Question 1

At the end of the period, the balance remaining in work in process is reported on the balance sheet.

Accepted Answer

A) True 
 B)False  True

Question 2

Anton believes his company's overhead costs are driven (affected) by the number of machine hours because the production process is heavily automated. During the period, the company produced 3,000 units of Product A requiring a total of 100 machine hours and 2,000 units of Product B requiring a total of 25 machine hours. What allocation rate should be used if the company incurs overhead costs of $10,000?

Accepted Answer

A)  $2 per unit 
B)  $2 per machine hour 
C)  $80 per unit 
D)  $80 per machine hour 
A)  $2 per unit 
B)  $2 per machine hour 
C)  $80 per unit 
D)  $80 per machine hour D

Question 3

Which of the following best represents a characteristic of managerial accounting?

Accepted Answer

A)  Information is historically based and reported annually. 
B)  Information is based on estimates and is bounded by relevance and timeliness. 
C)  Information is regulated by the Securities and Exchange Commission. 
D)  Information is characterized by reliability and objectivity. 
A)  Information is historically based and reported annually. 
B)  Information is based on estimates and is bounded by relevance and timeliness. 
C)  Information is regulated by the Securities and Exchange Commission. 
D)  Information is characterized by reliability and objectivity. B

Question 4

Tucker Company's work in process account decreased by $1,000, while its Finished Goods Inventory account increased by $500. Assuming total manufacturing costs were $5,000, what was the company's cost of goods sold amount?

Accepted Answer

A)  $3,500 
B)  $4,500 
C)  $4,000 
D)  $5,500 
A)  $3,500 
B)  $4,500 
C)  $4,000 
D)  $5,500

Question 5

What is the effect on the balance sheet of recording a $200 cash purchase of raw materials?

Accepted Answer

A)  Assets decrease by $200 and equity decreases by $200. 
B)  Assets and equity do not change. 
C)  Assets increase by $200 and equity increases by $200. 
D)  Assets increase by $200 and equity does not change. 
A)  Assets decrease by $200 and equity decreases by $200. 
B)  Assets and equity do not change. 
C)  Assets increase by $200 and equity increases by $200. 
D)  Assets increase by $200 and equity does not change.

Question 6

A potential negative effect of using a just in time inventory system is the immediate impact of labor strikes on the transportation system such as railroad.

Accepted Answer

A) True 
 B)False

Question 7

The following information relates to Marshall Manufacturing's current accounting period:   Based on this information, what is the company's net income?

Accepted Answer

A)  $40,000 
B)  $70,000 
C)  $30,000 
D)  $42,000 
A)  $40,000 
B)  $70,000 
C)  $30,000 
D)  $42,000

Question 8

Select the correct statement regarding managerial and financial accounting.

Accepted Answer

A)  Users of managerial accounting information desire greater aggregation than do users of financial accounting information. 
B)  Both managerial and financial accounting use economic and physical data in addition to financial data. 
C)  Financial accounting is more highly regulated than managerial accounting. 
D)  Timeliness is more important in financial accounting than in managerial accounting. 
A)  Users of managerial accounting information desire greater aggregation than do users of financial accounting information. 
B)  Both managerial and financial accounting use economic and physical data in addition to financial data. 
C)  Financial accounting is more highly regulated than managerial accounting. 
D)  Timeliness is more important in financial accounting than in managerial accounting.

Question 9

Cost of goods sold is equal to the cost of goods:

Accepted Answer

A)  manufactured minus ending finished goods. 
B)  available for sale minus beginning finished goods. 
C)  available for sale minus ending finished goods. 
D)  manufactured minus beginning finished goods. 
A)  manufactured minus ending finished goods. 
B)  available for sale minus beginning finished goods. 
C)  available for sale minus ending finished goods. 
D)  manufactured minus beginning finished goods.

Question 10

Which of the following statements concerning manufacturing costs is incorrect?

Accepted Answer

A)  All salaries incurred by the sales department are expensed as incurred. 
B)  Direct labor costs are recorded initially in an inventory account. 
C)  Depreciation on manufacturing equipment is a period cost. 
D)  The cost of direct materials can be readily traced to products. 
A)  All salaries incurred by the sales department are expensed as incurred. 
B)  Direct labor costs are recorded initially in an inventory account. 
C)  Depreciation on manufacturing equipment is a period cost. 
D)  The cost of direct materials can be readily traced to products.

Question 11

Product costs are immediately recorded in expense accounts when the products are manufactured.

Accepted Answer

A) True 
 B)False

Question 12

The sequence of activities through which an organization provides products to its customers is called a supply chain.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements is true with regard to product costs versus general, selling, and administrative costs?

Accepted Answer

A)  Product costs associated with unsold units appear on the income statement as general expenses. 
B)  General, selling, and administrative costs appear on the balance sheet. 
C)  Product costs associated with units sold appear on the income statement as cost of goods sold. 
D)  None of these is true. 
A)  Product costs associated with unsold units appear on the income statement as general expenses. 
B)  General, selling, and administrative costs appear on the balance sheet. 
C)  Product costs associated with units sold appear on the income statement as cost of goods sold. 
D)  None of these is true.

Question 14

Managerial accounting systems consider economic and non-financial data as well as financial statement data.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following costs would be classified as a direct cost for a company that produces motorcycles?

Accepted Answer

A)  Rent of manufacturing facility that produces motorcycles 
B)  Seats used in the motorcycles 
C)  Wages of motorcycle assembly workers 
D)  Both seats used in the motorcycles and wages of motorcycle assembly workers are correct. 
A)  Rent of manufacturing facility that produces motorcycles 
B)  Seats used in the motorcycles 
C)  Wages of motorcycle assembly workers 
D)  Both seats used in the motorcycles and wages of motorcycle assembly workers are correct.

