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