Kuni Automotive Controller/Office Manager Certification Test

65 Questions | Total Attempts: 65

SettingsSettingsSettings
Automotive Quizzes & Trivia

Questions and Answers
  • 1. 
    Which of the following is appropriately capitalized as a fixed asset?
    • A. 

      HVAC component repair (major component of the unit that affects functionality)

    • B. 

      Re-roofing of the dealership facility

    • C. 

      I-Phones (bulk purchase of 4 at $595 each)

    • D. 

      Special model-year tools for the shop

  • 2. 
    Which of the following statements regarding fixed assets is most accurate?
    • A. 

      The Internal Book is the only book that needs to be reviewed for accuracy and completeness against the current Depreciation Guidelines because it is what gets used for posting in the general ledger.

    • B. 

      All books (Internal, Tax, AMT, State (when applicable) and State AMT (when applicable)) are equally important and must all receive thorough review.

    • C. 

      Estimated useful lives are always consistent between the Internal Book and the Tax Book in FAS.

    • D. 

      Regarding depreciation methods, MF200 is the same as MA200 so it doesn’t matter which one you pick when you set up a new asset.

  • 3. 
    Customer deposits on vehicles are most appropriately recorded in which of the following accounts?
    • A. 

      Contracts-in-Transit or Vehicle Receivables, depending on the nature of the deposit

    • B. 

      In a separate general ledger account that appropriately relates to a current liability line on the financial statement

    • C. 

      Combined in Accounts Payable, set up under separate control numbers

    • D. 

      Prepaid vehicles, as a credit

  • 4. 
    Which of the following best describes the number of days outstanding at which CIT and Vehicle Receivables must be reserved as bad debts, assuming there is no event which would cause immediate write-off?
    • A. 

      5 days

    • B. 

      10 days

    • C. 

      30 days

    • D. 

      45 days

  • 5. 
    Which of the following responsibilities would not be appropriate for the warranty administrator to handle from a segregation of duties standpoint?
    • A. 

      Posting of the credits as received from the manufacturer

    • B. 

      Corresponding with the factory for collection of any differences between claims submitted and claims paid

    • C. 

      Warranty schedule review and journal entry voucher preparation for any differences between claims submitted and claims paid

    • D. 

      Posting of any necessary journal entries to write off rejected claims

    • E. 

      Both a and d above are not appropriate duties for the warranty administrator

  • 6. 
    Who is primarily responsible for submission of RDR’s?
    • A. 

      Finance Managers

    • B. 

      Sales Managers

    • C. 

      Accounting Department

  • 7. 
    A factory incentive should be appropriately recorded as a reduction of cost of sales if it is (choose one):
    • A. 

      Dependent on customer satisfaction

    • B. 

      Tied to facility compliance

    • C. 

      Solely tied to hitting vehicle volume targets

    • D. 

      Dependent on other non-volume performance-related items

  • 8. 
    True or False:  Flooring interest credits should be set up as deferred credits when a vehicle is purchased into inventory and should be recognized into income upon sale of the vehicle to the end customer.
    • A. 

      True

    • B. 

      False

  • 9. 
    True or False:  Differences between factory incentive credit received and the corresponding factory incentive receivable balance per the factory incentive schedule should be written off to delivery expense if the write off occurs in a month subsequent to the corresponding vehicle sale.
    • A. 

      True

    • B. 

      False

  • 10. 
    On June 20, the dealership sells $1200 of parts to an approved customer on credit.  On July 28, it becomes evident that collection of this receivable is unlikely.  As of July 31, the receivable is aged 41 days.  Which of the following statements is true?
    • A. 

      The receivable should not be reserved as a bad debt as of July month-end because it has not yet reached the 90-day aging guideline.

    • B. 

      The receivable should be partially reserved as of July month-end.

    • C. 

      The receivable should be reserved in total as of July month-end.

  • 11. 
    Which of the following best describes when a new vehicle should be stocked into inventory?
    • A. 

      We should always record new vehicles into inventory as they physically arrive at the dealership, so the stock-in date should always match the bill of lading.

    • B. 

      We should always record new vehicles into inventory 10 days in advance of the invoice date, as this is an acceptable estimation of when the vehicle will leave the manufacturer in an FOB shipping point situation.

    • C. 

      We should record new vehicles into inventory when ownership transfers to the dealership, which may differ by manufacturer.

  • 12. 
    The dealership conducts a new vehicle dealer trade with a nearby dealer.  The transportation cost to get the incoming vehicle to our lot was $225.  In addition, the vehicle we are receiving on the dealer trade has pinstripes whereas the vehicle we’re trading out does not.  How should the transportation cost and the dealer trade difference related to the pinstriping be accounted for on our books?
    • A. 

      Record the transportation cost to the inventory cost of the incoming vehicle; record the pinstriping cost difference to delivery expense.

    • B. 

