Question 1

Which of the following statements is true of financial accounting?

Accepted Answer

A)  It provides information to investors needed for their investment decisions. 
B)  It provides future focused information needed for managing and delegating operations. 
C)  It focuses on detailed reports for parts of the company rather than the whole company. 
D)  It focuses on planning, directing and controlling day-to-day operations. 
A)  It provides information to investors needed for their investment decisions. 
B)  It provides future focused information needed for managing and delegating operations. 
C)  It focuses on detailed reports for parts of the company rather than the whole company. 
D)  It focuses on planning, directing and controlling day-to-day operations.

Question 2

Which of the following statements is true of the flow of product and period costs for a manufacturer?

Accepted Answer

A)  When the manufacturing process is completed, the costs are transferred to the Work-in-Process Inventory account. 
B)  The cost of the finished goods that the manufacturer sells becomes its Cost of Goods Sold on the income statement. 
C)  Period costs remain in inventory accounts on the balance sheet until the product is sold. 
D)  All product costs that have been paid are expensed and reported on the income statement at the end of the accounting period. 
A)  When the manufacturing process is completed, the costs are transferred to the Work-in-Process Inventory account. 
B)  The cost of the finished goods that the manufacturer sells becomes its Cost of Goods Sold on the income statement. 
C)  Period costs remain in inventory accounts on the balance sheet until the product is sold. 
D)  All product costs that have been paid are expensed and reported on the income statement at the end of the accounting period.

Question 3

Repair and maintenance costs of vehicles used to deliver products to customers are product costs.

Accepted Answer

A) True 
 B)False

Question 4

Grant's Ironhorse Company manufactures model railroad cars. At the end of October, 2019 the accounting records showed the following:
 $$\begin{array} { | l | r | r | } 
\hline \text { Inventories: } & { \text { Beginning } } & { \text { Ending } } \
\hline \text { Direct Materials } & \$ 10,000 & \$ 5,000 \
\hline \text { Work-in-Process } & 15,000 & 20,000 \
\hline \text { Finished Goods } & 0& 5,800 \
\hline \text { Other Information: } & &  \
\hline \text { Direct Materials Purchases } & &40,000\
\hline \text { Plant maintenance services } & & 6,800 \
\hline \text { Plant supervisor's salary } & &  31,500  \
\hline \text { Sales salaries } & &12,700  \
\hline \text { Delivery costs } & & 3,100 \
\hline \text { Sales revenue } & & 236,000\
\hline \text { Utilities for plant } & &10,500  \
\hline \text { Rent on plant } & &  23,000 \
\hline \text { Advertising } & &8,000\
\hline \text { Direct labor } & & 30,000  \
\hline
\end{array}$$ (a) Prepare a schedule of cost of goods manufactured for Grant's Ironhorse Company and
(b) Prepare an income statement for Grant's Ironhorse Company for the year ended October 31, 2019

Accepted Answer

The answer of Grant's Ironhorse Company manufactures model railroad cars....

Question 5

You did not understand what the term accrual meant and failed to accrue the interest due at the end of the year on the company's bonds. Which of the IMA standards appears to have been violated?

Accepted Answer

A)  integrity 
B)  confidentiality 
C)  competence 
D)  objectivity 
A)  integrity 
B)  confidentiality 
C)  competence 
D)  objectivity

Question 6

The managerial role that involves the day-to-day running of the business is the ________.

Accepted Answer

A)  directing function 
B)  planning function 
C)  controlling function 
D)  strategic planning function 
A)  directing function 
B)  planning function 
C)  controlling function 
D)  strategic planning function

Question 7

Crabapples, Inc. purchases and sells boxes of dried fruit. The following information summarizes its operating activities for the year: $$\begin{array} { | l | r | } 
\hline \text { Selling Expenses } & \$ 10,000 \
\hline \text { Merchandise Inventory on December 31 } & 32,000 \
\hline \text { Merchandise Inventory on January 1 } & 46,000 \
\hline \text { Purchases of merchandise } & 82,500 \
\hline \text { Rent for store } & 12,700 \
\hline \text { Sales commissions } & 7100 \
\hline \text { Sales revenue } & 168,000 \
\hline
\end{array}$$ What is the cost per box of dry fruits if Crabapples sold 4000 boxes of dry fruit during the year? (Round your answer to the nearest cent.)

Accepted Answer

A)  $8.00 
B)  $42.00 
C)  $32.13 
D)  $24.13 
A)  $8.00 
B)  $42.00 
C)  $32.13 
D)  $24.13

Question 8

Financial accounting prepares reports for internal purposes, whereas managerial accounting provides information to external stakeholders.

Accepted Answer

A) True 
 B)False

Question 9

In a manufacturing plant, indirect materials costs from lubricants and cleaning fluids are product costs.

Accepted Answer

A) True 
 B)False

Question 10

For a manufacturer, rent paid for an office building is an example of a period cost.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following will most likely be considered an indirect material cost for a bakery?

Accepted Answer

A)  spices 
B)  flour 
C)  milk 
D)  eggs 
A)  spices 
B)  flour 
C)  milk 
D)  eggs

Question 12

Fire Cat, Inc. selected cost data for the year are shown below: $$\begin{array} { | l | r | } 
\hline \text { Cost of Goods Manufactured } & \$ 145,500 \
\hline \text { Work-in-Process Inventory, Jan. 1 } & 19,500 \
\hline \text { Work-in-Process Inventory, Dec. 31 } & 22,000 \
\hline \text { Direct Materials Used } & 18,600 \
\hline
\end{array}$$ What is the total of manufacturing costs incurred by Fire Cat, Inc. during the year?

