1. Sampling is used heavily in manufacturing and service settings to ensure high-quality products. In which of the following areas would sampling be inappropriate?

Custom cabinet making

Computer assembly

Technical support by phone

Cell phone manufacturing

2. The preparation of adjusting entries is:

needed to ensure that the expense recognition principle is followed.

straightforward because the accounts that need adjustment will be out of balance

optional when financial statements are prepared.

only required for accounts that do not have a normal balance.

3. What is an advantage of the correlation coefficient over the covariance?

It falls between -1 and 1.

It is a unit-free measure, therefore making it easier to interpret.

It falls between -1 and 1; and it is a unit free measure, therefore making it easier to interpret.

It falls between 0 and 1.  

4. Interest may be included in the acquisition cost of a plant asset:

during the construction period of a self-constructed asset.

if the asset acquisition is financed by a long-term note payable.

if the asset is purchased on credit.

if it is a part of a lump-sum purchase.

5. Which trial balance will consist of the greatest number of accounts?

Balance

Adjusted trial balance

Trial balance

Post-closing trial balance

6. Expenditures that maintain the operating efficiency and expected productive life of a plant asset are generally:

capitalized as a part of the cost of the asset.

not recorded until they become material in amount.

expensed when incurred.

debited to the Accumulated Depreciation account.

7. A SWOT analysis is a framework for analyzing a firm’s environments. A SWOT is made up of

Internal environmental analysis of threats and weaknesses.

External analysis of strengths and opportunities.

Internal threats and weakness and external strengths and opportunities.

Internal strengths and weaknesses; external threats and opportunities.

8. GAAP, compared to IFRS, tends to be more:

simple in disclosure requirements

simple in accounting requirements

principles-based

rules-based

9. Firms must be aware of goals other than short-term profit maximization. One area of concern should be social responsibility which is:

the idea that organizations are solely responsible to local citizens

the idea that businesses are responsible to maintain a healthy social climate for their employees

the expectation that business will strive to improve the overall welfare of society

the fact that court costs could impact the financial bottom line

10. Which of the following can be represented by a continuous random variable?

The number of typos found on a randomly selected page of this test bank

The number of students who will get financial assistance in a group of 50 randomly selected students

The number of customers who visit a department store between 10:00 a.m. and 11:00 a.m. on Mondays

The average temperature in Tampa, Florida, during the month of July

11. According to value-chain analysis, which of the following would be considered part of the general administration in a firm?

procurement

technology development

information systems

human resource management

12. Which of the following can be represented by a discrete random variable?

The number of defective light bulbs in a sample of five

The average distance achieved in a series of long jumps

The circumference of a randomly generated circle

The time of a flight between Chicago and New York

13. Sarbanes Oxley applies to:

U.S and international companies.

international companies but not U.S. companies.

U.S. and Canadian companies but not other international companies.

U.S companies but not international companies.

14. Vertical analysis is a technique that expresses each item in a financial statement:

as a percent of the item in the previous year.

starting with the highest value down to the lowest value.

in dollars and cents.

as a percent of a base amount.

15. The owner of a company has recently decided to raise the salary of one employee, who was already making the highest salary, by 20%. Which of the following is(are) expected to be affected by this raise?

Mean, median, and mode

Median only

Mean and median only

Mean only

16. Which of the following meets the requirements of a simple random sample?

A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include six people chosen at random, without regard to age.

A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include two people chosen at random under the age of 25 and four people chosen at random over 25.

A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include six people who volunteer for the sample.

A population contains 10 members under the age of 25 and 20 members over the age of 25. The sample will include six males chosen at random, without regard to age.

17. The acquisition of treasury stock by a corporation:

decreases its total assets and total stockholders’ equity.

requires that a gain or loss be recognized on the income statement.

increases its total assets and total stockholders’ equity.

has no effect on total assets and total stockholders’ equity.

18. Under the accrual basis of accounting:

the ledger accounts must be adjusted to reflect a cash basis of accounting before financial statements are prepared under generally accepted accounting principles.

cash must be received before revenue is recognized.

events that change a company’s financial statements are recognized in the period they occur rather than in the period in which cash is paid or received.

net income is calculated by matching cash outflows against cash inflows.

