ACCT105 Accounting for non Accounting Majors

 

ACCT105 Accounting for non Accounting Majors

American Public University System (APUS)

 

ACCT105 Week 1 Homework Template SCORE 90 PERCENT

Matching
Referring to the items listed below, place the appropriate letter next to the corresponding description.
a.	Accounting equation		g.	Merchandising company		m.	Service company
b.	Assets		h.	Net income		n.	Single proprietorship
c.	Corporation		i.	Net loss		o.	Solvency
d.	Dividends		j.	Profitability		p.	Stockholders' equity
e.	Liabilities		k.	Salaries expense		q.	Transactions
f.	Manufacturing company		l.	Stockholders'equity / Total equities		r.	Statement of cash flows
1.			Ability to generate earnings.
2.			Cash paid to stockholders as distribution of income.
3.			Exchanges of goods and services that are objective and that occur at an agreed-upon price.
4.			An organization owned by stockholders and managed by officers who generally are people other than the owners.
5.			Land, buildings, cash, and other resources owned by the business.
6.			This type of business acquires materials and converts them into products to sell to other companies or final customers.
7.			Creditor's equity or claims on assets.
8.			An organization owned by one individual who is solely responsible for all debts of the business.
9.			The resulting figure when expenses exceed revenues.
10.			This type of business acquires goods and sells them in the same form to customers.
11.			Ability to pay debts as they become due.
12.			Stockholders' equity = assets - liabilities is one form of this equation.
13.			Shows cash inflows and cash outflows for a period of time.
14.			Equity ratio.

 

Completion and Exercises

Fill in the blanks using the dropdown list.

1.

The __________ __________ (sometimes called the statement of financial position) reflects a firm's solvency, while the __________ __________ shows profitability.

2.

Accounting deals primarily with information regarding __________ activities of a business and is expressed in __________ terms.

3.

__________, __________, and __________ are the three forms of ownership of business organizations.

4.

The balance sheet of a business corporation usually shows three classes of items, namely (a) __________, (b) __________, and (c) __________ __________; while the income statement shows two classes, namely, (a) __________ and (b) __________.

5.

In its most basic form, the accounting equation is simply __________ = __________. This is usually expanded to ________ = __________ + __________ __________.

6.

Changes in the financial position of an organization are brought about by events, exchanges, and other real-world happenings that accountants measure and record and which they call __________.

7.

To show your understanding of the effects of each of the named transactions on the assets, liabilities, and stockholders' equity of a business, fill in the blank in each column with either + (for increase), - (for decrease), or 0 (for no change).

Assets

Liabilities

Stockholders' Equity

a.

Stockholders invested cash in the business

b.

Borrowed money from a bank

c.

Purchased equipment on credit

d.

Rendered services for cash

e.

Paid creditor in (c)

f.

Paid monthly rent

g.

Rendered services for which the customer promised to pay at a later date.

8.

Indicate, by letter, which of the above transactions would be reported in the income statement: __________, __________, and __________.

9.

The inflows of assets for services rendered or goods delivered (as measured by the assets received from customers) are called __________, while the assets surrendered or consumed in this process are called __________.

10.

The statement that shows the assets and equities of an entity as of a point in time is called the __________ __________.

11.

The specific unit or organization for which accounting information is accumulated and reported is called the __________. The basis for valuation of assets in accounting is __________.

12.

The __________ concept in accounting refers to the fact that the amounts entered in an accounting system are the objective money prices determined in the exchange process.

13.

If expenses for a period exceed revenues for the same period, the entity is deemed to have suffered a __________ __________.

14.

An income statement is prepared for a __________, while a balance sheet is prepared as of a __________.

15.

Under the __________-__________ concept, the accountant assumes that a business will continue more of less indefinitely.

16.

The __________ __________ is equal to stockholders' equity divided by __________ __________.

17.

The __________ __________ __________ __________ shows the cash inflows and cash outflows for a period of time.

18.

Indicate the effect each of the following transactions has on the basic accounting equation by indicating one of the following:

a. Decrease in an asset, decrease in a liability.

b. Increase in an asset, increase in stockholders' equity.

c. Increase in one asset, decrease in another asset.

d. Increase in an asset, increase in a liability.

e. None of the above.

1.

Purchased equipment on account.

2.

Returned an item of defective equipment purchased in (1).

3.

Paid cash to the supplier of equipment purchased in (1) for the remainder of the equipment.

4.

Received cash on account from customers.

5.

The stockholders invested additional cash in the business.

