D196 Principles of Financial and Managerial Accounting - Set 4 - Part 2

Test your knowledge of technical writing concepts with these practice questions. Each question includes detailed explanations to help you understand the correct answers.

Question 21: Which of the following is an example of indirect labor?

Assembly line workers

Factory supervisors

Sales staff

Maintenance workers

Question 22: Which of the following is classified as a current liability?

Bonds payable

Accounts payable

Equipment

Retained earnings

Question 23: If a company repays $20,000 of a loan, how does this transaction affect the accounting equation?

Decrease assets; decrease liabilities

Increase assets; increase liabilities

Decrease assets; increase equity

Increase assets; decrease liabilities

Question 24: What is the predetermined overhead rate if estimated overhead is $150,000 and estimated direct labor hours are 10,000 hours?

$10 per direct labor hour

$12 per direct labor hour

$15 per direct labor hour

$20 per direct labor hour

Question 25: Which financial statement shows changes in owners equity during a period?

Balance sheet

Income statement

Statement of retained earnings

Statement of cash flows

Question 26: What is the total contribution margin if a company has sales of $400,000 and variable costs of $250,000?

$100,000

$150,000

$200,000

$250,000

Question 27: What is the journal entry to record the purchase of equipment on credit?

Debit equipment; credit cash

Debit cash; credit equipment

Debit equipment; credit accounts payable

Debit accounts payable; credit equipment

Question 28: Which of the following is an example of a direct material?

Glue used in furniture assembly

Wood used to build furniture

Lubricants for factory machines

Office supplies

Question 29: What type of cost is unaffected by changes in production volume?

Variable cost

Fixed cost

Mixed cost

Stepped cost

Question 30: Which of the following is an example of a job that would use job order costing?

Refining gasoline

Custom furniture production

Mass production of cereal

Manufacturing of paper

Question 31: What is the contribution margin if the sales price is $25 per unit and the variable cost is $15 per unit?

$10

$15

$20

Question 32: Which financial statement reports cash flows from operating, investing, and financing activities?

Income statement

Balance sheet

Statement of cash flows

Statement of retained earnings

Question 33: What is the formula for break-even in units?

Fixed costs / Sales price per unit

Fixed costs / Contribution margin per unit

Sales price per unit / Variable costs

Fixed costs / Variable costs

Question 34: What type of cost includes both fixed and variable components?

Fixed cost

Mixed cost

Variable cost

Stepped cost

Question 35: Which budget includes expected expenditures for factory maintenance and utilities?

Direct labor budget

Manufacturing overhead budget

Sales budget

Administrative expense budget

Question 36: What is the break-even point in units if the sales price per unit is $50, variable costs per unit are $30, and fixed costs are $40,000?

1,500 units

2,000 units

2,500 units

3,000 units

Question 37: Which of the following is classified as a long-term asset?

Accounts receivable

Inventory

Equipment

Prepaid expenses

Question 38: Which costing system is used by companies that produce a continuous flow of identical products?

Job order costing

Process costing

Activity-based costing

Standard costing

Question 39: What is the primary purpose of financial accounting?

To provide information to internal users

To help managers make decisions

To provide information to external users

To allocate costs

Question 40: What is the journal entry to record the payment of wages?

Debit wages expense; credit cash

Debit cash; credit wages expense

Debit wages payable; credit wages expense

Debit wages expense; credit accounts payable

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