Principles of Accounting II- Please answer these questions and explain how to answer them so that way I can understand and reread the chapter again and compare them to my answers if I answer them right or not.
Question 1 If land costing $145,000 was sold for $205,000, the $60,000 gain on the sale would be added to net income in the operating activities section of the statement of cash flows (prepared by the indirect method). True False Explanation: Question 2 The ability of a business to pay its debts as they come due and to earn a reasonable net income is solvency and leverage solvency and profitability solvency and liquidity solvency and equity Explanation: Question 3 The percent of fixed assets to total assets is an example of vertical analysis solvency analysis profitability analysis horizontal analysis Explanation: Question 4 Job order costing and process costing are pricing systems cost accounting systems cost flow systems inventory tracking systems Explanation: Question 5 Identify the section of the statement of cash flows (a-d) where each of the following items would be reported. Purchase of the stock of another company as investment Decrease in inventory Exchange of land for note payable Issuance of bond payable Increase in accounts receivable Payment of dividends to stockholders Sale of machinery held for use by the company Loss on sale of equipment Dividends received on investment Increase in income taxes payable 1. Operating activities 2. Financing activities 3. Investing activities 4. Schedule of noncash financing and investing Question 6 In calculating cash flows from operating activities using the indirect method, a gain on the sale of equipment is added to net income deducted from net income ignored because it does not affect cash reported supplementally as a noncash investing and financing activity Explanation: Question 7 Reynolds Manufacturers Inc. has estimated total factory overhead costs of $95,000 and expected direct labor hours of 9,500 for the current fiscal year. If job number 117 incurs 2,300 direct labor hours, Work in Process will be debited and Factory Overhead will be credited for $21,850 $2,300 $95,000 $23,000 Explanation: Question 8 The current period statement of cash flows includes the following: Cash balance at the beginning of the period $310,000 Net cash flow from operating activities 185,000 Net cash flow used for investing activities 43,000 Net cash flow used for financing activities 97,000 The cash balance at the end of the period is $45,000 $635,000 $355,000 $125,000 Explanation: Question 9 Match each ratio that follows to its use (items a–h). Items may be used more than once. rate earned on common stockholders’ equity quick ratio earnings per share (EPS) on common stock dividends per share working capital price-earnings (P/E) ratio ratio of sales to assets rate earned on total assets current ratio ratio of liabilities to stockholders’ equity 1. assess the profitability of the assets 2. assess the effectiveness in the use of assets 3. indicate the ability to meet currently maturing obligations 4. indicate the margin of safety to creditors 5. indicate instant debt-paying ability 6. assess the profitability of the investment by common stockholders 7. indicate future earnings prospects 8. indicate the extent to which earnings are being distributed to common stockholders Question 10 To determine cash payments for operating expenses for the statement of cash flows using the direct method, a decrease in accrued expenses is added to operating expenses payable other than depreciation. True False Explanation: Question 11 Since there are few rules to restrict how an organization chooses to arrange its own internal data for decision making, managerial accounting provides ample opportunity for creativity and change. True False Explanation: Question 12 When using the spreadsheet (work sheet) method to analyzing noncash accounts, no order of analysis is required, but it is more efficient to start with Retained Earnings and proceed upward in the account listing. True False Explanation: Question 13 Match the costs that follow to the type of product cost (a-c) or designate as not a product cost (d). salesmen commissions plastic parts maintenance supplies factory depreciation president’s salary machine operator factory supervisor’s salary assembler’s wages wood 1. direct labor 2. direct materials 3. factory overhead 4. not a product cost Question 14 When using the spreadsheet (work sheet) for the statement of cash flows, indirect method, entries made on the spreadsheet are not recorded in the journal or posted to the ledger recorded in the journal and posted to the ledger recorded in the journal but not posted to the ledger not recorded in to the journal but are posted to the ledger Explanation: Question 15 Which of the following are basic phases of the management process? supervising and directing decision making and supervising organizing and directing planning and controlling Explanation: Question 16 On the statement of cash flows, the cash flows from financing activities section would include receipts from the sale of investments payments for the acquisition of investments receipts from a note receivable receipts from the issuance of capital stock Explanation: Question 17 A job order cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory. True False Explanation: Question 18 A cost object indicates how costs are related or identified. True False Explanation: Question 19 Free cash flow is all cash in the bank cash from operations cash from financing less cash used to purchase fixed assets to maintain productive capacity and cash used for dividends cash flow from operations less cash used to purchase fixed assets to maintain productive capacity Explanation: Question 20 Job order cost accounting systems can be used only for companies that manufacture a product. True False Explanation: Question 21 In horizontal analysis, the current year is the base year. True False Explanation: Question 22 Cash, as the term is used for the statement of cash flows, could indicate either cash or cash equivalents. True False Explanation: Question 23 The following are some of the costs incurred by Cupcake Company. Identify them as either: Cupcake mix Factory rent Depreciation expense—factory Depreciation expense—office Salesman commissions Baker’s wages Sprinkles for decoration (indirect material) Frosting 1. Prime costs 2. Conversion costs 3. Both prime and conversion costs 4. Neither prime or conversion costs Question 24 Managers used managerial information for all of the following except to evaluate the company’s stock performance to analyze the performance of a company’s operations to support long-term planning decisions to determine the cost of manufacturing a product Explanation: Question 25 Current position analysis measures a company's ability to pay its current liabilities. True False Explanation: Question 26 Managerial accounting uses only past data in reports to aid management in the decision making process. True False Explanation: Question 27 In most business organizations, the chief accountant is called the treasurer. True False Explanation: Question 28 Managerial accounting provides useful information to managers on product costs. True False Explanation: Question 29 Managerial accounting reports are prepared according to GAAP prepared according to management needs prepared periodically only related to the entire business entity only Explanation: Question 30 What term refers to the cost of changing direct materials into a finished manufactured product? factory overhead cost period cost conversion cost direct labor cost Explanation: Question 31 In the job order costing system, the finished goods account is the controlling account for the factory overhead ledger. True False Explanation: Question 32 For which of the following businesses would the job order cost system be appropriate? canned soup processor oil refinery lumber mill hospital Explanation: Question 33 During the period, labor costs incurred on account amounted to $175,000, including $150,000 for production orders and $25,000 for general factory use. Factory overhead applied to production was $23,000. The entry to record the factory overhead applied to production is Work in Process 25,000 Factory Overhead 25,000 Factory Overhead 23,000 Work in Process 23,000 Work in Process 23,000 Factory Overhead 23,000 Factory Overhead 25,000 Accounts Payable 25,000 Explanation: Question 34 Sanders Inc. has applied $567,988 of overhead to jobs in the cost ledger. Actual overhead at the end of the year is $575,000. The adjustment for over- or underapplied overhead is $7,012 overapplied, increase Cost of Goods Sold $7,012 underapplied, increase Cost of Goods Sold $7,012 overapplied, decrease Cost of Goods Sold $7,012 underapplied, decrease Cost of Goods Sold Explanation: Question 35 Match each of the following phrases with the term (a-g) that it most closely describes. applied overhead is less than actual overhead incurred typically used by companies that make custom products a system that uses a different overhead rate for each activity applied overhead is more than actual overhead incurred typically used by companies whose products are indistinguishable from each other the stock ledger a subsidiary ledger that maintains a separate account for each type of material 1. job order cost system 2. process cost system 3. activity-based costing 4. underapplied overhead 5. overapplied overhead 6. finished goods ledger 7. materials ledger