Fundamentals of financial and management accounting Quiz

Fundamentals of financial and management accounting Quiz Answer. In this post you will get Quiz  Answer Fundamentals of financial and management accounting

 

Fundamentals of financial and management accounting Quiz

Offered By ”Politecnico di Milano”

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Week 1 – Quiz 1

1.
Question 1
A company is expecting the following Net Cash Flows for the upcoming three years:

· NCF (1) = 5.000 €

· NCF (2) = 8.000 €

· NCF (3) = 12.000 €

Given a cost of capital of 6%, the NPV (0) is:

1 point

• 25.000 €
• 21.912 €
• 20.990 €
• 22.195 €

2.
Question 2
Which of the following statements is false?

1 point

• The overall community, the state and local governments are examples of stakeholders
• Shareholders’ capital is always remunerated
• Shareholders provide capital inside the company
• Stakeholders are interested in how the company is performing

3.
Question 3
The Net Present Value can be defined as

1 point

• The profit generated by the company
• The sum of discounted profits generated by the company
• The discounted sum of future net cash flows
• The total capital available for the company

4.
Question 4
Which of the following statements regarding a company is true?

1 point

• Companies spend a small amount of time in activities to transform input into output
• Companies are financed by shareholders only
• The company’s core activity is the transformation of input into output
• Companies activities are centred around earning interests from financial investments

 

 

Week 1 – Quiz 2

1.
Question 1
Which of the following requirements about the information provided in Financial Statement is not true?

1 point

• Comparability
• Consistency
• Reliability
• Simplicity

2.
Question 2
The Accounting standards accepted at the international level are called:

1 point

• IAS-IFRS
• IASB
• IASC
• GAAP

3.
Question 3
In December 2013, a company receives a cash payment of 5.000€ for services performed in December 2013 and a cash payment of 15.000€ for services to be performed in January 2014. The company also receives the December utility bill for 800€ that will be paid in January 2014. In December 2013, by adopting an accrual logic, the company would recognize:

1 point

• 15.000 € of revenue and 0 € of expense
• 5.000 € of revenue and 800 € of expense
• 15.000 € of revenue and 800 € of expense
• 5.000 € of revenue and 0 € of expense

4.
Question 4
The financial document that is not defined by adopting an accrual logic is:

1 point

• The cash flow statement
• The statement of changes in equity
• The income statement
• The balance sheet

 

 

Week 2 – Quiz 1

1.
Question 1
Which of the following statement about Shareholders’ equity is not true?

1 point

Shareholders’ equity represents the rights of the owners of the company

Shareholders’ equity is a resource of a company and it represents therefore an asset

Shareholders’ equity is comprised in the “Equity and Liabilities” section of a balance sheet

Shareholders’ equity comprises capital, reserves and profit or loss

2.
Question 2
In January 1st, the company purchases an equipment that will be used for production. The value of the equipment is 50.000€ and it will be depreciated by using a straight-line approach in 10 years starting from the purchasing year. At the end of December of the same year, the company would recognize:

1 point

Equipment (BS) 45.000 € and depreciation (IS) 5.000 €

Equipment (BS) 45.000 € and depreciation (IS) 0 €

Equipment (BS) 50.000 € and depreciation (IS) 0 €

Equipment (BS) 50.000 € and depreciation (IS) 5.000 €

3.
Question 3
At the beginning of 2012, a company purchases an equipment with a value of 20.000€. This equipment has a useful life of 10 years and a straight-line depreciation is applied. At the end of 2014, the fair value of the equipment is 15.000€. By adopting a revaluation model, the company would recognize:

1 point

Equipment (BS) 15.000 € and Revaluation reserve (BS): 1.000

Equipment (BS) 14.000 € and Revaluation reserve (BS): 2.000

Equipment (BS) 14.000 € and Revaluation reserve (BS): 1.000

Equipment (BS) 15.000 € and Revaluation reserve (BS): 2.000

4.
Question 4
During the month of October, three different hats are in stock: hat A (the first to be entered in the warehouse) with a value of 18 €, hat B (the second to be entered in the warehouse) with a value of 20 € and hat C (third entrance) with a value of 15 €. During the same month, two of the three products were sold. By applying a FIFO logic, inventories will be recognized in the BS with a value of:

1 point

20 €

18 €

15 €

17,6 €

 

 

