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36. 51.Which of the following is a method used to reduce an expected labor shortage that is low on...51.Which of the following is a method used to reduce an expected labor shortage that is low on revocability?
A. Overtime
B. New external hires
C. Temporary employees
D. Outsourcing
E. Retrained transfers
52.Which of the following is most likely to lead to a successful downsizing?
A. Avoiding indiscriminant reductions
B. Informing employees that they are laid off via emails
C. Downsizing at random
D. Avoiding changes in the nature of work roles
E. Removing the company's long-term employees first
53.Which of the following best explains why older people approaching retirement age have no intention of retiring?
A. Many employers want to stay away from the costs of hiring a younger crowd and refuse to retire the older workers.
B. Older workers typically occupy the best-paid jobs and hence prevent the hiring of younger workers.
C. Improved health of older people in general, in combination with the decreased physical labor in many jobs has made working longer a viable option.
D. Employers are ignoring situations where it is more expensive to pay for an older worker's experience than hire younger employees.
E. Statistical forecasting results have shown that older people are an asset to an organization's economic strength.
54.Which of the following is NOT one of the forces that draw out an older worker's career?
A. The improved health of older people in general
B. The fear of Social Security being cut
C. Employers being constrained by age discrimination legislation
D. Insufficient younger workers to replace the older workforce
E. Employers' fear of losing the experience that older workers possess
55.In the face of demographic pressures dealing with an aging workforce, many employers try to use _____ among their older workers through early retirement incentive programs.
A. paid leave
B. job rotation
C. work sharing
D. voluntary attrition
E. transfers
56.Which of the following is a disadvantage of employing temporary workers as a means of eliminating a labor shortage?
A. The use of temporary workers adds up to many administrative tasks and financial burdens associated with being the "employer of record."
B. Temporary workers pose no threat to current employees, which makes the overall environment less competitive.
C. The low levels of commitment to the organization and its customers that temporary workers bring with them often reduces the level of customer loyalty.
D. Many temporary agencies train employees prior to sending them over to employers, which often means that the company has to retrain them in accord with its own standards.
E. Because temporary workers have little experience in the host firm, the objective perspective they bring is of no value.
57.Which of the following is true about temporary workers?
A. Although they are temporary, these workers have to be included in employee records.
B. The objective perspective that temporary workers bring along with them is of no value because of their lack of experience.
C. Despite prior training from temporary agencies, companies have to retrain temporary workers to match company standards.
D. Some full-time employees perceive the temporary help as a threat to their own job security.
E. Instead of replacing long-term employees with temporary employees, many organizations supplement their core staff with a small set of temporary workers who act more like assistants to the core staff than potential replacements.
58.Which of the following is true about outsourcing?
A. Outsourcing became a valid choice after certain methods of production and manufacturing became obsolete.
B. Outsourcing is a logical choice when a firm simply does not have certain expertise and is not willing to invest time and effort into developing it.
C. Technological advancements have slowed the momentum of outsourcing being done today.
D. Statistical forecasting resulted in companies transferring their operations and functions overseas.
E. Companies shifting their operations overseas did so because customers were complaining about poor client services domestically.
59.A special case of outsourcing where the jobs that move actually leave one country and go to another is called _____.
A. homesourcing
B. co-sourcing
C. reshoring
D. telecommuting
E. offshoring
60.Is the argument that "call center" staffing is the only type of work being offshored valid?
A. No, because countries to where jobs are being offshored are facing a shortage of skilled labor and are refusing "call center" jobs.
B. Yes, because the level of education and infrastructure does not support high-end support jobs like reading X-rays and other medical tests.
C. Yes, because the state of online security and privacy is less advanced in developed countries.
D. No, because figures have shown that countries like China and India are trying to climb the skill ladder of available work.
E. Yes, because in order to maintain employment rates in their own countries, companies avoid offshoring jobs.
37. 91. If the revenues are correctly reported and the Gross Profit of a company is understated,...
91. If the revenues are correctly reported and the Gross Profit of a company is understated, what is the effect on Owner’s Equity?
A. Understated
B. Overstated
C. Correctly Stated
D. None of the above
92. If merchandise inventory is being valued at cost and the price level is steadily rising, the method of costing that will yield the highest net income is
A. periodic
B. LIFO
C. FIFO
D. average
93. If merchandise inventory is being valued at cost and the purchase price is steadily falling, which method of costing will yield the largest net income?
A. average cost
B. LIFO
C. FIFO
D. weighted average
94. During a period of falling prices, which of the following inventory methods generally results in the lowest balance sheet amount for inventory.
