Basic Business Accounting MCQ
1. The clothing and accessories at new fashion stores, inc. are an example of ________ assets.
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2. The distribution of a stock dividend ________.
Answer
Correct Answer:
Effects only stockholders’ equity accounts
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3. __________ pricing tactics lower the price of a product below the store's cost.
Answer
Correct Answer:
Loss leader
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4. ________ represents a debt owed for renting a building currently.
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Correct Answer:
Rent Payable
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5. An organization with a low-commitment approach is likely to _______________________.
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Correct Answer:
Deal only with existing problems.
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6. A high rate of employee turnover indicates that ________.
Answer
Correct Answer:
Employees of the organization leave their jobs frequently
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7. A disadvantage of using ________ as an advertising medium is their short life span.
Answer
Correct Answer:
Newspapers
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8. A consultation with a world-famous surgeon is an example of a(n) ________ service.
Answer
Correct Answer:
Specialty
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9. A computer program that imitates human thinking is a(n) ________.
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Correct Answer:
Expert system
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10. _____ involves reducing the number of employees to cut costs.
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Correct Answer:
Downsizinga
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11. The ratio of cash to monthly cash expenses can be used to _____.
Answer
Correct Answer:
Assess how long a company with positive cash flows from financing activities
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12. The proportion of assets that are financed with debt can be calculated using the ________ ratio.
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13. Molding and sanding each unit of product would most likely be classified as a ________ cost.
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Correct Answer:
Unit-level
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14. Lean manufacturing ___________ productivity.
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Correct Answer:
Increases
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15. A tax adjustment must be made in determining the cost of ________.
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Correct Answer:
Common stock
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16. A reference value involves comparing the costs and benefits of __________.
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Correct Answer:
Substitute items
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17. A recent gallup study reported that firms with top engagement scores had _____ higher productivity.
Answer
Correct Answer:
18 percent
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18. An advertisement that emphasizes crash test ratings appeals to the audience's desire for _____.
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19. The primary difference between soc 2 and soc 3 reports is ________.
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Correct Answer:
Their audience
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20. One of the key enhancements in ____ is energy efficiency.
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Correct Answer:
Bluetooth smart
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21. The role of the board of directors in an organization is to _____.
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Correct Answer:
Audit committee
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22. The number of newspapers sold on may 30 would be kept in a ________ field.
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23. Soc 2 and soc 3 reports both address primarily ________-related controls.
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24. One of the best techniques for determining current network capacities is creating a ____.
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25. In a zero-sum game, the overall return actually becomes ____ if transaction costs are included.
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26. The exclusion of implied warranties in general states that _____.
Answer
Correct Answer:
For an implied warranty or merchantability, the disclaimer need not be in writing
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27. ________ = cash on hand + cash receipts - cash disbursement.
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28. When demand is elastic, a price increase will __________ total revenues.
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29. When bonds are retired at maturity ________.
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Correct Answer:
The carrying value always equals the face value
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30. The standard & poor's 500 is __________ weighted index.
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31. The manufacturing sector ________.
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Correct Answer:
Fixed overhead costs are subtracted to determine gross margin
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32. The ________ budget is the only budget stated only in units, not dollars.
Answer
Correct Answer:
Production
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33. The _____ contains all the executive orders created by the president.
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Correct Answer:
Code of Federal Regulations
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34. Sustainability reporting is ______________ for american companies:
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Correct Answer:
Largely a voluntary effort
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35. Salespeople often are paid a _______ based on a percentage of their sales.
Answer
Correct Answer:
Commission
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36. Salaries payable, interest payable, and unearned revenue are examples of ________.
Answer
Correct Answer:
Current Liabilities
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37. Roll-forward work normally occurs between the ____ and the ____.
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Correct Answer:
Date of interim work; date of the auditors' report
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38. The two methods that use present values to analyse capital investment proposal consider the _____.
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Correct Answer:
Time value of money concept
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39. The standard quantity per unit defines the ________.
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Correct Answer:
All of these
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40. Income __________ when there is zero beginning inventory and all inventory units produced are sold.
