ACCT 301 (Essential of Accounting)

Week 1

ACCT 301 Week 1 Homework Problems

Week 2

Week 2: Internal Controls – Discussion

Describe what you think is the most important control activity that a company can implement. Why do you think that the one you chose is the most important?

Describe one of the three elements that are present when fraud occurs. Of the three elements, which do you think is present first in an ethical situation?

Week 2 Assignments:

ACCT 301 Week 2 Quiz (15 MCQ’s)

1. (TCO 1) Which of the following would not be considered an external user of accounting data for XYZ Company?
2. (TCO 1) The cost of assets consumed or services used is also known as _________.
3. (TCO 1) The financial statement that summarizes the changes in retained earnings for a specific period of time is the _________.
4. (TCO 1) Pinson Company began the year with retained earnings of $210,000. During the year, the company recorded revenues of $300,000, expenses of $228,000, and paid dividends of $24,000. What was Pinson’s retained earnings at the end of the year?
5. (TCO 4) Which of the following statements is not true?
6. (TCO 4) Using the following balance sheet and income statement data, what is the current ratio? Current assets $7,000 Net income $12,000 Current liabilities 4,000 Stockholders’ equity 21,000 Total assets 30,000 Total liabilities 9,000 Average common shares outstanding was 10,000
7. (TCO 4) Using the following balance sheet and income statement data, what is the total amount of working capital? Current assets $7,000 Net income $12,000 Current liabilities 4,000 Stockholders’ equity 21,000 Total assets 30,000 Total liabilities 9,000 Average common shares outstanding was 10,000
8. (TCO 4) Using the following balance sheet and income statement data, what is the debt to total assets ratio? Current assets $7,000 Net income $12,000 Current liabilities 4,000 Stockholders’ equity 21,000 Total assets 30,000 Total liabilities 9,000 Average common shares outstanding was 10,000
9. (TCO 2) Powers Company paid its office rent of $1,000 with cash. As a result of this event, _________.
10. (TCO 2) Which accounts normally have debit balances?
11. (TCO 2) In the first month of operations, the total of the debit entries to the cash account amounted to $700 and the total of the credit entries to the cash account amounted to $300. The cash account has a _________
12. (TCO 2) A trial balance would only help in detecting which one of the following errors?
13. (TCO 3) From an internal control standpoint, the asset most susceptible to improper diversion and use is _________
14. (TCO 3) Ron Jones has been a trusted employee for over 10 years. He is responsible for ordering merchandise inventory, receiving the inventory items, and authorizing the payment for these items. Which internal control principle, if any, is being violated?
15. (TCO 3) A check written by the company for $167 is incorrectly recorded by a company as $176. On the bank reconciliation, the $9 error should be _________

Week 2 Homework

1. 1. In two to three paragraphs, describe the Sarbanes-Oxley Act and why it is important to the accounting profession. (15 points)
2. 2. Name and briefly describe the five components of COSO’s internal control framework. (10 points)
3. 3. Describe the relationship between the Sarbanes-Oxley Act and COSO. (10 points)
4. 4. Tom Jackson is a CPA who really likes to go to Las Vegas, play poker, and bet on football games. Tom knows that the accounting profession disapproves of gambling, but because he spends a lot of time studying sports facts and how to win at poker, he feels that he is simply making educated decisions based on facts. He says that this is no different from using accounting information to buy stocks. Use the fraud triangle as a basis to comment on Tom’s gambling activities. (15 points)

Week 3

Week 3: Financial Statement Analysis – Discussion

Horizontal and Vertical Analysis (graded)

Ratio Analysis (graded)

Week 3 Assignment:

ACCT 301 Week 3 Homework Problems

Week 4

Week 4: Managerial Accounting – Discussion

Managerial Accounting (graded)

This week, we are shifting our focus from financial accounting to managerial accounting.

How do the content and verification of the reports differ between managerial and financial accounting?

CVP Analysis (graded)

What is CVP analysis? How is it useful to managers?