A. average method
B. LIFO method
C. FIFO method
D. can not tell without more information
95. Damaged merchandise that can be sold only at prices below cost should be valued at
A. net realizable value
B. LIFO
C. FIFO
D. average
96. If a manufacturer ships merchandise to a retailer on consignment, the unsold merchandise should be included in the inventory of the
A. consignee
B. retailer
C. manufacturer
D. shipper
97. Merchandise inventory at the end of the year was inadvertently overstated. Which of the following statements correctly states the effect of the error on net income, assets, and retained earnings?
A. net income is overstated, assets are overstated, retained earnings is understated
B. net income is overstated, assets are overstated, retained earnings is overstated
C. net income is understated, assets are understated, retained earnings is understated
D. net income is understated, assets are understated, retained earnings is overstated
98. Merchandise inventory at the end of the year was understated. Which of the following statements correctly states the effect of the error?
A. net income is understated
B. net income is overstated
C. cost of merchandise sold is understated
D. merchandise inventory reported on the balance sheet is overstated
99. Merchandise inventory at the end of the year is overstated. Which of the following statements correctly states the effect of the error?
A. retained earnings is overstated
B. cost of merchandise sold is overstated
C. gross profit is understated
D. net income is understated
100. If the cost of an item of inventory is $50 and the current replacement cost is $57, the amount included in inventory according to the lower of cost or market is
A. $7
B. $50
C. $57
38. 2. When goods are received, the receiving clerk should match the goods with a. The purchase order...
2. When goods are received, the receiving clerk should match the goods with
a. The purchase order and the requisition form.
b. The vendor invoice and the purchase order.
c. The vendor shipping document and the purchase order.
d. The vendor invoice and the vendor shipping document.
3. Internal control is strengthened when the quantity of merchandise ordered is omitted from the copy of the purchase order sent to the
a. Department that initiated the requisition.
b. Receiving department.
c. Purchasing agent.
d. Accounts payable department.
4. Which of the following control activities is not usually performed in the accounts payable department?
a. Matching the vendor’s invoice with the related receiving report.
b. Approving vouchers for payment by having an authorized employee sign the vouchers.
c. Indicating the asset and expense accounts to be debited.
d. Accounting for unused prenumbered purchase orders and receiving reports.
5. In a properly designed purchasing process, the same employee most likely would match vendors’ invoices with receiving reports and
a. Post the detailed accounts payable records.
b. Recompute the calculations on vendors’ invoices.
c. Reconcile the accounts payroll ledger.
d. Cancel vendors’ invoices after payment.
6. For effective internal control purposes, which of the following individuals should be responsible for mailing signed checks?
a. Receptionist.
b. Treasurer.
c. Accounts payable clerk.
d. Payroll clerk.
7. To determine whether accounts payable are complete, an auditor performs a test to verify that all merchandise received is recorded. The population of documents for this test consists of all
a. Vendor invoices.
b. Purchase orders.
c. Receiving reports.
d. Canceled checks.
8. Which of the following audit procedures is best for identifying unrecorded trade accounts payable?
a. Examination of unusual relationships between monthly accounts payable balances and recorded cash payments.
b. Reconciliation of vendors’ statements to the file of receiving reports to identify items received just prior to the balance sheet date.
c. Investigation of payables recorded just prior to and just subsequent to the balance sheet date to determine whether they are supported by receiving reports.
d. Review of cash disbursements recorded subsequent to the balance sheet date to determine whether the related payables apply to the prior period.
9. Purchase cutoff procedures should be designed to test whether all inventory
a. Purchased and received before the end of the year was paid for.
b. Ordered before the end of the year was received.
c. Purchased and received before the end of the year was recorded.
d. Owned by the entity is in the possession of the entity at the end of the year.
10. Which of the following procedures is least likely to be performed before the balance sheet date?
a. Test of internal control over cash.
b. Confirmation of receivables.
c. Search for unrecorded liabilities.
d. Observation of inventory.
11. When using confirmations to provide evidence about the completeness assertion for accounts payable, the appropriate population most likely would be
a. Vendors with whom the entity has previously done business.
b. Amounts recorded in the accounts payable subsidiary ledger.
c. Payees of checks drawn in the month after year- end.
d. Invoices filed in the entity’s open invoice file.
39. 11. Howell Corporation has a job order cost system. The following debits (credits) appeared in Work.
11. Howell Corporation has a job order cost system. The following debits (credits) appeared in Work in Process for the month of July:
July 1, balance............................................$ 12,000
July 31, direct materials................................................40,000
July 31, direct labor...................................................30,000
July 31, factory overhead...............................................27,000
July 31, to finished goods...............................................(100,000)
Howell applies overhead to production at a predetermined rate of 90% based on the direct labor cost. Job 1040, the only job still in process at the end of July, has been charged with factory overhead of $2,250. What was the amount of direct materials charged to Job 1040?
