1) The income statement and balance sheet columns of Pine Company’s worksheet reflects the following totals:

Income Statement Balance Sheet

Dr. Cr. Dr. Cr.

Totals

Closing entries are necessary for __________.

A. temporary accounts only

B. permanent accounts only

C. permanent or real accounts only

D. both permanent and temporary accounts

2) As Plant Controller, you are trying to determine which costs over which you have the most control on a day to day basis. Your goal is to achieve better profitability. The Plant Operations Manager suggests that overhead is the easiest area to directly reduce costs. Which of the following items would be classified as manufacturing overhead?

A. General corporate liability insurance

B. Factory janitor

C. The western division’s vice president’s salary

D. Cost of landscaping the corporate office

3) Which list below best describes the major services performed by public accountants?

A. Employee training, auditing, bookkeeping

B. Bookkeeping, mergers, budgets

C. Cost accounting, production scheduling, recruiting

D. Auditing, taxation, management consulting

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4) The conceptual framework developed by the Financial Accounting Standards Board __________.

A. are rules that all accountants must follow

B. was approved by a vote of all accountants

C. is legally binding on all accountants

D. is viewed as providing a constitution for setting accounting standards for financial reporting

5) In what situations will a static budget be most effective in evaluating a manager’s effectiveness?

A. The company has substantial variable costs.

B. The company has substantial fixed costs.

C. The company has no fixed costs.

D. The planned activity levels match actual activity levels.

6) Which one of the following items is not generally used in preparing a statement of cash flows?

A. Comparative balance sheets

B. Adjusted trial balance

C. Additional information

D. Current income statement

7) These are selected account balances on December 31, 2008.

Land (location of the corporation’s office building) $150,000

Land (held for future use) 225,000

Corporate Office Building 900,000

Inventory 300,000

Equipment 675,000

Office Furniture 150,000

Accumulated Depreciation 450,000

What is the net amount of property, plant, and equipment that will appear on the balance sheet?

A .$1,425,000

B. $1,650,000

C. $2,400,000

D. $1,950,000

8) A well-designed activity-based costing system starts with __________.

A. analyzing the activities performed to manufacture a product

B. computing the activity-based overhead rate

C. assigning manufacturing overhead costs for each activity cost pool to products

D. identifying the activity-cost pools

9) The cost principle is the basis for preparing financial statements because it is __________.

A. the most accurate measure of purchasing power

B. relevant and objectively measured, and verifiable

C. an international accounting standard

D. a conservative value

10) Which one of the following is a product cost?

A. Advertising costs

B. Office salaries

C. Sales person’s salaries

D. Indirect labor

11) If a company reports a net loss, it __________.

A. will not be able to make capital expenditures

B. will not be able to pay cash dividends

C. will not be able to get a loan

D. may still have a net increase in cash

12) The primary purpose of the statement of cash flows is to __________.

A. prove that revenues exceed expenses if there is a net income

B. provide information about the investing and financing activities during a period

C. facilitate banking relationships

D. provide information about the cash receipts and cash payments during a period

13) The major reporting standard for management accounts is __________.

A. the Sarbanes-Oxley Act of 2002

B. the Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management

C. generally accepted accounting principles

D. relevance to decisions

14) Disney’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $22,000. If sales are expected to increase $40,000, by how much will the company’s net income increase?

A. $28,000

B. $18,000

C. $6,000

D. $12,00

15) The price of a good that prevails in a world market is called the

A. relative price.

B. absolute price.

C. world price.

D. comparative price.

16) A country’s consumption possibilities frontier can be outside its production possibilities frontier if __________.

A. the citizens of the country have a greater desire to consume goods and services than do the citizens of other countries

B. the country’s technology is superior to the technologies of other countries

C. the country imports more than it exports

D. the country engages in trade

17) The general term for market structures that fall somewhere in-between monopoly and perfect competition is __________.

A. monopolistically competitive markets

B. imperfectly competitive markets

C. incomplete markets

D. oligopoly markets

18) For a college student who wishes to calculate the true costs of going to college, the costs of room and board __________.

A. plus the cost of tuition, equals the opportunity cost of going to college

B. should be counted only to the extent that they are more expensive at college than elsewhere

C. should be counted in full, regardless of the costs of eating and sleeping elsewhere

D. usually exceed the opportunity cost of going to college

19) A tax on an imported good is called a __________.

A. trade tax

B. tariff

C. quota

D. supply tax

20) Without trade, __________.

A. interdependence is more extensive than it would be with trade

B. a country’s production possibilities frontier is also its consumption possibilities frontier

C. a country is better off because it will have to learn to be self-sufficient without trade

D. a country can still benefit from international specialization

21) Which of the following statements about GDP is correct?