Week 2 – Quiz 2

1.
Question 1
The difference between revenues and cost of sales sold is defined

1 point

Net Profit

Gross Profit

Operating Profit

Operating Cash Flow

2.
Question 2
In April 2014, a company purchases 25.000€ of raw materials that enter in stock. Revenues for the month of April is equal to 0. In the same month, the company receives a cash payment of 40.000 € for a credit of the previous month. The net profit of April 2014 is:

1 point

– 25.000 €

0 €

+ 25.000 €

+ 15.000 €

3.
Question 3
We have the following information about a company during the month of November:

– Initial value of inventories: 5.000€

– Final value of inventories: 8.000 €

In financial statements, the company will recognize:

1 point

Variation of inventories (initial – final) = – 3000€ and inventories (BS) = 8.000€

Variation of inventories (initial – final) = – 3000€ and inventories (BS) = -3.000€

Variation of inventories (initial – final) = – 3000€ and inventories (BS) = 0€

Variation of inventories (initial – final) = – 3000€ and inventories (BS) = 5.000€

4.
Question 4
In the last quarter, our company: distributed 30.000 € of dividends to shareholders, repaid a bank debt of 50.000€, purchased 10.000€ of raw material (to be paid the next quarter) that entered in stock and received a cash of 70.000€ for a trade receivable related to the previous quarter. Net cash and net profit at the end of the quarter are:

1 point

Net Cash -+10.000 € and Net Profit + 70.000 €

Net Cash -10.000 € and Net Profit + 70.000 €

Net Cash -10.000 € and Net Profit + 0 €

Net Cash +10.000 € and Net Profit + 0 €

 

 

Week 3 – Quiz 1

1.
Question 1
Company A is a car manufacturer. Which of the following element is not a product costs?

1 point

Energy to power machine in the production department

Commercial expenses

Machine depreciation

Direct workers

2.
Question 2
Company B produces water and soft drinks. Assume that direct labour is paid on an hourly basis and all the other factory workers are salaried. Classify the Salary of the marketing manager as variable or fixed:

1 point

Fixed

Variable

3.
Question 3
Company B produces water and soft drinks. Assume that direct labour is paid on an hourly basis and all the other factory workers are salaried. Classify Sugar to produce soft drinks as variable or fixed:

1 point

Variable

Fixed

4.
Question 4
Company B produces water and soft drinks. Assume that direct labour is paid on an hourly basis and all the other factory workers are salaried. Classify Wages paid to workers who work on the assembly line as variable or fixed:

1 point

Fixed

Variable

5.
Question 5
Company B produces water and soft drinks. Assume that direct labour is paid on an hourly basis and all the other factory workers are salaried. Classify Machine depreciation as variable or fixed:

1 point

Variable

Fixed

6.
Question 6
Company B produces water and soft drinks. Assume that direct labour is paid on an hourly basis and all the other factory workers are salaried. Classify the cost of food and drink for the annual Christmas party for all factory employees as variable or fixed:

1 point

Fixed

Variable

7.
Question 7
Company C produces bottled apple juice. The following unitary data are available for the month of March:

Fruit: 0.2 €/u

Sugar: 0.05 €/u

Water: 0.05 €/u

Bottle: 0.03 €/u

Production workers: 0.025 €/u

Machinery depreciation: 0,12 €/u

Production department supervisors: 0,03 €/u

Marketing expenses: 0,016€/u

The unitary full manufacturing cost is:

1 point

0,521 €/u

0,505 €/u

0,475 €/u

0,330 €/u

8.
Question 8
During the month of June, company D, a ties manufacture, incurred in the following costs: 20.000 € of administrative costs, 8.000 € of yarn costs, 15.000 € of machine depreciation costs, 40.000 € of direct workers costs and 35.000 € of marketing costs. Overheads of the month are

1 point

118.000 €

63.000 €

70.000 €

55.000 €

 

 

Week 3 – Quiz 2

1.
Question 1
The Job Order Sheet for Job A includes the following data:

1.500 € to cover raw material costs

20.000 € to cover 5.000 hours of direct labour.

Job A has 1.000 units completed in the period.