19. The acquisition of treasury stock by a corporation:

has no effect on total assets and total stockholders’ equity.

decreases its total assets and total stockholders’ equity.

increases its total assets and total stockholders’ equity.

requires that a gain or loss be recognized on the income statement.

20. In multiple regression, plot the residuals against ____ to detect changing variability.

Collinear variables

All explanatory variables

The response variable

The predicted values

21. The resource-based view (RBV) of the firm combines two perspectives:

the interrelationships among the primary activities of the firm and corporate management

the industry and the competitive environment

the internal analysis of the firm and the external analysis of the industry and competitive environment

the primary and support activities of the firm

22. Cost allocation of an intangible asset is referred to as:

accretion

capitalization

depreciation

amortization

23. The fraud triangle applies to:

U.S. and Canadian companies, but not other international companies.

U.S companies but not international companies.

international companies but not U.S. companies.

U.S and international companies.

24. On March 1st, Candy, Inc. had supplies on hand of $1,500. During the month, Candy purchased supplies of $2,900 and used supplies of $2,800.  The March 31st balance sheet should report what balance in their supplies account?

$1,600

$1,500

$2,900

$2,800

25. Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. This is an example of _______________. 

using related diversification to achieve value by integrating vertically in order to acquire market power

using related diversification to achieve value by pooling negotiating power to achieve market power

using related diversification to achieve value by leveraging core competencies to achieve economies of scope

using related diversification to achieve value by integrating vertically in order to attain economies of scope

26. Assume that the Fitzgerald Corporation uses the indirect method to depict cash flows. Indicate where, if at all, accounts receivable collected would be classified on the statement of cash flows.

Does not represent a cash flow.

Financing activities section.

Investing activities section.

Operating activities section.

27. __________involves ensuring proper strategic controls and organizational designs. 

Strategy implementation

Business-level strategy

Corporate-level strategy

Corporate governance

28. The manager of Weiser is given a bonus based on net income before taxes. The net income after taxes is $35,700 for FIFO and $29,400 for LIFO. The tax rate is 30%. The bonus rate is 20%. How much higher is the manager’s bonus if FIFO is adopted instead of LIFO?

$9,000

$1,800

$6,300

$12,600

29. Which of the following controls would best help detect the removal of a blank check by an employee from the back of a company’s checkbook for subsequent misappropriation of funds?

Tracing any debit memorandums from the bank to the company’s records

A review of the cash budget

An accounting policies manual

The use of pre-numbered checks

30. Which of the following is not a current liability on December 31, 2014?

A Note Payable due December 31, 2015

A lawsuit judgment to be decided on January 10, 2015

An Accounts Payable due January 31, 2015

Accrued salaries payable from 2014

31. When collection is made on Accounts Receivable,

Stockholders equity will increase.

total assets will remain the same.

total assets will decrease.

total assets will increase.

32. Which financial statement would best indicate whether the company relies on debt or stockholders’ equity to finance its assets?

Retained earnings statement

Statement of cash flows

Income statement

Balance sheet

33. Is it possible for a data set to have no mode?

No, if the data set is nonempty, there is always a mode

No, unless there is an odd number of observations

Yes, if there are no observations that occur more than once

Yes, if two observations occur twice

34. An analyst believes the probability that U.S. stock returns exceed long-term corporate bond returns over a 5-year period is based on personal assessment. This type of probability is best characterized as a(n) ____________.

Empirical probability

A priori probability

Objectivity probability

Subjective probability

35. Continuous monitoring in the contemporary approach, is beneficial because _____________. 

organization response time is increased

it increases the time it takes to detect changes in the competitive environment

It reduces time lags

organizational flexibility is reduced

36. WellPoint Health Network states: WellPoint will redefine our industry: through a new generation of consumer-friendly products that put individuals back in control of their future. This is an example of a: 

Strategic objective

Line manger’s individual goal

Vague statement of direction

Vision statement

37. A post-closing trial balance will show:

zero balances for all accounts

only income statement accounts

only balance sheet accounts

zero balances for balance sheet accounts

38. Which of the following requirements about internal controls were enacted under the Sarbanes Oxley Act:

Independent outside auditors must eliminate redundant internal controls.

Companies must develop sound internal controls over financial reporting.

