ACCT CH 10 SB

A company recorded a total of $1,200 in depreciation. If $900 is for manufacturing equipment and $300 is for office equipment, a total of $____ will be recorded as an expense

$300

A company recorded a total of $1,200 in depreciation. If $900 is for manufacturing equipment and $300 is for office equipment, a total of $_______will be recorded as an expense.

$300

1.Economic and financial data 2.Primarily financial data and some economic and nonfinancial data 3.Financial and nonfinancial data 4.Primarily nonfinancial data and some financial data matches

1.Investors and creditors 2.Senior executives 3.Middle managers 4.Operating employees

What accounts are affected when a company pays cash for a manufacturing cost?

Cash Inventory

Materials used to make products are usually called ______ materials.

raw

Materials used to make products are usually called __________materials.

raw

Lumber, metals, paints, and chemicals that will be used to make the company's products are all part of ____________inventory.

raw material

Characteristics of financial accounting information include ______.

reliability objectivity consistency

Financial accounting information is ______.

reported periodically, normally at year end

The IMA's overarching ethical principles include ______.

responsibility objectivity fairness honesty

Product costs are expensed when products are ________.

sold

Recognizing depreciation expense on selling and administrative assets affects ______.

total assets on the balance sheet expenses on the income statement

The only reporting restriction for managerial accounting is the - principle.

value added

The only reporting restriction for managerial accounting is the - principle. (Enter only one word per blank.)

value-added

As production occurs, materials used, labor and overhead are first accumulated in ______ inventory.

work in process

At what level is information aggregated in managerial accounting?

Local on subunits of the organization

Which of the following would be included in manufacturing overhead?

Rent on manufacturing facilities Depreciation on manufacturing assets Indirect labor Indirect materials Factory utilities

Which of the following costs are not included in the cost of manufacturing a product?

Research Administrative Marketing

Which of the following would not be included in manufacturing overhead?

Selling and administrative costs Direct materials Depreciation of selling and administrative facilities Direct labor

Indirect costs ______.

cannot be cost-effectively traced to products and services

IMA standards include ______.

competence confidentiality credibility integrity

To help managers analyze manufacturing costs schedule of ________ is prepared.

cost of goods manufactured and sold

IMA members must communicate information fairly and objectively under the standard of

credibility

Financial accounting provides information used primarily by ______.

creditors investors

Managerial accounting information is ______.

delivered on a continuous basis

Raw materials that can be easily and conveniently traced to products are called________ raw materials.

direct

A member of the IMA that fails to comply with the standards may face ______.

disciplinary action

When a company records a cash payment for manufacturing costs, total assets _____.

do not change Reason: This is an asset exchange transaction.

Direct raw materials are ______.

easily and conveniently traced to products

External users (outsiders) rely on ______ data.

economic financial

Managerial accounting provides information used primarily by ______.

employees executives

According to the Statement of Ethical Professional Practice, members must keep information confidential ______

except when disclosure is authorized or legally required

According to the Statement of Ethical Professional Practice, members must keep information confidential ______.

except when disclosure is authorized or legally required

Goods are transferred to cost of goods sold from ______ inventory.

finished goods

Inventory accounts for manufacturers are ______.

finished goods work in process raw materials

According to the IMA Statement of Ethical Professional Practice, when faced with an ethical conflict, members should first ______.

follow his or her organization's established policies

A schedule of cost of goods manufactured and sold is prepared to ______.

help managers analyze manufacturing costs

Diminished motivation, sloppy work and inattentive attitudes are all examples of hidden inventory __________costs.

holding

Recognizing depreciation on manufacturing equipment results in ______.

increased inventory no change to the income statement

Paying production workers with cash ______.

increases inventory decreases cash decreases operating cash flow

General operating costs and selling and administrative costs are generally expensed when ______.

incurred

Costs that cannot be traced to a product or service in a cost-effective manner are called ______ costs.

indirect

Costs that cannot be traced to a product or service in a cost-effective manner are called _________costs

indirect or overhead

IMA members must abstain from engaging in any activity that might discredit the profession under the standard of

integrity

Management accounting information gathering and reporting ______.

is only restricted by the value-added principle

Reduced inventory holding costs and increased customer satisfaction can occur as a result of implementing ______.

just in time

The three costs recognized by GAAP that are incurred in the process of making products are , and

labor materials overhead

Direct labor is ______.

labor cost that can be easily and conveniently traced to products

Indirect costs incurred to make a product, including indirect labor, indirect materials, factory utilities, rent on manufacturing facilities, and depreciation on manufacturing facilities are called

manufacturing overhead

Indirect costs incurred to make a product, including indirect labor, indirect materials, factory utilities, rent on manufacturing facilities, and depreciation on manufacturing facilities are called ______.

manufacturing overhead

Just-in-time inventory ______.

minimizes inventory holding costs by making products just in time for customer consumption

When compared to financial accounting, managerial accounting uses ______.

more estimates and fewer facts

Internal users (insiders) primarily rely on ______ data.

non-financial financial

Inventory holding costs include _______.

obsolescence diminished motivation warehouse space financing

According to the IMA Statement of Ethical Professional Practice, when faced with an ethical conflict, communicating the problems to authorities or individuals outside the organization is ______.

only appropriate if there is a clear violation of law

Resources other than materials and labor that are used in manufacturing a product are called ______ costs.

overhead

Resources, such as equipment and utilities, consumed in the process of manufacturing a product are called

overhead

Selling, general and administrative costs are sometimes called ______ costs.

period

If a company incurs $2,000 in manufacturing costs to produce 1,000 units, the average cost per unit is $

$2

If a company incurs $4,000 in manufacturing costs to produce 200 units, the average cost per unit is

$20

How do product costs flow through the financial statements?

Added to the inventory account when incurred and expensed on the income statement when the inventory is sold.

The primary organization responsible for developing accounting rules is the

FASB

The primary organization responsible for developing accounting rules is the__________ . (Enter the organization's acronym.)

FASB

Which organization is primarily responsible for creating GAAP?

FASB

Which organization is primarily responsible for developing accounting rules?

FASB

What are the three categories of inventory for a manufacturing company?

Finished goods Work in process Raw materials

The pronouncements and practices that guide accountants as to how to report financial information are referred to as_______ . (Use acronym).

GAAP

At what level is information aggregated in financial accounting?

Global on the company as a whole

Identify the costs that are included in manufacturing a product.

Overhead Labor Materials

Managerial Accounting Financial Accounting

Past, present, and future Past only, historically based

Cost that are expensed as soon as they are incurred are called ______costs.

Period

Which of the following statements is correct?

Production wages are recorded as inventory and salaries to selling and administrative employees are expensed as incurred.

Production workers' salaries are not expensed because the cash paid to the workers is used to produce inventory, not revenue.

True

True or false: Initially classifying a cost as a product cost, delays but does not eliminate its recognition as an expense.

True

True or false: Salaries paid to selling and administrative employees are accounted for differently than wages paid to production workers.

True