 

ACCT105 Week 1 Quiz SCORE 100 PERCENT

Question 1 of 10
10.0/ 10.0 Points
The payment of cash to the supplier of services previously accounted for as a purchase on account would:

•
A. Increase an asset and increase a liability.
•
B. Increase an asset and increase stockholders' equity.
•
C. Increase one asset and decrease another asset.
•
D. Decrease an asset and decrease a liability.
•
E. None of the above.




Question 2 of 10
10.0/ 10.0 Points
Investment of additional cash in the business by the stockholders would:

•
A. Decrease an asset and decrease a liability.
•
B. Increase an asset and increase a liability.
•
C. Increase an asset and increase stockholders' equity.
•
D. Increase one asset and decrease another asset.
•
E. None of the above.




Question 3 of 10
10.0/ 10.0 Points
In accounting, the resources of a business organization are called:

•
A. Assets.
•
B. Proprietorship.
•
C. Creditors' equity.
•
D. Stockholders' equity.
•
E. None of the above.




Question 4 of 10
10.0/ 10.0 Points
The receipt of cash on account from customers would:

•
A. Decrease an asset and decrease a liability.
•
B. Increase one asset and decrease another asset.
•
C. Increase an asset and increase stockholders' equity.
•
D. Increase an asset and increase a liability.
•
E. None of the above.




Question 5 of 10
10.0/ 10.0 Points
The accounting equation should be in balance only at the end of the year when the income of the period is determined.



A. True

B. False






Question 6 of 10
10.0/ 10.0 Points
The creditors of an organization are the companies and individual customers who owe the business for goods and services purchased on account.



A. True

B. False






Question 7 of 10
10.0/ 10.0 Points
Cash is increased when an outstanding account receivable is collected.



A. True
B. False






Question 8 of 10
10.0/ 10.0 Points
The payment of business debts:

•
A. Increases a liability account.
•
B. Increases stockholders' equity.
•
C. Has no effect on stockholders' equity.
•
D. Increases assets.




Question 9 of 10
10.0/ 10.0 Points
The purchase of equipment for cash would:

•
A. Decrease an asset and decrease a liability.
•
B. Increase an asset and increase a liability.
•
C. Increase one asset and decrease another asset.
•
D. Increase an asset and increase stockholders' equity.
•
E. None of the above.




Question 10 of 10
10.0/ 10.0 Points
The statement of cash flows shows cash inflows and cash outflows from (select the false statement):

•
A. Operating activities.
•
B. Investing activities.
•
C. Intangible activities.
•
D. Financing activities.

    

 

ACCT105 Week 2 Quiz SCORE 100 PERCENT

Question 1 of 10
10.0/ 10.0 Points
Since a particular journal entry has equal debits and credits, this entry must be correct.



A. True

B. False






Question 2 of 10
10.0/ 10.0 Points
The type of analysis that shows the percentage that each item in a financial statement is of some significant total such as total assets or sales is called:

•
A. Horizontal analysis
•
B. Vertical analysis
•
C. Balance sheet analysis
•
D. None of the above




Question 3 of 10
10.0/ 10.0 Points
Which of the following statements about the accounting equation is not true?

•
A. A transaction may add to both sides of the equation.
•
B. A transaction may add to two items on the same side of the equation.
•
C. A transaction may transfer between the terms on one side of the equation and have no effect on the other side of the equation.
•
D. A transaction may subtract from both sides of the equation.




Question 4 of 10
10.0/ 10.0 Points
If only two liability accounts are affected by a transaction, the balance of one account must be increased and the balance of the other decreased in recording this transaction.



A. True
B. False






Question 5 of 10
10.0/ 10.0 Points
Which of the following is (are) descriptive of an asset?

•
A. It is something of value because it can be used to produce products of the business.
•
B. It has value because it has service potential.
•
C. It is owned and/or under the control of the business.
•
D. (a), (b), and (c) are all correct.




Question 6 of 10
10.0/ 10.0 Points
A $150 debit to Office Equipment was entered in the account as a $150 credit. This error caused the trial balance to be out of balance by:

•
A. $75
•
B. $150
•
C. $450
•
D. $300
•
E. None of these




Question 7 of 10
10.0/ 10.0 Points
Which of the following is not a business asset?

•
A. Cash.
•
B. Capital stock.
•
C. Equipment.
•
D. Accounts receivable.
•
E. All of the above are business assets.




Question 8 of 10
10.0/ 10.0 Points
Revenue is the difference between the selling price of a service and the cost of providing such service.



