabilities 4,000 Stockholders equity 27,000
Average assets 44,000 Total liabilities 6,000
Total assets 30,000
Average common shares outstanding was 10,000
$1.20
$2.00
$0.83
$0.44

4.  Which of the following is not considered a measure of liquidity
Current ratio
Working capital
Debt to total assets ratio
Each of the above are liquidity measures

5. (TCO 2) Which pair of the listed accounts follows the rules of debits and credits, in relation to increases and decreases, in the same manner?
Salary Expense and Notes Payable
Common Stock and Rent Expense
Accounts Receivable and Advertising Expense
Service Revenue and Equipment

6. (TCO 2) The principle purpose of posting is which of the following help identify errors made in the journal accumulate the effects of journalized transactions in the individual accounts enter transactions directly into the ledger help determine if the financial statements are ready to be prepared

7.  Joe is a warehouse custodian, and also maintains the accounting record of the inventory held at the warehouse. An assessment of this situation indicates ___ .
documentation procedures are violated
independent internal verification is violated
segregation of duties is violated
establishment of responsibility is violated

8.  The following information was taken from Niland Company cash budget for the month of April:
Beginning cash balance $30,000
Cash receipts 27,000
Cash disbursements 34,000
If the company has a policy of maintaining end of the month cash balance of $25,000, the amount the company would have to borrow is which of the following
$29,000
$5,000
$2,000
$0

9.  Managerial accounting does which of the following is concerned with costing products is governed by generally accepted    accounting principles pertains to the entity as a whole and is highly aggregated places emphasis on special-purpose information.

10.  Which of the following is not a manufacturing cost category
Cost of goods sold
Direct materials
Direct labor
Manufacturing overhead

11.  Which of the following are period costs
Raw materials
Direct materials and direct labor
Direct labor and manufacturing overhead
Selling expenses

12.  Ranger Company reported total manufacturing costs of $65,000, manufacturing overhead totaling $13,000, and direct materials totaling $15,000. How much is direct labor cost
$52,000
$37,000
$94,000
$29,000

13.  Hardigan Manufacturing Company reported the following year-end information:

beginning work in process inventory, $80,000
cost of goods manufactured, $980,000
beginning finished goods inventory, $50,000
ending work in process inventory, $70,000
and ending finished goods inventory, $40,000
How much is Hardigan s cost of goods sold for the year?
$980,000
$990,000
$970,000
$1,000,000

14.  What effect do changes in activity have on fixed costs per unit
No effect. Fixed costs per unit stay the same at every activity level.
An inverse effect.
A directly proportional effect.
It depends on the particular level of activity.

15.  Which of the following is an underlying assumption of CVP analysis
Factors other than changes in activity may affect costs.
Cost classifications are reasonably accurate.
Increases in inventories cause increase in total fixed costs.

Unit costs remain the same over the relevant range.

1.  A company has total fixed costs of $150,000 and a contribution margin ratio of 30%. How much sales are necessary to break even?
$450,000
$120,000
$54,000
$500,000

2.  How much sales are required to earn a target income of $80,000, if total fixed costs are $100,000 and the contribution margin ratio is 40%
$300,000
$200,000
$450,000
$330,000

3.  Which one of the following is not a benefit of budgeting?
It facilitates the coordination of activities.
It provides definite objectives for evaluating performance.
It provides assurance that the company will achieve its objectives.
It requires all levels of management to plan ahead on a recurring basis.

4.  Which one of the following would most likely cause an unrealistic budget to result?
All levels of management contributed to its development.
The budget has been developed in a participative approach.
The budget has been developed in a top down fashion.
The budget was developed after considerable planning.

5.  What three differences exist between long-range planning and budgeting
Amount of detail, content, and emphasis
Time periods involved, amount of detail, and content
Content, emphasis, and amount of detail
Emphasis, time periods involved, and amount of detail

6.  Which of the following statements about a budgeted income statement is true?
It is prepared before the operating budgets are prepared.
It reflects the cash to be received and paid as a result of operations.
It is prepared after the cash budget is prepared.
It is prepared using the individual operating budgets.

7.  Which statement is true concerning a static budget report
It considers performance at numerous activity levels.
It is appropriate in evaluating a manager s effectiveness in controlling fixed costs.
It should be used when the actual level of activity is materially different from the master budget activity level.
It is most effective when evaluating a manager s effectiveness in controlling variable costs.

8.  The foreign subsidiary of a large corporation is which of the following
not a responsibility center
a profit center
a cost center
an investment center

9.  The best measure of the performance of the manager of a profit center is which of the following
rate of return on investment
success in meeting budgeted goals for controllable costs
amount of controllable margin generated by the profit center
amount of contribution margin generated by the profit center

10.  Merck Pharmaceuticals is evaluating its Vioxx division, an investment center. The division has a $45,000 controllable margin and $300,000 of sales. How much will Merck s average operating assets be when its return on investment is 10%?
$450,000
$495,000
$300,000
$255,000