Accounting Chapter 1

Which of the following statements are true? All costs in a merchandising company are considered to be period costs. Inventoriable costs are expensed in the period in which they are incurred. Classifying a cost a product or period can impact reported profitability. The distinction between product and period costs has more to do with financial accounting than managerial accounting.

Classifying a cost a product or period can impact reported profitability. The distinction between product and period costs has more to do with financial accounting than managerial accounting.

True or false: Virtually all accounting and business problems have clear right or wrong answers.

False

Which of the following is NOT one of the three common types of analytics? Informative Descriptive Predictive Prescriptive

Informative

Which of the following statements are true? When making decisions regarding costs, GAAP rules must be followed. There are many different ways to categorize costs. Costs are treated differently in different situations.

There are many different ways to categorize costs. Costs are treated differently in different situations.

Which of the following is NOT one of the V's of big data? Variety Volume Validity Velocity

Validity

In an attempt to reduce the opportunities for error and fraud, SOX places additional responsibilities on ______.

all managers boards of directors external auditors

Labor costs that can be easily and conveniently traced to specific products are ______ costs.

direct labor

Examples of indirect labor costs include ______.

factory security guards factory supervisors restaurant kitchen managers

Direct materials and direct labor are both ______ costs.

manufacturing

Costs associated with running a business and selling the product as opposed to making it are called _____ costs.

nonmanufacturing or period

Direct materials, direct labor, and manufacturing overhead are all ______ costs.

product

Inventoriable costs is another term for______ costs

product

Managers must conduct a review of the company's internal control system and issue a report of their effectiveness. This was enacted as part of SOX in an attempt to ______.

reduce the opportunity for error and fraud

Which of the following expenses are associated with running the overall business?

general & administrative

The Sarbanes-Oxley (SOX) Act ______.

has many implications for managers was primarily aimed at renewing investor confidence

Companies with strong ethical cultures ______.

have higher productivity than those without such cultures have higher levels of customer satisfaction

If cost data will be used for decision making, it is important to consider ______.

how costs will behave or change

The Sarbanes Oxley Act ______

includes rules that should help employees make ethical decisions

The Sarbanes Oxley Act ______.

includes rules that should help employees make ethical decisions

Costs that differ between decision alternatives are called differential or _____ costs.

incremental

Materials are treated as ______ costs when it is not worth the cost or effort to trace them to specific products.

indirect

Salaries of managers and maintenance personnel are examples of ______ labor costs.

indirect

When classifying costs, ______ costs relate to making a product and ____ costs relate to delivering and selling a produ

manufacturing nonmanufacturing

Factory costs such as cleaning supplies, taxes, insurance, and janitor wages are classified as ______.

manufacturing overhead

Indirect materials and indirect labor are classified as ______.

manufacturing overhead

Costs incurred to get the final product to the customer are known as _____ or selling expenses.

marketing

The distinction between manufacturing and nonmanufacturing costs applies ______.

only to companies that make a physical product

A foregone benefit from choosing one path over another is a(n) _____.

opportunity cost

The difference between ______ costs and ______ costs determines how and when the cost will be matched up against revenue on the income statement.

period product

The continuous, ongoing cycle of management functions include ______.

planning, implementing, and controlling

True or false: A particular cost may be direct or indirect depending on the cost object.

true

True or false: Cost control is a critical concern for most organizations.

true

Costs that remain constant on a per unit basis are called _____ costs.

variable

Which of the following are most likely fixed costs?

Property taxes Administrative salaries Rent

Manufacturing overhead costs include ______.

indirect materials, factory supervisors' salaries, and factory depreciation

A(n) _____ cost will not influence a decision.

irrelevent

Which of the following are marketing or selling expenses? Sales commissions Administrative salaries Sales salaries Advertising

sales commissions sales salaries advertising

Hotels and airlines are examples of _____ companies.

service

Today most public companies issue corporate_______ reports that provide sustainability-related information.

social responsibility

A cost that has already been incurred is called a(n) _____ cost.

sunk

When applied to business, _____ means a company can meet today's needs without sacrificing future generations from meeting their own needs.

sustainability

The Sarbanes-Oxley (SOX) Act focuses on three factors that affect the accounting reporting environment:

Blank 1: opportunity Blank 2: incentives or incentive Blank 3: character

A(n) _______ cost does not change in total and a(n) ______ cost does not change per unit.

fixed variable

Fixed costs ______.

remain constant in total become progressively smaller per unit as the level of activity increases

True statements

A regional sales manager's salary would be a direct cost of the regional office in which the sales manager works. Occupancy costs can be either direct or indirect.

Which of the following statements are true? Most public companies now issue corporate social responsibility (CSR) reports. The sole focus of most business strategies is achieving financial results. Most managers today are driven primarily by economic results. The triple bottom line is a component of sustainability accounting.

Most public companies now issue corporate social responsibility (CSR) reports. Most managers today are driven primarily by economic results. The triple bottom line is a component of sustainability accounting.

Which of the following statements are true? The wages of assembly-line workers are period costs. Period costs are also called inventoriable costs. Nonmanufacturing costs are period costs. Period costs are expensed in the same period in which they are incurred.

Nonmanufacturing costs are period costs. Period costs are expensed in the same period in which they are incurred.

Which of the following statements is true? Product costs "attach" to units of product as they are purchased for resale or produced. Product costs include all costs involved in making and selling a product. GAAP requires all manufacturing costs be treated as product costs. Product costs are always expensed in the same period in which the related products are produced.

Product costs "attach" to units of product as they are purchased for resale or produced. GAAP requires all manufacturing costs be treated as product costs.

The process of discovering and communicating meaningful patterns and insights from data to find more intelligent ways of operating a business is known as_____

analytics

A cost is treated as a direct cost when is it ______.

both possible and reasonable to trace it to a cost object

Nonmanufacturing costs include ______.

company president's salary sales commissions

Direct labor and manufacturing overhead are referred to as _____ costs.

conversion

Direct labor and manufacturing overhead costs are known as ______ costs.

conversion

Any item a manager wants to know the cost of is called a(n) ______.

cost object