Week 4 Assignments:

ACCT 301 Week 4 Homework Problems

ACCT 301 Week 4 Midterm Exam Set 1 (4 MCQ’s and Problem)

1. (TCO 1) Suppose your company sold $25,000 in merchandise to a customer for cash. How does this transaction impact the accounting equation? (Points : 12)
2. (TCO 2) Suppose your company sold $50,000 in merchandise to a customer for cash. How does this transaction impact the accounting equation? (Points : 12)
3. (TCO 3) Rationalization is one of the components of the fraud triangle. What types of rationalization could a person use to justify misconduct? How can a company protect itself from rationalization as a part of fraud? (Points : 12)
4. (TCO 4) What is horizontal analysis of financial statements? How does horizontal analysis differ from vertical analysis? (Points : 12)
5. (TCO 3) Separation of duties is a key feature in an internal control system. Why is separation of duties such an important internal control? Give an example of separation of duties as an internal control. (Points : 24)
6. (TCO 1) Describe the balance sheet. Why is this statement important to the company, creditors, and investors? (Points : 24)
7. (TCO 4) Name and describe one liquidity ratio. What does this ratio measure? What is the formula for this ratio? (Points : 24)

ACCT 301 Week 4 Midterm Exam Set 2 (15 MCQ’s)

1. (TCO 1) The retained earnings statement shows all of the following except which one?
2. (TCO 1) Management’s views on the company’s short-term debt paying ability, expansion financing, and results of operations are found in which of the following?
3. (TCO 4) For 2010, Fielder Corporation reported net income of $30,000; net sal
   es $400,000; and average share outstanding 6,000. There were no preferred stock dividends. What was the 2010 earnings per share?
4. (TCO 4) A useful measure of solvency is which of the following?
5. (TCO 2) Which pair of accounts follows the rules of debit and credit, in relation to increases and decreases, in the same manner?
6. (TCO 2) The principle purpose of posting is which of the following?
7. (TCO 3) Joe is a warehouse custodian, and also maintains the accounting record of the inventory held at the warehouse. An assessment of this situation indicates
8. (TCO 3) The following information was taken from Hurlbert Company cash budget for the month of June:
9. (TCO 11) Managerial accounting information does which of the following?
10. (TCO 11) Which one of the following is not a direct material?
11. (TCO 11) Sales commissions are classified as which of the following?
12. (TCO 11) Manufacturing costs include which of the following?
13. (TCO 11) Neeley Manufacturing Company reported the following year-end information:
14. (TCO 5) What effect do changes in activity have on fixed costs per unit?
15. (TCO 5) Which one of the following is notan assumption of CVP analysis?

ACCT 301 Week 4 Midterm Exam Set 3 (15 MCQ’s and Q & A’s)

1. (TCO 5) A company has total fixed costs of $210,000 and a contribution margin ratio of 30%. How much sales are necessary to break even?
2. (TCO 5) How much sales are required to earn a target income of $70,000, if total fixed costs are $100,000 and the contribution margin ratio is 40%?
3. (TCO 6) For which one of the following budgeting aspects does the budget committee generally have the responsibility?
4. (TCO 6) Under what situation might a budget be most effective?
5. (TCO 6)How does long-range planning compare to a master budget?
6. (TCO 6) Which one of the following is a source of information used to prepare the budgeted income statement?
7. (TCO 7) When is a static budget most appropriate in evaluating a manager’s performance?
8. (TCO 7) Which type of center is the housekeeping department of a manufacturing company?
9. (TCO 7) For which of the following is an investment center manager responsible?
10. (TCO 7) Merck Pharmaceuticals is evaluating its Vioxx division, an investment center. The division has a $45,000 controllable margin and $300,000 of sales. How much will Merck’s average operating assets be when its return on investment is 10%?
11. (TCO 11) Financial and managerial accounting are both concerned with the economic events of an enterprise. Similarities between financial and managerial accounting do exist, but they have a different focus. Briefly distinguish between financial and managerial accounting as they relate to (1) the primary users, (2) the type and frequency of reports, (3) the purpose of reports, and (4) the content of reports.
12. (TCO 4) Are short-term creditors, long-term creditors, and stockholders primarily interested in the same characteristics of a company? Explain.
13. (TCO 5) In the month of September, Nixon Company sold 800 units of product. The average sales price was $30. During the month, fixed costs were $7,200 and variable costs were 60% of sales.