A. GDP increases if the total population increases.

B. Money continuously flows from households to government and then back to households, and GDP measures this flow of money.

C. GDP measures two things at once: the total income of everyone in the economy and the unemployment rate.

D. GDP is to a nation’s economy as household income is to a household.

22) The political business cycle refers to __________.

A. the potential for a central bank to increase the money supply and therefore real GDP to help the incumbent get re-elected

B. changes in output created by the monetary rule the Fed must follow

C. the fact that about every four years some politician advocates greater government control of the Fed

D. the part of the business cycle caused by the reluctance of politicians to smooth the business cycle

23) The open-economy macroeconomic model examines the determination of __________.

A. unemployment and the exchange rate

B. the trade balance and the exchange rate

C. the output growth rate and the real interest rate

D. the output growth rate and the inflation rate

24) The model of short-run economic fluctuations focuses on the price level and __________.

A. economic growth

B. Net GDP

C. real GDP

D. the neutrality of money

25) Which of the following statements about GDP is correct?

A. Nominal GDP values production at constant prices, whereas real GDP values production at current prices.

B. Nominal GDP consistently underestimates the value of production, whereas real GDP consistently overestimates the value of production.

C. Nominal GDP values production at current prices, whereas real GDP values production at constant prices.

D. Nominal GDP values production at market prices, whereas real GDP values production at the cost of the resources used in the production process.

26) Real GDP __________.

A. evaluates current production at the prices that prevailed in some specific year in the past.

B. is a measure of the value of goods only; it excludes the value of services.

C. evaluates current production at current prices.

D. is not a valid measure of the economy’s performance, since prices change from year to year.

27) The balance of payment account is made up of:

A. an import account and an export account.

B. a monetary account and a fiscal account.

C. a current account and a financial and capital account.

D. an investment account and a consumption account.

28) Which of the following best describes a mental image of a possible and desirable future state of the organization?

A. Horizontal communication

B. Vision

C. Mission

D. Vertical communication

E. Leadership

29) Which of these refers to the practices aimed at discovering and harnessing an organization’s intellectual resources?

A. Effectiveness

B. Knowledge management

C. Collaboration

D. Competitiveness

E. Innovation

30) As related to managing of human resources, diversity refers to:

A. Differences in retention strategies (such as training, hiring, incentives, etc)

B. Differences in recruiting methods (such as newspapers, schools, flyers, magazines, agencies, etc.)

C. Differences in employee benefit plans (such as pensions, insurance, vacations, memberships, etc.)

D. Differences in pay methods (such as hourly, salaried, overtime, hazard-pay, commissioned, etc.)

E. Differences in demographics (such as age, race, gender, disability status, lifestyle, veteran status, educational level, etc.)

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31) When a company establishes technology leadership by pioneering unique products or services that command premium prices, it has benefited from a:

A. Differentiation strategy

B. High-price strategy

C. High-cost strategy

D. Diversification strategy

E. Low-cost strategy

32) Teams that operate separately from the regular work structure and exist temporarily are known as:

A. Transnational teams

B. Parallel teams

C. Management teams

D. Self-managed teams

E. Self-designing teams

33) Which of these represent skills that managers need?

A. Interpersonal, quantitative, and professional

B. Technical, interpersonal & communication and conceptual & decision making

C. Interpersonal & communication, conceptual & decision making and professional

D. Conceptual & decision making, professional and technical

E. Professional, technical and interpersonal & communication

34) Having individuals actually do the job they are applying for as a test to see if they can do it is __________.

A. an approach with high face validity

B. a formal means of screening candidates

C. an approach with low reliability

D. an approach with high reliability

E. an informal means of screening candidates

35) A manager’s ability to stimulate people to be high performers is referred to as:

A. Organizing

B. Staffing

C. Planning

D. Controlling

E. Leading

36) The most dominant areas in the global economy include:

A. North America, Mexico and Asia

B. Western Europe, Asia and Africa

C. North America, Western Europe and Asia

D. North America, Asia and Africa

E. North America, South America and Western Europe

37) An organization that is managed aggressively and has growth and high profits as primary objectives may be considered a(n):

A. Large corporation

B. Online Business

C. Multinational corporation

D. Entrepreneurship venture

E. Small business

38) __________ is the process of working with people and resources to accomplish organizational goals.

A. Management

B. Supervising

C. Planning

D. Decision making

E. Controlling

39) Building a dynamic organization is another way of describing which function of management?

A. Controlling

B. Organizing

C. Planning

D. Leading

E. Staffing

40) One study found that manufacturing labor costs about _____ an hour in China, compared to _____ dollars in the United States.

A. $2; about 25

B. About $2; about 15

C. Less than $1; about 15

D. Less than $1; about 25

E. Less than $1; about 40 (Check your textbook!!!)