Question 16

Which of the following costs is not considered to be a period cost?

Accepted Answer

A)  Warehousing costs 
B)  Depreciation of delivery vehicles 
C)  Salaries paid to company executives 
D)  Freight paid on a purchase of raw materials 
A)  Warehousing costs 
B)  Depreciation of delivery vehicles 
C)  Salaries paid to company executives 
D)  Freight paid on a purchase of raw materials

Question 17

Period costs are initially recorded in asset accounts and are later expensed in the period when the related units are sold.

Accepted Answer

A) True 
 B)False

Question 18

During its first year of operations, Silverman Company paid $14,000 for direct materials and $19,000 for production workers' wages. Lease payments and utilities on the production facilities amounted to $17,000 while general, selling, and administrative expenses totaled $8,000. The company produced 5,000 units and sold 3,000 units at a price of $15.00 a unit. What was Silverman's net income for the first year in operation?

Accepted Answer

A)  $7,000 
B)  $12,000 
C)  $28,000 
D)  $37,000 
A)  $7,000 
B)  $12,000 
C)  $28,000 
D)  $37,000

Question 19

During its first year of operations, Silverman Company paid $14,000 for direct materials and $19,000 for production workers' wages. Lease payments and utilities on the production facilities amounted to $17,000 while general, selling, and administrative expenses totaled $8,000. The company produced 5,000 units and sold 3,000 units at a price of $15.00 a unit. What is the amount of finished goods inventory on the balance sheet at year-end?

Accepted Answer

A)  $10,000 
B)  $20,000 
C)  $4,000 
D)  $15,000 
A)  $10,000 
B)  $20,000 
C)  $4,000 
D)  $15,000

Question 20

The philosophy of encouraging workers to achieve zero defects and high customer satisfaction is known as total quality management.

Accepted Answer

A) True 
 B)False

At the end of the period, the balance remaining in work in process is reported on the balance sheet.

Which of the following best represents a characteristic of managerial accounting?

Tucker Company's work in process account decreased by $1,000, while its Finished Goods Inventory account increased by $500. Assuming total manufacturing costs were $5,000, what was the company's cost of goods sold amount?

What is the effect on the balance sheet of recording a $200 cash purchase of raw materials?

A potential negative effect of using a just in time inventory system is the immediate impact of labor strikes on the transportation system such as railroad.

The following information relates to Marshall Manufacturing's current accounting period: Based on this information, what is the company's net income?

Select the correct statement regarding managerial and financial accounting.

Cost of goods sold is equal to the cost of goods:

Which of the following statements concerning manufacturing costs is incorrect?

Product costs are immediately recorded in expense accounts when the products are manufactured.

The sequence of activities through which an organization provides products to its customers is called a supply chain.

Which of the following statements is true with regard to product costs versus general, selling, and administrative costs?

Managerial accounting systems consider economic and non-financial data as well as financial statement data.

Which of the following costs would be classified as a direct cost for a company that produces motorcycles?

Which of the following costs is not considered to be a period cost?

Period costs are initially recorded in asset accounts and are later expensed in the period when the related units are sold.

The philosophy of encouraging workers to achieve zero defects and high customer satisfaction is known as total quality management.

An Introduction to Accounting

Accounting for Accruals and Deferrals

Accounting for Merchandising Businesses

Internal Controls, Accounting for Cash, and Ethics

Accounting for Receivables and Inventory Cost Flow

Accounting for Long-Term Operational Assets

Accounting for Liabilities

Proprietorships, Partnerships, and Corporations

Financial Statement Analysis

Cost Behavior, Operating Leverage, and Profitability Analysis

Cost Accumulation, Tracing, and Allocation

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Planning for Capital Investments

Filters

Exam 10: An Introduction to Management Accounting

At the end of the period, the balance remaining in work in process is reported on the balance sheet.

Which of the following best represents a characteristic of managerial accounting?

Tucker Company's work in process account decreased by $1,000, while its Finished Goods Inventory account increased by $500. Assuming total manufacturing costs were $5,000, what was the company's cost of goods sold amount?

What is the effect on the balance sheet of recording a $200 cash purchase of raw materials?

A potential negative effect of using a just in time inventory system is the immediate impact of labor strikes on the transportation system such as railroad.

The following information relates to Marshall Manufacturing's current accounting period: Based on this information, what is the company's net income?

Select the correct statement regarding managerial and financial accounting.

Cost of goods sold is equal to the cost of goods:

Which of the following statements concerning manufacturing costs is incorrect?

Product costs are immediately recorded in expense accounts when the products are manufactured.

The sequence of activities through which an organization provides products to its customers is called a supply chain.

Which of the following statements is true with regard to product costs versus general, selling, and administrative costs?

Managerial accounting systems consider economic and non-financial data as well as financial statement data.

Which of the following costs would be classified as a direct cost for a company that produces motorcycles?

Which of the following costs is not considered to be a period cost?

Period costs are initially recorded in asset accounts and are later expensed in the period when the related units are sold.

The philosophy of encouraging workers to achieve zero defects and high customer satisfaction is known as total quality management.

An Introduction to Accounting

Accounting for Accruals and Deferrals

Accounting for Merchandising Businesses

Internal Controls, Accounting for Cash, and Ethics

Accounting for Receivables and Inventory Cost Flow

Accounting for Long-Term Operational Assets

Accounting for Liabilities

Proprietorships, Partnerships, and Corporations

Financial Statement Analysis

Cost Behavior, Operating Leverage, and Profitability Analysis

Cost Accumulation, Tracing, and Allocation

Relevant Information for Special Decisions

Planning for Profit and Cost Control

Performance Evaluation

Planning for Capital Investments

Filters