Question 1

What is the main difference between the income statement of a manufacturer and that of a merchandiser?

Accepted Answer

In the calculation of cost of goods sold

Question 2

The focus of financial accounting is on an organization's projects,processes,and subdivisions,and the focus of managerial accounting is on the whole organization.

Accepted Answer

A) True 
 B)False

Question 3

_______________ are beliefs that distinguish right from wrong.

Accepted Answer

The answer of _______________ are beliefs that distinguish right from...

Question 4

Just-in-time manufacturing is a system where companies manufacture products only after the orders have been received from customers.

Accepted Answer

A) True 
 B)False

Question 5

An attitude of constantly seeking ways to improve company operations,including customer service,product quality,product features,the production process,and employee interactions,is called:

Accepted Answer

A) Continuous improvement. 
B) Customer orientation. 
C) Just-in-time. 
D) Theory of constraints. 
E) Total quality measurement. 
A) Continuous improvement. 
B) Customer orientation. 
C) Just-in-time. 
D) Theory of constraints. 
E) Total quality measurement.

Question 6

Period costs for a manufacturing company would flow directly to:

Accepted Answer

A) The current income statement. 
B) Factory overhead. 
C) The current balance sheet. 
D) Job cost sheet. 
E) The current manufacturing statement. 
A) The current income statement. 
B) Factory overhead. 
C) The current balance sheet. 
D) Job cost sheet. 
E) The current manufacturing statement.

Question 7

Managerial accounting information:

Accepted Answer

A) Is used mainly by external users. 
B) Involves gathering information about costs for planning and control decisions. 
C) Is generally the only accounting information available to managers. 
D) Can be used for control purposes but not for planning purposes. 
E) Has little to do with controlling costs. 
A) Is used mainly by external users. 
B) Involves gathering information about costs for planning and control decisions. 
C) Is generally the only accounting information available to managers. 
D) Can be used for control purposes but not for planning purposes. 
E) Has little to do with controlling costs.

Question 8

Continuous improvement:

Accepted Answer

A) Is a measure of profits. 
B) Is a measure of costs. 
C) Rejects the notion of "good enough." 
D) Is not applicable to most businesses. 
E) Is possible only in service businesses. 
A) Is a measure of profits. 
B) Is a measure of costs. 
C) Rejects the notion of "good enough." 
D) Is not applicable to most businesses. 
E) Is possible only in service businesses.

Question 9

Whether a cost is controllable or not controllable by an employee is dependent on the employee's level of responsibility.

Accepted Answer

A) True 
 B)False

Question 10

Financial accounting relies on accepted principles that are enforced through an extensive set of rules and guidelines; on the other hand,managerial accounting systems are flexible.

Accepted Answer

A) True 
 B)False

Question 11

___________________________ reveals how much raw materials inventory is available in terms of the number of days' sales.

Accepted Answer

Days' sale

Question 12

A company manufactures coats in a large facility.One area in the production facility is an underused storage space.The company has twice turned down offers to lease out this facility.This situation is an example of what costing concept?
 How should the company handle the costing for this situation?

Accepted Answer

The situation raises an opportunity cost

Question 13

A direct cost is a cost that is:

Accepted Answer

A) Identifiable as controllable. 
B) Variable with respect to the volume of activity. 
C) Fixed with respect to the volume of activity. 
D) Traceable to a cost object. 
E) Sunk with respect to a cost object. 
A) Identifiable as controllable. 
B) Variable with respect to the volume of activity. 
C) Fixed with respect to the volume of activity. 
D) Traceable to a cost object. 
E) Sunk with respect to a cost object.

Question 14

An opportunity cost is:

Accepted Answer

A) An uncontrollable cost. 
B) A cost of potential benefit lost. 
C) A change in the cost of a component. 
D) A direct cost. 
E) A sunk cost. 
A) An uncontrollable cost. 
B) A cost of potential benefit lost. 
C) A change in the cost of a component. 
D) A direct cost. 
E) A sunk cost.

Question 15

Expenditures necessary and integral to the manufacture of finished products are ________________ costs.

Accepted Answer

The answer of Expenditures necessary and integral to the manufacture...

Question 16

Factory overhead includes selling and administrative expenses because they are indirect costs of a product.

Accepted Answer

A) True 
 B)False

Question 17

A company's prime costs total $3,000,000 and its conversion costs total $7,000,000.If direct materials are $1,000,000 and factory overhead is $5,000,000,then direct labor is:

Accepted Answer

A) $4,000,000. 
B) $14,000,000. 
C) $2,000,000. 
D) $1,000,000. 
E) $3,000,000. 
A) $4,000,000. 
B) $14,000,000. 
C) $2,000,000. 
D) $1,000,000. 
E) $3,000,000.

Question 18

Both financial and managerial accounting report monetary information; managerial accounting also reports considerable nonmonetary information.

Accepted Answer

A) True 
 B)False

Question 19

The Ticky Company manufactures tacks.Costs for September were direct labor,$84,000; indirect labor,$36,700; direct materials,$55,900; factory maintenance,$4,800; factory utilities,$3,200; and insurance on plant and equipment,$700.What is Ticky Company's factory overhead for September?

Accepted Answer

The answer of The Ticky Company manufactures tacks.Costs for September...

Question 20

An employee overstates his reimbursable expenses in one period in order to receive needed additional cash.Since he intends to reduce his expenses the next period by the current overstatement,this act is not considered fraudulent.

Accepted Answer

A) True 
 B)False

Exam 18: Managerial Accounting Concepts and Principles

What is the main difference between the income statement of a manufacturer and that of a merchandiser?

The focus of financial accounting is on an organization's projects,processes,and subdivisions,and the focus of managerial accounting is on the whole organization.

_______________ are beliefs that distinguish right from wrong.

Just-in-time manufacturing is a system where companies manufacture products only after the orders have been received from customers.

An attitude of constantly seeking ways to improve company operations,including customer service,product quality,product features,the production process,and employee interactions,is called:

Period costs for a manufacturing company would flow directly to:

Managerial accounting information:

Continuous improvement:

Whether a cost is controllable or not controllable by an employee is dependent on the employee's level of responsibility.

Financial accounting relies on accepted principles that are enforced through an extensive set of rules and guidelines; on the other hand,managerial accounting systems are flexible.

___________________________ reveals how much raw materials inventory is available in terms of the number of days' sales.

A company manufactures coats in a large facility.One area in the production facility is an underused storage space.The company has twice turned down offers to lease out this facility.This situation is an example of what costing concept? How should the company handle the costing for this situation?

A direct cost is a cost that is:

An opportunity cost is:

Expenditures necessary and integral to the manufacture of finished products are ________________ costs.

Factory overhead includes selling and administrative expenses because they are indirect costs of a product.

A company's prime costs total $3,000,000 and its conversion costs total $7,000,000.If direct materials are $1,000,000 and factory overhead is $5,000,000,then direct labor is:

Both financial and managerial accounting report monetary information; managerial accounting also reports considerable nonmonetary information.

The Ticky Company manufactures tacks.Costs for September were direct labor,$84,000; indirect labor,$36,700; direct materials,$55,900; factory maintenance,$4,800; factory utilities,$3,200; and insurance on plant and equipment,$700.What is Ticky Company's factory overhead for September?

An employee overstates his reimbursable expenses in one period in order to receive needed additional cash.Since he intends to reduce his expenses the next period by the current overstatement,this act is not considered fraudulent.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Job Order Costing

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Time Value of Money B

Activity-Based Costing C

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