A. True

B. False




Question 9 of 10
10.0/ 10.0 Points
Even though an expense is recognized on the income statement, it may not require an equivalent outlay of cash in the same period.


A. True
B. False


Question 10 of 10
10.0/ 10.0 Points
If $500 cash and a $2,000 note are given in exchange for a delivery truck for use in a business:

•
A. The stockholders' equity is increased.
•
B. Total assets are decreased.
•
C. Total liabilities are decreased.
•
D. None of the above. 

 

   

 

ACCT105 Week 3 Forum

The Week 3 Forum consists of one question. The question needs to be answered with an initial post of at least 250 words.   

List and briefly describe the five major generally accepted accounting principles (GAAP) that accountants must consider when presenting financial accounting information.

     

 

ACCT105 Week 3 Assignment

Write a 500 - 750 word paper that addresses the following topic:

 

• Explain the impact of accounting transactions in financial statements.
• Describe the elements and purpose of each financial statement.
• Discuss the components and use of financial analysis.

         

 

No comments:

ACCT105 Week 2 Homework Template SCORE 97 PERCENT

Completion and Exercises
Fill in the blanks using the dropdown list.
1.			The act of entering a transaction in a journal is called __________. After a transaction is so entered, it is __________ from the journal to the __________, at which time a process known as __________-__________ also takes place so that amounts in the accounts can be readily traced to the original record of each transaction.
2.			Accountants do not speak in terms of increases and decreases. Rather, they use technical terminology. Thus, to __________ an account means to place an entry on the left side of the account; to __________ an account means to place an entry on the right side of the account.
3.			The __________-__________ procedure requires that an entry has equal debits and credits, which keeps the accounting equation in balance.
4.			For each of the following T-accounts, indicate on which side increases are recorded and on which side decreases are recorded:
				Assets
5.			Fill in the blanks below with the word debits or credits:
			Type of account				Increased by		Decreased by
			Asset
			Liability
			Stockholders' equity
			Revenue
			Expense
6.			A __________ __________ contains a listing of the ledger accounts and their debit or credit balances to determine that __________ equal __________ in the recording process.
7.			Collectively, all of the accounts in the accounting system are referred to as the __________. The list of accounts in an accountings system (often together with their numbers) is called the __________ __________ __________.
8.			The basic unit in which data are stored in an accounting system is called an __________. These storage units should be so constructed as to readily receive money measurements of the __________ or ___________ in the items for which they are established.
9.			Whether or not an account is established is determined largely by whether or not it will provide __________ __________.
10.			The difference between the amounts entered as increases in an account and those entered as decreases is called the __________ of the account.
11.			Since revenues increase Retained Earnings, and increases in Retained Earnings are recorded on the __________ side of the account, it follows that increases in revenues are recorded on the __________ side of the account.
12.			Since expenses decrease Retained Earnings and since decreases in Retained Earnings are recorded on the __________ side of the account, it follows that increases in expenses are recorded on the __________ side of the account.
13.			The financial accounting process has been shown to consis of eight steps, namely:
			1.
			2.
			3.
			4.
			5.
			6.
			7.
			8.
14.			A __________ is often called a book of original entry and contains a chronological record of the transactions of a business. Before a transaction can be entered in this book of original entry, its effects on the business must be determined and encoded in terms of __________ and __________.
15.			The properties used by a business are known as __________; whereas the rights in the properties of a business are known as __________.
16.			A sale made to a customer or client is recorded as an increase in a revenue account and an increase in an __________ account.
17.			The total assets of the Miller Service Company are $22,000 and the total liabilities are $10,000. Therefore, the total stockholders' equity is __________.
18.			An entry on the left side of an account is known as a __________.

 

Matching
Referring to the items listed below, place the appropriate letter next to the corresponding description.
a.	Accounting period		f.	Book value		k.	Fiscal year
b.	Accrued asset		g.	Calendar year		l.	Prepaid expense
c.	Accrual basis of accounting		h.	Cash basis of accounting		m.	Estimated salvage value
d.	Accumulated depreciation		i.	Depreciation		n.	Unearned revenue
e.	Adjusting entries		j.	Earned revenue		o.	Estimated useful life
1.			A plant asset's cost less its accumulated depreciation.
2.			A period that begins on January 1 and ends on December 31.
3.			Contra asset account.
4.			An asset that will be assigned to expense at a later date.
5.			A time period into which an entity's life is arbitrarily divided for financial reporting purposes.
6.			Made at the end of an accounting period to reflect economic activity that has taken place but has not yet been recorded.
7.			Recognizes revenues when cash is received and recognizes expenses when cash is paid out.
8.			An asset that exists at the end of an accounting period but has not yet been recorded.
9.			The expense resulting from a plant equipemnt's expiration of usefulness.
10.			The estimated number of time periods that a company expects to make use of a plant asset.
11.			A period of any twelve consecutive months used as an accounting period.
12.			Cash received in advance for goods and services to be delivered at a later date.

