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Accounting Questions - True & False

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1. (True or False) Articulation of the financial statements mean that the balance sheet, income statement, and statement of stockholders equity must tie together and tell the same story.

2. (Circle one) Dividends paid by Corporation A usually (increases or decrease) the stockholder's equity of Corporation A over time?

3. (True or False) The ending balance of stockholder equity usually found in the financing section of the statement of cash flows?

4. (True or False) Plant, property, and equipment usually carried at fair market value on the Income Statement?

5. (True or False) The amount spent on advertising to establish a competitive advantage such as a brand-name is usually accounted for on the face of the balance sheet as an asset?

6. (True or False) Is the cash used in investing activities on the statement of cash flows is usually the amount invested in plant, property and equipment (net of any proceeds from sales).

7. (Circle one) For a profitable mature company, is the cash flow from operations usually (positive or negative)?

8. A share repurchase would show up where in the statement of cash flows? (Operating, Financing, or Investing)

9. (True or False) A dirty surplus is something that reflects a change in an assets value but accountants (using GAAP) chose to book directly to the stockholders equity section of the balance sheet instead of the income statement?

10. (True or False) A stock is a balance in an account at a point in time and a flow is a change in the balances over time.

11. (True or False) Net income is one item that will appear on the income statement, the cash flow statement, and the statement of shareholders equity.

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Solution Summary

The solution answers Accounting Questions related to items of cash flow statement, income statement, balance sheet etc.

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Managerial Accounting Questions

1. A newly opened bed-and-breakfast projects the following:
Monthly fixed costs $6000
Variable cost per occupied room per night $20
Revenue per occupied room per night $75
If there are 12 rooms available, what percentage of rooms would have to be occupied, on average, to break even?

2. The relationship d = 5000 - 25p describes what happens to demand (d) as price (p) varies. Price can vary between $10 and $50. How many units can be sold when the price is $10?

True/False. Write T if the statement is true and F if the statement is false.

3. Enterprise Resource Planning (ERP) system is a data-oriented decision support system that utilizes specific management science solution procedures to solve individual problems such as cost-volume analysis.
a) True b) False

4. The break-even point is the volume that equates total revenue with total cost and profit is zero.
a) True b) False

5. Fixed costs depend on the number of items produced.
a) True b) False

6. Profit is the difference between total revenue and total cost.
a) True b) False

7. Data are pieces of information from the problem environment.
a) True b) False

8. The quantitative method is a general approach to decision making.
a) True b) False

Multiple-Choice: Choose the one alternative that best completes the statement or answers the question.

9. ________ involves determining the functional relationship between variables, parameters, and equations.
a) Problem Observation
b) Model construction
c) Model Implementation
d) Problem definition
e) Model solution

10. A decrease in fixed costs with everything else remaining constant
a) increases the break-even point.
b) decreases the break-even point.
c) keeps the break-even point at the same level.
d) does not affect the level of the break-even point.

11. Decision analysis is a ________ technique.
a) linear mathematical programming
b) probabilistic
c) non-linear programming
d) simulation
e) network

12. Linear mathematical programming techniques assume that all parameters in the models are
a) known with certainty.
b) predictable.
c) unknown.
d) unpredictable.

13. Which of the following statements is false?
a) Decision models designate decision variables.
b) Decision models selectively describe the managerial situation.
c) Decision models designate performance measures that reflect objectives.
d) Decision models consider all factors from the real world.

14. The indicator that results in total revenues being equal to total cost is called the
a) break-even point.
b) marginal cost.
c) profit mix.
d) marginal volume.

15. The steps of the scientific method are
a) observation, problem definition, model construction, model solution, implementation.
b) observation, implementation, problem definition, model construction, model solution.
c) model construction, problem definition, observation, model solution, implementation.
d) problem definition, model construction, observation, model solution, implementation.

16. A difficult aspect of using spreadsheets to solve management science problems is
a) obtaining the solution to standard management science problems.
b) data entry.
c) setting up a spreadsheet with complex models and formulas.
d) performing sensitivity analysis.

17. An increase in price with everything else remaining constant
a) raises the break-even point.
b) does not affect the level of the break-even point.
c) decreases the break-even point.
d) keeps the break-even point at the same level.

18. The components of break-even analysis are
a) volume, cost, and profit.
b) volume and profit.
c) cost and profit.
d) volume and cost.

Short Answer: Write the word or phrase that best completes the statement or answers the question.

19. ________ depend on the number of items produced.

20. The ________ is the volume that equates total revenue with total cost and profit is zero.

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