Another name for the balance sheet is the _____? Retained earnings statement Statement of cash flows Statement of earnings Statement of financial position

Statement of financial position

Which of the following types of accounts show how resources came into a firm? Owners' equity Both liabilities and owners' equity Liabilities Assets

Both liabilities and owners' equity

According to the Securities Act of 1933, which of the following must be included in a preliminary prospectus? A written statement on the left border of the preliminary prospectus The final offering price The purpose for which the funds are being raised The financial status and history of the company

A written statement on the left border of the preliminary prospectus

Buy-and-hold and systematic rebalancing are examples of passive approaches to asset allocation. Both of these methods are based on which hypothesis? The Efficient Market Hypothesis The Arbitrage Pricing Theory The Capital Asset Pricing Model The Random Walk Hypothesis

The Efficient Market Hypothesis

If a customer enters an order that is good for one month only, who is responsible for cancelling the order at the end of the month if the order is not executed? The customer who placed the order The brokerage firm that entered the order The stock exchange where the order was placed The clearinghouse processing the order

The brokerage firm that entered the order

Fee-based accounts are generally suitable for which type of account? An account with only equity securities An account with infrequent trading An account with only fixed income securities An account that's rebalanced frequently

An account that's rebalanced frequently

At the December 31, 2024 balance sheet date, Unruh Corporation reports an accrued receivable for financial reporting purposes but not for tax purposes. When this asset is recovered in 2025, what will occur? Unruh will record an increase in a deferred tax asset in 2025 Pretax financial income will exceed taxable income in 2025 Total income tax expense for 2025 will exceed current tax expense for 2025 Unruh will record a decrease in a deferred tax liability in 2025

Unruh will record a decrease in a deferred tax liability in 2025

What is a major distinction between temporary and permanent differences in accounting? Temporary differences occur frequently, whereas permanent differences occur only once Permanent differences are not representative of acceptable accounting practice Temporary differences reverse themselves in subsequent accounting periods, whereas permanent differences do not reverse Once an item is determined to be a temporary difference, it maintains that status; however, a permanent difference can change in status with the passage of time

Temporary differences reverse themselves in subsequent accounting periods, whereas permanent differences do not reverse

Which of the following is a temporary difference classified as a revenue or gain that is taxable after it is recognized in financial income? Prepaid royalty received in advance Interest received on a municipal obligation Subscriptions received in advance An installment sale accounted for on the accrual basis for financial reporting purposes and on the installment (cash) basis for tax purposes

An installment sale accounted for on the accrual basis for financial reporting purposes and on the installment (cash) basis for tax purposes

Which of the following is an example of a permanent difference in accounting? Interest expense on money borrowed to invest in municipal bonds All of these answers are correct as they are all examples of permanent differences Insurance expense for a life insurance policy on officers Proceeds from life insurance on officers

All of these answers are correct as they are all examples of permanent differences

A company records an unrealized loss on trading securities. This would result in what type of difference and in what type of deferred income tax? A permanent difference creating a DTL A temporary difference creating a DTA A permanent difference creating a DTA A temporary difference creating a DTL

A temporary difference creating a DTA

Balance sheet information is useful for all of the following except: Analyze cash inflows and outflows for the period Evaluate capital structure Compute rates of return Assess future cash flows

Analyze cash inflows and outflows for the period

What is a limitation of the balance sheet that is not a limitation of the income statement? The numbers are affected by the accounting methods employed Omitted items Valuation of items at historical cost The use of judgments and estimates

Valuation of items at historical cost

The basis for classifying assets as current or noncurrent is conversion to cash within: The accounting cycle or one year, whichever is longer The operating cycle or one year, whichever is longer The accounting cycle or one year, whichever is shorter The operating cycle or one year, whichever is shorter

The operating cycle or one year, whichever is longer

Long-term liabilities include all of the following except: Obligations payable at some date beyond the operating cycle Accrued interest on bonds payable Deferred income taxes and most lease obligations Obligations not expected to be liquidated within the operating cycle

Accrued interest on bonds payable

How should treasury stock be reported? Contra asset Current asset Reduction of stockholders' equity Investment

Reduction of stockholders' equity

What are the three parts into which the stockholders' equity section is usually divided? Preferred stock, common stock, retained earnings Preferred stock, common stock, treasury stock Capital stock, appropriated retained earnings, unappropriated retained earnings Capital stock, additional paid-in capital, retained earnings

Capital stock, additional paid-in capital, retained earnings

What is the definition of cost behavior in the context of managerial accounting? Cost behavior is the process of allocating costs to different departments. Cost behavior is the method of calculating total production costs. Cost behavior refers to the fixed nature of costs regardless of activity level. Cost behavior is defined as the manner in which costs respond to changes in volume or activity.

Cost behavior is defined as the manner in which costs respond to changes in volume or activity.

Is it true that total variable and fixed costs remain the same regardless of the number of units produced? True, as both costs are independent of production levels. False, because fixed costs change with production levels. False, because variable costs change with the level of production. True, because total costs are always constant.

False, because variable costs change with the level of production.

Do fixed costs always remain constant regardless of the level of production? True, but only in the short term. False, fixed costs vary with production levels. True, fixed costs do not change with production levels. False, fixed costs are variable in nature.

True, fixed costs do not change with production levels.

What is normal capacity in the context of production planning? Normal capacity is the maximum production level achievable under ideal conditions. Normal capacity is the minimum production level required to break even. Normal capacity is the production level that maximizes profit. Normal capacity is the average annual level of operating capacity needed to meet expected sales demand, adjusted for seasonal changes and industry and economic cycles.

Normal capacity is the average annual level of operating capacity needed to meet expected sales demand, adjusted for seasonal changes and industry and economic cycles.

Can regression analysis be used to predict costs using one or more activities? True, but only with a single activity. False, regression analysis is only used for sales forecasting. True, regression analysis can be performed using one or more activities to predict costs. False, regression analysis is not applicable to cost prediction.

True, regression analysis can be performed using one or more activities to predict costs.

Does cost-volume-profit analysis assume a constant sales mix? False, the sales mix is assumed to vary. True, cost-volume-profit analysis assumes a constant sales mix. False, sales mix is irrelevant in cost-volume-profit analysis. True, but only for short-term analysis.

True, cost-volume-profit analysis assumes a constant sales mix.

At the breakeven point, does the contribution margin equal total fixed costs? True, but only in the long term. False, the contribution margin is always greater than fixed costs. False, the contribution margin is less than fixed costs. True, the contribution margin equals total fixed costs at the breakeven point.

True, the contribution margin equals total fixed costs at the breakeven point.

For profit planning purposes, which equation is used to determine target sales units? Target Sales Units = (P - FC) divided by CM per Unit Target Sales Units = CM per Unit divided by (FC + P) Target Sales Units = FC divided by CM per Unit Target Sales Units = (FC + P) divided by CM per Unit

Target Sales Units = (FC + P) divided by CM per Unit

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