Mizzou ACCTCY 2037 - fall 06 final exam blank (12 pages)

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fall 06 final exam blank



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fall 06 final exam blank

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Pages:
12
School:
University of Missouri
Course:
Acctcy 2037 - Accounting II

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Problem 1 Multiple Choice 40 points 2 points each Choose the best answer for each question 1 The increase in total cost that would result from initiating a new product line is called a A sunk cost b An out of pocket cost c An opportunity cost d An incremental cost 2 Under conditions of scarce resources the product that should be manufactured is the one that provides the highest a Sales price per unit of the product b Contribution margin per unit of the product c Contribution margin per unit of the resource d Gross profit per unit of the resource 3 If the actual quantity of materials used is less than the standard quantity the entry to record the use of direct materials would include a decrease in a Raw Materials Inventory b Accounts Payable c Direct Materials Quantity Variance d Direct Materials Price Variance 4 Which of the following methods must be used for financial purposes if it is used for tax purposes a FIFO b LIFO c Average cost d Specific identification 5 When a company evaluates long term investment proposals which of the following should not be considered a The time value of money b The past costs c The amount of net cash flows d The timing of net cash flows 6 Which of the following methods can not be used to account for investments in common stock a Consolidation method b Equity method c Amortized cost method d Market value method 7 On August 12 2003 McDongal Corporation purchased as its only Available for Sale security 1 000 shares of Ivy Company at 30 per share The market price per share of the Ivy Company stock on December 31 2003 and 2004 was 26 and 29 respectively On the December 31 2004 balance sheet the investment in the Ivy Company stock would be carried at a 25 000 b 26 000 c 29 000 d 30 000 8 Where is the cash paid to purchase bonds reported on the cash flow statement a Operating activities b Financing activities c Investing activities d Investing and operating activities 9 Under the equity method of accounting for an investment in stock



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