ACCOUNTING BY CHARLES
THOMAS FINAL EXAMS BEST
GRADE A+ YEAR 2025 WITH THE
BEST AND VERIFIED SOLUTION
AND CORRECT ANSWERS
What are traceable fixed expenses? - -answer--a fixed cost that is incurred because
of the existence of the segment and it would be eliminated if the segment were
eliminated
What are common fixed expenses? - -answer--a fixed cost that supports more than
one business segment, but is NOT traceable in whole or in part to any one of the
business segments
How do you calculate contribution margin? - -answer--Sales - Variable expenses
How do you calculate segment margin? - -answer--Segment contribution margin -
traceable fixed costs
How do you calculate variable expense ratio? - -answer--Variable expenses/selling
price
How do you calculate average contribution margin ratio? - -answer--Contribution
margin/sales
What is the break-even point? - -answer--the level of sales at which profit is zero
How do you calculate breakeven in units? - -answer--Total fixed cost/unit
contribution margin
How do you calculate breakeven in dollar sales? - -answer--Total fixed cost/average
contribution margin ratio
What is the margin of safety? - -answer--The excess or budgeted or actual dollar
sales over the break-even sales
How do you calculate unit sales to attain the target profit? - -answer--Target profit +
fixed expenses/ Unit CM
How do you calculate margin of safety in dollar sales? - -answer--Total budgeted (or
actual) sales - Breakeven sales
,How do you calculate margin of safety in % of sales? - -answer--Margin of safety in
dollars/Total budgeted (or actual) sales in dollars
What are some questions the statement of cash flows helps answer? - -answer--
shows how changes in balance sheet accounts and income affect cash and cash
equivalents, and breaks the analysis down to operating, investing and financing
activities
What is cash? - -answer--most liquid asset, standard medium of exchange, basis for
measuring and accounting for all items, current asset
What is a cash equivalent? - -answer--Short term investments of EXCESS cash
Is accumulation depreciation an operating, financing, or investing activity? - -answer-
-Operating Activity
Is accounts receivable an operating, financing, or investing activity? - -answer--
Operating Activity
Is inventory an operating, financing, or investing activity? - -answer--Operating
Activity
Is prepaid expense an operating, financing, or investing activity? - -answer--
Operating Activity
Is accounts payable an operating, financing, or investing activity? - -answer--
Operating Activity
Is accrued liabilities an operating, financing, or investing activity? - -answer--
Operating Activity
Is income taxes payable an operating, financing, or investing activity? - -answer--
Operating Activity
Is common stock an operating, financing, or investing activity? - -answer--Financing
Activity
Is dividends an operating, financing, or investing activity? - -answer--Financing
Activity
What increases a liability? - -answer--Increased by credits
What Increases an asset? - -answer--Increased by debits
What decreases an asset? - -answer--Decreased by credits
What decreases a liability? - -answer--Decreased by debits
Is property, plant, and equipment an operating, financing, or investing activity? - -
answer--Operating Activity
, Is retained earnings a operating, financing, or investing activity? or no label? - -
answer--No label
The left side of the T-account you should add or subtract from net income? - -
answer--Subtract from Net Income
The right side of the t-account you should add or subtract from net income? - -
answer--Add to Net Income
What is segment margin? - -answer--It represents the margin available after a
segment has covered all of its own traceable costs (LONG TERM PROFITABILITY)
What is a segment? - -answer--any part or activity of an organization about which a
manager seeks cost, revenue, or profit data
What is contribution margin? - -answer--the amount remaining from sales revenue
after variable expenses have been deducted
What does the contribution margin show? - -answer--How the contribution margin
will be affected by a change in total sales
How do you calculate change in contribution margin? - -answer--CM ratio x change
in sales
How do you calculate the relationship between profit and the CM ratio? - -answer--
CM ratio x sales - fixed expenses
How do you calculate NOI or NOL? - -answer--Projected sales increase x average
CMR
How do you calculate contribution margin when you have the CMR already? - -
answer--Sales x CMR
How do you calculate break even analysis? - -answer--Sales = Variable cost + fixed
cost
What is the equation method? - -answer--Variable cost + fixed cost + (Target net
profit)
How do you calculate dollar sales to attain the target net profit? - -answer--Target
profit + fixed expenses/CMR
What is operating activity? - -answer--Use of cash. (CASH GOING OUT) activities
and events that affect the determination of net income (comes from daily business
operations)
Current liabilities and current assets are what type of account? - -answer--Working