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Correct Answer:
Will be the same under both variable and absorption costing
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41. The amount spent by a publishing company to pay for manufacturing its books is called ________.
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Correct Answer:
Cost of goods purchased
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42. Proponents of the emh typically advocate __________.
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Correct Answer:
A passive investment strategy.
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43. In the accompanying figure, the book rep table displays in ____.
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Correct Answer:
Design view
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44. Disaster recovery typically looks at the __________.
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Correct Answer:
Short term
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45. The ________ capital budgeting model considers both profitability and the time value of money.
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Correct Answer:
Net present value
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46. If a company retires preferred stock, ________.
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Correct Answer:
Total stockholders' equity will decrease
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47. A correlation coefficient of _____ provides the greatest possible risk reduction to the firm.
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48. ____ manufacturing deals with several suppliers in hopes of finding the best price.
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Correct Answer:
Traditional
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49. When a company receives cash from customers before earning the revenue, _________ will be credited.
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Correct Answer:
Unearned Revenue
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50. _____ are numbers or letters assigned in a specific order.
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51. _____ define(s) the specific types of people the advertiser wants to reach.
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Correct Answer:
Audience objectives
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52. A _____ cost occurs when the amount used varies based on the volume of service provided.
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53. A ____ invests money in the business but has no management responsibility.
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Correct Answer:
Limited partner
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54. ________ is pay stated as a percentage of a sale amount.
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Correct Answer:
Commission
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55. Volatility refers to the degree of ________ within an environment.
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Correct Answer:
Instability.
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56. Long-term investments are made by the investment center manager for the purpose of ________.
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Correct Answer:
Increasing profits
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57. ________ are a company's decision makers.
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58. The cost of goods sold is subtracted from sales to arrive at _____.
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Correct Answer:
Gross profit.
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59. A short-term creditor is primarily interested in the __________ of the borrower.
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Correct Answer:
Liquidity
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60. At the internal rate of return, the present value of net cash inflows will equal the ________.
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Correct Answer:
Initial cost of the investment
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61. Activity drivers can be classified as either ____ or ____.
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Correct Answer:
Unit-level; nonunit-level
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62. When deciding whether to discontinue a segment of a business, relevant costs include ________.
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Correct Answer:
Future administrative costs that will continue
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63. __________ relate to the effort spent in making sales.
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Correct Answer:
Marketing input data
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64. The revenue recognition principle guides accountants in ________
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Correct Answer:
Determining when to record revenues
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65. All of the following are assets except ________.
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Correct Answer:
Bank loans
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66. When 1,000 shares of $3 stated value common stock is issued at $18 per share, ________.
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Correct Answer:
The difference between the issue price and the stated value is credited to Paid-In Capital in Excess of Stated
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67. In a negative message regarding a transaction, the salutation should be _____.
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Correct Answer:
Personalized to the recipient
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68. A cost center responsibility report ________.
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Correct Answer:
Typically focuses on the flexible budget variance
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69. Underallocated overhead occurs when ________.
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Correct Answer:
Allocated overhead costs are less than actual overhead costs
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70. Total revenue divided by ________ = units sold.
Answer
Correct Answer:
Selling price
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71. The interest rate that investors demand to earn for loaning their money is known as the ________.
Answer
Correct Answer:
Market interest rate
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72. The entry to record the purchase of direct materials on account would include a ________.
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Correct Answer:
Debit to the Raw Materials Inventory account.
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73. Reduction in production cost results in ________.
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Correct Answer:
Increased profitability
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74. Under variable costing, a unit of a product includes ________.
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Correct Answer:
Direct material, direct labor, and variable overhead cost
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75. The ________ capital budgeting method uses accrual accounting income.
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76. Given a price of p2, this firm in a purely competitive industry should ___________
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Correct Answer:
Shut down to minimize the loss at the fixed cost level
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77. All fixed costs are listed ________ on a contribution margin income statement.
Answer
Correct Answer:
Below the contribution margin line
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78. ____ manufacturing philosophy emphasizes quality and zero defects.
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79. The amount of net income is transferred from ________ to ________.
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Correct Answer:
The income statement; the statement of owner's equity
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80. _____ are people who are prompted to apply for a job by someone within the organization.