Accepted Answer

A)  $148,000 
B)  $143,000 
C)  $22,900 
D)  $38,100 
A)  $148,000 
B)  $143,000 
C)  $22,900 
D)  $38,100

Question 13

Which of the following would be considered a product cost for a manufacturing company?

Accepted Answer

A)  salary of the sales manager 
B)  salary of the CEO 
C)  salaries of the accounting staff 
D)  salary of the production manager 
A)  salary of the sales manager 
B)  salary of the CEO 
C)  salaries of the accounting staff 
D)  salary of the production manager

Question 14

Identify each cost as a period cost or a product cost.
-Delivery expense

Accepted Answer

A) Period cost 
B) Product cost 
A) Period cost 
B) Product cost

Question 15

Match each term with its correct definition.
-This role requires managers to look to the future.

Accepted Answer

A) Controlling 
B) Managerial accounting 
C) Organizational chart 
D) Planning 
E) Line position
F)Financial accounting
G)Directing 
A) Controlling 
B) Managerial accounting 
C) Organizational chart 
D) Planning 
E) Line position
F)Financial accounting
G)Directing

Question 16

Costs are transferred from the balance sheet to the income statement as cost of goods sold when ________.

Accepted Answer

A)  finished goods are sold 
B)  goods are transferred from the Work-in-Process Inventory account to the Finished Goods Inventory account 
C)  direct materials, direct labor and manufacturing overhead are transferred to the beginning Work-in-Process Inventory account 
D)  the total of Cost of Goods Manufactured is determined 
A)  finished goods are sold 
B)  goods are transferred from the Work-in-Process Inventory account to the Finished Goods Inventory account 
C)  direct materials, direct labor and manufacturing overhead are transferred to the beginning Work-in-Process Inventory account 
D)  the total of Cost of Goods Manufactured is determined

Question 17

Period costs are the ________.

Accepted Answer

A)  product costs that must be paid in the accounting period in which they are incurred. 
B)  operating costs that are expensed in the accounting period in which they are incurred. 
C)  costs related to production of products. 
D)  same as manufacturing overhead costs. 
A)  product costs that must be paid in the accounting period in which they are incurred. 
B)  operating costs that are expensed in the accounting period in which they are incurred. 
C)  costs related to production of products. 
D)  same as manufacturing overhead costs.

Question 18

In a manufacturing company, wages and benefits of assembly line workers are included in manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 19

Viva, Inc. has provided the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Cost of Goods Manufactured } & \$ 1,261,000 \
\hline \text { Beginning Balance - Finished Goods Inventory } & 99,000 \
\hline \text { Ending Balance - Finished Goods Inventory } & 85,000 \
\hline
\end{array}$$ What is the cost of goods sold?

Accepted Answer

A)  $184,000 
B)  $1,275,000 
C)  $1,261,000 
D)  $1,247,000 
A)  $184,000 
B)  $1,275,000 
C)  $1,261,000 
D)  $1,247,000

Question 20

A diagram that shows the relationships between departments and divisions, and the managers that are responsible for each section is called a(n) ________.

Accepted Answer

A)  departmentalization chart 
B)  work specialization chart 
C)  organizational chart 
D)  chain of command chart 
A)  departmentalization chart 
B)  work specialization chart 
C)  organizational chart 
D)  chain of command chart

Exam 16: Introduction to Managerial Accounting

Which of the following statements is true of financial accounting?

Which of the following statements is true of the flow of product and period costs for a manufacturer?

Repair and maintenance costs of vehicles used to deliver products to customers are product costs.

You did not understand what the term accrual meant and failed to accrue the interest due at the end of the year on the company's bonds. Which of the IMA standards appears to have been violated?

The managerial role that involves the day-to-day running of the business is the ________.

Financial accounting prepares reports for internal purposes, whereas managerial accounting provides information to external stakeholders.

In a manufacturing plant, indirect materials costs from lubricants and cleaning fluids are product costs.

For a manufacturer, rent paid for an office building is an example of a period cost.

Which of the following will most likely be considered an indirect material cost for a bakery?

Fire Cat, Inc. selected cost data for the year are shown below: Cost of Goods Manufactured \ 145,500 Work-in-Process Inventory, Jan. 1 19,500 Work-in-Process Inventory, Dec. 31 22,000 Direct Materials Used 18,600 What is the total of manufacturing costs incurred by Fire Cat, Inc. during the year?

Which of the following would be considered a product cost for a manufacturing company?

Identify each cost as a period cost or a product cost. -Delivery expense

Match each term with its correct definition. -This role requires managers to look to the future.

Costs are transferred from the balance sheet to the income statement as cost of goods sold when ________.

Period costs are the ________.

In a manufacturing company, wages and benefits of assembly line workers are included in manufacturing overhead.

Viva, Inc. has provided the following information for the year: Cost of Goods Manufactured \ 1,261,000 Beginning Balance - Finished Goods Inventory 99,000 Ending Balance - Finished Goods Inventory 85,000 What is the cost of goods sold?

A diagram that shows the relationships between departments and divisions, and the managers that are responsible for each section is called a(n) ________.

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Internal Control and Cash

Receivables

Plant Assets, Natural Resources, and Intangibles

Investments

Current Liabilities and Payroll

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Job Order Costing

Process Costing

Cost Management Systems: Activity-Based Just-In-Time

Cost Volume Profit Analysis

Variable Costing

Master Budgets

Flexible Budgets and Standard Cost Systems

Responsibility Accounting and Performance Evaluation

Short-Term Business Decisions

Capital Investment Decisions

Understanding Accounting Information Systems and their Components

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