Given that the company has a predetermined overhead rate of 4 € per direct labour hour, the unitary cost for Job A is:

1 point

21,5 €

25 €

41,5 €

41.500 €

2.
Question 2
Which of the following statements about ABC is false?

1 point

Activity based costing requires the identification of activities for which resources are employed

Activity based costing is more precise than JOC in allocating overheads

Activity based costing do not require to calculate allocation basis and allocation coefficients

Activity based costing involves a two-stage allocation process

3.
Question 3
A company produces apple and orange juices. The following data are available:

Apple Orange
Quantity (u) 200 600
Production time (min/u) 1 2
Fruit (€/u) 0,2 0,3
Sugar (€/u) 0,05 0,2
Water (€/u) 0,05 0,05
Bottle (€/u) 0,03 0,01
Production works (€/u) 0,02 0,05
In addition the company incurred in production department supervisory costs for 35.000 € and machine depreciation costs for 14.000€. What is the total portion of overheads assigned to both apple and orange juices?

1 point

5.000 € to apple juices and 35.000 € to orange juices

7.000 € to apple juices and 42.000 € to orange juices

12.250 € to apple juices and 36.750 € to orange juices

2.000 € to apple juices and 12.000 € to orange juices

4.
Question 4
A textile company produces ties and scarfs. The cost controller is now struggling on how to allocate 120.000 € of commercial costs between the two products. He has collected some data. People in the commercial department spend 45% of time to manage orders, 15% of time to manage complains and the remaining time to manage invoices. Data about the production of the period are the following:

Ties Scarfs
Quantity (u) 1200 3500
N. of managed orders (u) 800 2500
N. of managed complaints (u) 35 10
N. of managed invoices (u) 780 2220

The manager finally decides to adopt an ABC approach to allocate commercial costs between the two production lines. The value of the overhead assigned to ties and scarfs will be:

1 point

abc cannot be applied

ties 30.000 € and scarfs 90.000 €

ties 30.638 € and scarfs 89.362 €

ties 39.571 € and scarfs 80.429 €

 

 

Week 4 – Quiz 1

1.
Question 1
Which of the following decisions is an investment decision?

1 point

Purchasing of additional raw material to place in stock

Purchasing of an additional equipment to introduce a new product line

Outsourcing of an additional quantity of production

Dismissal of a business segment

2.
Question 2
Investment decisions are evaluated by calculating:

1 point

Net Profit

NPV

OCF

EBIT

3.
Question 3
Which of the following sentence about investment appraisal is false?

1 point

Investment appraisal requires unbundling independent projects and bundling complementary projects

The value tree is a useful approach to qualitatively analyze impacts of an investment decision on NPV

NPV calculation is the first step to investment appraisal

Non mandatory investments give the possibility to consider the situation “not to invest” as an alternative

 

 

 

Week 4 – Quiz 2

1.
Question 1
A company recognized the following information for the year 2013: 650.000€ of revenue, 200.000 € of raw material costs, 120.000€ of personnel costs, 75.000€ of service costs, 20.000€ of depreciation and amortization. Given this information, cash flow gross operating is

1 point

415.000 €

235.000 €

255.000 €

650.000 €

2.
Question 2
A company is evaluating the variance of operating working capital (OWC) at a given year. The following information are available:

– Additional Revenues : 1.200.000 € (constant over the year)

– Time for receivables collection: 4 months

– Additional operating costs: 600.000 (constant over the year)

– Time for payables payment: 2 months

– Inventories: 10% of revenues

The production starts at the beginning of the year and therefore no initial inventories, payables or receivables are recognized. OWC at the end of the year is:

1 point

+ 620.000 €

+ 420.000 €

+ 600.000 €

– 420.000 €

3.
Question 3
Assume that an investment generates 80.000 € of revenues, 40.000€ of personnel costs, 25.000 € of raw material and 20.000 € of depreciation and amortization. Given a tax rate of 40%:

1 point

CF gross operating is 15.000€ and CF net operating is 6.000 €

CF gross operating is -5.000€ and CF net operating is -2.000 €

CF gross operating is -5.000€ and CF net operating is 17.000 €

CF gross operating is 15.000€ and CF net operating is 17.000 €

4.
Question 4
An investment of 650.000€ is financed for the 60% by shareholders and for the remaining part by banks at a cost of 8%. At the end of the first year, the CF generated is of 14.000 €. The cost of shareholders capital is 12%. Adopting an invested capital logic:

1 point

cost of capital will be 10,40% and Cash Flow 14.000 €

cost of capital will be 12% and Cash Flow – 6.800 €

cost of capital will be 12 % and Cash Flow 14.000 €

cost of capital will be 10,40% and Cash Flow – 6.800 €

 

 

Week 5 – Quiz 1

1.
Question 1
Which of the following descriptions is not a short-term decision?

1 point

Outsourcing of production

Production of additional 1000 units

Acquisition and implementation of a new software to manage customers

Definition of the new selling price

2.
Question 2
A company is evaluating the feasibility of organizing a Christmas party to present the new product line to customers. The following information about the party are available: 1.200 expected customers, 2.000€ of food costs, 3.500€ of drink costs, 1.000€ of orchestra costs and 2500€ of commercial costs. Food and drink will be provided by an external catering, orchestra costs will be paid after the event while commercial costs relate to a company employee who is in charge of managing customers on a seasonal basis. Which of the following costs is a sunk cost?

