BUS 475 Final Exam Guideby ACCNerd $14.99
BUS 475 Final Exam Answers
What's in the BUS 475 final exam study guide?
- Study Guide with Answer Explanations
- 4 Sets of Final Exam Samples
- 400 Total Answers
- Instant Download in .docx format
- Last updated in Feb 6th 2014
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Sample Answers with Explanations
64) Which statement attempts to show the earnings of the firm’s operations over a specific time period?
Explanation: The income statement will generally show how much a company has earned on a quarterly or annual basis.
65) Let’s say a machine costs $1,000, has a three-year life, and has an expected salvage value of $100. It will produce after-expense twelve-month cash flows (ACF) of $600 per year, beginning one year from now. Provided that your needed rate of return for the task is 10%, what is the NPV (Net Present Value) of this investment product?
Explanation: NPV is calculated using the formula: Rt (1 + i)^2. In this case the NPV is determined be $570 when the required return is 10%.
66) What are some of the disadvantages of using current liabilities versus long-term debt?
Greater risk of illiquidity, and uncertainty of interest costs
Explanation: Short-term debt often carries a larger interest rate and will make your company appear risker to investors and creditors.
Preview of Answers
1) Which one of the following is a product cost?
A. Indirect labor
B. Sales person’s salaries
C. Office salaries
D. Advertising costs
Explanation: Indirect labor is often required to bring a product to necessary sales standards.
2) Lucy starts her own psychiatric practice, but her expenditures to open the practice exceed her income. Lucy is a __________.
A. borrower who demands money from the financial system
B. borrower who supplies money to the financial system
C. saver who supplies money to the financial system
D. saver who demands money from the financial system
3) Of the following companies, which one would not likely employ the specific identification method for inventory costing?
A. Music store specializing in organ sales
B. Antique shop
C. Farm implement dealership
D. Hardware store
4) Which one of the following items is not generally used in preparing a statement of cash flows?
A. Adjusted trial balance
B. Comparative balance sheets
C. Additional information
D. Current income statement
5) The conceptual framework developed by the Financial Accounting Standards Board __________.
A. was approved by a vote of all accountants
B. is viewed as providing a constitution for setting accounting standards for financial reporting
C. are rules that all accountants must follow
D. is legally binding on all accountants
6) What is the preparation of reports for each level of responsibility in the company’s organization chart called?
A. Static reporting
B. Exception reporting
C. Responsibility reporting
D. Master budgeting analysis
7) The cost principle requires that when assets are acquired, they be recorded at __________.
A. appraisal value
B. selling price
C. exchange price paid
D. list price
8) If a company reports a net loss, it __________.
A. will not be able to make capital expenditures
B. will not be able to get a loan
C. may still have a net increase in cash
D. will not be able to pay cash dividends
9) The major reporting standard for management accounts is __________.
A. generally accepted accounting principles
B. relevance to decisions
C. the Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management
D. the Sarbanes-Oxley Act of 2002
10) The primary purpose of the statement of cash flows is to __________.
A. facilitate banking relationships
B. provide information about the cash receipts and cash payments during a period
C. provide information about the investing and financing activities during a period
D. prove that revenues exceed expenses if there is a net income