AC 1 CNOW Assignment

Which group of accounts is composed of only assets?

Accounts Receivable, Revenue, Cash b.Prepaid Expenses, Buildings, Patents c.Unearned Revenues, Prepaid Expenses, Cash d.Cash, Accounts Payable, Buildings

Resources owned by a business are known as

assets

The balance of an account is determined by

a.adding all of the debits, adding all of the credits, and then subtracting the smaller sum from the larger sum

Accounts

a.are records of increases and decreases in individual accounting equation elements

Assets are

a.financed by the stockholders and/or creditors

The stockholders' equity will be reduced by all of the following except

a.revenues

An example of a period cost is

advertising expense

Which of the following is an example of a cost that varies in total as the number of units produced changes?

b.direct materials cost

Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as

b.factory overhead cost

Accounts are classified in the ledger

b.in accordance with their appearance in the financial statements

Which of the following is not an example of a cost that varies in total as the number of units produced changes?

b.insurance premiums on factory building

The rights of owners in a corporation are referred to as

b.stockholder's equity

Debts owed by a business are referred to as

Liabilities

Which of the following statements is not true about liabilities?

a.Account titles of liabilities often include the term "payable." b.Cash received before a service is performed creates a liability. >c.Liabilities include accumulated depreciation. d.Liabilities are debts owed to outsiders.

Which of the following describes the behavior of a variable cost per unit?

a.It remains constant with changes in the activity level.

Which of the following is true about T accounts?

a.The left side of a T account is called the debit side.

A cash payment is recorded in the cash account as

a.a credit

Accounting designed to meet the needs of decision makers inside the business is

d.managerial accounting

The chart of accounts is designed to

d.meet the information needs of a company's managers and other users of its financial statements

Which of the following manufacturing costs is an indirect cost of producing a product?

d.oil lubricants used for factory machinery

Period costs include

d.operating costs that are shown on the income statement in the period in which they are incurred

For purposes of analysis, mixed costs are

d.separated into their variable and fixed cost components

Which are the parts of the T account?

d.title, debit side, credit side

Which side of the account increases the cash account?

debit

Another term for factory overhead is

factory burden

All of the following would be reported on the balance sheet as current assets except

factory overhead

Costs that remain constant in total dollar amount as the level of activity changes are called ________ costs.

fixed

Which of the following individuals are charged with the responsibility for directing the day-to-day operations of a business?

managers

Which of the following terms is used to describe the process of developing the organization's objectives and translating those into courses of action?

planning

The graph of a variable cost when plotted against its related activity base appears as a

straight line

All of the following are general-purpose financial statements except

c.cash budget

A product cost is

d.expensed in the period the product is sold

The accounting equation may be expressed as

b.Assets - Liabilities = Stockholders' Equity

Which of the following accounts is a stockholders' equity account?

b.Common Stock

Which statement(s) concerning cash is (are) true?

b.cash is increased with a debit

Liabilities are reported on the

balance sheet

Which of the following must be true in order for materials to be classified as direct materials?

a.They must be an integral part of the finished product and be a significant portion of the total product cost.

The three most common cost behavior classifications are

a.fixed costs, variable costs, and mixed costs

A financial statement user would determine if a company was profitable or not during a specific period of time by reviewing the

a.income statement

All of the following are examples of indirect labor except

a.machine operators

The primary goal of managerial accounting is to provide information to

a.management

Which of the following is the primary criterion for the preparation of managerial accounting reports?

a.manager needs

A cost that has characteristics of both a variable cost and a fixed cost is called a

a.mixed cost

Which of the following is not a prime cost?

a.plant janitor's wages

Insurance expense incurred on a factory building would be treated as a

a.product cost

Which of the following activity bases would be the most appropriate for gasoline costs of a delivery service?

a.total miles driven

Which of the following is an example of direct materials cost for an automobile manufacturer?

b.cost of interior upholstery

>Which of the following is an example of direct labor cost for a cell phone manufacturer?

b.cost of wages of assembly worker

Which of the following describes the behavior of the fixed cost per unit?

b.decreases with increasing production

Which of the following costs are conversion costs?

b.direct labor cost and factory overhead cost

Prime costs are

b.direct materials and direct labor

Which of the following activity bases would be the most appropriate for food costs of a hospital?

b.number of patients who stay in the hospital

An account is said to have a debit balance if

b.the amount of the debits exceeds the amount of the credits

Goods that are partially completed by a manufacturer are

b.work in process inventory

Which of the following financial statements reports information as of a specific date?

balance sheet

Four financial statements are usually prepared for a business. The statement of cash flows is usually prepared last. The statement of stockholders' equity (SSE), the balance sheet (B), and the income statement (I) are prepared in a certain order to obtain information needed for the next statement. In what order are these three statements prepared?

c.I, SSE, B

On the income statement of a manufacturing company, which of the following replaces purchases in the "Cost of goods sold" section of a retail company?

c.cost of goods manufactured

The cost of wages paid to employees directly involved in the manufacturing process in converting materials into finished products is classified as

c.direct labor cost

Which of the following items would not be classified as part of factory overhead?

c.direct labor used

The financial statement that presents a summary of the revenues and expenses of a business for a specific period of time, such as a month or year, is called a(n)

c.income statement

The debit side of an account

c.is the left side of the account

Which of the following are basic phases of the management process?

c.planning and controlling

Which of the following is an example of a mixed cost?

c.rental costs of $10,000 per month plus $0.30 per machine hour of use

The increases in stockholders' equity attributable to selling services or products to customers are called

c.revenues

Which of the following costs is an example of a cost that remains the same in total as the number of units produced changes?

c.salary of a factory supervisor

If a shareholder wanted to know how money flowed into and out of the company, which financial statement would the shareholder use?

c.statement of cash flows

Which of the following is not an example of a cost that varies in total as the number of units produced changes?

c.straight-line depreciation on factory equipment

The assets section of the balance sheet normally presents assets in

c.the order in which they will be converted into cash or used in operations

A chart of accounts is

c.usually a listing of accounts in financial statement order

A list of the accounts used by a business is called the

chart of accounts

Which of the following terms is used to describe the process of monitoring operating results and comparing actual results with the expected results?

controlling

Of the following, which is true about assets?

d.Assets include both physical and intangible items.

Cost behavior refers to the manner in which a cost

d.changes as the related activity changes

Which of the following terms refers to the cost of changing direct materials into a finished manufactured product?

d.conversion cost

Which of the following is part of factory overhead cost?

d.depreciation of factory equipment and machines

The cost of a manufactured product generally consists of which of the following costs?

d.direct labor cost, direct materials cost, and factory overhead cost

A plant manager's salary is a(n)

d.indirect cost