Cash Budget with Supporting Schedules
Cash Budget with Supporting Schedules
Seaport BUSC110 Quiz 3
1. What is legal is not necessarily ethical and what is ethical is not necessarily legal.
2. The agency problem in corporate governance is about how to get managers’ interests well aligned with the shareholders’ interests.
3. According to utilitarianism, _____.
results, not rules, are emphasized
ethical action arises from doing one’s duty
duties are defined by rational thought
emphasis is on what is the fair way to distribute goods among a group of people
people give up certain rights to government in exchange for security
4. Which of the following is true according to Aristotle and the Virtue theory?
Aristotle believed that as all activity was aimed at some goal or perceived good, no ranking was required among those goals or goods.
Aristotle rejected wealth, pleasure, and fame as the distinguishing feature of humans as opposed to other species.
Happiness is living according to passive use of reason.
The emphasis on virtue theory has gradually been reducing while more attention is being given to the utilitarian and deontological approaches to ethics.
Happiness cannot be associated with reason.
5. The manager’s fiduciary duty refers to _____.
the duty of managers to maximize returns to employees
the legally prescribed duties which make their employment possible
the moral duty managers have to act as responsible agents to the owners
managers resisting hostile takeover bids
managers managing by number
6. _____ helps companies embrace the idea that profit and prosperity must go hand in hand with social justice and environmental stewardship.
7. It is possible to become someone’s partner without intending to or even realizing that partnership has been created.
8. Partnership is limited to a direct association between human beings.
9. A _____ is the association of two or more people carrying on a business as co-owners for profit.
limited liability company
10. The concept of a business firm as a legal person, with existence and accountability separate from its owners stems from _____.
11. The Uniform Partnership Act and the Revised Uniform Partnership Act do not dictate what relations among partners must be.
12. The Revised Uniform Partnership Act (RUPA), generally, requires the judgment creditor to exhaust the partnership’s assets before going after the separate assets of a partner.
13. For tortuous acts, the partners are said to be jointly and severally liable under both Uniform Partnership Act (UPA) and Revised Uniform Partnership Act (RUPA), and the plaintiff may separately sue one or more partners.
14. _____ is the highest duty of good faith and trust, imposed on partners as to each other and the firm.
15. A court order that directs a partnership to pay a partner’s judgment creditor the distribution that the partner would normally receive is called _____.
doctrine of estoppel
order of relief
proof of claim
16. Sub-S corporations, limited liability partnerships, and limited liability limited partnerships are all entities.
17. The partnership law imposed personal liability on the partners because people tend to be more careful when they are personally liable for their own mistakes and bad judgment.
18. The original source of limited partnership law is the _____ that was drafted in 1916.
Uniform Limited Partnership Act (ULPA)
Revised Uniform Limited Partnership Act
National Conference of Commissioners on Uniform Laws
Limited Liability Partnership Act
19. It is required that the limited liability company (LLC) members file a _____ with the secretary of the state during its creation.
certificate of stare decisis
certificate of organization
certificate of ultra vires
certificate of derivative action
certificate of parens patriae
20. When the limited liability company (LLC) is manager managed, _____.
all members have actual and apparent authority to bind the LLC to contracts on its behalf
all member votes have equal weights
non-manager members also have duty of care and fiduciary duty
only managers have the legal authority to bind the firm
firm decisions that are extraordinary can be taken only by its manager members
21. The corporate veil creates a separate, legally recognized corporate entity and shields the people behind the corporation from personal liability.
22. Failure to follow corporate formalities may subject stockholders to personal liability.
23. Choosing the particular venue in which to incorporate is the first critical decision to be made after deciding to incorporate.
24. Public corporations are also known as _____ corporations.
25. An officer can be held strictly liable for his corporation’s violation of the regulations, regardless of the fact that he or she had no knowledge about it.
26. Shareholders are permitted to adopt, amend, and repeal the corporation’s bylaws.
27. The Sarbanes-Oxley Act of 2002 states that a corporate officer or a director cannot be fired without a particular clause.
28. A majority of the members of the board constitutes a quorum, unless the articles of incorporation specify a larger number.