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Correct Answer:
Referrals
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81. When preparing the cost of goods sold budget, ________.
Answer
Correct Answer:
Multiply units produced by the total projected cost per unit
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82. The predetermined overhead allocation rate is calculated by dividing ________.
Answer
Correct Answer:
The estimated overhead costs by total estimated quantity of the overhead allocation base
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83. The ima?s ethical standards include all of the following except ________.
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Correct Answer:
Confidence,
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84. The direct materials budget is prepared using information from the ________ budget.
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Correct Answer:
Production
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85. The current portion of long-term notes payable is ________.
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Correct Answer:
Recorded an adjusting entry
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86. The commitment concept says that plans should ________.
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Correct Answer:
Extend far enough to meet those commitments made when the plans were developed
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87. Payment cards with disposable numbers are known as _____.
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Correct Answer:
Single-use cards
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88. Inventory reduction is a ____ principle.
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Correct Answer:
Just-in-time
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89. In multiple regression, plot the residuals against ____ to detect changing variability
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Correct Answer:
All explanatory variables
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90. Dividends normally carry a _______ balance and are shown in the ______________.
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Correct Answer:
Credit; Balance sheet.
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91. Discounted cash flow methods, such as net present value and internal rate of return, ________.
Answer
Correct Answer:
Consider discounted cash flows
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92. At the maturity of a note payable, a borrower will pay ________.
Answer
Correct Answer:
The principal plus interest
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93. An unfavorable flexible budget variance in operating income might be due to a(n) ________.
Answer
Correct Answer:
Decrease in fixed costs
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94. An entity that buys goods and sells them to customers at a markup is a ________.
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Correct Answer:
Merchandiser
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95. A shortened form of the ledger is called a ________.
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Correct Answer:
T-account
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96. __________ is the total combined values of all of the company’s customers.
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Correct Answer:
Customer equity
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97. ________ includes general management, finance, accounting, legal, and government affairs.
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Correct Answer:
Firm infrastructure
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98. When a company pays cash for a long-term investment in bonds, ________.
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Correct Answer:
Equity remains unchanged
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99. The income statement of a service company will most likely include ________.
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Correct Answer:
Salaries expense
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100. When the total fixed costs increases, the contribution margin per unit ________.
Answer
Correct Answer:
Remains the same
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101. When the sales price per unit decreases, the contribution margin per unit ________.
Answer
Correct Answer:
Increases
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102. When discussing weighing schemes for calculating the weighted average cost of capital, ________.
Answer
Correct Answer:
Market value weights are preferred over book value weights and target weights are preferred over historic weights.
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103. When a company uses the allowance method to measure bad debts, ________.
Answer
Correct Answer:
The amount of bad debts expense is estimated at the end of the accounting period
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104. Changes in activity have a(n) _________ effect on fixed costs per unit
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105. Calculating gross pay for hourly workers is an example of ________ decision making.
Answer
Correct Answer:
Structured
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106. By increasing ________, a manager can increase operating income under absorption costing.
Answer
Correct Answer:
Fixed costs
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107. Set up time is disregarded as an improvement priority under the ____ manufacturing concept.
Answer
Correct Answer:
Traditional
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108. With _____, marketers group people by their values, attitudes, personality, and lifestyle.
Answer
Correct Answer:
Psychographics
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109. When a division is operating at capacity, the transfer price should be ________.
Answer
Correct Answer:
Based on opportunity cost
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110. The contribution margin income statement presents ________ below the contribution margin line.
Answer
Correct Answer:
All fixed expenses
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111. Bank capital is equal to ________ minus ________.
Answer
Correct Answer:
Total assets; total liabilities.
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112. Because ________ are less liquid for the depositor than ________, they earn higher interest rates.
Answer
Correct Answer:
Savings accounts; checkable deposits
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113. When a business records accrued interest expense on a note payable ________.
Answer
Correct Answer:
Interest Payable is credited
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114. Under the _____, partnership assets are arranged in a certain order to pay any outstanding debts.
Answer
Correct Answer:
Marshaling/debts
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Business Accounting MCQs | Topic-wise
