Exam 2 Practice - Practice Exam 2 (Chapters 4, 15, 16 and...

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Practice Exam 2 (Chapters 4, 15, 16 and Appendix to Chapter 6) These practice questions do not cover every topic that may appear on the actual exam, but they should be a part of your exam preparation. You should also study your class notes, homework, practice problems as well as the assigned reading from the textbook. 01. Which department is often responsible for a direct materials variance based on useage? A. The accounting department B. The production department C. The purchasing department D. The budgeting department 02. A project has the following projected cash flows: year 1 $1000, year 2 $3,000, year 3 $2,000, year 4 $1,500 and year 5 $800. If the project required an investment of $6,500 what is the payback period? A. 3.33 years B. 3.00 years C. 4.63 years D. 3.66 years E. none of the above 03. Which of the following accounts is closed at the end of the year? A. Cash B. Revenue C. Retained earnings D. Accounts payable 04. When a company receives a utility bill that is not due until next month, it should A. debit utilities expense and credit accounts payable. B. debit utilities expense and credit accounts receivable. C. debit accounts payable and credit utilities expense. D. debit utilities expense and credit cash E. make no entry until the bill is paid. 05. How long will it take an investment of $25,000 to accumulate to a total of $35,462.50 assuming an interest rate of 6 percent? A. 4 years. B. 10 years. C. 5 years. D. 6 years. E. 2 years. 06. Cobert Company’s actual sales results exceeded the planned results for July. This amount exceeded the amount of an unfavorable difference reported for June sales. Which of the following statements about the sales performance report for both months is true? A. The sales report is not useful since it shows a favorable and unfavorable difference for the two months. B. The differences for the two months will offset each other so the differences should not be a concern. C. The difference for July can be ignored. D. The differences for both months should be investigated if the amounts are significant. 07. Which of the following statements is true? A. A flexible budget expresses all costs on a per unit basis. B. Sales variances may be computed in a manner similar to cost variances and can be caused by a difference from planned prices or volume. C. The final budget amounts in a performance report are based on an expected level of sales or production. D. If an actual amount is more than a budgeted amount, an unfavorable variance will always result. -- Page 1 --
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08. When deciding whether to replace some equipment, the purchase price of the new equipment is A. a relevant cost. B.
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This note was uploaded on 01/31/2011 for the course ACC 310F taught by Professor Verduzco during the Fall '07 term at University of Texas at Austin.

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Exam 2 Practice - Practice Exam 2 (Chapters 4, 15, 16 and...

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