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Tuesday, 6 August 2013

List three (3) separate internal controls that could be implemented to protect a company’s assets and provide an example for each of how they would be implemented.

The three internal controls that can be implemented are as follows:

1.      Segregation of duties
2.      Proper authorization procedure
3.      Balancing procedure

Steps in the Accounting Cycle.

Steps in the Accounting Cycle.

The following are the steps for accounting cycle:

1.      Analyzing and Recording Transactions via Journal Entries
2.      Posting Transactions to Ledger Accounts
3.      Preparing Unadjusted Trial Balance
4.      Preparing Adjusting Entries at the end of the Period
5.      Preparing Adjusted Trial Balance
6.      Preparing Financial Statements
7.      Closing Temporary Accounts via Closing Entries
8.      Preparing Post Closing Trial Balance

A fixed cost: Requires the future outlay of cash and is relevant for future decision making. Does not change with changes in the volume of activity within the relevant range. Is directly traceable to a cost object. Changes with changes in the volume of activity within the relevant range. Has already been incurred and cannot be avoided so it is irrelevant for decision making.

A fixed cost:
Requires the future outlay of cash and is relevant for future decision making.
Does not change with changes in the volume of activity within the relevant range.
Is directly traceable to a cost object.
Changes with changes in the volume of activity within the relevant range.
Has already been incurred and cannot be avoided so it is irrelevant for decision making.
Answer
Does not change with changes in the volume of activity within the relevant range.

Budgeted production needs are determined by: adding budgeted sales in units to the desired ending inventory in units and deducting the beginning inventory in units from this total. adding budgeted sales in units to the beginning inventory in units and deducting the desired ending inventory in units from this total. adding budgeted sales in units to the desired ending inventory in units. deducting the beginning inventory in units from budgeted sales in units.

Budgeted production needs are determined by:
adding budgeted sales in units to the desired ending inventory in units and deducting the beginning inventory in units from this total.
adding budgeted sales in units to the beginning inventory in units and deducting the desired ending inventory in units from this total.
adding budgeted sales in units to the desired ending inventory in units.
deducting the beginning inventory in units from budgeted sales in units.
Answer
adding budgeted sales in units to the desired ending inventory in units and deducting the beginning inventory in units from this total.

I. It is part of the double-entry procedure that keeps the accounting equation in balance. II. It represents a decrease to assets. III. It represents an increase to liabilities. IV. It is on the right side of a T-account. Answer I and II. IV only. I, II, and III. I, II, III, and IV.

Which of the following is/are true about a "credit"?

I. It is part of the double-entry procedure that keeps the accounting equation in balance.
II. It represents a decrease to assets.
III. It represents an increase to liabilities.
IV. It is on the right side of a T-account.
Answer
  I and II.
  IV only.
  I, II, and III.
  I, II, III, and IV.
Answer
I, II, III, and IV.

Which transaction would not be recorded under cash-basis accounting? Answer Providing services to customers for cash. Purchasing one year of rent in advance. Paying salaries to employees. Purchasing supplies on account.

Which transaction would not be recorded under cash-basis accounting?
Answer
  Providing services to customers for cash.
  Purchasing one year of rent in advance.
  Paying salaries to employees.
  Purchasing supplies on account.
Answer
Purchasing supplies on account.

Which one of the following accounts would NOT have a balance after closing entries? Answer Unearned Revenue Supplies Prepaid Rent Dividends

Which one of the following accounts would NOT have a balance after closing entries?
Answer
  Unearned Revenue
  Supplies
  Prepaid Rent
  Dividends
Answer
  Dividends

When a company provides services on account, which of the following would be recorded using cash-basis accounting? Answer Debit to Cash. Debit to Service Revenue. Credit to Unearned Revenue. No entry would be recorded.

When a company provides services on account, which of the following would be recorded using cash-basis accounting?
Answer
  Debit to Cash.
  Debit to Service Revenue.
  Credit to Unearned Revenue.
  No entry would be recorded.
Answer
No entry would be recorded.

Which of the following transactions causes a decrease in stockholders' equity? Answer Pay dividends to stockholders. Obtain cash by borrowing from a local bank. Provide services to customers on account. Purchase office equipment for cash.

Which of the following transactions causes a decrease in stockholders' equity?
Answer
  Pay dividends to stockholders.
  Obtain cash by borrowing from a local bank.
  Provide services to customers on account.
  Purchase office equipment for cash.
Answer
Pay dividends to stockholders.

Which of the following transactions would cause a decrease in both assets and stockholders' equity? Answer Paying insurance premium for the next two years. Purchasing office equipment on account. Paying advertising for the current month. Providing installation services to customers.

