Question 1

On a departmental income statement, sales less cost of goods sold and direct expenses equals:

Accepted Answer

A) gross margin. 
B) income before taxes. 
C) indirect expenses. 
D) departmental contribution margin. 
A) gross margin. 
B) income before taxes. 
C) indirect expenses. 
D) departmental contribution margin.

Question 2

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 contribution margin on sales. 
D) None of these answers are correct. 
A) indirect expenses are combined with direct expenses. 
B) indirect departmental expenses are added to contribution margin. 
C) direct expenses are subtracted from contribution margin on sales. 
D) None of these answers are correct.

Question 3

Joyful Praises Corporation has total advertising expenses of $84,000: $32,000 for radio advertising and $52,000 for print advertising. The print advertising is allocated to Departments A and B based on net sales generated in each department. Department A has net sales of $558,000 and Department B has net sales of $186,000. How much of the print advertising should be allocated to Department A?

Accepted Answer

A) $13,000 
B) $39,000 
C) $63,000 
D) $21,000 
A) $13,000 
B) $39,000 
C) $63,000 
D) $21,000

Question 4

When a company tracks gross profit by department, the sales journal has separate columns for Sales for each department.

Accepted Answer

A) True 
 B)False

Question 5

The following information is available for Charter Company:
   Complete the following chart to determine the total cost for each department, using the most appropriate method to apportion the indirect costs.

Accepted Answer

The answer of The following information is available for Charter...

Question 6

A company has three departments (A, B, and C)and the net sales are $350,000; $410,000; and $285,000 respectively. The cost of goods sold per department are $295,000; $360,000; and $225,000 respectively. What department has the highest gross profit?

Accepted Answer

A) A 
B) B 
C) C 
D) Both departments A and B 
A) A 
B) B 
C) C 
D) Both departments A and B

Question 7

A maintenance department would be an example of a:

Accepted Answer

A) cost center. 
B) direct expense. 
C) profit center. 
D) None of these answers are correct. 
A) cost center. 
B) direct expense. 
C) profit center. 
D) None of these answers are correct.

Question 8

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. What is the gross profit for each category of the department respectively?

Accepted Answer

A) $730,600 and $934,900 
B) $534,000 and $491,400 
C) $239,200 and $400,900 
D) $196,600 and $443,500 
A) $730,600 and $934,900 
B) $534,000 and $491,400 
C) $239,200 and $400,900 
D) $196,600 and $443,500

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 lowest gross profit?

Accepted Answer

A) A 
B) B 
C) C 
D) both A and D 
A) A 
B) B 
C) C 
D) both A and D

Question 10

The difference between a department's gross profit and its operating expenses is known as the:

Accepted Answer

A) departmental operating margin. 
B) departmental operating cost. 
C) departmental operating income. 
D) departmental gross profit. 
A) departmental operating margin. 
B) departmental operating cost. 
C) departmental operating income. 
D) departmental gross profit.

Question 11

Which of the following would not be considered a direct expense?

Accepted Answer

A) Building expenses 
B) Advertising expense 
C) Administrative expense 
D) All of the above 
A) Building expenses 
B) Advertising expense 
C) Administrative expense 
D) All of the above

Question 12

If the music department in a department store is 8,000 square feet and the total square feet is 40,000, how much of the total building cost of $40,000 will be allocated to music?

Accepted Answer

A) $8,000 
B) $1,000 
C) $32,000 
D) $10,000 
A) $8,000 
B) $1,000 
C) $32,000 
D) $10,000

Question 13

When a department showing a loss is eliminated, other departments will always achieve a greater contribution margin.

Accepted Answer

A) True 
 B)False

Question 14

The photography department in a department store experienced the following revenue and expenses during October:   The photography department's contribution margin is:

Accepted Answer

A) $15,300. 
B) $20,200. 
C) $13,000. 
D) $14,300. 
A) $15,300. 
B) $20,200. 
C) $13,000. 
D) $14,300.

Question 15

From the following, calculate income by departments.

Accepted Answer

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

Question 16

The financial statement(s)that can be broken down by departments would be:

Accepted Answer

A) income statement. 
B) balance sheet. 
C) statement of owner's equity. 
D) All of these answers are correct. 
A) income statement. 
B) balance sheet. 
C) statement of owner's equity. 
D) All of these answers are correct.

Question 17

Indirect expenses are normally:

Accepted Answer

A) subjective and approximate. 
B) assigned by arbitrary methods. 
C) assigned precisely by accepted methods. 
D) overlooked. 
A) subjective and approximate. 
B) assigned by arbitrary methods. 
C) assigned precisely by accepted methods. 
D) overlooked.

Question 18

Which of the following indirect expenses would most likely be allocated on the basis of gross sales?

Accepted Answer

A) Rent expense 
B) Utilities expense 
C) Miscellaneous expense 
D) None of the above 
A) Rent expense 
B) Utilities expense 
C) Miscellaneous expense 
D) None of the above

Question 19

A net income would occur if the contribution margin is less than indirect expenses.

Accepted Answer

A) True 
 B)False

Question 20

Which allocation base is best used to allocate building depreciation?

Accepted Answer

A) Square feet of space used 
B) Number of employees 
C) Hours used 
D) Building depreciation can be separately traced to each department 
A) Square feet of space used 
B) Number of employees 
C) Hours used 
D) Building depreciation can be separately traced to each department

Exam 24: Departmental Accounting

On a departmental income statement, sales less cost of goods sold and direct expenses equals:

When preparing an income statement showing departmental contribution margin:

When a company tracks gross profit by department, the sales journal has separate columns for Sales for each department.

The following information is available for Charter Company: Complete the following chart to determine the total cost for each department, using the most appropriate method to apportion the indirect costs.

A company has three departments (A, B, and C)and the net sales are $350,000; $410,000; and $285,000 respectively. The cost of goods sold per department are $295,000; $360,000; and $225,000 respectively. What department has the highest gross profit?

A maintenance department would be an example of a:

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. What is the gross profit for each category of the department respectively?

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 lowest gross profit?

The difference between a department's gross profit and its operating expenses is known as the:

Which of the following would not be considered a direct expense?

If the music department in a department store is 8,000 square feet and the total square feet is 40,000, how much of the total building cost of $40,000 will be allocated to music?

When a department showing a loss is eliminated, other departments will always achieve a greater contribution margin.

The photography department in a department store experienced the following revenue and expenses during October: The photography department's contribution margin is:

From the following, calculate income by departments.

The financial statement(s)that can be broken down by departments would be:

Indirect expenses are normally:

Which of the following indirect expenses would most likely be allocated on the basis of gross sales?

A net income would occur if the contribution margin is less than indirect expenses.

Which allocation base is best used to allocate building depreciation?

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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