These are selected account balances on December 31, 2008.
Land (location of the corporation's office building) $150,000
Land (held for future use) 225,000
Corporate Office Building 900,000
Inventory 300,000
Equipment 675,000
Office Furniture 150,000
Accumulated Depreciation 450,000
What is the net amount of property, plant, and equipment that will appear on the balance sheet?
A. $1,650,000
B. $2,400,000
C. $1,950,000
D. $1,425,000
2) Balance sheet accounts are considered to be __________.
A. permanent accounts
B. nominal accounts
C. temporary stockholders’ accounts
D. capital accounts
3) The major reporting standard for management accounts is __________.
A. the Sarbanes-Oxley Act of 2002
B. generally accepted accounting principles
C. the Standards of Ethical Conduct for Practitioners of Management Accounting and Financial
Management
D. relevance to decisions
4) The first step in activity-based costing is to __________.
A. compute the activity-based overhead rate per cost driver
B. identify the cost driver that has a strong correlation to the activity cost pool
C. assign manufacturing overhead costs for each activity cost pool to products
D. identify and classify the major activities involved in the manufacture of specific products
5) The income statement and balance sheet columns of Pine Company's worksheet reflects the following totals:
Income Statement Balance Sheet

Dr. Cr. Dr. Cr.
Totals $58,000 $48,000 $34,000 $44,000
To enter the net income (or loss) for the period into the above worksheet requires an entry to the
__________.
A. income statement credit column and the balance sheet debit column
B. balance sheet debit column and the balance sheet credit column
C. income statement debit column and the balance sheet credit column
D. income statement debit column and the income statement credit column
6) A company just starting in business purchased three merchandise inventory items at the following prices. First purchase $80; Second purchase $95; Third purchase $85. If the company sold two units for a total of $240 and used FIFO costing, the gross profit for the period would be _____.
A. $75
B. $50
C. $65
D. $60
7) "Generally accepted" in the phrase generally accepted accounting principles means that the principles
__________.
A. have substantial authoritative support
B. have been approved for use by the managements of business firms
C. are proven theories of accounting
D. have been approved by the Internal Revenue Service
8) These are selected account balances on December 31, 2008.
Land (location of the corporation's office building) $100,000
Land (held for future use) 150,000
Corporate Office Building 600,000
Inventory 200,000
Equipment 450,000
Office Furniture 100,000
Accumulated Depreciation 300,000
What is the net amount of property, plant, and equipment that will appear on the balance sheet?
A. $1,100,000
B. $950,000
C. $1,300,000
D. $1,600,000

9) The cost principle is the basis for preparing financial statements because it is __________.
A. relevant and objectively measured, and verifiable
B. the most accurate measure of purchasing power
C. a conservative value
D. an international accounting standard
10) The income statement and balance sheet columns of Pine Company's worksheet reflects the following totals:
Income Statement Balance Sheet
Dr. Cr. Dr. Cr.
Totals $58,000 $48,000 $34,000 $44,000
The net income (or loss) for the period is __________.
A. $10,000 income
B. not determinable
C. $48,000 income
D. $10,000 loss
11) One of Astro Company's activity cost pools is machine setups, with estimated overhead of $150,000.
Astro produces sparklers (400 setups) and lighters (600 setups). How much of the machine setup cost pool should be assigned to sparklers?
A. $60,000
B. $90,000
C. $150,000
D. $75,000
12) What is the preparation of reports for each level of responsibility in the company’s organization chart called?
A. Responsibility reporting
B. Master budgeting analysis
C. Static reporting
D. Exception reporting
13) The standards and rules that are recognized as a general guide for financial reporting are called
__________.
A. operating guidelines

B. generally accepted accounting standards
C. generally accepted accounting principles
D. standards of financial reporting
14) Of the following companies, which one would not likely employ the specific identification method for inventory costing?
A. Antique shop
B. Music store specializing in organ sales
C. Farm implement dealership
D. Hardware store