question

Which of the following is NOT one of the primary responsibilities of management?

answer

Adhering to GAAP

question

Planning involves which of the following activities?

answer

Setting goals and objectives for the company

question

Which of the following is being fulfilled when management compares the budget to actual results?

answer

Controlling

question

Budgets are a way for managers to communicate their ______

answer

Plans

question

Overseeing the day-to-day operations of a company is an example of which of the following management functions?

answer

Directing

question

How often should managerial accounting reports be prepared?

answer

As often as necessary

question

Which of the following statements is TRUE regarding managerial accounting information?

answer

Managerial accounting information emphasizes relevance

question

Which of the following statements is FALSE about financial accounting?

answer

Financial accounting provides sufficient information for managers to effectively plan and control operations

question

Which of the following statements is TRUE about managerial accounting information?

answer

Managerial accounting reports provide detailed internal information

question

Which of the following are the internal decision makers of a company?

answer

Managers

question

___________ are a company's decision makers.

answer

Managers

question

Management accountants rarely interact with employees from other business functions such as marketing and customer service.

answer

False

question

The treasurer and the controller report directly to the CFO.

answer

True

question

The internal audit department reports directly to the audit committee, a subcommittee of the board of directors.

answer

True

question

Managerial accountants no longer perform routine mechanical accounting tasks in most companies.

answer

True

question

Managerial accountants are now considered to be similar to internal consultants and business advisors.

answer

True

question

Oral and written communication skills are considered among the skills that are critical to management accountants.

answer

True

question

What position is typically responsible for general financial accounting, managerial accounting, and tax reporting?

answer

Controller

question

The IMA issues which of the following certifications?

answer

CMA

question

The standards in the IMA statement of Ethical Professional Practice includes

answer

Competence, Confidentiality, Integrity, Credibility

question

All of the following are overarching principles in the IMA Statement of Ethical Professional Practice except

answer

Integrity

question

The standards of the IMA statement of Ethical Professional Practice include which of the following?

answer

Integrity

question

Preparing financial statements in accordance with GAAP is an example of

answer

Competence

question

Communicating information fairly and objectively is an example of which ethical standard?

answer

Credibility

question

Performing duties in accordance with relevant laws, regulations, and technical standards comprise the IMA professional ethics standard of

answer

Competence

question

Inflating your expenses for a company-sponsored conference that discredits the profession is a violation of what ethical standard?

answer

Integrity

question

What ethical standard is being violated when you tell a friend that the company you work for is going to report lower than expected earnings next week?

answer

Confidentiality

question

What is the name of the professional association for managerial accountants?

answer

Institute of Management Accountants

question

Which type of system integrates ALL of the company's departments, worldwide functions, and data?

answer

ERP Systems

question

According to the Sarbanes-Okley Act, who is responsible for establishing and maintaining internal controls over financial reporting?

answer

The CEO and CFO

question

In recent years, there has been an increasing awareness and growing interest in _________ and social responsibility by both consumers and corporations.

answer

Sustainability

question

The "triple bottom line" focuses on what three factors that influence a firm's ability to survive and thrive in the long run?

answer

Profit, people, planet

question

Under SOX, a CPA firm is permitted to perform which of the following services for an audit client with pre-approval from the client's audit committee?

answer

Tax

question

The SEC is considering the move to adopt IFRS for which types of companies?

answer

All U.S. publicly traded companies

question

IFRS stands for

answer

International Financial Reporting Standards

question

XBRL stands for

answer

Extensible Business Reporting Language

question

In what year will XBRL be required for all publicly traded companies?

answer

2011

question

XBRL can be described as a

answer

Standardized tagging system for financial statement data.

question

_________ is the business philosophy and a strategy of manufacturing without waste.

answer

Lean thinking

question

Companies may adopt which of the following in an attempt to increase their competitive edge?

answer

All of the above, Green initiatives, learning thinking, TQM

question

The Sarbanes-Oxley Act was enacted

answer

To restore trust in publicly traded companies

question

ISO 9001:2008 is a

answer

Certification that a company complies with international quality standards

question

Which of the following is a software system that integrates all of a company's departments?