 

 

ACCT105 Week 4 Homework Template SCORE 100 PERCENT

Matching
Referring to the items listed below, place the appropriate letter next to the corresponding description.
a.	FOB shipping point		f.	Freight collect		k.	Debit
b.	Freight prepaid		g.	Purchase discounts		l.	Cost of goods sold
c.	Chain discount		h.	Operating revenues		m.	Gross margin
d.	Sales discounts		i.	Nonoperating revenues		n.	Selling expenses
e.	FOB destination		j.	Credit		o.	Adminstrative
1.			The term used when the buyer incurs all transportation costs after the merchandise is loaded at the point of shipment.
2.			This term is used when the buyer pays the freight bill upon arrival of the goods.
3.			This term is applied when a list price is subject to several trade discounts.
4.			Cash discounts as recorded on the books of the buyer.
5.			The term used when goods are shipped to their destination without charge to the buyer.
6.			This term is used when the seller pays the freight at the time of shipment.
7.			Revenues generated by the major activities of the business.
8.			The term used when the seller bears all the transportation charges.
9.			The normal balance of the Purchase Discounts account.
10.			Net Sales - Cost of Goods Sold
11.			Expenses incurred in performing and facilitating the marketing effort.
12.			Beginning inventory + Net purchases - Ending inventory
13.			Operating expenses incurred in the overall management of a business.
14.			Advertising Expense, Warehousing and Handling Expense, and Salaries Expense - Marketing Managers are grouped into this category.
15.			Are deducted along with purchase returns and allowances from gross purchases to arrive at net purchases.

 

Completion and Exercises

Fill in the blanks using the dropdown list.

1.

When the perpetual inventory method is being used, the accountant debits __________ __________ and credits Accounts Payable (or Cash) when goods are purchased and debits Cost of Goods Sold and credits __________ __________ when gods are sold, along with the proper sales entry.

2.

When prices are rising, LIFO inventory is __________ (higher or lower) than FIFO inventory at the end of the year. This will cause the cost of goods sold under LIFO to be __________ (higher or lower) than under FIFO, and accordingly the net income will be __________ (higher or lower) under LIFO.

3.

Name two recognized methods of estimating the cost of ending inventory.

4.

Assuming periodic inventory procedure, what effect would an understatement of ending inventory have on the different items on the financial statements?

Balance Sheet

Income Statement

Current Assets

Cost of Goods Sold

Total Assets

Gross Margin

Retained Earnings

Net Income

Total Liabilities and Retained Earnings

5.

Both __________-__________, __________-__________ and __________-__________, __________-__________ methods of inventory valuation are assumptions as to the flow of costs.

6.

Following is a summary of beginning inventory, purchases, and sales. At what amount would the inventory be priced assuming, the first-in, first-out method is used under perpetual invventory procedure?

Beg. Inv., Jan. 1

2,400 units @ $8.80

Purchases:

Jan. 8

5,600 units @ $9.00

Mar. 15

2,000 units @ $9.10

Jul. 28

2,800 units @ $9.50

Nov. 30

400 units @ $9.70

Sales:

Feb. 13

3,000 units

Jun. 9

2,800 units

Sep. 22

1,400 units

7.

At what amount would the inventory in the preceding question be priced if the last-in, first-out method were used under perpetual inventory procedure?

8.

Under FIFO, net income exists if revenues are sufficient to cover the __________ cost of the units of inventory sold.

9.

Under LIFO, net income exists if revenues are sufficient to cover the __________ cost of the units of inventory sold, provided new units are acquired before the end of the accounting period.

10.

The principle argument for __________ is that this method more precisely matches costs and revenues in current terms.

11.

During a period of rising prices, __________ will give a higher net income figure.

12.

Below is a record of beginning inventory and purchases. Compute the ending inventory under the weighted-average method assuming periodic inventory procedure is a physical count showed 150 units on hand at the end of the month.

Inventory on May 1

75

units @ $10.00

=

$750.00

Purchases:

May 10

50

units @ $10.50

=

525.00

May 15

25

units @ $10.30

=

257.50

May 25

100

units @ $10.10

=

1,010.00

250

$2,542.50

13.

