ACC561 10 Final Questions A+ Work-5 - 23037

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11) The _____ is also called the statement of financial position.
A. statement of cash flows
B. income statement
C. balance sheet
D. statement of retained earnings

12) Etiwanda Company's accountant recorded a debit to Accounts Payable and a credit to Cash. This transaction will_____.
A. decrease Cash and decrease Accounts Payable
B. increase Cash and increase Accounts Payable
C. increase Cash and decrease Accounts Payable
D. decrease Cash and increase Accounts Payable

13) Valuing assets at replacement cost to facilitate the measurement of “economic income” violates the _____ accounting convention.
A. cost benefit
B. conservatism
C. materiality
D. objectivity

14) The use of acquisition cost less depreciation in valuing an asset on the balance sheet is the logical result of the _____ accounting convention.
A. materiality
B. cost-benefit
C. continuity
D. conservatism

15) Mr. Bryant invested $50,000 cash in a new corporation. The new corporation will record this transaction with a debit to_____.
A. Cash and a credit to Paid-in Capital for $50,000
B. Paid-in Capital and a credit to Retained Earnings for $50,000
C. Retained Earnings and a credit to Cash for $50,000
D. Cash and a credit to Retained Income for $50,000

16) The statement of cash flows is used for all of the following except_____.
A. evaluating the creditworthiness of the organization
B. revealing commitments that may restrict future courses of action
C. showing the relationship of net income to changes in cash
D. determining a company's ability to pay its debts when they are due

17) Nonoperating items on the income statement_____.
A. appear on the income statement immediately after gross profit
B. appear only on corporate income statements
C. are revenues and expenses arising from adjusting entries
D. reflect the effects of financial management decisions

18) The Rebecca Company acquired merchandise inventory costing $10,000 on September 1. The company will not pay for the inventory until October 1. This transaction will affect the Rebecca Company by increasing the Merchandise Inventory account by $10,000 and _____.
A. decreasing the Capital account by $10,000
B. increasing the Capital account by $10,000
C. increasing the Accounts Payable account by $10,000
D. decreasing the Accounts Payable account by $10,000

19) Which of the following is not a cost driver of customer services costs?
A. All of these answers are correct
B. Travel costs are not a cost driver of customer services costs.
C. Number of service calls is not a cost driver of customer services costs.
D. Hours spent servicing products are not a cost driver of customer services costs.

20) Which value chain function would include the cost of computer-aided design equipment and cost to develop the prototype of a product?
A. The marketing function would include these costs
B. The design of product, services, and processes function would include these costs.
C. The production function would include these costs.
D. The distribution function would include these costs.


Solution Description

11) The _____ is also called the statement of financial position.
A. statement of cash flows
B. income statement
C. balance sheet
D. statement of retained earnings

12) Etiwanda Company's accountant recorded a debit to Accounts Payable and a credit to Cash. This transaction will_____.
A. decrease Cash and decrease Accounts Payable
B. increase Ca