answer

ERP

question

Which of the following types of companies has raw materials, work in progress and finished goods inventory?

answer

Manufacturers

question

Which type of company makes up the largest sector of the United States economy?

answer

Service companies

question

The balance sheet of a service company has

answer

little or no inventory

question

Which type of company typically produces its own inventory?

answer

Manufacturer

question

What type of company resells tangible products it purchases ready-made from suppliers?

answer

All of the above, Merchandiser, Wholesaler, and Retailer

question

How would Chevrolet classify its partially completed vehicles?

answer

Work in process inventory

question

A _______ company's balance sheet reports just one inventory called "inventory"

answer

Merchandising

question

All of the following items would be found in raw materials inventory for a furniture manufacturer except

answer

Assembly worker wages

question

All of the following are part of a company's value chain EXCEPT

answer

Administration

question

Which element of the value chain would deprecation on a factory be classified as?

answer

Production

question

Testing ways to increase the strength of your product would be classified as which element of the value chain?

answer

Research and development

question

Which element of the value chain would a technical support hotline for customers be considered?

answer

Customer service

question

Advertising expenses would be considered which element of the value chain?

answer

Marketing

question

The cost associated with reengineering machinery and its location within the factory to increase efficiency would be considered which element of the value chain?

answer

Design

question

The cost incurred to transport merchandise to a company's retail store would be considered to be what element of the value chain?

answer

Production or purchases

question

If a company wants to determine a product's cost, it must assign both direct and indirect costs.

answer

True

question

Direct costs can be traced to specific units

answer

True

question

Indirect cost cannot be traced to the cost objects, so they are allocated

answer

True

question

Which of the following items could be examples of a cost object?

answer

All of the above, An international plant, the accounting department, a manufacturing plant

question

Which of the following is NOT an example of an indirect cost incurred in manufacturing automobiles?

answer

Cost of the automobiles engines

question

A factory janitor's wages would be classified as ______ when determining the cost of a manufactured product.

answer

An indirect cost

question

A salesperson's salary would be classified as ______ when determining the cost of a manufactured product

answer

A period cost

question

The cost of lighting the factory would be classified as ____ when determining the cost of a manufactured product

answer

An indirect cost

question

Which of the following would NOT be considered a direct cost of a mattress?

answer

Glue

question

All of the following would be considered a direct material for a kitchen cabinet except

answer

Sand paper

question

Prime costs consist of

answer

Direct materials and direct labor

question

Conversion cost consist of

answer

Direct labor and manufacturing overhead

question

An example of direct labor would be which of the following?

answer

Wages of assembly line personnel

question

Which of the following is an example of direct labor?

answer

Wages of a machine operator

question

Which of the following is an example of overhead expense in a factory?

answer

Wages of factory maintenance personnel

question

Indirect materials, indirect labor, and indirect manufacturing costs are what type of manufacturing cost?

answer

Manufacturing overhead

question

Which of the following would NOT be considered a product cost of a manufacturer?

answer

Freight out

question

Period costs are

answer

Always recorded as an expense

question

Inventoriabe product costs for a manufactured product include

answer

The costs of direct materials, direct labor and manufacturing overhead

question

Which of the following is an example of indirect labor in a manufacturing plant?

answer

Plant managers

question

Product costs and period costs receive similar treatment when presented in the financial statements

answer

False

question

The income statements of manufacturing companies are more complex than those of service or merchandising companies.

answer

True

question

The financial statements of a merchandiser are more complex than those of a manufacturer.

answer

False

question

Service companies have the most complex accounting with regard to the income statement.

answer

False

question

Cost of goods sold is a major expense of service companies.

answer

False

question

The schedule of cost of goods manufactured is prepared before the income statement for a manufacturing company.

answer

True

question

Which of the following items is NOT used when calculating the cost of goods manufactured?

