BUS 475 Final Exam Study Guide 2012 � Set 1

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BUS 475 Final Exam Study Guide 2012–Set 1100 Answers from 2012 BUS/475 Final ExamReviewed and Prepared by ACCNerd.com. Thank you!1) Although the U.S. has had a longstanding agreement with _____ after the passage of NAFTA,_____ became theUnited States' second largest trading partner.A.Mexico, VenezuelaB.Canada, VenezuelaC.Great Britain, ParaguayD.Mexico, CanadaE.Canada, Mexico2) "Generally accepted" in the phrase generally accepted accounting principles meansthat theprinciples __________.A.have been approved for use by the managements of business firmsB.have been approved by the Internal Revenue ServiceC.have substantial authoritative supportD.are proven theories of accounting30) Building a dynamic organization is another way of describing which function of management?A.StaffingB.OrganizingC.LeadingD.ControllingE.Planning4) Sam's Used Cars uses the specific identification method of costing inventory. During March, Sampurchased three cars for $6,000, $7,500, and $9,750, respectively. During March, two cars are soldfor $9,000 each. Sam determines that at March 31, the $9,750 car is still on hand. What is Sam’sgross profit for March?A.$8,250B.$750C.$4,500D.$5,2505) Hess, Inc. sells a single product with a contribution margin of $12 per unit and fixed costs of$74,400 and sales for the current year of $100,000. How much is Hess’s break even point?A.2,133 unitsB.6,200 unitsC.$25,600D.4,600 units6) As Plant Controller, you are trying to determine which costs over which you have the mostcontrol on a day to day basis. Your goal is to achieve better profitability. The Plant Operations

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Manager suggests that overhead is the easiest area to directly reduce costs. Which of the followingitems would be classified as manufacturing overhead?A.The western division’s vice president’s salaryB.Cost of landscaping the corporate officeC.General corporate liability insuranceD.Factory janitor7) What is the preparation of reports for each level of responsibility in the company’s organizationchart called?A.Master budgeting analysisB.Exception reportingC.Responsibility reportingD.Static reporting8) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaignthat will cost $22,000. If sales are expected to increase $40,000, by how much will the company'snet income increase?A.$6,000B.$12,000C.$28,000D.$18,0009) The cost of an asset and its fair market value are __________.A.never the sameB.irrelevant when the asset is used by the business in its operationsC.the same on the date of acquisitionD.the same when the asset is sold10) Which one of the following is a product cost?A.Indirect laborB.Sales person’s salariesC.Advertising costsD.Office salaries11) What exists when budgeted costs exceed actual results?A.A budgeting errorB.An unfavorable differenceC.An excessprofitD.A favorable difference12) The income statement and balance sheet columns of Pine Company's worksheet reflects thefollowing totals:Income StatementBalance SheetDr.Cr.Dr.Cr.Totals$58,000$48,000$34,000$44,000Closing entries are necessary for __________.

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A.permanent accounts onlyB.both permanent and temporary accountsC.permanent or real accounts onlyD.temporary accounts only13) Managerial accounting __________.A.is concerned with costing productsB.pertains to the entity as a whole and is highly aggregatedC.places emphasis on special-purpose informationD.is governed by generally accepted accounting principles14) H55 Company sells two products, beer and wine. Beer has a 10 percent profit margin and winehas a 12 percent profit margin. Beer has a 27 percent contribution margin and wine has a 25percent contribution margin. If other factors are equal, which product should H55 push tocustomers?A.BeerB.Selling either results in the same additional income for the companyC.It should sell an equal quantity of bothD.Wine15) Lekeisha's income exceeds her expenditures. Lekeisha is a __________.A.saver who demands money from the financial systemB.borrower who demands money from the financial systemC.borrower who supplies money to the financial systemD.saver who supplies money to the financial system16) Maurice receives $100 as a birthday gift. In deciding how to spend the money, he narrows hisoptions down to four choices: Option A, Option B, Option C, and Option D. Each option costs $100.Finally he decides on Option B. The opportunity cost of this decision is __________.A.the value to Maurice of the option he would have chosen had Option B not been availableB.$100C.$300D.the value to Maurice of Options A, C and D combined17) A production possibilities frontier will be a straight line if __________.A.the economy is producing efficientlyB.the economy is engaged in trade with at least one other economyC.increasing the production of one good by x units entails no opportunity cost in terms of the othergoodD.increasing the production of one good by x units entails a constant opportunity cost in terms ofthe other good18) In economics, the cost of something is __________.A.what you give up to get itB.often impossible to quantify, even in principleC.the dollar amount of obtaining itD.always measured in units of time given up to get it