Which of the following transactions would cause a decrease in both assets and stockholders' equity?
Answer
  Paying insurance premium for the next two years.
  Purchasing office equipment on account.
  Paying advertising for the current month.
  Providing installation services to customers.
Answer
Paying advertising for the current month.

Which of the following is a possible adjusting journal entry? Answer Debit Cash, credit Accounts Payable. Debit Service Revenue, credit Cash. Debit Salaries Expense, credit Salaries Payable. Debit Utilities Expense, credit Retained Earnings.

Which of the following is a possible adjusting journal entry?
Answer
  Debit Cash, credit Accounts Payable.
  Debit Service Revenue, credit Cash.
  Debit Salaries Expense, credit Salaries Payable.
  Debit Utilities Expense, credit Retained Earnings.
Answer
Debit Salaries Expense, credit Salaries Payable.

Which step in the process of measuring external transactions involves assessing the equality of total debits and total credits? Answer Use source documents to determine accounts affected by the transaction. Prepare a trial balance. Analyze the impact of the transaction on the accounting equation. Post the transaction to the T-account in the general ledger.

Which step in the process of measuring external transactions involves assessing the equality of total debits and total credits?
Answer
  Use source documents to determine accounts affected by the transaction.
  Prepare a trial balance.
  Analyze the impact of the transaction on the accounting equation.
  Post the transaction to the T-account in the general ledger.
Answer
Prepare a trial balance.

Xenon Corporation borrows $75,000 from First Bank. Xenon Corporation records this transaction with a: Answer Debit to Investments. Credit to Retained Earnings. Credit to Notes Payable. Credit to Interest Expense.

Xenon Corporation borrows $75,000 from First Bank. Xenon Corporation records this transaction with a:
Answer
  Debit to Investments.
  Credit to Retained Earnings.
  Credit to Notes Payable.
  Credit to Interest Expense.
Answer
Credit to Notes Payable.

Ayssa's Custom Cakes currently sells 6 birthday, 5 wedding, and 4 specialty cakes each month for $40,

Ayssa's Custom Cakes currently sells 6 birthday, 5 wedding, and 4 specialty cakes each month for $40, $180, and $120 each respectively. The cost of labor is $60 per hour including benefits. It takes 90 minutes to produce a birthday cake, 240 minutes to produce a wedding cake, and 60 minutes to produce a specialty cake. Alyssa's current multifactor productivity ratio is 1.20.

What is Alyssa's labor productivity ratio in dollars per hour for the birthday cakes?
Solution:
Sale price per birthday cake                                                              = $40
Labor time per birthday cake in hours (90 minutes / 60 minutes) *            =  1.50 hours per cake
Labor productivity ratio in dollars per hour for the birthday cakes = Sale price per cake / labor time per birthday cake
                        = $40 / 1.50
                        = $26.67 per hour

Selected transactions for D. Reyes, an interior decorator in her first month of business, are as follows. Jan. 2 Invested $10,000 cash in business. 3 Purchased used car for $4,000 cash for use in business. 9 Purchased supplies on account for $500. 11 Billed customers $1,800 for services performed. 16 Paid $200 cash for advertising. 20 Received $700 cash from customers billed on January 11. 23 Paid creditor $300 cash on balance owed. 28 Withdrew $1,000 cash for personal use of owner. Instructions For each transaction indicate the following. (a) The basic type of account debited and credited (asset, liability, owner's equity). (b) The specific account debited and credited (cash, rent expense, service revenue, etc.). (c) Whether the specific account is increased or decreased. (d) The normal balance of the specific account.

Selected transactions for D. Reyes, an interior decorator in her first month of business, are as follows.
Jan.
2  
Invested $10,000 cash in business.
 
3  
Purchased used car for $4,000 cash for use in business.
 
9  
Purchased supplies on account for $500.
 
11  
Billed customers $1,800 for services performed.
 
16  
Paid $200 cash for advertising.
 
20  
Received $700 cash from customers billed on January 11.
 
23  
Paid creditor $300 cash on balance owed.
 
28  
Withdrew $1,000 cash for personal use of owner.
Instructions
For each transaction indicate the following.
(a) The basic type of account debited and credited (asset, liability, owner's equity).
(b) The specific account debited and credited (cash, rent expense, service revenue, etc.).
(c) Whether the specific account is increased or decreased.
(d) The normal balance of the specific account.

