Accounting Exam Review 1 T/F – Flashcards
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Managerial accounting reports must be useful to the user of the information.
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True
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Planning is the process of developing the company's objectives or goals and translating these objectives into courses of action.
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True
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A diagram of the operating structure of an organization is called an organization chart.
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True
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A staff department has no direct authority over a line department.
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True
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Managerial accounting reports must be prepared according to generally accepted accounting principles.
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False
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Planning is the process of monitoring operating results and comparing actual results with the expected results.
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False
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The vice presidents of production and sales and the controller hold line positions in most large organizations.
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False
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Since there are few rules to restrict how an organization chooses to arrange its own internal data for decision making, managerial accounting provides ample opportunity for creativity and change.
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True
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In most business organizations, the chief accountant is called the treasurer.
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False
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Controlling deals with choosing goals and deciding how to achieve them.
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True
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The controller's staff consists of management accountants responsible for systems and procedures, general accounting, budgets, taxes, and cost accounting.
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True
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In most business organizations, the chief management accountant is called the controller.
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True
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A staff department or unit is one that provides services, assistance, and advice to the departments with line or other staff responsibilities.
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True
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Managerial accounting information includes both historical and estimated data.
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True
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Managerial accounting uses only past data in reports to aid management in the decision making process.
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False
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Direct costs can be specifically traced to a cost object.
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True
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Conversion cost is the combination of direct labor cost and factory overhead cost.
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True
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Factory overhead includes all manufacturing costs except direct materials and direct labor.
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True
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Prime costs consist of direct materials, indirect materials, and direct labor.
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False
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Conversion costs consist of product costs and period costs.
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False
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The costs of materials and labor that do not enter directly into the finished product are classified as cost of goods sold.
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False
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Period (nonmanufacturing) costs are classified into two categories: selling and administrative.
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True
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Factory overhead is an example of a product cost.
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True
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Managerial accounting provides useful information to managers on product costs.
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True
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Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as factory overhead cost.
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True
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Conversion cost is the combination of direct materials cost and factory overhead cost.
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False
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Prime costs are the combination of direct labor costs and factory overhead costs.
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False
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Prime costs are the combination of direct materials and direct labor costs.
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True
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Indirect labor and indirect materials would be part of factory overhead.
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True
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The cost of wages paid to employees directly involved in converting materials to finished product is classified as direct labor cost.
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True
