Posted: April 13th, 2016

When a job is completed in a service organization, the job costs are transferred to the???

Conversion costs are

a. direct materials and factory overhead
b. factory overhead and direct labor
c. direct materials and indirect labor
d. direct materials and direct labor

The cost of wages paid to employees directly involved in converting materials to finished product is classified as direct labor cost.

a. True
b. False

The percent of fixed assets to total assets is an example of

a. solvency analysis
b. horizontal analysis
c. profitability analysis
d. vertical analysis

Debtors are interested in the times-interest-earned ratio because they want to

a. know the tax effect of lending to a corporation
b. have adequate protection against a potential drop in earnings jeopardizing their interest payments
c. be sure their debt is backed by collateral
d. know what rate of interest the corporation is paying

An example of a period cost is:

a. property taxes on plant facilities
b. advertising expense
c. depreciation on factory equipment
d. indirect materials

Accounts receivable from sales to customers amounted to $40,000 and $32,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $110,000. Exclusive of the effect of other adjustments, the cash flows from operating activities to be reported on the statement of cash flows is

a. $150,000.
b. $102,000.
c. $110,000.
d. $118,000.

When there are material differences between the results of using the straight-line method and using the effective interest method of amortization, the effective interest method should be used.

a. True
b. False

The job order costing system is used by service firms to determine revenues, expenses, and ultimately profit.

a. True
b. False

A company that has 25,000 shares of $5.00 par value common stock issued and outstanding paid a dividend of $.75 per share. The market value of the stock is $20.00 per share. The company’s dividend yield is:

a. 400%
b. 25%
c. 3.75%
d. 15%

Cash outflows from financing activities include the payment of cash dividends, the acquisition of treasury stock, and the repayment of amounts borrowed.

a. True
b. False

When a job is completed in a service organization, the job costs are transferred to the

a. finished goods account.
b. work in process account.
c. cost of goods sold account.
d. cost of services account

The vice presidents of production and sales and the controller hold line positions in most large organizations.
a. True
b. False

A staff department has no direct authority over a line department.

a. True
b. False