Chapter 8 quiz

In the context of managerial accounting, _____ are costs that are incurred as the result of some specific cost object.

direct costs

The members of the Financial Accounting Standards Board (FASB) are appointed by the Securities and Exchange Commission. true or false

false

The _____ summarizes the financial statement that reports the revenues, expenses, and net income that resulted from a firm's operations over a period of time.

income statement

Kahale is an accountant in a communications firm. She prepares financial reports upon request by the management of the firm and does not stick to a predetermined schedule. The reports that she prepares mainly help the internal stakeholders of the firm. Given this information, it can be said that Kahale performs _____.

managerial accounting

In the context of balance sheets, retained earnings are a major component of the _____ section.

owners' equity

Idina, a management accountant in a haircare company, is asked by her manager to calculate the profit or loss earned by the company in a given time period . To get the required data, Idina is most likely to___________.

subtract the company's expenses from its revenue

Common stock is a key owners' equity account for corporations. true or false

true

The net income of a company is calculated by subtracting expenses from revenue. true or false

true

For which scenario would an independent auditor's report offer a qualified opinion ?

If the auditor identifies some minor concerns but believes that on balance the firm's statements remain a fair and accurate representation of the company's financial position

In the context of budget preparation, which of the following is a disadvantage of participatory budgeting?

It can lead to budgetary slack.

In the context of financial accounting, the external stakeholders of a firm__________.

are seldom interested in analyzing detailed accounting information about the individual departments within the firm

The management of Halima, a furniture manufacturing company, comes across a case of employee theft in their inventory. In this case, the company should seek the help of a(n) _____ to look into the matter .

internal auditor

Ebrill Incorporated, a workout equipment manufacturing company, borrows a considerable sum of money as a loan from LRF Bank, a private bank, at a time of financial crisis. The corporation has five years to repay the principal amount along with the interest to the bank. In this scenario, the money that Ebrill Incorporated owes the bank represents its _____.

long term liability

Edalene is a member of the Financial Accounting Standards Board (FASB) and is entrusted with the responsibility of establishing accounting principles in the United States. As a member of the board, Edalene

must sever all ties with any firms or institutions that she served prior to joining the board

Jacop, a managerial accountant in an oven manufacturing company, is asked to calculate the total amount of money the company spends on the wages of its workers and on the payments it makes to its suppliers for raw materials. By finding out the company's total actual expenses, the management can come to a decision on whether or not the company can increase its workers' wages by at least ten percent. In this scenario, Jacop is asked to calculate the company's

out-of-pocket costs