Question 1

Which of the following costs should be recorded as an expense?

Accepted Answer

A)  Administrative employee salaries 
B)  Depreciation of manufacturing equipment 
C)  Insurance for the factory building 
D)  All of these are expenses. 
A)  Administrative employee salaries 
B)  Depreciation of manufacturing equipment 
C)  Insurance for the factory building 
D)  All of these are expenses.

Question 2

Cost of goods sold must be determined prior to computing cost of goods manufactured.

Accepted Answer

A) True 
 B)False

Question 3

Ringgold Company had beginning finished goods of $36,000. During the period, the company produced goods that cost $150,000. If the ending balance in the Finished Goods Inventory account was $24,000, the amount of cost of goods sold was:

Accepted Answer

A)  $162,000. 
B)  $150,000. 
C)  $138,000. 
D)  none of these. 
A)  $162,000. 
B)  $150,000. 
C)  $138,000. 
D)  none of these.

Question 4

Choose the answer that is not a distinguishing characteristic of financial accounting information.

Accepted Answer

A)  It is global information that reflects the performance of the whole company. 
B)  It is focused primarily on the future. 
C)  It is more concerned with financial data than physical or economic data. 
D)  It is more highly regulated than managerial accounting information. 
A)  It is global information that reflects the performance of the whole company. 
B)  It is focused primarily on the future. 
C)  It is more concerned with financial data than physical or economic data. 
D)  It is more highly regulated than managerial accounting information.

Question 5

Identify the false statement regarding how product costs in a manufacturing company differ from product costs in a service or merchandising company.

Accepted Answer

A)  Both manufacturing companies and service companies incur costs for supplies. 
B)  Manufacturing companies accumulate product costs in inventory accounts, while service companies do not. 
C)  Products of service companies such as restaurants are consumed immediately. 
D)  Most labor costs for merchandising companies are treated as product costs. 
A)  Both manufacturing companies and service companies incur costs for supplies. 
B)  Manufacturing companies accumulate product costs in inventory accounts, while service companies do not. 
C)  Products of service companies such as restaurants are consumed immediately. 
D)  Most labor costs for merchandising companies are treated as product costs.

Question 6

Select the incorrect statement regarding upstream and downstream costs.

Accepted Answer

A)  Companies normally incur significant downstream costs. 
B)  To be profitable, companies must recover the total cost of developing, producing, and delivering products. 
C)  Pricing decisions must consider both upstream and downstream costs in addition to manufacturing costs. 
D)  Upstream and downstream costs are reported as product costs on the income statement. 
A)  Companies normally incur significant downstream costs. 
B)  To be profitable, companies must recover the total cost of developing, producing, and delivering products. 
C)  Pricing decisions must consider both upstream and downstream costs in addition to manufacturing costs. 
D)  Upstream and downstream costs are reported as product costs on the income statement.

Question 7

Select the incorrect statement regarding costs and expenses.

Accepted Answer

A)  Some costs are initially recorded as expenses while others are initially recorded as assets. 
B)  Expenses are incurred when assets are used to generate revenue. 
C)  Manufacturing-related costs are initially recorded as expenses. 
D)  Non-manufacturing costs should be expensed in the period in which they are incurred. 
A)  Some costs are initially recorded as expenses while others are initially recorded as assets. 
B)  Expenses are incurred when assets are used to generate revenue. 
C)  Manufacturing-related costs are initially recorded as expenses. 
D)  Non-manufacturing costs should be expensed in the period in which they are incurred.

Question 8

Which of the following types of labor costs will never flow through the balance sheet?

Accepted Answer

A)  Plant supervision 
B)  Sales commissions 
C)  Material handling 
D)  Assembly labor 
A)  Plant supervision 
B)  Sales commissions 
C)  Material handling 
D)  Assembly labor

Question 9

Because management accountants prepare and analyze financial information used by company decision-makers, they are considered to be at the forefront of Statement of Ethical Professional Practice.

Accepted Answer

A) True 
 B)False

Question 10

Levenworth Company incurs unnecessary costs each period because of the excess quantities of inventory maintained to meet unexpected customer demand. The costs of inventory financing, storage, supervision, and obsolescence could most likely be reduced by which of the following practices?

Accepted Answer

A)  Activity-based costing 
B)  Just-in-time inventory 
C)  Total quality management 
D)  Benchmarking 
A)  Activity-based costing 
B)  Just-in-time inventory 
C)  Total quality management 
D)  Benchmarking

Question 11

Managerial accounting focuses primarily on the performance of the company as a whole.

Accepted Answer

A) True 
 B)False

Which of the following costs should be recorded as an expense?

Cost of goods sold must be determined prior to computing cost of goods manufactured.

Ringgold Company had beginning finished goods of $36,000. During the period, the company produced goods that cost $150,000. If the ending balance in the Finished Goods Inventory account was $24,000, the amount of cost of goods sold was:

Choose the answer that is not a distinguishing characteristic of financial accounting information.

Identify the false statement regarding how product costs in a manufacturing company differ from product costs in a service or merchandising company.

Select the incorrect statement regarding upstream and downstream costs.

Select the incorrect statement regarding costs and expenses.

Which of the following types of labor costs will never flow through the balance sheet?

Because management accountants prepare and analyze financial information used by company decision-makers, they are considered to be at the forefront of Statement of Ethical Professional Practice.

Levenworth Company incurs unnecessary costs each period because of the excess quantities of inventory maintained to meet unexpected customer demand. The costs of inventory financing, storage, supervision, and obsolescence could most likely be reduced by which of the following practices?

Managerial accounting focuses primarily on the performance of the company as a whole.

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

Which of the following costs should be recorded as an expense?

Cost of goods sold must be determined prior to computing cost of goods manufactured.

Ringgold Company had beginning finished goods of $36,000. During the period, the company produced goods that cost $150,000. If the ending balance in the Finished Goods Inventory account was $24,000, the amount of cost of goods sold was:

Choose the answer that is not a distinguishing characteristic of financial accounting information.

Identify the false statement regarding how product costs in a manufacturing company differ from product costs in a service or merchandising company.

Select the incorrect statement regarding upstream and downstream costs.

Select the incorrect statement regarding costs and expenses.

Which of the following types of labor costs will never flow through the balance sheet?

Because management accountants prepare and analyze financial information used by company decision-makers, they are considered to be at the forefront of Statement of Ethical Professional Practice.

Levenworth Company incurs unnecessary costs each period because of the excess quantities of inventory maintained to meet unexpected customer demand. The costs of inventory financing, storage, supervision, and obsolescence could most likely be reduced by which of the following practices?

Managerial accounting focuses primarily on the performance of the company as a whole.

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