MSB 201 MID-TERM 2 EXAM WITH COMPLETE QUESTIONS AND VERIFIED ANSWERS

MSB 201 MID-TERM 2 EXAM WITH COMPLETE QUESTIONS AND VERIFIED ANSWERS .Select the best definition of fixed costs. - ANSWERS-Costs that are constant regardless of changes in volume. .What is the basic CVP equation? - ANSWERS-Sales Revenue - Variable Costs - Fixed Costs = Net Income .Given the following information, determine the sales price per unit required at an anticipated sales volume of 15,000 units to achieve a net income of $80,000. They have a total fixed cost of $25,000 and a variable costs ratio of 60%. - ANSWERS-17.5 .Select the example of a product costs. - ANSWERS-Direct Labor Direct Materials Manufacturing Overhead .Which of the following accounts is reported on the income statement? - ANSWERS-Tax Expense .Which ONE of the following statements is TRUE regarding ACCRUAL accounting? - ANSWERS-"Expense" is a measure of economic value consumed .Which of the following does NOT appear on an income statement? - ANSWERS-Interest Payable .Which of the following is NOT presented on the income statement? - ANSWERS-Retained Earnings .The balance sheet embodies which of the following basic accounting equations? - ANSWERS-Assets = Liabilities + Owners Equity .Owners Equity can be defined as: - ANSWERS-Common stock + Retained earnings .If a company's total assets amount to $150,000 and total liabilities and capital contributions amount to $70,000 and $20,000, respectively, then retained earnings must amount to: - ANSWERS-$60,000 .Given the following balances at the end of the year: Liabilities: $22,000 Retained Earnings: $4,000 Capital Stock: $8,000. Determine the total amount of assets: - ANSWERS-$34,000 .What is the effect on the financial statements if a cash dividend is paid to owners? - ANSWERS-Decrease assets and owner's equity, but no effect on liabilities .What is capital? - ANSWERS-Money .What is debt financing? - ANSWERS-Borrowing money from a creditor (i.e., bank) with the expectation that the company will pay them back. The creditor will not own any part of the business. .Which of the following financial statements is shown as of one specific date? - ANSWERS-Balance Sheet .Which of the following is NOT a way financial accounting information is used? - ANSWERS-Breakeven Analysis .Select the TWO critical conditions that must exist for financial statements to be useful. - ANSWERS-Comparability Creditability .What is a bond? - ANSWERS-A loan from an investor to a company or government with the promise of repayment and interest in the future .What is a stock? - ANSWERS-A share of ownership in a company .What is the formula for NPV? - ANSWERS-Sum of all the discounted cash flows - initial investment .Which of the following is a reason that the time value of money is important? - ANSWERS-Investment opportunities