A. $6,750
B. $2,250
C. $2,500
D. $4,250
E. $9,000
12. Valentino Corporation makes aluminum fasteners. Among Valentino's 19 - manufacturing costs were:
Wages and salaries:
Machine operators...................................................$80,000
Factory supervisors................................................... 30,000
Machine mechanics................................................... 20,000
Direct labor amounted to:
A. $50,000
B. $100,000
C. $110,000
D. $130,000
E. none of the above
13. Rudolpho Corporation makes aluminum fasteners. Among Rudolpho's 19-- manufacturing costs were:
Materials and supplies:
Aluminum$400,000
Machine parts..................................................18,000
Lubricants for machines..................................................5,000
Direct materials amounted to:
A. $23,000
B. $400,000
C. $405,000
D. $418,000
E. $423,000
14. Selected cost data (in thousands) concerning the past fiscal year's operations of the Moscow Manufacturing Company are presented below.
Inventories
BeginningEnding
Materials$75.................................. $ 85
Work in process.......................................8030
Finished goods.......................................90110
Materials used, $326
Total manufacturing costs charged to production during the year (including direct materials, direct labor, and factory overhead applied at the rate of 60% of direct labor cost), $686
Cost of goods available for sale, $826
Selling and general expenses, $25
The cost of direct materials purchased during the year amounted to:
A. $360
B. $316
C. $336
D. $411
E. none of the above
15. Selected cost data (in thousands) concerning the past fiscal year's operations of the Moscow Manufacturing Company are presented below.
Inventories
BeginningEnding
Materials$75..................................$ 85
Work in process.......................................8030
Finished goods.......................................90110
Materials used, $326
Total manufacturing costs charged to production during the year (including direct materials, direct labor, and factory overhead applied at the rate of 60% of direct labor cost), $686
Cost of goods available for sale, $826
Selling and general expenses, $25
Direct labor costs charged to production during the year amounted to:
A. $216
B. $135
C. $225
D. $360
E. none of the above
16. Selected cost data (in thousands) concerning the past fiscal year's operations of the Moscow Manufacturing Company are presented below.
Inventories
BeginningEnding
Materials$75..................................$ 85
Work in process.......................................8030
Finished goods.......................................90110
Materials used, $326
Total manufacturing costs charged to production during the year (including direct materials, direct labor, and factory overhead applied at the rate of 60% of direct labor cost), $686
Cost of goods available for sale, $826
Selling and general expenses, $25
The cost of goods manufactured during the year was:
A. $736
B. $716
C. $636
D. $766
E. none of the above
17. Selected cost data (in thousands) concerning the past fiscal year's operations of the Moscow Manufacturing Company are presented below.
Inventories
BeginningEnding
Materials$75..................................$ 85
Work in process.......................................8030
Finished goods.......................................90110
Materials used, $326
Total manufacturing costs charged to production during the year (including direct materials, direct labor, and factory overhead applied at the rate of 60% of direct labor cost), $686
Cost of goods available for sale, $826
Selling and general expenses, $25
The cost of goods sold during the year was:
A. $716
B. $691
C. $801
D. $736
E. none of the above
18. J. D. Doonesbury Company manufactures tools to customer specifications. The following data pertain to Job 1501 for April:
Direct materials used..................................................$4,200
Direct labor hours worked..............................................300
Direct labor rate per hour...............................................$8.00
Machine hours used...................................................200
Applied factory overhead rate per machine hour..............................$15.00
What is the total manufacturing cost recorded on Job 1501 for April?
A. $9,600
B. $10,300
C. $11,100
D. $5,400
E. $8,800
19. In service businesses using job order costing, the most commonly used base for applying overhead to jobs is:
A. machine hours
B. direct materials consumed
C. direct labor cost
D. meals, travel, and entertainment
E. none of the above
20. In service businesses using job order costing, the hourly rate used to charge costs to a job usually includes:
A. both labor and overhead cost
B. labor cost only
C. overhead cost only
D. labor, overhead, and miscellaneous costs
E. none of the above
21. Work in Process is debited and Materials is credited for:
A. the issuance of direct materials into production
B. the issuance of indirect materials into production
C. the return of materials to the storeroom
D. the application of materials overhead
E. none of the above
22. Factory Overhead Control is debited and Payroll is credited for:
A. the recording of payroll
B. the distribution of indirect labor costs
C. the distribution of direct labor costs
D. the distribution of withholding taxes
E. none of the above
23. Applied Factory Overhead is debited and Factory Overhead is credited to:
A. close the estimated overhead account to actual overhead
B. record the actual factory overhead for the period
C. charge estimated overhead to all jobs worked on during the period
D. to record overapplied overhead for the period
E. none of the above
24. The best overhead allocation base to use in a labor-intensive manufacturing environment probably would be:
A. materials cost
B. machine hours
C. direct labor hours
D. units of production
E. none of the above
