Accounting for managers 20 multiple choice questions
Question 1 of 205.0 Points
Using a base year as 100% and expressing other years as a percentage of the base year is an example of:
A. trend analysis.
B. vertical analysis.
C. horizontal analysis.
D. benchmarking.
Question 2 of 20 5.0 Points
A company reported the following amounts of net income:
Year 1 |
$15,000 |
Year 2 |
$21,000 |
Year 3 |
$31,500 |
Which of the following is the percentage change from Year 2
to Year 3?
A. 40.00%
B. 50.00%
C. 110.00%
D. 150.00%
Question 3 of 205.0 Points
Environmental sustainability is the primary concern of which of the following types of organizations?
A. Large domestic corporations
B. Global service firms
C. Manufacturing firms
D. All organizations regardless of size, location, or sector
Question 4 of 20 5.0 Points
A company uses the indirect method to prepare the statement of cash flows. It presents the following amounts on its financial statements.
|
End of this year |
End of prior year |
Accounts receivable |
$105,000 |
$100,000 |
Cost of goods sold |
550,000 |
|
Sales revenue |
850,000 |
|
Accounts payable* |
75,000 |
65,000 |
Inventory |
85,000 |
106,000 |
Salary payable |
15,000 |
11,000 |
Salary expense |
50,000 |
42,000 |
*Relates solely to the acquisition of inventory.
What will appear in the operating activities section related to inventory?
A. The decrease of $21,000 will be subtracted from net income.
B. The decrease of $21,000 will be subtracted from cost of goods sold.
C. The decrease of $21,000 will be added to net income.
D. The decrease of $21,000 will be added to cost of goods sold.
Question 5 of 205.0 Points
The following information relates to Woolf Unlimited for the past two years.
Account |
Current year |
Prior year |
Net sales (all credit) |
$237,250 |
$180,000 |
Cost of goods sold |
$115,000 |
$110,000 |
Gross profit |
$122,250 |
$ 70,000 |
Income from operations |
$ 32,000 |
$ 30,000 |
Interest expense |
$ 2,000 |
$ 7,000 |
Net income |
$ 24,000 |
$ 18,000 |
Cash |
$ 22,000 |
$ 14,000 |
Accounts receivable, net |
$ 25,000 |
$ 31,000 |
Inventory |
$ 56,000 |
$ 44,000 |
Prepaid expenses |
$ 2,000 |
$ 1,000 |
Total current assets |
$105,000 |
$ 90,000 |
Total long-term assets |
$150,000 |
$175,000 |
Total current liabilities |
$ 60,000 |
$ 90,000 |
Total long-term liabilities |
$ 22,000 |
$ 78,000 |
Common stock, no par, 2,500 shares, market value $96 per share |
$ 40,000 |
$ 40,000 |
Retained earnings |
$133,000 |
$ 57,000 |
What is the inventory turnover for the current year?
A. 2.30 times
B. 0.78 times
C. 13.00 times
D. 2.20 times
Question 6 of 205.0 Points
The following information relates to Woolf Unlimited for the past two years.
Account |
Current year |
Prior year |
Net sales (all credit) |
$237,250 |
$180,000 |
Cost of goods sold |
$115,000 |
$110,000 |
Gross profit |
$122,250 |
$ 70,000 |
Income from operations |
$ 32,000 |
$ 30,000 |
Interest expense |
$ 2,000 |
$ 7,000 |
Net income |
$ 24,000 |
$ 18,000 |
Cash |
$ 22,000 |
$ 14,000 |
Accounts receivable, net |
$ 25,000 |
$ 31,000 |
Inventory |
$ 56,000 |
$ 44,000 |
Prepaid expenses |
$ 2,000 |
$ 1,000 |
Total current assets |
$105,000 |
$ 90,000 |
Total long-term assets |
$150,000 |
$175,000 |
Total current liabilities |
$ 60,000 |
$ 90,000 |
Total long-term liabilities |
$ 22,000 |
$ 78,000 |
Common stock, no par, 2,500 shares, market value $96 per share |
$ 40,000 |
$ 40,000 |
Retained earnings |
$133,000 |
$ 57,000 |
What is the acid-test ratio for the current year?
A. 0.52
B. 0.75
C. 0.78
D. 2.30
Question 7 of 20 5.0 Points
A payment of interest on a loan would be considered a:
A. cash outflow from investing activities.
B. cash outflow from operating activities.
C. cash outflow from financing activities.
D. cash outflow from depreciation.
Question 8 of 20 5.0 Points
The following data relate to Sorrentino Corporation for last year:
Operating income |
$250,000 |
Net increase in all current assets except cash |
$45,000 |
Net decrease in current liabilities |
$30,000 |
Gain on sale of investments |
$8,000 |
Cash dividends paid on common stock |
$35,000 |
Depreciation expense |
$10,000 |
What is the net cash provided by operating activities for
last year on the statement of cash flows for Sorrentino
Corporation?