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19) A tax on an imported good is called a __________.A.supply taxB.trade taxC.quotaD.tariff20) Which of the following statements about GDP is correct?A.GDP is to a nation’s economy as household income is to a household.B.GDP increases if the total population increases.C.GDP measures two things at once: the total income of everyone in the economy and theunemployment rate.D.Money continuously flows from households to government and then back to households, andGDP measures this flow of money.21) In computing GDP, market prices are used to value final goods and services because__________.A.if market prices are out of line with how people value goods, the government sets price ceilingsand price floorsB.Market prices are not used in computing GDPC.market prices reflect the values of goods and servicesD.market prices do not change much over time, so it is easy to make comparisons between years22) Which of the following statements about GDP is correct?A.Nominal GDP values production at market prices, whereas real GDP values production at the costof the resources used in the production process.B.Nominal GDP consistently underestimates the value of production, whereas real GDP consistentlyoverestimates the value of production.C.Nominal GDP values production at current prices, whereas real GDP values production atconstant prices.D.Nominal GDP values production at constant prices, whereas real GDP values production at currentprices.23) Which of the following is not correct?A.The U.S. debt per-person is large compared with average lifetime income.B.In 2005, the U.S. government had a deficit.C.A potential cost of deficits is that they reduce national saving, thereby reducing growth of thecapital stock and output growth.D.Deficits give people the opportunity to consume at the expense of their children, but they do notrequire them to do so.24) The part of the balance of payments account that lists all long-term flows of payments is calledthe:A.balance of trade.B.financial and capital account.C.government financial account.D.current account.

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25) Edward Prescott and Finn Kydland won the Nobel Prize in Economics in 2004. One of theircontributions was to argue that if a centralbank could convince people to expect zero inflation,then the Fed would be tempted to raise output by increasing inflation. This possibility is known as__________.A.the sacrifice ratio dilemmaB.the monetary policy reaction lagC.the time inconsistency of policyD.inflation targeting26) In general, the longest lag for __________.A.fiscal policy is the time it takes to change policy, while for monetary policy thelongest lag is thetime it takes for policy to affect aggregate demandB.both fiscal and monetary policy is the time it takes for policy to affect aggregate demandC.monetary policy is the time it takes to change policy, while for fiscal policy the longest lag is thetime it takes for policy to affect aggregate demandD.both fiscal and monetary policy is the time it takes to change policy27) Consider two items that might be included in GDP: (1) The estimated rental value of owner-occupied housing; and (2) purchases of newly-constructed homes. How are these two itemsaccounted for when GDP is calculated?A.Only item (2) is included in GDP and it is included in the investment component.B.Item (1) is included in the consumption component, while item (2) is included in the investmentcomponent.C.Item (1) is included in the investment component, while item (2) is included in the consumptioncomponent.D.Both item (1) and item (2) are included in the consumption component of GDP.28) Managers will utilize __________ skills with increasing frequency as they risewithin anorganization.A.ProfessionalB.Interpersonal and communicationC.TechnicalD.ProfessionalE.Conceptual and decision29) Which of these represent skills that managers need?A.Interpersonal, quantitative, and professionalB.Technical, interpersonal & communication and conceptual & decision makingC.Professional, technical and interpersonal & communicationD.Conceptual & decision making, professional and technicalE.Interpersonal & communication, conceptual & decision making and professional30) The standards and rules that are recognized as a general guide for financial reporting are called__________.A.standards of financial reportingB.operating guidelinesC.generally accepted accounting principles

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