29. Who among the following have little decision making authority in a corporation?
A company’s director
A company’s employee
A company’s manager
A company’s officer
A company’s stockholder
30. The _____ doctrine is a doctrine holding that certain legal consequences attach to an attempt by a corporation to carry out acts that are outside its lawful powers.
31. Drafters of the Sherman Act based the act on a common-law policy against monopolies and other infringements on competition.
32. The Clayton Act was enacted in 1914 to plug the loopholes in the Sherman Act.
33. Like the Sherman Act, the Federal Trade Commission Act is a civil statute, involving no criminal penalties.
34. Possessing a monopoly is not per se unlawful.
35. The Sherman Antitrust Act of 1890 was formed to:
forbid combinations in restraint of trade and monopolizing
forbid employers from interacting with workers in the private sector who create labor unions
limit the formation of yellow-dog contracts
set enhanced standards for all U.S. public company boards, management and public accounting firms.
limit the formation of runaway shop agreements
36. _____ is a remedy used to break up a firm into smaller, independent units, where the firm has exercised its monopoly power.
37. The first principle of Federal Trade Commission action is that it gauges deceptive acts and practices as interpreted by the general public, not by the more sophisticated.
38. If a fact not disclosed has a bearing on a consumer’s decision whether to purchase the product, its omission might be tantamount to deception.
39. The Federal Trade Commission can order a company to remove or modify a deceptive trade name.
40. In the _____ Act of 1912, Congress for the first time empowered a federal agency to investigate and deter acts of unfair competition.
Federal Protective Service
Federal Emergency Management
Federal Trade Commission
Federal Law Enforcement Training
Federal Housing Administration
Strayer FIN100 Week 5 Quiz 3
1. Which of the following will only be executed if the order’s price conditions are met?
An unlimited order
A limit order
2. A 5.5 percent corporate coupon bond is callable in four years for a call premium of one year of coupon payments. Assuming a par value of $1,000, what is the price paid to the bondholder if the issuer calls the bond? (Assume annual interest payments.)
3. Which of the following terms is the chance that the bond issuer will not be able to make timely payments?
Interest rate risk
Liquidity of interest rate risk
Term structure of interest rates
Credit quality risk
4. Which of the following is a true statement?
If interest rates fall, corporate bonds will have decreasing values.
If interest rates fall, U.S. Treasury bonds will have decreasing values.
If interest rates fall, no bonds will enjoy rising values.
If interest rates fall, all bonds will enjoy rising values.
5. At your discount brokerage firm, it costs $9.95 per stock trade. How much money do you need to buy 100 shares of Ralph Lauren (RL), which trades at $85.13?
6. As residual claimants, which of these investors claim any cash flows to the firm that remain after the firm pays all other claims?
7. You would like to sell 100 shares of Pfizer, Inc. (PFE). The current bid and ask quotes are $27.22 and $27.25, respectively. You place a limit sell-order at $27.24. If the trade executes, how much money do you receive from the buyer?
8. A fast growing firm recently paid a dividend of $0.50 per share. The dividend is expected to increase at a 25 percent rate for the next 3 years. Afterwards, a more stable 12 percent growth rate can be assumed. If a 15 percent discount rate is appropriate for this stock, what is its value?
9. Consider the following three bond quotes; a Treasury note quoted at 87:25, and a corporate bond quoted at 102.42, and a municipal bond quoted at 101.45. If the Treasury and corporate bonds have a par value of $1,000 and the municipal bond has a par value of $5,000, what is the price of these three bonds in dollars?
$877.81, $1,024.20, $5,072.50, respectively
$872.50, $1,000, $1,000, respectively
$1000, $1,000, $1,000, respectively
$1,000, $1,024.20, $1,001.45, respectively
10. Which of the following terms is a comparison of market yields on securities, assuming all characteristics except maturity are the same?
Credit quality risk
Liquidity of interest rate risk
Term structure of interest rates
Interest rate risk
11. Which of the following is a legal contract that outlines the precise terms between the issuer and the bondholder?
12. Which of the following is a debt security whose payments originate from other loans, such as credit card debt, auto loans, and home equity loans?