answer

Salesperson salaries

question

Before operating income can be determined for a manufacturer, which of the following is calculated?

answer

All of the above, Cost of goods sold, costs of goods manufactured, and costs of goods available for sale

question

The balance sheet of a service company would include which of the following?

answer

Accounts receivable

question

The income statement of a retailer would include which of the following?

answer

Costs of goods sold

question

The income statements for BOTH a merchandiser and manufacturer would include which of the following?

answer

Operating expenses

question

What is the cost of goods available for sale?

answer

Beginning inventory + Purchases

question

What is the cost of goods sold for the year?

answer

Beginning inventory + Purchases - Ending inventory

question

What is the gross profit for the year?

answer

Sales revenue - cost of goods sold for the year

question

The only difference in the balance sheet of various types of businesses (for example, manufacturing vs. service) is

answer

Current assets

question

A merchandiser's purchases are equivalent to a manufacture's

answer

Cost of goods manufactured

question

Which of the following types of information differs between alternatives and can affect the future?

answer

Relevant

question

Which of the following represents a sunk cost?

answer

A historical cost that is never relevant

question

Subtracting the costs of one alternative from the costs of the other alternative would be called the _______ cost.

answer

Differential

question

When deciding to buy a new computer, all of the following should be considered EXCEPT for the

answer

Cost of the old computer

question

When deciding to buy a new computer, all of the following should be considered EXCEPT

answer

Sunk costs

question

A company is deciding whether to purchase production equipment that can produce units more quickly than the current equipment. Which of the following costs would be relevant to its decision?

answer

The cost of the new equipment

question

A company is deciding whether to purchase production equipment that can produce units more quickly than the current equipment. Which of the following costs would be relevant to its decision?

answer

The additional labor required to run the new equipment

question

A restaurant is facing a decision about whether it should bake its own apple pies or whether it should continue to purchase the pies from a local bakery. Which of the following costs would be relevant to its decision?

answer

The purchase price of the apple pies purchased from the local bakery

question

A company is deciding whether to purchase hybrid cars for its salespeople or gasoline-engine cars. All of the following costs would be relevant to its decision EXCEPT

answer

The book value of the current fleet of sales vehicles

question

Forecast total cost

answer

Total fixed cost + (variable cost per unit x total units predicted)

question

What is the cost of making one more unit called?

answer

Marginal cost

question

Average cost per unit

answer

Total cost / Number of units

question

A _______ cost is one whose total amount changes in direct proportion to a change in volume.

answer

Variable

question

An example of a fixed cost for a manufacturer would be which of the following?

answer

Salary of plant manager

question

Which of the following describes the way in which total fixed costs behave?

answer

They will remain the same throughout production levels with the relevant range

question

Process costing is used by companies that produce large numbers of identical units of production in a continuous fashion.

answer

True

question

Job costing systems accumulate the costs for each individual job.

answer

True

question

Companies should always use job costing rather than process costing.

answer

False

question

The end goal of process costing and job costing at a manufacturing company is the same: to find the cost of producing one more unit of product.

answer

True

question

A job costing system can be used by which types of companies?

answer

Service, manufacturing, and merchandising businesses

question

Which product costing system would better account for a unique product?

answer

Job costing system

question

The two basic types of costing system are

answer

Job costing and process costing

question

Which of the following industries would be most likely to use a job costing system?

answer

Commercial building construction

question

Which of the following is an example of an industry that would use a process costing - rather than a job costing - system?

answer

Coca-Cola

question

Which of the following types of costing is used for many similar products?

answer

Process costing

question

Which of these documents authorizes the purchase of specific raw materials from a specific supplier?

answer

Purchase order

question

A ________ is used to accumulate the costs of a job.

answer

Job cost record

question

The _______ substantiates the total of the raw materials inventory account shown on the company's balance sheet.

answer

Raw materials records

question

Which of these documents informs the storeroom to send specific materials tot he factory floor?

answer

Materials requisition

question

A ______ is a source document used to track employee hours.