capital account
THOMAS FINAL EXAMS BEST
GRADE A+ YEAR 2025 WITH THE
BEST AND VERIFIED SOLUTION
AND CORRECT ANSWERS
What are traceable fixed expenses? - -answer--a fixed cost that is incurred because
of the existence of the segment and it would be eliminated if the segment were
eliminated
What are common fixed expenses? - -answer--a fixed cost that supports more than
one business segment, but is NOT traceable in whole or in part to any one of the
business segments
How do you calculate contribution margin? - -answer--Sales - Variable expenses
How do you calculate segment margin? - -answer--Segment contribution margin -
traceable fixed costs
How do you calculate variable expense ratio? - -answer--Variable expenses/selling
price
How do you calculate average contribution margin ratio? - -answer--Contribution
margin/sales
What is the break-even point? - -answer--the level of sales at which profit is zero
How do you calculate breakeven in units? - -answer--Total fixed cost/unit
contribution margin
How do you calculate breakeven in dollar sales? - -answer--Total fixed cost/average
contribution margin ratio
What is the margin of safety? - -answer--The excess or budgeted or actual dollar
sales over the break-even sales
How do you calculate unit sales to attain the target profit? - -answer--Target profit +
fixed expenses/ Unit CM
How do you calculate margin of safety in dollar sales? - -answer--Total budgeted (or
actual) sales - Breakeven sales
,How do you calculate margin of safety in % of sales? - -answer--Margin of safety in
dollars/Total budgeted (or actual) sales in dollars
What are some questions the statement of cash flows helps answer? - -answer--
shows how changes in balance sheet accounts and income affect cash and cash
equivalents, and breaks the analysis down to operating, investing and financing
activities
What is cash? - -answer--most liquid asset, standard medium of exchange, basis for
measuring and accounting for all items, current asset
What is a cash equivalent? - -answer--Short term investments of EXCESS cash
Is accumulation depreciation an operating, financing, or investing activity? - -answer-
-Operating Activity
Is accounts receivable an operating, financing, or investing activity? - -answer--
Operating Activity
Is inventory an operating, financing, or investing activity? - -answer--Operating
Activity
Is prepaid expense an operating, financing, or investing activity? - -answer--
Operating Activity
Is accounts payable an operating, financing, or investing activity? - -answer--
Operating Activity
Is accrued liabilities an operating, financing, or investing activity? - -answer--
Operating Activity
Is income taxes payable an operating, financing, or investing activity? - -answer--
Operating Activity
Is common stock an operating, financing, or investing activity? - -answer--Financing
Activity
Is dividends an operating, financing, or investing activity? - -answer--Financing
Activity
What increases a liability? - -answer--Increased by credits
What Increases an asset? - -answer--Increased by debits
What decreases an asset? - -answer--Decreased by credits
What decreases a liability? - -answer--Decreased by debits
Is property, plant, and equipment an operating, financing, or investing activity? - -
answer--Operating Activity
, Is retained earnings a operating, financing, or investing activity? or no label? - -
answer--No label
The left side of the T-account you should add or subtract from net income? - -
answer--Subtract from Net Income
The right side of the t-account you should add or subtract from net income? - -
answer--Add to Net Income
What is segment margin? - -answer--It represents the margin available after a
segment has covered all of its own traceable costs (LONG TERM PROFITABILITY)
What is a segment? - -answer--any part or activity of an organization about which a
manager seeks cost, revenue, or profit data
What is contribution margin? - -answer--the amount remaining from sales revenue
after variable expenses have been deducted
What does the contribution margin show? - -answer--How the contribution margin
will be affected by a change in total sales
How do you calculate change in contribution margin? - -answer--CM ratio x change
in sales
How do you calculate the relationship between profit and the CM ratio? - -answer--
CM ratio x sales - fixed expenses
How do you calculate NOI or NOL? - -answer--Projected sales increase x average
CMR
How do you calculate contribution margin when you have the CMR already? - -
answer--Sales x CMR
How do you calculate break even analysis? - -answer--Sales = Variable cost + fixed
cost
What is the equation method? - -answer--Variable cost + fixed cost + (Target net
profit)
How do you calculate dollar sales to attain the target net profit? - -answer--Target
profit + fixed expenses/CMR
What is operating activity? - -answer--Use of cash. (CASH GOING OUT) activities
and events that affect the determination of net income (comes from daily business
operations)
Current liabilities and current assets are what type of account? - -answer--Working
capital account