      Record both items to delivery expense.

    • C. 

      Record both items as additions to the inventory cost of the incoming vehicle.

  • 13. 
    Which of the following is true with regard to chrome wheels?
    • A. 

      Chrome wheels installed on a showroom unit that never leave the showroom must be added to the cost of the vehicle on which they were installed.

    • B. 

      Chrome wheels installed on a vehicle inventory unit while in inventory must always be added to the vehicle cost.

    • C. 

      Chrome wheels installed and driven around off the dealership premises on a demo vehicle must be added to the cost of the vehicle on which they were installed.

  • 14. 
    Which of the following are not appropriate additions to the cost of a new vehicle in inventory?
    • A. 

      Gas

    • B. 

      Gift bags

    • C. 

      Removable accessories (i.e. bike racks)

    • D. 

      Advertising photos

    • E. 

      None of the above would be appropriate additions to vehicle cost

  • 15. 
    True or False:  The New Vehicle Inventory schedule must be reconciled to the final physical inventory before calculation of new vehicle LIFO is started.
    • A. 

      True

    • B. 

      False

  • 16. 
    True or False:  In dealer trade transactions, ownership transfer is deemed to occur on the date of the buyer's order, regardless of the vehicle's physical location.
    • A. 

      True

    • B. 

      False

  • 17. 
    True or False:  Vehicle sales to employees should be recorded as regular retail sales.
    • A. 

      True

    • B. 

      False

  • 18. 
    True or False:  Approved wholesalers may be allowed to take delivery of a vehicle as long as they have good credit history and agree to pay within 5 business days.
    • A. 

      True

    • B. 

      False

  • 19. 
    Which of the following items must be confirmed before a vehicle RDR can be submitted?
    • A. 

      Customer name must match between the RDR and the car deal

    • B. 

      The vehicle must have been delivered to the customer

    • C. 

      The date of the RDR must be within the same month the vehicle was sold

    • D. 

      All of the above must be confirmed prior to RDR submission

  • 20. 
    As of October 31, the dealership has one pre-owned unit aged 63 days with a cost of $14,500, one pre-owned unit aged 95 days with a cost of $24,000, and one pre-owned unit aged 125 days with a cost of $23,000.  All of these units are brands "other" than the franchise of the dealership and all of these units remain in used vehicle inventory on October 31st.  Under the revised “Used Vehicle Write-Down Policy”, what would be the month-to-date income statement impact for the write-down of these units on the October financial statement?  NOTE: Assume none of these vehicles were purchased at auction.
    • A. 

      $9,400

    • B. 

      $28,300

    • C. 

      $22,350

    • D. 

      $29,250

  • 21. 
    Which of the following are true with regard to credit and debit card purchases on vehicle sales transactions? (select all that apply)
    • A. 

      Limits may not be imposed on how much a customer can charge

    • B. 

      Credit card payments on vehicle purchases must be disclosed on the sales contract if the contract allows for such disclosure

    • C. 

      The credit card does not need to be presented and swiped, phone-in credit card information is acceptable

    • D. 

      Fees associated with credit card transactions on vehicle purchases may not be charged to the customer and must instead be recorded to cost of sales as the car deal is posted.

  • 22. 
    Which of the following is NOT true with regard to the company’s Intercompany Vehicle Sales policy?
    • A. 

      Selling dealerships have until a used vehicle is 90 days aged to determine whether it will be sold to another Kuni dealership and to complete the sale.

    • B. 

      Intercompany vehicle sales must be valued at MMR (Manheim Market Report) value, as obtained using V-Auto, at the selling dealership’s location.

    • C. 

      A printout supporting the V-Auto MMR value must be attached to the buyer’s order and must be maintained in both the deal jacket of the selling dealership and the inventory jacket of the purchasing dealership.

    • D. 

      For accounting purposes, the transaction is considered a sale on the date indicated on the buyer's order which is signed and dated by both dealerships.

  • 23. 
    True or False:  On intercompany vehicle sales, vehicle aging starts over for the purchasing dealership as of the date of the signed buyer’s order.
    • A. 

      True

    • B. 

      False

  • 24. 
    True or False:  If a deferred down payment is disclosed as a cash down payment on the sales contract, the dealership must have the cash before the contract can be submitted for funding.
    • A. 

      True

    • B. 

      False

  • 25. 
    In a situation where the dealership purchases a factory part from a competing dealer (instead of directly from the manufacturer) and the price of that part is $210 when purchased from the competitor whereas it would have cost $200 if purchased directly from the manufacturer, how should the $10 price difference be accounted for?
    • A. 

      The part should be added into parts inventory at the actual price of $210, regardless of the factory cost

    • B. 

      The part should be added into parts inventory at $200 (the factory cost), with the additional $10 being recorded to the Parts Inventory Adjustment account

    • C. 

      Either way is fine, there is no consequential effect

Back to Top Back to top