health Construction builds standard prefabricated wooden frames for walls. Each frame requires 10 direct labot hours and the standard hourly direct labor rate is $ 18. During July, the company produced 670 frames and worked 6,800 direct labor hours. Payroll records indicate that workers earned $ 127, 500. a. What were the standard hours for July construction? Solution Standard Hours for July construction =? Standard Hours for July construction = 10 Hours x 670 frames Standard Hours for July construction = 6700 Hours b. Calculate the direct labor variances. Solution Direct labor variances =? Formula Direct labor variances =Actual Cost – [Standard rate x Standard Hours] Calculation Direct labor variances = $127,500 – [ $18 x 6700] Direct labor variances = $127,500 – $120,600 Direct labor variances = 6,900 unfavorable c. What was the actual hourly wage rate? Solution Actual hourly wage rate =? Actual hourly wage rate =$127,500 / 6,800 hours Actual hourly wage rate = $18.75 per hour



health Construction builds standard prefabricated wooden frames for walls. Each frame requires 10 direct labot hours and the standard hourly direct labor rate is $ 18. During July, the company produced 670 frames and worked 6,800 direct labor hours. Payroll records indicate that workers earned $ 127, 500.

a.       What were the standard hours for July construction?
Solution
Standard Hours for July construction =?
Standard Hours for July construction = 10 Hours x 670 frames
Standard Hours for July construction = 6700 Hours


b.      Calculate the direct labor variances.
Solution
Direct labor variances =?
Formula
Direct labor variances =Actual Cost – [Standard rate x Standard Hours]
Calculation
Direct labor variances = $127,500 – [ $18 x 6700]
Direct labor variances = $127,500 – $120,600
Direct labor variances = 6,900 unfavorable
c. What was the actual hourly wage rate?
Solution
Actual hourly wage rate =?

Actual hourly wage rate =$127,500 / 6,800 hours

Actual hourly wage rate = $18.75 per hour



Explain the generation of the Income Statement. Where does the information come from and how is it structured? Who uses this report and what information are they interested in? Do provide the textbook

Explain the generation of the Income Statement. Where does the information come from and how is it structured? Who uses this report and what information are they interested in? Do provide the textbook

Answer

Income statement is prepared to compute the earning of the company for a specific period of time. The income is calculated by deducting the expenses of a period from the revenue of that specific period of the company to arrive at the earning of the company in that specific period. This information is derived from the trial balance of the company that is prepared at the end of each period. The basic format of income statement is as follows:
Revenue                                                                                 = $xxxxx
Less: Cost of goods sold / cost of services rendered          = $xxxxx
Gross Profit                                                                           = $xxxxx
Less: Selling & Administrative expenses                           = $xxxxx
Operating Income                                                                 = $xxxxx
Less: Income tax expense                                                    = $xxxxx
Net income after tax                                                             = $xxxxx
The users of the income statement are:
  • The existing stockholders who use this information to determine the expected return for the shares in the shape of dividend.
  • The prospective stockholders who are interested to determine the company earning capability for making the investment decision.
  • The Government to evaluate the tax collection based on the earning of the company.
  • The lenders i.e. financial institutions to evaluate the pay back capacity and risk associated with their investment in the company.
  • The employees to determine the financial stability of the company.

Explain why a costing system that uses either a plantwide or a departmental overhead rate is likely to produce distorted product costs.

Explain why a costing system that uses either a plantwide or a departmental overhead rate is likely to produce distorted product costs.

Answer
Plant wide or a departmental overhead rate is calculated on the basis of a single cost allocation base i.e. direct labor hours or direct labor cost. This predetermined rate is then used to allocate the overhead cost to allocate the cost to the products. So, the product using the higher amount of allocation base units i.e. direct labor hours or direct labor cost will be charged with more overhead cost. All this cost allocation process is ignoring the actual overhead bases used by the different products in the different production processes.
So, it will not be possible to get the accurate production cost of the units produced based on the plant wide or a departmental overhead rate.

(x-4)/(x+6)=(2x+3)/(2x-1)

(x-4)/(x+6)=(2x+3)/(2x-1)

By cross multiplying
(x-4) (2x-1)=( 2x+3) (x+6)
2X2-8x-x+4=2x2+12x+3x+18
2X2-9x+4=2x2+15x+18
2X2-9x+4-2x2-15x-18=0
-24x -14=0
-24x = 14
Divided by -24  both side, we have
X =14/-24
Cutting by 2
X = 7/-12

4 3 2 X 6 2 5 ________ complete answer with all steps

4   3   2
X 6   2     5
   ________

complete answer with all steps

  4   3   2
X 6   2     5
   ________
         2  1   6     0
       8  6    4     x
25 9  2      X   X
____________
27 0   0        0       0

solve the equation for x: x+3=6

solve the equation for x:
x+3=6

Solution
X = 6 - 3
X = 3

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