Credit quality securities
13.The Dow Jones Industrial Average (DJIA) includes:
500 firms that are the largest in their respective economic sectors.
all of the stock listed on the New York Stock Exchange.
30 of the largest (market capitalization) and most active companies in the U.S. economy.
500 firms that are the largest as ranked by Fortune Magazine.
14. On November 26, 2007, The Dow Jones Industrial Average closed at 12,743.40, which was down 237.44 that day. What was the return (in percent) of the stock market that day?
15. Which of these investors earn returns from receiving dividends and from stock price appreciation?
16. Pfizer, Inc. (PFE) has earnings per share of $2.09 and a P/E ratio of 11.02. What is the stock price?
17. We can estimate a stock’s value by:
using the book value of the total stockholder equity section.
discounting the future dividends and future stock price appreciation.
compounding the past dividends and past stock price appreciation.
using the book value of the total assets divided by the number of shares outstanding.
18. Which of these statements is false?
The bond market is larger than the stock market.
Bonds are always less risky than stocks.
Some bonds offer high potential for rewards and, consequently, higher risk.
Bonds are more important capital sources than stocks for companies and governments.
19. Which of the following determines the dollar amount of interest paid to bondholders?
Original issue discount
20. Determine the interest payment for the following three bonds: 5.5 percent coupon corporate bond (paid semi-annually), 6.45 percent coupon Treasury note, and a corporate zero coupon bond maturing in 10 years. (Assume a $1,000 par value.)
$55.00, $64.50, $0, respectively
$5.50, $6.45, $0, respectively
$27.50, $32.25, $100, respectively
$27.50, $32.25, $0, respectively
Rutgers BUS 300 Quiz 1
1. Which of the following aspects of a company would not be considered a critical success factor, for a company that competes on differentiation?
A. Cutting edge research and development.
B. Excellent customer service
C. Award-winning product quality
D. Continually beating competitors to the market with new, innovative products
E. High level of production efficiency
2. The competitive strategy of cost leadership allows a firm to outperform competitors by producing products or services:
A. With lowered quality standards, thus reducing overall costs.
B. In smaller operational units.
C. At lower cost achieved by increased productivity.
D. With attractive added features making the product more expensive, or “the cost leader”.
E. That are heavily promoted and heavily warranted.
3. Cost management information typically is the responsibility of the:
A. Chief Financial Officer.
D. Chief Information Officer.
4. Which one of the following critical success customer factors is best measured by warranty expense?
B. Dealer and distributor efficiency and effectiveness
C. Timeliness of delivery3
D. Customer satisfaction
5. All of the following actions enhance the new focus on making management accounting information more relevant in helping a firm achieve strategic goals, except:
Increasing emphasis on the management accountant as a business partner.
Increasing emphasis on external financial reporting.
Decreasing emphasis on financial statement inventory cost valuation.
Increasing emphasis on timely and useful information.
Increasing emphasis on detailed and accurate costing methods such as ABC costing.
6. According to the IMA Code of Ethics, what should a management accountant do if a significant ethical situation can’t be resolved?
The accountant should confront the guilty party and demand the unethical action be stopped.
The accountant should try to rationalize and understand the position of the other party.
The accountant should say nothing about the matter until he or she has retired.
The accountant should first discuss the matter with the immediate supervisor.
7. In SWOT analysis, strengths and weaknesses are most easily identified by looking:
At the firm as a potential customer.
Inside the firm at its specific resources.
At the firm’s competition.
At the firm’s product.
Outside the firm from a consultant’s perspective.
8. RTP Corp. is developing a new computer processor to compete against Intel’s successful product line. RTP has already determined the market price and the required profit margin on each processor sold in order to be successful. Which costing method will RTP most likely use to reduce costs and obtain the desired results?
9. The balanced scorecard can be made more effective by developing it at a detail level so that employees:
Can see how it is put together.
Appreciate all the effort that goes into its preparation.
Respect management for including them in its formulation.
Can see how their actions contribute to the success of the firm.
Do not feel left out.
10. Cost management has moved from a traditional role of product costing and operational control to a broader strategic focus, which places an emphasis on:
11. Which of the following is the primary user of management accounting information regarding business units?
Industry and governmental organizations.
