ACCT $2110/2120$

ACCOUNTING:$$ The student understands financial statements and applies accounting analysis to support business decisions. Strong competencies in utilizing financial information to support business decisions or to improve profitability. There are total$10$ multiple$-$choice questions in this subject and choose the best answer for each question.

Which of the following is not classified as direct labor?

a$.$ Bottlers of beer in a brewery

b$.$ Copy machine operators at a copy shop

c$.$ Wages of supervisors

d$.$ Bakers in a bakery

$$Which one of the following is not a typical current liability?

a$.$ Mortgages payable

b$.$ Income tax payable

c$.$ Interest payable

d$.$ Salaries payable

Gross profit equals the difference between

a$.$ sales revenue and cost of goods sold plus operating expenses.

b$.$ net income and operating expenses.

c$.$ sales revenue and operating expenses.

d$.$ sales revenue and cost of goods sold.

On a CVP income statement

a$.$ Sales $$ Variable costs $$ Fixed costs $=$ Contribution margin.

b$.$ Sales $$ Fixed costs $=$ Contribution margin.

c$.$ Sales $$ Cost of goods sold $=$ Contribution margin.

d$.$ Sales $$ Variable costs $=$ Contribution margin.

The consistent application of an inventory costing method enhances

a$.$ efficiency.

b$.$ conservatism.

c$.$ accuracy.

d$.$ comparability.

The LIFO inventory method assumes that the cost of the latest units purchased are

a$.$ the last to be allocated to cost of goods sold.

b$.$ the first to be allocated to ending inventory.

c$.$ the first to be allocated to cost of goods sold.

d$.$ not allocated to cost of goods sold or ending inventory.

Which of the following is not an internal user?

a$.$ Controller

b$.$ Treasurer

c$.$ Creditor

d$.$ Department manager

Collection of a $$600$ Accounts Receivable

a$.$ increases an asset $$600$; decreases an asset $$600$

b$.$ increases an asset $$600$; decreases a liability $$600$

c$.$ decreases a liability $$600$; increases stockholders$$ equity $$600$

d$.$ decreases an asset $$600$; decreases a liability $$600$

The revenue recognition principle dictates that revenue should be recognized in the accounting records:

a$.$ when cash is received

b$.$ when the performance obligation is satisfied

c$.$ at the end of the month

d$.$ in the period that income taxes are paid