ACCT 2121 Final Review - Extras

Question 1

if sales revenue increases (i/s)

Answer 1

cash increases (b/s)

Question 2

if cogs increases (i/s)

Answer 2

inventory decreases (b/s)

Question 3

moh includes:

Answer 3

indirect materials (cleaning, lubricants/oils, and other supplies), indirect labor (inspector, maintenance), operating expenses (utilities, rent, depreciation)

Question 4

direct labor includes:

Answer 4

in-factory workers wages

Question 5

working capital (equation)

Answer 5

= currents assets - current liabilites

Question 6

current ratio (equation)

Answer 6

= currents assets/current liabilities

Question 7

inventory turnover (equation)

Answer 7

= cogs/avg. inventory ((y1+y2)/2)

Question 8

debt to total assets (equation)

Answer 8

= total liabilities/total equities (liabilities + SE)

Question 9

gross profit ratio (equation)

Answer 9

= gross profit/net sales (revenue)
*gp = net sales - cogs

Question 10

profit margin (equation)

Answer 10

= net income/net sales

Question 11

return on assets (equation)

Answer 11

= net income/avg. total assets ((y1+y2)/2)

Question 12

sales revenue (equation)

Answer 12

= q * sp/unit

Question 13

is preferred stock a contra account?

Answer 13

no

Question 14

preferred stockholders (equation)

Answer 14

= q * rate * p

Question 15

common stock (equation)

Answer 15

= cash dividend - preferred stockholders

Question 16

upon maturity, the carrying value of bonds payable is equivalent to:

Answer 16

face value

Question 17

if marketed interest rate is higher than stated interest rate then:

Answer 17

you are financing at a discount

Question 18

higher gross margin/net income:

Answer 18

better company

Question 19

sometimes treasury stock is reissued to:

Answer 19

corporate execs. as bonus and comp.

Question 20

depreciation rate (equation)

Answer 20

= (hc - sv)/useful life (in units)
* (hc-sv) = depreciable max

Question 21

net book value (equation)

Answer 21

= hc - (a/d) = cv

Question 22

what should you include in historical cost?

Answer 22

trial run

Question 23

smallest of the big 4 accounting firms?

Answer 23

kpmg

Question 24

sales revenue contra accounts

Answer 24

sales revenue and allowances & sales discounts (to equal net sales)

Question 25

accounts receivable contra account

Answer 25

allowance for doubtful accounts (to equal net realizable value/net a/r)

Question 26

ppe contra account

Answer 26

accumulated depreciation (to equal net ppe)

Question 27

bonds payable contra accounts

Answer 27

discount on bonds payable and *+ premium on bonds payable - only contra acct we add (to equal net bonds payable)