ACCT 212 FINAL EXAM-LIBERTY UNIVERSITY
WITH ALL CORRECT & VERIFIED ANSWERS
Horizontal Analysis (side-by-side) Correct answer-compare year to year analysis of each account's
dollar amount changes and percentage changes; dollar change=current year minus previous year;
%change= dollar change/previous year
Vertical Analysis of Balance Sheet Correct answer-each item is stated as a percent of total assets.
Vertical Analysis of Income Statement Correct answer-account balance/net sales
ratio analysis Correct answer-the assessment of a firm's financial condition using calculations and
interpretations of financial ratios developed from the firm's financial statements
current ratio Correct answer-current assets/current liabilities
acid-test ratio Correct answer-(Current Assets - Inventory) / Current Liabilities
total asset turnover Correct answer-net sales/average total assets
A/R turnover Correct answer-Sales/Average A/R, net
Days' sales uncollected Correct answer-365 / A/R Turnover
inventory turnover Correct answer-COGS/Average Inventory
debt-to-equity ratio Correct answer-total liabilities/total equity
times interest earned Correct answer-EBIT/ interest expense
profit margin Correct answer-net income/net sales
return on assets Correct answer-net income/average total assets
working capital Correct answer-current assets-current liabilities
fixed costs Correct answer-costs that remain constant as output changes
variable costs Correct answer-costs that vary directly with the level of production
direct costs Correct answer-Costs that can be specifically identified with a particular project or
activity.
indirect costs Correct answer-Costs that cannot be easily and accurately traced to a cost object.
schedule of cost of goods manufactured Correct answer-Direct Materials used
+Direct Labor
+Factory Overhead
=total manufacturing cost
+beginning WIP
-ending WIP
, =COGM
direct labor Correct answer-the work of factory employees that can be physically and directly
associated with converting raw materials into finished goods
indirect labor Correct answer-The labor costs of janitors, supervisors, materials handlers, and other
factory workers that cannot be conveniently traced to particular products.
prime cost Correct answer-Direct Materials + Direct Labor
factory overhead Correct answer-manufacturing costs that are not raw material or direct labor
costs (depreciation, rent, insurance, utilities, etc.)
Inventory to COGS Correct answer-Raw material inventory+purchases-RM used(also called
DM)=ending RM inventory
WIP beginning+DM+DL+FOH-Ending WIP=COGM
Finished Goods+COGM-Ending Finished Goods=COGS
total quality management Correct answer-managing the entire organization so that it excels on all
dimensions of products and services that are important to the customer
process cost Correct answer-the total cost incurred in producing and delivering outputs
job costs Correct answer-customizable
build to order Correct answer-manufacturing a product only when there is an order from a
customer
Predetermined Overhead Rate Correct answer-estimates cost of a job and is calculated by
total estimate overhead/total estimated activity base
raw materials to WIP Correct answer-WIP Inventory $$
RM inventory $$
Direct labor to WIP Correct answer-WIP inventory $$
------S&W Payable $$
Indirect materials to overhead Correct answer-FOH............$$
RM Inv............$$
Indirect labor to FOH Correct answer-FOH $$
S&W Payable $$
FOH to WIP Correct answer-WIP $$
FOH $$
Factory Overhead as an account Correct answer-applied amount (POHR) is a credit and the actual
amount is a debit
If Fac OH is overapplied... Correct answer-Fac OH $$
COGS $$
WITH ALL CORRECT & VERIFIED ANSWERS
Horizontal Analysis (side-by-side) Correct answer-compare year to year analysis of each account's
dollar amount changes and percentage changes; dollar change=current year minus previous year;
%change= dollar change/previous year
Vertical Analysis of Balance Sheet Correct answer-each item is stated as a percent of total assets.
Vertical Analysis of Income Statement Correct answer-account balance/net sales
ratio analysis Correct answer-the assessment of a firm's financial condition using calculations and
interpretations of financial ratios developed from the firm's financial statements
current ratio Correct answer-current assets/current liabilities
acid-test ratio Correct answer-(Current Assets - Inventory) / Current Liabilities
total asset turnover Correct answer-net sales/average total assets
A/R turnover Correct answer-Sales/Average A/R, net
Days' sales uncollected Correct answer-365 / A/R Turnover
inventory turnover Correct answer-COGS/Average Inventory
debt-to-equity ratio Correct answer-total liabilities/total equity
times interest earned Correct answer-EBIT/ interest expense
profit margin Correct answer-net income/net sales
return on assets Correct answer-net income/average total assets
working capital Correct answer-current assets-current liabilities
fixed costs Correct answer-costs that remain constant as output changes
variable costs Correct answer-costs that vary directly with the level of production
direct costs Correct answer-Costs that can be specifically identified with a particular project or
activity.
indirect costs Correct answer-Costs that cannot be easily and accurately traced to a cost object.
schedule of cost of goods manufactured Correct answer-Direct Materials used
+Direct Labor
+Factory Overhead
=total manufacturing cost
+beginning WIP
-ending WIP
, =COGM
direct labor Correct answer-the work of factory employees that can be physically and directly
associated with converting raw materials into finished goods
indirect labor Correct answer-The labor costs of janitors, supervisors, materials handlers, and other
factory workers that cannot be conveniently traced to particular products.
prime cost Correct answer-Direct Materials + Direct Labor
factory overhead Correct answer-manufacturing costs that are not raw material or direct labor
costs (depreciation, rent, insurance, utilities, etc.)
Inventory to COGS Correct answer-Raw material inventory+purchases-RM used(also called
DM)=ending RM inventory
WIP beginning+DM+DL+FOH-Ending WIP=COGM
Finished Goods+COGM-Ending Finished Goods=COGS
total quality management Correct answer-managing the entire organization so that it excels on all
dimensions of products and services that are important to the customer
process cost Correct answer-the total cost incurred in producing and delivering outputs
job costs Correct answer-customizable
build to order Correct answer-manufacturing a product only when there is an order from a
customer
Predetermined Overhead Rate Correct answer-estimates cost of a job and is calculated by
total estimate overhead/total estimated activity base
raw materials to WIP Correct answer-WIP Inventory $$
RM inventory $$
Direct labor to WIP Correct answer-WIP inventory $$
------S&W Payable $$
Indirect materials to overhead Correct answer-FOH............$$
RM Inv............$$
Indirect labor to FOH Correct answer-FOH $$
S&W Payable $$
FOH to WIP Correct answer-WIP $$
FOH $$
Factory Overhead as an account Correct answer-applied amount (POHR) is a credit and the actual
amount is a debit
If Fac OH is overapplied... Correct answer-Fac OH $$
COGS $$