What is the cost of goods sold in the example in the preceding question?

14.

The lower-of-cost-or-market method uses market values only to the extent that these values are __________ than historical cost.

15.

The Mia Company has three different products in its inventory at December 31, 2007 which have costs and current market value as follows:

Item

Cost

Market

A

$5,000

$5,500

B

15,000

14,750

C

12,500

12,875

If each product is priced at the lower-of-cost-or-market, the inventory is $__________.

If the total is priced at the lower-of-cost-or-market, the inventory is $__________.

16.

To apply the gross margin method, the rate of gross margin on sales is multiplied by __________ __________ to arrive at gross margin. The gross margin is then subtracted from net sales to arrive at __________ __________ __________ __________ __________. This figure is then subtracted from __________ __________ __________ __________ __________ __________ to arrive at ending inventory.

17.

Use the following information and the retail inventory method to estimate the ending inventory at cost:

Cost

Retail

Beginning inventory

$44,000

$70,000

Purchases, net

550,000

920,000

Sales

900,000

18.

The Computational Error Company reported net income of $240,000 and $270,000 for 2006 and 2007. It was discovered later that the ending inventory for 2006 was understated by $28,000. The net income for 2006 was __________, and the net income for 2007 was __________.

19.

A company began an accounting period with 100 units of an item that cost $7.50 each. During the period it purchased 400 units of the item at $9 each and it sold 390 units. In the spaces below give the costs assigned to the ending inventory and to goods sold under each of the three assumptions using periodic inventory procedures.

Ending Inventory

Cost of Goods Sold

1.

The costs were assigned on a LIFO basis

2.

The costs were assigned on a weighted-average cost basis

3.

Costs were assigned on a FIFO basis

20.

Company A has the following financial information for 2007:

Beginning inventory

$230,000

Ending inventory

$300,000

Cost of goods sold

$175,000

The inventory turnover ratio is equal to __________.

               

 

ACCT105 Week 5 Quiz SCORE 100 PERCENT

Part 1 of 1 - 100.0/ 100.0 Points

Question 1 of 10
10.0/ 10.0 Points
A corporation may elect not to prepare a statement of cash flows.



A. True

B. False






Question 2 of 10
10.0/ 10.0 Points
The collection of accounts receivable is a financing activity.



A. True

B. False






Question 3 of 10
10.0/ 10.0 Points
Capital stock issued as a stock dividend is reported in a statement of cash flows.



A. True

B. False






Question 4 of 10
10.0/ 10.0 Points
If accounts receivable increased from $12,000 to $15,000 during the year and if sales amounted to $100,000 for the year, cash receipts from customers amounted to $103,000.



A. True

B. False






Question 5 of 10
10.0/ 10.0 Points
The former statement of changes in financial position presented information on the flow of financial resources into and out of a business.



A. True
B. False






Question 6 of 10
10.0/ 10.0 Points
If capital stock is split three for one, this transaction is reported on a statement of cash flows.



A. True

B. False



Question 7 of 10
10.0/ 10.0 Points
Paid cash for office supplies, $9,000. What is the effect on working capital, the current ratio, and the acid-test ratio? Assume the current ratio is 1:1 before this transaction occurred.

•
A. Increase working capital and current ratio, decrease acid-test ratio.
•
B. No effect on all three items.
•
C. No effect on working capital and current ratio, decrease acid-test ratio.
•
D. Decrease all three items.




Question 8 of 10
10.0/ 10.0 Points
What is the current ratio for the following data? Cash - $34,000; marketable securities - $16,000; accounts and notes receivable, net - $46,000; merchandise inventory - $61,000; prepaid expenses - $3,000; accounts and notes payable, short term - $64,000; accrued liabilities - $16,000.

•
A. 1:2
•
B. 2:1
•
C. 1.2:1
•
D. 3:1
•
E. 4:1




Question 9 of 10
10.0/ 10.0 Points
The indirect method of computing cash flows from operating activities adjusts net income rather than each income statement item to a cash basis.



A. True
B. False






Question 10 of 10
10.0/ 10.0 Points
Express operating expenses as a common-size percentage using the following data. Sales - $45,000; cost of goods sold - $29,340; gross profit from sales - $15,660; operating expenses - $10,800; net income - $4,860.