12. The balanced scorecard:
A. Is not comprehensive, since it doesn’t include all the CSFs which contribute to competitive B. success.
B. Helps focus managers’ attention to bottom line profits.
C. Is forward looking, stressing nonfinancial measures that can lead to benefits in the future.
D. Fails to reflect environmental and social effects of the firm’s operations.
E. Is heavily weighted toward the financial critical success factors (CSFs).
13. Which of the following could be considered part of the value chain in a service firm?
A. Inspection of product.
C. Raw materials.
D. Customer service.
E. Advertising and customer service.
14. Which of the following is not considered part of the Institute of Management Accountants’ definition of management accounting?
A. Partnering in management decision making.
B. Devising planning and performance management systems.
C. Gathering, summarizing, analyzing, and providing information.
D. Providing expertise in financial reporting and control.
E. Assisting management in the formulation and implementation of an organization’s strategy.
15. The following problems have occurred at your company: management seems to be making decisions based on guesses and intuition, there’s a lack of clarity concerning direction and goals, and profitable opportunities are being missed. What is your company suffering from?
A. A lack of strategic information; management has not determined its strategic competitive position.
B. Managers have too much information.
C. The company is not familiar with business reengineering and value chain analysis.
D. The company has an inappropriate mission statement.
Devry ACCT434 Week 6 Quiz
Question 1.1.(TCO 9) To guide cost allocation decisions, the cause-and-effect criterion(Points : 3)
may allocate corporate salaries to divisions based on profits
is used less frequently than the other criteria
is the primary criterion used inactivity-based costing
is a difficult criterion on which to obtain agreement
Question 2.2.(TCO 9) Which cost-allocation criterion is superior when making an economic decision?(Points : 3)
All of the above
Question 3.3.(TCO 9) The MOST likely reason for NOT allocating corporate costs to divisions include that(Points : 3)
divisions receive no benefits from corporate costs
these costs are not controllable by division managers
these costs are incurred to support division activities, not corporate activities
division resources are already used to attain corporate goals
Question 4.4.(TCO 9)Identifying homogeneous cost pools(Points : 3)
requires judgment and should be reevaluated on a regular basis
should include the input of management
should include a cost-benefit analysis
All of the above
Question 5.5.(TCO 9) The Hassan Corporation has an electric mixer division and an electric lamp division. Of a $20,000,000 bond issuance, the electric mixer division used $14,000,000 and the electric lamp division used $6,000,000for expansion. Interest costs on the bond totaled $1,500,000 for the year. Which corporate costs should be allocated to divisions?(Points : 3)
Neither fixed nor variable costs
Both fixed and variable costs
Question 6.6.(TCO 10) The stage of the capital budgeting process in which a firm obtains funding for the project is the(Points : 3)
implement the decision, evaluate performance, and learn stage.
Question 7.7.(TCO 10) Assume your goal in life is to retire with $1 million. How much would you need to save at the end of each year if investment rates average 9% and you have a 15-year work life? (Points : 3)
Question 8.8.(TCO 10) If the net present value for a project is zero or positive, this means that the (Points : 3)
project should be accepted
project should not be accepted
expected rate of return is below the required rate of return
Both 1 and 3are correct
Question 9.9.(TCO 10) An important advantage of the net-present-value method of capital budgeting over the internal rate-of-return method is(Points : 3)
the net present value method is expressed as a percentage
the net present values of individual projects can be added to determine the effects of accepting a combination of projects
there is no advantage
Both 1and 2 are correct
Question 10.10.(TCO 10) Upper Darby Park Department is considering a new capital investment. The following information is available on the investment. The cost of the machine will be $150,000. The annual cost savings if the new machine is acquired will be $40,000. The machine will have a five-year life, at which time the terminal disposal value is expected to be $20,000. Upper Darby Park Department is assuming no tax consequences. If Upper Darby Park Department has a required rate of return of 10%, which of the following is closest to the present value of the project?(Points : 3)
Make or Buy A Component
Climate-Control, Inc., manufactures a variety of heating and air conditioning units. The company is currently manufacturing all of its own component parts. An outside supplier has offered to sell a theromostat to Climate-Control for $20 per unit. To evaluate this offer, Climate-Control, Inc., has gathered the following information relating to its own cost of producing the thermostat internally:
