Question 1

Prepare an income statement showing departmental contribution margin based on the following:

Accepted Answer

The answer of Prepare an income statement showing departmental contribution...

Question 2

Below is a list of expenses; you are to identify each as either [1] a direct expense or [2] an indirect expense.
-Electricity for the stove in a restaurant. ________

Accepted Answer

The answer of Below is a list of expenses; you...

Question 3

Below is a list of departments; you are to identify each as either [1] a profit center or [2] a cost center.
-The jewelry department of a major retailer. ________

Accepted Answer

The answer of Below is a list of departments; you...

Question 4

A direct expense should be traceable to a respective department.

Accepted Answer

A) True 
 B)False

Question 5

Direct expenses are assigned to departments based on the actual expenses incurred.

Accepted Answer

A) True 
 B)False

Question 6

On a departmental income statement, contribution margin minus total indirect expenses equals:

Accepted Answer

A)  departmental contribution margin. 
B)  net income. 
C)  income before taxes. 
D)  net sales. 
A)  departmental contribution margin. 
B)  net income. 
C)  income before taxes. 
D)  net sales.

Question 7

The cosmetic department experienced the following revenue and expenses during December:   The cosmetic department's contribution margin is:

Accepted Answer

A)  $53,000. 
B)  $45,000. 
C)  $75,000. 
D)  $48,000. 
A)  $53,000. 
B)  $45,000. 
C)  $75,000. 
D)  $48,000.

Question 8

Sports apparel department's gross profit is $300,000; clothing department gross profit is $300,000; indirect advertising expense is $6,000. Indirect expense charged to the clothing apparel department based on gross profit would be $3,000.

Accepted Answer

A) True 
 B)False

Question 9

Below is a list of expenses; you are to identify each as either [1] a direct expense or [2] an indirect expense.
-Insurance paid on employees working in high risk areas of a machine shop. ________

Accepted Answer

The answer of Below is a list of expenses; you...

Question 10

To calculate departmental gross profit, separate accounts should be set up for Assets, Liabilities, etc., for each department.

Accepted Answer

A) True 
 B)False

Question 11

Given the following, calculate contribution margin and net income:

Accepted Answer

The answer of Given the following, calculate contribution margin and...

Question 12

From the following, calculate income by departments.

Accepted Answer

The answer of From the following, calculate income by departments....

Question 13

When a company tracks gross profit by department, the sales journal does not have separate columns for Accounts Receivable for each department.

Accepted Answer

A) True 
 B)False

Question 14

When preparing an income statement showing departmental contribution margin:

Accepted Answer

A)  indirect expenses are combined with direct expenses. 
B)  indirect departmental expenses are added to contribution margin. 
C)  direct expenses are subtracted from gross profit of a department. 
D)  None of these answers is correct. 
A)  indirect expenses are combined with direct expenses. 
B)  indirect departmental expenses are added to contribution margin. 
C)  direct expenses are subtracted from gross profit of a department. 
D)  None of these answers is correct.

Question 15

Which of the following would be a direct expense of a sales department?

Accepted Answer

A)  Sales salaries 
B)  Administrative expense 
C)  Advertising expense 
D)  Both A and C 
A)  Sales salaries 
B)  Administrative expense 
C)  Advertising expense 
D)  Both A and C

Question 16

Below is a list of expenses; you are to identify each as either [1] a direct expense or [2] an indirect expense.
-Rent paid for the building of department store. ________

Accepted Answer

The answer of Below is a list of expenses; you...

Question 17

Which allocation base is best used to allocate advertising expense by selling department?

Accepted Answer

A)  Square feet of spaced used 
B)  Gross sales of each department as a percent of total gross sales 
C)  An even split among all selling departments 
D)  Some other method not listed 
A)  Square feet of spaced used 
B)  Gross sales of each department as a percent of total gross sales 
C)  An even split among all selling departments 
D)  Some other method not listed

Question 18

Indirect expenses are allocated to departments based on:

Accepted Answer

A)  decisions of the stockholders. 
B)  directives from customers. 
C)  some reasonable basis, such as percent of sales. 
D)  generally accepted accounting principles. 
A)  decisions of the stockholders. 
B)  directives from customers. 
C)  some reasonable basis, such as percent of sales. 
D)  generally accepted accounting principles.

Question 19

Below is a list of departments; you are to identify each as either [1] a profit center or [2] a cost center.
-The warehouse area for a wholesale club. ________

Accepted Answer

The answer of Below is a list of departments; you...

Question 20

Advertising expense totaled $70,000. If indirect advertising costs are allocated based on gross sales per department, what amount would be allocated to the Jewelry department if $10,000 of advertising is indirect? (Round any percentages two decimal places, X.XX%, and round your final answer to the nearest dollar.) Gross Sales: Jewelry, $50,000; Glassware, $40,000; Watches, $10,000.

Accepted Answer

A)  $3,333 
B)  $5,000 
C)  $35,000 
D)  $16,667 
A)  $3,333 
B)  $5,000 
C)  $35,000 
D)  $16,667

Exam 24: Departmental Accounting

Prepare an income statement showing departmental contribution margin based on the following:

Below is a list of expenses; you are to identify each as either [1] a direct expense or [2] an indirect expense. -Electricity for the stove in a restaurant. ________

Below is a list of departments; you are to identify each as either [1] a profit center or [2] a cost center. -The jewelry department of a major retailer. ________

A direct expense should be traceable to a respective department.

Direct expenses are assigned to departments based on the actual expenses incurred.

On a departmental income statement, contribution margin minus total indirect expenses equals:

The cosmetic department experienced the following revenue and expenses during December: The cosmetic department's contribution margin is:

Sports apparel department's gross profit is $300,000; clothing department gross profit is $300,000; indirect advertising expense is $6,000. Indirect expense charged to the clothing apparel department based on gross profit would be $3,000.

Below is a list of expenses; you are to identify each as either [1] a direct expense or [2] an indirect expense. -Insurance paid on employees working in high risk areas of a machine shop. ________

To calculate departmental gross profit, separate accounts should be set up for Assets, Liabilities, etc., for each department.

Given the following, calculate contribution margin and net income:

From the following, calculate income by departments.

When a company tracks gross profit by department, the sales journal does not have separate columns for Accounts Receivable for each department.

When preparing an income statement showing departmental contribution margin:

Which of the following would be a direct expense of a sales department?

Below is a list of expenses; you are to identify each as either [1] a direct expense or [2] an indirect expense. -Rent paid for the building of department store. ________

Which allocation base is best used to allocate advertising expense by selling department?

Indirect expenses are allocated to departments based on:

Below is a list of departments; you are to identify each as either [1] a profit center or [2] a cost center. -The warehouse area for a wholesale club. ________

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Banking Procedure and Control of Cash

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying, Recording, and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, Plant, Equipment, and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, Dividends, Treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Manufacturing Accounting

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