•
A. 69 percent
•
B. 24 percent
•
C. 28 percent
•
D. 2.22 percent

   

 

ACCT105 Week 5 Homework Template SCORE 100 PERCENT

Matching
Referring to the items listed below, place the appropriate letter next to the corresponding description.
a.	Direct method		f.	Noncash charges / expenses		k.	Statement of changes in financial position
b.	Financing activities		g.	Noncash credits / revenues		l.	Working capital
c.	Indirect method		h.	Operating activities		m.	Cash flow margin ratio
d.	Investing activities		i.	Separate schedule		n.	Cash flow per share of common stock outstanding
e.	Cash flows from operating activities		j.	Statement of cash flows
1.			Generally include the cash effects of transactions and other events that enter into the determination of net income.
2.			Replaced by the statement of cash flows.
3.			Reports the flow of cash into and out of a business in a given period.
4.			Current assets minus current liabilities.
5.			Include obtaining resources from owners and providing them with a return on their investment and obtaining resources from creditors and repaying or otherwise setling the debt.
6.			Shows significant financing and investing activities that did not affect cash.
7.			A way of determining cash flows from operating activities that starts with net income and adjusts for expenses and revenues that do not affect cash.
8.			Include lending money and collecting the principal on those loans; acquiring and selling or disposing of securities of other companies; and acquiring or disposing of property, plant, and equipment.
9.			Deducts from cash sales only those operating expenses that consumed cash.
10.			Revenues and gains included in arriving at net income that do not provide cash.
11.			Expenses and losses that are added back to net income because they do not actually use cash of the the company.
12.			Net cash provided by operating activities divided by the average number of shares of common stock outstanding.
13.			Net cash provided by operating activities divided by net sales.
14.			Cash generated by the regular operations of a business; usually computed as net income plus or minus the effects of other current assets and current liabilities on cash flows, plus noncash expenses deducted in arriving at net income, minus noncash revenues included, less certain gains and plus any losses that are included in the total proceeds received from sale of fixed assets.

 

Problem
1.	Common-size percentages are often used to compare the statements of companies of unequal size. The condensed income statements of Companies A and B are given below. Enter in the spaces provided the amounts expressed in common-size percentages.
	Company A and Company B
	Income Statements for Year Ended December 31, 2007
				Dollar Amounts						Common-Size Percentages
				Company A			Company B			Company A			Company B
	Sales			$450,000			$525,000
	Cost of goods sold			261,000			210,000
	Gross margin			$189,000			$315,000
	Selling expenses			$81,000			$89,250
	Administrative expenses			45,000			52,500
	Total operating expenses			$126,000			$141,750
	Income			$63,000			$173,250
2.	After expressing the amounts of the income statements in common-size percentages, examine them and name the company that operated more efficiently.

 

       

 

ACCT105 Week 6 Forum

Discuss cost concepts used in manufacturing accounting. Be sure to address the basic product cost components.

(Answer is 283 words with 1 reference, and also 2 posts to other students)

 

 

ACCT105 Week 6 Quiz SCORE 100 PERCENT

Question 1 of 10 10.0/ 10.0 Points Materials were requisitioned for use, $28,200, of which $25,000 were direct materials. The entry is:   A. Dr. Manufacturing Overhead for $25,000 and Work in Process Inventory for $3,200 and Cr. Materials Inventory for $28,200   B. Dr. Work in Process Inventory for $25,000 and Manufacturing Overhead for $3,200 and Cr. Materials Inventory for $28,200   C. Dr. Manufacturing Overhead for $25,000 and Work in Process Inventory for $3,200 and Cr. Materials Purchases for $28,200   D. Dr. Work in Process Inventory for $28,200 and Cr. Materials Inventory for $28,200

Question 2 of 10 10.0/ 10.0 Points Which of the following would be classified as manufacturing overhead? (1) marketing research; (2) depreciation on president's office facilities; (3) advertising; (4) factory taxes; (5) indirect materials; (6) machinery maintenance.   A. 1, 3, 4 are manufacturing overhead costs.   B. 4, 5, 6 are manufacturing overhead costs.   C. 4, 6 are manufacturing overhead costs.   D. 1, 2, 3, 4, 5, 6 are manufacturing overhead costs.   E. None of the above combinations.

Question 3 of 10 10.0/ 10.0 Points A job is a unique order made for a particular customer according to the customer's requirements.   A. True B. False

Question 4 of 10 10.0/ 10.0 Points When actual overhead costs incurred are larger than the amount of overhead costs applied to production, manufacturing overhead is underapplied.   A. True B. False

Question 5 of 10 10.0/ 10.0 Points Materials, labor, and overhead are always assumed to be added evenly throughout the process of manufacturing.   A. True B. False

Question 6 of 10 10.0/ 10.0 Points The essential distinction between a process cost system and a job cost system is that:   A. A job order cost system usually requires the use of an estimated overhead rate to allocate manufacturing overhead costs to jobs.   B. A process cost system accumulates product costs by department or time periods while a job order cost system accumulates product costs by jobs.   C. A job order cost system requires a more orderly classification of costs than does a process cost system.   D. A job order cost system does not use a predetermined overhead rate to apply manufacturing overhead.

