DEVRY ACCT 301 Week 4 Midterm
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<strong>DEVRY</strong> <strong>ACCT</strong> <strong>301</strong> <strong>Week</strong> 4 <strong>Midterm</strong> - 3 Sets<br />
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<strong>ACCT</strong> <strong>301</strong> <strong>Week</strong> 4 <strong>Midterm</strong> - 3 Sets<br />
1. (TCO 1) Suppose your company sold $25,000 in merchandise to a customer for<br />
cash. How does this transaction impact the accounting equation? (Points : 12)<br />
2. (TCO 2) Suppose your company sold $50,000 in merchandise to a customer for<br />
cash. How does this transaction impact the accounting equation? (Points : 12)<br />
3. (TCO 3) Rationalization is one of the components of the fraud triangle. What types<br />
of rationalization could a person use to justify misconduct? How can a company<br />
protect itself from rationalization as a part of fraud? (Points : 12)<br />
4. (TCO 4) What is horizontal analysis of financial statements? How does horizontal<br />
analysis differ from vertical analysis? (Points : 12)<br />
1. (TCO 3) Separation of duties is a key feature in an internal control system. Why is<br />
separation of duties such an important internal control? Give an example of<br />
separation of duties as an internal control. (Points : 24)
2. . (TCO 1) Describe the balance sheet. Why is this statement important to the<br />
company, creditors, and investors? (Points : 24)<br />
3. (TCO 4) Name and describe one liquidity ratio. What does this ratio measure?<br />
What is the formula for this ratio? (Points : 24)<br />
1. Question (TCO 1) The retained earnings statement shows all of the following<br />
except which one?<br />
2. Question (TCO 1) Management’s views on the company’s short-term debt paying<br />
ability, expansion financing, and results of operations are found in which of the<br />
following?<br />
3. Question (TCO 4) For 2010, Fielder Corporation reported net income of $30,000;<br />
net sales $400,000; and average share outstanding 6,000. There were no preferred<br />
stock dividends. What was the 2010 earnings per share?<br />
4. Question (TCO 4) A useful measure of solvency is which of the following?<br />
5. Question (TCO 2) Which pair of accounts follows the rules of debit and credit, in<br />
relation to increases and decreases, in the same manner?<br />
6. Question (TCO 2) The principle purpose of posting is which of the following?<br />
7. Question (TCO 3) Joe is a warehouse custodian, and also maintains the accounting<br />
record of the inventory held at the warehouse. An assessment of this situation<br />
indicates<br />
8. Question (TCO 3) The following information was taken from Hurlbert Company<br />
cash budget for the month of June:<br />
9. Question (TCO 11) Managerial accounting information does which of the<br />
following?<br />
10. Question (TCO 11) Which one of the following is not a direct material?<br />
11. Question (TCO 11) Sales commissions are classified as which of the following?<br />
12. Question (TCO 11) Manufacturing costs include which of the following?<br />
13. Question (TCO 11) Neeley Manufacturing Company reported the following yearend<br />
information:<br />
14. Question (TCO 5) What effect do changes in activity have on fixed costs per unit?
15. Question (TCO 5) Which one of the following is not an assumption of CVP<br />
analysis?<br />
1. Question (TCO 5) A company has total fixed costs of $210,000 and a contribution<br />
margin ratio of 30%. How much sales are necessary to break even?<br />
2. Question (TCO 5) How much sales are required to earn a target income of $70,000,<br />
if total fixed costs are $100,000 and the contribution margin ratio is 40%?<br />
3. Question (TCO 6) For which one of the following budgeting aspects does the<br />
budget committee generally have the responsibility?<br />
4. Question (TCO 6) Under what situation might a budget be most effective?<br />
5. Question (TCO 6) How does long-range planning compare to a master budget?<br />
6. Question (TCO 6) Which one of the following is a source of information used to<br />
prepare the budgeted income statement?<br />
7. Question (TCO 7) When is a static budget most appropriate in evaluating a<br />
manager’s performance?<br />
8. Question (TCO 7) Which type of center is the housekeeping department of a<br />
manufacturing company?<br />
9. Question (TCO 7) For which of the following is an investment center manager<br />
responsible?<br />
10. Question (TCO 7) Merck Pharmaceuticals is evaluating its Vioxx division, an<br />
investment center. The division has a $45,000 controllable margin and $300,000 of<br />
sales. How much will Merck’s average operating assets be when its return on<br />
investment is 10%?<br />
11. Question (TCO 11) Financial and managerial accounting are both concerned with<br />
the economic events of an enterprise. Similarities between financial and managerial<br />
accounting do exist, but they have a different focus. Briefly distinguish between<br />
financial and managerial accounting as they relate to (1) the primary users, (2) the<br />
type and frequency of reports, (3) the purpose of reports, and (4) the content of<br />
reports.<br />
12. Question (TCO 4) Are short-term creditors, long-term creditors, and stockholders<br />
primarily interested in the same characteristics of a company? Explain.
13. Question (TCO 5) In the month of September, Nixon Company sold 800 units of<br />
product. The average sales price was $30. During the month, fixed costs were $7,200<br />
and variable costs were 60% of sales.