Question 1

All of the following are used to compute gross profit except:

Accepted Answer

A) sales. 
B) purchase returns and allowances. 
C) rent expense. 
D) purchases. 
A) sales. 
B) purchase returns and allowances. 
C) rent expense. 
D) purchases. C

Question 2

In a cost center, the manager:

Accepted Answer

A) has the responsibility for controlling costs, but not directly generating revenue. 
B) is not responsible for controlling costs, but is responsible for generating revenue. 
C) is responsible for controlling costs and generating revenue. 
D) None of these answers are correct. 
A) has the responsibility for controlling costs, but not directly generating revenue. 
B) is not responsible for controlling costs, but is responsible for generating revenue. 
C) is responsible for controlling costs and generating revenue. 
D) None of these answers are correct. A

Question 3

Which of the following expenses is the most difficult to allocate to departments?

Accepted Answer

A) Cost of goods sold 
B) Use of general supplies by everyone 
C) Salaries and wages 
D) Merchandise purchases 
A) Cost of goods sold 
B) Use of general supplies by everyone 
C) Salaries and wages 
D) Merchandise purchases B

Question 4

Gross profit by department appears on the:

Accepted Answer

A) balance sheet. 
B) statement of retained earnings. 
C) statement of cash flows. 
D) income statement. 
A) balance sheet. 
B) statement of retained earnings. 
C) statement of cash flows. 
D) income statement.

Question 5

Supporters of the contribution margin approach believe that:

Accepted Answer

A) indirect expenses should be departmentalized. 
B) indirect expenses should not be used for evaluating departmental performance. 
C) indirect expenses are proportionally charged to each department. 
D) direct expenses should not be used in evaluating departmental performance. 
A) indirect expenses should be departmentalized. 
B) indirect expenses should not be used for evaluating departmental performance. 
C) indirect expenses are proportionally charged to each department. 
D) direct expenses should not be used in evaluating departmental performance.

Question 6

Calculate the costume jewelry department net income given the following:

Accepted Answer

A) $1,300 
B) $1,000 
C) $300 
D) ($250) 
A) $1,300 
B) $1,000 
C) $300 
D) ($250)

Question 7

Which of the following is not a direct departmental expense in a sales department?

Accepted Answer

A) Sales salaries 
B) Delivery expense for related items 
C) Advertising for the sales department 
D) All are direct departmental expenses. 
A) Sales salaries 
B) Delivery expense for related items 
C) Advertising for the sales department 
D) All are direct departmental expenses.

Question 8

A indirect expense should be traceable to a respective department.

Accepted Answer

A) True 
 B)False

Question 9

A company has four departments (A, B, C and D)and the net sales are $35,000; $40,000; $60,000 and $25,000 respectively. The cost of goods sold per department are $25,000; $15,000; $40,000 and $15,000 respectively. What department has the highest gross profit?

Accepted Answer

A) A 
B) B 
C) C 
D) D 
A) A 
B) B 
C) C 
D) D

Question 10

Direct expenses, such as salaries, can be traced to a particular department.

Accepted Answer

A) True 
 B)False

Question 11

Departmental accounting requires:

Accepted Answer

A) measuring departmental gross profit. 
B) allocating direct costs to departments. 
C) allocating indirect costs to departments. 
D) None of these answers is correct. 
A) measuring departmental gross profit. 
B) allocating direct costs to departments. 
C) allocating indirect costs to departments. 
D) None of these answers is correct.

Question 12

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 13

In a department store, the men's clothing section would be a(n):

Accepted Answer

A) profit center. 
B) direct expense. 
C) cost center. 
D) indirect expense. 
A) profit center. 
B) direct expense. 
C) cost center. 
D) indirect expense.

Question 14

Trends in the industry, such as advancements in technology, should always be a consideration in determining whether or not a department is eliminated.

Accepted Answer

A) True 
 B)False

Question 15

The photography department in a department store experienced the following revenue and expenses during October:   The photography departmental gross profit on sales is:

Accepted Answer

A) $3,100. 
B) $5,200. 
C) $6,000. 
D) $8,100. 
A) $3,100. 
B) $5,200. 
C) $6,000. 
D) $8,100.

Question 16

An example of a cost center is:

Accepted Answer

A) a Holiday Inn. 
B) the restaurant in a motel. 
C) the administrative department in a motel. 
D) the catering department in a motel. 
A) a Holiday Inn. 
B) the restaurant in a motel. 
C) the administrative department in a motel. 
D) the catering department in a motel.

Question 17

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

Question 18

All of the following are used to compute gross profit except:

Accepted Answer

A) sales. 
B) sales returns and allowances. 
C) accounts receivable. 
D) purchases. 
A) sales. 
B) sales returns and allowances. 
C) accounts receivable. 
D) purchases.

Question 19

A department with sales of $120,000; cost of goods sold of $75,000; and operating expenses of $20,000 has a gross profit of $45,000.

Accepted Answer

A) True 
 B)False

Question 20

The PPC department of Ajax shows gross sales of $730,600 for computer supplies and $934,900 for office supplies. The cost of the computer supplies was $534,000 and the cost of the office supplies was $491,400. Direct expenses were $56,600 for the company and indirect expenses were $75,200. What was the contribution margin for the company?

Accepted Answer

A) $640,100 
B) $583,500 
C) $508,300 
D) $564,900 
A) $640,100 
B) $583,500 
C) $508,300 
D) $564,900

Exam 24: Departmental Accounting

All of the following are used to compute gross profit except:

In a cost center, the manager:

Which of the following expenses is the most difficult to allocate to departments?

Gross profit by department appears on the:

Supporters of the contribution margin approach believe that:

Calculate the costume jewelry department net income given the following:

Which of the following is not a direct departmental expense in a sales department?

A indirect expense should be traceable to a respective department.

A company has four departments (A, B, C and D)and the net sales are $35,000; $40,000; $60,000 and $25,000 respectively. The cost of goods sold per department are $25,000; $15,000; $40,000 and $15,000 respectively. What department has the highest gross profit?

Direct expenses, such as salaries, can be traced to a particular department.

Departmental accounting requires:

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

In a department store, the men's clothing section would be a(n):

Trends in the industry, such as advancements in technology, should always be a consideration in determining whether or not a department is eliminated.

The photography department in a department store experienced the following revenue and expenses during October: The photography departmental gross profit on sales is:

An example of a cost center is:

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

All of the following are used to compute gross profit except:

A department with sales of $120,000; cost of goods sold of $75,000; and operating expenses of $20,000 has a gross profit of $45,000.

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: the Conclusion of the Payroll Process

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, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Manufacturing Accounting

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