Question 7 of 10 10.0/ 10.0 Points The entry to reflect a practical disposition of overapplied overhead contains a debit to Cost of Goods Sold and a credit to Manufacturing Overhead.   A. True B. False

Question 8 of 10 10.0/ 10.0 Points If the variable costing concept is followed, which of the following costs would be included as part of the cost of product manufactured? (1) Depreciation on plant; (2) Direct labor; (3) Direct materials; (4) Property taxes on plant; (5) Insurance on plant; (6) Electricity purchased to operate machinery.   A. 1, 2, 3 would be included.   B. 2, 3, 5, and 6 would be included.   C. Only 2, 3, and 6 would be included.

Question 9 of 10 10.0/ 10.0 Points In a job cost accounting system, costs are accumulated in terms of departments for a specified time period.   A. True B. False

Question 10 of 10 10.0/ 10.0 Points What is the cost of materials available for use assuming the following data? Materials inventory, January 1 - $33,660; materials purchases - $148,800; direct labor - $120,000; work in process inventory, January 1 - $336,000; selling expense - $28,800; materials inventory, December 31 - $48,000; manufacturing overhead - $360,000; work in process inventory, December 31 - $288,000; transportation-in - $600.   A. $48,000   B. $183,060   C. $33,660   D. $182,460   E. None of the above.

 

ACCT105 Week 6 Assignment

Matching
Referring to the items listed below, place the appropriate letter next to the corresponding description.
a.	Product Cost		g.	Cost of Goods Manufactured		n.	Cost Driver
b.	Period Cost		h.	Cost to Manufacture		o.	Process Costing
c.	Material Inventory		i.	Converstion Cost		p.	Job Costing
d.	Work in Process Inventory		j.	Administrative Costs		q.	Underapplied Overhead
e.	Finished Goods Inventory		k.	Direct Labor		r.	Overapplied Overhead
f.	Cost of Goods Sold		l.	Direct Materials		s.	Predetermined Overhead Rate
			m.	Manufacturing Overhead
1.			A cost that "attaches" to the product as the product moves through the operating cycle.
2.			The total cost of all resources put into production during the period, whether completed or not.
3.			The amount shown on the balance sheet that represents the cost incurred to produce goods that are not yet completed.
4.			The cost of services of employees who work directly on the product.
5.			A cost that is not directly related to production of the product.
6.			The amount that represents the cost of goods made available for sale in the current period.
7.			Product costs.
8.			Direct labor plus manufacturing overhead.
9.			An activity that causes costs to be incurred.
10.			Debit balance remaining in the Manufacturing Overhead account after all entries have been recorded prior to the closing entries.
11.			An alternative to the job order cost system for accumulating costs.
12.			A cost accounting system in which the costs incurred to produce a product are accumulated for each individual job.
13.			Estimated manufacturing overhead divided by the expected level of activity.
14.			Amount by which the overhead applied to production exceeds the actual overhead costs incurred in the same period.

 

 

Completion and Exercises

Fill in the blanks using the dropdown list.

1.

Wages paid to inspectors, factory accountants, and plant supervisors are classified as __________ __________, while wages paid to painters, machine operators, and assemblers are classified as __________ __________.

2.

__________ __________ are materials that are necessary for production but are not traced to the products being manufactured; these materials costs are classified as part of __________ __________.

3.

A manufacturing company's costs can be classified broadly as __________, __________, and __________. The costs to manufacture a product are classified as __________ __________, __________ __________, and __________ __________.

4.

Give a typical heading for the Statement of Cost of Goods Manuafactured.

Line 1

Line 2

Line 3

5.

On the Statement of Cost of Goods Manufactured, Cost to Manufacture is added to __________ (Beginning or Ending) Work in Process inventory, and __________ (Beginning or Ending) Work in Process Inventory is deducted to give Cost of Goods Manufactured.

6.

Give the entry to assign overhead to production for a given period, assuming that the overhead rate is 150 percent of direct labor cost and that $80,000 of direct labor cost was incurred in that period.

To assign overhead to work in process.

7.

