ACCT EAXAM 1

1. __________ are identified with and can be traced to a cost object. a. Direct costs b. Factory overhead costs c. Indirect costs d. None of these choices are correct.

a. Direct costs

2. __________ cannot be identified with or traced to a cost object. a. Direct costs b. Prime costs c. Indirect cost d. None of these choices are correct.

c. Indirect cost

4. Which of the following are ways by which managerial accounting provides information and reports for managers to use in operating the business? a. Managerial accounting provides the cost of manufacturing a product, which can be used to determine its selling price. b. Managerial accounting allows for comparing the costs of manufacturing products over time and can be used to monitor and control the cost of direct materials, direct labor, and factory overhead. c. Performance reports allow management to identify any large amounts of scrap materials or employee downtime. d. All of these choices are correct.

d. All of these choices are correct.

Journalizing the entry for a job completed would include a debit to a. Finished Goods b. Work in Process c. Factory Overhead d. Cost of Goods Sold

a. Finished Goods

Which of the following is the most useful in analyzing companies of different sizes? a. common-sized financial statements b. comparative statements c. audit report d. price-level accounting

a. common-sized financial statements

If the amount of factory overhead cost incurred exceeds the amount applied, the factory overhead account will have a a. credit balance and be underapplied b. debit balance and be underapplied c. debit balance and be overapplied d. credit balance and be overapplied

b. debit balance and be underapplied

The cost of a manufactured product generally consists of which of the following costs? a. direct labor cost and factory overhead cost only b. direct labor cost, direct materials cost, and factory overhead cost c. direct materials cost and direct labor cost only d. direct materials cost and factory overhead cost only

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

2. The process by which managers run day-to-day operations is called ________.a. planning b. directing c. executing d. None of these choices are correct.

b. directing

3. __________ consist of selling and administrative costs .a. Direct costs b. Prime costs c. Period costs d. Indirect Costs.

c. Period costs

Which of the following costs is included in finished goods inventory? a. factory overhead b. direct materials c. direct labor d. all of these choices

d. all of these choices

Which of the following is used to evaluate a company's ability to pay its current liabilities? a. quick ratio b. working capital c. current ratio d. all of these choices

d. all of these choices

Financial accountants would prepare which of the following reports? a. performance report identifying amounts of scrap b. sales report targeting monthly sales and potential bonuses c. control report comparing direct material usage over time d. annual report for external regulators such as the SEC

d. annual report for external regulators such as the SEC

Which of the following is part of factory overhead cost? a. sales commissions b. direct materials used c. depreciation of sales-person's vehicle d. depreciation of factory equipment and machines

d. depreciation of factory equipment and machines

1. All of the following are considered phases of the management process except ________.a. planning b. directing c. controlling d. executing

d. executing

A plant manager's salary is a(n) a. indirect cost b. direct cost and an indirect cost c. period cost d. direct cost

a. indirect cost

A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that tota factory overhead costs would be $330,500 and direct labor hours would be 44,500. Actual manufacturing overhead costs incurred were $311,600, and actual direct labor hours were 50,800. The journal entry to apply the factory overhead costs for the year would include a a. credit to Factory Overhead for $377,444 b. debit to Factory Overhead for $311,600 c. debit to Factory Overhead for $377,444 d. credit to Factory Overhead for $330,500

a. credit to Factory Overhead for $377,444

Question Content Area In job order costing, the journal entry for the flow of direct materials into production consists of a a. debit to Work in Process and a credit to Materials b. debit to Factory Overhead and a credit to Materials c. debit to Work in Process and a credit to Supplies d. debit to Materials and a credit to Work in Process

a. debit to Work in Process and a credit to Materials

In job order costing, the journal entry for the flow of direct labor costs into production consists of a a. debit to Work in Process and a credit to Wages Payable b. debit to Finished Goods and a credit to Wages Payable c. debit to Factory Overhead and a credit to Wages Payable d. debit to Factory Overhead and a credit to Work in Process

a. debit to Work in Process and a credit to Wages Payable

Which of the following is the primary criterion for the preparation of managerial accounting reports? a. manager needs b. cost of the reports c. timing of the reports d. relevance of the reports

a. manager needs

Which of the following is most associated with financial accounting reports? a. prepared in accordance with GAAP b. can be prepared for the entity or segment c. can have both objective and subjective information d. can be prepared periodically, or as needed

a. prepared in accordance with GAAP

The current ratio is a. used to evaluate a company's liquidity and short-term debt-paying ability b. computed by subtracting current liabilities from current assets c. computed by dividing current liabilities by current assets d. a solvency measure that indicates the margin of safety for bondholders

a. used to evaluate a company's liquidity and short-term debt-paying ability

An analysis in which all of the components of an income statement are expressed as a percentage of sales is a a. vertical analysis b. solvency analysis c. liquidity analysis d. horizontal analysis

a. vertical analysis

The relationship of $325,000 to $125,000, expressed as a ratio, is a. 0.45 b. 2.6 c. 2.5 d. 2.0

b. 2.6 (325000/125000)

3. __________ is the philosophy of enhancing employees, business processes, and products on a regular basis. a. Improvement process b. Continuous process improvement c. Quality process d. None of these choices are correct

b. Continuous process improvement

A firm has $100,000 in direct materials costs, $50,000 in direct labor costs, and $80,000 in overhead. Which of the following is true? a. Prime costs are $150,000; conversion costs are $180,000. b. Prime costs are $130,000; conversion costs are $150,000. c. Prime costs are $150,000; conversion costs are $130,000. d. Prime costs are $180,000; conversion costs are $150,000.

c. Prime costs are $150,000; conversion costs are $130,000.

In practice, items such as wood screws and glue used in the production of school desks and chairs would most likely be classified as: a. period costs. b. direct labor. c. factory overhead. d. direct materials.

c. factory overhead.

Horizontal analysis is a technique for evaluating financial statement data a. on a certain date b. as it may appear in the future c. over a period of time d. for one period of time

c. over a period of time

Which of the following is a period cost? a. depreciation on factory lunchroom furniture b. computer chips used by a computer manufacturer c. salary of telephone receptionist in the sales office d. salary of a security guard for the factory parking lot

c. salary of telephone receptionist in the sales office

Managerial accounting provides performance reports to internal users. Which of the following is considered an advantage of performance reports? a. Performance reports allow management to identify any large amounts of scrap materials or employee downtime. b. A report could analyze the potential efficiencies and dollar savings of purchasing computerized equipment to speed up the production process. c. A report could analyze how many units need to be sold to cover operating costs and expenses and used to set monthly selling targets and bonuses for sales personnel. d. All of these choices are correct.

d. All of these choices are correct.

Which of the following is the correct flow of manufacturing costs? a. raw materials, finished goods, cost of goods sold, work in process b. cost of goods sold, raw materials, work in process, finished goods c. work in process, finished goods, raw materials, cost of goods sold d. raw materials, work in process, finished goods, cost of goods sold

d. raw materials, work in process, finished goods, cost of goods sold

Question Content Area The purpose of an audit is to a. determine whether or not a company is a good investment b. determine whether or not a company complies with corporate social responsibility c. determine whether or not a company is a good credit risk d. render an opinion on the fairness of the statements

d. render an opinion on the fairness of the statements

Which of the following is required by the Sarbanes-Oxley Act? a. price-earnings ratio b. vertical analysis c. common-sized statement d. report on internal control

d. report on internal control