Per Units Per
Direct materials $6 $90,000
Direct labor 8 120,000
Variable manufacturing overhead 1 15,000
Fixed manufacturing overhead, traceable *** 5 75,000
Fixed mfg. overhead, common, and allocated 10 150,000
Total cost $30 $450,000 300000 $150,000
*** 40% supervisory salaries; 60% depreciation of special equipment (no resale value).
1. Assuming that the company has no alternative use for the facilities now being used to produce the thermostst, should the outside supplier’s offer be accepted?
2. Suppose that if the thermostats were purchased, Climate-Control, Inc., could use the freed capacity to launch a new product. The segment margin of the new product would be $65,000 per year. Should Climate-Control, Inc., accept the offer to buy the thermostats from the outside supplier for $20 each?
Dropping or Retaining a Segment
Boyle’s Home Center, a retailing company, has two departments, Bath and Kitchen. The company’s most recent monthly contribution format income statement follows:
Bath Kitchen Total
Sales $1,000,000 $4,000,000 $5,000,000
Variable expenses 300,000 1,600,000 1,900,000
Contribution margin $700,000 $2,400,000 $3,100,000
Fixed expenses 900,000 1,800,000 2,700,000
Net operating income (loss) ($200,000) $600,000 $400,000
A study indicates that $370,000 of the fixed expenses being charged to the Bath Department are sunk costs or allocated costs that will continue even if the Bath Department is dropped. In addition, the elimination of the Bath Department would result in a 10% decrease in the sales of the Kitchen Department.
If the Bath Department is dropped, what will be the effect on the net operating income of the company as a whole?
Identification of Relevant Costs
Samantha Ringer purchased a used automobile for $10,000 at the beginning of last year and incurred the following operating costs:
Depreciation ($10,000 / 5 years) $2,000
Garage rent 480
Automobile tax and license 60
Variable operating costs $0.08 per mile
The variable operating cost consist of gasoline, oil, tires, maintenance, and repairs. Samantha estimates that at her current rate of usage the car will have zero resale value in five years, so the annual straight-line depreciation is $2,000. The car is kept in a garage for a monthly fee.
1. Samantha drove the car 10,000 miles last year. Compute the average cost per mile of owning and operating the car.
2. Samantha is unsure about whether she should use her own car or rent a car to go on an extended cross-country trip for two weeks during spring break. What costs above are relevant in this decision? Explain.
3. Samantha is thinking about buying an expensive sports car to replace the car she bought last year. She would drive the same number of miles regardless of which car she owns and would rent the same parking space. The sports car’s variable operating costs would be roughly the same as the variable operating costs of her old car. However, her insurance and automobile tax and license costs would go up. What costs are relevant in estimating the incremental cost of owning the more expensive car? Explain.
Cretin Enterprises uses a predetermined overhead rate of $21.40 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $171,200 of total manufacturing overhead for an estimated activity level of 8,000 direct labor-hours.
The company incurred actual total manufacturing overhead costs of $172,500 and 8,250 total direct labor-hours during the period.
1. Determine the amount of underapplied or overapplied manufacturing overhead for the period. (Input the amount as a positive value. Omit the “$” sign in your response.)
2. Assuming that the entire amount of the underapplied or overapplied overhead is closed out to cost of goods sold, what would be the effect of the underapplied or overapplied overhead on the company’s gross margin for the period? (Input the amount as a positive value. Omit the “$” sign in your response.)
Westan Corporation uses a predetermined overhead rate of $23.10 per direct labor-hour. This predetermined rate was based on a cost formula that estimated $277,200 of total manufacturing overhead for an estimated activity level of 12,000 direct labor-hours.
The company incurred actual total manufacturing overhead costs of $266,000 and 12,600 total direct labor-hours during the period.
Determine the amount of manufacturing overhead that would have been applied to all jobs during the period. (Omit the “$” sign in your response.)