Classify each of the following costs of a mobile home manufacturer using these symbols: DM - Direct Materials, DL = Direct Labor, MO = Manufacturing Overhead, and O = Other.

a.

Sheet aluminum.

h.

Wages of assemblers.

b.

Wages of drill press operators.

i.

Salaries of inspectors.

c.

Oil for factory machines.

j.

Lumber.

d.

Salary of company president.

k.

Factory accountant's salary.

e.

Factory supervisors' salaries.

l.

Executive office rent.

f.

Sales salaries.

m.

Nails and staples.

g.

Factory building insurance.

n.

Purchasing agent's salary.

8.

Identify by letters the costs in the preceding question that would be classified as product costs and as period costs.

Product Costs

Period Costs

9.

Selling and administrative costs are often called __________ costs and are __________ as incurred.

10.

If Cost of Goods Manufactured is $306,790, beginning Work in Process Inventory, $25,000, and Cost to Manufacture, $300,000, the ending Work in Process Inventory balance is $__________.

11.

Using the same data as in the preceding question, with Direct Labor costing $140,000 and Direct Materials costing $90,000, Manufacturing Overhead is $__________.

12.

The entry to assign manufacturing overhead to production includes a debit to __________ __________ __________ __________ and a credit to __________ __________.

13.

The two major types of cost accumulation systems are the __________ __________ system and the __________ __________ system. A __________ __________ system would be employed in accounting for the costs of constructing an apartment building.

14.

The three elements of manufacturing cost are __________ __________, __________ __________, and __________ __________.

15.

Assume the following information relates to the Q Company for the Month of May:

Job No. 306

Job No. 307

Job No. 308

In process - May 1:

Materials

$30,000

$15,000

$0

Labor

45,000

30,000

0

Overhead

67,500

45,000

0

Costs added in May:

Materials

7,500

30,000

30,000

Labor

30,000

30,000

60,000

Overhead

?

?

?

Actual overhead costs incurred in May amounted to $172,500. Job Nos. 306 and 307 were completed and transferred out in May. Overhead is applied using a predetermined overhead rate. From the above data compute:

a.

The cost of the May 1 work in process inventory

b.

The total amount of overhead assigned to production in May assuming no change in the overhead rate employed.

c.

The cost of Job No. 306 when completed.

d.

The cost of the goods completed and transferred.

e.

The cost of the May 30 work in process inventory.

16.

In reference to the preceding problem, the balance in the Manufacturing Overhead account is $__________, and overhead is __________ (overapplied / underapplied).

17.

A __________ __________ is a measure of activity, such as machine-hours or computer time, that is a causal factor in the incurrence of costs in an organization.

18.

Generally speaking, manufacturing overhead is applied to production by means of a __________ __________ __________, which is computed under the general formula of dividing __________ __________ __________ by some measure of the __________ __________ __________.

19.

Common bases or levels of activity on which overhead rates are often based include __________ __________ __________ __________ __________, __________ __________-__________, and __________-__________.

20.

Manufacturing overhead is __________ when the amount of overhead applied to production exceeds the amount of overhead incurred in a period. When the reverse is true, overhead is __________.

21.

Assume that budgeted total overhead is $1,000,000 and that budgeted machine-hours are 100,000 for the coming period. Actual overhead was $1,006,000 and actual machine-hours were 102,000. Overhead for the period is __________ (overapplied / underapplied) by $_________.

22.

One difference between the income statements unders the two methods, absorption and variable costing, is that absorption costing focuses on gross __________, while variable costing focuses on __________ margin.

23.

Under __________ __________, all __________ manufacturing overhead costs are charged off during the period rather than being deferred and carried forward to the next period as part of inventory cost.

24.

The only differences between absorption costing and variable costing are the treatment of __________ __________ __________ and the __________ __________ preparation.

25.

__________ and __________ expenses are treated as __________ costs under both absorption and variable costing methods.

26.

Variable __________ and __________ expenses are not part of product costs under either absorption or variable costing methods.

 

 

              

 

ACCT105 Week 7 Assignment

Write a 500 - 750 word paper on the following topic:
Compare and contrast the views of management and accountants regarding the changes required by the Sarbanes-Oxley Act on internal controls and how these changes have affected corporations, accounting firms, and investors.

 

   

 

ACCT105 Week 8 Assignment

 

 Compare and contrast financial and managerial accounting. Provide one specific, real-life example of how either financial accounting helps external stakeholders make informed decisions or how managerial accounting helps managers to improve operational and financial performance.

Use minimum three external references.