ACCOUNTING 526 FINAL EXAM QUESTIONS AND CORRECT
ANSWERS (NEWEST 2026)
focuses on how different options affect pertinent revenues and expenses—
ANSWER Incremental Analysis
amount that a course of action is expected to enhance or decrease revenue in
comparison to an alternative ANSWER Relevant Revenue
amount that a course of action is projected to cost more or less than an
alternative - ANSWER Relevant Price
expenses that are not pertinent to a decision and have already been incurred -
ANSWER Sunk Cost
ANSWER Opportunity Cost is the benefit lost by selecting one course of
action over another.
Developing a profitable product requires precise cost estimation early in the
value chain. (Very or Untrue) ANSWER TRUE
Managers using _______________ look to the market to determine a selling
price. ANSWER Target Costs
An example of this is a computer system that was installed last year:
A cost that may be avoided, a cost that is pertinent, a sunk cost, or a differential
cost— ANSWER c.) a sunk cost
At Dos Santos, Inc., employee morale is extremely good. This kind of data is
referred to as:
One is a qualitative factor, and the other is an opportunity cost.
c.) a factor of differentiation
d.) a numerical component The response A qualitative component
What is missed when determining client profitability solely by examining if a
customer's sales income above the cost of products sold? ANSWER : It
disregards all selling and administrative expenses related to customer support
and service.
, Which combination of the following yields pertinent data?
a.) happens later and cannot be prevented.
b.) happens later and can be prevented
c.) happens in the past and can be prevented
d.) has happened in the past and cannot be avoided The response b.) happens
later and can be prevented
The calculation of a ________________ can be used to identify the main means
of disseminating established goals within an organization. ANSWER Budget
What formula is used to determine the production budget? The desired ending
finished goods in units plus the budgeted sales in units equals the beginning
finished goods in units.
The budgeted income statement is created using each of the following budgets,
with the exception of:
Budgets for a.) direct labor; b.) sales; c.) capital expenditures; d.) selling and
administrative; and c.) capital expenditures
a.) Beg Cash Balance + Cash Receipts + Cash from Financing - Cash
Disbursements is the framework for a cash budget.
b.) Net Income - Cash Dividends + Beg Cash Balance
b.) Start Cash Balance + Cash Income - Cash Outlays
The ANSWER to the following question is d.) Beg Cash Balance + Cash
Receipts - Cash Disbursements (+/-) Financing
The budget specifies a particular plan of action for the upcoming time frame,
which is a planning function of the budgeting process. (Very or Untrue) -
ACCEPTABLE
What is the first step in creating the master budget? The response Getting the
sales budget ready
The cash budget aids in planning to guarantee that the company has enough
cash on hand. (Very or Untrue) - ACCEPTABLE
One prepared at a single activity level, usually the activity level used to create
the master budget, is called a ______________________. The response
Budgetary Stability
One that estimates budget dates at various activity levels is called a
_____________________. ANSWER Adaptable Spending Plan
ANSWERS (NEWEST 2026)
focuses on how different options affect pertinent revenues and expenses—
ANSWER Incremental Analysis
amount that a course of action is expected to enhance or decrease revenue in
comparison to an alternative ANSWER Relevant Revenue
amount that a course of action is projected to cost more or less than an
alternative - ANSWER Relevant Price
expenses that are not pertinent to a decision and have already been incurred -
ANSWER Sunk Cost
ANSWER Opportunity Cost is the benefit lost by selecting one course of
action over another.
Developing a profitable product requires precise cost estimation early in the
value chain. (Very or Untrue) ANSWER TRUE
Managers using _______________ look to the market to determine a selling
price. ANSWER Target Costs
An example of this is a computer system that was installed last year:
A cost that may be avoided, a cost that is pertinent, a sunk cost, or a differential
cost— ANSWER c.) a sunk cost
At Dos Santos, Inc., employee morale is extremely good. This kind of data is
referred to as:
One is a qualitative factor, and the other is an opportunity cost.
c.) a factor of differentiation
d.) a numerical component The response A qualitative component
What is missed when determining client profitability solely by examining if a
customer's sales income above the cost of products sold? ANSWER : It
disregards all selling and administrative expenses related to customer support
and service.
, Which combination of the following yields pertinent data?
a.) happens later and cannot be prevented.
b.) happens later and can be prevented
c.) happens in the past and can be prevented
d.) has happened in the past and cannot be avoided The response b.) happens
later and can be prevented
The calculation of a ________________ can be used to identify the main means
of disseminating established goals within an organization. ANSWER Budget
What formula is used to determine the production budget? The desired ending
finished goods in units plus the budgeted sales in units equals the beginning
finished goods in units.
The budgeted income statement is created using each of the following budgets,
with the exception of:
Budgets for a.) direct labor; b.) sales; c.) capital expenditures; d.) selling and
administrative; and c.) capital expenditures
a.) Beg Cash Balance + Cash Receipts + Cash from Financing - Cash
Disbursements is the framework for a cash budget.
b.) Net Income - Cash Dividends + Beg Cash Balance
b.) Start Cash Balance + Cash Income - Cash Outlays
The ANSWER to the following question is d.) Beg Cash Balance + Cash
Receipts - Cash Disbursements (+/-) Financing
The budget specifies a particular plan of action for the upcoming time frame,
which is a planning function of the budgeting process. (Very or Untrue) -
ACCEPTABLE
What is the first step in creating the master budget? The response Getting the
sales budget ready
The cash budget aids in planning to guarantee that the company has enough
cash on hand. (Very or Untrue) - ACCEPTABLE
One prepared at a single activity level, usually the activity level used to create
the master budget, is called a ______________________. The response
Budgetary Stability
One that estimates budget dates at various activity levels is called a
_____________________. ANSWER Adaptable Spending Plan