A. $130,000
B. $142,000
C. $173,000
D. $177,000
Question 9 of 20 5.0 Points
The study of percentage changes in comparative financial statements is an example of:
A. vertical analysis.
B. trend analysis.
C. benchmarking.
D. horizontal analysis.
Question 10 of 20 5.0 Points
The Nichols Corporation data for the current year:
Account |
Current year |
Prior year |
Current assets |
$75,600 |
$60,000 |
A/R |
$59,400 |
$44,000 |
Mdse. Inventory |
$51,200 |
$40,000 |
Current liabilities |
$71,500 |
$55,000 |
Long-term liabilities |
$36,000 |
$30,000 |
Common stock (5,000 shares) |
$47,460 |
$42,000 |
Retained earnings |
$31,240 |
$17,000 |
Net sales revenue |
$607,700 |
$515,000 |
COGS |
$469,700 |
$385,000 |
Gross Profit |
$138,000 |
$130,000 |
Selling/General expenses |
$49,080 |
$52,000 |
Net income before taxes |
$88,920 |
$78,000 |
Income tax expense |
$20,520 |
$18,000 |
Net Income |
$68,400 |
$60,000 |
What would a horizontal analysis report with respect to long-term liabilities?
A. Long-term liabilities increased by $6,000.
B. Long-term liabilities decreased by 5.92%.
C. Long-term liabilities increased by 6.21%.
D. Long-term liabilities decreased by $1,500.
Question 11 of 205.0 Points
There are several reasons an organization might pursue sustainable initiatives. "A legislative act requires retailers to take back old batteries and electronic devices for recycling or reuse." This situation is an example of which type of reason to implement sustainable initiatives?
A. Cost reduction
B. Regulatory compliance
C. Stakeholder influence
D. Competitive strategy
Question 12 of 20 5.0 Points
Which of the following items represents monetary information in an environmental management accounting system?
A. Kilowatt hours of electricity used
B. Cost of upgrading factory equipment to reduce emissions
C. Ratio of recycled trash to total trash
D. Cost of janitorial services in office
Question 13 of 20 5.0 Points
A company's inventory account increased $26,500 and its accounts payable account decreased $18,250 during the year. The accounts payable relates only to the acquisition of inventory. Sales were $789,500 and cost of goods sold was $532,700. What was the amount of payments to suppliers of inventory?
A. $550,950
B. $577,450
C. $540,950
D. $834,250
Question 14 of 20 5.0 Points
Alexander Industries, in Chicago, plans to take advantage of the winds blowing in from Lake Michigan. Alexander is developing a project to install a wind turbine that would generate electricity and reduce energy costs. The turbine would have an initial cost of $500,000 and would provide a net cost savings of $57,000 per year. The turbine will have a life of 25 years. What is the payback period, in years, for the wind turbine?
A. 8.77 years
B. 9.08 years
C. 25 years
D. 28.75 years
Question 15 of 205.0 Points
A company reported the following amounts of net income:
Year 1 |
$120,960 |
Year 2 |
$151,200 |
Year 3 |
$187,488 |
Which of the following is the percentage change from Year 2 to Year 3?
A. 24.00%
B. 55.00%
C. 124.00%
D. 25.00%
Question 16 of 20 5.0 Points
Which of the following would appear on a statement of cash flows prepared using the direct method?
A. Cash payments for salaries would appear on the statement.
B. A loss of the sale of equipment would appear on the statement.
C. Amortization expenses would appear on the statement.
D. Depreciation expenses would appear on the statement.
Question 17 of 20 5.0 Points
Which of the following items is most likely to be found on an environmental management accounting report?
A. CEO's salary
B. Public accounting firm's fee for doing financial accounting audit
C. Ratio of recycled trash to total trash
D. Regional sales revenue
Question 18 of 20 5.0 Points
Which type of analysis includes the computation of the percentage change in total assets between two balance sheet dates?
A. Profitability
B. Vertical
C. Horizontal
D. Capital
Question 19 of 20 5.0 Points
A ________ is a measure of the total emissions of carbon dioxide and other greenhouse gases.
A. carbon footprint
B. waste footprint
C. carbon mark
D. water footprint
Question 20 of 205.0 Points
Computing cash generated from operating activities is:
A. the same for both the direct and indirect methods.
B. different in that the indirect method considers depreciation.
C. different in that the direct method considers depreciation.
D. none of the above.












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