1 point

None of the above

Commercial costs

Orchestra costs

Food and drink costs

3.
Question 3
A company is a T-shirts producer that target casual wearing teenagers. It is currently evaluating the profitability of the upcoming weeks. These data have been collected: 80.000 units of expected sale, direct material costs of 3€/u and direct labour costs of 4€/u. Depreciation of the analysed period is 50.000€ and marketing costs of 60.000€. T–shirts will be sold at 10 €/u. The unitary contribution margin and net operating income are:

1 point

7€ of unitary contribution margin and 130.000 € of NOI

7€ of unitary contribution margin and 190.000 € of NOI

3€ of unitary contribution margin and 190.000 € of NOI

3€ of unitary contribution margin and 130.000 € of NOI

4.
Question 4
Which of the following statements is false:

1 point

Short-term decisions are evaluated by calculating contribution margin and NOI

Short term decisions impact one on a time horizon of one year or less

Short-term decisions require assets investments

Short-term decisions do not require to discount cash flows

 

 

 

Week 5 – Quiz 2

1.
Question 1
A company produces a single product with a price of 18€/u, variable costs per unit of 14€ and fixed costs of 8.000€. Astoria’s Break Even Point is

1 point

250 u

Cannot be determined with the given information

2.000 u

2.500 u

2.
Question 2
The sweet company realizes breakfast biscuits. The selling price for a package is 4€/u, unitary package costs are 1,5€/u of direct material and 2€/u per direct labour. In addition, 8.000 € of fixed costs have been incurred. If the company wants to achieve a NOI of 10.000 €, it should be able to sell:

1 point

2.000 u

5.142 u

36.000 u

16.000 u

3.
Question 3
The following data are available about the production process of a company: 530.000€ of direct material costs, 95.000€ of direct labour costs, 130.000€ of variable ovh and 455.000€ of fixed ovh. The company needs to produce 60.000 u. It is currently evaluating the outsourcing alternative. The purchasing price of the finished product from an external supplier is 14€/u. In case of “buy”:

1 point

The increase of income will be of + 85.000 €

The decrease of income will be of – 85.000 €

The increase of income will be of + 155.000 €

The decrease of income will be of – 155.000 €

4.
Question 4
A company realizes three different products. Data about the production are the following

Prod A Prod B Prod C
Quantity (u) 1000 1200 1500
p (€/u) 25 25 20 18
vc (€/u) 12 14 6
production time (min/u) 5 1 4
The production machine has a capacity of 10.000 minutes. Which is the product mix?

1 point

Prod A: 0 u; Prod B: 1.200u; Prod C: 1.500 u

Prod A: 560 u; Prod B: 1.200u; Prod C: 1.500 u

Prod A: 1.000 u; Prod B: 1.000u; Prod C: 1.000 u

Prod A: 1.000 u; Prod B: 1.200u; Prod C: 1.500 u

 

 

 

Final Quiz

1.
Question 1
Which of the following categories of individuals can be considered as shareholders?

1 point

Company employees

Company owners

Company customers

Company suppliers

2.
Question 2
In December 2013, a company sold products for 10.000€ that the customer will pay in 60 days. Moreover, in the same month, the company had a cash payment of 6.000€ for services to be performed in January. On December 31, the company will report:

1 point

Revenue 4.000€ and net cash of -6000€

Revenue 10.000€ and net cash of +6000€

Revenue 10.000€ and net cash of +4.000€

Revenue 10.000€ and net cash of -6.000€

3.
Question 3
A company is collecting data to prepare the Balance Sheet of the year. The collected information so far are the following:

– Bank debts: 76.000€

– Trade receivables: 12.000€

– Equipment: 120.000€

– Shareholders’ capital: 80.000€

– Account payables: 35.000€

– Financial assets: 6.000€

– Provisions: 27.000€

– Cash: 4.000€

Under the heading “third part liabilities” the company will register:

1 point

218.000 €

138.000 €

76.000 €

103.000 €

4.
Question 4
In January 1st, the company purchases a software to improve the customer management. The value of the software is 120.000€ and it will be depreciated by using a straight-line approach in 6 years starting from the purchasing year. At the end of December of the same year, the company would recognize:

1 point

Software (BS) 100.000 € and depreciation (IS) 20.000 €

Software (BS) 120.000 € and depreciation (IS) 0 €

Software (BS) 100.000 € and depreciation (IS) 0 €

Software (BS) 120.000 € and depreciation (IS) 20.000 €

5.
Question 5
In September 2014, a company sold products for 60.000€. During the same month the company purchased direct materials for 22.000€ and 16.000€ of direct labours. Moreover, the initial value of raw material inventories was 3.000€ while the finished value of these material was 2.000. Given these data, at the end of the month, the company will register:

1 point

Gross profit of 25.000€

Gross profit of 21.000€

Gross profit of 22.000€

Gross profit of 17.000€

6.
Question 6
A company makes a product in two qualities, called “basic” and “advanced”. Factory overheads comprise both employees costs for 75.000€ and software costs for 15.000€. Employees devoted the 20% of their time to the activity of sales order processing, 50% of the time to invoice management and the remaining part to customer management. The software is instead equally absorbed by the activities of sales order processing and invoice management. Furthermore, these data are available:

Basic Advanced
Number of processed sales orders 300 170
Number of managed invoices 260 110
Number of managed customers 80 54
If we use an ABC approach, the total overheads assigned to each product will be:

1 point

Basic 58.140€ and Advanced 31.860 €

Basic 45.000€ and Advanced 45.000 €

Basic 174.421€ and Advanced 95.579 €

Basic 59.416€ and Advanced 30.584 €

7.
Question 7
Company XYZ has a batch production process. Overheads of the months are 20.000€. Each month, 2.000 direct labour hours are worked and charges to the produced units. The following data about a specific job are known:

– Direct material costs: 12€

– Direct labour hours absorbed by the job: 3h/u

– Direct labour cost: 8€/h

Overheads are charged to jobs on a direct labour hour basis. What is the full cost of the job?

1 point

Full cost of the job: 46€

Full cost of the job: 50€

Full cost of the job: 30€

Full cost of the job: 66€

8.
Question 8
Bikini is a swimsuits producer, which is now planning sales and production for the upcoming year. The company plans to sell 2.000 swimsuits at 40€ each in the upcoming year. Product costs include:

– Direct material per swimsuit: 8 €/u

– Direct labour per swimsuit: 6 €/u

– Variable overhead per swimsuit: 2,5 €/u

– Total fixed factory overhead: 15.000 €

– Variable selling commission per swimsuit: 2 €/u

– Fixed selling and administrative expenses: 30.000€

By using these data, the company will obtain:

1 point

Unitary contribution margin per swimsuit of 21,5€/u and total contribution margin of 43.000€

Unitary contribution margin per swimsuit of 23,5€/u and total contribution margin of 47.000€

Unitary contribution margin per swimsuit of 26€/u and total contribution margin of 52.000€

Unitary contribution margin per swimsuit of -1€/u and total contribution margin of -2.000€

9.
Question 9
The Bikini company decided to adopt a different approach to manage the production and selling plans for the upcoming years. It decided therefore to calculate the Break-Even Point. Before starting the calculations, some estimations were revised and they are now as follows:

Unitary selling price: 45/u

Direct material per swimsuit: 7 €/u

Direct labour per swimsuit: 4 €/u

Variable overhead per swimsuit: 2 €/u

Total fixed factory overhead: 15.000 €

Variable selling commission per swimsuit: 2 €/u

Fixed selling and administrative expenses: 30.000€

Given this information:

1 point

BEP: 1407u

BEP: 2000u

BEP: 1500u

BEP: 1000u

10.
Question 10
The company Time has just completed the development of a smart watch. This new product is expected to produce annual revenues (constant) of 450.000€ and operating costs (constant) of 310.000€ starting from year 1. To realize the new product, an investment in a new equipment was required. The investment occurred at year 0, its value was of 680.000€ (immediately paid in cash at year 0) and the equipment is expected to be sold at the end of year 5 at 60.000€. The projected life cycle of the smart watch is of 5 years. The 60% of the investment is financed with equity capital (ke:8%), while the remaining part with third parties capital at a cost of 6%. By adopting an invested capital logic:

1 point

NPV: + 80.213 €

NPV: 0 €

NPV: -66.652 €

NPV: -80.213€