answer

Labor time record

question

A ______ is used to accumulate all of the direct materials and direct labor used on the job, as well as the manufacturing overhead allocated to the job.

answer

Job cost record

question

In the basic flow of inventory though a manufacturing system, which of the following occurs first in a job costing system?

answer

Raw materials inventory

question

In the basic flow of inventory though a manufacturing system, which of the following occurs second in the job costing system?

answer

Work in process inventory

question

In the basic flow of inventory though a manufacturing system, which of the following occurs third in the job costing system?

answer

Finished goods inventory

question

In the basic flow of inventory though a manufacturing system, which of the following occurs last in the job costing system?

answer

Cost of goods sold

question

The first three steps to allocating manufacturing overhead are taken BEFORE the year begins and include all of the following EXCEPT

answer

Allocating some manufacturing overhead toe each individual job

question

What is the primary factor that causes "cost" called?

answer

Cost driver

question

A ______ is an estimated manufacturing overhead rate computed during the year.

answer

Predetermined manufacturing overhead rate

question

Assigning manufacturing overhead costs and other indirect cost is called

answer

Cost allocation

question

Manufacturing follow four steps to implement a manufacturing overhead allocation system. The last step is

answer

Allocate some manufacturing overhead to each individual job

question

Manufacturing overhead is allocated on the basis of

answer

All of the above, direct labor costs, direct labor hours, and machine hours

question

Allocating manufacturing overhead cost is done

answer

During the period

question

When is the predetermined manufacturing overhead rate computed?

answer

Before the period starts

question

How do you calculate the predetermined manufacturing overhead rate used to allocate manufacturing overhead cost?

answer

By dividing the total estimated manufacturing overhead costs by the total estimated amount of the allocation base

question

__________ laws, or "take-back" laws, create future costs associated with production of electronic devices and require manufacturers of electronic devices to take back their products at the end of the products useful lives.

answer

Extended producer responsibility (EPR)

question

If a job consists of a batch of identical units, how can managers find the unit cost?

answer

By dividing the total job cost by the number of units in the job

question

The difference between the sales prices and the job cost is

answer

Gross profit

question

How is the cost - plus price determined?

answer

Cost + markup on cost

question

Which of the following would be an example of a typical manufacturing overhead cost?

answer

Depreciation on factory equipment

question

Management can use job costing information for each of the following EXCEPT

answer

All of the listed choices are possible uses for job cost information, Determining cost of goods sold, bidding on custom jobs, and determining the profitability of different jobs

question

Under allocated manufacturing overhead results when

answer

Actual overhead is greater than allocated overhead

question

Over allocated manufacturing overhead results when

answer

Actual overhead is less than expected

question

Determining how much manufacturing overhead is over or under allocated

answer

Is done at the end of the period

question

If manufacturing overhead has been over allocated during the period, then

answer

The jobs produced during the period have been over costed

question

If manufacturing overhead has been under allocated during the period, then which of the following is true?

answer

The jobs produced during the period have been undercosted

question

Cost of goods sold account is debited and finished goods inventory is credited for

answer

The sale of goods to a customer

question

Under which of the following situations is finished goods inventory debited and work-in-process inventory account credited?

answer

Transfer of goods to the finished goods storeroom

question

The cost of direct labor used in production is recorded as a

answer

Debit to work-in-process inventory account

question

The cost of indirect labor used in the factory is recorded as a

answer

Debit to manufacturing overhead account

question

How is the cost of indirect materials used in the factory recorded?

answer

Debit to manufacturing overhead account

question

When job costing is used at a service firm, the bill to the clients shows

answer

The billing rate and hours spent on the job

question

The journal entries needed for job costing at a service company

answer

Are simpler than those needed at a manufacturing company

question

How is the cost of direct materials used in production recorded?

answer

Debit to work-in-process inventory account

question

The _______ is the hourly price charged to clients for professional labor.

answer

Billing rate

question

Service firms develop a predetermined rate for some costs. This rate is called the

answer

Indirect cost allocation rate

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