Companies must assess the functionality of internal controls only when a violation occurs.

Internal auditors replace independent outside auditors when evaluating the level of internal control.

39. Which of these statements regarding the industry life cycle is correct?

Part of the power of the market life cycle is its ability to serve as a short-run forecasting device.

It points out the need to maintain a differentiation advantage and a low cost advantage simultaneously.

It has important implications for company generic strategies, functional areas, value-creating activities, and overall objectives.

Trends suggested by the market life cycle model are generally not reversible or repeatable.

40. International Financial Reporting Standards (IFRS): 

implies that receivables with different characteristics should be reported separately.

implies that receivables with different characteristics should be reported as one un-segregated amount.

requires that receivables with different characteristics should be reported separately.

requires that receivables with different characteristics should be reported as one un-segregated amount.

41. In a simple linear regression model, if the plots on a scatter diagram lie on a straight line, what is the standard error of the estimate?

Infinity

0

-1

+1

42. Shaw Industries, a giant carpet manufacturer, increases its control over raw materials by producing much of its own polypropylene fiber, a key input to its manufacturing process. This is an example of _______________. 

using related diversification to achieve value by integrating vertically in order to attain economies of scope

using related diversification to achieve value by pooling negotiating power to achieve market power

using related diversification to achieve value by integrating vertically in order to acquire market power

using related diversification to achieve value by leveraging core competencies to achieve economies of scope

43. The four key attributes of strategic management include the idea that:

Strategy must be focused on long-term objectives.

Strategy must be focused on one specific area of an organization.

Strategy must be directed toward overall organizational goals and objectives.

Strategy must be focused on competitor strengths.

44. If a corporation issued $8,000,000 in bonds which pay 5% annual interest, what is the annual net cash cost of this borrowing if the income tax rate is 30%?

$120,000

$280,000

$400,000

$4,000,000

45. Green, Inc. had 200,000 shares of common stock outstanding before a stock split occurred and 800,000 shares outstanding after the stock split. The stock split was:

1-for-8

4-for-1

8-for-1

2-for-8

46. You work in marketing for a company that produces work boots. Quality control has sent you a memo detailing the length of time before the boots wear out under heavy use. They find that the boots wear out in an average of 208 days, but the exact amount of time varies, following a normal distribution with a standard deviation of 14 days. For an upcoming ad campaign, you need to know the percent of the pairs that last longer than six months-that is, 180 days. Use the empirical rule to approximate this percent.

95%

97.5%

5%

2.5%

47. What is a difference between merchandising companies and service enterprises?

Cost of goods sold is an expense for service enterprises but not for merchandising companies.

The operations in merchandising companies and service enterprises are identical.

Merchandising companies must prepare multiple-step income statements and service enterprises must prepare single-step income statements.

Merchandising companies generally have a longer operating cycle than service enterprises.

48. For both qualitative and quantitative data, what is the difference between the relative frequency and the percent frequency?

The percent frequency equals the relative frequency multiplied by 100

As opposed to the percent frequency, the relative frequency is divided by the number of observations  the data set.

The relative frequency equals the percent frequency multiplied by 100.

The percent frequency equals the relative frequency multiplied by 100

49. According to the text the triple bottom line approach to corporate accounting includes three components: 

financial, organizational, and customer

financial, environmental, and customer

financial, organizational, and psychological

financial, environmental, and social

50. As opposed to the relative frequency, the percent frequency is divided by the number of observations in the data set.

Trumpeting Trumpets has the following inventory data:

July 1:  Beginning inventory           30 units at $120

July 5:  Purchases                             180 units at $112

July 14: Sale        120 units

July 21: Purchases            90 units at $115

July 30: Sale        84 units

Assuming that a periodic inventory system is used, what is the cost of goods sold on a FIFO basis?

$10,992

$23,118

$11,022

$23,088

(90 × $115) + [(120 + 84 − 90) × $112] = $23,118

51. For both qualitative and quantitative data what is the difference between the relative frequency and the percent frequency?

The percent frequency equals the relative frequency multiplied by 100

As opposed to the percent frequency, the relative frequency is divided by the number of observations  the data set.

The relative frequency equals the percent frequency multiplied by 100.

The percent frequency equals the relative frequency multiplied by 100