Week 5

Week 5: Budgets and Productivity – Discussion

Incremental Analysis (graded)

What is incremental analysis? How is it used by management?

Our lecture states that relevant costs can also be viewed as avoidable costs. What does this mean? This is a very difficult concept, so help your classmates understand it!

Week 5 Assignment:

ACCT 301 Week 5 Homework Problems

Week 6

Week 6: Pricing – Discussion

Why is budgeting important for a company? What are some reasons that a company would not prepare a budget?

Describe responsibility accounting and its purpose. What conditions are necessary for responsibility accounting to be used effectively?

Week 6 Assignments:

ACCT 301 Week 6 Homework Problems

ACCT 301 Week 6 Quiz (15 MCQ’s)

1. (TCO 9) Which one of the following stages of the management decision-making process is properly sequenced?
2. (TCO 9) When is incremental analysis most useful?
3. (TCO 9) Which of the following will never be a relevant cost?
4. (TCO 9) A company is deciding whether or not to replace some old equipment with new equipment. Which of the following is not considered in the incremental analysis?
5. (TCO 9) It costs Lannon Fields $14 of variable costs and $6 of allocated fixed costs to produce an industrial trash can that sells for $30. A buyer in Mexico offers to purchase 2,000 units at $18 each. Lannon has excess capacity and can handle the additional production. What effect will acceptance of the offer have on net income?
6. (TCO 9)Wishnell Toys can make 1,000 toy robots with the following costs:
7. (TCO 9) All of the following are relevant to the sell or process-further decision, except for __________.
8. (TCO 8)Most of the capital budgeting methods use __________.
9. (TCO 8) The capital budgeting decision depends in part on the __________.
10. (TCO 8) The cash-payback technique __________.
11. (TCO 8) All of the following statements about intangible benefits in capital budgeting are correct, except that they __________
12. (TCO 8) The profitability index __________.
13. (TCO 8) Post audits of capital projects __________.
14. (TCO 8) A company has a minimum required rate of return of 9% and is considering investing in a project that costs $50,000 and is expected to generate cash inflows of $20,000 at the end of each year for 3 years. The profitability index for this project is __________
15. (TCO 8)Disadvantages of the annual rate of return method include all of the following, except that____

Week 7

Week 7: Capital investment and Incremental – Discussion

Discuss the capital budgeting process and the inputs that are used in capital budgeting.

What is the transfer price? Why is determining a fair transfer price important for division managers?

Week 7 Assignments:

ACCT 301 Week 7 Homework Problems

Week 8

ACCT 301 Week 8 Final Exam

1. (TCO 1) What is the accounting equation? Suppose your company sold $12,000 in merchandise to a customer for cash. How does this transaction impact the accounting equation? (Points : 17)
2. (TCO 2) What are the four basic financial statements? Describe the balance sheet, and explain why it is important
3. What is the Sarbanes-Oxley Act? Do you think this act has more importance for the accounting profession or for investors? Why
4. Whatis horizontal analysis of financial statements? How does horizontal analysis differ from vertical analysis?
5. (TCO 8) Why is capital budgeting important? What is the IRR method? How is it calculated? (Points : 26)
6. (TCO 9) What are five different types of decisions that could use incremental analysis? What are the relevant costs in a make-or-buy decision? (Points : 26)
7. (TCO 10) How is a transfer price determined? Describe the cost-based method. Do you think it is better than the market-based method? (Points : 26)
8. (TCO 11) What are direct materials? Give an example of a direct material. How do direct materials differ from indirect materials? Give an example of an indirect material. (Points : 26)
9. (TCO 5) What is CVP analysis? Why is this an important analysis for a company to perform? (Points : 26)
10. (TCO 6) What is an operating budget? What does it result in? What is the first step in completing an operating budget? (Points : 26)
11. (TCO 7) What is responsibility accounting? What is a cost center? How does a cost center differ from a profit center? (Points : 26)